TIDMARGO
RNS Number : 9342I
ARGO Group Limited
10 August 2023
Argo Group Limited
("Argo" or the "Company")
Interim Results for the six months ended 30 June 2023
Argo today announces its interim results for the six months
ended 30 June 2023.
Key highlights for the six months period ended 30 June 2023
This report sets out the results of Argo Group Limited (the
"Company") and its subsidiaries (collectively "the Group" or
"Argo") covering the six months ended 30 June 2023.
- Revenues US$1.5 million (six months to 30 June 2022: US$1.3 million)
- Operating loss US$0.7 million (six months to 30 June 2022: US$1.5 million)
- Profit before tax US$0.1 million (six months to 30 June 2022: loss before tax US$3.5 million)
- Net assets US$19.7 million (31 December 2022: US$19.6 million)
Commenting on the results and outlook, Kyriakos Rialas, Chief
Executive of Argo said:
"Argo Group was profitable for the first six months of 2023
mainly due to a positive performance of its investment in The Argo
Fund and continuous control of expenses. The group maintains good
liquidity and its operational and investment team has the capacity
to take on a third first loss managed account in the second half of
2023. During the first half of 2023, the two first loss managed
accounts were up 15%. Emerging markets continue to be adversely
affected by inflation and higher interest rates but there are signs
that disinflation and lower rates has already started ahead of
developed markets. As a result, our macro strategy has outperformed
distressed debt with many sovereigns still negotiating and waiting
for IMF approvals. Finally, the situation in Ukraine remains
unstable with the shopping mall in Odessa now opened but only up to
60% capacity."
Enquiries
Argo Group Limited
Andreas Rialas
020 7016 7660
Panmure Gordon
Dominic Morley
020 7886 2500
This announcement contains inside information for the purposes
of Article 7 of the Market Abuse Regulation (EU) No 596/2014 as it
forms part of UK domestic law by virtue of the European Union
(Withdrawal) Act 2018.
CHAIRMAN'S STATEMENT
Key highlights for the six months ended 30 June 2023
This report sets out the results of Argo Group Limited (the
"Company") and its subsidiaries (collectively "the Group" or
"Argo") covering the six months ended 30 June 2023.
- Revenues US$1.5 million (six months to 30 June 2022: US$1.3 million)
- Operating loss US$0.7 million (six months to 30 June 2022: US$1.5 million)
- Profit before tax US$0.1 million (six months to 30 June 2022: loss before tax US$3.5 million)
- Net assets US$19.7 million (31 December 2022: US$19.6 million)
The Group and its investment objective
Argo's investment objective is to provide investors with
absolute returns in the funds that it manages by investing in multi
strategy investments in emerging markets.
Argo was listed on the AIM market in November 2008 and has a
performance track record dating back to 2000.
Business and operational review
For the six months ended 30 June 2023 the Group generated
revenues of US$1.5 million (six months to 30 June 2022: US$1.3
million) with management fees accounting for US$1.1 million (six
months to 30 June 2022: US$1.1 million).
Total operating costs for the period, ignoring bad debt
provisions, are US$1.8 million compared to US$2.5 million for the
six months to 30 June 2022 . The Group has provided against
management fees of US$0.4 million due from the Designated share
class in The Argo Fund ("TAF") (six months to 30 June 2022: US$0.3
million). In the Directors' view these amounts are fully
recoverable however they have concluded that it would only be
appropriate to recognise income without provision from these
investment management services once a liquidity event occurs in
this share class.
Overall, the financial statements show an operating loss for the
period of US$0.7 million (six months to 30 June 2022: US$1.5
million) and a profit before tax of US$0.1 million (six months to
30 June 2022: loss before tax of US$3.5 million). Net profit on
investments of US$0.3 million (six months to 30 June 2022: net loss
on investments US$2.5 million) and interest income of US$0.5
million (six months to 30 June 2022: US$0.5 million).
At the period end, the Group had net assets of US$19.7 million
(31 December 2022: US$19.6 million) and net current assets of
US$5.4 million (31 December 2022: US$6.0 million) including cash
reserves of US$1.2 million (31 December 2022: US$1.6 million).
