TIDMBAY
RNS Number : 3230Z
Bay Capital PLC
14 September 2022
14 September 2022
BAY CAPITAL PLC
("Bay" or the "Company")
Interim Results for the six months ended 30 June 2022
Bay Capital (LSE: BAY) announces its unaudited condensed interim
results for the six months to 30 June 2022 (the "Interim
Report").
Peter Tom CBE, Chairman, said:
"Since listing, we have evaluated a number of opportunities that
fit with our strategy, and we continue to assess several potential
transactions in our sectors of focus - industrials, construction,
business services, and the software and technology companies which
service those industry verticals.
Throughout the first half of the year we have sought to conserve
capital with strong cost control and a careful approach to managing
operating expenses.
The current macroeconomic and geopolitical environment is
creating interesting opportunities for the business, and we look
forward to updating shareholders with further progress in due
course."
Strategy
The Company was established in 2021 to pursue opportunities in
the industrial, construction and business services sectors,
including the software and technology companies which service those
industries.
The Company has a flexible approach, enabling it to deploy
capital in minority, majority or outright ownership investments
across the UK and internationally. The Directors aim to identify
fundamentally sound assets, where tangible opportunities exist to
drive strategic, operational and performance improvements.
Results and developments in the six month period to 30 June
2022
The Company's loss after taxation was GBP108,394 (6 month period
to 30 June 2021: GBP89,500) principally reflecting operating
expenses incurred as a listed business of GBP103,938. The Company
generated a loss per share of 0.2 pence (6 month period to 30 June
2021: GBP44,750 loss per share).
As a result of tight cost control and moderate operating
expenses, as at 30 June 2022, the Company's cash balance was
GBP6,572,054 (31 December 2021: GBP6,720,238).
On 28 June 2022, the Company held its inaugural Annual General
Meeting at which all resolutions were unanimously passed.
Risks
As the Company has yet to complete an investment or acquisition,
it has limited financial statements, historical financial data and
trading history. As such, during the period the Company was subject
to the risks and uncertainties associated with those of an
early-stage acquisition company.
The Directors are of the opinion that these risks, which were
detailed in Bay's published final results for the financial year
ended 31 December 2021, remain applicable to the Company.
Dividend
At this point in the Company's development, it does not
anticipate declaring any dividends in the foreseeable future. The
Directors will determine an appropriate dividend policy for the
Company following its inaugural investment or acquisition.
Outlook
During the period and post period end, Bay has continued to
pursue its investment and acquisition strategy and is currently
assessing opportunities across the industrial and construction
sectors. The Directors have identified a number of successful
companies with the potential for growth and value creation that
have considered a listing and are seeking to partner with, and
leverage the benefits of, the Board's experience and that of the
wider Bay team. The Directors look forward to updating shareholders
on progress in due course.
Peter Tom CBE
Chairman
13 September 2022
Enquiries :
Bay Capital Plc
Peter Tom CBE, Chairman
David Williams, Director
c/o Montfort Communications
Tessera - Strategic Adviser
Tony Morris +44 (0) 77 4218 9145
Montfort Communications
Olly Scott +44 (0) 78 1234 5205
INTERIM CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the period 1 January 2022 to 30 June 2022
Note Unaudited Unaudited
period ended 3 month period
30 ended 30 June
June 2022 2021
GBP GBP
Revenue - -
Cost of sales - -
-------------- ----------------
Gross profit - -
Operating expenses (109,427) (89,500)
-------------- ----------------
Operating loss (109,427) (89,500)
Net finance income 5 1,033 -
-------------- ----------------
Loss before tax (108,394) (89,500)
Taxation - -
-------------- ----------------
Loss for the period (108,394) (89,500)
Loss attributable to the Company (108,394) (89,500)
-------------- ----------------
Loss per share expressed in
pounds per share
From continuing and total operations:
Basic & diluted loss per share,
GBP 10 (0.002) (44,750)
The Company has no items of other comprehensive income.
