28 June
2019
Clear Leisure
Plc
("Clear Leisure", "the Company" or
“the Group”)
FINAL RESULTS
For the Year Ended
31 December 2018
Clear Leisure (AIM: CLP) announces its final results for the
year ended 31 December 2018.
Clear Leisure is an AIM listed investment company with a
portfolio of companies primarily encompassing the leisure and real
estate sectors mainly in Italy.
The focus of the management is to pursue the monetisation of all of
the Company’s existing assets, through selected realisations,
court-led recoveries of misappropriated assets and substantial
debt-recovery processes. The Company has recently realigned its
strategic focus to technology related investments, with special
regard to interactive media, blockchain and AI sectors. For further
information, please visit, www.clearleisure.co.uk
Francesco Gardin, Chairman of
Clear Leisure, commented, “Much has been achieved since the
appointment of the new Board in July
2015, but other challenges still need to be overcome before
we achieve our goal of realising meaningful value for the Company’s
shareholders.
“We are confident that by continuing with our processes and
strategies, this goal will be met.”
The Company advises that the 2018 Report and Accounts have been
posted out to shareholders, together with the AGM notice and form
of proxy. The AGM will be held at Company’s legal address, 22 Great
James Street London WC1N 3ES, at 12pm on
Monday, 22 July 2019.
For further information please
contact:
Clear Leisure
Plc +39
335 296573
Francesco Gardin, CEO and Executive
Chairman
SP Angel Corporate Finance (Nominated Adviser &
Broker) +44 (0)20 3470 0470
Jeff Keating / John Mackay
Leander (Financial PR)
+44
(0) 7795 168 157
Christian Taylor-Wilkinson
CHAIRMAN’S STATEMENT
I am pleased to present the Company’s Final Results for the year
ended 31 December 2018.
Overview
Since its appointment, in July
2015, the Board has worked diligently to unravel an
inherited, complex and often disputed ownership of a number of
assets whilst simultaneously looking to reduce and reschedule the
Group’s debt burden.
During 2018, the Company achieved sufficient progress in this
task to allow it to begin seeking new investment opportunities,
primarily within the technology sector, in which the Chairman has
considerable experience.
During the year, the debt of the Company reduced by €2,256,722;
improving the Company’s balance sheet, reducing the Group’s
interest burden and freeing the Board and its relevant advisers
from the substantial time consumed in dealing with debt
holders.
Between March and May 2018, the
Company issued 30,584,679 new ordinary shares of 0.25 pence each (“New Ordinary Shares”) in order
to convert £341,722 in outstanding loans and in October, it issued
a further 1,625,000 New Ordinary Shares to convert the remaining
amount (£65,000) of its 2010 7% bond.
In December, Clear Leisure converted €2.1 million at face value
plus accrued interest, of its €9.9 million Zero Rate Convertible
Bond into 50,992,826 New Ordinary Shares, representing an 80%
discount on the Bond’s face value.
Whilst managing to reduce debt, Clear Leisure also secured
access to additional funds. Eufingest SA (“Eufingest”), a
substantial shareholder in the Company, continued supporting the
Company through the provision of loan facilities amounting to
€250,000 in 2018. Additionally, £1.25 million (before expenses) was
raised via three equity placings between January and May 2018.
In addition to the debt reduction initiatives, the Company
continued its strategy of monetising its assets, most notably being
the successful recovery of £1.15 million (before expenses) in
January 2019 of the Company’s
interest in an IT and media company, relating to an investment the
Company disposed of in 2007.
This successful outcome underlines why the Company will not
hesitate to initiate legal action to protect shareholders
interests. Two examples of this are:
- Firstly, the Company firmly opposed the decision of the Ivrea
Court to deny the assignment of land belonging to Mediapolis srl
(“Mediapolis”) to a Clear Leisure subsidiary (Clear Leisure 2017
Limited – “Clear Leisure 2017”), the Court preferring to sell the
land through an auction process for €1.96 million (which is covered
by a prior charge granted to a Clear Leisure subsidiary)
- Secondly, the Company counter-claimed for damages in the UK
High Court against former shareholders and management of its
subsidiary, Sosushi Company Srl, (“Sosushi”).
Moreover, the Company has been fully supportive of its Italian
subsidiary, Sipiem Spa (“Sipiem”), which, in March 2019,
filed a €10.8m claim against the previous management and audit
committee, whilst, with regard to Mediapolis, the Company retains
the unchallengeable legal rights to receive the proceeds of the
sale (net of auction fees).
In addition to the above, in December
2018, Sosushi, has filed a claim to the Bologna Court
against the previous management for an amount of €1.03 million,
whilst reopening the criminal case in the Bologna Court against the
former director and largest shareholder of the subsidiary.
The Company, with the support of its lawyers, remains very
confident on the successful outcome of these legal actions.
During the first half of the year, Clear Leisure completed its
€200,000 investment (of which €100,000 of the consideration due was
paid in cash and €100,000 in New Ordinary Shares) in a
cryptocurrencies mining datacentre, located in Serbia, through a
joint venture partnership with a specialist IT company 64Bit
Ltd.
In December 2018, Clear Leisure
invested £278,750 for a 10% interest in PBV Monitor Srl, (“PBV
Monitor”), an Italian company specialising in the acquisition and
dissemination of data for the legal services industry, utilising
proprietary market intelligence tools and dedicated search
software.
It is the Board’s intention to remain alert to further
opportunities to improve the Company’s and Group’s financial
position, should they arise.
Financial Review
The Group reported a total comprehensive loss of €4,331,000 for
the year ended 31 December 2018
(2017: total comprehensive loss €1,884,000) and a loss before tax
of €3,939,000 (2017: loss before tax €63,000). Operating losses for
the period were €3,866,000 (2017: €324,000).
The increase of the loss is primarily due to the decrease of
value assigned to Mediapolis as result of the non-assignment of the
land to the Company and its subsequent sale via an auction process
(see Operational Review). Clear Leisure 2017, the wholly owned
subsidiary of the Company, retains the unchallengeable rights on
the proceeds of the auction. Additionally, the Company has
prudently reduced the amount it believes it could potentially
recover from Sosushi and Sipiem. These prudent provisions, together
with an increase in legal expenses, are reflected in the increase
in administrative expenses.
The undiluted Net Asset Value (“NAV”) of the Group as of
31 December 2018 increased to €1.9
million, compared to €1.2 million at 31 December 2017.
The increase is mainly due to three events: the conversion at a
discount of the Zero Rate Convertible Bond for the amount of €2.1
million; the £1.25 million capital increase during the year; and
the £1.15 million legal settlement (before costs) with the IT and
media company. The increase of the NAV has been partially offset by
the decrease of value assigned to by Mediapolis, Sipiem and
Sosuhi.
The Group had Net Current Assets of €7,538,000 as at
31 December 2018 (2017: net current
assets of €2,443,000) as result of the reschedule of the Zero Rate
Convertible Bond’s maturity from 2018 to 2022 and its partial
conversion, together with the conversion of short term outstanding
loans and the increase of the current investments.
Operational Review
As already mentioned, the Company began 2018 by making its first
investment under the new Board’s control; in a cryptocurrency
datamining joint venture. Its partner in this operation is 64 Bit
Ltd, a Maltese based specialist in data mining. Clear Leisure’s 50%
stake in the joint venture was satisfied by the issue of 7,878,130
Clear Leisure New Ordinary Shares and a payment of €100,000 cash.
The data centre commenced operations in July
2018 and by 20 September 2018
had mined 0.454 Bitcoins and 17 Litecoins.
Responding to the significant downturn in the price of Bitcoin
towards the end of 2018, the Board elected, on March 2019, to place the data centre on “care and
maintenance” until such time that the value of cryptocurrencies
rose to a level sufficient to make the operation profitable. In
this regard, the dramatic recovery in the Bitcoin price from just
over $3,000 in December to above
$12,000 at the time of writing,
offers encouragement for a resumption of cryptocurrency
“mining.”
The Company’s long-term investment in Mediapolis Srl
(“Mediapolis”) was concluded in 2018, with the Court appointed
administrators ruling against Clear Leisure’s appeal to assign the
land owned by Mediapolis to a subsidiary of the Company, over which
it held the first charge mortgage of €2.68 million. Subsequently,
on 25 July, the land was auctioned off to a third party for €1.96
million. The Company’s wholly owned subsidiary, Clear Leisure 2017,
retains the unchallengeable rights on the proceeds of the
auctions.
The board was successful in its prosecution against a UK IT and
media company, where it recovered funds of £1.15 million (before
legal expenses), relating to a full and final settlement from an
investment the Company disposed of in 2007.
On 28 December, the Company announced the acquisition of a 10
per cent interest in PBV Monitor, an Italian company specialising
in the acquisition and dissemination of data for the legal services
industry, utilising proprietary market intelligence tools and
dedicated search software. PBV addresses the strategic needs of a
global market for legal services estimated at $849 billion in 2017 and projected to exceed
$1 trillion in 2021. Current
competitors, (such as “Legal 500,” and “Chambers,”) cover only a
fraction of facilities available and under development by PBV.
Portfolio Companies
An update on the Group’s portfolio companies as at 31 December 2018 is as follows (percentage of
equity held is shown in parenthesis):
SIPIEM SpA (50.17%): is a minority shareholder
in T.L.T. Sas which owns a number of real estate assets including
the operating Ondaland Waterpark located in north-west Italy.
The waterpark is a popular summer destination for Italians
living in north-west Italy and
there are plans to create an all year family-oriented theme park
facility, using the existing 7500 sqm empty building, erected in
2012.
GeoSim Systems Ltd, (“GeoSim”) (www.geosim.co.il)
(4.46%): is an Israeli company that develops 3D modelling software.
Clear Leisure was advised that the most recent round of fundraising
by GeoSim took place at a pre-money valuation in excess of
US$11 million, corresponding to a
valuation for Clear Leisure’s stake of US$667,487 (or approximately €583,319). This
value has been incorporated in the balance sheet.
GeosSim, after having concluded the mapping of Vancouver and its 'Proof of Concept” phase,
has been awarded, on a “sole source” basis, two important contracts
in recognition of the uniqueness of its 3D modelling technology.
The first contract, for Hong Kong
International Airport (“HKIA”), the world’s busiest cargo airport
gateway (primarily to China and
rest of Asia) and one of the
world’s busiest passenger airports, entails the production of a
high definition reality model of HKIA’s Terminal 1.
The second contract, awarded by the Los Angeles Metropolitan
Transportation Authority, is to produce a high-definition “Reality
Model” of a segment of downtown LA (including 7th Street Metro
Center Station), that will serve as a simulator for training First
Responders in a variety of emergency situations.
Mediapolis Srl (84.04%): in October 2017 and despite strenuous legal
challenges by Clear Leisure, the Ivrea Court declared the company
bankrupt. At that time, Mediapolis owned a strategically located
development site, covering 497,884 sqm, in north-west Italy on the A4/A5 motorway between
Milan and Turin and 10 holiday villas near Porto Cervo,
the most exclusive holiday location in Sardinia. Following the Ivrea Court ruling in
favour of the winding-up petition, the Company requested the
assignment of the land, on which Clear Leisure, through its wholly
owned subsidiary Clear Leisure 2017, holds a first charge. During
2018 the Ivrea Court denied the assignment of the land to Clear
Leisure and sold the land via auction for a consideration of €1.96
million. Clear Leisure 2017, the wholly owned subsidiary of the
Company, retains the unchallengeable rights on the proceeds of the
auctions.