Net assets include investments in The Argo Fund ("TAF") at fair
values of US$4.5 million (31 December 2022: US$4.4 million).
At the period end TAF owed the Group total fees of US$2.4
million ( 31 December 2022 : US$2.1 million). At 30 June 2023, a
provision for US$2.3 million was made against this amount as the
timing of the receipt of the fees from the designated share class
in TAF is unknown.
TAF ended the period with Assets under Management ("AUM") at
US$110.5 million (31 December 2022: US$109.8 million). The current
level of AUM remains below that required to ensure sustainable
profits on a recurring management fee basis in the absence of
performance fees. This has necessitated an ongoing review of the
Group's cost basis. Nevertheless, the Group has ensured that the
operational framework remains intact and that it retains the
capacity to manage additional fund inflows as and when they
arise.
The average number of permanent employees of the Group for the
six months to 30 June 2023 was 20 ( 30 June 2022 : 20).
Fund performance
The Argo Funds
30 June 30 June 2022
Launch 2023 2022 year Sharpe Down
Since Annualised
Fund date 6 months 6 months total inception performance ratio months
% % % % CAGR %
-------- ---------- ---------- ------- ---------- ------------ ------- ---------
The Argo Fund 92 of
- A class Oct-00 1.46 -14.25 -12.54 219.78 6.00 0.39 273
-------- ---------- ---------- ------- ---------- ------------ ------- ---------
The Argo Fund 12 of
- X2 class Feb21 -1.16 -21.39 -16.83 -8.05 -3.42 -0.22 29
-------- ---------- ---------- ------- ---------- ------------ ------- ---------
The Argo Fund
- DI Class Jan-20 1.96 -6.20 -2.82 92.88 N/A N/A N/A
-------- ---------- ---------- ------- ---------- ------------ ------- ---------
In the first half of 2023, global macroeconomic trends continued
to have a significant impact on the outlook for and performance of
emerging market ("EM") assets. Ongoing uncertainty over the path of
inflation and policy trajectory led to false dawns around a peak in
US rates. The Federal Reserve raised rates three times in the
period and although left fed funds unchanged at 5 -5.25% at the
meeting in June, it increased the fed funds rate to a target range
of 5.25%-5.5% at its meeting in late July. By contrast, ten-year US
Treasury yields were much more volatile, starting the period at
3.9% before dropping below 3.4% by mid-January only to exceed 4% in
early March. After falling back to 3.3% in early April they had
moved up to over 4% in early July.
After a strong post-pandemic recovery, concern over the
evolution of China's economic growth picked up through the second
quarter of 2023, as macroeconomic data began to disappoint. This
has led to speculation around stimulus measures in recent weeks,
although the consensus does not expect a major announcement, even
if some targeted support may come through.
However, against this backdrop both EM equities and bonds
broadly advanced. The former, as measured by the MSCI Emerging
Markets Index, returned close to 5% in the first half of 2023,
lagging the MSCI World which was up just over 15%. As mentioned
previously, China, which is the largest index market in EM, has
been a drag. However, the stunning rally from March onwards of the
Super-7 stocks (Apple, Microsoft, Alphabet, Amazon, Tesla, Meta,
Nvidia) in the MSCI World has been a factor.
EM bonds and currencies have generated positive returns
year-to-date. In sovereign and corporate credit, the impact of
higher US Treasury yields was offset by credit spread compression,
while EM local debt continued to outperform core fixed income
markets almost entirely driven by lower yields. The global
inflation surge in 2021-2022 caught the attention of central banks
worldwide. However, EM central banks were quicker to respond to
this inflationary shock, initiating a remarkable series of rate
hikes in the first quarter of 2021 that continued until late
2022/early 2023.
This swift action allowed EM countries to witness falling core
inflation in recent months, unlike the developed world, which
continues to grapple with entrenched core inflation.
Emerging markets currencies were roughly flat against the US
dollar, although Latin American currencies have seen the most
appreciation relative to the US dollar year to-date. Turkey and
South Africa have seen the greatest currency depreciation.
