TIDMRAI
RNS Number : 2847Y
RA International Group PLC
08 September 2020
This announcement contains inside information
RA INTERNATIONAL GROUP PLC
("RA International" or the "Company")
Interim Results for the six months to 30 June 2020
RA International Group plc (AIM: RAI), a leading provider of
services to remote locations in Africa and the Middle East, is
pleased to announce its interim results in respect of the six
months ended 30 June 2020.
6 months 6 months 6 months
ended Ended Ended
30 June 31 December 30 June
2020 2019 2019
USD'000 USD'000 USD'000
Restated(1)
Revenue 35,365 46,020 23,044
Gross profit 10,295 14,673 7,217
Gross profit margin 29.1% 31.9% 31.3%
Underlying operating profit(2) 6,204 10,850 2,836
Underlying operating profit
margin 17.5% 23.6% 12.3%
Profit before tax 5,067 10,636 2,623
Profit before tax margin 14.3% 23.1% 11.4%
Basic EPS (cents) 2.9 5.9 1.5
Net cash (end of period) 20,266 21,393 25,830
OPERATIONAL HIGHLIGHTS
-- Order book of USD 132m at 30 June 2020 with new contracts,
uplifts and extensions to existing contracts of USD 26m in the
period, including a USD 15.6m task order with IAP Worldwide
Services for the provision of supply chain services; and a
long-term contract for the provision of integrated facilities
management ("IFM") services in East Africa for a humanitarian
organisation.
-- Order book increased to USD 185m at 31 August 2020, highlighting continued contract momentum.
-- Landmark USD 60m commercial contract awarded in August 2020.
This two-year contract is our largest contract award since
Admission to AIM, providing IFM services to a new global client in
Southern Africa.
-- Appointed by Danakali as the preferred supplier to construct
a 1150-person camp facility and other infrastructure and provide
full IFM services for two years during the construction phase of
the Colluli mine in the Danakal depression in Eritrea.
-- Managed the impact of COVID-19 effectively across our
business, remaining operational throughout the period and
maintaining contract momentum whilst protecting colleagues and
customers. We reported a good level of underlying profitability in
the first half, with higher margin and resilient IFM revenue
offsetting lower construction revenue.
FINANCIAL HIGHLIGHTS
-- H1 20 revenue of USD 35.4m (H2 19: USD 46.0m, H1 19: USD 23.0m),
a 53.5% increase from H1 19, reflects the strength of RA's
customer-focused strategy.
-- Underlying Operating Profit ("UOP") of USD 6.2m (H2 19: USD
10.9m, H1 19 restated: USD 2.8m), highlights the continued
attractive profitability of the RA business model. Reported
Operating Profit for the period was USD 5.4m (H2 19: USD 10.8m,
H1 19 restated: USD 2.8m).
-- Operating cash flow of USD 9.1m (H2 19: USD 4.8m, H1 19: USD
3.9m) and cash on balance sheet of USD 20.3m as at 30 June
2020 (H2 19: USD 21.4m, H1 19: USD 25.8m), highlights strong
cash generation in the period and a continued robust liquidity
position.
Soraya Narfeldt, CEO of RA International, commented:
"We have executed well to maintain momentum whilst managing the
disruption caused by COVID-19. I am pleased with our performance
and I am proud of the way our team has responded to the challenges
of 2020, has focused on delivering for our customers, and has
secured significant contract wins which meaningfully strengthen our
business going forward. We continue to build RA's reputation for
managing and delivering large and complex projects and,
importantly, have announced major contract wins in the commercial
sector.
As highlighted by the Board previously, COVID-19 will have a
material impact on our 2020 financial performance. Whilst we are
encouraged by the return of more normal working practices and
commercial activity across our business, we remain cautious on
quantifying the impact of this disruption on our 2020 financial
performance. Despite this, the resilience and capability of our
business has been demonstrated through this period and with our
balance sheet and growing order book we remain well-placed to
withstand any near-term headwinds. We are also greatly encouraged
by the quality of the business we are building at RA. The
composition of our order-book continues to improve; we are winning
larger contracts and we are broadening the mix of customer activity
by sector and geography. This is all in-line with our customer-led
growth strategy and we remain excited about the opportunity for
sustainable growth as we deliver on our plans."
Notes to summary table of financial results:
(1) Further details can be found in note 1 of the Condensed
Consolidated Interim Financial Statements.
(2) Underlying operating profit is calculated by adding acquisition
costs and COVID-19 costs to operating profit.
