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Interim Results For The 6 Months End 30 April 2017

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RNS Number : 0812M
Minoan Group PLC
26 July 2017
 

26 July 2017

 

Interim Results Announcement

 

Minoan Group Plc

(the "Group" or the "Company" or "Minoan")

announces its unaudited interim results for the 6 months ended 30 April 2017

 

HIGHLIGHTS

 

·      Group total transaction value up by circa 20% to £39,729,000 from £33,106,000

·      Travel and Leisure gross profit up by circa 14% to £4,052,000 from £3,544,000

·      Travel and Leisure profit at EBITDA level increased by circa 35% to £449,000 from £332,000

 

 Christopher Egleton, Minoan Chairman, said:

 

"Following the dismissal of the Appeals against the Presidential Decree granting Outline Planning Consent for its Project in Crete, and the continued increase in the profitability of its travel business, the Group is about to enter the most rewarding period in its history."

 

The Company's unaudited interim results for the 6 months ended 30 April 2017 can be viewed on Minoan's website, www.minoangroup.com, with effect from 26 July 2017.

 

For further information visit www.minoangroup.com or contact:

Minoan Group Plc

 

Christopher Egleton

christopher.egleton@minoangroup.com

Duncan Wilson

0141 226 2930

Bill Cole

020 8253 4305

 

 

WH Ireland Limited

020 7220 1666

Adrian Hadden/Alex Bond

 

 

 

Morgan Rossiter

020 3195 3240

Richard Morgan Evans/James Rossiter

 

 

 

 

The information contained within this announcement is deemed to constitute inside information as stipulated under the Market Abuse Regulation (EU) No. 596/2014. Upon the publication of this announcement, this inside information is now considered to be in the public domain.

 

 

 

 

 

 

Chairman's Statement    

 

Introduction

 

The Group is poised for what is likely to be the most rewarding period in its history. As indicated in my last Chairman's Statement the dismissal of the Appeals against the Presidential Decree ("PD") is a transformational event which will, finally, allow the Group to crystallise the significant value of the Itanos Gaia project in Crete (the "Project").

 

We now have an un-appealable PD which, in effect, gives Outline Planning Consent for what is probably the most significant foreign investment project in the tourism sector that has been approved by the Greek Government. It puts the Group in a strong position in terms of negotiating with potential partners and investors to ensure that shareholders receive the best value in any transaction.

 

In addition, I am pleased to report that the Group has enjoyed a strong period of trading in its Travel and Leisure business, with total transaction value up by circa 20%, gross profit up by circa 14% and profit at EBITDA level up by circa 35% - all compared with the same period last year.

 

Greece

With the dismissal of the Appeals against the PD, the Group is now in position to move towards the completion of a number of ongoing negotiations with potential partners and investors. It is also likely that, with the announcement of the dismissals, a number of previously silent observers will wish to become involved, as has already occurred.

 

The key partners in a Project of this nature are divided into two main sectors: operating partners such as hotel groups etc. and financial/investor partners. Although both are required, from a developer's point of view the key players at this stage are usually those investors who are themselves experienced in the tourism and leisure sector and, as you would expect, this is where we have been concentrating our efforts to date. Simultaneously, the next steps for the development and operation of the Project are continuing so as to enable it to progress as soon as possible.

 

Now that we have obtained Outline Planning Consent it is worth re-stating some of the key facts related to the Group's hotel and leisure Project and its site. The combination of the site itself and the Project is unique. With the Project's inherent sustainability, a build footprint of less than 0.5% and more than 90% of the landscape being left in its natural state, the Group intends to ensure that Itanos Gaia will be one of the "softest", most environmentally friendly major projects in Europe and a landmark for tourism in Greece.

 

The site comprises around 6,000 acres and is set on a peninsula. It has 28 kilometres of coastline with numerous coves and bays, spectacular cliffs and, as you would expect, stunning views in all directions. The areas for development within the site, with outline consent for 108,000 square metres, are spread over approximately 2,000 acres.