Meanwhile, market access has remained a concern for high yield
EM issuers. While investment grade EM issuance is almost in line
with the average over the past few years, for high yield sovereigns
and corporates the equivalent figure is around a third. Inevitably,
this increases the likelihood of restructurings particularly if
world growth proves disappointing.
The NAV of the Class A shares of the TAF increased by 1.46 % in
the first half of 2023, compared to the drop of 14.25% in the same
period of the previous year. The fund benefited from a recovery in
Argentine bond prices, though they remained volatile. There were
also positive contributions from long positions in local currency
bonds (mainly Latin American and East European). The main
detractors were corporates in the throes of restructuring and
generic credit hedges. Class A shares issued by TAF continue to be
invested in diversified sovereign and corporate debt and macro
positions which seek to capture alpha through long and short
investment. In addition, there are other share classes within the
TAF master/feeder structure which offer investors exposure to a
distressed debt portfolio (Class X2 launched in 2021); macro
strategies (Class X3, launched last year) and also special
situations where the timeline to investment realisation will be
longer.
Loan to Argo Real Estate Limited Partnership
On 21(st) March 2023, the back to back loans from the Group to
Argo Real Estate Limited Partnership to Novi Biznes Poglyady LLC
were replaced by a direct loan from the Group to Novi Biznes
Poglyaddy LLC. The Shopping Centre partially reopened in November
2022. As the loan receivable is still exposed to the performance of
this investment property held in Ukraine, the Group continues to
hold an IFRS 9 valuation adjustment for US$0.5 million for expected
losses at the reporting date (note 10).
Dividends and share purchase programme
The Group did not pay a dividend during the current or prior
period . The Directors intend to restart dividend payments as soon
as the Group's performance provides a consistent track record of
profitability.
Outlook
The Board remains optimistic about the Group's prospects based
on the transactions in the pipeline and the Group's initiatives to
increase AUM. A significant increase in AUM is still required to
ensure sustainable profits on a recurring management fee basis and
the Group is well placed with capacity to absorb such an increase
in AUM with negligible impact on operational costs.
Boosting AUM will be Argo's top priority in the next six months.
The Group's marketing efforts continue to focus on TAF which has a
22-year track record as well as identifying acquisitions that are
earnings enhancing.
Over the longer term, the Board believes there is significant
opportunity for growth in assets and profits and remains committed
to ensuring the Group's investment management capabilities and
resources are appropriate to meet its key objective of achieving a
consistent positive investment performance in the emerging markets
sector.
CONDENSED CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER
COMPREHENSIVE INCOME
FOR THE SIX MONTHSED 30 JUNE 2023
Six months Six months
ended ended
30 June 30 June
2023 2022
Note US$'000 US$'000
Management fees 1,111 1,140
Performance fees - -
Other income 400 125
============================================= ===== =========== ===========
Revenue 1,511 1,265
============================================= ===== =========== ===========
Legal and professional expenses (119) (128)
Management fees payable (141) (180)
Operational expenses (402) (362)
Employee costs (1,108) (1,752)
9,
Bad debt provision 10 (367) (320)
Foreign exchange (loss)/profit (9) 9
Depreciation 7 (48) (71)
Operating loss (683) (1,539)
============================================= ===== =========== ===========
Interest income 496 499
Realised and unrealised gain/(loss)
on investments 308 (2,507)
============================================= ===== =========== ===========
Profit/(loss) on ordinary activities
before taxation 121 (3,547)
============================================= ===== =========== ===========
Taxation 5 - -
============================================= ===== =========== ===========
Profit/(loss) for the period after
taxation attributable to members of
the Company 6 121 (3,547)
Other comprehensive income
Items that may be reclassified subsequently
to profit or loss:
Exchange differences on translation
of foreign operations 6 (107)
============================================= ===== =========== ===========
Total comprehensive income for the
period 127 (3,654)
============================================= ===== =========== ===========