PBV Monitor Srl (pbvmonitor.com) (10%): in December 2018 Clear Leisure acquired a 10 per
cent interest in PBV Monitor, an Italian company specialising in
the acquisition and dissemination of data for the legal services
industry, utilising proprietary market intelligence tools and
dedicated search software, for a consideration of £278,750 paid in
New Ordinary Shares.
Over the past four years, PBV Monitor has assembled and analysed
the activity of over 8,600 law firms worldwide and over 100,000
business lawyers in 100 jurisdictions, producing approximately
43,000 articles that have regularly been published on the Global
Legal Chronicle (globallegalchronicle.com), a trusted news source
for lawyers and businesses, available in English, Italian and
French. Currently, PBV Monitor processes approximately 12
thousand corporate transactions per year,
In addition, PBV Monitor has secured important media
partnerships with leading publishers to market online and printed
directories to Italian and South American law firms consulting on
real estate, banking & finance and private equity deals.
Furthermore, agreements have been signed with other important
Italian and international partners, for the organization of legal
award events based on PBV rankings.
Post-Balance Sheet Events
The focus of 2019 will be to take the Company forward by
assessing new investment opportunities, while concluding, where
possible, existing legal actions against its historical investee
companies.
In June, Eufingest SA provided the Company with a new loan
facility that the Company used to fully settle the outstanding debt
towards an UK private company, whilst also extending the maturity
of its €500,000 loan facilities to 31
December 2019.
On 2 April, the website of PBV Monitor (www.pbvmonitor.com)
became commercially operational.
With regards to the ongoing legal cases the Board is pursuing,
as announced by the Company on 21 March
2019, the liquidator of the Company’s subsidiary Sipiem
filed a claim in the Italian Courts for €10.8 million, against
previous board members of Sipiem, for fraud and mismanagement,
following complex legal and accounting investigations.
On the same day, the Company’s subsidiary, Sosushi reactivated a
criminal legal case against the former management of the company,
which had been erroneously dismissed by the Bologna Court.
Outlook
The Board remains committed to improving the financial health of
Clear Leisure through court-led recoveries of misappropriated
assets, further reduction of the debt position and investment in
high growth businesses with a technological bias.
In addition, the Board remains focused on the negotiations for
the recovery of value from Mediapolis, Sipiem and Sosushi.
After a disappointing year for cryptocurrencies, the recent
strong rally in the Bitcoin price and announcements by an
increasing number of major companies that they are exploring how
best to utilise blockchain technology heralds the potential for
better times for the Company’s investment in this sector.
PBV Monitor and Geosim are generating considerable interest in
their products and services and the Board is confident that they
will eventually make a meaningful contribution to Clear Leisure’s
balance sheet.
Much has been achieved since the appointment of the new Board in
July 2015, but other challenges still
need to be overcome before the Board achieves its goal of realising
meaningful value for the Company shareholders.
We are confident that by continuing with our processes and
strategies, this goal will be achieved.
Francesco Gardin
Chairman
27 June 2019
GROUP INCOME
STATEMENT AND STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED
31 DECEMBER 2018
|
|
Note |
2018 |
2017 |
|
|
|
€’000 |
€’000 |
Continuing operations |
|
|
|
|
Revenue |
|
|
12 |
5 |
|
|
|
12 |
5 |
|
|
|
|
|
Administration
expenses |
|
7 |
(3,878) |
(329) |
Operating loss |
|
|
(3,866) |
(324) |
|
|
|
|
|
Other gains and (losses) |
|
8 |
(150) |
(77) |
Exceptional items |
|
9 |
1,300 |
- |
Finance income |
|
|
- |
421 |
Finance charges |
|
10 |
(1,223) |
(83) |
Loss before tax |
|
|
(3,939) |
(63) |
Tax |
|
14 |
- |
- |
Loss from continuing
operations |
|
|
(3,939) |
(63) |
|
|
|
|
|
Discontinued operations |
|
|
|
|
Loss from discontinued operations,
net of tax |
|
27 |
- |
(1,821) |
Loss for the year |
|
|
(3,939) |
(1,884) |
|
|
|
|
|
Other comprehensive
(loss) |
|
|
|
|
Loss on translation of overseas
subsidiaries |
|
|
(392) |
- |
|
|
|
|
|
TOTAL COMPREHENSIVE LOSS FOR THE
YEAR |
|
|
(4,331) |
(1,884) |
|
|
|
|
|
Loss for the year attributable
to: |
|
|
|
|
Owners of the parent |
|
|
(4,331) |
(1,884) |
Non-controlling interests |
|
|
- |
- |
|
|
|
|
|
|
|
|
|
|
Earnings per share: |
|
|
|
|
Basic and fully diluted loss from
continuing operations |
|
15 |
(€0.008) |
(€0.00) |
Basic and fully diluted loss from
discontinued operations |
|
15 |
(€0.000) |
(€0.01) |
Basic and fully diluted loss per
share |
|
|
(€0.008) |
(€0.01) |
The accounting policies and notes form
part of these financial statements.
STATEMENTS OF
FINANCIAL POSITION AT 31 DECEMBER
2018
|
Notes |
Group
2018
€’000 |
Restated Group
2017
€’000 |
Company
2018
€’000 |
Company
2017
€’000 |
Non-current assets |
|
|
|
|
|
Investments |
17,18 |
447 |
302 |
9,667 |
10,019 |
Total non-current assets |
|
447 |
302 |
9,667 |
10,019 |
|
|
|
|
|
|
Current assets |
|
|
|
|
|
Investments |
17 |
1,118 |
557 |
535 |
- |
Trade and other receivables |
18 |
7,003 |
9,329 |
99 |
454 |
Cash and cash equivalents |
19 |
267 |
- |
267 |
- |
Total current assets |
|
8,388 |
9,886 |
901 |
454 |
|
|
|
|
|
|
Current liabilities |
|
|
|
|
|
Trade and other payables |
20 |
(507) |
(716) |
(251) |
(711) |
Borrowings |
21 |
(343) |
(7,029) |
(343) |
(7,029) |
Total current
liabilities |
|
(850) |
(7,745) |
(594) |
(7,740) |
|
|
|
|
|
|
Net current assets/
(liabilities) |
|
7,538 |
2,141 |
307 |
(7,286) |
|
|
|
|
|
|
Total assets less current
liabilities |
|
7,985 |
2,443 |
9,974 |
2,733 |
|
|
|
|
|
|
Non-current liabilities |
|
|
|
|
|
Borrowings |
21 |
(6,042) |
(1,243) |
(6,042) |
(1,243) |
Total non-current
liabilities |
|
(6,042) |
(1,243) |
(6,042) |
(1,243) |
|
|
|
|
|
|
Net assets |
|
1,943 |
1,200 |
3,932 |
1,490 |
|
|
|
|
|
|
Equity |
|
|
|
|
|
Share capital |
23 |
7,227 |
6,412 |
7,227 |
6,412 |
Share premium account |
23 |
47,038 |
43,563 |
47,038 |
43,563 |
Other reserves |
25 |
10,504 |
10,112 |
1,861 |
1,788 |
Retained losses |
|
(62,826) |
(58,887) |
(52,194) |
(50,273) |
Equity attributable to owners of the
Company |
|
1,943 |
1,200 |
3,932 |
1,490 |
Non-controlling interests |
|
- |
- |
- |
- |
Total
equity |
|
1,943 |
1,200 |
3,932 |
1,490 |
The accounting policies and notes form
part of these financial statements.
STATEMENT OF CHANGES IN EQUITY FOR THE
YEAR ENDED 31 DECEMBER 2018
Group |
Share
capital
€’000 |
Share
premium
account
€’000 |
Other
reserves
€’000 |
Retained losses
€’000 |
Total
equity
€’000 |
|
|
|
|
|
|
At 1 January 2018 |
6,412 |
43,563 |
10,112 |
(58,887) |
1,200 |
|
|
|
|
|
|
Total
comprehensive loss
for the year |
- |
- |
- |
(3,939) |
(3,939) |
Issue of shares |
815 |
3,559 |
- |
- |
4,374 |
Share issue costs |
- |
(84) |
- |
- |
(84) |
Foreign currency
translation |
- |
- |
392 |
- |
392 |
At 31 December
2018 |
7,227 |
47,038 |
10,504 |
(62,826) |
1,943 |
Company |
|
|
|
|
|
|
|
|
|
|
|
At 1
January 2018 |
6,412 |
43,563 |
1,788 |
(50,273) |
1,490 |
Total
comprehensive loss
for the year |
- |
- |
- |
(1,921) |
(1,921) |
Issue of shares |
815 |
3,559 |
- |
- |
4,374 |
Share issue costs |
- |
(84) |
- |
- |
(84) |
Foreign currency
translation |
- |
- |
73 |
- |
73 |
At 31 December
2018 |
7,227 |
47,038 |
1,861 |
(52,194) |
3,932 |
The following describes the nature and
purpose of each reserve:
Share
Capital
represents the nominal value of equity shares
Share
Premium
amount subscribed for share capital in excess of the nominal
value
Retained
losses
cumulative net gains and losses less distributions made
Other
reserves
Consists of four reserves, see below:
Merger
Reserve
relates to the difference in consideration and nominal value of
shares issued during a merger and the fair value of assets
transferred.
Loan note equity
reserve
relates to the equity portion of the convertible loan notes
Share option
reserve
fair value of the employee and key personnel equity settled share
option scheme as accrued at the statement of financial position
date
Foreign exchange
reserve
cumulative net gains and losses from translation of foreign
subsidiaries
The accounting policies and notes form
part of these financial statements.
STATEMENT OF CHANGES IN EQUITY FOR THE
YEAR ENDED 31 DECEMBER 2017
Group |
Share
capital
€’000 |
Share
premium
account
€’000 |
Other
reserves
€’000 |
Retained losses
€’000 |
Total
€’000 |
Non-controlling interests
€’000 |
Total equity
€’000 |
|
|
|
|
|
|
|
|
At 1 January 2017 |
6,344 |
43,351 |
11,440 |
(59,842) |
1,293 |
308 |
1,601 |
|
|
|
|
|
|
|
|
Total comprehensive loss for the year |
|
|
|
|
|
|
|
- |
- |
- |
(1,884) |
(1,884) |
- |
(1,884) |
Issue of shares |
68 |
212 |
- |
- |
280 |
- |
280 |
Issue of
convertible loan notes |
- |
- |
1,203 |
- |
1,203 |
- |
1,203 |
Transfer of
reserves |
- |
- |
(2,531) |
2,531 |
- |
- |
- |
Transfer
of non-controlling interest to retained losses on disposal of
Mediapolis |
- |
- |
- |
308 |
308 |
(308) |
- |
At 31 December
2017 |
6,412 |
43,563 |
10,112 |
(58,887) |
1,200 |
- |
1,200 |
Company |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At 1
January 2017 |
6,344 |
43,351 |
585 |
(49,243) |
1,037 |
- |
1,037 |
Total
comprehensive income
for the year |
- |
- |
- |
(1,030) |
(1,030) |
- |
(1,030) |
Issue of shares |
68 |
212 |
- |
- |
280 |
- |
280 |
Issue of convertible
loan notes |
- |
- |
1,203 |
- |
1,203 |
- |
1,203 |
At 31 December
2017 |
6,412 |
43,563 |
1,788 |
(50,273) |
1,490 |
- |
1,490 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The accounting policies and notes form
part of these financial statements.
