TIDMARGO
RNS Number : 6955U
ARGO Group Limited
31 July 2020
Argo Group Limited
("Argo" or the "Company")
Interim Results for the six months ended 30 June 2020
Argo today announces its interim results for the six months
ended 30 June 2020.
The Company will today make available its interim report for the
six months period ended 30 June 2020 on the Company's website
www.argogrouplimited.com.
Key highlights for the six months period ended 30 June 2020
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 2020.
- Revenues US$1.4 million (six months to 30 June 2019: US$2.4 million)
- Operating loss US$0.4 million (six months to 30 June 2019: US$0.03 million)
- Profit before tax US$0.2 million (six months to 30 June 2019: US$1.5 million)
- Net assets US$21.4 million (31 December 2019 restated: US$21.3 million)
Commenting on the results and outlook, Kyriakos Rialas, Chief
Executive Officer of Argo said:
"The outbreak of the Covid-19 pandemic has been totally
unexpected but Argo Group took early measures to protect the health
of its employees and their families. The office was closed early on
with employees working from home and key operations such as trading
and settlements functioned smoothly with remote secure computers.
The market volatility that resulted provided trading opportunities
and although March was a down month The Argo Fund recovered
strongly from April to June resulting in a YTD return of 4.55%. In
January 2020 Argo Group finalised the refinancing of the Odessa
Riviera shopping mall in Ukraine with EBRD at improved terms. This
involved the company contributing US$11.2 million to the
outstanding loan balance.
Finally in July 2020 we have launched the Argo US Feeder Fund in
an effort to attract US onshore investors as the Group's main
target is to increase assets under management."
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.
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 2020 the Group generated
revenues of US$1.4 million (six months to 30 June 2019: US$2.4
million) with management fees accounting for US$1.2 million (six
months to 30 June 2019: US$2.0 million). Management fees for the
comparative period included USD$0.6 million earned from Argo Real
Estate Opportunities Fund Limited ("AREOF"). The management
contract with AREOF was terminated on 1 January 2020, so there was
no fees earned from AREOF in the current period. The Group does not
accrue for performance fees until they are crystalized at the year
end.
Total operating costs for the period, ignoring bad debt
provisions, are US$1.6 million compared to US$2.5 million for the
six months to 30 June 2019 . The Group has provided against
management fees of US$0.2 million due from the Designated share
class in The Argo Fund ("TAF") (six months to 30 June 2019: US$0.3
million (EUR0.2 million) due from AREOF). 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$0.4 million (six months to 30 June 2019: US$0.03
million) and a profit before tax of US$0.2 million (six months to
30 June 2019: US$1.5 million) reflecting the net profit on
investments of US$0.2 million (six months to 30 June 2019: US$1.4
million) and interest income of US$0.4 million (six months to 30
June 2019: US$0.1 million).
At the period end, the Group had net assets of US$21.4 million
(31 December 2019 restated: US$21.3 million) and net current assets
of US$9.0 million (31 December 2019 restated: US$20.7 million)
including cash reserves of US$1.6 million (31 December 2019: US$0.9
million).
Net assets include investments in TAF, ASSF LP and ADCF
(together referred to as "the Argo Funds") at fair values of US$7.8
million (31 December 2019: US$18.6 million),), US$ nil (31 December
2019: US$0.1 million) and US$0.02 million (31 December 2019: US$0.8
million) respectively . On 30 June 2020, The ASSF LP was struck
off. Its assets and remaining investors were moved to ADCF.
Business and operational review
At the period end the Argo Funds owed the Group total fees of
US$0.3 million ( 31 December 2019 : US$0.9 million). At 30 June
2020, a provision for US$0.2 million was made against this amount
as the timing of the receipt of the fees from the designated share
class in TAF is uncertain. Moreover, the Group owes US$0.3 million
to ADCF in overpayment of performance fees at the period end. This
overpayment will be set off against future management fees that the
fund will owe to the Group.