Six months Six months
Ended Ended
30 June 30 June
2023 2022
US$ US$
Earnings per share (basic) 6 0.003 (0.09)
============================================= ===== =========== ===============
Earnings per share (diluted) 6 0.003 (0.08)
============================================= ===== =========== ===============
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2023
30 June 31 December
2023 2022
Note US$'000 US$'000
Assets
Non-current assets
Land, fixtures, fittings and
equipment 7 571 607
Loans and advances receivable 10 14,147 13,416
================================ ===== ========== ============
Total non-current assets 14,718 14,023
================================ ===== ========== ============
Current assets
Financial assets at fair value
through profit or loss 8 4,451 4,387
Loan and advances receivable 10 9 -
Trade and other receivables 9 309 413
Cash and cash equivalents 1,241 1,642
Total current assets 6,010 6,442
================================ ===== ========== ============
Total assets 20,728 20,465
================================ ===== ========== ============
Equity and liabilities
Equity
Issued share capital 11 390 390
Share premium 25,353 25,353
Retained earnings (2,856) (2,977)
Foreign currency translation
reserve (3,203) (3,209)
================================ ===== ========== ============
Total equity 19,684 19,557
================================ ===== ========== ============
Current liabilities
Trade and other payables 15 662 497
Total current liabilities 662 497
-------------------------------- ----- ---------- ------------
Non-current liabilities
Trade and other payables 15 382 411
-------------------------------- ----- ---------- ------------
Total non-current liabilities 382 411
-------------------------------- ----- ---------- ------------
Total equity and liabilities 20,728 20,465
-------------------------------- ----- ---------- ------------
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS'
EQUITY
FOR THE SIX MONTHSED 30 JUNE 2023
Foreign
Issued currency
share Share Retained translation
capital premium earnings reserve Total
2022 2022 2022 2022 2022
US$'000 US$'000 US$'000 US$'000 US$'000
As at 1 January 2022 390 25,353 420 (3,086) 23,077
Total comprehensive
income
Loss for the period
after taxation - - (3,547) - (3,547)
Other comprehensive
income - - - (107) (107)
As at 30 June 2022 390 25,353 (3,127) (3,193) 19,423
====================== ========== ========== =========== ================ ========
Foreign
Issued currency
share Share Retained translation
capital premium earnings reserve Total
2023 2023 2023 2023 2023
US$'000 US$'000 US$'000 US$'000 US$'000
As at 1 January 2023 390 25,353 (2,977) (3,209) 19,557
Total comprehensive income
Profit for the period after
taxation - - 121 - 121
Other comprehensive income - - - 6 6
As at 30 June 2023 390 25,353 (2,856) (3,203) 19,684
============================= ========== ========== =========== ================ ========
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE SIX MONTHSED 30 JUNE 2023
Six months Six months
ended ended
30 June 30 June
2023 2022
Note US$'000 US$'000
Net cash outflow from operating
activities 12 (387) (332)
======================================= ===== =========== ===========
Cash flows used in investing
activities
Purchase of fixtures, fittings
and equipment 7 (3) (4)
Net cash (used)/ generated from
investing activities (3) (4)
======================================= ===== =========== ===========
Cash flows from financing activities
Payment of lease liabilities - (78)
Net cash used in financing activities - (78)
======================================= ===== =========== ===========
Net decrease in cash and cash
equivalents (390) (414)
Cash and cash equivalents at 1
January 2023 and
1 January 2022 1,642 1,709
Foreign exchange loss on cash
and cash equivalents (11) (63)
Cash and cash equivalents as
at 30 June 2023 and 30 June 2022 1,241 1,232
======================================= ===== =========== ===========
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL
STATEMENTS
For the six months ended 30 June 2023
1. CORPORATE INFORMATION
The Company is domiciled in the Isle of Man under the Companies
Act 2006. Its registered office is at 33-37 Athol Street, Douglas,
Isle of Man, IM1 1LB. The condensed consolidated interim financial
statements of the Group as at and for the six months ended 30 June
2023 comprise the Company and its subsidiaries (together referred
to as the "Group").
The consolidated financial statements of the Group as at and for
the year ended 31 December 2022 are available upon request from the
Company's registered office or at www.argogrouplimited.com.