Enquiries:
RA International Group PLC Via Bamburgh Capital
Soraya Narfeldt, Chief Executive Officer
Lars Narfeldt, Chief Operating Officer
Andrew Bolter, Chief Financial Officer
Cenkos Securities PLC (Nominated Adviser and
Broker)
Derrick Lee +44 (0)131 220
Peter Lynch 6939
Bamburgh Capital Limited (Financial PR & Investor +44 (0)191 229
Relations) 9500
Murdo Montgomery investors@raints.com
Background to the Company
RA International is a leading provider of services to remote
locations in Africa and the Middle East. The Company offers its
services through three channels: construction, integrated
facilities management and supply chain, and services three main
client groups: humanitarian and aid agencies, governments and
commercial customers, predominantly in the oil and gas and mining
sectors. It has a strong customer base, largely comprising UN
agencies, western governments and global corporations.
The Company provides comprehensive, flexible, mission critical
support to its clients enabling them to focus on the delivery of
their respective businesses and services. Focusing on integrity and
values alongside making on-going investment in its people,
locations and operations has over time created a reliable and
trusted brand within its sector.
CHIEF EXECUTIVE'S REVIEW
Overview
I am pleased to update the Company's shareholders on our
performance for the six months ending 30 June 2020 (the "Period" or
"First Half"). We entered 2020 with momentum after a year of strong
progress in 2019, which saw the business undertake the highest
level of activity in the Company's history during the second half
of the year. That momentum has been maintained during a period
where financial performance was impacted by the disruption caused
by the COVID-19 pandemic. Whilst we have responded to the
challenges COVID-19 has brought, we have not been distracted from
building on our strong foundations and executing on our
customer-led growth strategy.
As a company specialising in working in demanding environments,
we are prepared for crisis situations and have confidence in the
sustainability of our business model. Over the past few years, we
have relentlessly and successfully focused on the diversification
of our business, in terms of geography, customer concentration, and
service channel. We believe this strategy will continue to set us
apart, allow us to mitigate the impacts of adverse events taking
place on a local and global scale and drive sustainable growth
through further expansion into our very significant addressable
markets.
It is clear through this period of disruption that our customers
continue to rely on us because they trust us to deliver under the
most challenging of circumstances. Our track record of delivering
large and complex projects, often through our "one-supplier" model,
is leading to broader recognition of the value of our approach and
a step-change in the type of commercial discussions we are having,
particularly with governments and global blue-chip companies. We
recently made two significant announcements relating to our
preferred contractor status with Danakali and our USD 60m project
in Southern Africa, which highlight the momentum we have generated
and are good examples of the type of discussions we are having.
Group revenue during the First Half was USD 35.4m (H2 19: USD
46.0m, H1 19: USD 23.0m) and underlying operating profit was USD
6.2m (H2 19: USD 10.9m, H1 19 restated: USD 2.8m). This performance
is a good marker of the financial resilience of our business and
means over the last 12 months we have reported revenue of USD 81.4m
and USD 17.1m of underlying operating profit at a blended
underlying operating margin of 21.0%.
COVID-19 Impact and Response
We provided a comprehensive review of our initial response to
the impact of COVID-19 in our market communication on 1 April 2020
and again with our 2019 Full Year results announcement on 17 April
2020. As a Board, we continue to monitor the situation closely and
COVID-19 remains a challenge for our customers and a threat in the
areas in which we operate.
We believe we have a responsibility to all stakeholders during
this time of crisis and have prioritised mitigating the human
impact of the emergency, including advocating with customers to
allow us to execute our projects in planned timelines while taking
all necessary and recommended precautions to protect the
livelihoods of our workers.
We have remained operational throughout the period since
COVID-19 disruptions started and have been able to fulfil our
client commitments and respond to their changing requirements.
The operational impact of COVID-19 has evolved since our last
update to the market and will continue to evolve. We took early
action to respond to the emergency including retraining staff to
offer sanitisation services and other in-demand activities, and
pursuing new opportunities such as medical infrastructure
construction, the management of isolation facilities and the
disinfection of larger spaces including offices and public
facilities. We were also supplying much needed PPE, including to
government customers. More recently as we prepare this report, we
are seeing signs of some return to more normal operational
practices. Important indicators for our business include lockdowns
starting to be lifted, air travel resuming and contracts which had
previously been suspended now restarting. We remain cautious about
the near-term outlook but are also encouraged that while the
adjudication process of bids outstanding has slowed, we are still
receiving contract awards. The recent contracts we have announced
highlight the efficacy of our operating model as we bid for new
project work, where our ability to respond quickly and demonstrate
a "business as usual" approach has been a key differentiator for
us.
The financial impact to date has been consistent with our
commentary earlier in the year. We have seen many of our service
contracts continue unabated or with minor scope reductions however
some construction contracts were suspended for periods of up to 6
months. While suspensions have now been repealed for all material
construction contracts, a significant value of revenue originally
forecast to be generated in 2020 will shift to 2021. IFM revenue
has been relatively resilient through the Period and supply chain
revenue has been supported by PPE orders from new Government
customers. Whilst we have looked to offset pressure on gross margin
through cost savings in the First Half, we maintained staff
remuneration for all employees irrespective of lockdowns
prohibiting their attendance on site and made certain additional
payments to staff in recognition of their continued efforts under
challenging circumstances.