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
As at 30 June 2022
Note Unaudited Audited
As at 30 June As at 31 December
2022 2021
GBP GBP
Assets
Current assets
Trade and other receivables 7 5,150 2,322
Cash 8 6,572,054 6,720,238
--------------- -------------------
Total current assets 6,577,204 6,722,560
--------------- -------------------
Current liabilities
Trade and other payables 9 (27,194) (69,645)
--------------- -------------------
Net current assets 6,550,010 6,652,915
--------------- -------------------
Net assets
Share capital 12 700,000 700,000
Capital redemption reserve 13 2 2
Share based payment reserve 13 8,738 3,249
Share premium 13 6,258,748 6,258,748
Retained earnings 13 (417,478) (309,084)
--------------- -------------------
Total equity attributable
to equity holders of the Company 6,550,010 6,652,915
--------------- -------------------
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the period from incorporation on 31 March 2021 to 30 June
2021
Share Capital Share Premium Retained Total
GBP GBP Earnings Equity
GBP GBP
Balance as at 31 - - - -
March 2021
Loss for period - - (89,500) (89,500)
-------------- -------------- ---------- ---------
Total comprehensive
loss - - (89,500) (89,500)
-------------- -------------- ---------- ---------
Shares issued 2 - - 2
-------------- -------------- ---------- ---------
Balance as at 30
June 2021 2 - (89,500) (89,498)
-------------- ============== ========== =========
For the period 1 January 2022 to 30 June 2022
Share Capital Share Share Retained Total
Capital Redemption Based Premium Earnings Equity
GBP Reserve Payments GBP GBP GBP
GBP Reserve
GBP
Balance
as at 31
December
2021 700,000 2 3,249 6,258,748 (309,084) 6,652,915
Share based
payment
charge - - 5,489 - - 5,489
Loss for
period - - - - (108,394) (108,394)
--------- ------------ ---------- ---------- ---------- ----------
Total comprehensive
loss - - 5,489 - (108,394) (102,905)
--------- ------------ ---------- ---------- ---------- ----------
Balance
as at 30
June 2022 700,000 2 8,738 6,258,748 (417,478) 6,550,010
========= ============ ========== ========== ========== ==========
CONSOLIDATED STATEMENT OF CASH FLOWS
For the period 1 January 2022 to 30 June 2022
Unaudited Unaudited
Period ended Period ended
30 June 2022 30 June 2021
GBP GBP
Cash flows from operating activities
Loss before income tax (108,394) (89,500)
Share based payment charge 5,489
(Increase)/decrease in trade and (2,828) -
other receivables
Increase/(decrease) in trade and
other payables (42,451) 89,500
------------------------- -------------------------
Net cash from operating activities (148,184) -
========================= =========================
Cash flows from financing activities
Cash received from issue of Ordinary
Shares - 2
Net cash flow from financing activities - 2
========================= =========================
Net increase in cash and cash equivalents (148,184) 2
Cash and cash equivalents at beginning 6,720,238 -
of period
------------------------- -------------------------
Cash and cash equivalents at end
of period 6,572,054 2
========================= =========================
NOTES TO THE GROUP FINANCIAL INFORMATION
1. General information
The Company was incorporated on 31 March 2021 as Bay Capital
Limited, a private limited company under the laws of Jersey with
registered number 134743. On 8 September 2021, the Company was
re-registered as an unlisted public limited company and its name
was changed to Bay Capital Plc. On 30 September 2021 the Company
shares were admitted to trading onto the Main Market of the London
Stock Exchange. The Company is the parent company of Bay Capital
Subco Limited (a private limited company under the laws of Jersey
with registered number 134744). The Company and its subsidiary
together form the Group.
The address of its registered office is 28 Esplanade, St.
Helier, Channel Islands, JE2 3QA, Jersey.
The Company has been incorporated for the purpose of identifying
suitable acquisition opportunities in accordance with the Group's
investment and acquisition strategy with a view to creating
shareholder value. The Group will retain a flexible investment and
acquisition strategy which will, subject to appropriate levels of
due diligence, enable it to deploy capital in target companies by
way of minority or majority investments, or full acquisitions where
it is in the interests of shareholders to do so. This will include
transactions with target companies located in the UK and
internationally.
2. Basis of preparation
These interim condensed consolidated financial statements and
accompanying notes have neither been audited nor reviewed by the
Company's auditor.
The principal accounting policies applied in the preparation of
the Interim Report are set out below. These policies have been
consistently applied to the period presented, unless otherwise
stated.
The Interim Report has been prepared in accordance with IFRS
using the measurement bases specified by IFRS for each type of
asset, liability, income and expense.
The Interim Report is presented in GBP unless otherwise
stated.
The Interim Report was approved by the Board of Directors on 13
September 2022.