The principal activity of the Company is that of a holding
company and the principal activity of the wider Group is that of an
investment management business. The functional currency of the
Group undertakings are US dollars, Sterling and Romanian Lei. The
presentational currency is US dollars.
Wholly owned subsidiaries Principal activity Country of incorporation
Argo Capital Management Limited Investment United Kingdom
management
Argo Property Management Srl Property management Romania
2. ACCOUNTING POLICIES
(a) Basis of preparation
These condensed consolidated interim financial statements have
been prepared in accordance with IAS 34 Interim Financial
Reporting. They do not include all 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 2022.
The accounting policies applied by the Group in these condensed
consolidated interim financial statements are the same as those
applied by the Group in its consolidated financial statements as at
and for the year ended 31 December 2022.
These condensed consolidated interim financial statements were
approved by the Board of Directors on 9 August 2023.
b) Financial instruments and fair value hierarchy
The following represents the fair value hierarchy of financial
instruments measured at fair value in the Condensed Consolidated
Statement of Financial Position. The hierarchy groups financial
assets and liabilities into three levels based on the significance
of inputs used in measuring the fair value of the financial assets
and liabilities. The fair value hierarchy has the following
levels:
Level 1: quoted prices (unadjusted) in active markets for
identical assets or liabilities;
Level 2: inputs other than quoted prices included within Level 1
that are observable for the asset or liability, either directly
(i.e. as prices) or indirectly (i.e. derived from prices); and
Level 3: inputs for the asset or liability that are not based on
observable market data (unobservable inputs).
The level within which the financial asset or liability is
classified is determined based on the lowest level of significant
input to the fair value measurement
3. SEGMENTAL ANALYSIS
The Group operates as a single asset management business.
The operating results of the companies are regularly reviewed by
the Directors of the Group for the purposes of making decisions
about resources to be allocated to each company and to assess
performance. The following summary analyses revenues, profit or
loss, assets and liabilities:
Argo Argo Capital Argo Property Six months
Group Management Management ended
Ltd Ltd Srl 30 June
2023 2023 2023 2023
US$'000 US$'000 US$'000 US$'000
Total revenues for
reportable segments
customers - 1,111 400 1,511
Intersegment revenues - - -
-
Total profit/(loss)
for reportable segments 687 (602) 36 121
Intersegment loss - - - -
Total assets for
reportable segments
assets 19,059 1,428 241 20,728
Total liabilities
for reportable segments 6 675 363 1,044
========================== ======== =============== ================ ===========
Revenues, profit or loss, assets and liabilities Six months
may be reconciled as follows:
Ended
30 June
2023
US$'000
Revenues
Total revenues for reportable segments 1,511
Elimination of intersegment revenues -
================================================== ===========
Group revenues 1,511
================================================== ===========
Profit or loss
Profit for reportable segments 121
Elimination of intersegment loss -
Other unallocated amounts -
================================================== ===========
Loss on ordinary activities before taxation -
================================================== ===========
Assets
Total assets for reportable segments 20,728
Elimination of intersegment receivables -
Group assets 20,728
================================================== ===========
Liabilities
Total liabilities for reportable segments 4,321
Elimination of intersegment payables (3,277)
================================================== ===========
Group liabilities 1,044
================================================== ===========
Argo Argo Capital Argo Property Six months
Group Management Management ended
Ltd Ltd Srl 30 June
2022 2022 2022 2022
US$'000 US$'000 US$'000 US$'000
Total revenues for
reportable segments
customers - 1,140 125 1,265
Intersegment revenues - - -
-
Total profit/(loss)
for reportable segments (2,329) (1,215) (211) (3,755)
Intersegment loss 208 - - 208
Total assets for
reportable segments
assets 18,046 1,279 207 19,532
Total liabilities
for reportable segments 6 77 26 109
========================== ======== =============== ================ ===========
Revenues, profit or loss, assets and liabilities Six months
may be reconciled as follows:
Ended
30 June
2022
US$'000
Revenues
Total revenues for reportable segments 1,265
Elimination of intersegment revenues -
================================================== ===========
Group revenues 1,265
================================================== ===========
Profit or loss
Loss for reportable segments (3,755)
Elimination of intersegment loss 208
Other unallocated amounts -
================================================== ===========
Loss on ordinary activities before taxation (3,547)
================================================== ===========
Assets
Total assets for reportable segments 19,536
Elimination of intersegment receivables (4)
Group assets 19,532
================================================== ===========
Liabilities
Total liabilities for reportable segments 3,466
Elimination of intersegment payables (3,357)
================================================== ===========
Group liabilities 109
================================================== ===========
4. SHARE-BASED INCENTIVE PLANS
To incentivise personnel and to align their interests with those
of the shareholders of Argo Group Limited, Argo Group Limited has
granted share options to directors and employees under The Argo
Group Limited Employee Stock Option Plan. The options are
exercisable within 10 years of the grant date.
