TIDMMCC
RNS Number : 9711C
Monchhichi plc
25 January 2018
For Immediate Release 25 January 2018
Monchhichi Plc ("Monchhichi" or the "Company")
Interim Results for the six months ended 30 September 2017
Proposed Material Shareholding Increase in Sentiance N.V
and
Cancellation from AIM
Interim Results for the six months ended 30 September 2017
Monchhichi today announces its unaudited interim results for the
six months ended 30 September 2017. During the Period, the Company
made encouraging progress with the first crucial steps of
implementing its bespoke investment policy to make a series of
cohesive and meaningful acquisitions with clear industry validation
and disruptive growth trajectory in the Technology, Media and
Internet sectors.
Proposed Material Shareholding Increase in Sentiance N.V.
("Sentiance") and Cancellation from AIM
The Board is pleased to announce that alongside the closing of
the primary EUR10.0 million equity investment in Sentiance as
initially announced on 14 September 2017, it is currently in final
negotiations to materially increase Monchhichi's initial 14.2%
shareholding in Sentiance ("Additional Acquisition"). In order to
fund the Additional Acquisition, Monchhichi is presently in the
process of placing new ordinary shares in Monchhichi with
international investors at a price of 50p per share. Further
information will be communicated to shareholders as soon as
practical regarding the Additional Acquisition.
The Company's shares were suspended from trading on AIM on 28
July 2017 as the initial investment would have constituted a
Reverse Take-over pursuant to AIM Rule 14. Under AIM Rule 41, the
Company's admission to AIM will be cancelled at 7.00 a.m. on 29
January 2018, having been suspended for six months.
The Company still intends to seek admission to the Standard
Segment of the Official List and to trading on the Main Market and
further details will be communicated via the Company's website
after the date of cancellation from AIM.
Market Abuse Regulation
The information contained within this announcement is deemed to
constitute inside information as stipulated under the Market Abuse
Regulations (EU) No. 596/2014. Upon the publication of this
announcement, this inside information is now considered to be in
the public domain. This announcement was approved for release by
Simon Fry, Executive Chairman of the Company.
For further information:
Buchanan (Financial communications)
Richard Oldworth / Henry Harrison-Topham Tel: +44 (0)20
/ 7466 5000
Catriona Flint www.buchanan.uk.com
monchhichi@buchanan.uk.com
Enquiries:
Panmure Gordon (Nominated Adviser Tel: +44 (0)20
and Broker) 7886 2500
Dominic Morley / Alina Vaskina
Chairman's Statement
During the first six months of our 2017/18 financial period we
made encouraging progress with the first crucial steps of
implementing our bespoke investment and acquisition policy.
On 22 September 2017 we announced that we had reached agreement
on our first Conviction Investment ("CI") in Sentiance, a leading
and proven private technology player in the exciting field of
artificial intelligence ("AI"), machine learning and behavioural
data science. Sentiance is an outstanding unquoted technology
business operating in the areas of artificial intelligence ("AI"),
machine learning and signal processing to interpret real-time and
behavioural context from sensor data. Sentiance already has an
impressive roster of Tier I global clients in a variety of vertical
market segments, as well as tactical industry partnerships and
shareholders. Its proprietary technology and distinct data science
capabilities are presently being tested and deployed into various
mainstream mass market data ecosystems.
The Sentiance platform uses machine learning algorithms and deep
learning techniques to analyse Internet of Things ("IoT") sensor
data from mobile phones, wearables and IoT gateways. It thereafter
turns data into behavioural and contextual insights:
o Understanding and predicting how people go through their
everyday lives with full user consent;
o Clients use platform to enrich their first-party client data
with real-life behavioural data. This in turn will deliver
context-aware and highly personalised experiences;
o Powers a broad range of applications including world class
telematics and driver scoring, personalised health coaching
real-time client engagement as well as smart home products and
services;
o Some of the world's most innovative companies are adopting
their platform through Sentiance to help them make their users'
lives safer, smarter, healthier, more cost effective and even more
convenient.
Crucially and as part of our conviction thesis I am happy to
inform shareholders that:
1. Sentiance is already benefiting from our international network and behind the scenes support;
2. Sentiance is operating in the sweet-spot of data analytics,
an area that we believe in years to come is going to be crucial for
product and service differentiation, improved consumer engagement
and response, sustainable higher conversion and retention rates
leading to materially better returns. The Company is confident that
Sentiance with the right support, conviction and of course a bit of
luck, will emerge and be known by 2020 as one of the global market
leaders in its field;
3. In the future, we can provide swift liquidity options to
Sentiance investors without this leading to management
distractions;
4. For more information please visit www.sentiance.com and do
sign up for their regular news broadcasts.
