TIDMRMA
RNS Number : 2578K
Rasmala PLC
20 September 2016
Rasmala plc
("Rasmala" or the "Company")
Condensed Consolidated Interim Financial Statements
For the six months ended 30 June 2016
Highlights
-- Financial performance in our core businesses for the six
months to 30 June 2016 was stable in challenging market
conditions
-- Operating income of GBP4.0m (first half 2015: GBP4.9m)
-- Operating loss of GBP1.3m, compared to a profit of GBP0.6m for the first half 2015
-- Assets under management (AUM) at 30 June 2016 including
capital seeded by the Group stood at US$1,007m (31 December 2015:
US$1,072m)
-- Strong capital adequacy, regulatory and liquidity ratios maintained
For further information please contact:
Rasmala plc Tel: +44 (0)20 7847 9900
Zak Hydari, CEO
Stockdale Securities Tel: +44 (0)20 7601 6100
Antonio Bossi / David
Coaten
Chief Executive's Statement
Financial results
Rasmala maintained stability in its core businesses in the
period up to 30 June 2016 despite the challenging economic backdrop
that has continued from 2015.
Total operating income for the six months to 30 June 2016 was
GBP4.0m (six months to 30 June 2015: GBP4.9m). Total expenses for
the six months were GBP5.2m (first half 2015: GBP4.3m). The
resulting operating loss for the six months was GBP1.3m (profit in
first half 2015: GBP0.6m).
Our stable performance in the first six months reflects a more
diversified business and our cautious approach during a period of
heightened uncertainty in our core markets and globally. We expect
the uncertainty to continue in the second half of the year and
remain defensively positioned.
The Group also maintained its strong capital adequacy,
regulatory and liquidity ratios.
Commentary
There was significant volatility in the first half of 2016
driven by various challenges to global growth, oil prices, China's
soft landing, US dollar strengthening, emerging market weakness and
finally the unexpected vote by the UK to leave the European Union
("EU"). There was no respite at the start of the year after a
challenging end to 2015 with low oil prices continuing to create
uncertainty in the GCC and globally.
Rasmala continued to make progress in the first half despite
these headwinds and there were some positive indicators in our core
businesses of Investment Management and Investment Banking. During
this period we continued to strengthen our platform with key new
hires and investment in new product development and
distribution.
The surprise referendum result in the UK to leave the EU
highlights the high level of unpredictability in the global
geopolitical environment. The US election in November and Italy's
constitutional referendum in October pose similar challenges to the
status quo and will likely continue to shape market sentiment
globally. The UK referendum raises questions about the future shape
of the EU and we expect pressures within the bloc to increase as
the UK starts negotiations to leave the EU. Amid the uncertainty,
and with the UK running a current account deficit of 5.2% of GDP
(2015), sterling has seen a sharp weakening since June.
With regard to UK Real Estate, the number of counter-balancing
economic variables and post-Brexit political uncertainty have
combined to create a significant level of uncertainty in financial
markets. There is concern that Brexit could result in large
financial institutions moving jobs out of London and consequently
weaken the London residential property market as well as the
commercial office market. However most of the factors that have
driven real estate over the past three years remain in place. The
UK economy remains fundamentally robust, interest rates remain low
and gilt prices high. We believe long term investors in UK
commercial property would be best served by continuing to show
tolerance to a period of weakness. European commercial property and
property funds have yet to respond in a meaningful and material way
to UK political uncertainty.
The U.S. Federal Reserve did not raise rates in Q2 2016 as a
direct result of market volatility in the aftermath of Brexit. As
compared to Q1 2016, markets now have lower expectations associated
with rate hikes in 2016, and are now pricing in a further hike in
Q4 2016. Recent economic data from the U.S. has been mixed with
equity markets trading at record-high levels whilst yields on 10
year Treasuries had dropped from around 1.65% to 1.30%, and now
stabilised around 1.59%. Growth in the US is expected to slow down,
with GDP growth below 2%.