STATEMENT OF CASH FLOWS FOR THE YEAR
ENDED 31 DECEMBER 2018
|
Note |
Group
2018
€’000 |
Group
2017
€’000 |
|
Company
2018
€’000 |
Company
2017
€’000 |
|
|
|
|
|
|
|
Net
cash outflow from operating activities |
26 |
(560) |
(2,816) |
|
(1,700) |
(977) |
|
|
|
|
|
|
|
Cash flows from
investing activities |
|
|
|
|
|
|
(Increase)/decrease in
loan to subsidiary undertakings |
|
(145) |
- |
|
352 |
(471) |
Interest paid |
|
(290) |
- |
|
(284) |
- |
Purchase of investments |
|
(95) |
- |
|
(504) |
- |
Net cash outflow from investing
activities |
|
(530) |
- |
|
(436) |
(471) |
|
|
|
|
|
|
|
Cash flows from financing
activities |
|
|
|
|
|
|
Proceeds of issue of shares |
23 |
1,357 |
280 |
|
2,403 |
280 |
Repayment of long-term debt |
|
- |
(1,250) |
|
- |
(1,250) |
Proceeds from borrowing |
|
- |
2,416 |
|
- |
2,416 |
Net cash inflow from
financing activities |
|
1,357 |
1,446 |
|
2,403 |
1,446 |
|
|
|
|
|
|
|
Net increase/(decrease) in cash
for the year |
|
267 |
(1,370) |
|
267 |
(2) |
Cash and cash equivalents at
beginning of year |
|
- |
1,370 |
|
- |
2 |
Exchange differences |
|
- |
- |
|
- |
- |
|
|
|
|
|
|
|
Cash and cash equivalents at end
of year |
19 |
267 |
- |
|
267 |
- |
The accounting policies and notes form
part of these financial statements.
NOTES TO THE FINANCIAL STATEMENTS FOR
THE YEAR ENDED 31 DECEMBER 2018
1.General Information
Clear Leisure plc is a company incorporated in the United Kingdom under the Companies Act 2006.
The Company’s ordinary shares are traded on AIM of the London Stock
Exchange. The address of the registered office is given on the
Company information page. The nature of the Group’s operations and
its principal activities are set out in the Directors’ report on
page 12.
Standards and amendments which became effective during the year
have not had a material impact on the financial statements.
Statement of compliance
|
The financial statements
comply with IFRS as adopted by the European Union. A number of new
and revised Standards and Interpretations have been adopted in the
current period by the Group for the first time and do not have a
material impact on the group. |
|
The
following new standards and amendments to standards and
interpretations have been issued but are not yet effective and not
early adopted. None of these are expected to have a significant
effect on the financial statements of the Group. |
|
IFRS 3, IFRS 11 |
Amendments resulting
from Annual Improvements 2015-2017 Cycle (remeasurement of
previously held interest) |
1 January 2019 |
|
IFRS 9 |
Amendments regarding
prepayment features with negative compensation and modifications of
financial liabilities |
1 January 2019 |
|
IFRS 16 |
Leases – new
standard |
1 January 2019 |
|
IAS 12 |
Amendments resulting
from Annual Improvements 2015–2017 Cycle (income tax consequences
of dividends) |
1 January 2019 |
|
IAS 19 |
Amendments regarding
plan amendments, curtailments or settlements |
1 January 2019 |
|
IAS 23 |
Amendments resulting
from Annual Improvements 2015–2017 Cycle (intended use or
sale) |
1 January 2019 |
|
IAS 28 |
Amendments regarding
long-term interests in associates and joint ventures |
1 January 2019 |
During the period, we applied the following standards.
IFRS 9
IFRS 9 establishes a framework of the recognition and
measurement, impairment, derecognition and general hedge
accounting. It replaces IAS 39 Financial Instruments: Recognition
and Measurement. The Group has adopted IFRS 9 in full at the date
of initial application (1 January
2018) and elected to apply the limited exemptions in IFRS 9
relating to classification, measurement and impairment requirements
for financial instruments, and accordingly comparative periods have
not been restated and remain in line with the previous standard IAS
39 Financial Instruments: Recognition and Measurement.
IFRS 15
IFRS 15 establishes a comprehensive framework for determining
whether, how much and when revenue is recognised. It replaces IAS
18 Revenue, IAS 11 Construction contracts and related
interpretations. Under IFRS 15, revenue is recognised when a
customer obtains control of the good or services. The Group has
adopted IFRS 15 in full at the date of initial application
(1 January 2018). Accordingly,
comparative information presented for 2017 has not been restated
and is presented, as previously reported under IAS 18, and related
interpretations as there was no impact of adoption of IFRS 15 on
opening balances.
2.Accounting policies
The principal accounting policies are summarised below. They
have all been applied consistently throughout the period covered by
these consolidated financial statements.
Basis of preparation
The consolidated Financial Statements of Clear Leisure plc have
been prepared in accordance with International Financial Reporting
Standards (IFRS) and International Financial Reporting
Interpretations Committee (IFRIC) as adopted by the European Union
and the parts of Companies Act 2006 applicable to companies
reporting under IFRS.
The financial statements have been prepared under the historical
cost convention except in respect of certain available for sale
investments that are stated at their fair values.
The preparation of Financial Statements in conformity with IFRS
requires the use of certain critical accounting estimates. It also
requires management to exercise its judgement in the process of
applying the Group’s accounting policies. The areas involving a
higher degree of judgement or complexity, or areas where
assumptions and estimates are significant to the consolidated
Financial Statements are disclosed in Note 3.
The Consolidated Financial Statements are presented in Euros
(€), the presentational and functional currency, rounded to the
nearest €’000.
Going Concern
Any consideration of the foreseeable future involves making a
judgement, at a particular point in time, about future events which
are inherently uncertain. The ability of the Group to carry out its
planned business objectives is dependent on its continuing ability
to raise adequate financing from equity investors and/or the
achievement of profitable operations.
Nevertheless, at the time of approving these financial
statements and after making due enquiries, the Directors have a
reasonable expectation that the Group has adequate resources to
continue operating for the foreseeable future. For this reason,
they continue to adopt the going concern basis of preparing the
Group’s financial statements as further disclosed in Note 3.
Basis of consolidation
The consolidated financial statements incorporate the financial
statements of the Group and entities controlled by the Group (its
subsidiaries) made up to 31 December each year. Control is achieved
where the Group has the power to govern the financial and operating
policies of an investee entity so as to obtain benefits from its
activities.
The results of subsidiaries acquired or disposed of during the
year are included in the consolidated income statement from the
effective date of acquisition or up to the effective date of
disposal, as appropriate. Where necessary, adjustments are made to
the financial statements of subsidiaries to bring the accounting
policies used into line with those used by the group. All
intra-group transactions, balances, income and expenses are
eliminated on consolidation.
Non-controlling interests in subsidiaries are identified
separately from the Group's equity therein. Those interests of
non-controlling shareholders that are present ownership interests
entitling their holders to a proportionate share of net assets upon
liquidation may initially be measured at fair value or at the
non-controlling interests' proportionate share of the fair value of
the acquiree's identifiable net assets. The choice of measurement
is made on an acquisition-by-acquisition basis. Other
non-controlling interests are initially measured at fair value.
Subsequent to acquisition, the carrying amount of non-controlling
interests is the amount of those interests at initial recognition
plus the noncontrolling interests' share of subsequent changes in
equity. Total comprehensive income is attributed to non-controlling
interests even if this results in the non-controlling interests
having a deficit balance.
Changes in the Group's interests in subsidiaries that do not
result in a loss of control are accounted for as equity
transactions. The carrying amount of the Group's interests and the
non-controlling interests are adjusted to reflect the changes in
their relative interests in the subsidiaries. Any difference
between the amount by which the non-controlling interests are
adjusted and the fair value of the consideration paid or received
is recognised directly in equity and attributed to the owners of
the Group.
When the Group loses control of a subsidiary, the profit or loss
on disposal is calculated as the difference between (i) the
aggregate of the fair value of the consideration received and the
fair value of any retained interest and (ii) the previous carrying
amount of the assets (including goodwill), less liabilities of the
subsidiary and any non-controlling interests. Amounts previously
recognised in other comprehensive income in relation to the
subsidiary are accounted for (i.e. reclassified to profit or loss
or transferred directly to retained earnings) in the same manner as
would be required if the relevant assets or liabilities are
disposed of. The fair value of any investment retained in the
former subsidiary at the date when control is lost is regarded as
the fair value on initial recognition for subsequent accounting or,
when applicable, the costs on initial recognition of an investment
in an associate or jointly controlled entity.
Business Combinations
Acquisitions of subsidiaries and businesses are accounted for
using the acquisition method. The consideration for each
acquisition is measured at the aggregate of the fair values (at the
date of exchange) of assets given, liabilities incurred or assumed,
and equity instruments issued by the Group in exchange for control
of the acquiree. Acquisition-related costs are recognised in profit
or loss as incurred.
Where applicable, the consideration for the acquisition includes
any asset or liability resulting from a contingent consideration
arrangement, measured at its acquisition-date fair value.
Subsequent changes in such fair values are adjusted against the
cost of acquisition where they qualify as measurement period
adjustments (see below). All other subsequent changes in the fair
value of contingent consideration classified as an asset or
liability are accounted for in accordance with relevant IFRSs.
Changes in the fair value of contingent consideration classified as
equity are not recognised.
Where a business combination is achieved in stages, the Group's
previously held interests in the acquired entity are remeasured to
fair value at the acquisition date (i.e. the date the Group attains
control) and the resulting gain or loss, if any, is recognised in
profit or loss. Amounts arising from interests in the acquiree
prior to the acquisition date that have previously been recognised
in other comprehensive income are reclassified to profit or loss,
where such treatment would be appropriate if that interest were
disposed of.
The acquiree's identifiable assets, liabilities and contingent
liabilities that meet the conditions for recognition under IFRS
3(2008) are recognised at their fair value at the acquisition date,
except that:
-
deferred tax assets or liabilities and liabilities or assets
related to employee benefit arrangements are recognised and
measured in accordance with lAS 12 Income Taxes and lAS 19
Employee Benefits respectively;
-
liabilities or equity instruments related to the replacement by
the Group of an acquiree's share based payment awards are measured
in accordance with IFRS 2 Share-based Payment; and
-
assets (or disposal groups) that are classified as held for sale
in accordance with IFRS 5 Non-current Assets Held for Sale and
Discontinued Operations are measured in accordance with that
Standard.