I am delighted that we announced today that, prior to formal
admission to the Standard List of the Main Market, we plan to
materially increase our initial 14.2% shareholding in Sentiance.
This is not only a reflection of our complete confidence in
Sentiance, it is also validated by our growing number of high
quality long term value focused international investors who want us
to act decisively with their full support. Further details will be
provided in the prospectus which we anticipate will be sent to
shareholders during February 2018.
Organisation Development
One of our internal objectives was to attract the right calibre
of people to successfully implement and execute our ambitious
plans. As part of this we announced on 10 November 2017 that three
additional Board appointments will become effective upon completion
of the upcoming General Meeting:
Henry Gordon (44) as Executive Director and Chief Operating
Officer. Henry has 20 years of equity markets experience with a
deep understanding of capital raising and management in both the
public and private arena and previously worked at Goldman Sachs in
Australia and Credit Suisse in London before returning to Asia as
CEO of BTIG in Singapore. Henry was most recently MD Equity Sales
and Trading at Macquarie Bank Hong Kong.
Henry joined Monchhichi in a fulltime capacity in December 2017
and his instant contribution, terrific energy and total dedication
combined with a huge dose of positive curiosity to learn and
personally deliver 24/7 bodes well for his future contribution.
Johnny Chan (58) as Non-Executive Director. Johnny has 30 years
of extensive Asia based experience in venture capital and equity
capital markets combined with major senior public service positions
in education and technology across the region. His current roles
include President and Executive Director of HK Venture Capital
& Private Equity Association and Non-Executive Director of CNQC
International Holdings.
Gerald Rossi (67) as Senior Non-Executive Director. Jerry has
over 40 years of executive experience in the TMT sector. His
initial experience included various posts with NYNEX (Verizon) in
the US and abroad followed by his appointment as CEO of PT
Excelcomindo Pratama ("XL"), one of the largest South East Asia
mobile network operators. He held this position until the company
was sold to Telekom Malaysia in January 2005.
I very much look forward to be working closely with my new
colleagues during 2018 and beyond.
As we recently announced, this financial period will be
shortened to 31 December 2017 and thus contain only nine months of
statutory accounts. We anticipate the audited accounts being
published by the end of February 2018 and our AGM taking place
during the second half of March 2018.
Conclusion
I am pleased with the considerable progress we have been able to
make in a very short period of time. Monchhichi is now a real
organisation with proper long-term growth oriented shareholders and
more than equal odds to deliver progressively positive results for
its stakeholders. We believe that our Sentiance investment will
prove to be an outstanding gem and thus a fitting starting point to
what promises to be an intensive and ultimately transformative
period ahead.
Simon Fry
Executive Chairman
25 January 2018
6 months 6 months
ended ended
30 September 30 September
2017 2016
Note Unaudited Unaudited
---------------------------------- ----- -------------- --------------
GBP GBP
Revenue 100,000 -
Expenses
General and administrative
expenses (571,397) (207,578)
Exceptional items 4 (468,406) -
Loss from Operations (939,803) (207,578)
Loss for the period before
taxation (939,803) (207,578)
Taxation - -
---------------------------------- ----- -------------- --------------
Loss for the period attributable
to equity holders (939,803) (207,578)
Other comprehensive income - -
---------------------------------- ----- -------------- --------------
Total comprehensive loss
for the period (939,803) (207,578)
================================== ===== ============== ==============
Loss per Ordinary share
Basic - continuing and
total operations (0.02) (0.01)
Diluted - continuing and
total operations (0.02) (0.01)
Headline loss per Ordinary
share
Basic - pre exceptional
items (0.01) (0.01)
Diluted - pre exceptional
items (0.01) (0.01)
================================== ===== ============== ==============
As at As at As at
30 September 30 September 31 March
2017 2016 2017
Note Unaudited Unaudited Audited
----------------------------------- ----- -------------- -------------- ----------
GBP GBP GBP
Non-current assets
Available for sale
financial assets 5 600,000 300,000 600,000
----------------------------------- ----- -------------- -------------- ----------
