TIDMRC2
RNS Number : 7291I
Reconstruction Capital II Ltd
12 August 2019
12 August 2019
Reconstruction Capital II Limited (the "Company")
Interim Unaudited Financial Statements
for the six months ended 30 June 2019
Reconstruction Capital II Limited ("RC2", the "Company" or the
"Group"), a closed-end investment company incorporated in the
Cayman Islands admitted to trading on the AIM market of the London
Stock Exchange, today announces its results for the six months
ended 30 June 2019.
Copies of the company's interim financial statements will today
be posted to shareholders. The interim report is also available on
the Company's website http://www. reconstructioncapital2.com/.
Financial highlights
On 30 June 2019, Reconstruction Capital II Limited ("RC2") had a
total unaudited net asset value ("NAV") of EUR30.3m or EUR0.2224
per share, which represents a 0.62% fall since the beginning of the
year.
During the first half of the year, RC2 acquired 4,075,463 of its
Ordinary Shares of nominal value EUR0.01 for a total consideration
of EUR 0.65m. The shares were subsequently cancelled bringing the
total shares in issue to 136,256,913.
As at 30 June 2019, RC2 had cash and cash equivalents of approximately
EUR0.1m while its subsidiary, RC2 (Cyprus) Ltd, had cash and cash equivalents
of EUR 2.21m. As at 30 June 2018, RC2 had sundry liabilities of EUR
0.11m.
Operational highlights
Policolor generated consolidated operating revenues of EUR 30.1m
in the first half of 2019, down 9.2% year-on- year and 7.6% below
budget. After a strong first quarter, Policolor's coatings sales
weakened considerably in the second quarter, in part due to weak
demand but also due to the difficulties in continuing to supply its
full range of coatings prior to the opening of its new Bucharest
factory. Over the first half of 2019, the Group generated recurring
EBITDA (net of revenues and expenses allocated to the real estate
division) of EUR 0.8m, significantly below the budgeted EBITDA of
EUR 1.4m, mainly due to the lower coatings sales in the second
quarter. Meanwhile, the construction of Policolor's new Bucharest
factory and warehouse has progressed well over the quarter, with
construction works having been finalized by the end of July, one
month later than originally planned.
Mamaia Resort Hotel's operating revenues over the first semester
were EUR 0.7m, up 19.7% year-on-year but 4.7% below budget. The
Hotel, which is highly seasonal, makes most of its revenues over
the months of July and August. The re-decoration of the Hotel's
beach-facing "Junona" wing bedrooms and the renovation of the
kitchen, which started at the end of 2018, were finalized just
before the 1st May holiday which is also the official start of the
Romanian seaside's summer season. The six-month EBITDA loss of EUR
-0.4m was worse than the budgeted loss of EUR -0.2m, due to the
lower than expected revenues, but also higher salary expenses and
the cost of certain renovation related works which were not
initially budgeted.
Following the recruitment of a new CEO as part of its strategy
to re-direct its business towards B2B lending, whilst continuing
with pay day lending to the extent permitted by the more
restrictive prudential regulations introduced by the National Bank
of Romania, Telecredit started to finance SMEs in February, having
granted EUR 1.2m as factoring services and microloans over the
first half of 2019. The lending activity was further helped by the
official launch of Omnicredit, Telecredit's SME financing dedicated
online platform at the beginning of June. The book value of
Telecredit's SME-focussed portfolio was EUR0.7m at the end of June,
considerably better than the budgeted figure of EUR 0.5m.
Meanwhile, as expected due to the regulatory restrictions on pay
day loans which came into effect at the beginning of 2019, pay day
lending activity continued to fall, with the book value of the pay
day loan book down from EUR 0.4m at the end of March to EUR 0.2m at
the end of June. At the end of April, RC2 (Cyprus) Ltd, a
wholly-owned subsidiary of RC2, acquired 20% of Telecredit for EUR
185,000, thereby bringing its shareholding in Telecredit to 100%.
