TIDMGUN
RNS Number : 0658T
Gunsynd PLC
15 March 2019
Gunsynd plc
("Gunsynd", or "the Company")
Interim Results for the six months ended 31 January 2019
Chairman's Statement
I am pleased to report the interim results for the six months
ended 31 January 2019.
Review of Investments
United Oil and Gas Plc ("UOG")
UOG is an independent oil & gas company established in 2015
by a former Tullow Oil team. Its strategy is to acquire assets
where the management team's experience can drive near-term activity
and unlock previously untapped value. Recently UOG has been awarded
two North Sea licences and has a minority interest in the Colter
well. This year OUG is expecting 3D Seismic to be acquired on the
Podere Gallina licence in which it has a minority interest, to
undertake development drilling at Waddock Cross and acquired 3D
data to be processed on its minority interest in a Jamaica licence,
ahead of a farm-out process.
Gunsynd currently holds 3.065m shares in UOG representing 0.89%
of its issued share capital.
Sale of 2% interest in Horse Hill Developments Limited ("HHDL")
to UK Oil and Gas plc ("UKOG")
As announced on 25 September 2018, Gunsynd sold its 2% interest
in HHDL to UKOG for a total consideration of GBP600,000 being
31,171,898 UKOG shares plus GBP50,000 in cash. As announced on 11
March 2019, Gunsynd has since disposed of 31,171,898 shares in UK
Oil and Gas plc ("UKOG") at an average price of 1.405 pence per
share for a total consideration of GBP437,966.
Following this disposal, Gunsynd no longer holds an interest in
UKOG.
Sunshine Minerals Limited ("Sunshine")
Sunshine is a nickel and bauxite exploration company focussing
on the Solomon Islands. During the period, Metminco Ltd, an ASX
listed company, conditionally agreed to acquire 100% of Sunshine.
However, they subsequently withdrew from the transaction. Sunshine
is currently in talks with interested parties with a view to
completing the sale of Sunshine and advancing the project. As
announced on December 20, Axiom Mining Limited is seeking judicial
review of the decision to award the Jejevo prospecting licence to
Sunshine Nickel, Sunshine's 100% owned subsidiary. Axiom's
Statement of Claim for judicial review names Sunshine as a
defendant alongside the Ministry of Mines, Energy and Rural
Electrification and one other party.
Gunsynd currently holds a 19.8% stake in Sunshine Minerals.
Human Brands International, Inc. ("Human Brands")
During the period, Human Brands' main focus was on building and
growing its Mazeray business (which is discussed below) and
launching its flagship whisky brand, Shinju.
Human Brands' first container of Shinju arrived in the US in
November 2018. Human Brands planned a soft launch into two of its
key markets, Washington DC/Maryland and Fort Lauderdale, Florida.
In just those two markets, with minimal sales and marketing
support, Human Brands sold approximately 300 cases of Shinju. A US
distributor, Oak Beverage, will launch Shinju into the New York
market starting on1 April 2019. Oak Beverage has roughly 10,000
accounts throughout the State and plans to make Shinju its premier
whisky brand in its portfolio. Shinju has been added to the menu at
Bloomingdales' flagship location on 5(th) Avenue in New York City.
The brand was also featured at New York City Fashion Week 2019.
Fedway, New Jersey's second largest distributor, has committed to
take on Shinju distribution.
Two major retailers have also committed to buying Shinju for
2019; Costco, one of the largest alcohol sellers in the US, and
Total Wine, plan to start selling Shinju.
In the last half of 2018 Human Brands also focused on building
its Mazeray division. Mazeray is Human Brands' division which sells
Miolo, a premier Brazilian wine. Human Brands officially acquired
Mazeray in March 2018 but did not take full operational control
until July 2018. Since then, Human Brands has significantly grown
the business. Mazeray was selling into a number of States in the US
prior to the acquisition, but since then Human Brands has expanded
the brand's distribution into several new States, including
Maryland, Nevada, California, Texas, Arizona, Wisconsin and
Tennessee.
Human Brands has also spent the past six months working to get
ready for the 2019 launch of its flagship Tequila brand, Copa
Imperial.