If the initial accounting for a business combination is
incomplete by the end of the reporting period in which the
combination occurs, the Group reports provisional amounts for the
items for which the accounting is incomplete. Those provisional
amounts are adjusted during the measurement period (see below), or
additional assets or liabilities are recognised, to reflect new
information obtained about facts and circumstances that existed as
of the acquisition date that, if known, would have affected the
amounts recognised as of that date.
The measurement period is the period from the date of
acquisition to the date the Group obtains complete information
about facts and circumstances that existed as of the acquisition
date and is subject to a maximum of one year.
Goodwill
Goodwill arising in a business combination is recognised as an
asset at the date that control is acquired (the acquisition date).
Goodwill is measured as the excess of the sum of the consideration
transferred, the amount of any non-controlling interest in the
acquiree and the fair value of the acquirer's previously held
equity interest (if any) in the entity over the net of the
acquisition-date amounts of the identifiable assets acquired and
the liabilities assumed.
If, after reassessment, the Group's interest in the fair value
of the acquiree's identifiable net assets exceeds the sum of the
consideration transferred, the amount of any non-controlling
interest in the acquiree and the fair value of the acquirer's
previously held equity interest in the acquiree (if any), the
excess is recognised immediately in profit or loss as a bargain
purchase gain.
Goodwill is not amortised but is reviewed for impairment at
least annually. For the purpose of impairment testing, goodwill is
allocated to each of the Group's cash-generating units expected to
benefit from the synergies of the combination. Cash-generating
units to which goodwill has been allocated are tested for
impairment annually, or more frequently when there is an indication
that the unit may be impaired. If the recoverable amount of the
cash-generating unit is less than the carrying amount of the unit,
the impairment loss is allocated first to reduce the carrying
amount of any goodwill allocated to the unit and then to the other
assets of the unit pro-rata on the basis of the carrying amount of
each asset in the unit. An impairment loss recognised for goodwill
is not reversed in a subsequent period.
On disposal of a subsidiary, the attributable amount of goodwill
is included in the determination of the profit or loss on
disposal.
Acquired intangible assets
Intangible assets acquired separately or as part of a business
combination are capitalised at cost and fair value as at the date
of acquisition, respectively. Intangible assets are subsequently
amortised on a straight-line basis over the expected period that
benefits will accrue to the Group:
Patents and trademarks over 10 years
Impairment of non-financial assets
Assets that have an indefinite useful life, for example
goodwill, are not subject to amortisation and are tested annually
for impairment. Assets that are subject to amortisation are
reviewed for impairment whenever events or changes in circumstances
indicate that the carrying amount may not be recoverable. An
impairment loss is recognised for the amount by which the asset’s
carrying amount exceeds its recoverable amount. The recoverable
amount is the higher of an asset’s fair value less costs to sell
and value in use. For the purposes of assessing impairment,
assets are grouped at the lowest levels for which there are
separately identifiable cash flows (cash-generating units).
Non-financial assets other than goodwill that suffered an
impairment are reviewed for possible reversal of the impairment at
each reporting date.
Intangible assets
Internally generated development expenditure is capitalised as
an intangible asset only if all the following criteria are met:
-
the asset can be identified;
-
it is probable that the asset will generate future economic
benefits;
-
the fair value of the asset can be measured reliably.
Capitalised development expenditure is amortised on a
straight-line basis over the period of expected future sales of the
resulting products, which has been assessed as between 5 and 10
years.
Investments in subsidiaries
Investments in subsidiaries are stated at cost less any
provision for impairment.
Foreign currency
The functional currency is Euro. Foreign currency transactions
are translated into the functional currency using the exchange
rates prevailing at the dates of the transactions or valuation
where items are re-measured. Exchange gains and losses resulting
from the settlement of such transactions and from the translation
at year-end exchange rates of monetary assets and liabilities
denominated in foreign currencies are recognised in the Statement
of Comprehensive Income. Exchange gains and losses that relate to
borrowings and cash and cash equivalents are presented in the
income statement within ‘finance income or costs’. All other
Exchange gains and losses are presented in the income statement
within ‘other (losses)/gains – net’.
Changes in the fair value of monetary securities denominated in
foreign currency classified as available for sale are analysed
between translation differences resulting from changes in the
amortised cost of the security and other changes in the carrying
amount of the security. Translation differences related to changes
in amortised cost are recognised in profit or loss, and other
changes in carrying amount are recognised in other comprehensive
income.
Taxation
The tax expense represents the sum of the tax currently payable
and any deferred tax.
Current taxes are based on the results of the Group companies
and are calculated according to local tax rules, using the tax
rates that have been enacted or substantially enacted by the
period-end date.
Deferred tax is provided in full using the financial position
liability method for all taxable temporary differences arising
between the tax bases of assets and liabilities and their carrying
values for financial reporting purposes. Deferred tax is measured
using currently enacted or substantially enacted tax rates.
Deferred tax is the tax expected to be payable or recoverable on
differences between the carrying amounts of assets and liabilities
in the financial statements and the corresponding tax bases used in
the computation of taxable profit and is accounted for using the
statement of financial position liability method. Deferred tax
liabilities are generally recognised for all taxable temporary
differences and deferred tax assets are recognised to the extent
that it is probable that taxable profits will be available against
which deductible temporary differences can be utilised. Such assets
and liabilities are not recognised if the temporary difference
arises from goodwill or from the initial recognition (other than in
a business combination) of other assets and liabilities in a
transaction that affects neither the taxable profit nor the
accounting profit.
Deferred tax assets are recognised to the extent the temporary
difference will reverse in the foreseeable future and that it is
probable that future taxable profit will be available against which
the asset can be utilised. Deferred tax is recognised for all
deductible temporary differences arising from investments in
subsidiaries and associates, to the extent that it is probable that
the temporary difference will reverse in the foreseeable future and
taxable profit will be available against which the temporary
difference can be utilised.
Revenue
The Group provides consultancy services, which are invoiced at
the point of the provision of the service. Revenue is recognised as
earned at a point in time on the unconditional supply of these
services, which are received and consumed simultaneously by the
customer. The Group measures revenues at the fair value of the
consideration received or receivable for the provision of
consultancy services net of Value Added Tax.
Interest income
Interest income is accrued on a time basis, by reference to the
principal outstanding and at the effective interest rate
applicable, which is the rate that exactly discounts estimated
future cash receipts through the expected life of the financial
asset to that asset’s net carrying amount on initial
recognition.
Financial instruments
The Company has elected to apply the
limited exemption in IFRS 9 relating to classification, measurement
and impairing requirements for financial instruments, and
accordingly comparative periods have not been restated and remain
in line with the previous standard IAS 39 “Financial Instruments:
Recognition and Measurement”;
Classification and measurement
The Company classifies its financial
assets into the following categories: those to be measured
subsequently at fair value (either through other comprehensive
income (FVOCI) or through the income statement (FVPL) and those to
be held at amortised cost.
Classification depends on the business
model for managing the financial assets and the contractual terms
of the cash flows.
Management determines the
classification of financial assets at initial recognition. The
Company’s policy with regard to financial risk management is set
out in Note 22. Generally, the Company does not acquire financial
assets for the purpose of selling in the short term.
The Company’s business model is
primarily that of “hold to collect” (where assets are held in order
to collect contractual cash flows). When the Company
enters into derivative contracts, these transactions are designed
to reduce exposures relating to assets and liabilities, firm
commitments or anticipated transactions.
Financial Assets held at amortised
cost
The classification applies to debt
instruments which are held under a hold to collect business model
and which have cash flows that meet the “solely payments of
principal and interest” (SPPI) criteria.
At initial recognition, trade receivables that do not have a
significant financing component, are recognised at their
transaction price. Other financial assets are initially
recognised at fair value plus related transaction costs, they are
subsequently measured at amortised costs using the effective
interest method. Any gain or loss on derecognition or
modification of a financial asset held at amortised cost is
recognised in the income statement.
Financial Assets held at fair value
through other comprehensive income (FVOCI)
The classification applies to the
following financial assets:
·Debt instruments that are held under
a business model where they are held for the collection of
contractual cash flows and also for sale (“collect and sale”) and
which have cash flows that meet the SPPI criteria. An example
would be where trade receivable invoices for certain customers were
factored from time to time. All movements in the fair value
of these financial assets are taken through comprehensive income ,
except for the recognition of impairment gains and losses, interest
revenue (including transaction costs by applying the effective
interest method), gains or losses arising on derecognition and
foreign exchange gains and losses which are recognised in the
income statement. When the financial asset is derecognised,
the cumulative fair value gain or loss previously recognised in
other comprehensive income is reclassified to the income
statement.
·Equity investments where the Company
has irrevocably elected to present fair value gains and losses on
revaluation of such equity investments, including any foreign
exchange component, are recognised in other comprehensive
income. When equity investment is derecognised, there is no
reclassification of fair value gains or losses previously
recognised in other comprehensive income to the income
statement. Dividends are recognised in the income statement
when the right to receive payment is established.
Financial Assets held at fair value
through profit or loss (FVPL)
The classification applies to the
following financial assets. In all cases, transaction costs
are immediately expensed to the income statement.
·Debt instruments that do not meet the
criteria of amortised costs or fair value through other
comprehensive income. The Company has a significant
proportion of trade receivables with embedded derivatives for
professional pricing. These receivables are generally held to
collect but do not meet the SPPI criteria and as a result must be
held at FVPL. Subsequent fair value gains or losses are taken
to the income statement.
·Equity investments which are held for
trading or where the FVOCI election has not been applied. All
fair value gains or losses and related dividend income are
recognised in the income statement.
·Derivatives which are not designated
as a hedging instrument. All subsequent fair value gains or
losses are recognised in the income statement.
Trade and other receivables
Trade and other receivables are measured at initial recognition
at fair value and are subsequently measured at amortised cost using
the effective interest rate method. A provision is established when
there is objective evidence that the Group will not be able to
collect all amounts due. The amount of any provision is recognised
in the income statement.
Cash and cash equivalents
Cash and cash equivalents comprise cash on hand and demand
deposits and other short-term highly liquid investments that are
readily convertible to a known amount of cash and are subject to an
insignificant risk of changes in value.
Impairment of financial assets
A forward looking expected credit loss (ECL) review is required
for: debt instruments measured at amortised costs are held at fair
value through other comprehensive income: loan commitments and
financial guarantees not measured at fair value through profit or
loss; lease receivables and trade receivables that give rise to an
unconditional right to consideration.
As permitted by IFRS9, the Company applies the “simplified
approach” to trade receivable balances and the “general approach”
to all other financial assets. The general approach
incorporates a review for any significant increase in counter party
credit risk since inception. The ECL reviews including
assumptions about the risk of default and expected loss
rates. For trade receivables, the assessment takes into
account the use of credit enhancements, for example, letters of
credit. Impairments for undrawn loan commitments are
reflected as a provision.
Financial liabilities
Borrowings and other financial liabilities (including trade
payables but excluding derivative liabilities) are recognised
initially at fair value, net of transaction costs incurred, and are
subsequently measured at amortised costs.