The fair value of the options granted during the period was
measured at the grant date using a Black-Scholes model that takes
into account the effect of certain financial assumptions, including
the option exercise price, current share price and volatility,
dividend yield and the risk-free interest rate. The fair value of
the options granted is spread over the vesting period of the scheme
and the value is adjusted to reflect the actual number of shares
that are expected to vest.
The principal assumptions for valuing the options are:
Exercise price (pence) 21.0
Weighted average share price
at grant date (pence) 19.0
Average option life at date
of grant (years) 10.0
Expected volatility (% p.a.) 15.0
Dividend yield (% p.a.) 10.0
Risk-free interest rate (%
p.a.) 2
The fair value of options granted is recognised as an employee
expense with a corresponding increase in equity. The total charge
to employee costs in respect of this incentive plan is GBPnil
(2022: GBPnil).
The number and weighted average exercise price of the share
options during the period is as follows:
Weighted average No. of share
exercise price options
Outstanding at beginning of
period 21.2p 3,895,998
Granted during the period - -
Forfeited during the period - -
============================== ================= =============
Outstanding at end of period 21.2p 3,895,998
============================== ================= =============
Exercisable at end of period 21.2p 3,895,998
============================== ================= =============
Outstanding share options are contingent upon the option holder
remaining an employee of the Group.
The weighted average fair value of the options issued during the
period was GBPNil (2022: GBPNil).
No share options were issued during the period.
5. TAXATION
Taxation rates applicable to the parent company and the UK and
Romanian subsidiaries range from 0% to 25% (2022: 0% to 19%).
Consolidated statement of profit or
loss Six months Six months
ended Ended
30 June 30 June
2023 2022
US$'000 US$'000
Taxation charge for the period on Group - -
companies
========================================= =========== ===========
The charge for the period can be reconciled to the profit shown
on the Condensed Consolidated Statement of profit or loss as
follows:
Six months Six months
Ended Ended
30 June 30 June
2023 2022
US$'000 US$'000
Profit/(loss) before tax 121 (3,547)
================================================ ============= ===========
Applicable Isle of Man tax rate for - -
Argo Group Limited of 0%
Timing differences - -
Non-deductible expenses - -
Other adjustments - -
Tax effect of different tax rates of - -
subsidiaries operating in other jurisdictions
================================================ ============= ===========
Tax charge - -
================================================ ============= ===========
Consolidated statement of financial
position
30 June 31 December
2023 2022
US$'000 US$'000
Corporation tax payable - -
===================================== ======== ============
6. EARNINGS PER SHARE
Earnings per share is calculated by dividing the net profit for
the period by the weighted average number of shares outstanding
during the period.