Comparative figures
Comparative figures which have been presented cover the period
from incorporation on 31 March 2021 to 30 June 2021. The statement
of financial position comparative figures are shown as at 31
December 2021.
Going concern
The interim condensed consolidated financial statements have
been prepared on a going concern basis.
The basis for this conclusion is as a result of the projected
monthly financial forecasts prepared and reviewed by the Directors
contained in the working capital board memorandum approved by the
Board of the Company as part of its approval of these interim
condensed consolidated financial statements. The Directors have a
reasonable expectation that the Group has adequate resources to
continue in operational existence for the foreseeable future. Thus,
they continue to adopt the going concern basis of accounting in
preparing the interim condensed consolidated financial
statements.
3. Significant accounting policies
The interim condensed consolidated financial statements is based
on the following policies which have been consistently applied:
Basis of consolidation
The interim condensed consolidated financial statements
incorporate the results of Bay Capital Plc and its subsidiary.
Control is achieved when the Group is exposed, or has rights, to
variable returns from its involvement with the investee and has the
ability to affect those returns through its power over the
investee. Specifically, the Group controls an investee if, and only
if, the Group has:
-- Power over the investee (i.e., existing rights that give it
the current ability to direct the relevant activities of the
investee)
-- Exposure, or rights, to variable returns from its involvement with the investee
-- The ability to use its power over the investee to affect its returns
Generally, there is a presumption that a majority of voting
rights results in control. To support this presumption and when the
Group has less than a majority of the voting or similar rights of
an investee, the Group considers all relevant facts and
circumstances in assessing whether it has power over an investee,
including:
-- The contractual arrangement(s) with the other vote holders of the investee
-- Rights arising from other contractual arrangements
-- The Group's voting rights and potential voting rights
The Group re-assesses whether or not it controls an investee if
facts and circumstances indicate that there are changes to one or
more of the three elements of control. Consolidation of a
subsidiary begins when the Group obtains control over the
subsidiary and ceases when the Group loses control of the
subsidiary. Assets, liabilities, income and expenses of a
subsidiary acquired or disposed of during the year are included in
the consolidated financial statements from the date the Group gains
control until the date the Group ceases to control the
subsidiary.
Profit or loss and each component of other comprehensive income
(OCI) are attributed to the equity holders of the parent of the
Group and to the non-controlling interests, even if this results in
the non-controlling interests having a deficit balance.
When necessary, adjustments are made to the interim condensed
consolidated financial statements of subsidiaries to bring their
accounting policies into line with those used by other members of
the Group.
All intra-group transactions, balances, income and expenses are
eliminated in full on consolidation.
Functional and presentational currency
The Group's functional and presentational currency for these
financial statements is the pound sterling.
Employee benefits
Short-term employee benefit obligations are measured on an
undiscounted basis and are expensed as the related service is
provided. A liability is recognised for the amount expected to be
paid under short-term cash bonus or profit-sharing plans if the
Group has a present legal or constructive obligation to pay this
amount as a result of past service provided by the employee and the
obligation can be estimated reliably.
Debtors
Short term debtors are measured at transaction price, less any
impairment.
Creditors
Short term trade creditors are measured at the transaction
price.
Cash and cash equivalents
Cash and cash equivalents comprise cash at bank and in hand and
on demand deposits due within three months with banks and other
financial institutions, that are readily convertible into known
amounts of cash and which are subject to an insignificant risk of
changes in value.
Equity
Equity comprises of share capital, share premium, capital
redemption reserve, shared based payment reserve, and retained
earnings.
Share capital is measured at the par value.
Share premium and retained earnings represent balances
conventionally attributed to those descriptions. The transaction
costs relating to the issue of shares was deducted from share
premium.
Capital redemption reserve includes amounts in relation to
deferred shared capital.
Taxation
Income tax for the period is based on the taxable income for the
year. Taxable income differs from profit as reported in the
statement of comprehensive income for the period as there are some
items which may never be taxable or deductible for tax and other
items which may be deductible or taxable in other periods. Income
tax for the period is calculated on the basis of the tax laws
enacted or substantively enacted at the end of the reporting
period. Current and deferred tax is recognised in profit or loss,
except to the extent that it relates to items recognised in other
comprehensive income or directly in equity. In this case, the tax
is also recognised in other comprehensive income or directly in
equity, respectively.