Convertible bonds
Convertible bonds are regarded as compound instruments,
consisting of a liability component and an equity component. At the
date of issue, the fair value of the liability component is
estimated using the prevailing market interest rate for similar
non-convertible debt. The difference between the proceeds of issue
of the convertible loan notes and the fair value assigned to the
liability component, representing the embedded option to convert
the liability into equity of the Group, is included in equity.
Issue costs are apportioned between the liability and equity
components of the convertible loan notes based on their relative
carrying amounts at the date of issue. The portion relating to the
equity component is charged directly against equity.
The interest expense on the liability component is calculated by
applying the prevailing market interest rate for similar
non-convertible debt to the liability component of the instrument.
The difference between this amount and the interest paid is added
to the carrying amount of the convertible loan note.
Borrowings
Borrowings are recognised initially at fair value, net of
transaction costs incurred. Borrowings are subsequently carried at
amortised cost; any difference between the proceeds (net of
transaction costs) and the redemption value is recognised in the
statement of comprehensive income over the period of the
borrowings, using the effective interest method. Borrowings are
classified as current liabilities unless the Group has an
unconditional right to defer settlement of the liability for at
least 12 months after the end of the reporting period.
Borrowings costs
Borrowing costs are recognised in profit or loss in the period
in which they are incurred.
Trade payables
Trade payables are initially measured at fair value, and are
subsequently measured at amortised cost, using the effective
interest rate method.
Segmental reporting
In identifying its operating segments, management generally
follows the Group's service lines, which represent the main
products and services provided by the Group. The measurement
policies the Group uses for segment reporting under IFRS 8 are the
same as those used in its financial statements. The disclosure is
based on the information that is presented to the chief operating
decision maker, which is considered to be the board of Clear
Leisure plc.
Equity instruments
An equity instrument is any contract that evidences a residual
interest in the assets of the Group after deducting all of its
liabilities. Equity instruments issued by the Group are recorded at
the proceeds received net of direct issue costs.
Share capital account represents the nominal value of the shares
issued.
The share premium account represents premiums received on the
initial issuing of the share capital. Any transaction costs
associated with the issuing of shares are deducted from share
premium, net of any related income tax benefits.
Retained losses include all current and prior period results as
disclosed in the statement of comprehensive income.
Other reserves consist of the merger reserve, revaluation
reserve, exchange translation reserve and loan equity reserve.
-
the merger reserve represents the premium on the shares issued
less the nominal value of the shares, being the difference between
the fair value of the consideration and the nominal value of the
shares.
-
the revaluation reserve represents the difference between the
purchase costs of the available for sale investments less any
impairment charge and the market or fair value of those investments
at the accounting date.
-
the exchange translation reserve represents the movement of
items on the statement of financial position that were denominated
in foreign before translation
-
the loan equity reserve represents the value of the equity
component of the nominal value of the loan notes issued.
Provisions
Provisions are recognised when the Group has a present
obligation (legal or constructive) as a result of a past event, it
is probable that the Group will be required to settle that
obligation and a reliable estimate can be made of the amount of the
obligation
The amount recognised as a provision is the best estimate of the
consideration required to settle the present obligation at the
year-end date, taking into account the risks and uncertainties
surrounding the obligation.
3.Critical accounting judgements and key sources of
estimation uncertainty
The preparation of Financial Statements in conformity with IFRSs
requires management to make judgements, estimates and assumptions
that affect the application of policies and reported amounts of
assets and liabilities, income and expenses. Estimates and
judgements are continually evaluated and are based on historical
experience and other factors including expectations of future
events that are believed to be reasonable under the
circumstances.
The Group makes estimates and assumptions concerning the future.
The resulting accounting estimates will, by definition, seldom
equal the related actual results. The estimates and assumptions
that have a significant risk of causing a material adjustment to
the carrying amounts of assets and liabilities within the next
financial year are discussed below
Impairment of goodwill
Goodwill has a carrying value of €Nil (2017: €Nil). The Group
tests annually whether goodwill has suffered any impairment, in
accordance with the accounting policy stated in Note 2. The
recoverable amounts of cash-generating units have been determined
based on value-in-use calculations.
Fair value measurement
Management uses valuation techniques to determine the fair value
of financial instruments (where active market quotes are not
available) and non-financial assets. This involves developing
estimates and assumptions consistent with how market participants
would price the instrument. Management bases its assumptions on
observable data as far as possible, but this is not always
available. In that case management uses the best information
available. Estimated fair values may vary from the actual prices
that would be achieved in an arm’s length transaction at the
reporting date.
In order to arrive at the fair value of investments a
significant amount of judgement and estimation has been adopted by
the Directors as detailed in the investments accounting policy.
Where these investments are un-listed and there is no readily
available market for sale the carrying value is based upon future
cash flows and current earnings multiples for which similar
entities have been sold.
Going Concern
The Group’s activities generated a loss of €3,939,000 (2017:
€1,884,000) and had net current assets of €7,985,000 as at
31 December 2018. The Group’s
operational existence is still dependent on the ability to raise
further funding either through an equity placing on AIM, or through
other external sources, to support the on-going working capital
requirements.
After making due enquiries, the Directors have formed a
judgement that there is a reasonable expectation that the Group can
secure further adequate resources to continue in operational
existence for the foreseeable future and that adequate arrangements
will be in place to enable the settlement of their financial
commitments, as and when they fall due.
For this reason, the Directors continue to adopt the going
concern basis in preparing the financial statements. Whilst there
are inherent uncertainties in relation to future events, and
therefore no certainty over the outcome of the matters described,
the Directors consider that, based upon financial projections and
dependant on the success of their efforts to complete these
activities, the Group will be a going concern for the next twelve
months. If it is not possible for the Directors to realise their
plans, over which there is significant uncertainty, the carrying
value of the assets of the Group is likely to be impaired.
4.Segment information
IFRS 8 requires reporting segments to be identified on the basis
of internal reports about components of the Group that are
regularly reviewed by the chief operating decision maker.
Information reported to the Group’s chief operating decision
maker for the purposes of resource allocation and assessment of
segment performance is specifically focused on the geographical
segments within the Group.
Information regarding the Group’s reportable segments is
presented below:
|
2018 |
|
2017 |
|
UK |
Italy |
Total |
UK |
Italy |
Total |
|
€’000 |
€’000 |
€’000 |
€’000 |
€’000 |
€’000 |
|
|
|
|
|
|
|
Revenue - Consultancy |
12 |
- |
12 |
5 |
- |
5 |
Cost of sales |
- |
- |
- |
- |
- |
- |
Gross Profit |
12 |
- |
12 |
5 |
- |
5 |
Finance Income |
- |
- |
- |
421 |
- |
421 |
Finance charges |
(1,223) |
- |
(1,223) |
(83) |
- |
(83) |
Other operating expenses |
(3,878) |
` |
(3,878) |
(329) |
- |
(329) |
Exceptional items |
1,300 |
- |
1,300 |
- |
- |
- |
Other gains and losses |
(150) |
- |
(150) |
(77) |
- |
(77) |
(Loss) from
discontinuing operations, net of
tax |
- |
- |
- |
- |
(1,821) |
(1,821) |
(Loss) for the financial
year |
(3,939) |
- |
(3,939) |
(63) |
1,821 |
(1,884) |
|
|
|
|
|
|
|
|
|
2018 |
|
|
2017 |
|
Segment assets |
Segment
liabilities |
Net
additions
to non-current
Assets |
Net assets/
(liabilities) |
Segment assets |
Segment liabilities |
Net Additions to
non-current assets |
Net assets/
(liabilities) |
|
€’000 |
€’000 |
€’000 |
€’000 |
€’000 |
€’000 |
€’000 |
€’000 |
|
|
|
|
|
|
|
|
|
UK |
8,835 |
(6,892) |
- |
1,943 |
10,188 |
(8,988) |
- |
1,200 |
Italy |
- |
- |
- |
- |
- |
- |
- |
- |
|
8,835 |
(6,892) |
- |
1,943 |
10,188 |
(8,988) |
- |
1,200 |
5.Staff costs
|
2018
€’000 |
2017
€’000 |
|
|
|
Staff costs during the period
including directors comprise: |
|
|
Wages and salaries |
458 |
266 |
Social security costs
and pension contributions |
12 |
|
|
470 |
266 |
6.Directors’ Emoluments
|
2018
€’000 |
2017
€’000 |
|
|
|
Aggregate
emoluments |
339 |
162 |
Share
based payment |
- |
33 |
|
339 |
195 |
There are no retirement benefits accruing to the Directors.
Details of directors’ remuneration are included in the Directors’
Report.
7.Expenses by nature
|
2018
€’000 |
2017
€’000 |
|
|
|
Directors
emoluments |
339 |
195 |
Employee
emoluments |
131 |
71 |
Legal and
professional fees |
705 |
(126) |
Audit and
accountancy fees |
107 |
70 |
Administrative expenditure |
236 |
114 |
Bad
debts |
2,673 |
5 |
Payables
waived |
(313) |
- |
|
3,878 |
329 |
8.Other gains and losses
|
2018
€’000 |
2017
€’000 |
|
|
|
Revaluation of investments |
- |
(77) |
Revaluation of Zero-Coupon Bond |
(150) |
- |
|
(150) |
(77) |
9.Exceptional items
|
2018
€’000 |
2017
€’000 |
Claim settlement |
1,300 |
- |
On 9 November 2018 a full and
final settlement had been reached in relation to a legal claim for
the sum of €1,300,000 payable in cash to Clear Leisure plc.
10.Finance charges
|
2018
€’000 |
2017
€’000 |
|
|
|
Interest on convertible bonds |
196 |
82 |
Interest on other loans |
87 |
- |
Interest on bank loans and
overdrafts |
- |
1 |
Impairment of syndicated loans |
933 |
- |
Irrecoverable VAT |
7 |
- |
|
1,223 |
83 |
11.Auditor’s remuneration
|
2018
€’000 |
2017
€’000 |
|
|
|
Group Auditor’s
remuneration: |
|
|
Fees
payable to the Group’s auditor for the audit of the Company and
consolidated financial statements: |
35 |
33 |
Non audit
services: |
|
|
Other services
(tax) |
3 |
3 |
Subsidiary
Auditor’s remuneration |
|
|
Other services
pursuant to legislation |
7 |
6 |
|
45 |
42 |
|
|
|
|
|
12.Employee numbers
|
2018
Number |
2017
Number |
|
|
|
The average number of Company’s
employees, including directors during the period was as
follows: |
|
|
Management and
administration |
4 |
4 |
13.Company income statement
An income statement for Clear Leisure plc is not presented in
accordance with the exemption allowed by Section 408 of the
Companies Act 2006. The parent company’s comprehensive loss for the
financial year amounted to €1,921,000 (2017: €1,030,000).
14.Tax
|
2018
€’000 |
2017
€’000 |
|
|
|
Current taxation |
- |
- |
Deferred taxation |
- |
- |
Tax charge for the year |
- |
- |
The Group has a potential deferred tax asset arising from
unutilised management expenses available for carry forward and
relief against future taxable profits. The deferred tax asset has
not been recognised in the financial statements in accordance with
the Group’s accounting policy for deferred tax.