The Argo Funds ended the period with Assets under Management
("AUM") at US$130.4 million. The current level of AUM remains below
that required to ensure sustainable profits on a recurring
management fee basis in the absence of performance fees. This has
necessitated an ongoing review of the Group's cost basis.
Nevertheless, the Group has ensured that the operational framework
remains intact and that it retains the capacity to manage
additional fund inflows as and when they arise.
The average number of permanent employees of the Group for the
six months to 30 June 2020 was 20 ( 30 June 2019 : 21).
Fund performance
The Argo Funds
30 June 30 June 2019
Launch 2020 2019 year Sharpe Down
Since Annualised
Fund date 6 months 6 months total inception performance ratio months AUM
% % % % CAGR % US$m
------- --------- --------- ------ ---------- ------------ ------ -------- -------
76 of
The Argo Fund Oct-00 4.55 4.25 2.18 239.11 7.14 0.51 237 105.0
------- --------- --------- ------ ---------- ------------ ------ -------- -------
Argo Distressed
Credit Fund Oct-08 25.4
------- --------- --------- ------ ---------- ------------ ------ -------- -------
Total 130.4
--------- --------- ------ ---------- ------------ ------ -------- -------
The events of the first six months of 2020 caught most by
surprise. At the beginning of the period markets were largely
focused on the US electoral cycle and whether growth momentum would
be maintained, particularly in the US and China, but very quickly
attention turned to the impact of the previously little-known
COVID-19 virus. Initially thought to be a localised problem in
parts of Asia, the virus (and fear of it) spread to the rest of the
world leading to a meltdown in global equity and credit markets
from early March. Arguably, the response from governments,
particularly the G7, was much faster compared with the 2008 Global
Financial Crisis and they announced sizeable packages of monetary
easing and fiscal support and stimuli alongside public health
initiative measures such as lockdowns and travel restrictions. As
confidence about a rapid economic recovery took hold, equity
markets partially rebounded and delivered strong returns from April
onwards. Emerging markets have not escaped the effects of COVID-19
despite the perceived advantage of a younger demographic; some like
Brazil have recorded a high number of infections and deaths whilst
others have seen their economies adversely affected by the sudden
halt in global growth and trade and direct hits on sectors
including oil and tourism. Countries such as Argentina and Lebanon
had already signalled a need to restructure their external debts,
but the strains of falling demand and additional health costs have
led to wider calls for debt relief, particularly for poorer
countries. Although government creditors (including China) have
begun to implement this for those countries that have requested it,
there remains a large question mark over the necessity and
operability of involvement by private creditors such as bond
investors.
The Class A NAV of TAF increased by 4.55% in the first half of
2020, compared to a rise of 4.25% in the same period of the
previous year, but against a very different -and more volatile-
global economic and financial backdrop; for example, the benchmark
JP Morgan EMBI+ bond index fell by 0.4% in the first six months.
The fund was conservatively positioned, with low net exposure,
heading into the first quarter sell-off and whilst TAF suffered a
drawdown in March, it was not of the scale witnessed in some other
funds. The losses were clawed back and more by a judicious choice
of long bond positions that benefited from positive developments in
sovereign restructurings and the oil market. At the end of 2019,
the decision was taken to restructure the fund, creating a
master/feeder structure. Class A shares issued by TAF continue to
be invested in a diversified debt and macro positions which seek to
capture alpha through long and short investment in liquid EM
corporate and sovereign bonds and FX. In addition, there are new
classes of Designated Investments which offer investors exposure to
distressed and special situations where the timeline to investment
realisation will be three years or more. A US feeder fund was also
recently established in order to widen the potential pool of
investors in that jurisdiction.