Global growth remains sluggish at a rate of 2.4% in 2016 and is
the slowest pace since the financial crisis. Central banks of most
major economies are engaged in some form of quantitative easing;
Europe and Japan have lowered rates to negative territory and the
UK has cut rates by 0.25% in August. Inflation is low in OECD
countries for structural reasons and is likely to remain low in
2016.
Oil continues to be a major contributor to global investment
sentiment in 2016. In the second quarter of 2016 oil peaked at
$52/bbl and is now trading at around $46/bbl. Despite the welcome
rally in oil since Q1 2016, the current price is still low by
historical standards with no cut in production by OPEC members
despite ongoing speculation of such a move.
The low oil price is highly relevant for our client base in the
GCC and MENA markets where it has implications for government
revenues, project spending, capex planning as well as for the
overall liquidity in the regional banking system. The recent price
action validates our house view that in the near term the oil price
is capped at around $50-$60/bbl which is seen as the cost of
marginal production by shale producers.
A key trend in recent months has been the strengthening of the
US Dollar, with the Dollar Index showing levels close to its 5 year
highs, partly linked to its safe haven status against
volatility.
Risks to the macro picture include a larger-than-expected rise
in US interest rates, a sharp economic slowdown in China, weakness
in the Euro area and the UK, and geopolitical events which threaten
the status quo.
Investment Management
Our investment performance was positive across most Funds and
client portfolios. The Arabian Markets Growth Equity Fund out
performed its benchmark in the six months to 30 June 2016, and the
Rasmala GCC Fixed Income Fund and the Rasmala Global Sukuk Fund,
produced returns of 5.17% and 4.68%, respectively, over the same
period.
Our Assets under management (AUM) including capital seeded by
the Group stood at US$1,007m (period to 31 December 2015:
US$1,072m). It is important to note our gross inflows during the
period exceeded $78m and we had net positive inflow for the period.
The overall fall in our total AUMs relates to market and FX
movements. The diversified flows continue across our product
offering.
Investment Banking
In the first half of the year, the Investment Banking team
successfully originated, structured and acquired AbbVie House
office building for GBP24.5m and fully placed the equity. The team
also successfully placed US$25mn of Kuvyet Turk 7.9%. Our
Investment Banking team will continue to focus on Real Estate
opportunities in the UK, Europe and UAE.
Treasury and Principal Investments
We continue to manage our balance sheet on a conservative basis
and deploy capital to support Investment Banking and drive our
product expansion strategy. We also remain committed to an orderly
exit of our legacy investments.
Outlook
The outlook for the second half of the year remains challenging
and we will continue to steer a steady ship. We will closely
monitor post Brexit investment opportunities in the UK and continue
to invest in our people and platforms. Whilst uncertainty and
market volatility are expected to pose challenges, we continue to
identify investment opportunities at attractive valuations and will
work closely with our clients to deliver on these.
Zulfi Caar Hydari
Chief Executive
Rasmala plc
Condensed consolidated statement of income
For the six months ended 30 June 2016 (unaudited)
Year to
6 months to 30-Jun-16 6 months to 30-Jun-15 31-Dec-15
GBP'000 GBP'000 GBP'000
--------------------------------------------------------- ---------------------- ---------------------- -----------
Income
Income from financing and investing activities 650 673 1,274
Returns to financial institutions and customers (83) (68) (127)
--------------------------------------------------------- ---------------------- ---------------------- -----------
Net margin 567 605 1,147
--------------------------------------------------------- ---------------------- ---------------------- -----------
Net fees and commission income 2,826 1,522 5,338
Net (loss)/gain from financial assets measured at fair
value through profit or loss 286 1,047 (59)
Gain on private equity investments designated at fair
value through profit or loss 351 1,264 3,155
Fair value gain on investment property (100) (52) 25
Other operating income 45 468 609
--------------------------------------------------------- ---------------------- ---------------------- -----------
Total operating income 3,975 4,854 10,215
--------------------------------------------------------- ---------------------- ---------------------- -----------
Expenses