Six months Six months
ended Ended
30 June 30 June
2023 2022
US$'000 US$'000
Net profit/( loss) for the period after
taxation attributable to members 121 (3,547)
========================================= ============= =============
No. of No. of
shares shares
Weighted average number of ordinary
shares for basic earnings per share 38,959,986 38,959,986
Effect of dilution (Note 4) 3,895,998 3,895,998
========================================= ============= =============
Weighted average number of ordinary
shares for diluted earnings per share 42,855,984 42,855,984
========================================= ============= =============
Six months Six months
Ended ended
30 June 30 June
2023 2022
US$ US$
Earnings per share (basic) 0.003 (0.09)
Earnings per share (diluted) 0.003 (0.08)
============================== =========== ===========
7. LAND, FIXTURES, FITTINGS AND EQUIPMENT
Fixtures,
Right fittings
of use and equipment Total
assets Land
USD'000000 US$'000 US$'000 US$'000
Cost
At 1 January 2022 732 201 182 1,115
Additions 455 7 - 462
Disposals (732) (3) - (735)
Foreign exchange movement - (17) (10) (27)
=========================== ============= =============== ======== =======================
At 31 December 2022 455 188 172 815
Additions - 3 - 3
Disposals - (31) - (31)
Foreign exchange movement 22 5 (7) 20
=========================== ============= =============== ======== =======================
At 30 June 2023 477 165 165 807
=========================== ============= =============== ======== =======================
Accumulated Depreciation
At 1 January 2022 634 191 - 825
Depreciation charge for
period 120 5 - 125
Disposals (732) (3) - (735)
Foreign exchange movement 8 (16) - (8)
=========================== ============= =============== ======== =======================
At 31 December 2022 30 177 - 207
Depreciation charge for
period 46 2 - 48
Disposals - (31) - (31)
Foreign exchange movement 3 9 - 12
=========================== ============= =============== ======== =======================
At 30 June 2023 79 157 - 236
=========================== ============= =============== ======== =======================
Net book value
At 31 December 2022 425 11 172 608
=========================== ============= =============== ======== =======================
At 30 June 2023 398 8 165 571
=========================== ============= =============== ======== =======================
8. FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS
30 June 30 June
2023 2023
Holding Investment in management Total cost Fair value
shares
US$'000 US$'000
10 The Argo Fund Ltd - -
- -
======== ========================= ============= =============
Holding Investment in ordinary Total cost Fair value
shares
US$'000 US$'000
13,920 The Argo Fund Ltd* 4,648 4,451
4,648 4,451
======== ======================= ============= =============
31 December 31 December
2022 2022
Holding Investment in management Total cost Fair value
shares
US$'000 US$'000
10 The Argo Fund Ltd - -
- -
==================================== ============== ==============
Holding Investment in ordinary Total cost Fair value
shares
US$'000 US$'000
13,920 The Argo Fund Ltd* 3,824 4,387
3,824 4,387
======== ======================= ============= =============
*Classified as current in the consolidated statement of
Financial Position
9. TRADE AND OTHER RECEIVABLES
At 30 June At 31 December
2023 2022
US$ '000 US$ '000
Trade receivables - Gross 2,500 2,255
Less: provision for impairment
of trade receivables (2,358) (1,980)
-------------------------------- ------------- -----------------
Trade receivables - Net 142 275
Other receivables 34 41
Prepayments and accrued income 133 97
================================ ============= =================
309 413
================================ ============= =================
The Directors consider that the carrying amount of trade and
other receivables approximates their fair value. All trade
receivable balances are recoverable within one year from the
reporting date except as disclosed below.
The movement in the Group's provision for impairment of trade
and loan receivables is as follow:
At 30 June At 31 December
2023 2022
US$ '000 US$ '000
As at 1 January 14,019 14,252
Bad debt recovered - (125)
Charged during the period 368 636
Foreign exchange movement 209 (744)
=========================== ============= =================
Closing balance 14,596 14,019
=========================== ============= =================
10. LOANS AND ADVANCES RECEIVABLE
At 30 June At 31 December
2023 2022
US$'000 US$'000
Deposits on leased premises - current 9 -
Deposits on leased premises - non-current
(see below) 89 96
9
Other loans and advances receivable
- non-current (note 14) 14,058 13,320
============================================ ========= ==========================
14,156 13,416
============================================ ========= ==========================
The deposits on leased premises relate to the Group's offices in
London and Romania.
The Group also has a balance receivable for $12.2 million
(EUR11.2 million) from Argo Real Estate Limited Partnership that
was assigned from Argo Real Estate Opportunities Fund Limited
during 2021. The carrying value of this balance is $nil.