Human Brands is making good progress towards preparing for a
proposed listing on the Standard Segment of the Main Market of the
London Stock Exchange during 2019 Audits for 3 years prior to 2018
have now been completed and work has begun on the prospectus
Gunsynd has invested approximately GBP300,000 by way of
convertible loan notes in Human Brands.
Oyster Oil and Gas Limited ("Oyster")
Gunsynd invested GBP250,000 into Oyster by way of a convertible
loan on 21 July 2017. In addition to the convertible loan note,
Gunsynd holds 2,313,000 ordinary shares in Oyster representing
approximately 5.29% of Oyster's issued share capital.
It was announced on 4 March 2019 that Northbay Capital Partners
Corp. and Gunsynd had reached conditional agreement ("Agreement")
with Oyster to settle aggregate debts of CAD1,426,500 owed to them
by Oyster in exchange for the outstanding share capital of Oyster's
wholly-owned operating subsidiary, Oyster Oil & Gas Limited
("Subco"), established under the laws of the British Virgin
Islands. Northbay and Gunsynd are currently in discussions with a
third party to raise money for the Subco to progress further work
on the Madagascar licence. We maintain our belief that this asset
has great potential. This change in strategy will hopefully see
that realised. Advancing this project is now a priority for Gunsynd
alongside the Human Brands IPO.
Oyster's production sharing contracts in Madagascar and Djibouti
are held through Subco.
The Agreement is subject to the approval of the shareholders of
Oyster, which Oyster intends to seek at a meeting of shareholders
in the near term. It is also subject to the review and approval of
the TSX Venture Exchange.
The future board composition of Subco is still under discussion
and a further announcement will be made in due course.
Brazil Tungsten Holdings Limited ("BTHL")
BTHL successfully raised a further US$2.0m of equity funds
during the period. BTHL also settled its outstanding debt with
Wogan which will allow it to forge a new commercial offtake
agreement. Production has slowed substantially while funds are
utilised to complete a staged exploration programme on its existing
licence with the main purpose of identifying a resource initially
for 2-4 years of production.
BTHL's initial focus will be on re-assaying the existing core
samples. There are irregularities regarding the historical logging
of the core and the assays. Re-logging and re-assaying the core
will give BTHL greater confidence with respect to the surrounding
mineralisation.
The team expects the programme to be completed by October
2019.
Gunsynd currently holds approximately 5% in BTHL.
FastBase Inc ("FastBase")
In light of the delayed timetable for the FastBase IPO and the
anticipated IPO of Human Brands in addition to recent developments
with the Oyster oil and gas asset in Madagascar, Gunsynd has
decided at this time to no longer assist FastBase in conjunction
with its listing on the London Stock Exchange and as a consequence
will not receive a consultancy fee in return for its assistance. No
funds were invested in FastBase and nothing will be written off as
a result of this decision. Gunsynd may revisit this in the
future.
All of our investments are minority investments. Certain of
these investments may seek to IPO. Whilst we may offer advice to
management of investee companies in this regard they can and
sometimes do ignore such advice. Similarly, private companies don't
have the disclosure requirements of public companies and are under
no obligation to keep us constantly updated. This seems to be lost
on many. Whilst it can be frustrating not least for us, the
regulatory hurdles to IPO are substantial and time consuming. There
are also market conditions to consider. Together these can severely
impact the potential of any IPO. Management may also feel they can
achieve a far higher valuation by waiting for an improvement in
market timing. This has been very evident lately due to market
conditions in general and Brexit uncertainty. All these things can
and do impact expectations of timings of any IPO. Decisions are
ultimately made by investee companies not by us.
Finance Review
The Company's loss for the period was GBP248,000 (31 January
2018 - GBP156,000 loss) mainly attributable to market value
revaluation losses of GBP178,000 (2018: loss of GBP25,000) mostly
arising from our Oyster shareholding.
The Company had net assets at 31 January 2019 of GBP2,175,000
(31 January 2018: GBP3,110,000) including cash balances of
GBP543,000 (31 January 2018: GBP449,000).
During the period, the Company did not raise any equity capital,
but managed its cashflow through the existing cash balances and
listed investment sales.
Outlook
Whilst conditions have been far from perfect, it is pleasing
that we managed to sell our Horse Hill Developments stake and
finally made progress on the Oyster situation where we have
strengthened our position. We are particularly pleased with
progress at Human Brands and excited by its future potential.