--------------------------------------------------------- ---------------------- ---------------------- -----------
Staff costs (3,298) (2,800) (6,199)
Depreciation and amortisation (44) (33) (76)
Other operating expenses (1,903) (1,438) (3,403)
--------------------------------------------------------- ---------------------- ---------------------- -----------
Total expenses (5,245) (4,271) (9,678)
--------------------------------------------------------- ---------------------- ---------------------- -----------
Operating profit before tax (1,270) 583 537
Tax charge 8 (21) (198)
--------------------------------------------------------- ---------------------- ---------------------- -----------
Loss from continuing operations (1,262) 562 339
--------------------------------------------------------- ---------------------- ---------------------- -----------
Loss after tax from discontinuing operations - - (90)
Loss for the year (1,262) 562 249
--------------------------------------------------------- ---------------------- ---------------------- -----------
Loss attributable to:
Owner of the Company (941) 997 (80)
Non-controlling interest (321) (435) 329
--------------------------------------------------------- ---------------------- ---------------------- -----------
(1,262) 562 249
--------------------------------------------------------- ---------------------- ---------------------- -----------
Earnings per share
- Basic (3.14p) 3.33p 0.37p
- Diluted (3.14p) 3.33p 0.37p
Rasmala plc
Condensed consolidated statement of comprehensive income
For the six months ended 30 June 2016 (unaudited)
Year to
6 months to 30-Jun-16 6 months to 30-Jun-15 31-Dec-15
GBP'000 GBP'000 GBP'000
Loss for the year (1,262) 562 249
Items that may be reclassified
subsequently to profit or loss:
Gain on fair value of
available-for-sale securities 317 107 109
Loss on fair value of
available-for-sale securities (96) (396) (658)
Exchange loss on net investment in
foreign operations (793) (198) (368)
Total comprehensive (loss)/income for
the year (1,834) 75 (668)
---------------------------------------- ------------------ ---------------------- -------------------
Total comprehensive (loss)/income
attributable to:
Owners of parent (1,820) 627 (1,080)
Non-controlling interest (14) (552) 412
---------------------------------------- -------- -------- -----------------------------------
(1,834) 75 (668)
---------------------------------------- -------- -------- -----------------------------------
Rasmala plc
Condensed consolidated statement of financial position
As at 30 June 2016 (unaudited)
6 months to 30-Jun-16 6 months to 30-Jun-15 Year to
31-Dec-15
GBP'000 GBP'000 GBP'000
---------------------------------------------------- ---------------------- ---------------------- -----------
Assets
Cash and cash equivalents 4,622 9,286 5,406
Financial assets measured at fair value through
profit or loss 46,133 48,279 48,993
Available-for-sale securities 23,689 19,223 21,735
Financial assets measured at amortised cost 18,523 21,128 20,565
Other assets 10,393 6,056 7,404
Investment property - 1,187 1,091
Property and equipment 334 189 344
Goodwill 12,651 10, 660 11,331
----------------------------------------------------- ---------------------- ---------------------- -----------
116,345 116,008 116,869
Assets classified as held for sale 107 90 96
Total assets 116,452 116,098 116,965
----------------------------------------------------- ---------------------- ---------------------- -----------
Liabilities
Financial liabilities measured at fair value through
profit or loss 5,931 40 1,481
Financial liabilities measured at amortised cost 3,677 6,635 4,180
Income tax payable 39 17 202
Other liabilities 4,256 4,236 6,731
----------------------------------------------------- ---------------------- ---------------------- -----------
13,903 10,928 12,594
Liabilities associated with asset held for sale 128 122 115
Total liabilities 14,031 11,050 12,709
----------------------------------------------------- ---------------------- ---------------------- -----------
Net assets 102,421 105,048 104,256
----------------------------------------------------- ---------------------- ---------------------- -----------
Capital and reserves
Share capital 15,721 15,721 15,721
Other reserves 103,386 103,386 103,386
Fair value reserve on available-for-sale securities 70 110 (151)
Foreign exchange reserve (2,393) (923) (1,293)
Accumulated losses (17,548) (15,521) (16,606)
----------------------------------------------------- ---------------------- ---------------------- -----------
Equity attributable to owners of parent 99,236 102,773 101,057
----------------------------------------------------- ---------------------- ---------------------- -----------