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 will continue to focus on TAF which
has a 19-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 2020
Six months Six months
ended ended
30 June 30 June
2020 2019
Note US$'000 US$'000
Management fees 1,227 2,013
Performance fees - 300
Other income 144 122
============================================= ===== =========== ===========
Revenue 1,371 2,435
============================================= ===== =========== ===========
Legal and professional expenses (267) (303)
Management and incentive fees payable - (34)
Operational expenses (335) (520)
Employee costs (1,202) (1,291)
9,
Bad debt provision 10 (203) (295)
Foreign exchange profit/(loss) 313 (20)
Depreciation 7 (97) (5)
Operating loss (420) (33)
============================================= ===== =========== ===========
Interest income 409 90
Realised and unrealised gain on investments 8 205 1,438
============================================= ===== =========== ===========
Profit on ordinary activities before
taxation 194 1,495
============================================= ===== =========== ===========
Taxation 5 - (19)
============================================= ===== =========== ===========
Profit for the period after taxation
attributable to members of the Company 6 194 1,476
Other comprehensive income
Items that may be reclassified subsequently
to profit or loss:
Exchange differences on translation
of foreign operations (15) (44)
============================================= ===== =========== ===========
Total comprehensive income for the
period 179 1,432
============================================= ===== =========== ===========
Six months Six months
Ended Ended
30 June 30 June
2020 2019
US$ US$
Earnings per share (basic) 6 0.004 0.03
============================================= ===== =========== ===============
Earnings per share (diluted) 6 0.005 0.03
============================================= ===== =========== ===============
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2020
30 June 31 December
2020 2019
Restated
Note US$'000 US$'000
Assets
Non-current assets
Land, fixtures, fittings and
equipment 7 541 661
Financial assets at fair value
through profit or loss 8 - 56
Loans and advances receivable 10 12,042 120
================================ ===== ========== ============
Total non-current assets 12,583 837
================================ ===== ========== ============
Current assets
Financial assets at fair value
through profit or loss 8 7,839 19,357
Trade and other receivables 9 452 951
Cash and cash equivalents 1,601 863
Total current assets 9,892 21,171
================================ ===== ========== ============
Total assets 22,475 22,008
================================ ===== ========== ============
Equity and liabilities
Equity
Issued share capital 11 390 390
Share premium 25,353 25,353
Revenue reserve (1,352) (1,546)
Foreign currency translation
reserve (2,947) (2,932)
================================ ===== ========== ============
Total equity 21,444 21,265
================================ ===== ========== ============
Current liabilities
Trade and other payables 870 443
Tax payable - 20
================================ ===== ========== ============
Total current liabilities 870 463
-------------------------------- ----- ---------- ------------
Non-current liabilities
Trade and other payables 15 161 280
-------------------------------- ----- ---------- ------------
Total non-current liabilities 161 280
-------------------------------- ----- ---------- ------------
Total equity and liabilities 22,475 22,008
-------------------------------- ----- ---------- ------------
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS'
EQUITY
FOR THE SIX MONTHSED 30 JUNE 2020
Foreign
Issued currency
share Share Revenue translation
capital premium reserve reserve Total
2019 2019 2019 2019 2019
US$'000 US$'000 US$'000 US$'000 US$'000
As at 1 January 2019 470 28,022 (2,363) (2,860) 23,269
Total comprehensive
income
Profit for the period
after taxation - - 1,476 - 1,476
Other comprehensive
income - - - (44) (44)
Transaction with owners
recorded directly in
equity
Purchase of own shares (80) (2,669) - - (2,749)
As at 30 June 2019 390 25,353 (887) (2,904) 21,952
========================= ========== ========== ========== ================ ========
Foreign
Issued currency
share Share Revenue translation
capital premium reserve reserve Total
2020 2020 2020 2020 2020
US$'000 US$'000 US$'000 US$'000 US$'000
As at 1 January 2020 restated
(note 16) 390 25,353 (1,546) (2,932) 21,265
Total comprehensive income
Profit for the period after
taxation - - 194 - 194
Other comprehensive income - - - (15) (15)
As at 30 June 2020 390 25,353 (1,352) (2,947) 21,444
=============================== ========== ========== ========== ================ ========
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE SIX MONTHSED 30 JUNE 2020
Six months Six months
ended ended
30 June 30 June
2020 2019
Note US$'000 US$'000
Net cash inflow/(outflow) from
operating activities 12 195 (32)
========================================= ===== =========== ===========
Cash flows used in investing activities
Interest received on cash and
cash equivalents 3 8
Purchase of fixtures, fittings
and equipment 7 (1) (1)
Proceeds from sale of financial
assets at fair value through profit
or loss 8 11,779 -
Loan investments (11,200) -
Net cash generated from investing
activities 581 7
========================================= ===== =========== ===========
Cash flows from financing activities
Payment of lease liabilities (44) -
Repurchase of own shares - (2,749)
Net cash used in financing activities (44) (2,749)
========================================= ===== =========== ===========
Net decrease in cash and cash
equivalents 732 (2,774)
Cash and cash equivalents at 1
January 2020 and
1 January 2019 863 4,005
Foreign exchange loss on cash
and cash equivalents 6 (63)
Cash and cash equivalents as at
30 June 2020 and 30 June 2019 1,601 1,168
========================================= ===== =========== ===========
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL
STATEMENTS
For the six months ended 30 June 2020
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
2020 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 2019 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 and presentational
currency of the Group undertakings is US dollars.