The Board would also like to take this opportunity to thank
shareholders for their continued support.
Hamish Harris
Chairman
This announcement contains inside information for the purposes
of Article 7 of EU Regulation 596/2014.
The directors of Gunsynd accept responsibility for this
announcement.
For further information, please contact:
Gunsynd plc:
Hamish Harris +44 (0) 20 7440 0640
Nominated Adviser / NEX Exchange Corporate Adviser:
Cairn Financial Advisers LLP
James Caithie/Liam Murray +44 (0) 20 7213 0880
Joint Broker:
Peterhouse Corporate Finance
Lucy Williams +44 (0) 20 7469 0930
The interim results will be available electronically on the
Company's website: www.gunsynd.com.
Gunsynd plc
Interim statement of comprehensive income - unaudited
For the six months ended 31 January 2019
Unaudited Unaudited
Six months Six months Audited
ended ended Year ended
31 January 31 January 31 July
2019 2018 2018
GBP'000 GBP'000 GBP'000
Unrealised (loss) on available
for sale assets (178) (25) (535)
Realised Profit on available for
sale assets 56 - 41
------------ ------------ ------------
(122) (25) (494)
Administrative and other costs (139) (131) (361)
Share based payment charge - - (100)
Finance income 13 - 16
Loss before tax (248) (156) (939)
Taxation - - -
------------ ------------ ------------
Loss for the period (248) (156) (939)
------------ ------------ ------------
Loss for the period and total
comprehensive loss attributable
to equity shareholders (248) (156) (939)
------------ ------------ ------------
Other comprehensive income/(expenditure) - - -
for the period net of tax
Total comprehensive income/(expenditure)
for the period (248) (156) (939)
------------ ------------ ------------
Loss per ordinary share
Basic (0.005) (0.003) (0.019)
Diluted (0.005) (0.003) (0.019)
Gunsynd plc
Interim statement of financial position - unaudited
As at 31 January 2019
Unaudited Unaudited Audited
At 31 January At 31 January At 31 July
2019 2018 2018
GBP'000 GBP'000 GBP'000
ASSETS
Non-current assets
Available for sale investments 1,592 2,636 2,098
--------------- --------------- ------------
Total non-current assets 1,592 2,636 2,098
--------------- --------------- ------------
Current assets
Trade and other receivables 207 147 296
Cash and cash equivalents 543 449 337
--------------- --------------- ------------
Total current assets 750 596 633
Total assets 2,342 3,232 2,731
--------------- --------------- ------------
LIABILITIES
Current liabilities
Trade and other payables (167) (122) (308)
--------------- --------------- ------------
Total current liabilities (167) (122) (308)
--------------- --------------- ------------
Total liabilities (167) (122) (308)
--------------- --------------- ------------
Net assets 2,175 3,110 2,423
--------------- --------------- ------------
EQUITY
Equity attributable to equity
holders of the company
Ordinary share capital 489 489 489
Deferred share capital 1,729 1,729 1,729
Share premium reserve 10,536 10,540 10,536
Share-based payments reserve 205 174 234
Retained earnings (10,784) (9,822) (10,565)
--------------- --------------- ------------
Total equity 2,175 3,110 2,423
--------------- --------------- ------------
Gunsynd plc
Interim statement of changes in equity - unaudited
For the six months ended 31 January 2019
Ordinary Deferred Share Share Retained Total
Share share Premium Based earnings
Capital capital Payment
Reserve
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Unaudited
At 1 August 2017 489 1,729 10,540 174 (9,666) 3,266
Loss for the six month period
ended 31 January 2018 - - - - (156) (156)
--------- --------- --------- --------- ---------- --------
Total comprehensive loss - - - - (156) (156)
At 31 January 2018 489 1,729 10,540 174 (9,822) 3,110
--------- --------- --------- --------- ---------- --------
Audited
At 1 August 2017 489 1,729 10,540 174 (9,666) 3,266
Loss for the year - - - - (939) (939)
--------- --------- --------- --------- ---------- --------
Total comprehensive loss - - - - (939) (939)
Transactions with owners:
Issue of share capital - - - - - -
Share issue costs - - (4) - - (4)
Share options issued - - - 100 - 100
Share options cancelled - - - (40) 40 -
At 31 July 2018 489 1,729 10,536 234 (10,565) 2,423
--------- --------- --------- --------- ---------- --------
Unaudited
At 1 August 2018 489 1,729 10,536 234 (10,565) 2,423
Loss for the six month period
ended 31 January 2019 - - - - (248) (248)