600,000 300,000 600,000
----------------------------------- ----- -------------- -------------- ----------
Current assets
Cash and cash equivalents 3,235,788 1,073,389 1,237,716
Trade and other
receivables 68,042 20,359 49,339
----------------------------------- ----- -------------- -------------- ----------
Total current assets 3,303,830 1,093,748 1,287,055
----------------------------------- ----- -------------- -------------- ----------
TOTAL ASSETS 3,903,830 1,393,748 1,887,055
=================================== ===== ============== ============== ==========
LIABILITIES AND
EQUITY
Current liabilities
Trade and other
payables 102,859 254,916 138,208
----------------------------------- ----- -------------- -------------- ----------
Total liabilities 102,859 254,916 138,208
----------------------------------- ----- -------------- -------------- ----------
Equity
Share capital 6 45,007 590,028 42,452
Shares to be issued 1,992,427 - -
Share premium 996,945 4,510,939 -
Warrant reserve - 20,122 -
Accumulated surplus/(deficit) 766,592 (3,982,257) 1,706,395
----------------------------------- ----- -------------- -------------- ----------
Total equity 3,800,971 1,138,832 1,748,847
----------------------------------- ----- -------------- -------------- ----------
TOTAL EQUITY AND
LIABILITIES 3,903,830 1,393,748 1,887,055
=================================== ===== ============== ============== ==========
Approved by the Board on 25 January 2018
F.W. Simonsen
Finance Director
Company registration 07951073
6 months 6 months
ended ended
30 September 30 September
2017 2016
Unaudited Unaudited
------------------------------------ -------------- --------------
GBP GBP
Cash flow from operating
activities
Loss for the period before
tax (939,803) (207,578)
Adjustments for:
Shares issued for services
rendered 492,000 -
Warrants issued for consulting
services - 3,000
(Increase)/ decrease in
trade and other receivables (18,703) 411,750
(Decrease) in trade and
other payables (35,349) (11,194)
Cash (used in)/ generated
by operations (501,855) 195,978
Cash flow from investing
activities
Proceeds on allotment of
shares 1,992,427 284,713
Issue of shares 507,500 -
Net cash generated from investing
activities 2,499,927 284,713
------------------------------------ -------------- --------------
Increase in cash and cash
equivalents 1,998,072 480,691
Cash and cash equivalents
at the beginning of the period 1,237,716 592,698
------------------------------------ -------------- --------------
Cash and cash equivalents
at the end of the period 3,235,788 1,073,389
==================================== ============== ==============
Shares Warrant Retained Total
Share Share to be reserve earnings
capital premium issued
------------------------ --------- ---------- -------- --------- ------------ ----------
GBP GBP GBP GBP GBP GBP
As at 31
March 2016
(Audited) 577,928 4,255,448 - - (3,774,679) 1,058,697
Shares issued
on
private
placement 12,100 273,278 - 17,122 - 302,500
Warrants
issued for
consulting
services - - - 3,000 - 3,000
Share issue
costs - (17,787) - - - (17,787)
Total comprehensive
loss for
the period - - - - (207,578) (207,578)
As at 30
September
2016 (Unaudited) 590,028 4,510,939 - 20,122 (3,982,257) 1,138,832
======================== ========= ========== ======== ========= ============ ==========
Shares Warrant Retained Total
Share Share to be reserve earnings
capital premium issued
------------------------ --------- --------- ---------- --------- ---------- ----------
GBP GBP GBP GBP GBP GBP
As at 31
March 2017
(Audited) 42,452 - - - 1,706,395 1,748,847
Shares issued
on
private
placement 1,450 506,050 - - - 507,500
Shares issued
in lieu
of fees,
expenses
and financial
commitments 1,105 490,895 - - - 492,000
Shares to
be issued
on private
placement - - 1,992,427 - - 1,992,427
Total comprehensive
loss for
the period - - - - (939,803) (939,803)
As at 30
September
2017 (Unaudited) 45,007 996,945 1,992,427 - 766,592 3,800,971
======================== ========= ========= ========== ========= ========== ==========
1. BASIS OF PRESENTATION
Basis of presentation and statement of compliance
These interim financial statements have been prepared in
accordance with IAS 34 Interim Financial Reporting. They do not
include all the information required for a complete set of IFRS
financial statements. However, selected explanatory notes are
included to explain events and transactions that are significant to
an understanding of the changes in the Group's financial position
and performance since the last annual consolidated financial
statements as at and for the year ended 31 March 2017. These
interim financial statements were authorised for issue by the
Company's Board of Directors on 25 January 2018.
