TIDMHNG
RNS Number : 4330B
Hawkwing PLC
30 September 2022
30 September 2022
Hawkwing plc
("Hawkwing" or the "Company")
Unaudited interim results for the six months ended 30 June
2022
Hawkwing (LSE: HNG) announces its unaudited interim results for
the six months ended 30 June 2022.
Financial Highlights
-- Operating loss before tax of GBP0.2 million (H1 2021 loss: GBP0.2 million)
-- Loss before tax GBP0.5 million (H1 2021 loss: GBP0.2 million)
-- Loss per share from continuing operations of GBP0.91 pence (H1 2021 loss: GBP0.38 pence)
-- Cash at 30 June 2022 of GBP2.03 million (H1 2021: GBP0.88 million)
Keith Sadler, Senior Independent Non-Executive Director,
commented: " We are progressing discussions with Internet Fusion
Group ("IFG") in respect to our secured loan of GBP13.7 million,
together with associated costs, interest and redemption premium,
that we made as part of the proposed Reverse Takeover of IFG and we
will issue a detailed update once these discussions have been
concluded."
Enquiries:
Hawkwing plc
Keith Sadler Senior Independent Non-Executive
Director +44 (0)20 4582 3500
Gracechurch Group
Harry Chathli, Alexis Gore +44 (0)20 4582 3500
About Hawkwing plc
For more information, please refer to the Company's website:
www.hawkwing.co
Interim Management Report
Overview
The Company is a cash shell, whose principal activity is to
identify potential acquisition opportunities. Once the Company has
resolved matters with IFG, it will continue to consider such
opportunities, targeting acquisitions in industries such as digital
marketing, medical applications, business and financial services
and the sports sector.
On 12 July 2021, the Company announced the signing of a
non-binding agreement to potentially acquire IFG. In connection
with this potential acquisition, Hawkwing raised GBP16.5 million on
12 August 2021 through the issue of Convertible Unsecured Loan
Stock ("CULS"), of which the Company has loaned GBP13.7 million to
IFG (SPP) Limited (in anticipation of the Reverse Takeover of IFG).
This loan is secured against the assets of Northcore Limited and
Shade Limited (t/a Shade Station) and guaranteed by IFG. In
December 2021, IFG terminated discussions in respect of the heads
of terms announced in July 2021. The Company remain in discussions
with IFG in respect of its secured loan, associated costs, interest
and redemption premium ("IFG liability"), until these discussions
have been concluded it is not possible to ascertain if all of the
IFG liability will be recoverable.
The Company will update the market as and when appropriate.
Headline results
For the six-month
period to 30 June 2022 2021 Change
GBP000's GBP000's
-------------------- --------- --------- -------
Revenue - 22 -
Operating income - - -
Headline EBITDA (200) (190) 5.2%
Headline loss
before tax (200) (190) 5.2%
Headline loss per (0.35)
share (pence) (0.91) (0.38) pence
Cash flow and net debt
As at 30 June 2022, the Company's cash balance was GBP2.03
million (H1 2021: GBP0.88 million) and it had GBP16.5 million of
CULS outstanding .
Dividend
The Directors have not declared an interim dividend for the six
months ended 30 June 2022. The Directors will continue to review
the Company's dividend policy.
Risks and uncertainties
The Directors do not consider that the Company's principal risks
and uncertainties have changed since the publication of its annual
report and accounts for the financial year ended December 2021 on 6
June 2022, which contains a detailed explanation of the risks
relevant to the Company on Pages 3 and 4 and is available at
https://hawkwing.co/wp-content/uploads/2022/06/Hawkwing-Annual-Report-2021-FINAL.pdf
Statement of directors' responsibilities in respect of the
condensed interim report and consolidated financial statement
The Directors; being Keith Sadler; Ken Wotton; Ian Robinson and
Dwight Mighty (all Non-Executive) confirm that the condensed set of
interim financial statements has been prepared in accordance with
international Accounting Standard 34 "interim financial reporting",
as adopted by the European Union and that interim report includes a
fair review of the information required by DTR 4.2.7R and DTR
4.2.8R, namely an indication of important events that have occurred
during the first six months of the financial year; material related
party transactions in the first six months, and any material
changes in the related party transactions described in the last
annual report.
By order of the Board
Keith Sadler
Senior Independent Non-Executive Director
Condensed Income statement (unaudited)
For the six month period to 30 June 2022
6-month 6-month Year ended
period period to 31 December
to 30 June 2021
30 2021
June
2022
(Audited)
GBP000's GBP000's GBP'000's
Revenue - 22 22
Cost of sale - - -
Operating income - - -
Administrative expenses (200) (212) (910)
Operating loss (200) (190) (388)
Headline EBITDA (200) (190) (388)
Exceptional costs - - -
-------------
Operating loss (200) (190) (388)
Note
Other gains and losses 4 591 1,029
Finance costs. 5 (938) (731)
Loss before taxation (547) (190) (90)
Taxation 90 - -
----------- -------------
Loss after taxation for the period (457) (190) (90)
Loss for the period is entirely attributable to the owners of
the Company.