Deferred income tax is recognised, using the liability method,
on temporary differences arising between the tax bases of assets
and liabilities and their carrying amounts in the interim condensed
consolidated financial statements. Deferred income tax is
determined using tax rates (and laws) that have been enacted, or
substantially enacted, by the end of the reporting period and are
expected to apply when the related deferred income tax asset is
realised, or the deferred income tax liability is settled.
Deferred income tax assets are recognised only to the extent
that it is probable that future taxable profit will be available
against which the temporary differences can be utilised.
Financial assets and liabilities
The Group's financial assets and liabilities comprise cash and
trade and other payables. Trade and other payables are not interest
bearing and are stated at their amortised cost.
Share-based payments
The Group operates an equity-settled share-based payment plan.
The fair value of the employee services received in exchange for
the grant of options is recognised as an expense over the vesting
period, based on the Group's estimate of awards that will
eventually vest, with a corresponding increase in equity as a
share-based payment reserve.
This plan includes market-based vesting conditions for which the
fair value at grant date reflects and are therefore not
subsequently revisited. The fair value is determined using a
binomial model.
Warrants
Warrants issued as part of share issues have been determined as
equity instruments under IAS 32. Since the fair value of the shares
issued at the same time as the warrants is equal to the price paid,
these warrants, by deduction, are considered to have been issued at
fair value.
Related party transactions
The Company discloses transactions with related parties which
are not wholly owned with the same group. It does not disclose
transactions with members of the same group that are wholly
owned.
4. Critical accounting estimates and judgments
In preparing the interim condensed consolidated financial
statements, the Directors have to make judgments on how to apply
the Group's accounting policies and make estimates about the
future. The Directors do not consider there to be any critical
judgments that have been made in arriving at the amounts recognised
in the interim condensed consolidated financial statements.
5. Net finance income
6 month period 3 month period
ended 30 June ended 30 June
2022 2021
GBP GBP
Interest income 1,033 -
========================== ==========================
6. Investments
Principal subsidiary undertakings of the Group
The Company directly owns the ordinary share capital of its
subsidiary undertakings as set out below:
Subsidiary Nature of business Country of Proportion of A Proportion
incorporation ordinary shares held of B ordinary
by Company shares held
by Company
------------------------ ------------------------ ------------------------ ----------------------- ---------------
Bay Capital Subco Intermediate holding Jersey, Channel Islands 100 per cent. 0 per cent.
Limited company
------------------------ ------------------------ ------------------------ ----------------------- ---------------
The address of the registered office of Bay Capital Subco
Limited (the "Subco") is 28 Esplanade, St. Helier, Channel Islands,
JE2 3QA, Jersey. The Subco was incorporated on 31 March 2021 and
prepares its own financial statements for the period ended 31
December each year.
The A ordinary shares have full voting rights, full rights to
participate in a dividend and full rights to participate in a
distribution of capital. The B ordinary shares have been issued
pursuant to the Company's Subco Incentive Scheme.
7. Trade and other receivables
As at 30 June As at 31 December
2022 2021
GBP GBP
Prepayments 5,150 2,322
Total 5,150 2,322
========================= =============================
8. Cash and cash equivalents
As at 30 June As at 31 December
2022 2021
GBP GBP
Cash at bank and in hand 6,572,054 6,720,238
========================= =============================
9. Trade and other payables
As at 30 June As at 31 December
2022 2021
GBP GBP
Accruals 27,194 69,645
Total 27,194 69,645
========================= =============================
10. Earnings per share
30 June 2022 30 June 2021
Loss attributable to the equity
holders of the Company (108,394) (89,500)
Weighted number of shares in
issue 70,000,000 2
------------- -------------
Loss per share (GBP) (0.002) (44,750)
11. Financial instruments
As at 30 June As at 31 December
2022 2021
GBP GBP
Financial assets
Cash and cash equivalents 6,572,054 6,720,238
As at 30 June As at 31 December
2022 2021
GBP GBP
Financial liabilities
Accruals 27,194 69,645
Financial risk management objectives and policies
The Group's financial assets and liabilities mainly comprise
cash, and trade and other payables. The carrying value of all
financial assets and liabilities equals fair value given their
short term in nature.
Credit risk
The Group's credit risk is wholly attributable to its cash
balance. The credit risk from its cash and cash equivalents is
deemed to be low due to the nature and size of the balances held as
of 30 June 2022.