Wholly owned subsidiaries Country of incorporation
Argo Capital Management Limited United Kingdom
Argo Capital Management Cyprus Limited Cyprus
Argo Capital Management Property Limited Cayman Islands
(dissolved in June 2020)
Argo Property Management Srl 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 2019.
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 2019.
These condensed consolidated interim financial statements were
approved by the Board of Directors on 30 July 2020.
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 Capital Argo Capital
Management Argo Capital Management Six months
Argo Group (Cyprus) Management Property ended
Ltd Ltd Ltd Ltd 30 June
2020 2020 2020 2020 2020
US$'000 US$'000 US$'000 US$'000 US$'000
Total revenues
for reportable
segments customers - 120 1,227 144 1,491
Intersegment
revenues - 120 - - 120
Total profit/(loss)
for reportable
segments 818 - (423) (201) 194
Intersegment
profit/(loss) - 120 (120) - -
Total assets
for reportable
segments assets 20,370 341 1,460 303 22,474
Total liabilities
for reportable
segments 6 90 857 78 1,031
===================== ============= ============= =============== =============== ===========
Revenues, profit or loss, assets and liabilities Six months
may be reconciled as follows:
Ended
30 June
2020
US$'000
Revenues
Total revenues for reportable segments 1,491
Elimination of intersegment revenues (120)
================================================== ===========
Group revenues 1,227
================================================== ===========
Profit or loss
Profit for reportable segments 194
Elimination of intersegment loss -
Other unallocated amounts -
================================================== ===========
Profit on ordinary activities before taxation 194
================================================== ===========
Assets
Total assets for reportable segments 25,358
Elimination of intersegment receivables (2,884)
Group assets 22,474
================================================== ===========
Liabilities
Total liabilities for reportable segments 3,915
Elimination of intersegment payables (2,884)
================================================== ===========
Group liabilities 1,031
================================================== ===========
Argo Capital Argo Capital
Management Argo Capital Management Six months
Argo Group (Cyprus) Management Property ended
Ltd Ltd Ltd Ltd 30 June
2019 2019 2019 2019 2019
US$'000 US$'000 US$'000 US$'000 US$'000
Total revenues
for reportable
segments customers - 437 1,748 687 2,872
Intersegment
revenues - 437 - - 437
Total profit/(loss)
for reportable
segments 1,114 135 157 70 1,476
Intersegment
profit/(loss) - 437 (437) - -
Total assets
for reportable
segments assets 20,034 346 1,100 690 22,170
Total liabilities
for reportable
segments 6 10 92 110 218
===================== ============= ============= =============== =============== ===========
Revenues, profit or loss, assets and liabilities Six months
may be reconciled as follows:
Ended
30 June
2019
US$'000
Revenues
Total revenues for reportable segments 2,872
Elimination of intersegment revenues (437)
================================================== ===========
Group revenues 2,435
================================================== ===========
Profit or loss
Total profit for reportable segments 1,495
Elimination of intersegment loss -
Other unallocated amounts -
================================================== ===========
Profit on ordinary activities before taxation 1,495
================================================== ===========
Assets
Total assets for reportable segments 22,546
Elimination of intersegment receivables (376)
Group assets 22,170
================================================== ===========
Liabilities
Total liabilities for reportable segments 594
Elimination of intersegment payables (376)
================================================== ===========
Group liabilities 218
================================================== ===========
4. SHARE-BASED INCENTIVE PLANS
On 14 March 2011 the Group granted options over 5,900,000 shares
to directors and employees under The Argo Group Limited Employee
Stock Option Plan. All options are exercisable at 24p per share
within 10 years of the grant date.