Note
Basic (pence) 2 (0.91) (0.38) (0.0004)
Diluted (pence) 2 (0.91) (0.38) (0.0004)
======= ======= =========
Condensed Balance Sheet (unaudited)
30 June 2022 30 June 2021 31 December 2021
GBP000's GBP000's GBP000's
(Audited)
Non-current assets
Investment in financial assets 14,461 14,414
Current assets
Trade and other receivables 2,154 34 1,577
Cash and cash equivalents 2,029 887 2,311
Total current assets 4,183 921 3,888
Current liabilities
Trade and other payables (41) (41) (90)
Net current assets 4,412 880 3,798
Non-current liabilities
Convertible loan notes (16,221) - (15,283)
Deferred tax liabilities (327) - (417)
_______________ ______________ ______________
(16,548 - (15,700)
_______________ ______________ ______________
Net assets 2,055 880 2,512
Equity
Share capital 3,731 3,731 3,731
Share premium 30,056 30,056 30,056
Option premium reserve 1,461 - 1,461
Merger reserve 251 251 251
Retained loss (33,444) (33,158) (32,987)
Equity attributable to owners of the Company 2,055 880 2,512
Condensed Statement of Cash Flows (unaudited)
For the six-month period to 30 June 2022
6-month period to 6-month period to Year ended
30 June 2022 30 June 2021 31 December 2021
Note GBP000's GBP000's GBP000's
Net cash outflow from operating activities 6 (282) (173) (1,549)
Investing activities
Advance of loan receivables - - (13,700)
______________ ______________ ______________
- - (13,700)
Financing activities
Proceeds on issue of convertible loans - - 16,500
Net decrease in cash and cash equivalents (282) (173) 1,251
Cash and cash equivalents at beginning of period 2,311 1,060 1,060
Cash and cash equivalents at end of period 2,029 887 2,311
Condensed Statement of Changes in Equity (unaudited)
For the six-month period to 30 June 2022
Share Share Merger Option Retained Total
Capital Premium reserve Premium Loss
reserve
GBP000's GBP000's GBP000's GBP000's GBP000's GBP000's
Balance as at
1 January 2021 3,731 30,056 251 - (32,967) 1,071
Total comprehensive
income for period - - - - (190) (190)
Balance as at
30 June 2021 3,731 30,056 251 - (33,157) 881
========= ========= ========= ========= ========= =========
Balance as at
1 January 2022 3,731 30,056 251 1,461 (32,987) 2,512
Total comprehensive
income for period - - - - (457) (457)
Balance as at
30 June 2022 3,731 30,056 251 1,461 (33,444) 2,055
========= ========= ========= ========= ========= =========
Notes to the Interim Report
General information
Hawkwing plc (the "Company") is incorporated and domiciled in
the United Kingdom. The Company is listed on the Standard Segment
of the Official List market of the London Stock Exchange. The
registered address is 25 Walbrook, London EC4N 8AF.
Basis of preparation
The condensed financial statements have been prepared in
accordance with IAS 34 "Half Year Financial Reporting" as adopted
by the European Union and the Disclosure and Transparency Rules of
the Financial Conduct Authority. These condensed financial
statements do not comprise statutory accounts within the meaning of
section 434 of the Companies Act 2006, do not include all the notes
of the type normally included in an annual financial report and
have not been audited or reviewed by the auditors pursuant to the
Financial Reporting Council guidance on Review of Interim Financial
Information. Accordingly, this report should be read in conjunction
with the annual report for the year ended 31 December 2021 (the
"Annual Financial Statements"), which has been prepared in
accordance with International Financial Reporting Standards as
adopted by the European Union ("IFRS"). The Annual Financial
Statements constitute statutory accounts as defined in section 434
of the Companies Act 2006 and a copy these statutory accounts has
been delivered to the Registrar of Companies. The auditor's report
on those statutory accounts was unqualified and did not contain a
statement under 498(2) or 498(3) of the Companies Act 2006.
The accounting policies adopted in the preparation of the
condensed financial statements are consistent with those used to
prepare the financial statements for the year ended 31 December
2021 and those applicable for the year ended 31 December 2022. The
preparation of the condensed financial statements requires
management to make judgements, estimates and assumptions that
affect the application of accounting policies and the reported
amounts of assets and liabilities, income and expense. Actual
results may differ from these estimates. In preparing these
condensed financial statements, the significant judgements made by
management in applying the accounting policies and the key sources
of estimation uncertainty were the same as those that applied to
the Annual Financial Statements described above. The condensed
financial statements have been prepared on a going concern basis,
under the historical cost convention.
The reporting currency of the Company is GBP, unless stated
otherwise.