11. SHARE CAPITAL
The Company's authorised share capital is unlimited with a
nominal value of US$0.01.
30 June 30 June 31 December 31 December
2023 2023 2022 2022
No. US$'000 No. US$'000
Issued and fully paid
Ordinary shares of
US$0.01 each 38,959,986 390 38,959,986 390
======================= ============= ========== ============= ============
38,959,986 390 38,959,986 390
======================= ============= ========== ============= ============
The Directors did not recommend the payment of a final dividend
for the year ended 31 December 2022 and do not recommend an interim
dividend in respect of the current period.
12. RECONCILIATION OF NET CASH INFLOW/(OUTFLOW) FROM OPERATING
ACTIVITIES TO PROFIT/(LOSS) ON ORDINARY ACTIVITIES BEFORE
TAXATION
Six months Six months
ended ended
30 June 30 June
2023 2022
US$'000 US$'000
Profit/(loss) on ordinary activities
before taxation 121 (3,547)
Interest income (496) (499)
Depreciation on fixtures, fittings
and equipment 2 3
Depreciation on right of use asset 46 68
Realised and unrealised (profit)/loss
on investments (308) 2,507
Net foreign exchange loss/(profit) 9 (9)
Increase/(decrease) in payables 136 (49)
Decrease in receivables, loans and
advances 103 1,194
Corporation tax paid - -
Net cash outflow from operating
activities (387) (332)
======================================= ============= =============
13. FAIR VALUE HIERARCY
The table below analyses financial instruments measured at fair
value at the end of the reporting period by the level of the fair
value hierarchy (note 2b).
At 30 June 2023
Level 1 Level 2 Level Total
3
US$ '000 US$ '000 US$ '000 US$ '000
Financial assets
at fair value through
profit or loss - 4,451 - 4,451
======================== ========== ========= ========= =========
At 31 December 2022
Level 1 Level 2 Level Total
3
US$ '000 US$ '000 US$ '000 US$ '000
Financial assets
at fair value through
profit or loss - 4,387 - 4,387
======================== ========== ========= ========= =========
14. RELATED PARTY TRANSACTIONS
All of the Group revenues derive from The Argo Fund in which two
of the Company's directors, Kyriakos Rialas and Kenneth Watterson,
have influence through directorships and the provision of
investment management services.
At the reporting date the Company holds investments in The Argo
Fund Limited. These investments are reflected in the accounts at
fair value of US$4.5 million (31 December 2022: $4.4 million).
At the period end, the Group was owed $14.6 million (note 10) by
Novi Biznes Poglyady LLC, an entity that is 100% ultimately owned
by Andreas Rialas. The adjusted IFRS 9 valuation of the loan after
providing for expected losses was US$14.1 million. This balance
relates to a loan that was originally made to ARE LP in February
2020 that was lent onwards to Novi Biznes Poglyady LLC for the
refinancing of Riviera Shopping City in Odessa, Ukraine. During the
period, the original back to back loans were replaced by a direct
loan from Argo Group Limited to Novi Biznes Poglyady LLC.
The Group is also owed US$12.2 million (EUR11.2 million) (31
December 2022: US$12.0 million (EUR11.2 million)) by ARE LP, which
were previously owed by the now liquidated Argo Real Estate
Opportunities Fund Limited. These balances are carried at US$ nil
(31 December 2020: US$ nil) in the financial statements.
15. TRADE AND OTHER PAYABLES
At 30 June At 31 December
2023 2022
US$ '000 US$ '000
Trade creditors 72 26
Other creditors and accruals 590 471
=============================== =========== ===============
Total current trade and other
payables 662 497
=============================== =========== ===============
Trade creditors are normally settled on 30-day terms.
At 30 June At 31 December
2023 2022
US$ '000 US$ '000
Other creditors and accruals 382 411
=================================== =========== ===============
Total non-current trade and other
payables 382 411
=================================== =========== ===============
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END
IR KZGMRNGNGFZG
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August 10, 2023 04:00 ET (08:00 GMT)
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