The fair value of the options granted 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) 24.0
Weighted average share price
at grant date (pence) 17.0
Weighted average option life
(years) 10.0
Expected volatility (% p.a.) 15.0
Dividend yield (% p.a.) 10.0
Risk-free interest rate (%
p.a.) 0.907
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 (30
June 2019: 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 24.0p 4,115,000
Granted during the period - -
Forfeited during the period - -
==================================== ================= =============
Outstanding at end of period 24.0p 4,115,000
==================================== ================= =============
Exercisable at end of period 24.0p 4,115,000
==================================== ================= =============
The options outstanding at 30 June 2020 have an exercise price
of 24p and a weighted average contractual life of 1 year.
Outstanding share options are contingent upon the option holder
remaining an employee of the Group.
No share options were issued during the period.
5. TAXATION
Taxation rates applicable to the parent company and the Cypriot,
UK, Luxembourg, Cayman and Romanian subsidiaries range from 0% to
19% (2019: 0% to 19%).
Consolidated statement of profit or
loss Six months Six months
ended Ended
30 June 30 June
2020 2019
US$'000 US$'000
Taxation charge for the period on Group
companies - 19
========================================= ================ ==============
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
2020 2019
US$'000 US$'000
Profit before tax 194 1,495
================================================== ============== ==============
Applicable Isle of Man tax rate for - -
Argo Group Limited of 0%
Timing differences - -
Non-deductible expenses - -
Other adjustments - (31)
Tax effect of different tax rates of
subsidiaries operating in other jurisdictions - 50
================================================== ============== ==============
Tax charge - 19
================================================== ============== ==============
Consolidated statement of financial
position
30 June 31 December
2020 2019
US$'000 US$'000
Corporation tax payable - (4)
======================================= ============= ===============
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
2020 2019
US$'000 US$'000
Net profit for the period after taxation
attributable to members 194 1,476
========================================== ============== ==============
No. of No. of
shares shares
Weighted average number of ordinary
shares for basic earnings per share 38,959,986 42,996,432
Effect of dilution (Note 4) 4,115,000 4,340,000
========================================== ============== ==============
Weighted average number of ordinary
shares for diluted earnings per share 43,074,986 47,336,432
========================================== ============== ==============
Six months Six months
Ended ended
30 June 30 June
2020 2019
US$ US$
Earnings per share (basic) 0.004 0.03
Earnings per share (diluted) 0.005 0.03
============================== ============== ==============
7. LAND, FIXTURES, FITTINGS AND EQUIPMENT
Fixtures,
Right fittings
of use and equipment Total
assets Land
USD'000000 US$'000 US$'000 US$'000
Cost
At 1 January 2019 - 266 184 450
IFRS 16 recognition at
1 January 2019 717 - - 717
Additions 91 5 - 96
Disposals - (31) - (31)
Foreign exchange movement - 20 (5) 15
=========================== ============= =============== ======== =======================
At 31 December 2019 808 260 179 1,247
Additions - 1 - 1
Foreign exchange movement (49) (9) 2 (56)
=========================== ============= =============== ======== =======================
At 30 June 2020 759 252 181 1,192
=========================== ============= =============== ======== =======================
Accumulated Depreciation
At 1 January 2019 - 238 - 238
IFRS 16 recognition at
1 January 2019 191 - - 191
Depreciation charge for
period 153 9 - 162
Disposals - (31) - (31)
Foreign exchange movement - 26 - 26
=========================== ============= =============== ======== =======================
At 31 December 2019 344 242 - 586
Depreciation charge for
period 91 6 - 97
Foreign exchange movement (18) (14) - (32)
