AfriAg Global Plc - Final results for the year ended 31 December 2017 PR Newswire

31 May 2018

AfriAg Global PLC

(“AfriAg Global” or the “Company”)

Audited Final results for the year ended 31 December 2017

Chairman’s report (incorporating the strategic report)

This has been a very good year for the Company business growth as a global agri-logistics logistics provider, and I am pleased to present the annual report and financial statements for AfriAg Global plc (the “Company” and, together with its wholly owned subsidiaries, the “Group”) for the year ended 31 December 2017.

Our global distribution footprint has expanded considerably during the year, as we moved to distributing perishable food products by road, air and sea for and to global customers (South Africa, Mauritius, Mozambique, Zimbabwe, Zambia, DRC, Kenya, USA, UK, France, Holland, Russia, Japan, New Zealand and others).

AfriAg Marketing had a good year, with revenues growing 3% to £3.122 million during the period.

The Company’s investment in specialist global agri-logistics group AfriAg (Pty) Limited continues to add value as its business continues to grow and develops into a significant global logistics enterprise. It has reported a 26% increase in full year revenues to £14.746 million for the 12 months ended 31 December 2017 (2016: £11.704 million); a gross profit of £2,173,000 (2016: £927,000) and a net profit for the year of £179,000 (2016: £104,000). The Company has equity-accounted for its 40% share of this profit for 2017, being £72,000 (2016: £42,000).

Gross profit for the Group decreased marginally to £280,000 (2016: £334,000).

Group Results for the period:

    --  The Group’s gross turnover has increased by 3% to £3.122 million for the
        year (2016 - £3.035 million).
    --  The Group’s net loss after taxation for the year was £38,000 (2016 -
        £9,000 loss).
    --  The Group’s current assets including cash at 31 December 2017 amounted
        to £1,293,000 (2016 - £1,261,000).
    --  The Group’s 40% owned agri-logistics investment, AfriAg (Pty) Ltd had
        gross turnover increasing 26% to £14.746 million (2016 - £11.704
        million) and reported a net profit of £179,000 (2016 - £104,000).

The Directors do not recommend a payment of a dividend

Strategic Review for the Period:

AfriAg Global is seeing its business plan come together as we expand our operations to providing elite logistic solutions for the timely movement of perishable food not only from Africa to the world but also from the world in to Africa.

At the heart of our business is our own global network, fleet and staff based in Johannesburg at our large modern facilities near O.R. Tambo International Airport. The AfriAg HQ is a full-service logistics facility equipped with the latest facilities to meet our customer’s demanding needs.

Our global partner network spans strategic road, air and sea routes harnessing our resources across this network enables us to deliver bespoke logistics solutions for our customers.

We have strong relationships with our freight counterparties and their branches, fleet, facilities and infrastructure in locations across Europe, Asia, North Americas, and the Middle East.

AfriAg has grown to supply our customers with world class global logistics delivering across our global footprint, international and domestic freight transport services, distribution and refrigerated warehousing services through to remote haulage logistics, aviation and marine logistics support services.

Delivering these services are our main priority. Collectively, they enable us to efficiently and effectively deliver the solutions our customers are looking for, right around the world.

AfriAg Marketing Pty Ltd (100% owned by AfriAg Global Plc):

AfriAg Marketing has experienced a good year of trading activity, with revenues of £3.122 million in 2017, compared to £3.035 million in 2016.

This consistent revenue not only demonstrates strong development, it also reinforces the belief that the company’s low-overhead, grower-focused structure works in today’s market. The model has been keenly welcomed by both our growers and our end customers in Europe and North America.

This year, the business has been focusing on consolidating our core activities of exporting, distribution and trading of a wide range of fruit and vegetable perishable food lines, including blueberry, passion fruit, pineapple, apple, strawberry, butternut, peas, fine beans, mange tout, sugar snap, baby corn, chillies, baby veg, and herbs to name our top product lines.