Application of new standards in issue
In the current period, no new or amended standards have been
adopted for the period commencing on or after 1 January 2022 have
had any impact on these financial statements.
Going concern
The Company raised GBP1.3m, before costs, in September 2020 from
an issue of shares, and issued convertible loan notes for proceeds
of GBP16.5 million in August 2021. After an onward secured loan of
GBP13.7m in September 2021 the Company has GBP2.3 million in cash
on its balance sheet at 30 June 2022. The directors are in
discussion with IFG in respect of its secured loan, associated
costs, interest and redemption premium ("IFG liability"), until
these discussions have been concluded it is not possible to
ascertain if all of the IFG liability will be recoverable. The
Company has minimal ongoing costs which reflect the costs of
administrating its listing on the London Stock Exchange.
Based on the current cash availability, predicted expenditure
levels, and the anticipated continued CULS holders support, the
directors believe the Company's resources are sufficient to allow
the Company to meet its obligations as they fall due for the
foreseeable future, and as a minimum for a period of at least 12
months from the date of approval of these financial statements.
Consequently, the Directors will continue to prepare the financial
statements on a going concern basis.
1. Segmental Analysis
The Company's single reporting segment is that of its activities
as an investment holding company. This activity takes place wholly
in the United Kingdom.
2. Loss per share
Basic and diluted loss per share attributable to ordinary
shareholders:
6-month period 6-month period
to 30 June to 30 June
2022 2021
pence per pence per
share share
Basis loss per share (0.91) (0.38)
Diluted loss per share (0.91) (0.38)
The calculation of loss per share per share is based on the
following data:
6-month period 6-month period
to 30 June to 30 June
2022 2021
GBP000's GBP000's
Loss for the purposes of basic earnings
per share being net loss attributable to
owners of the Company (457) (190)
Number of Number of
Shares Shares
Weighted average number of shares in issue: 50,288,019 50,288,019
3. Taxation
6 month 6 month
period to period to
30 June 2022 30 June
2021
Current taxation
UK corporation tax - -
Deferred tax
Origination and reversal of timing differences 90 -
________ _______
Total tax credit 90 -
________ _______
The charge for the year can be reconciled
to the income statement as follows:
Loss before tax (547) (190)
Tax credit at the UK corporation tax
rate of 19% (2021: 19%) (104) (36)
Effects of:
Losses (utilised)/not recognised (19) 36
Adjustment for changes in tax rate 33 -
_______ _______
Tax (credit) / charge for the period (90) -
_______ _______
The Company has tax losses carried forward of GBP1,121,316
(2021 GBP1,475,181) in respect of which no deferred tax asset
has been recognised due to uncertainty of the Company's expected
future profitability.
4. Other gains and losses
6 month 6 month
period to period to
30 June 2022 30 June
2021
Net gain on financial assets measured 591 -
at FVTPL
On 16 September 2021 the Company issued a three-year term loan,
on which interest is charged at 8%, which may be capitalised in
year one (the IFG loan). The loan is secured on the assets of the
borrower and its group.
The loan carries a redemption premium upon repayment. The
premium is 5% for repayments up to 15 September 2022, 10% for
repayments between 16 September 2022 and 15 September 2023 and 15%
thereafter.
The contractual terms of this financial instrument are such that
the repayment and redemption premium do not meet the conditions to
be measured at amortised cost, and the instrument is consequently
measured at fair value through profit or loss (FVTPL).
The net gain on financial assets measured at FVTPL comprises an
increase in fair value of GBP714,000 and interest of
GBP315,000.
5. Finance
6 month 6 month
period to period to
30 June 2022 30 June
2021
Interest cost on convertible loan notes 938 -
6. Notes to the Statement of Cash Flow
6 month 6 month period
period to to
30 June 2022 30 June 2022
Loss for the year before taxation (547) (191)
Adjustments for:
Other gains & losses 891 -
________ ________
Operating cash flows before movements
in working capital 344 (191)
(Increase)/Decrease in receivables (576) 9
Increase/(Decrease) in payables (50) 9
________ _________
Cash (used in) / generated by operations (282) (173)
Income taxes - -
Net cash flows from operating activities ________ _________
(282) (173)
________ _________
6. Notes to the Statement of Cash Flow (continued
Cash and cash equivalents comprise cash and short-term bank
deposits with an original maturity of three months or less. The
carrying amount of these assets is approximately equal to their
fair value.
The Company's net cash has moved as follows during the year:
1 January Cash flow Non-cash 30 June
2022 movement 2022
---------- ----------- ---------- -------------------
GBP000's GBP000's GBP000's GBP000's
Cash and bank balances 2,311 (282) - 2,029
Net cash 2,311 (282) - 2,029
---------- ----------- ---------- -------------------
7. Interim accounts
This interim statement will be available of the Company's
investor relations website at www.hawkwing.co
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