=========================== ============= =============== ======== =======================
At 30 June 2020 417 234 - 651
=========================== ============= =============== ======== =======================
Net book value
At 31 December 2019 464 18 179 661
=========================== ============= =============== ======== =======================
At 30 June 2020 342 18 181 541
=========================== ============= =============== ======== =======================
8. FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS
30 June 2020 30 June 2020
Holding Investment in management Total cost Fair value
shares
US$'000 US$'000
10 The Argo Fund Ltd - -
100 Argo Distressed Credit - -
Fund Ltd
- Argo Special Situations - -
Fund LP
- -
======== ========================= =============== ===============
Holding Investment in ordinary Total cost Fair value
shares
US$'000 US$'000
23,061 The Argo Fund Ltd* 6,226 7,821
- Argo Special Situations - -
Fund LP
Argo Distressed Credit
9 Fund Limited* 56 18
======== ======================== ============= =============
6,282 7,839
======== ======================== ============= =============
31 December 31 December
2019 2019
Holding Investment in management Total cost Fair value
shares
US$'000 US$'000
10 The Argo Fund Ltd - -
100 Argo Distressed Credit - -
Fund Ltd
1 Argo Special Situations - -
Fund LP
- -
======== ========================= ============== ==============
Holding Investment in ordinary Total cost Fair value
shares
US$'000 US$'000
57,301 The Argo Fund Ltd* 15,472 18,587
Argo Special Situations
115 Fund LP 115 56
Argo Distressed Credit
221 Fund Ltd* 786 770
======== ======================== ============= =============
16,373 19,413
======== ======================== ============= =============
*Classified as current in the consolidated statement of
Financial Position
Note that some of the Argo Funds listed above may have
investments in each other.
9. TRADE AND OTHER RECEIVABLES
At 30 June At 31 December
2020 2019
US$ '000 US$ '000
Trade receivables - Gross 10,141 10,489
Less: provision for impairment
of trade receivables (9,995) (9,733)
-------------------------------- ------------- -----------------
Trade receivables - Net 146 756
Other receivables 209 105
Prepayments and accrued income 97 90
================================ ============= =================
452 951
================================ ============= =================
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
2020 2019
US$ '000 US$ '000
Opening balance 12,405 11,803
Bad debt recovered - (335)
Charged during the period 203 1,270
Foreign exchange movement 75 (333)
=========================== ============= =================
Closing balance 12,683 12,405
=========================== ============= =================
10. LOANS AND ADVANCES RECEIVABLE
At 30 June At 31 December
2020 2019
US$'000 US$'000
Deposits on leased premises - current 12 -
Deposits on leased premises - non-current
(see below) 101 120
Other loans and advances receivable 11,929 -
- non-current (note 14)
============================================== =========== ==================
12,042 120
============================================== =========== ==================
The deposits on leased premises are retained by the lessor until
vacation of the premises at the end of the lease term as
follows:
At 30 June At 31 December
2020 2019
US$'000 US$'000
Non-current:
Lease expiring in second year 12 -
after the reporting date
Lease expiring in second year
after the reporting date 101 12
Lease expiring in third year after
the reporting date - 108
113 120
==================================== ============== ==================
11. SHARE CAPITAL
The Company's authorised share capital is unlimited with a
nominal value of US$0.01.
30 June 30 June 31 December 31 December
2020 2020 2019 2019
No. US$'000 No. US$'000
Issued and fully paid
Ordinary shares of
US$0.01 each 38,959,986 390 38,959,986 390
======================= ============= ========== =============== ===============
38,959,986 390 38,959,986 390
======================= ============= ========== =============== ===============
The Directors did not recommend the payment of a final dividend
for the year ended 31 December 2019 and do not recommend an interim
dividend in respect of the current period.
