TIDMGUN
RNS Number : 9992K
Gunsynd PLC
27 April 2020
Gunsynd plc
("Gunsynd", or "the Company")
Interim Results for the six months ended 31 January 2020
Chairman's Statement
I am pleased to report the interim results for the six months
ended 31 January 2020.
Review of Investments
Human Brands Inc. ("HB")
Human Brands is a private company which owns, licenses, and
markets a portfolio of liquor brands. Its two key products are an
aged tequila (Copa Imperial Tequila) and a Japanese Whiskey (Shinju
Whiskey). On 27 January 2020, the Company announced that it had
rolled up its existing investments in Human Brands into a new
GBP378,575 convertible loan note.
A number of distribution deals have recently been signed for
Shinju, extending its distribution to include Florida, California
and New Jersey, in addition to Maryland/DC, Massachusetts and New
York.
Human Brands has entered into conditional agreements with the
owners of the Santo Coyote restaurant in Guadalajara to develop two
new bar/restaurants in conjunction with Santo Coyote management. In
addition, Human Brands has conditionally taken a minority stake in
a new bar (Santo Cantina), within the Santa Coyote restaurant, the
consideration for which will be settled in a cash and shares. Human
Brands' Armero tequila brand will be heavily promoted on the menu
at these locations and Shinju will also be available. These
agreements are on hold for now due to the COVID-19 situation in
Mexico.
Whilst numerous states in the US have gone into lockdown this
looks like ending sooner rather than later. The lockdown has
impacted Human Brands particularly with respect to its bar in
Washington DC which has had to shut temporarily.
As announced on 10 December 2019, Human Brands intends to
re-domicile its business from the US to the UK and change its name
to Rogue Baron Ltd and then raise further funds. This process is
still ongoing and has been impacted by the effects of COVID-19 on
confidence and markets.
United Oil and Gas Plc ("UOG")
UOG is an independent oil & gas company established in 2015
by a former Tullow Oil team. Its strategy is to acquire assets
where the management team's experience can drive near-term activity
and unlock previously untapped value.
In September 2019, UOG was awarded four blocks in a North Sea
licensing round which follows on from UOG signing a non-binding
Heads of Terms on an agreement to sell North Sea blocks 15/18d and
15/19b to Anasuria Hibiscus UK Limited for a headline consideration
of up to US$5 million.
Prior to that, UOG announced a c onditional acquisition by UOG
of Rockhopper Egypt Pty Ltd ("Rockhopper Egypt") for US$16
million.
Following the announcement on 20 December 2019, issued pursuant
to media reports in Egypt, ASH-2, which was drilled to a total
depth of 4,030m in the Alem El Buieb (AEB) Formation, has been
completed to allow selective production from both an upper and
lower reservoir interval. The upper and lower intervals were tested
separately at maximum gross rates of 7,027 and 3,851 boepd
respectively.
ASH-2 came on stream on 2 January 2020 and has been consistently
producing at over 3,000 boepd (660 boepd net to Rockhopper's 22%
interest) on a 32/64" choke. The well will continue to be monitored
over the coming months, and during this period, the interpretation
of the test data and the longer-term planning for the ASH
field-development will continue with the joint venture partners and
Egyptian General Petroleum Corporation ('EGPC'). They are currently
drilling the first well in the 2020 infill programme (El Salmiya 5)
with an update due on this shortly.
Since ASH-2 came on stream, gross production from the Abu Sennan
licence has averaged c. 8,000 boepd, which equates to c. 1,760
boepd net to Rockhopper's 22% interest. On April 2 it was announced
that gross production in Egypt was 8,400 boepd (1,850 net to
UOG)
20% of United's net production is gas which is sold under a
fixed price contract that is relatively insensitive to oil-price
changes.
In response to COVID-19, UOG has deferred Italian capex, reduced
its Egyptian infill campaign from 4 to 2 wells, cut admin
expenditure and looked at divestment plans for selected non-core
assets.
Gunsynd currently holds 1.93 million shares in UOG which is a
holding of approximately 0.3%
Sunshine Minerals Limited ("Sunshine")
The Company has an 18.2% interest in Sunshine Minerals, a
company with nickel interests in the Solomon Islands.
On 2 December 2019, Sunshine announced that an ASX listed
company, Malachite Resources ("Malachite"), had entered into a
conditional share subscription agreement with Sunshine to acquire a
15% stake. The Company understands that Malachite continues to
undertake due diligence on the transaction including site visits
and analysis of the relevant drilling data.