Foreign exchange management with the wild fluctuations in global currency rates always proves challenging, however profit levels remained good at ZAR 0.343 million (£20,000) (2016: ZAR 2.057 million (£105,000).

AfriAg (Pty) Limited (40% owned by AfriAg Global Plc):

AfriAg (Pty) Limited is a truly global and fast growing logistics business. Road haulage, air freight and sea freight of fresh and frozen food in to and out of Africa and to many destinations around the world is what AfriAg (Pty) Limited focuses on.

AfriAg (Pty) Limited now operates logistics services to many major global cities and ports around the globe. The company has turned into a truly global enterprise and we seeing tremendous growth across many markets. We are now one of the largest air freighters of perishable food out of southern Africa using some of the world’s largest airlines and providing bespoke first world logistics to destinations all over the world through our rapidly expanding global network of airlines and agents.

AfriAg (Pty) Limited reported a 26% increase in full year revenues to £14.746 million for the 12 months ended 31 December 2017 (2016: £11.704 million); a gross profit of £2,173,000 (2016: £927,000) and a net profit for the year of £179,000 (2016: £104,000). The Company has equity-accounted for its 40% share of this profit for 2017, being £72,000 (2016: £42,000).

A new initiative in 2017 by AfriAg (Pty) Limited was to seek out investments in the southern African legalised medical cannabis sector. In July 2018, AfriAg (Pty) Limited announced that it had signed a sole and exclusive agreement to potentially acquire a 60% interest in South Africa’s House of Hemp, subject to a number of pre-conditions and completion of satisfactory due diligence. AfriAg (Pty) Limited jointly signed this deal with LGC Capital Ltd (as it’s 50/50 partner) with House of Hemp. David Lenigas serves as a director of AfriAg, AfriAg Global and LGC Capital Ltd and pursuant to the NEX Exchange Growth Market Rules for Issuers, this transaction would have constituted a related party transaction. The deal with House of Hemp was however terminated in early 2018, as the South African Government had not provided the necessary legal framework for medical cannabis in the country. AfriAg (Pty) Ltd are actively perusing other medical cannabis investment opportunities in southern Africa, where governments do have a fully legislated and legal framework in place for the medical cannabis sector. Only businesses that are legally permitted to cultivate and produce medical cannabis will be considered and any investment in this sector must meet the strict requirements of the UK regulators.

Outlook

The Company anticipates another good year of growth ahead. The Company also intends to identify further investments in the African agri-logistics sector, to enhance the AfriAg brand, which has now become very well established.

The Board would like to take this opportunity to thank our shareholders, staff and consultants for their continued support and I look forward to reporting further significant progress over the next period and beyond.

David Lenigas
Executive Chairman
31 May 2018

The directors of the Company accept responsibility for the contents of this announcement.

For further information please contact:


Afriag Global Plc:                   +44 (0)20 7440 0640
David Lenigas (Executive Chairman)

Peterhouse Corporate Finance Limited +44 (0)20 7469 0930
Guy Miller
Fungai Ndoro





Financial statements

Consolidated statement of comprehensive income for the period to 31 December 2017

__________________________________________________________________________________________


                                                          Year ended  Year ended
                                                         31 December 31 December
                                                                2017        2016

                                                             GBP’000     GBP’000

Revenue                                                        3,122       3,035

Cost of sales                                                (2,842)     (2,701)

Gross Profit                                                     280         334

Administration expenses                                        (378)       (367)

Share Based Payment Charge                                         -          98

Operating (loss)                                                (98)       (131)

Share of associate result                                         72          42

Investment income                                               (11)          85

Finance costs                                                    (1)         (5)

(Loss) before taxation                                          (38)         (9)

Taxation                                                           -           -

(Loss) for the period attributable to equity holders of         (38)         (9)
the parent

Other comprehensive income

Gain on revaluation of available for sale investments              -           5

Transfer to income statement                                      14        (55)

Translation exchange (loss)/gain                                 (3)         160

Other comprehensive income for the period net of                  11         110
taxation

Total comprehensive income for the year attributable to         (27)         101
equity holders of the parent

Loss per share

Basic and diluted (pence)                                    (0.003)     (0.001)



The accompanying accounting policies and notes form part of these financial statements.