Non-controlling interest 3,184 2,275 3,199
----------------------------------------------------- ---------------------- ---------------------- -----------
Total equity 102,421 105,048 104,256
----------------------------------------------------- ---------------------- ---------------------- -----------
Rasmala plc
Condensed consolidated cash flow statement
For the six months ended 30 June 2016 (unaudited)
6 months to 30-Jun-16 6 months to 30-Jun-15 Year to
31-Dec-15
GBP'000 GBP'000 GBP'000
--------------------------------------------------------- ---------------------- ---------------------- -----------
Cash flows from operating activities
Operating (loss)/profit for the period (1,270) 583 537
Operating loss on discontinued operations - - (90)
Adjusted for:
Unrealised loss from financial assets measured at fair
value through profit or loss 4 (848) 380
Unrealised gain on private equity investments designated
at fair value through profit or loss (316) (1,264) (3,061)
Unrealised gain on investment property - 52 (99)
Depreciation and amortisation 44 33 76
Financial assets measured at fair value through profit
or loss 2,856 (4,865) (6,808)
Available-for-sale securities (1,732) 3,249 188
Financial assets measured at amortised cost 2,357 22,000 24,359
Other assets (5,103) 5,677 3,893
Investment property 1,091 434 682
Financial liabilities measured at fair value through
profit or loss 4,450 (914) 527
Financial liabilities measured at amortised cost (503) 4 (2,450)
Other liabilities (2,475) (593) 1,916
Assets classified as held for sale (11) 1 (5)
Liabilities associated with asset held for sale 13 (1) (9)
Distribution made by a subsidiary - - (171)
--------------------------------------------------------- ---------------------- ---------------------- -----------
Cash used in operating activities (595) 23,547 19,865
Tax paid (155) (778) (783)
--------------------------------------------------------- ---------------------- ---------------------- -----------
Net cash generated by/ (used in) operating activities (750) 22,769 19,082
--------------------------------------------------------- ---------------------- ---------------------- -----------
Cash flow from investing activities
Purchase of property and equipment (34) (45) (238)
--------------------------------------------------------- ---------------------- ---------------------- -----------
Net cash (used in)/ generated from investing activities (34) (45) (238)
--------------------------------------------------------- ---------------------- ---------------------- -----------
Cash flow from financing activities
Tender offer - (20,000) (20,000)
--------------------------------------------------------- ---------------------- ---------------------- -----------
Net cash used in investing activities - (20,000) (20,000)
--------------------------------------------------------- ---------------------- ---------------------- -----------
Net (decrease)/increase in cash and cash equivalents (784) 2,724 (1,156)
Cash and cash equivalents at the beginning of year 5,406 6,562 6,562
--------------------------------------------------------- ---------------------- ---------------------- -----------
Cash and cash equivalents at the end of the period 4,622 9,286 5,406
--------------------------------------------------------- ---------------------- ---------------------- -----------
Notes to the condensed consolidated interim financial statements
(unaudited)
At 30 June 2016
1. Principal activities and authorisation of the financial
statements
Rasmala plc ('Company') is a London headquartered specialist
asset management and financing group incorporated in the United
Kingdom on 11 January 2005. The Company is focused on the Gulf
Cooperation Council countries and offers investment management and
structured finance solutions.
The interim condensed consolidated financial statements of the
Company and its subsidiaries (the 'Group') for the six months ended
30 June 2016 were authorised by the Board of Directors for issue on
19 September 2016.
The condensed consolidated financial statements of the Group as
at and for the period ended 30 June 2016 are available at
www.rasmala.com
2. Accounting policies
The accounting policies applied by the Group in these condensed
consolidated interim financial statements are the same as those
applied by the Group in its consolidated financial statements as at
and for the year ended 31 December 2015.
3. Subsequent events
There were no significant events occurring subsequent to the
interim reporting period.
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR GMGMLLLNGVZM
(END) Dow Jones Newswires
September 20, 2016 02:01 ET (06:01 GMT)
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