On 20 December 2019, the Company announced a dispute between
Axiom Mining Limited ("Axiom") and the Mines and Minerals Board of
the Solomon Islands ("MMERE") relating to certain of Sunshine's
assets was still ongoing. The Company notes that the Solomon
Islands government purportedly cancelled Axiom's foreign investor
certificates for alleged failure to complete surveys and hold a
provincial business licence.
Gunsynd's interest in Sunshine Minerals Limited is likely to be
diluted by certain consultants' fees owed being paid in equity, and
the Malachite share subscription if it were to proceed. Malachite
Resources has now held its AGM which was needed in order to allow
the conversion of certain debts to equity.
Kolosori Nickel Limited ("Kolosori")
On 4 December 2019, the Company announced it had purchased a
7.67% stake in Kolosori, which owns 80% of the nickel prospecting
licence PL05/19 over the Kolosori Prospect in the Solomon Islands,
for consideration of GBP45,000. Gunsynd also had an option to
acquire a larger stake but did not take this up. Kolosori has been
in talks with a party regarding the financing of a work programme
but no binding agreement has been reached.
Oyster Oil and Gas Limited ("Oyster") now ZTR Acquisition
Corporation ("ZTR")
On 29 November 2019, the Company announced it had entered into a
binding term sheet with Sajawin Pty Ltd ("Sajawin") to
conditionally sell the Oyster Madagascar licence for circa
GBP260,000 subject to various conditions.
The Production Sharing Contract for Blocks 1-4 in the Republic
of Djibouti are not included in the above transaction and will be
transferred to a party of Subco's choosing before completion of the
sale to Sajawin. Oyster remains in discussions with the Djibouti
government over these blocks and given the current circumstances
with respect to oil prices and the effect of COVID-19 on capital
markets it is possible that some or all of the blocks will be
relinquished.
Sajawin continues to undertake the necessary work to meet the
conditions precedent to conclude this deal.
As notified on 2 July 2019 Oyster has reached an "in principle"
agreement with the Government of Madagascar for a two-year
extension to the current exploration phase, however this has still
yet to be formally documented. As such the conditions precedent for
the deal have yet to be met, given this and the current oil price
Gunsynd is in discussions with Sajawin regarding extending the long
stop date on the transaction.
Brazil Tungsten Holdings Limited ("BTHL")
On 7 February 2020, the Company announced that it had been
notified by BTHL, a company in which it has a 6.18% interest, that
BTHL had very constrained working capital and that, in order to
continue with its operations, it would need to undertake a deep
discounted rights issue, which would lead to a significant dilution
in Gynsynd's shareholding or alternatively that BTHL would place
itself into administration which would reduce Gunsynd's interest to
nil. The rights issue was not taken up by shareholders and as a
result BTHL are in discussion with lawyers over the best way to
wind the company up. There will be likely to be no money
distributed to shareholders after liquidation.
The Company has since written down its investment in BTHL by
GBP400,000 to nil.
All of our investments are minority investments. Whilst we may
offer advice to management of investee companies, they can and
sometimes do ignore such advice. Similarly, private companies don't
have the disclosure requirements of public companies and are under
no obligation to keep us constantly updated. Decisions are
ultimately made by investee companies not by the Company.
Finance Review
The Company's loss for the period was GBP642,000 (31 January
2019: GBP248,000 loss). The increase in loss from last year is
attributable to the GBP400,000 impairment expense for the period in
relation to the Company's investment in BTHL. The market valuation
gain for "available for sale" assets was a loss of GBP13,000 (31
January 2019: GBP178,000 loss).
The Company had net assets at 31 January 2020 of GBP1,721,000 (
31 January 2019 : GBP2,175,000) including cash balances of
GBP225,000 ( 31 January 2019 : GBP543,000).
Outlook
The outbreak of the coronavirus and subsequent government
actions have had an extraordinarily negative economic impact which
has been reflected on global stock exchanges. The panic selling has
seen dramatic falls in share prices. However, in recent days there
seems to be a shift towards optimism as parts of Europe are talking
of partially ending their lockdowns. Hopefully this sentiment will
flow through to the markets. Historically alcohol has been regarded
as recession proof which gives us grounds for some confidence even
if the economy enters a prolonged recession which we obviously hope
it won't.
Over the past quarter the board of Gunsynd has been actively
conducting due diligence on a number of early stage exploration
opportunities in the Australian precious metals sector. With the
current gold price reaching record highs of 1,800 USD/oz ($2,800
AUD/oz equivalent) early stage exploration has a strong tail-wind
of risk capital willing to invest in in this sector. Due diligence
is ongoing and the board hopes to secure an attractive exposure in
this space in the short to medium term.