Progress in Executing on our Customer-Led Growth Strategy
We see growing our customer base and winning larger, long-term
contracts as the primary drivers of sustainable long-term business
growth. During the First Half, our business development activity
was focused on these objectives, particularly with respect to the
commercial sector. We achieved notable success in being awarded our
largest ever contract in the commercial sector and also being named
a preferred supplier to support Danakali in developing the Colluli
Mine in Eritrea. We are in the process of final value engineering
and expect the contract value to be in excess of USD 20m. The
current order book of USD 185m does not include any potential
revenue from this announcement.
2020 has also seen continued success in diversifying our
customer base, specifically increasing the percentage of revenue
generated from Government and Commercial customers. In the First
Half, for the first time in the Company's history, revenue from the
Humanitarian sector represented less than half of total
turnover.
We continue to advocate the benefits of a "one-supplier" model
as a way for clients to improve efficiencies and are providing
hybrid services, where we execute across two or more service
channels, to the majority of our clients.
The contract we announced in August 2020 with a new, global
client in the oil and gas sector is an example of how our track
record of delivering projects on time and to a high standard in
exacting circumstances is helping to attract new clients and extend
our one supplier model to the commercial sector.
Our established market presence with global, blue chip customers
remains a key pillar in expanding our geographical presence. We
have made good progress in recent years in broadening and deepening
our geographical footprint such that in 2020, we are delivering
contracts across 12 countries. We expect our strategy to diversify
into new geographies will continue to bear fruit reflecting both
the quality of our research-led approach, which enables us to
anticipate the location of future contracts, and through the
deepening relationships we have with existing customers which leads
to opportunities to support them in new geographies.
Contracts
We were awarded new contracts, uplifts, and extensions to
existing contracts of USD 26m in the First Half, a creditable
performance in the context of COVID-19. Subsequent contract awards
since the end of June 2020, have seen us deliver cumulative
contract wins of USD 86m so far in 2020, excluding a conditional
award to undertake works at the Colluli Mine in Eritrea, with an
expected value in excess of USD 20m. This builds on our annual
track record for contract wins of USD 62m in 2018 and USD 91m in
2019.
Current Trading and Outlook
We have executed well to maintain momentum whilst managing the
disruption caused by COVID-19. I am pleased with our performance
and I am proud of the way our team has responded to the challenges
of 2020, has focused on delivering for our customers, and has
secured significant contract wins which meaningfully strengthen our
business going forward. We continue to build RA's reputation for
managing and delivering large and complex projects and,
importantly, have announced major contract wins in the commercial
sector.
As highlighted by the Board previously, COVID-19 will have a
material impact on our 2020 financial performance. Whilst we are
encouraged by the return of more normal working practices and
commercial activity across our business, we remain cautious on
quantifying the impact of this disruption on our 2020 financial
performance. Despite this, the resilience and capability of our
business has been demonstrated through this period and with our
balance sheet and growing order book we remain well-placed to
withstand any near-term headwinds. We are also greatly encouraged
by the quality of the business we are building at RA. The
composition of our order-book continues to improve; we are winning
larger contracts and we are broadening the mix of customer activity
by sector and geography. This is all in-line with our customer-led
growth strategy and we remain excited about the opportunity for
sustainable growth as we deliver on our plans.
Soraya Narfeldt
Chief Executive Officer
08 September 2020
FINANCIAL REVIEW
Overview
The impact of COVID-19 on our business has been consistent with
our previous communications. IFM revenue and margins have proven
resilient while a significant value of revenue from construction
projects, as a result of project suspensions, is expected to be
recognised in 2021. Despite the challenges inherent in managing
these project suspensions, the Group generated USD 35.4m of revenue
during H1 20 (H2 19: USD 46.0m, H1 19: USD 23.0m).
Given current circumstances, we are pleased with the Company's
performance in the First Half. From a profitability perspective,
while gross margin decreased to 29.1% in H1 20 (H2 19: 31.9%, H1 19
restated: 31.3%), primarily as a result of many construction
projects operating at or around break-even in the second quarter,
it highlights resilience in profitability through a period when the
business model has been tested. Similarly, we generated USD 9.1m in
operating cashflow during the Period (H2 19: USD 4.8m, H1 19: USD
3.9m), driven by strong receivable collections. We continue to
invest in growth, spending USD 9.2m on capital expenditure,
developing our owned remote camp facilities in Mozambique and East
Africa, while maintaining significant liquidity to both execute and
bid for large projects. Both owned camp facilities are now fully
leased.