At the end of June, in order to support the expansion of
Telecredit's SME loan book, RC2 (Cyprus) Ltd made available to
Telecredit a EUR 1m financing line, none of which was drawn until
after the end of June.
For further information, please contact:
Reconstruction Capital II Limited
Cornelia Oancea / Anca Moraru
Tel: +40 21 316 76 80
Grant Thornton UK LLP
(Nominated Adviser)
Philip Secrett
Tel: +44 (0) 20 7383 5100
finnCap Limited
(Broker)
William Marle / Giles Rolls
Tel: +44 20 7220 0500
ADVISER'S REPORT
For the six months ended 30 June 2019
On 30 June 2019, Reconstruction Capital II Limited ("RC2") had a total
unaudited net asset value ("NAV") of
EUR30.3m or EUR0.2224 per share, which represents a 0.62% fall since
the beginning of the year.
During the first half of the year, RC2 acquired 4,075,463 of its Ordinary
Shares of nominal value EUR0.01 for a total consideration of EUR 0.65m.
The shares were subsequently cancelled bringing the total shares in
issue to 136,256,913.
Policolor generated consolidated operating revenues of EUR 30.1m in
the first half of 2019, down 9.2% year-on- year and 7.6% below budget.
After a strong first quarter, Policolor's coatings sales weakened
considerably in the second quarter, in part due to weak demand but
also due to the difficulties in continuing to supply its full range
of coatings prior to the opening of its new Bucharest factory. Over
the first half of 2019, the Group generated recurring EBITDA (net
of revenues and expenses allocated to the real estate division) of
EUR 0.8m, significantly below the budgeted EBITDA of EUR 1.4m, mainly
due to the lower coatings sales in the second quarter. Meanwhile,
the construction of Policolor's new Bucharest factory and warehouse
has progressed well over the quarter, with construction works having
been finalized by the end of July, one month later than originally
planned.
Mamaia Resort Hotel's operating revenues over the first semester were
EUR 0.7m, up 19.7% year-on-year but 4.7% below budget. The Hotel,
which is highly seasonal, makes most of its revenues over the months
of July and August. The re-decoration of the Hotel's beach-facing
"Junona" wing bedrooms and the renovation of the kitchen, which started
at the end of 2018, were finalized just before the 1st May holiday
which is also the official start of the Romanian seaside's summer
season. The six-month EBITDA loss of EUR -0.4m was worse than the
budgeted loss of EUR -0.2m, due to the lower than expected revenues,
but also higher salary expenses and the cost of certain renovation
related works which were not initially
budgeted.
Following the recruitment of a new CEO as part of its strategy to
re-direct its business towards B2B lending, whilst continuing with
pay day lending to the extent permitted by the more restrictive prudential
regulations introduced by the National Bank of Romania, Telecredit
started to finance SMEs in February, having granted EUR 1.2m as factoring
services and microloans over the first half of 2019. The lending activity
was further helped by the official launch of Omnicredit, Telecredit's
SME financing dedicated online platform at the beginning of June.
The book value of Telecredit's SME-focussed portfolio was EUR0.7m
at the end of June, considerably better than the budgeted figure of
EUR 0.5m. Meanwhile, as expected due to the regulatory restrictions
on pay day loans which came into effect at the beginning of 2019,
pay day lending activity continued to fall, with the book value of
the pay day loan book down from EUR 0.4m at the end of March to EUR
0.2m at the end of June. At the end of April, RC2 (Cyprus) Ltd, a
wholly-owned subsidiary of RC2, acquired 20% of Telecredit for EUR
185,000, thereby bringing its shareholding in Telecredit to 100%.
At the end of June, in order to support the expansion of Telecredit's
SME loan book, RC2 (Cyprus) Ltd made available to Telecredit a EUR
1m financing line, none of which was drawn until after the end of
June.