Consolidated statement of financial position at 31 December 2017

__________________________________________________________________________________________


                             31 December 31 December

                                    2017        2016

                                 GBP’000     GBP’000

Non-current assets

Property, plant & equipment            5           5

Investments in associates          1,590       1,518

                                   1,595       1,523

Current assets

Inventory                              3           9

Trade and other receivables          846         976

Available for sale assets              1          35

Cash and cash equivalents            443         240

                                   1,293       1,261

Total assets                       2,888       2,783

Current liabilities

Trade and other payables           (919)       (987)

                                   (919)       (987)

Net current assets                   374         274

Net assets                         1,969       1,796

Equity

Share capital                      1,461       1,381

Share premium account              8,648       8,528

Share based payment reserve          279         279

Revaluation reserves                (22)        (36)

Foreign currency reserve              34          37

Retained earnings                (8,431)     (8,393)

                                   1,969       1,796



The financial statements of AfriAg Global plc (registered number 002845V) were approved by the Board of Directors and authorised for issue on 31 May 2018 and were signed on its behalf by:

David Lenigas                                                                            Donald Strang

Chairman                                                                                    Director

The accompanying accounting policies and notes form part of these financial statements.

Company statement of financial position at 31 December 2017

__________________________________________________________________________________________


                                        31 December 31 December

                                               2017        2016

                                            GBP’000     GBP’000

Non-current assets

Investments in subsidiary undertakings            -           -

Trade and other receivables                   1,836       1,836

                                              1,836       1,836

Current assets

Trade and other receivables                       8           7

Available for sale assets                         1          35

Cash and cash equivalents                       123          43

                                                132          85

Total assets                                  1,968       1,921

Current liabilities

Trade and other payables                      (385)       (444)

                                              (385)       (444)

Net current (liabilities)                     (253)       (359)

Net assets                                    1,583       1,477

Equity

Share capital                                 1,461       1,381

Share premium account                         8,648       8,528

Share based payment reserve                     279         279

Revaluation reserves                           (22)        (36)

Retained earnings                           (8,783)     (8,675)

                                              1,583       1,477



The financial statements of AfriAg Global plc (registered number 002845V) were approved by the Board of Directors and authorised for issue on 31 May 2018 and were signed on its behalf by:

David Lenigas                                                                            Donald Strang

Chairman                                                                                    Director

The accompanying accounting policies and notes form part of these financial statements.

Consolidated statement of changes in equity for the period to 31 December 2017

_______________________________________________________________________________________________________________________________________________________


                Share   Share  Share based Foreign  Revaluation Retained  Total
               capital premium   payment   currency  reserves   earnings
                                 reserve   reserve

               GBP’000 GBP’000     GBP’000  GBP’000     GBP’000  GBP’000 GBP’000

At 31 December   1,381   8,528         213    (123)          14  (8,416)   1,597
2015

(Loss) for the       -       -           -        -           -      (9)     (9)
period

Currency             -       -           -      160           -        -     160
translation
gain

Gain on              -       -           -        -           5        -       5
revaluation of
available for
sale
investments

Transfer to          -       -           -        -        (55)        -    (55)
income
statement

Total                -       -           -      160        (50)      (9)     101
Comprehensive
Income

Shares options       -       -        (32)        -           -       32       -
expired

Share based          -       -          98        -           -        -      98
payment charge

Total                -       -          66        -           -       32      98
contributions
by and
distributions
to owners of
the Company

At 31 December   1,381   8,528         279       37        (36)  (8,393)   1,796
2016

(Loss) for the       -       -           -        -           -     (38)    (38)
period

Currency             -       -           -      (3)           -        -     (3)
translation
gain

Gain on              -       -           -        -           -        -       -
revaluation of
available for
sale
investments

Transfer to          -       -           -        -          14        -      14
income
statement

Total                -       -           -      (3)          14     (38)    (27)
Comprehensive
Income

Shares issued       80     120           -        -           -        -     200

Share based          -       -           -        -           -        -       -
payment charge

Total               80     120           -        -           -        -     200
contributions
by and
distributions
to owners of
the Company

At 31 December   1,461   8,648         279       34        (22)  (8,431)   1,969
2017



The accompanying accounting policies and notes form part of these financial statements.