The Group’s unutilised management expenses and capital losses
carried forward at 31 December 2018
amount to approximately €21 million (2017: €20 million) and €9
million (2017: €9 million) respectively.
The standard rate of tax for the current year, based on the UK
effective rate of corporation tax is 19.00% (2017: 19.25%). The
actual tax for the current and previous year varies from the
standard rate for the reasons set out in the following
reconciliation:
Continuing
operations |
2018
€’000 |
2017
€’000 |
|
|
|
Loss for the year before
tax |
(3,939) |
(1,884) |
Tax on ordinary activities at
standard rate |
(748) |
(363) |
Effects of: |
|
|
Expenses not deductible for tax
purposes |
2 |
15 |
Foreign taxes |
- |
- |
Tax losses available for carry
forward against future profits |
746 |
348 |
Total tax |
- |
- |
|
|
|
15.Earnings per share
The basic earnings per share is calculated by dividing the loss
attributable to equity shareholders by the weighted average number
of ordinary shares in issue during the period. Diluted earnings per
share is computed using the weighted average number of shares
during the period adjusted for the dilutive effect of share options
and convertible loans outstanding during the period.
The loss and weighted average number of shares used in the
calculation are set out below:
|
|
2018 |
|
|
|
2017 |
|
|
Profit/ (Loss)
€’000 |
Weighted
average no.
of shares
000’s |
Per share
Amount
Euro |
|
Profit/ (Loss)
€’000 |
Weighted
average no.
of shares
000’s |
Per share
Amount
Euro |
Basic and fully
diluted earnings per share |
|
|
|
|
|
|
|
Continuing operations |
(3,939) |
468,986 |
(€0.008) |
|
(63) |
295,429 |
(€0.00) |
Discontinued operations |
- |
- |
- |
|
(1,821) |
295,429 |
(€0.001) |
Total
operations |
(3,939) |
468,986 |
(€0.008) |
|
(1,884) |
295,429 |
(€0.001) |
The share options in issue are anti-dilutive in respect of the
loss per share calculation and have therefore not been
included.
IAS 33 requires presentation of diluted earnings per share when
a company could be called upon to issue shares that would decrease
earnings per share. In respect of 2017 and 2018 the diluted loss
per share is the same as the basic loss per share as the loss for
each year has an anti-dilutive effect.
16.Goodwill
|
2018
€’000 |
2017
€’000 |
Cost |
|
|
At 1 January |
- |
1,312 |
Disposal of subsidiary |
- |
(1,312) |
At 31 December |
- |
- |
|
|
|
Accumulated impairment
losses |
|
|
At 1 January |
- |
1,312 |
Impairment loss for the year |
- |
- |
Disposal of subsidiary |
- |
(1,312) |
At 31 December |
- |
- |
|
|
|
Net book value |
- |
- |
Goodwill is allocated to cash generating units. The recoverable
amount of each unit is determined based on value-in-use
calculations. The key assumptions for the value-in-use calculation
are those regarding discount rates and growth rates as well as
expected changes to costs and selling prices. Management have
estimated the discount rate based on the weighted average cost of
capital. Changes in selling prices and direct costs are based on
past experience and expectations of future change in the markets.
These calculations use cash flow projections based on financial
budgets approved by management looking forward up to five years.
Cash flows are extrapolated using estimated growth rates beyond the
budget period. The key assumptions for the value-in-use
calculations are:
·a real growth rate of 2% which has
been used to extrapolate cash flows beyond the budget period;
and
·a WACC rate of 15% applied to the
cash flow projection.
The Group tests annually for impairment, or more frequently if
there are indications that goodwill might be impaired.
17.Investments
Company |
2018
€’000 |
2017
€’000 |
As at 1 January: |
|
|
Loans to subsidiary
undertakings |
10,019 |
9,548 |
Net
advances/(repayments) during the year |
(352) |
471 |
Impairment in
investment |
- |
- |
As at 31 December |
9,667 |
10,019 |
The significant subsidiary undertakings held by the Group at
31 December 2018 were as follows:
Subsidiaries |
Country
of incorporation |
|
% Owned |
Nature of business |
Clear Leisure 2017
Limited |
England |
|
100.00 |
Investment holding company |
Brainspark Associates
Limited |
England |
|
100.00 |
Investment holding company |
SoSushi Company
S.r.l. |
Italy |
|
99.93 |
Brand
Management |
Clear Holiday
S.r.l. |
Italy |
|
100.00 |
Dormant
company |
Group |
Group
2018
€’000 |
Group
2017
€’000 |
Company
2018
€’000 |
Company
2017
€’000 |
Fair value |
|
|
|
|
At 1 January |
557 |
634 |
- |
- |
Movement in fair value
of investments |
57 |
(77) |
31 |
- |
Additions |
504 |
- |
504 |
- |
Carrying value at 31
December |
1,118 |
557 |
535 |
- |
An amount of €583,000 included within Group investments held for
trading is a level 3 investment and represents the fair value of
533,990 shares in GeoSim Systems Ltd.
An amount of €340,000 included within Company investments held
for trading is a level 3 investment and represents the fair value
of a 10% interest in PBV Monitor Srl.
An amount of €195,000 included within Company investments held
for trading is a level 3 investment and represents a 50% Joint
Venture partnership interest in Miner One Limited.
18.Trade and other receivables
|
Group
2018
€’000 |
Restated
Group
2017
€’000 |
Company
2018
€’000 |
Company
2017
€’000 |
Other receivables |
7,003 |
9,329 |
99 |
454 |
|
Trade receivables |
- |
- |
- |
- |
|
Amount falling due
after one year |
- |
- |
- |
- |
|
Amounts owed by
subsidiaries |
447 |
302 |
9,222 |
10,019 |
|
Current assets |
7,003 |
9,329 |
99 |
454 |
|
Non-current assets |
447 |
302 |
9,222 |
10,019 |
|
|
|
|
|
|
|
|
|
|
|
Group other receivables include €4,440,000 due from Sipiem, the
amount is unsecured, interest free and does not have fixed terms of
repayment.
The directors consider that the carrying value of trade and
other receivables approximates to their fair value.
19.Cash and cash equivalents
Group |
Group
2018
€’000 |
Group
2017
€’000 |
Company
2018
€’000 |
Company
2017
€’000 |
Cash at
bank and in hand |
267 |
- |
267 |
- |
|
267 |
- |
267 |
- |
The Directors consider the carrying
amounts of cash and cash equivalents approximates to their fair
value.
20.Trade and other payables
|
Group
2018
€’000 |
Group
2017
€’000 |
Company
2018
€’000 |
Company
2017
€’000 |
Trade payables |
307 |
632 |
146 |
632 |
Other payables |
150 |
39 |
60 |
39 |
Accruals |
50 |
45 |
45 |
40 |
Trade and other payables |
507 |
716 |
251 |
711 |
The directors consider that the carrying value of trade and
other payables approximates to their fair value.
21.Borrowings
|
Group
2018
€’000 |
Group
2017
€’000 |
Company
2018
€’000 |
Company
2017
€’000 |
7% Convertible bond
2014 |
- |
73 |
- |
73 |
Zero rate convertible
bond 2015 |
4,522 |
6,292 |
4,522 |
6,292 |
Convertible loan
note |
1,520 |
1,243 |
1,520 |
1,243 |
Other borrowings |
343 |
664 |
343 |
664 |
|
6,385 |
8,272 |
6,385 |
8,272 |
Disclosed as:
Current borrowings |
343 |
7,029 |
343 |
7,029 |
Non-current
borrowings |
6,042 |
1,243 |
6,042 |
1,243 |
|
6,385 |
8,272 |
6,385 |
8,272 |
7% Convertible Bond 2014
On 31 March 2010 the company
launched an issue of £10 million (€12 million), before issue costs,
7% convertible bonds due 2014. The Bonds are denominated in
sterling and are convertible into new ordinary shares of
2.5 pence each in the company at a
conversion rate of 400 New Ordinary Shares per Bond up until
15 March 2014. The nominal value of
each Bond is £1,000 (€1,200). The redemption date of the bonds is
31 March 2014 the coupon of 7% is
payable at the end of each year. The Company, between 1 and
7 April 2012, was able to repurchase
and serve notice on any or all of the bondholders to sell their
Bond in whole or in part at 110% of the nominal value. The
bondholders, at any time prior to redemption, may serve a
conversion notice to the company in respect of all or any integral
multiple of £1,000 (€1,200) nominal value of bonds held by
them.
During 2011, a bond holder converted £2.64 million (€3.17
million) into equity shares for which 8,035,856 ordinary shares of
2.5p each were issued in exchange for the bond and cumulative
interest due thereon.
During 2012, bonds were converted for a total amount of €8.2
million. The conversion was settled as follows:
€4.9 million (£3.9 million) including cumulative interest was
converted into equity shares (11,000,000 Ordinary 2.5p shares at
36p each.) €3.3 million (£2.7 million) including cumulative
interest was settled in cash for €1.9 million, with approximately
40% discount realising €1.3 million (£1.1 million) profit for the
Group.
In March 2014 €1,885,400 zero rate
convertible bonds 2015 were issued in settlement of £1,563,000 7%
bonds including all unpaid and accrued interest up to the date of
settlement. This settlement has resulted in a credit to the income
statement of €439,000 for the year ended 31
December 2014.
In October 2018, two bond holders
converted £65,000 (€73,000) including cumulative interest into
1,625,000 new ordinary shares of 0.25
pence at a price of 4.00 pence
per share.
Zero Rate Convertible Bond 2015
|
2018
€’000 |
2017
€’000 |
Liability component at
1 January |
6,292 |
6,453 |
Adjustment from
renegotiation of convertible bonds |
- |
(363) |
Interest charge for
the year |
192 |
202 |
Adjustment from the
conversion of bonds |
(1,962) |
- |
Liability component at
31 December |
4,522 |
6,292 |
Disclosed as: |
|
|
Non-Current
Liabilities |
4,522 |
- |
Current
Liabilities |
- |
6,292 |
Interest on the bonds was payable annually on 31 March each
year. No interest payment was made on 31
March 2014 or on 31 March
2015. The liability component of the bonds at 31 December 2018 includes all interest accrued to
that date. The unpaid interest together with accrued interest to
31 December 2018 is included within
current liabilities.
Under IAS 32 the bonds contain two components, liability and
equity elements. The equity element is presented in equity under
the heading of “equity component of convertible instrument”. The
effective interest rate of the liability element on initial
recognition is 12.5% per annum.
On 25 March 2013 the Company
issued €3,000,000 nominal value of zero rate convertible bonds at a
discount of 22%. The bonds are convertible at 15p per share and had
a redemption date of 15 December
2015.
During 2014 the Company issued €1,885,400 zero bonds in
settlement of £1,563,000 7% bonds (see above). Also €600,000 zero
bonds were issued in settlement of a debt of €518,000 and €450,000
bonds were issued for cash realising €412,000 before expenses.