Gunsynd maintains a low fixed cost structure and with no large
General and Administration expenses and this will continue through
volatile and uncertain conditions across global markets.
The Board would like to take this opportunity to thank
shareholders for their continued support.
Hamish Harris
Chairman
This announcement contains inside information for the purposes
of Article 7 of EU Regulation 596/2014.
For further information, please contact:
Gunsynd plc:
Hamish Harris +44 (0) 20 7440 0640
Nominated Adviser / AQSE Corporate Adviser:
Cairn Financial Advisers LLP
James Caithie / Liam Murray +44 (0) 20 7213 0880
Joint Broker:
Peterhouse Corporate Finance
Lucy Williams +44 (0) 20 7469 0930
The interim results will be available electronically on the
Company's website: www.gunsynd.com .
Gunsynd plc
Interim statement of comprehensive income - unaudited
For the six months ended 31 January 2020
Unaudited Unaudited
Six months Six months Audited
ended ended Year ended
31 January 31 January 31 July
2020 2019 2019
GBP'000 GBP'000 GBP'000
Unrealised (loss) on available
for sale assets (13) (178) (224)
Realised Profit on available for
sale assets (2) 56 35
------------ ------------ ------------
(15) (122) (189)
Administrative and other costs (208) (139) (347)
Share of associate losses (34) - (6)
Impairment of financial investments (400) - (100)
Other income - - 50
Finance income 15 13 34
Loss before tax (642) (248) (558)
Taxation - - -
------------ ------------ ------------
Loss for the period (642) (248) (558)
------------ ------------ ------------
Loss for the period and total
comprehensive loss attributable
to equity shareholders (642) (248) (558)
------------ ------------ ------------
Other comprehensive income/(expenditure) - - -
for the period net of tax
Total comprehensive income/(expenditure)
for the period (642) (248) (558)
------------ ------------ ------------
Loss per ordinary share
Basic (0.010) (0.005) (0.011)
Diluted (0.010) (0.005) (0.011)
Gunsynd plc
Interim statement of financial position - unaudited
As at 31 January 2019
Unaudited Unaudited Audited
At 31 January At 31 January At 31 July
2020 2019 2019
GBP'000 GBP'000 GBP'000
ASSETS
Non-current assets
Available for sale investments 876 1,592 1,238
Investment in associate 315 - 350
--------------- --------------- ------------
Total non-current assets 1,191 1,592 1,588
--------------- --------------- ------------
Current assets
Trade and other receivables 372 207 333
Cash and cash equivalents 225 543 568
--------------- --------------- ------------
Total current assets 597 750 901
Total assets 1,788 2,342 2,489
--------------- --------------- ------------
LIABILITIES
Current liabilities
Trade and other payables (67) (167) (126)
--------------- --------------- ------------
Total current liabilities (67) (167) (126)
--------------- --------------- ------------
Total liabilities (67) (167) (126)
--------------- --------------- ------------
Net assets 1,721 2,175 2,363
--------------- --------------- ------------
EQUITY
Equity attributable to equity
holders of the company
Ordinary share capital 633 489 633
Deferred share capital 1,729 1,729 1,729
Share premium reserve 10,890 10,536 10,890
Share-based payments reserve 205 205 205
Retained earnings (11,736) (10,784) (11,094)
--------------- --------------- ------------
Total equity 1,721 2,175 2,363
--------------- --------------- ------------
Gunsynd plc
Interim statement of changes in equity - unaudited
For the six months ended 31 January 2019
Ordinary Deferred Share Share Retained Total
Share share Premium Based earnings
Capital capital Payment
Reserve
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Unaudited
At 1 August 2018 489 1,729 10,536 234 (10,565) 2,423
Loss for the six month period
ended 31 January 2018 - - - - (248) (248)
--------- --------- --------- --------- ---------- --------
Total comprehensive loss - - - - (248) (248)
Transactions with owners:
Share options lapsed - - - (29) 29 -
--------- --------- --------- --------- ---------- --------
At 31 January 2019 489 1,729 10,536 205 (10,784) 2,175
--------- --------- --------- --------- ---------- --------
Audited
At 1 August 2018 489 1,729 10,536 234 (10,565) 2,423
Loss for the year - - - - (558) (558)
--------- --------- --------- --------- ---------- --------
Total comprehensive loss - - - - (558) (558)
Transactions with owners:
Issue of share capital 144 - 393 - - 537
Share issue costs - - (39) - - (39)
Share options lapsed - - - (29) 29 -
At 31 July 2019 633 1,729 10,890 205 (11,094) 2,363
--------- --------- --------- --------- ---------- --------
Unaudited