 

 

 

 

Chairman's Statement (continued)     

 

Greece (continued)

 

In terms of local infrastructure, Sitia Municipality, the Regional Government of Crete and the Central Government in Athens have worked together to improve the access to the area by means of major improvements to the East - West main road network linking the area to the Centre and West of Crete. The local authorities in Crete have also dramatically improved the local road network and the Project is now less than 30 minutes from Sitia International Airport which is fully operational.

  

The granting of Outline Planning Consent, the negotiations in progress and the improvements in local infrastructure provide a secure base for the realisation of the Group's ambitions in Greece.

 

Travel and Leisure ("T&L")

 

The T&L division continues to be the Group's main operating driver with its network of specialist, corporate and award-winning travel agencies, spanning all aspects of worldwide travel and delivering another period of strong growth.

 

Total transaction value was up by circa 15% in the 6 months ended 30 April 2016 to £33,106,000 and has continued to rise, being up circa 20% to £39,729,000 in the 6 months ended 30 April 2017.

 

Gross profit has also continued to rise. Following a 19% increase in the 6 months ended 30 April 2016 to £3,544,000 it was up a further 14% in the current period to £4,052,000. In similar fashion, profit at EBITDA level is up 35% on the comparable period last year i.e. up from £332,000 to £449,000.

 

Another positive has been the recent announcement of the acquisition of Morningside Travel Limited, an independent travel agent based in Edinburgh and an ideal fit for the Stewart Travel retail business, which will make a full contribution to the Group's figures in the forthcoming year. With a successful track record of travel agency acquisitions the Group is still looking for further suitable opportunities to acquire other leading, specialist travel agencies to help further enhance the T&L division's performance.

 

Finance

 

Since the period end, prior to the dismissal of the Appeals, we completed a small placing, raising £450,000 before expenses, to help with our working capital position.

 

The most significant financial event has been the recently announced extension from 30 June 2017 to 31 December 2017 of the £5million 8% Loan Facility dated 16 October 2013 from Hillside International Holdings Limited. This bolsters the Group's financial position and will greatly help the Board as it continues its negotiations with parties interested in the Project.

 

 

 

 

 

 

Chairman's Statement (continued)     

 

Outlook

 

Clearly, the Board's main goal is to move forward with the realisation of the Project and the prospects for this have never looked better. With regard to the T&L business, its organic growth remains healthy and we will work to continue to improve its operational profitability whilst reviewing suitable opportunites and strategies to increase its rate of growth. This may involve bringing in a suitable partner or investor.

 

Conclusion

 

The past six months have been a landmark period for the Group with the profitability of the T&L business reaching new heights, while the dismissal of the Appeals against the PD promises to be the catalyst for the joint development of one of the premier resorts in the Mediterranean and a world-class tourist destination.

 

The forthcoming year looks set to be a transformational period for the Group. I would like to thank all our shareholders for their patience and forbearance to date and to reassure them that the Board's overriding objective is to achieve maximum value for them.

 

 

Christopher W Egleton

 

Chairman

26 July 2017

 

 

 

 

 

 

 

 

 

 

 

 

Unaudited Consolidated Statement of Comprehensive Income

6 months ended 30 April 2017

 

 

6 months ended 30.04.17

                        £'000

6 months ended 30.04.16

                         £'000

Year ended 31.10.16

                         £'000

Total transaction value

39,729

33,106

67,820

 

 

 

 

Revenue

4,223

3,544

7,317

Cost of sales

(171)

-

(273)

Gross profit

4,052

3,544

7,044

 

 

 

 

Operating expenses

(4,084)

(3,618)

(7,261)

 

 

 

 

Other operating expenses

 

 

 

Corporate development costs

(238)

(222)

(595)

(Charge)/credit in respect of share based payments

-

(14)

24

Operating loss

(270)

(310)

(788)

 

 

 

 

Finance costs

(637)

(746)

(1,484)

Loss before taxation

(907)

