TIDMRC2
RNS Number : 2764Y
Reconstruction Capital II Ltd
20 August 2018
20 August 2018
Reconstruction Capital II Limited (the "Company")
Interim Unaudited Financial Statements
for the six months ended 30 June 2018
Reconstruction Capital II Limited ("RC2", the "Company" or the
"Group"), a closed-end investment company incorporated in the
Cayman Islands admitted to trading on the AIM market of the London
Stock Exchange, today announces its results for the six months
ended 30 June 2018.
Copies of the company's interim financial statements will today
be posted to shareholders. The interim report is also available on
the Company's website http://www. reconstructioncapital2.com/.
Financial highlights
On 30 June 2018, Reconstruction Capital II Limited ("RC2") had a
total unaudited net asset value ("NAV") of EUR35.7m or EUR0.2463
per share, which represents a 1.61% fall since the beginning of the
year.
At a general meeting of shareholders held on 21 February 2018 a
decision was made to acquire 22% of the issued share capital of
Reconstruction Capital Plc (RC) for EUR1.6m and 10% of the issued
share capital of The Romanian Investment Fund Limited (RIF) for
EUR1.7m. Both funds are Romanian-focused and have as their main
underlying asset a 60% shareholding in Policolor SA in which RC2
already owns the balance of 40%. RC2 now has a further 15.36%
indirect shareholding as a result of these acquisitions. To date,
only part of the acquisition has been settled for EUR1.1m, the
balance of EUR2.1m being due once the vendors have resolved certain
technical issues for settlement.
As at 30 June 2018, RC2 had cash and cash equivalents of
approximately EUR4.6m while its wholly-owned subsidiary RC2 Cyprus
Ltd had cash and cash equivalents of EUR2.3m. As at 30 June 2018,
RC2 had sundry liabilities of EUR2.3m, including the EUR2.1m due
for the settlement of the acquisitions of shares in RC and RIF.
Operational highlights
In May, Policolor signed an amendment to the sales contract with
the buyers of its main site in Bucharest, bringing forward the sale
of 4.4ha of its remaining 7.6ha from 2019 to 2018. The land being
sold in 2018 has been divided into three plots, with the first plot
already having been sold in May generating cash proceeds of
EUR1.4m. A second plot of land was sold in July, generating
proceeds of EUR1.5m, and a further 2.2ha is due to be sold in the
autumn, generating cash proceeds of EUR3m. In May, Policolor also
signed the contract for the construction of its new Bucharest
plant, which is due to be completed in the spring of 2019 and to
become operational in the summer of that year.
Operationally, the Policolor Group had a reasonable first half
of the year with sales marginally ahead of the same period last
year at EUR33.3m (cf. 2017 EUR32.9m), whilst EBITDA fell by 10.6%
to EUR1.95m compared to the same period of the previous year.
The fair value of the investments held under the Private Equity
Programme increased by EUR3.4m to EUR33.6m during the period,
primarily due to the acquisition of the shares in RC and RIF
detailed above.
For further information, please contact:
Reconstruction Capital II Limited
Cornelia Oancea / Anca Moraru
Tel: +40 21 316 76 80
Grant Thornton UK LLP
(Nominated Adviser)
Philip Secrett
Tel: +44 (0) 20 7383 5100
finnCap Limited
(Broker)
William Marle / Giles Rolls
Tel: +44 20 7220 0500
ADVISER'S REPORT
For the six months ended 30 June 2018
On 30 June 2018, Reconstruction Capital II Limited ("RC2") had a
total unaudited net asset value ("NAV") of EUR35.7m or EUR0.2463
per share, which represents a 1.61% fall since the beginning of the
year.