6 months 6 months 6 months
ended Ended Ended
30 June 31 December 30 June
2020 2019 2019
USD'000 USD'000 USD'000
Restated(1)
Revenue 35,365 46,020 23,044
Gross profit 10,295 14,673 7,217
Gross profit margin 29.1% 31.9% 31.3%
Underlying operating profit(2) 6,204 10,850 2,836
Underlying operating profit
margin 17.5% 23.6% 12.3%
Profit before tax 5,067 10,636 2,623
Profit before tax margin 14.3% 23.1% 11.4%
Basic EPS (cents) 2.9 5.9 1.5
Net cash (end of period) 20,266 21,393 25,830
(1) Further details can be found in note 1 of the Condensed
Consolidated Interim Financial Statements.
(2) Underlying operating profit is calculated by adding
acquisition costs and COVID-19 costs to operating profit.
Revenue
Reported revenue for H1 20 was USD 35.4m (H2 19: USD 46.0m, H1
19: USD 23.0m). This represents a 53.5% increase when compared with
H1 19. Albeit we are encouraged that all material construction
contacts had restarted as at the end of August 2020, we anticipate
a significant value of revenue originally expected to be recognised
in 2020 will shift to 2021 resulting from the respective suspension
periods.
During the First Half, despite undertaking a reduced scope of
service on many IFM contracts, revenue from this service channel
proved resilient, continuing to increase over the last four
half-year periods. Revenue from supply chain activities exceeded
our expectations, resulting from USD 2.7m in contracts awarded
which relate to the COVID-19 response in Europe.
Revenue by service channel:
6 months 6 months 6 months
ended ended Ended
30 June 31 December 30 June
2020 2019 2019
USD'000 USD'000 USD'000
Integrated facilities management 15,916 15,308 13,292
Construction 10,665 19,593 8,041
Supply chain services 8,784 11,119 1,711
---------------- ---------------- ----------------
35,365 46,020 23,044
The Company's order book at 30 June 2020 stood at USD 132
million, with more than half this balance comprising high value IFM
work. This ratio has continued to increase since the end of the
First Half as a result of new contract awards. The magnitude of our
order book and proven resilience of IFM revenue provides confidence
to continue to make long-term investment decisions, even in these
dynamic times.
Profit Margin
Gross margin in H1 20 was 29.1% (H2 19: 31.9%, H1 19 restated:
31.3%) resulting from many construction projects operating at or
around breakeven while under suspension. During this period of
disruption, we have found our long-term relationships with our
clients to be of paramount importance. In many instances, even
where projects have been suspended, we have still been able to
undertake off-site works or minimal on-site works. Whilst there are
inefficiencies in working under these conditions, our view is that
these are outweighed by the benefits of maintaining project
momentum and commercial activity to help offset labour costs.
Overall, we believe that by supporting our clients' interests in
this way it will lead to long-term benefits.
The percentage of revenue generated from supply chain activities
also contributed to the decrease in H1 20 profit margin. While we
had indicated at the time of our 2019 Full Year results
announcement that we did not anticipate supply chain revenue
increasing from 18.6% of total revenue, the contribution was 24.8%
in H1 20. This is as a direct result of the USD 2.7m in
non-recurring contracts awarded to supply COVID-19 related PPE. We
still foresee margins from supply chain work increasing in the
future as the complexity of contracts increases, however these
margins are likely to remain below those earned when undertaking
construction or IFM services.
Underlying operating profit margin in H1 20 was 17.5% (H2 19:
23.6%, H1 19 restated: 12.3%). Administrative expenses have been
fairly consistent over the past three half-years and as a result,
the variance in UOP has been driven by variances in revenue and
gross margin.
COVID-19 costs almost entirely comprise of incremental staff
costs relating to the ongoing pandemic. These include both staff
salaries paid to employees unable to work due to local lockdowns or
travel restrictions and special payments made to employees working
throughout the pandemic. Incremental project costs associated with
PPE consumption and COVID-19 testing are also included in this
balance. We have not included any figure relating to general
inefficiencies experienced as a result of COVID-19 given the high
level of judgement this exercise would entail.
Finance costs of USD 0.5m were reported in the Period (H2 19:
USD 0.3m, H1 19: USD 0.3m). The increase compared with prior
periods is primarily due to adverse foreign exchange movements
relating to GBP cash holdings.
Given no exceptional costs were incurred in the First Half or in
2019, Underlying Profit is equal to profit before tax.
Earnings Per Share
Basic earnings per share was 2.9 cents in the current period (H2
19: 5.9 cents, H1 19: 1.5 cents) and is equal to diluted earnings
per share.