On 15 December 2015 the
bondholders meeting approved the amendments on the Zero Rate
Convertible Bond 2015, originally due on 15
December 2015. Under new terms the final maturity date of
the Bond is 15 December 2017 and the
interest was reduced from 9.5% to 7%.
On 15 December 2016 the
bondholders meeting approved the amendments on the Zero Rate
Convertible Bond 2015, originally due on 15
December 2017. Under new terms the final maturity date of
the Bond is 15 December 2018 and the
interest has been reduced from 7% to 1%.
On 19 June 2018, the holders of
its €9.9m Bonds agreed to extend the final maturity date of the
Bonds from 15 December 2018 to
15 December 2022. The Company is now
able to convert the Bonds into new ordinary shares of 0.25p
each.
On 28 December 2018, bonds with a
face value of €2,100,000 plus cumulative interest were converted
into 50,992,826 new ordinary shares of 0.25
pence at a price of 3.76 pence
per share.
Other Borrowings
In March 2018, the Company agreed
with a lender to settle €250,000 of a loan by issuing 22,321,429
new ordinary shares of 0.25 pence at
a price of 1.00 pence per share.
22.Financial instruments
The Group’s financial instruments
comprise cash, available for sale investments, trade receivables,
trade payables that arise from its operations and borrowings. The
main purpose of these financial instruments is to provide finance
for the Group’s future investments and day to day operational
needs. The Group does not enter into any derivative transactions
such as interest rate swaps or forward foreign exchange contracts,
as the Group’s exposure to movements in foreign exchange rates is
not considered significant (see Foreign currency risk management).
The main risks faced by the Group are limited to interest rate risk
on surplus cash deposits and liquidity risk associated with raising
sufficient funding to meet the operational needs of the business.
The Board reviews and agrees policies for managing these risks and
they are summarised below.
FINANCIAL ASSETS BY CATEGORY
The categories of financial assets included in the statement of
financial position and the headings in which they are included are
as follows:
|
2018 |
2017 |
|
€'000 |
€'000 |
Financial assets: |
|
|
Financial assets held
at fair value through other comprehensive income |
1,118 |
557 |
Loans and
receivables |
7,540 |
9,631 |
Cash and cash
equivalents |
267 |
- |
|
8,835 |
10,188 |
FINANCIAL LIABILITIES BY CATEGORY
The categories of financial liabilities included in the
statement of financial position and the headings in which they are
included are as follows:
|
2018 |
2017 |
|
€'000 |
€'000 |
Financial liabilities
at amortised cost: |
|
|
Trade and other
payables |
507 |
716 |
Borrowings |
6,385 |
8,272 |
|
6,892 |
8,988 |
Financial instruments measured at fair value:
|
Level
1 |
Level
2 |
Level
3 |
|
€’000 |
€’000 |
€’000 |
As at 31 December
2018 |
|
|
|
Available for sale
investments |
- |
- |
- |
Investments held for
trading |
- |
- |
1,118 |
|
- |
- |
1,118 |
|
|
|
|
As at 31 December
2017 |
|
|
|
Available for sale
investments |
- |
- |
- |
Investments held for
trading |
- |
- |
557 |
|
- |
- |
557 |
The Company has adopted fair value measurements using the IFRS 7
fair value hierarchy.
Categorisation within the hierarchy has been determined on the
basis of the lowest level of input that is significant to the fair
value measurement of the relevant asset as follows:
Level 1: valued using quoted prices in
active markets for identical assets;
Level 2: valued by reference to
valuation techniques using observable inputs other than quoted
prices included in Level 1;
Level 3: valued by reference to
valuation techniques using inputs that are not based on observable
markets criteria.
The Level 3 investment refers to an investment in GeoSim Systems
Ltd, PBV Monitor Srl and Miner One Limited.
Capital risk management
The Group manages its capital to ensure that entities in the
Group will be able to continue as going concerns while maximising
the return to stakeholders through optimisation of the debt and
equity balance. The capital structure of the Group consists of debt
attributable to convertible bondholders, borrowings, cash and cash
equivalents, and equity attributable to equity holders of the
Group, comprising issued capital, reserves and retained earnings,
all as disclosed in the Statement of Financial Position.
Significant accounting policies
Details of the significant accounting policies and methods
adopted, including the criteria for recognition, the basis of
measurement and the basis on which income and expenses are
recognised, in respect of each class of financial asset, financial
liability and equity instrument disclosed in Note 2 to the
financial statements.
Financial risk management
objectives
The company is exposed to a variety of financial risks which
result from both its operating and investing activities. The
Group’s risk management is coordinated by the board of directors
and focuses on actively securing the Company’s short- and
medium-term cash flows by raising liquid capital to meet current
liability obligations.
Market price risk
The Company’s exposure to market price risk mainly arises from
movements in the fair value of its investments held for trading.
The Group manages the investment price risk within its long-term
investment strategy to manage a diversified exposure to the market.
If the investments held for trading were to experience a rise or
fall of 15% in their fair value, this would result in the Group’s
net asset value and statement of comprehensive income increasing or
decreasing by €168,000 (2017: €180,000).
Liquidity risk management
Ultimate responsibility for liquidity risk management rests with
the Board of Directors, which monitors the Group’s short, medium
and long-term funding and liquidity management requirements on an
appropriate basis. The Group has minimal cash balances at the
reporting date (refer to Note 2 – Basis of preparation of financial
statements and going concern). The Group continues to secure future
funding and cash resources from disposals as and when required in
order to meet its cash requirements. This is an on-going process
and the directors are confident with their cash flow models.
The following are the undiscounted contractual maturities of
financial liabilities:
|
Carrying
Amount |
Less
than 1 year |
Between
1 and 5 years |
Total |
|
€’000 |
€’000 |
€’000 |
€’000 |
As at 31 December
2018 |
|
|
|
|
Trade and other
payables |
507 |
507 |
- |
507 |
Borrowings |
6,385 |
343 |
6,042 |
6,385 |
|
6,892 |
850 |
6,042 |
6,892 |
|
|
|
|
|
As at 31 December
2017 |
|
|
|
|
Trade and other
payables |
716 |
716 |
- |
716 |
Borrowings |
8,272 |
7,029 |
1,243 |
8,272 |
|
8,988 |
7,745 |
1,243 |
8,988 |
Management believes that based on the information provided in
Notes 2 and 3 – in the ‘Basis of preparation’ and ‘Going
concern’, that future cash flows from operations will be
adequate to support these financial liabilities.
Interest rate risk
The Group and Company manage the interest rate risk associated
with the Group cash assets by ensuring that interest rates are as
favourable as possible, whilst managing the access the Group
requires to the funds for working capital purposes.
The Group’s cash and cash equivalents are subject to interest
rate exposure due to changes in interest rates. Short-term
receivables and payables are not exposed to interest rate risk. The
borrowings are at fixed interest rates.
|
Group |
Company |
|
2018 |
2017 |
2018 |
2017 |
|
€’000 |
€’000 |
€’000 |
€’000 |
Fixed rate
instruments |
|
|
|
|
Financial assets |
8,835 |
10,188 |
901 |
454 |
Financial
liabilities |
6,892 |
8,988 |
6,636 |
8,983 |
|
|
|
|
|
Change in interest rates will affect the Group’s income
statement as follows:
Group |
|
|
Gain / (loss) |
|
2018 |
2017 |
|
€’000 |
€’000 |
|
|
|
Euribor +0.5% /
-0.5% |
- /
- |
-/- |
|
|
|
The analysis was applied to financial liabilities based on the
assumption that the amount of liability outstanding as at the
reporting date was outstanding for the whole year.
Foreign currency risk management
The Group undertakes certain transactions denominated in
currencies other than Euro, hence exposures to exchange rate
fluctuations arise. Amounts due to fulfil contractual obligations
of £Nil (2017: £Nil) are denominated in sterling. An adverse
movement in the exchange rate will impact the ultimate amount
payable, a 10% increase or decrease in the rate would result in a
profit or loss of £Nil (2017: £Nil). The Group’s functional and
presentational currency is the Euro as it is the currency of its
main trading environment, and most of the Group’s assets and
liabilities are denominated in Euro. The parent company is located
in the sterling area.
Credit risk management
The Group’s financial instruments, which are subject to credit
risk, are considered to be trade and other receivables. There is a
risk that the amount to be received becomes impaired. The Group’s
maximum exposure to credit risk is €7,450,000 (2017: €10,085,000)
comprising receivables during the period. About 65% of total
receivables are due from a single company. The ageing profile of
trade receivables was:
|
2018 |
2017 |
|
Total
book value |
Allowance for impairment |
Total
book value |
Allowance
for impairment |
Group |
€’000 |
€’000 |
€’000 |
€’000 |
Current |
7,450 |
- |
9,631 |
- |
Overdue more than one
year |
- |
- |
- |
- |
|
7,450 |
- |
9,631 |
- |
|
2018 |
2017 |
|
Total
book value |
Allowance for impairment |
Total
book value |
Allowance
for impairment |
Company |
€’000 |
€’000 |
€’000 |
€’000 |
Current |
9,766 |
- |
10,437 |
- |
Overdue more than one
year |
- |
- |
- |
- |
|
9,766 |
- |
10,437 |
- |
22.Share capital and share premium
ISSUED AND FULLY PAID: |
Number of ordinary
shares |
Number of
deferred
shares |
Ordinary
share capital
€’000 |
Deferred
Share
capital
€’000 |
Share
premium
€’000 |
Total
€’000 |
At 1 January
2017 |
286,043,117 |
199,409,377 |
877 |
5,467 |
43,351 |
49,695 |
Issue of shares |
3,658,536 |
- |
11 |
- |
24 |
35 |
Issue of shares |
13,043,478 |
- |
37 |
- |
134 |
171 |
Conversion of loan stock to
shares |
7,546,155 |
- |
21 |
- |
54 |
75 |
At 31 December 2017 |
310,291,286 |
199,409,377 |
946 |
5,467 |
43,563 |
49,976 |
Issue of shares |
58,333,334 |
- |
162 |
- |
226 |
388 |
Settlement of other
borrowings |
22,321,429 |
- |
62 |
- |
186 |
248 |
Issue of shares |
42,857,143 |
- |
119 |
- |
214 |
333 |
Issue of shares |
63,157,890 |
- |
175 |
- |
490 |
665 |
Issue of shares |
8,263,250 |
- |
23 |
- |
79 |
102 |
Issue of shares |
7,868,130 |
- |
22 |
- |
75 |
97 |
Conversion of loan
note to shares |
1,625,000 |
- |
5 |
- |
68 |
72 |
Conversion of loan
note to shares |
50,992,826 |
- |
141 |
- |
1,985 |
2,126 |
Issue of shares |
35,365,389 |
- |
98 |
- |
211 |
309 |
Issue of shares |
3,076,923 |
- |
9 |
- |
25 |
33 |
Share issue costs |
- |
- |
- |
- |
(84) |
(84) |
At 31 December
2018 |
604,152,600 |
199,409,377 |
1,761 |
5,467 |
47,038 |
54,265 |
The deferred shares have restricted rights such that they have
no economic value.