(1,056)

(2,272)

 

 

 

 

Taxation

-

-

-

Loss for period  attributable to equity holders of the Company

(907)

(1,056)

 

(2,272)

 

 

 

 

Loss per share attributable to equity holders of 

 

 

 

the Company: Basic and diluted

(0.46)p

(0.56)p

(1.19p)

 

 

 

 

 

 

 

 

 

Unaudited Consolidated Statement of Changes in Equity

6 months ended 30 April 2017

 

6 months ended 30 April 2017

 

 

Share capital

£'000

Share premium

£'000

Merger

reserve
£'000

Warrant reserve

£000

Retained earnings
£'000

Total

equity
£'000

Balance at 1 November 2016

15,119

32,585

9,349

2,119

(16,127)

    43,045

Loss for the period

-

-

-

-

(907)

(907)

Issue of ordinary shares at a premium

109

508

-

-

              -

         617

Share based payments

-

-

-

293

           -    

        293

Balance at 30 April 2017

15,228

33,093

9,349

2,412

(17,034)

43,048

 

6 months ended 30 April 2016

 

 

Share capital

£'000

Share premium

£'000

Merger

reserve £'000

Warrant reserve

£000

Retained earnings
£'000

Total

equity
£'000

Balance at 1 November 2015

14,975

31,435

9,349

1,904

(13,831)

   43,832

Loss for the period

-

-

-

-

(1,056)

(1,056)

Issue of ordinary shares at a premium

82

800

-

-

-

        882

Share based payments

-

-

-

-

            14

          14

Balance at 30 April 2016

15,057

32,235

9,349

1,904

(14,873)

43,672

 

Year ended 31 October 2016

 

 

Share capital

£'000

Share premium

£'000

Merger

reserve  £'000

Warrant reserve

£000

Retained earnings £'000

Total

equity £'000

Balance at 1 November 2015

14,975

31,435

9,349

1,904

(13,831)

   43,832

Loss for the period

-

-

-

-

(2,272)

(2,272)

Issue of ordinary shares at a premium

144

1,150

-

-

-

     1,294

Share based payments

-

-

-

-

            (24)

         (24)

Extension of warrant expiry date

-

-

-

215

 

        215

Balance at 31 October 2016

15,119

32,585

9,349

2,119

(16,127)

43,045

 

 

 

 

 

Unaudited Consolidated Balance Sheet as at 30 April 2017

 

 

 

As at 30.04.17
£'000

 

As at 30.04.16
£'000

As at 31.10.16
£'000

Assets

 

 

 

Non-current assets

 

 

 

Intangible assets

9,892

9,818

9,771

Property, plant and equipment

743

688

728

Total non-current assets

10,635

10,506

10,499

 

 

 

 

Current assets

 

 

 

Inventories

43,458

41,781

42,562

Receivables

2,947

2,683

2,610

Cash and cash equivalents

88

67

104

Total current assets

46,493

44,531

45,276

 

 

 

 

Total assets

57,128

55,037

55,775

 

 

 

 

Equity

 

 

 

Share capital

15,228

15,057

15,119

Share premium account

33,093

32,235

32,585

Merger reserve account

9,349

9,349

9,349

Warrant reserve

2,412

1,904

2,119

Retained earnings

(17,034)

(14,873)

(16,127)

Total equity

43,048

43,672

43,045

 

 

 

 

Liabilities

 

 

 

Current liabilities

14,080

11,365

12,730

Total liabilities

14,080

11,365

12,730    

 

 

 

 

Total equity and liabilities

57,128

55,037

55,775

 

 

 

 

 

Unaudited Consolidated Cash Flow Statement

6 months ended 30 April 2017

 

 

6 months ended 30.04.17

£'000

6 months ended 30.04.16

£'000

  Year ended 31.10.16

£'000

 

 

 

 

Cash flows from operating activities

 

 

 

Net cash inflow/(outflow) from continuing operations (note 1)

(650)

(490)