Basis of consolidation
The Group financial statements include the financial statements
of the Company and its subsidiary undertaking Mercom Capital Canada
Inc., a company incorporated in Canada. The results of subsidiary
undertakings sold or acquired are included in the Consolidated
Statement of Comprehensive Income up to, or from the date control
passes. Intra group sales and profits are eliminated fully on
consolidation. This subsidiary is currently in the process of being
wound up by the Directors.
Functional currency
The presentational and functional currency of the Group and
Company is U.K Sterling.
Significant accounting estimates and judgments
The preparation of these financial statements requires
management to make judgments and estimates that affect the reported
amounts of assets and liabilities at the date of the financial
statements and reported amounts of expenses during the reporting
period. Actual outcomes could differ from these judgments and
estimates. The financial statements include judgments and estimates
which, by their nature, are uncertain. The impacts of such
judgments and estimates are pervasive throughout the financial
statements, and may require accounting adjustments based on future
occurrences. Revisions to accounting estimates are recognised in
the period in which the estimate is revised and the revision
affects both current and future periods.
Significant assumptions about the future and other sources of
judgments and estimates that management has made at the statement
of financial position date, that could result in a material
adjustment to the carrying amounts of assets and liabilities, in
the event that actual results differ from assumptions made, relate
to, but are not limited to, the following:
-- The accounting treatment of the available for sale financial assets;
-- The valuation of available for sale financial assets; and
-- The judgment that significant influence is not exercised by the Group over its investments.
Going concern
These financial statements have been prepared in accordance with
International Financial Reporting Standards ("IFRS") applicable to
a going concern, which assume that the Company will be able to
realise its assets and discharge its liabilities in the normal
course of operations. The Company has no current source of
recurring operating revenues and its capacity to operate as a going
concern in the near-term will likely depend on its ability to
continue raising equity or debt financing. There can be no
assurance that the Company will be able to continue to raise funds
in which case the Company may be unable to meet its obligations.
Should the Company be unable to realise on its assets and discharge
its liabilities in the normal course of business, the net
realisable value of its assets may be materially less than the
amounts recorded in the Consolidated Statement of Financial
Position. The financial statements do not include adjustments to
amounts and classifications of assets and liabilities that might be
necessary should the Company be unable to continue operations.
2. SIGNIFICANT ACCOUNTING POLICIES
The accounting policies applied in these interim financial
statements are the same as those applied in the Group's
consolidated financial statements as at and for the year ended 31
March 2017.
3. CAPITAL AND FINANCIAL RISK MANAGEMENT
The capital of the Group consists of shareholders' equity. The
Group's objectives when managing capital are to safeguard the
Group's ability to continue as a going concern and to maintain
optimal returns to shareholders and benefits for other
stakeholders.
The Group manages its capital structure and makes adjustments to
it in light of changes in economic conditions and the risk
characteristics of the underlying assets. To maintain or adjust its
capital structure, the Group may attempt to issue new shares or
debt, dispose of assets, or adjust the amount of cash and cash
equivalents.
Management reviews its capital management approach on an ongoing
basis and believes that this approach, given the relative size of
the Group, is reasonable. There were no changes in the Group's
approach to capital management during the period ended 30 September
2017. The Group is not subject to externally imposed capital
requirements.
Credit risk
All the Group's cash and cash equivalents are held with
well-known and established financial institutions. As such,
management considers credit risk related to these financial assets
to be minimal. The Group's maximum credit risk exposure is limited
to the carrying value of its cash and subscriptions receivable.
Cash and cash equivalents at the period end include GBP2,411,394
which was held by the Company's legal advisors.
Commodity price risk
The Group is currently in its development stage and as such
exposure to fluctuations in commodity prices is not actively
managed.
Interest rate risk
Interest rate risk is the risk that future cash flows will
fluctuate as a result of changes in market interest rates. The
Group does not have a material exposure to this risk as there are
no outstanding debt facilities.
Liquidity risk
Liquidity risk is the risk that the Group will not be able to
meet its financial obligations as they come due. The Group ensures,
as far as possible, that it will have sufficient liquidity to meet
its liabilities when due, without incurring unacceptable losses or
harm to the Group's reputation.
The Group utilises authorisation for expenditures to further
manage capital expenditures and attempts to match its payment cycle
with available cash resources.
Foreign currency risk
The Group has limited exposure to foreign currency fluctuations
on its cash which is denominated in U.K. Sterling.