At 1 August 2019
Loss for the six month period
ended 31 January 2019 - - - - (642) (642)
--------- --------- --------- --------- ---------- --------
Total comprehensive loss - - - - (642) (642)
At 31 January 2020 633 1,729 10,890 205 (11,736) 1,721
--------- --------- --------- --------- ---------- --------
Gunsynd plc
Interim statement of cash flows - unaudited
For the six months ended 31 January 2019
Unaudited Unaudited Audited
Six months ended Six months ended Year ended
31 January 2020 31 January 2019 31 July 2019
GBP'000 GBP'000 GBP'000
------------------ ------------------ --------------
Cash flows from operating activities
(Loss)/profit after tax (642) (248) (558)
Finance income net of finance costs (15) (13) (34)
Unrealised Revaluation of AFS assets 13 178 224
(Loss)/profit on sale of AFS Asset 3 (56) (35)
Share of associate loss 34 - 6
Impairment provision 400 - 100
Operating cash outflow before changes in working capital (207) (139) (295)
Movement in trade and other receivables (23) 89 79
Movement in trade and other payables (59) (141) (182)
Cash flow from operations (289) (191) (400)
Tax received - - -
------------------ ------------------ --------------
Net cash flows used in operating activities (289) (191) (400)
Cash flow from investing activities
Payments for investments in AFS assets (87) (100) (358)
Disposal proceeds from sale of AFS asset 48 497 600
Unsecured loans to investee company (15) - (109)
Net cash outflow from investing activities (54) 397 133
Cash flows from financing activities
Proceeds on issuing of ordinary shares - - 537
Cost of issue of ordinary shares - - (39)
------------------ ------------------ --------------
Net cash inflow from financing activities - - 498
Net (decrease)/increase in cash and cash equivalents (343) 206 231
Cash and cash equivalents at start of period 568 337 337
Cash and cash equivalents at end of period 225 543 568
------------------ ------------------ --------------
Notes to the interim report
For the six months ended 31 January 2019
1 Basis of preparation
As permitted IAS 34, 'Interim Financial Reporting' has not been
applied to these half-yearly results. The financial information of
the Company for the six months ended 31 January 2020 have been
prepared in accordance with the recognition and measurement
principles of International Financial Reporting Standards,
International Accounting Standards and Interpretations
(collectively "IFRS") issued by the International Accounting
Standards Board ("IASB") as adopted by the European Union ("adopted
IFRS") and are in accordance with IFRS as issued by the IASB. The
condensed interim financial information has been prepared using the
accounting policies which will be applied in the Company's
statutory financial statements for the year ending 31 July
2019.
The financial information shown in this publication is unaudited
and does not constitute statutory accounts as defined in Section
434 of the Companies Act 2006. The comparative figures for the
financial year ended 31 July 2019 have been derived from the
statutory accounts for 2019. The statutory accounts have been
delivered to the Registrar of Companies. The auditors have reported
on those accounts; their report was unqualified and did not contain
statements under the section 498(2) or 498(3) of the Companies Act
2006.
2 Loss per share
The calculation of the loss per share is based on the loss
attributable to ordinary shareholders divided by the weighted
average number of shares in issue during the period.
Unaudited Unaudited
Six months Six months Audited
ended ended Year ended
31 January 31 January 31 July
2020 2019 2019
GBP'000 GBP'000 GBP'000
Loss on ordinary activities after
tax (642) (248) (558)
Weighted average number of ordinary
shares for the purposes of basic
earnings/(loss) per share (millions) 6,334.3 4,882.9 5,082.7
Weighted average number of ordinary
shares for the purposes of diluted
earnings/(loss) per share (millions) 6,675.9 5,224.6 5,424.4
Basic (loss)/ earnings per share
(expressed in pence) (0.010) (0.005) (0.011)
Diluted (loss)/ earnings per share
(expressed in pence) (0.010) (0.005) (0.011)
However, due to losses incurred in the year there is no dilutive
effect from the potential exercise of the share options in
existence.
3 Events after the end of the reporting period
None noted.
4. Financial Information
The Board of Directors approved this interim report on 27 April
2020.
A copy of this report can be obtained from our website at
www.gunsynd.com
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 ZZGZDZNKGGZM
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