458

Finance costs

(96)

(265)

(255)

Net cash (used in)/generated from operating activities

(746)

(755)

 

203

 

 

 

 

Cash flows from investing activities

 

 

 

Purchase of property, plant and equipment

(78)

(24)

(103)

Purchase of intangible assets:

 

 

 

Goodwill- deferred consideration

(25)

-

(130)

IT Project

(5)

(51)

(140)

Net cash used in investing activities

(108)

(75)

(373)

 

 

 

 

Cash flows from financing activities

 

 

 

Net proceeds from the issue of ordinary shares

-

-

-

Loans received

838

752

129

Net cash generated from financing activities

838

752

                    129

 

 

 

 

Net decrease in cash

(16)

(78)

(41)

 

 

 

 

Cash at beginning of period

104

145

145

Cash at end of period

88

67

104

 

 

 

 

 

 

 

 

 

 

 

 

 

Notes to the Unaudited Consolidated Cash Flow Statement

6 months ended 30 April 2017

 

1             Cash flows from operating activities

 

 

6 months ended 30.04.17

                   £'000

6 months ended 30.04.16

                   £'000

Year ended 31.10.16

                         £'000

Loss before taxation

(907)

(1,056)

(2,272)

Finance costs

637

746

1,484

Depreciation

57

51

122

Amortisation

172

158

334

Exchange gain/(loss) relevant to property, plant and equipment

9

6

(36)

Increase in inventories

(896)

(515)

(1,296)

Share based payments

-

14

(24)

Increase in receivables

(337)

(512)

(439)

Increase in current liabilities

498

593

1,291

Non cash movement in equity

117

25

1,294

Net cash inflow/(outflow) from continuing operations

(650)

(490)

458

 

 

 

 

Notes to the unaudited interim results

6 months ended 30 April 2017

 

1. General information

 

The Company is a public limited company incorporated in England and Wales and quoted on AIM. The Company's principal activity in the period under review was that of a holding and management company of a Group involved in the design, creation, development and management of environmentally friendly luxury hotels and resorts and in the operation of independent travel businesses, through which the Group provides a broad range of services including, inter alia, transportation, hotel and other accommodation and leisure services.

 

2. Basis of preparation

 

The interim financial statements are unaudited and do not constitute statutory accounts as defined in Section 434(3) of the Companies Act 2006. A copy of the audited Report and Financial Statements for the year ended 31 October 2016 has been delivered to the Registrar of Companies. The auditor's report on these accounts was unqualified and did not contain statements under s498(2) to s498(4) of the Companies Act 2006. The Report and Financial Statements for the year ended 31 October 2016 were approved by the Board on 31 March 2017.

 

The interim financial statements for the 6 months ended 30 April 2017 comprise an Unaudited Consolidated Statement of Comprehensive Income, Unaudited Consolidated Statement of Changes in Equity, Unaudited Consolidated Balance Sheet and Unaudited Consolidated Cash Flow statement plus relevant notes.

 

The interim financial statements are prepared in accordance with EU adopted International Financial Reporting Standards ("IFRS") and the International Financial Reporting Interpretations Committee ("IFRIC") interpretations and the Companies Act 2006 applicable to companies reporting under IFRS.

 

The principal accounting policies adopted in the preparation of the interim financial statements are consistent with those adopted in the Report and Financial Statements for the year ended 31 October 2016.

 

Going concern

 

The interim unaudited financial statements have been prepared on the going concern basis.

 

The directors have considered the financial and commercial position of the Group in relation to its project in Crete (the "Project") and also in respect of its travel and leisure business. In particular, the directors have reviewed the matters referred to below.

 

Following the dismissal, in June, of the Appeals against the Presidential Decree granting land use approval for the Project, the Company now has an un-appealable Presidential Decree which, in effect, gives outline planning consent for the Project.

 

The directors consider it relevant that having completed financial joint venture agreements prior to the above, and any other consents, they will conclude further Project joint venture agreements in the near term. In addition, the directors are considering other options which would have a major beneficial impact on the Group's resources.