As at 30 June 2019, RC2 had cash and cash equivalents of approximately
EUR0.1m while its subsidiary, RC2 (Cyprus) Ltd, had cash and cash
equivalents of EUR 2.21m. As at 30 June 2018, RC2 had sundry liabilities
of
EUR 0.11m.
New Europe Capital SRL
STATEMENT OF COMPREHENSIVE INCOME For the six months ended 30 June 2019
30 June 30 June 31 December
2019 2018 2018
EUR EUR EUR
Unaudited Unaudited Audited
Investment Income
Fair value loss on financial
assets at
fair value through profit
or loss (2,162,241) (2,077,374) (7,436,971)
Recovery of previously
written off receivable - - 9,000
Interest income 2,151,033 2,153,054 4,341,794
Other income 255 10 10
--------------- --------------- ---------------
Net investment (loss)/gain (10,953) 75,690 (3,086,167)
--------------- --------------- ---------------
Expenses
Impairment on trade and
other - (126,000) -
receivables
Operating expenses (443,456) (534,322) (1,031,186)
Financial expenses - (721) (886)
--------------- --------------- ---------------
Total expenses (443,456) (661,043) (1,032,072)
--------------- --------------- ---------------
Loss for the period/year (454,409) (585,353) (4,118,239)
--------------- --------------- ---------------
Other comprehensive income - - -
--------------- --------------- ---------------
Total comprehensive income
for the period/year
attributable
to owners (454,409) (585,353) (4,118,239)
--------------- --------------- ---------------
Earnings Per Share
attributable
to the owners of the Company
Basic and diluted earnings
per share (0.0033) (0.0040) (0.0285)
STATEMENT OF FINANCIAL POSITION As at 30 June
2019
30 June 30 June 31 December
2019 2018 2018
EUR EUR EUR
Unaudited Unaudited Audited
ASSETS
Non-current assets
Financial assets at
fair
value through profit
or
loss 30,293,424 33,568,867 30,614,632
------------------ ------------------ -----------------
Total non-current
assets 30,293,424 33,568,867 30,614,632
------------------ ------------------ -----------------
Current assets
Trade and other
receivables 14,299 18,281 21,011
Cash and cash
equivalents 100,964 4,567,668 1,480,305
------------------ ------------------ -----------------
Total current assets 115,263 4,585,949 1,501,316
------------------ ------------------ -----------------
TOTAL ASSETS 30,408,687 38,154,816 32,115,948
------------------ ------------------ -----------------
LIABILITIES
Current liabilities
Trade and other
payables 109,949 2,451,315 710,726
------------------ ------------------ -----------------
TOTAL LIABILITIES 109,949 2,451,315 710,726
------------------ ------------------ -----------------
NET ASSETS 30,298,738 35,703,501 31,405,222
------------------ ------------------ -----------------
EQUITY ATTRIBUTABLE TO OWNERS
Share capital 1,362,569 1,449,460 1,403,324
Share premium 109,250,778 110,581,355 109,862,098
Accumulated deficit (80,314,609) (76,327,314) (79,860,200)
------------------ ------------------ -----------------
TOTAL EQUITY 30,298,738 35,703,501 31,405,222
------------------ ------------------ -----------------
Net Asset
Value per
share
Basic and
diluted net
asset
value per
share 0.2224 0.2463 0.2238
STATEMENT OF CHANGES IN EQUITY
For the six months ended 30 June 2019
Share capital Share premium Retained Equity component Total
(deficit)/ of loan
earnings notes
EUR EUR EUR EUR EUR
Balance at 1 January 2018 1,449,460 110,581,355 (75,741,961) - 36,288,854
Loss for the period - - (585,353) - (585,353)
Other comprehensive income - - - - -
---------------------------- ---------------------------- --------------------------- ----------------------------- ----------------------------
Total comprehensive income
for the period - - (585,353) - (585,353)
---------------------------- ---------------------------- --------------------------- ----------------------------- ----------------------------
Balance at 30 June 2018 1,449,460 110,581,355 (76,327,314) - 35,703,501
---------------------------- ---------------------------- --------------------------- ----------------------------- ----------------------------
Loss for the period - - (3,532,886) - (3,532,886)
Other comprehensive income - - - - -
---------------------------- ---------------------------- --------------------------- ----------------------------- ----------------------------