At a general meeting of shareholders held on 21 February 2018 a
decision was made to acquire 22% of the issued share capital of
Reconstruction Capital Plc (RC) for EUR1.6m and 10% of the issued
share capital of The Romanian Investment Fund Limited (RIF) for
EUR1.7m. Both funds are Romanian-focused and have as their main
underlying asset a 60% shareholding in Policolor SA in which RC2
already owns the balance of 40%. RC2 now has a further 15.36%
indirect shareholding as a result of these acquisitions. To date,
only part of the acquisition has been settled for EUR1.1m, the
balance of EUR2.1m being due once the vendors have resolved certain
technical issues for settlement.
As at 30 June 2018, RC2 had cash and cash equivalents of
approximately EUR4.6m while its wholly-owned subsidiary RC2 Cyprus
Ltd had cash and cash equivalents of EUR2.3m. As at 30 June 2018,
RC2 had sundry liabilities of EUR2.3m, including the EUR2.1m due
for the settlement of the acquisitions of shares in RC and RIF.
In May, Policolor signed an amendment to the sales contract with
the buyers of its main site in Bucharest, bringing forward the sale
of 4.4ha of its remaining 7.6ha from 2019 to 2018. The land being
sold in 2018 has been divided into three plots, with the first plot
already having been sold in May generating cash proceeds of
EUR1.4m. A second plot of land was sold in July, generating
proceeds of EUR1.5m, and a further 2.2ha is due to be sold in the
autumn, generating cash proceeds of EUR3m. In May, Policolor also
signed the contract for the construction of its new Bucharest
plant, which is due to be completed in the spring of 2019 and to
become operational in the summer of that year.
Operationally, the Policolor Group had a reasonable first half
of the year with sales marginally ahead of the same period last
year at EUR33.3m (cf. 2017 EUR32.9m), whilst EBITDA fell by 10.6%
to EUR1.95m compared to the same period of the previous year.
The fair value of the investments held under the Private Equity
Programme increased by EUR3.4m to EUR33.6m during the period,
primarily due to the acquisition of the shares in RC and RIF
detailed above.
New Europe Capital SRL
STATEMENT OF COMPREHENSIVE INCOME
For the six months ended 30 June 2018
30 June 30 June 31 December
2018 2017 2017
EUR EUR EUR
Unaudited Unaudited Audited
Revenue
Fair value loss on financial
assets at
fair value through profit
or loss (2,077,374) (4,011,373) (10,981,533)
Recovery of previously
written off
receivable - - 189,000
Interest income 2,153,054 2,146,080 4,334,820
Dividend income - 3,500,000 7,619,610
Other income 10 - -
Total revenue 75,690 1,634,707 1,161,897
Expenses
Impairment on trade and other
receivables (126,000) - -
Operating expenses (534,322) (1,096,874) (1,619,749)
Financial expenses (721) (200) (188)
Total expenses (661,043) (1,097,074) (1,619,937)
Profit for the period/year (585,353) 537,633 (458,040)
Other comprehensive income - - -
Total comprehensive income
for
the period/year (585,353) 537,633 (458,040)
Earnings Per Share attributable
to
the owners of the Company
Basic and diluted earnings
per share (0.0040) 0.0037 (0.0031)
STATEMENT OF FINANCIAL POSITION
As at 30 June 2018
30 June 30 June 31 December
2018 2017 2017
EUR EUR EUR
Unaudited Unaudited Audited
ASSETS
Non-current assets
Financial assets at fair
value through
profit or loss 33,568,867 34,804,972 30,143,162
Total non-current assets 33,568,867 34,804,972 30,143,162
Current assets
Trade and other receivables 18,281 50,564 136,439
Cash and cash equivalents 4,567,668 3,028,792 6,439,763
Total current assets 4,585,949 3,079,356 6,576,202
TOTAL ASSETS 38,154,816 37,884,328 36,719,364
LIABILITIES
Current liabilities
Trade and other payables 2,451,315 335,779 430,510