Cashflow
Net cash flow from operations was USD 9.1m in the Period (H2 19:
USD 4.8m, H1 19: USD 3.9m) which represented 169% cash
conversion(3) ; an improvement on prior period comparators (H2 19:
44%, H1 19: 140%). The strong cash conversion ratio was driven by a
period of strong collections of accounts receivable balances. This
was partially offset by the build-up of inventory related to the
Company's purchase of a 2500-person prefabricated camp facility in
January which is expected to be utilised servicing Danakali's
requirements in Eritrea along with developments being undertaken or
planned by the Group.
During the First Half we invested USD 9.2m in capital
expenditure with almost all spend relating to developing our
property in Mozambique and expanding a facility in East Africa in
connection with an ongoing contract. We plan to continue to develop
these properties to meet current demand for accommodation and
commercial space, as well as identify new locations to build
similar facilities and service the needs of new and existing
clients.
(3) Cash conversion is calculated as cashflow generated from
operations divided by operating profit.
Balance Sheet and Liquidity
Net assets at 30 June 2020 were USD 71.8m (31 December 2019: USD
69.5m, 30 June 2019: USD 59.2m), with the majority of the total
balance sheet comprising cash of USD 20.3m and other current assets
of USD 28.0m.
Net cash on the balance sheet at 30 June 2020 of USD 20.3m
reflects a modest decrease from the year-end of USD 21.4m and
provides the business with significant liquidity after a period
during which the business has invested significantly in its
Mozambique development project.
Liquidity and available cash are often assessed by potential
customers during the contract adjudication process. We are
satisfied that both metrics are sufficient so that we can continue
to bid for larger projects and have the financial capacity to
mobilise multiple large projects simultaneously.
Medium Term Note Programme
Anticipating both a need to accelerate the development of our
Mozambique facility and an increase in client inquiries relating to
undertaking large projects, on 1 July 2020 we launched a debt
fundraising programme whereby a subsidiary of the Company will
issue unsecured notes to investors repayable in the second half of
2022. To date we have received funds or commitments totalling USD
6.3m.
We are pleased with the initial response and the terms of the
funding and plan to keep the debt programme open so as to enable
the Company to retain a flexible approach to its potential capital
requirements. Further details can be found in note 6 of the
condensed consolidated interim financial statements.
Dividend
A dividend of 1.25p per share totalling USD 2.7m was declared
and authorised during H1 20 (H2 19: nil, H1 19: USD 2.2m) and was
subsequently paid on 9 July 2020.
The Board's intention continues to be to adopt a progressive
dividend policy and to increase the dividend in future years while
retaining sufficient working capital to meet the needs of the
business and to fund continued growth. The Board believes the
continued growth in our customer base and the pursuit of a
one-supplier model will provide a basis for continued earnings
growth in the future.
Share Buyback Programme
In the First Half, the Company commenced its Share Buyback
Programme, and to date a total of 3.125m shares have been
repurchased under the programme announced on 8 June 2020. This
represents 1.8% of the issued share capital of the Company prior to
the programme commencing.
The Company intends to re-issue the shares acquired through the
Share Buyback Programme in order to incentivise and retain key
Directors, officers and staff and to service future exercise of
existing options and warrants.
Andrew Bolter
Chief Financial Officer
08 September 2020
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the six months ended 30 June 2020
6 months 6 months 6 months
ended ended ended
30 June 31 December 30 June
2020 2019 2019
USD'000 USD'000 USD'000
Notes Restated(4)
Revenue 35,365 46,020 23,044
Direct costs (25,070) (31,347) (15,827)
---------------- ---------------- ----------------
Gross profit 10,295 14,673 7,217
Administrative expenses (4,091) (3,823) (4,381)
---------------- ---------------- ----------------
Underlying operating profit 6,204 10,850 2,836
Acquisition costs - (10) (36)
COVID-19 costs (797) - -
---------------- ---------------- ----------------
Operating profit 5,407 10,840 2,800
Investment revenue 139 125 169
Finance costs (479) (329) (346)
---------------- ---------------- ----------------
Profit before tax 5,067 10,636 2,623
Tax expense (41) (384) -
---------------- ---------------- ----------------
Profit and total comprehensive
income for the period 5,026 10,252 2,623
Basic and diluted earnings per
share (cents) 2 2.9 5.9 1.5
(4) Further details can be found in note 1 of the Condensed
Consolidated Interim Financial Statements.