Total comprehensive income
for the period - - (3,532,886) - (3,532,886)
---------------------------- ---------------------------- --------------------------- ----------------------------- ----------------------------
Repurchase and cancellation
of own shares (46,136) (719,257) - - (765,393)
---------------------------- ---------------------------- --------------------------- ----------------------------- ----------------------------
Transactions with owners (46,136) (719,257) - - (765,393)
---------------------------- ---------------------------- --------------------------- ----------------------------- ----------------------------
Balance at 31 December 2018 1,403,324 109,862,098 (79,860,200) - 31,405,222
---------------------------- ---------------------------- --------------------------- ----------------------------- ----------------------------
Loss for the period - - (454,409) - (454,409)
Other comprehensive income - - - - -
---------------------------- ---------------------------- --------------------------- ----------------------------- ----------------------------
Total comprehensive income
for the period - - (454,409) - (454,409)
---------------------------- ---------------------------- --------------------------- ----------------------------- ----------------------------
Repurchase and cancellation
of own shares (40,755) (611,320) - - (652,075)
---------------------------- ---------------------------- --------------------------- ----------------------------- ----------------------------
Transactions with owners (40,755) (611,320) - - (652,075)
---------------------------- ---------------------------- --------------------------- ----------------------------- ----------------------------
Balance at 30 June 2019 1,362,569 109,250,778 (80,314,609) - 30,298,738
---------------------------- ---------------------------- --------------------------- ----------------------------- ----------------------------
CASH FLOW STATEMENT
For the six months ended 30 June 2019
30 June 30 June 31 December
2019 2018 2018
EUR EUR EUR
Unaudited Unaudited Audited
Cash flows from operating activities
Loss before taxation (454,409) (585,353) (4,118,239)
Adjustments for:
Fair value loss on financial
assets at fair value
through profit or loss 2,162,241 2,077,374 7,436,971
Impairment on trade and other
receivables - 126,000 -
Reversal of loan impairment - - (9,000)
Interest income (2,151,033) (2,153,054) (4,341,794)
Net (gain)/loss on foreign
exchange (255) 721 886
----------------- ----------------- -----------------
Net cash outflow before changes
in working capital (443,456) (534,312) (1,031,176)
Decrease/(increase) in trade
and other receivables 6,712 (7,842) 115,427
Increase/(decrease) in trade
and other payables 14,348 (83,686) (180,513)
Purchase of financial assets (133,602) (1,224,079) (3,433,045)
Disposals and repayments of
financial assets 310,000 - 9,000
----------------- ----------------- -----------------
Net cash used in operating
activities (245,998) (1,849,919) (4,520,307)
----------------- ----------------- -----------------
Cash flows from financing activities
Payments to purchase own shares (1,000,657) - (416,810)
Redemptions of B shares (132,941) (21,455) (21,455)
----------------- ----------------- -----------------
Net cash flow used in financing
activities (1,133,598) (21,455) (438,265)
----------------- ----------------- -----------------
Net decrease in cash and cash
equivalents before currency
adjustment (1,379,596) (1,871,374) (4,958,572)
Effects of exchange rate differences
on cash and cash equivalents 255 (721) (886)
----------------- ----------------- -----------------
Net decrease in cash and cash
equivalents after currency
adjustment (1,379,341) (1,872,095) (4,959,458)
Cash and cash equivalents at
the beginning of the period/year 1,480,305 6,439,763 6,439,763
----------------- ----------------- -----------------
Cash and cash equivalents at
the end of the period/year 100,964 4,567,668 1,480,305
----------------- ----------------- -----------------
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 GGUBURUPBGUP
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