 

In addition to specific Project related matters as noted above, and as has been the case in the past, the Group continues to raise capital in order to meet its existing working capital requirements and the directors consider that any necessary funds will be raised as required.

 

 

Notes to the unaudited interim results (continued)

6 months ended 30 April 2017

 

2. Basis of preparation (continued)

 

Going concern (continued)

 

With a number of acquisitions in the planned expansion of its Travel and Leisure business having been completed over a period of time, the Group is now generating profits and cash flow within this sector of its activities.

 

 

3. Segmental information

 

The Group strategy and growth objectives necessitate the building of an associated infrastructure. The Group considers it appropriate to identify separately the corporate development division together with costs related to acquisitions. Accordingly, the Group is organised into three divisions both by business segment and geographical location:

 

·      the luxury resorts division, currently being the development of a luxury resort in Crete, which includes the central administration costs of the Group;

 

·      the Travel and Leisure division (UK), being the operation and management of the travel businesses; and

 

·      the corporate development division (UK) as described above.

 

 

 

 

Notes to the unaudited interim results (continued)

6 months ended 30 April 2017

 

3. Segmental information (continued)

 

The information presented below is consistent with how information is presented to the Board, with the Group's accounting policies and with the geographical location of the relevant divisions.

 

 

6 months ended 30 April 2017

 

Luxury Resorts

Travel and Leisure

Corporate Development

Total

 

£'000

£'000

£'000

£'000

Total transaction value

        -

        39,729

-

     39,729

 

 

 

 

 

Revenue

-

         4,223

-

       4,223

Cost of sales

-

            (171)

-

         (171)

Gross profit

-

         4,052

-

      4,052

 

 

 

 

 

Operating expenses

(252)

       (3,832)

(238)

(4,322)

 

(252)

            220

(238)

(270)

Charge in respect of share based payments

            -

                -

                   -

-

Operating (loss)/profit

(252)

            220  

(238)

(270)

Finance costs

(587)

              (50)

                 -

(637)

(Loss)/profit before taxation

(839)

           170

  (238)

(907)

 

 

 

 

 

Operating expenses include:

 

 

 

 

Depreciation and amortisation

-

229

                     -

229

 

 

 

 

 

Assets/liabilities

 

 

 

 

Goodwill

6,127

            3,765

-

9,892

Other non-current assets

159

584

-

             743

Current assets

44,513

1,980

-

46,493

Total assets

50,799

6,329

-

57,128

 

 

 

 

 

Total liabilities

11,710

2,370

 

14,080

 

 

 

 

 

 

 

 

 

 

Notes to the unaudited interim results (continued)

6 months ended 30 April 2017

 

3. Segmental information (continued)

 

 

 6 months ended 30 April 2016

 

Luxury Resorts

Travel and Leisure

Corporate Development

Total

 

£'000

£'000

£'000

£'000

Total transaction value

        -

         33,106

-

     33,106

 

 

 

 

 

Revenue

-

           3,544

-

       3,544

Cost of sales

-

                   -

-

              -

Gross profit

-

          3,544

-

       3,544

 

 

 

 

 

Operating expenses

(197)

  (3,421)

(222)

(3,840)

 

(197)

           123

(222)

(296)

Charge in respect of share based payments

            (14)

                 -

                   -

(14)

Operating (loss)/profit

(211)

            123

(222)

(310)

Finance costs

(680)

              (66)

                 -

(746)

(Loss)/profit before taxation

(891)

              57

  (222)

(1,056)

 

 

 

 

 

Operating expenses include:

 

 

 

 

Depreciation and amortisation

-

209

                     -

209

Operating leases - plant and equipment

-

8

-

8

 

 

 

 

 

Assets/liabilities

 

 

 

 

Goodwill

6,127

           2,601

-

8,728

Other non-current assets

138

1,640

-

1,778

Current assets

42,638

1,893

-

44,531

Total assets

48,903

6,134

-

55,037

 