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
As at 30 June 2020
As at As at As at
30 June 31 December 30 June
2020 2019 2019
USD'000 USD'000 USD'000
Notes
Assets
Non-current assets
Property, plant, and equipment 5 36,114 28,516 22,855
Goodwill 138 138 138
---------------- ---------------- ----------------
36,252 28,654 22,993
---------------- ---------------- ----------------
Current assets
Inventories 8,971 6,178 5,837
Trade and other receivables 19,078 24,520 13,458
Cash and cash equivalents 20,266 21,393 25,830
---------------- ---------------- ----------------
48,315 52,091 45,125
---------------- ---------------- ----------------
Total assets 84,567 80,745 68,118
Equity and liabilities
Equity
Share capital 24,300 24,300 24,300
Share premium 18,254 18,254 18,254
Merger reserve (17,803) (17,803) (17,803)
Treasury shares (51) - -
Share based payment reserve 62 47 32
Retained earnings 47,037 44,685 34,434
---------------- ---------------- ----------------
Total equity 71,799 69,483 59,217
---------------- ---------------- ----------------
Non-current liabilities
Lease liabilities 2,579 2,397 2,469
Employees' end of service benefits 477 391 328
---------------- ---------------- ----------------
3,056 2,788 2,797
---------------- ---------------- ----------------
Current liabilities
Lease liabilities 163 437 122
Trade and other payables 9,549 8,037 5,982
---------------- ---------------- ----------------
9,712 8,474 6,104
---------------- ---------------- ----------------
Total liabilities 12,768 11,262 8,901
---------------- ---------------- ----------------
Total equity and liabilities 84,567 80,745 68,118
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the six months ended 30 June 2020
Share Based
Share Share Merger Treasury Payment Retained
Capital Premium Reserve Shares Reserve Earnings Total
Notes USD'000 USD'000 USD'000 USD'000(5) USD'000 USD'000 USD'000
As at 1
January 2019 24,300 18,254 (17,803) - 16 34,013 58,780
Total
comprehensive
income for
the period - - - - - 2,623 2,623
Share based
payments - - - - 16 - 16
Dividends
declared and
authorised 3 - - - - - (2,202) (2,202)
---------------- ---------------- ---------------- ---------------- ---------------- ---------------- ----------------
As at 30 June
2019 24,300 18,254 (17,803) - 32 34,434 59,217
Total
comprehensive
income for
the period - - - - - 10,252 10,252
Share based
payments - - - - 15 - 15
Dividends
declared and
authorised 3 - - - - - (1) (1)
---------------- ---------------- ---------------- ---------------- ---------------- ---------------- ----------------
As at 31
December 2019 24,300 18,254 (17,803) - 47 44,685 69,483
Total
comprehensive
income for
the period - - - - - 5,026 5,026
Share based
payments - - - - 15 - 15
Dividends
declared and
authorised 3 - - - - - (2,674) (2,674)
Purchase of
treasury
shares - - - (51) - - (51)
---------------- ---------------- ---------------- ---------------- ---------------- ---------------- ----------------
As at 30 June
2020 24,300 18,254 (17,803) (51) 62 47,037 71,799
(5) Treasury Shares acquired in period relate to the Share
Buyback Programme launched 8 June 2020. Refer to the Financial
Review for further details.
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
For the six months ended 30 June 2020
6 months 6 months 6 months
ended ended ended
30 June 31 December 30 June
2020 2019 2019
USD'000 USD'000 USD'000
Notes
Operating activities
Operating profit 5,407 10,840 2,800
Adjustments for non-cash and other items:
Depreciation on property, plant, and equipment 5 1,846 1,453 1,124
Loss on disposal of property, plant, and equipment 10 8 38
Unrealised differences on translation of foreign
balances 335 (88) (77)
Provision for employees' end of service benefits 99 106 68
Share based payments 15 15 16
---------------- ---------------- ----------------
7,712 12,334 3,969
Working capital adjustments:
Inventories (2,793) (341) (1,266)
Accounts receivable, deposits, and other
receivables 5,442 (11,063) 2,757
Accounts payable and accruals (1,124) 4,018 (1,459)
---------------- ---------------- ----------------
Cash flows generated from operations 9,237 4,948 4,001
Tax paid (79) (144) -
Employees' end of service benefits paid (13) (43) (90)
---------------- ---------------- ----------------
Net cash flows from operating activities 9,145 4,761 3,911
---------------- ---------------- ----------------
Investing activities
Investment revenue received 139 125 169
Purchase of property, plant, and equipment (9,180) (6,658) (5,700)
Proceeds from disposal of property, plant, and
equipment 4 97 73
Acquisition of subsidiary (net of cash acquired) - - (106)
---------------- ---------------- ----------------
Net cash flows used in investing activities (9,037) (6,436) (5,564)
---------------- ---------------- ----------------
Financing activities
Payment of lease liabilities (370) (318) (52)
Finance costs paid (479) (329) (346)
Dividends paid 3 - (2,203) -
Purchase of treasury shares (51) - -
---------------- ---------------- ----------------
Net cash flows used in financing activities (900) (2,850) (398)
---------------- ---------------- ----------------
Net decrease in cash and cash equivalents (792) (4,525) (2,051)
Cash and cash equivalents as at start of the period 21,393 25,830 27,804
Effect of foreign exchange on cash and cash
equivalents (335) 88 77
---------------- ---------------- ----------------
Cash and cash equivalents as at end of the period 20,266 21,393 25,830
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL
STATEMENTS
For the six months ended 30 June
1 BASIS OF PREPARATION
The principal activity of RA International Group plc ("RAI" or
the "Company") and its subsidiaries (together the "Group") is
providing services in demanding and remote areas. These services
include construction, integrated facilities management, and supply
chain services. RAI was incorporated on 13 March 2018 as a public
company in England and Wales under registration number 11252957.