4. EXCEPTIONAL ITEMS
6 months 6 months
ended ended
30 September 30 September
2017 2016
Unaudited Unaudited
-------------------------------- -------------- --------------
GBP GBP
Professional costs re:
Investment in Sentiance,
capital raising and intended
move to the Standard UK
list of the Main Market 400,000 -
Provision for potential
VAT repayment relating
to period prior to appointment
of new Board 57,218 -
Other legal and professional
fees 11,188 -
468,406 -
================================ ============== ==============
5. INVESTMENTS
a) Available for sale financial assets
Cost GBP
At 1 April 2017 1,368,632
Additions -
------------------- ----------
30 September 2017 1,368,632
=================== ==========
Impairment GBP
At 1 April 2017 768,632
Impairment in period -
---------------------- --------
At 30 September 2017 768,632
====================== ========
Net book value GBP
At 1 April 2017 600,000
At 30 September 2017 600,000
====================== ========
The Company has agreed to dispose of the investments in Viet
Energy Ltd and MOWISAT Mexico SAPI for a total cash consideration
of GBP600,000. The initial GBP100,000 of the consideration was
received during the period, is non refundable and has therefore
been recognised as income in the period.
b) Investment in subsidiary undertaking
The Company has a 100% shareholding in Mercom Oil Sands Canada
Inc, a dormant company incorporated in Canada which is in the
process of being wound up.
6. SHARE CAPITAL
a) Shares authorised
On 16 July 2014 the Company consolidated its share capital so
that every 50 Ordinary shares of GBP0.001 in the issued share
capital of the Company was consolidated into one Ordinary share of
GBP0.05 (New Ordinary share). Each New Ordinary share would have
the same rights and would be subject to the same restrictions as an
Ordinary share. Following the consolidation, the New Ordinary
shares were sub divided into one Ordinary share of GBP0.001 and one
Deferred share of GBP0.049.
On 24 January 2017 the Company purchased and cancelled the
11,238,797 Deferred shares.
On 1 March 2017 the Company cancelled the capital redemption
reserve and share premium account by Special Resolution, as
confirmed by an Order of the High Court of Justice, Chancery
Division.
b) Ordinary shares issued
Called up, allotted and fully paid:
30 September 31 March
2017 2017
GBP GBP
45,007,063 (31 March 2017:
42,452,063) Ordinary shares
of GBP0.001 45,007 42,452
============= =========
During the period 1,450,000 Ordinary shares were issued at 35p
per share raising GBP507,500.
On 8 June 2017, 1,000,000 Ordinary shares were issued at 45p in
respect of GBP450,000 of outstanding liabilities and financial
commitments. On the same date 60,000 Ordinary shares were issued to
the Company's former Company Secretary and 45,000 Ordinary shares
in aggregate were issued to the Company's Directors at 40p per
share in respect of their remuneration for the quarter up to 31
March 2017.
On 22 September 2017, it was announced that adjusted terms had
been agreed on the Investment Warrants originally issued on 8 June
2017 which would result in the issue of 25,333,333 shares at 37.5p
per share to raise GBP9.5m. At the period end GBP1,992,427 of cash
had been received from subscribers in advance of issuing the
underlying shares and this amount has been shown as a "shares to be
issued" reserve at 30 September 2017.
c) Share options
On 31 December 2016 the Board adopted the Directors and Senior
Management Option Scheme. The initial exercise price under the
Scheme was set at 35p per share, representing a premium of 19.7% to
the closing mid market price of 29.25p per share on 30 December
2016. There was a subsequent grant made on 29 March 2017 with an
exercise price under the Scheme at 80p per share, representing a
premium on 139% to the closing mid market price of 33.5p per share
on 28 March 2017.
Number of options
granted
31 Dec 29 March
2016 2017
Non-executive 2,000,000 -
JP Tranié Director
F Simonsen Finance Director 2,000,000 -
S Fry Chairman - 2,000,000
The options granted on 31 December 2016 and 29 March 2017 are
exercisable at 35p per share and 80p per share respectively. The
options of S. Fry and F. Simonsen vest over a three year period
with 40% at the end of the first year, a further 30% at the end of
the second year and the final 30% at the end of the third year. In
the case of JP Tranié's options 1,250,000 shares vested on 30
September 2017 with 375,000 shares vesting on 31 March 2019 and a
further 375,000 on 31 March 2020. The blended average price per
outstanding option is 55.3p per share.
The maximum number of options that can be granted under this
scheme is set at 10 million. It is the stated objective of the new
Board that their interests will be strongly aligned with
shareholders, being well rewarded only in the event of significant
shareholder value creation in the medium to long term.
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR PGUUAGUPRGAA
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