TOTAL LIABILITIES 2,451,315 335,779 430,510
NET ASSETS 35,703,501 37,548,549 36,288,854
EQUITY ATTRIBUTABLE TO OWNERS
Share capital 1,449,460 1,465,223 1,449,460
Share premium 110,581,355 110,829,614 110,581,355
Retained deficit (76,327,314) (74,746,288) (75,741,961)
TOTAL EQUITY 35,703,501 37,548,549 36,288,854
Net Asset Value per
share
Basic and diluted net
asset value per
share 0.2463 0.2563 0.2504
STATEMENT OF CHANGES IN EQUITY
For the six months ended 30 June 2018
Retained Equity
component
Share (deficit)/ of
Share capital premium earnings loan notes Total
EUR EUR EUR EUR EUR
Balance at 1 January 2017 1,476,223 127,991,989 (75,283,921) - 54,184,291
Profit for the period - - 537,633 - 537,633
Other comprehensive income - - - - -
Total comprehensive income
for the period - - 537,633 - 537,633
Issue of B shares 16,997,375 (16,997,375) - - -
Redemption of B shares (16,997,375) - - - (16,997,375)
Repurchase and cancellation
of own shares (11,000) (165,000) - - (176,000)
Transactions with owners (11,000) (17,162,375) - - (17,173,375)
Balance at 30 June 2017 1,465,223 110,829,614 (74,746,288) - 37,548,549
Loss for the period - - (995,673) - (995,673)
Other comprehensive income - - - - -
Total comprehensive income
for the period - - (995,673) - (995,673)
Repurchase and cancellation
of own shares (15,763) (248,259) - - (264,022)
Transactions with owners (15,763) (248,259) - - (264,022)
Balance at 31 December
2017 1,449,460 110,581,355 (75,741,961) - 36,288,854
Profit for the period - - (585,353) - (585,353)
Other comprehensive income - - - - -
Total comprehensive income
for the period - - (585,353) - (585,353)
Balance at 30 June 2018 1,449,460 110,581,355 (76,327,314) - 35,703,501
CASH FLOW STATEMENT
For the six months ended 30 June 2018
30 June 30 June 31 December
2018 2017 2017
EUR EUR EUR
Unaudited Unaudited Audited
Cash flows (used in)/generated
from operating
activities
Profit/(loss) before taxation (585,353) 537,633 (458,040)
Adjustments for:
Fair value loss on financial
assets at fair value
through profit or loss 2,077,374 4,011,373 10,981,533
Impairment on trade and other
receivables 126,000 - -
Reversal of loan impairment - - (189,000)
Interest income (2,153,054) (2,146,080) (4,334,820)
Dividend income - (3,500,000) (7,619,610)
Net loss on foreign exchange 721 200 188
Net cash outflow before changes
in working
capital (534,312) (1,096,874) (1,619,749)
(Increase)/decrease in trade
and other receivables (7,842) (32,773) 7,352
(Decrease)/increase in trade
and other payables (83,686) 43,377 138,108
Purchase of financial assets (1,224,079) (370,000) (370,000)
Disposals and repayments of
financial assets - - 63,000
Dividends received - 3,500,000 7,500,000
Net cash (used in)/generated
from operating
activities (1,849,919) 2,043,730 5,718,711
Cash flows used in financing
activities
Payments to purchase own shares - (176,000) (440,022)
Redemptions of B shares (21,455) (16,842,979) (16,842,979)
Net cash flow used in financing
activities (21,455) (17,018,979) (17,283,001)
Net decrease in cash and cash
equivalents
before currency adjustment (1,871,374) (14,975,249) (11,564,290)
Effects of exchange rate differences
on cash and
cash equivalents (721) (200) (188)
Net decrease in cash and cash
equivalents after
currency adjustment (1,872,095) (14,975,449) (11,564,478)
Cash and cash equivalents at
the beginning of the
period/year 6,439,763 18,004,241 18,004,241
Cash and cash equivalents at
the end of the
period/year 4,567,668 3,028,792 6,439,763
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Authority to act as a Primary Information Provider in the United
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END
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