--------- --------- --------- --------- ---------- --------
Total comprehensive loss - - - - (248) (248)
Transactions with owners:
Share options lapsed - - - (29) 29 -
At 31 January 2019 489 1,729 10,536 205 (10,784) 2,175
--------- --------- --------- --------- ---------- --------
Gunsynd plc
Interim statement of cash flows - unaudited
For the six months ended 31 January 2019
Unaudited Unaudited Audited
Six months ended Six months ended Year ended
31 January 2019 31 January 2018 31 July 2018
GBP'000 GBP'000 GBP'000
------------------ ------------------ --------------
Cash flows from operating activities
(Loss)/profit after tax (248) (156) (939)
Finance income net of finance costs (13) - (11)
Unrealised Revaluation of AFS assets 178 25 535
(Loss)/profit on sale of AFS Asset (56) - (41)
Share based payment - - 100
Operating cash outflow before changes in working capital (139) (131) (356)
Movement in trade and other receivables 89 339 190
Movement in trade and other payables (141) (55) 141
Cash flow from operations (191) 153 (25)
Tax received - - -
------------------ ------------------ --------------
Net cash flows used in operating activities (191) 153 (25)
Cash flow from investing activities
Payments for investments in AFS assets (100) (76) (365)
Disposal proceeds from sale of AFS asset 497 - 358
Finance income - - 11
Net cash outflow from investing activities 397 (76) 4
Cash flows from financing activities
Cost of issue of ordinary shares - - (14)
------------------ ------------------ --------------
Net cash inflow from financing activities - - (14)
Net (decrease)/increase in cash and cash equivalents 206 77 (35)
Cash and cash equivalents at start of period 337 372 372
Cash and cash equivalents at end of period 543 449 337
------------------ ------------------ --------------
Notes to the interim report
For the six months ended 31 January 2019
1. Basis of preparation
As permitted IAS 34, 'Interim Financial Reporting' has not been
applied to these half-yearly results. The financial information of
the Company for the six months ended 31 January 2019 have been
prepared in accordance with the recognition and measurement
principles of International Financial Reporting Standards,
International Accounting Standards and Interpretations
(collectively "IFRS") issued by the International Accounting
Standards Board ("IASB") as adopted by the European Union ("adopted
IFRS") and are in accordance with IFRS as issued by the IASB. The
condensed interim financial information has been prepared using the
accounting policies which will be applied in the Company's
statutory financial statements for the year ending 31 July
2018.
The financial information shown in this publication is unaudited
and does not constitute statutory accounts as defined in Section
434 of the Companies Act 2006. The comparative figures for the
financial year ended 31 July 2018 have been derived from the
statutory accounts for 2018. The statutory accounts have been
delivered to the Registrar of Companies. The auditors have reported
on those accounts; their report was unqualified and did not contain
statements under the section 498(2) or 498(3) of the Companies Act
2006.
2. Loss per share
The calculation of the loss per share is based on the loss
attributable to ordinary shareholders divided by the weighted
average number of shares in issue during the period.
Unaudited Unaudited
Six months Six months Audited
ended ended Year ended
31 January 31 January 31 July
2019 2018 2018
GBP'000 GBP'000 GBP'000
Loss on ordinary activities after
tax (248) (156) (939)
Weighted average number of ordinary
shares for the purposes of basic
earnings/(loss) per share (millions) 4,882.9 4,882.9 4,882.9
Weighted average number of ordinary
shares for the purposes of diluted
earnings/(loss) per share (millions) 5,224.6 4,915.5 5,225.6
Basic (loss)/earnings per share
(expressed in pence) (0.005) (0.003) (0.019)
Diluted (loss)/earnings per share
(expressed in pence) (0.005) (0.003) (0.019)
However, due to losses incurred in the year there is no dilutive
effect from the potential exercise of the share options in
existence.
3. Events after the end of the reporting period
None noted
4. Financial Information
The Board of Directors approved this interim report on 15 March
2019.
A copy of this report can be obtained from our website at
www.gunsynd.com
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 DMGMFDKGGLZM
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