Interest rate risk
As of 30 June 2022, the Group had no exposure to interest rate
risk.
Currency risk
All monetary assets and liabilities and all transactions of the
Group are denominated in its functional currency. As such, the
Group is exposed to no foreign currency risk.
Fair value of financial assets and liabilities
There is no material difference between the fair value of the
Group's financial asset and its carrying value in the interim
condensed consolidated financial statements.
12. Share capital
Allocated, called up and fully paid
30 June 30 June 31 December 31 December
2022 2022 2021 2021
Number GBP Number GBP
Ordinary
shares of
1p each 70,000,000 700,000 70,000,000 700,000
13. Reserves
Share premium and retained earnings represent balances
conventionally attributed to those descriptions. The transaction
costs relating to the issue of shares were deducted from share
premium.
Capital redemption reserve includes amounts in relation to
deferred shared capital.
The Group having no regulatory capital or similar requirements,
its primary capital management focus is on maximising earnings per
share and therefore shareholder return.
14. Share incentive Plan
On 14 September 2021, the Group created a Subco Incentive Scheme
within its wholly owned subsidiary Bay Capital Subco Limited
("Subco"). Under the terms of the Subco Incentive Scheme, scheme
participants are only rewarded if a predetermined level of
shareholder value is created over a three to five year period or
upon a change of control of the Company or Subco (whichever occurs
first), calculated on a formula basis by reference to the growth in
market capitalisation of the Company, following adjustments for the
issue of any new Ordinary shares and taking into account dividends
and capital returns ("Shareholder Value"), realised by the exercise
by the beneficiaries of a put option in respect of their shares in
Subco and satisfied either in cash or by the issue of new ordinary
shares at the election of the Company.
Under these arrangements in place, participants are entitled to
up to a share of 15 percent of the Shareholder Value created,
subject to such Shareholder Value having increased by at least 10
percent. per annum compounded over a period of between three and
five years from admission or following a change of control of the
Company or Subco.
15. Share based payments
The Subco Incentive Scheme detailed in Note 14 is an
equity-settled share option plan which allows employees and
advisors of the Group to sell their B shares to the Company in
exchange for a cash payment or for shares in the Company (at the
Company's election) if certain conditions are met.
These conditions include good and bad leaver provisions and that
growth in Shareholder Value of 10 percent compounded per annum is
delivered over a three to five year period for the scheme to vest.
This second condition is therefore a market condition which has
been taken into account in the measurement at grant date of the
fair value of the options.
The weighted average exercise price of the outstanding B share
options is GBP0.10 which have a weighted average contractual life
of 4 years 9 months. 110,000 B share options were issued in the
period, all of which were outstanding at the period end. No B share
options were exercised in the period. No B share options have
expired during the period.
The Group recognised GBP5,489 of expenditure statement of total
comprehensive income in relation to equity-settled share-based
payments in the period.
The fair value of options granted during the period was
determined by applying a binominal model. The expense is
apportioned over the vesting period of the option and is based on
the number which are expected to vest and the fair value of these
options at the date of grant.
The inputs into the binomial model in respect of options granted
in the period are as follows:
Opening share price 10.0p
Expected volatility
of share price 16.67%
Expected life of options 5 years
Risk-free rate 0.73%
Target increase in share
price per annum 10%
Fair value of options 50.342p
Expected volatility was estimated by reference to the average
5-year volatility of the FTSE SmallCap Index.
The target increase in Shareholder Value is laid out in the
Articles of Association of the Subco and represents the compounded
target annual increase in market capitalisation (adjusted for
capital raises and dividends) that needs to be met between the
third and fifth anniversary of the Group's admission onto the
London Stock Exchange in order for the scheme to vest.
The Group did not enter into any share-based payment
transactions with parties other than employees and advisors during
the current period.
16. Related party transactions
The Chairman and Non-Executive Director are entitled to fees of
GBP30,000 and GBP20,000 per annum for their respective roles with
the Company, as per their service agreements entered into on 14
September 2021. There are no other benefits paid to Directors
outside of their service fees, save for ordinary course
reimbursable expenses properly incurred in performing their duties
as Directors. The Company does not operate a pension scheme.
17. Ultimate controlling party
In the opinion of the Directors, there is no single ultimate
controlling party.
18. Post balance sheet events
There are no events subsequent to the reporting date which would
have a material impact on the financial statements.
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