12. RECONCILIATION OF NET CASH INFLOW/(OUTFLOW) FROM OPERATING
ACTIVITIES TO PROFIT/(LOSS) ON ORDINARY ACTIVITIES BEFORE
TAXATION
Six months Six months
ended ended
30 June 2020 30 June
2019
US$'000 US$'000
Profit on ordinary activities before
taxation 194 1,495
Interest income (409) (90)
Depreciation on fixtures, fittings
and equipment 6 5
Depreciation on right of use asset 91 -
Realised and unrealised gain (205) (1,438)
Net foreign exchange (profit)/loss (313) 20
Increase in payables 97 34
Decrease/(increase) in receivables,
loans and advances 754 (48)
Corporation tax paid (20) (10)
Net cash inflow/(outflow) from operating
activities 195 (32)
========================================== ================ =============
13. FAIR VALUE HIERARCY
The table below analyses financial instruments measured at fair
value at the end of the reporting period by the level of the fair
value hierarchy (note 2b).
At 30 June 2020
Level 1 Level 2 Level 3 Total
US$ '000 US$ '000 US$ '000 US$ '000
Financial assets
at fair value through
profit or loss - 7,839 - 7,839
======================== ========== ========= ========= =========
At 31 December 2019
Level 1 Level 2 Level 3 Total
US$ '000 US$ '000 US$ '000 US$ '000
Financial assets
at fair value through
profit or loss - 19,357 56 19,413
======================== ========== ========= ========= =========
The following table shows a reconciliation from the opening
balances to the closing balances for fair
value measurements in Level 3 of the fair value hierarchy:
Unlisted Listed open
closed ended ended investment
investment fund
fund Emerging Markets
Real Estate Total
US$ '000 US$ '000 US$ '000
Balance as at 1 January
2020 - 56 56
Total profit recognized - - -
in profit or loss
Transfer to ADCF - (56)
Balance as at 30 June - - -
2020
========================= ================== ==================== =========
14. RELATED PARTY TRANSACTIONS
Most Group revenues derive from funds or entities in which one
of the Company's directors, Kyriakos Rialas, has an influence
through directorships and the provision of investment advisory
services.
At the reporting date the Company holds investments in The Argo
Fund Limited and Argo Distressed Credit Fund Limited . These
investments are reflected in the accounts at fair value of US$7.8
million, and US$0.02 million respectively.
The management contract with AREOF was terminated on 1 January
2020. As at the period end, AREOF owed US$12.2 million (EUR10.9
million) (31 December 2019: US$12.1 million (EUR10.9 million)).
These balances are carried at US$ nil (31 December 2019: US$ nil)
in the financial statements.
David Fisher, a non-executive director of the Company, is also a
non-executive director of AREOF.
During the period, the Group also made a loan for $11.2 million
to Argo Real Estate Limited Partnership, an entity that is 100%
owned by Andreas Rialas. The loan carries an interest rate of 9%
with a final maturity of July 2027.
15. TRADE AND OTHER PAYABLES
At 30 June At 31 December
2020 2019
US$ '000 US$ '000
Trade creditors 434 17
Other creditors and accruals 436 426
=============================== =========== ===============
Total current trade and other
payables 870 443
=============================== =========== ===============
Trade creditors are normally settled on 30-day terms.
At 30 June At 31 December
2020 2019
US$ '000 US$ '000
Other creditors and accruals 161 280
=================================== =========== ===============
Total non-current trade and other
payables 161 280
=================================== =========== ===============
16. PRIOR YEAR ADJSUTMENTS
The comparatives have been restated for correction of
performance fees for the prior period. Comparatives were adjusted
by decreasing performance fees and debtors by $0.2 million. As a
result, the opening revenue reserve at 1 January 2020 has been
adjusted downward by $0.2 million.
US$'000
Opening revenue reserve at 1
January 2020 (1,357)
--------
Prior year adjustment (189)
--------
Restated opening reserve at
1 January 2020 (1,546)
========
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
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