The address of its registered office is One Fleet Place, London,
EC4M 7WS.
The financial information set out in these interim condensed
consolidated interim financial statements does not constitute the
Group's statutory accounts within the meaning of section 434 of the
Companies Act 2006.
The unaudited condensed consolidated interim financial
statements for the six months ended 30 June 2020 have been prepared
in accordance with IAS 34, 'Interim Financial Reporting'. They do
not include all the information required for full annual financial
statements and should be read in conjunction with the consolidated
financial statements of RAI for the year ended 31 December 2019.
The unaudited financial information has been prepared using the
same accounting policies and methods of computation as the Annual
Report for the year ended 31 December 2019. The same accounting
policies and methods of computation will be used to prepare the
Annual Report for the year ended 31 December 2020. The financial
statements of the Group are prepared in accordance with IFRS.
Presentation of Statement of Consolidated Income
The Company has modified the presentation of the Consolidated
Statement of Comprehensive Income to reclassify holding company
expenses as administrative expenses, so as to increase the
similarity of presentation to sector comparators. The Company
believes this provides a more meaningful basis for users of the
financial statements. Prior period results have been restated
accordingly.
2 EARNINGS PER SHARE
The Group presents basic earnings per share ("EPS") data for its
ordinary shares. Basic EPS is calculated by dividing the profit
attributable to ordinary shareholders of the Group by the weighted
average number of ordinary shares outstanding during the period.
Diluted earnings per share is calculated by dividing the profit
attributable to ordinary shareholders of the Group by the weighted
average number of ordinary shares outstanding during the period
plus the weighted average number of ordinary shares that would be
issued on conversion of all the dilutive potential ordinary shares
into ordinary shares.
Normalised earnings per share is calculated by dividing
underlying profit by the weighted average number of ordinary shares
outstanding during the period.
6 months 6 months 6 months
ended ended ended
30 June 31 December 30 June
2020 2019 2019
Profit for the period (USD'000) 5,026 10,252 2,623
Basic weighted average number
of ordinary shares 173,566,950 173,575,741 173,575,741
Effect of warrants - - -
Effect of employee share options - - -
---------------- ---------------- ----------------
Diluted weighted average number
of shares 173,566,950 173,575,741 173,575,741
Basic earnings per share (cents) 2.9 5.9 1.5
Diluted earnings per share (cents) 2.9 5.9 1.5
3 DIVIDS
During the interim period, a dividend of 1.25 pence (USD 0.02)
per share (173,575,741 shares) totalling GBP 2,170,000 (USD
2,674,000) was declared and authorised (H2 19: nil, H1 19: 1 pence
(USD 0.01) per share (173,575,741 shares) totalling GBP 1,736,000
(USD 2,203,000). The dividend declared and authorised during the
interim period was paid to ordinary shareholders on 9 July
2020.
4 SEGMENT INFORMATION
For management purposes, the Group is organised into one segment
based on its products and services, which is the provision of
services in demanding and remote areas. Accordingly, the Group only
has one reportable segment. The Group's Chief Operating Decision
Maker ("CODM") monitors the operating results of the business as a
single unit for the purpose of making decisions about resource
allocation and assessing performance. The CODM is considered to be
the Board of Directors.
Operating segments
Revenue, operating results, assets and liabilities presented in
the financial statements relate to the provision of services in
demanding and remote areas.
Revenue by service channel:
6 months 6 months 6 months
ended ended ended
30 June 31 December 30 June
2020 2019 2019
USD'000 USD'000 USD'000
Integrated facilities management 15,916 15,308 13,292
Construction 10,665 19,593 8,041
Supply chain services 8,784 11,119 1,711
---------------- ---------------- ----------------
35,365 46,020 23,044
The Group allocates a contract to a specific service channel
based on the nature of the primary deliverable to the customer.
Revenue by recognition timing:
6 months 6 months 6 months
Ended ended ended
30 June 31 December 30 June
2020 2019 2019
USD'000 USD'000 USD'000
Revenue recognised over time 20,178 22,618 15,832
Revenue recognised at a point
in time 15,187 23,402 7,212
---------------- ---------------- ----------------
35,365 46,020 23,044
Geographic segment
The Group primarily operates in Africa and the CODM considers
Africa and Other to be the only geographic segments of the Group.
The below geography split is based on the location of project
implementation.