 

 

 

 

Total liabilities

7,859

3,506

-

11,365

 

 

 

 

 

 

 

 

 

 

Notes to the unaudited interim results (continued)

6 months ended 30 April 2017 

 

3. Segmental information (continued)

 

 

Year ended 31 October 2016

 

Luxury Resorts

Travel and Leisure

Corporate Development

Total

 

£'000

            £'000

£'000

          £'000

Total transaction value

             -

        67,820

                 -

         67,820

 

 

 

 

 

Revenue

            -

          7,317

                 -

          7,317

Cost of sales

            -

              (273)

                 -

              (273)

Gross profit

            -

           7,044

                 -

           7,044    

 

 

 

 

 

Operating expenses

(489)

           (6,772)

(595)

         (7,856)

 

(489)

             172

(595)

(812)

Credit in respect of share-based payments

            24

                  -

                -

                  24

Operating (loss)/profit

(465)

                272

(595)

(788)

Contribution to central costs

          100

              (100)

                 -

                  -

Finance costs

(1,341)

(143)

                 -

(1,484)

(Loss)/profit before taxation

(1,706)

                  29

(595)

(2,272)

Taxation

            -

                  -

                 -

                     -

(Loss)/profit after taxation

(1,706)

                29

(595)

           (2,272)

 

 

 

 

 

Operating expenses include:

 

 

 

 

Depreciation and amortisation

             13

                 443

                  -

                456

Operating leases - plant and equipment

              -

                   83

                  -

                  83

 

 

 

 

 

Assets/liabilities

 

 

 

 

Goodwill

        6,127

2,641

                  -

             8,768

Other non-current assets

           157

1,574

                  -

             1,731

Current assets

43,491

1,785

                 -

           45,276

Total assets

49,775

6,000

                 -

           55,775

 

 

 

 

 

Total and current liabilities

      10,561

2,169

                 -

            12,730

 

4. Goodwill

 

Goodwill arising on acquisitions represents the difference between the fair value of the net assets acquired and the consideration paid and is recognised as an asset.

 

Goodwill arising on acquisition is allocated to cash-generating units.  The recoverable amount of the cash-generating unit to which goodwill has been allocated is tested for impairment annually, or on such other occasions that events or changes in circumstances indicate that it might be impaired. Any impairment is recognised immediately as an expense and is not subsequently reversed.

 

The Group conducts an annual impairment test on the carrying value of goodwill based on the recoverable amount of two cash generating units: the Project and the Travel and Leisure business.

 

The directors consider that there have been no indicators of impairment of goodwill for either the Project or the Travel and Leisure CGU since the last annual review and therefore do not consider that an interim review is required.

 

Notes to the unaudited interim results (continued)

6 months ended 30 April 2017

 

5. Loss per share attributable to equity holders of the Company

 

Earnings per share are calculated by dividing the earnings attributable to the equity holders of a company by the weighted average number of ordinary shares in issue during the period. Diluted earnings per share are calculated by adjusting basic earnings per share to assume the conversion of all dilutive potential ordinary shares. There are no dilutive instruments in issue, therefore the basic loss per share and diluted loss per share are the same. The weighted average number of shares used in calculating basic and diluted loss per share for the 6 months ended 30 April 2017 was 197,769,617 (6 months ended 30 April 2016: 188,729,546, year ended 31 October 2016: 190,972,389).

 

6. Share based payments charge

 

 

6 months ended 30.04.17

                        £'000

6 months ended 30.04.16

                         £'000

Year ended 31.10.16

                         £'000

Share based payments - directors

-

14

24

Share based payments - warrants finance charges

293

481

930

 

293

495

954

 

 

 

 

In accordance with IAS 32, the share based payments charge in respect of warrants finance charges shown above has been included in Finance costs in the Unaudited Consolidated Statement of Comprehensive Income.


This information is provided by RNS
The company news service from the London Stock Exchange
 
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