On 24 January 2017, the Company
allotted 3,658,536 ordinary shares of 0.25
pence to Francesco Gardin in
accordance with his contract at a price of 0.82 pence per share.
On 17 July 2017, the Company
raised a total of £150,000 (€171,000) gross of expenses through a
placing of 13,043,478 ordinary shares of 0.25 pence at a price of 1.15 pence per share.
On 25 July 2017, convertible loans
of €74,830 were converted to 7,546,155 ordinary shares of
0.25 pence at a price of 0.89 pence per share.
On 26 January 2018, the Company
raised a total of £350,000 (€388,000) gross of expenses through a
placing of 58,333,334 new ordinary shares of 0.25 pence at a price of 0.60 pence per share.
In March 2018, the Company agreed
with a lender to settle €250,000 of a loan by issuing 22,321,429
new ordinary shares of 0.25 pence at
a price of 1.00 pence per share.
On 16 March 2018, the Company
raised a total of £300,000 (€333,000) gross of expenses through a
placing of 42,857,143 new ordinary shares of 0.25 pence at a price of 0.70 pence per share.
On 23 May 2018, the Company raised
a total of £600,000 (€665,000) gross of expenses through a placing
of 63,157,890 new ordinary shares of 0.25
pence at a price of 0.95 pence
per share.
On 30 May 2018, the Company agreed
with a lender to settle a balance of £91,722 (€102,000) of accrued
interest on a loan by issuing 8,263,250 new ordinary shares of
0.25 pence at a price of 1.11 pence per share.
On 30 May 2018, the Company issued
7,868,130 new ordinary shares of 0.25
pence amounting to €100,000 to its Joint Venture Partner in
Miner One Limited at a price of 1.11
pence per share.
On 5 October 2018, the Company
issued 1,625,000 new ordinary shares on conversion by two
bondholders of the 2010 7% Bonds (“Bonds”) with a face value of
£65,000 (€72,000) at a price of 4.00
pence per share.
On 28 December 2018, convertible
bonds with a face value of €2,100,000 plus accrued interest were
converted into 50,992,826 new ordinary shares at a price of
3.76 pence per share.
On 28 December 2018, the Company
issued 35,365,389 new ordinary shares as consideration of £278,750
(€309,000) to acquire a 10% interest in PBV Monitor Srl at a price
of 0.788 pence per share.
On 31 December 2018, the Company
allotted 3,076,923 new ordinary shares of 0.25 pence, £30,000 (€33,000) to Francesco Gardin in settlement of his 2017
remuneration package at a price of 0.975
pence per share.
Within the year ended 31 December
2018, invoices with a cumulative value of €127,000 were
settled by the issue of new ordinary shares of 0.25 pence at an average price of 0.740 pence per share. €84,000 related directly
to expenses incurred during the issue of new share capital.
23.Share based payments
Equity settled share option scheme
The Company operates share-based payment arrangements to
remunerate directors and key employees in the form of a share
option scheme. Equity-settled share-based payments are measured at
fair value (excluding the effect of non-market based vesting
conditions) at the date of grant. The fair value determined at the
grant date of the equity-settled share-based payments is expensed
on a straight-line basis over the vesting period, based on the
Company’s estimate of shares that will eventually vest and adjusted
for the effect of non-market based vesting conditions.
On 31 July 2015, Francesco Gardin and Reginald Eccles were granted options to
subscribe for 10,000,000 and 3,000,000 new ordinary shares in the
Company at an exercise price of 1.25
pence per share. The options are exercisable for a period of
ten years from the date of grant.
The significant inputs to the model in respect of the options
granted in 2015 were as follows:
|
2015 |
Grant date share
price |
0.74 pence |
Exercise share
price |
1.25 pence |
No. of share
options |
13,000,000 |
Risk free rate |
1.5% |
Expected
volatility |
50% |
Option life |
10 years |
Calculated fair value
per share |
0.2 pence |
The total share-based payment expense recognised in the income
statement for the year ended 31 December
2018 in respect of the share options granted was €Nil (2017:
€Nil).
Number of
options at
1 Jan 2018 |
Granted
in the year |
Exercised
in the year |
Exercised
in the year |
Number of
options at
31 Dec 2018 |
Exercise
Price, pence |
Expiry
date |
10,000,000 |
- |
- |
- |
10,000,000 |
1.25 |
31.07.2020 |
3,000,000 |
- |
- |
- |
3,000,000 |
1.25 |
31.07.2020 |
13,000,000 |
- |
- |
- |
13,000,000 |
|
|
Number of
options at
1 Jan 2017 |
Granted
in the year |
Exercised
in the year |
Cancelled
in the year |
Number of
options at
31 Dec 2017 |
Exercise
Price, pence |
Expiry
date |
10,000,000 |
- |
- |
- |
10,000,000 |
1.25 |
31.07.2020 |
3,000,000 |
- |
- |
- |
3,000,000 |
1.25 |
31.07.2020 |
13,000,000 |
- |
- |
- |
13,000,000 |
|
|
The remaining contractual life at 31
December 2018 is 1.5 years (31
December 2017 – 2.5 years).
24.Other reserves
The Group considers its capital to comprise ordinary share
capital, share premium, retained losses and its convertible bonds.
In managing its capital, the Group’s primary objective is to
maintain a sufficient funding base to enable the Group to meet its
working capital and strategic investment needs. In making decisions
to adjust its capital structure to achieve these aims, through new
share issues, the Group considers not only their short-term
position but also their long-term operational and strategic
objectives.
Group |
Merger
reserve
€’000 |
Revaluation
reserve
€’000 |
Loan
note equity reserve
€’000 |
Share
option reserve
€’000 |
Foreign exchange reserve
€’000 |
Total
other
reserves
€’000 |
At 1
January 2017 |
8,325 |
2,531 |
533 |
51 |
- |
11,440 |
Issue of
convertible loan notes |
- |
- |
1,203 |
- |
- |
1,203 |
Transfer
of reserves |
- |
(2,531) |
- |
- |
- |
(2,531) |
At 31
December 2017 and at 1 January
2018 |
8,325 |
- |
1,736 |
51 |
- |
10,112 |
Transfer
of reserves |
- |
- |
(43) |
- |
435 |
392 |
Movements
within the year |
11 |
- |
- |
- |
(11) |
- |
At 31
December 2018 |
8,336 |
- |
1,693 |
51 |
424 |
10,504 |
Company |
Merger
reserve
€’000 |
Revaluation
reserve
€’000 |
Loan
note equity reserve
€’000 |
Share
option reserve
€’000 |
Foreign exchange reserve
€’000 |
Total
other
reserves
€’000 |
At 1
January 2017 |
- |
- |
533 |
51 |
- |
584 |
Issue of
convertible loan notes |
- |
- |
1,203 |
- |
- |
1,203 |
Transfer
of reserves |
- |
- |
- |
- |
- |
- |
At 31
December 2017 and at 1 January
2018 |
- |
- |
1,736 |
51 |
- |
1,788 |
Transfer
of reserves |
- |
- |
(43) |
- |
116 |
73 |
Movements
within the year |
- |
- |
- |
- |
- |
- |
At 31
December 2018 |
- |
- |
1,693 |
51 |
116 |
1,861 |
25.Cash used in operations
|
Group
2018
€’000 |
Group
2017
€’000 |
Company
2018
€’000 |
Company
2017
€’000 |
|
|
|
|
|
Loss
before tax |
(3,939) |
(1,884) |
(1,921) |
(1,030) |
Renegotiation of zero-coupon bond |
- |
(421) |
- |
421 |
Movement
in fair value of investments
held for trading |
(57) |
77 |
(31) |
- |
Foreign
exchange effect |
392 |
- |
73 |
- |
Loss on
disposal of discontinued operations |
- |
1,821 |
- |
902 |
Finance
charges |
1,223 |
83 |
284 |
83 |
(Increase) in receivables |
2,030 |
(2,081) |
355 |
(378) |
(Decrease) in payables |
(209) |
(411) |
(460) |
(133) |
Cash
used in operations |
(560) |
(2,816) |
(1,700) |
(977) |
27.Discontinued operations
On 1 October 2017 a liquidator was
appointed to Mediapolis Srl. This has been accounted for as a
disposal of the Group’s equity interest in Mediapolis.
|
|
2017 |
|
|
€'000 |
Net assets
of Mediapolis at the date of liquidation |
1,798 |
Proceeds of
disposal |
|
- |
Disposal proceeds less net
assets |
|
(1,798) |
Secured debt assigned
to Clear Leisure |
|
2,678 |
Amounts paid for
assignment of debt |
|
(1,250) |
Write down of unsecured
debt |
|
(402) |
Loss on disposal of
discontinued operations |
|
(772) |
|
|
|
|
The results of the discontinued operations, which have been
included in the consolidated income statement, were as follows:
|
2017 |
|
€'000 |
Revenue |
63 |
Expenses |
(1,112) |
Loss before tax |
(1,049) |
Loss on disposal of
discontinued operations |
(772) |
Net loss
attributable to discontinued operations |
(1,821) |
28.Operating lease commitments
There were no operating lease commitments at 31 December 2017 and 31
December 2018.
29.Ultimate controlling party
The Group considers that there is no ultimate controlling
party.
30.Related party transactions
Transactions between the company and its subsidiaries, which are
related parties have been eliminated on consolidation and are not
disclosed in this note. Transactions between the company and its
subsidiaries are disclosed in the company’s separate financial
statements.
On 31 December 2018, the Company
allotted 3,076,923 new ordinary shares of 0.25 pence to Francesco
Gardin in settlement of his 2017 remuneration package at a
price of 0.975 pence per share.
During the year, Metals Analysis Limited, a company in which R
Eccles is a Director, charged Clear Leisure Plc €6,000 (2017:
€48,000) for consultancy fees. The amount owed from Metals Analysis
Limited at year end is €3,964 (2017: €14,943 owed to).
The shareholder loan as disclosed in Note 22 ‘Borrowings’ is a
loan provided by Eufingest which has a 14.28% shareholding also has
an outstanding loan for €2,440,422.
Remuneration of key management
personnel
The remuneration of the directors, who are the key personnel of
the group, is included in the Directors Report. Under “IAS 24:
Related party disclosures”, all their remuneration is in relation
to short-term employee benefits.
31.Events after the reporting date
On 29 March 2019, Eufingest SA
agreed to extend the repayment of the following unsecured loans
from initially 31 December 2018 to
31 March 2019 and then to
30 June 2019. €50,000 & €250,000
as announced on 7 December 2017 and
2 January 2018 respectively. €200,000
as first announced on 3 October 2018.
All other terms and conditions of the Loans remain unchanged.
On 9 November 2018 a full and
final settlement has been reached in relation to a legal claim for
the sum of €1,300,000 payable in cash to Clear Leisure plc. In
January 2019, the Company received
both tranches of the settlement of £1.15 million (before legal and
insurance expenses of nearly £300,000) from the defendants of the
High Court Case.
32.Prior year adjustments
The 2017 Group figures have been restated which incorrectly
classified Investments held at a value of €302,000 as other
receivables.
-ends-