Revenue by geographic area of project implementation:
6 months 6 months 6 months
ended ended ended
30 June 31 December 30 June
2020 2019 2019
USD'000 USD'000 USD'000
Africa 32,420 45,737 22,998
Other 2,945 283 46
---------------- ---------------- ----------------
35,365 46,020 23,044
Non-current assets by geographic area:
6 months 6 months 6 months
ended ended ended
30 June 31 December 30 June
2020 2019 2019
USD'000 USD'000 USD'000
Africa 35,003 27,527 21,985
Other 1,249 1,127 1,008
---------------- ---------------- ----------------
36,252 28,654 22,993
Revenue split by customer:
6 months 6 months 6 months
ended ended ended
30 June 31 December 30 June
2020 2019 2019
% % %
Customer A 24 28 33
Customer B 9 14 11
Customer C 9 7 12
Customer D 7 9 -
Other 51 42 44
---------------- ---------------- ----------------
100 100 100
5 PROPERTY, PLANT AND EQUIPMENT
Machinery,
Right-of-use motor
Assets vehicles,
-
Land and Land and furniture Leasehold
and
Buildings buildings Equipment improvements Total
USD'000 USD'000 USD'000 USD'000 USD'000
Cost:
At 1 January 2020 3,375 16,605 14,892 471 35,343
Additions 278 5,855 3,325 - 9,458
Disposals - - (275) - (275)
---------------- ---------------- ---------------- ---------------- ----------------
At 30 June 2020 3,653 22,460 17,942 471 44,526
---------------- ---------------- ---------------- ---------------- ----------------
Depreciation:
At 1 January 2020 940 1,475 4,290 122 6,827
Charge for the period 273 469 1,071 33 1,846
Relating to disposals - - (261) - (261)
---------------- ---------------- ---------------- ---------------- ----------------
At 30 June 2020 1,213 1,944 5,100 155 8,412
---------------- ---------------- ---------------- ---------------- ----------------
Net carrying amount:
At 30 June 2020 2,440 20,516 12,842 316 36,114
Machinery,
Right-of-use motor
Assets vehicles,
-
Land and Land and furniture Leasehold
and
Buildings buildings equipment improvements Total
USD'000 USD'000 USD'000 USD'000 USD'000
Cost:
At 1 July 2019 2,814 11,345 13,652 470 28,281
Additions 561 5,307 1,359 1 7,228
Disposals - (47) (119) - (166)
---------------- ---------------- ---------------- ---------------- ----------------
At 31 December 2019 3,375 16,605 14,892 471 35,343
---------------- ---------------- ---------------- ---------------- ----------------
Depreciation:
At 1 July 2019 704 1,133 3,501 88 5,426
Charge for the period 236 342 841 34 1,453
Relating to disposals - - (52) - (52)
---------------- ---------------- ---------------- ---------------- ----------------
At 31 December 2019 940 1,475 4,290 122 6,827
---------------- ---------------- ---------------- ---------------- ----------------
Net carrying amount:
At 31 December 2019 2,435 15,130 10,602 349 28,516
Machinery,
Right-of-use motor
Assets vehicles,
-
Land and Land and furniture Leasehold
and
buildings buildings equipment improvements Total
USD'000 USD'000 USD'000 USD'000 USD'000
Cost:
At 1 January 2019 2,814 9,605 10,515 451 23,385
Additions - 1,981 3,731 19 5,731
Disposals - (241) (594) - (835)
---------------- ---------------- ---------------- ---------------- ----------------
At 30 June 2019 2,814 11,345 13,652 470 28,281
---------------- ---------------- ---------------- ---------------- ----------------
Depreciation:
At 1 January 2019 585 888 3,233 55 4,761
Charge for the period 119 264 708 33 1,124
Relating to disposals - (19) (440) - (459)
---------------- ---------------- ---------------- ---------------- ----------------
At 30 June 2019 704 1,133 3,501 88 5,426
---------------- ---------------- ---------------- ---------------- ----------------
Net carrying amount:
At 30 June 2019 2,110 10,212 10,151 382 22,855
6 SUBSEQUENT EVENTS
On 1 July 2020 the Company commenced a debt fundraising
programme whereby a subsidiary, RA International FZCO, will issue
unsecured medium-term notes to investors (the "Medium Term Note
Programme" or "MTN programme"). Under the terms of the MTN
programme principal will be repaid in full, two years from the date
of subscription. The MTN programme is multi-currency with notes
being issued in both US Dollars and Pound Sterling. Coupon rates
are fixed at 7.5% and 7.0% per annum respectively and interest is
payable quarterly, semi-annually, annually, or upon maturity at the
option of the investor.
To date USD 6.3m of funds or commitments have been received.
7 APPROVAL OF CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
The condensed consolidated interim financial statements were
approved by the board of directors on 07 September 2020.
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END
IR FFFLVASIDIII
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