Company statement of changes in equity for the period to 31 December 2017

_______________________________________________________________________________________________________________________________________________________


                     Share   Share  Share based Revaluation Retained  Total
                    capital premium   payment    reserves   earnings
                                      reserve

                    GBP’000 GBP’000     GBP’000     GBP’000  GBP’000 GBP’000

At 31 December 2015   1,381   8,528         213          14  (8,558)   1,578

(Loss) for the            -       -           -           -    (149)   (149)
period

Gain on revaluation       -       -           -           5        -       5
of available for
sale investments

Transfer to income        -       -           -        (55)        -    (55)
statement

Total Comprehensive       -       -           -        (50)    (149)   (199)
Income

Shares options            -       -        (32)           -       32       -
expired

Share based payment       -       -          98           -        -      98
charge

Total contributions       -       -          66           -       32      98
by and
distributions to
owners of the
Company

At 31 December 2016   1,381   8,528         279        (36)  (8,675)   1,477

(Loss) for the            -       -           -           -    (108)   (108)
period

Transfer to income        -       -           -          14        -      14
statement

Total Comprehensive       -       -           -          14    (108)      94
Income

Shares issued            80     120           -           -        -     200

Share issue costs         -       -           -           -        -       -

Total contributions      80     120           -           -        -     200
by and
distributions to
owners of the
Company

At 31 December 2017   1,461   8,648         279        (22)  (8,783)   1,583



The accompanying accounting policies and notes form part of these financial statements.

Consolidated statement of cash flows for the period ended 31 December 2017

__________________________________________________________________________________________


                                                          Year ended  Year ended

                                                         31 Dec 2017 31 Dec 2016

                                                             GBP’000     GBP’000

Cash flows from operating activities

Operating (loss)                                                (98)       (131)

Decrease/(increase) in inventory                                   6         (9)

Decrease/(increase) in trade and other receivables               130       (591)

(Decrease)/increase in trade and other payables                 (68)         296

Depreciation                                                       4           -

Share option charge                                                -          98

Net cash outflow in operating activities                        (26)       (337)

Investing activities

Investment income                                                  2           9

Finance costs                                                    (1)         (5)

Receipts on sale of AFS investments                               35         168

Payments for PPE assets                                          (4)         (3)

Net cash inflow in investing activities                           32         169

Financing activities

Issue of share capital                                           200           -

Issue costs                                                        -           -

Net cash inflow from financing activities                        200           -

Net increase/(decrease) in cash and cash equivalents             206       (168)

Cash and cash equivalents at beginning of period                 240         248

Effect of foreign exchange on cash and cash equivalents          (3)         160

Cash and cash equivalents at end of period                       443         240



The accompanying accounting policies and notes form part of these financial statements.

Company statement of cash flows for the period ended 31 December 2017

__________________________________________________________________________________________


                                                     Year ended  Year ended

                                                    31 Dec 2017 31 Dec 2016

                                                        GBP’000     GBP’000

Cash flows from operating activities

Operating (loss)                                           (95)       (227)

(Increase)/decrease in trade and other receivables          (1)          22

(Decrease) in trade and other payables                     (59)        (59)

Share option charge                                           -          98

Net cash outflow in operating activities                  (155)       (166)

Investing activities

Investment income                                             -           2

Receipts on sale of AFS investments                          35         168

Net cash inflow in investing activities                      35         170

Financing activities

Issue of share capital                                      200           -

Issue costs                                                   -           -

Net cash inflow from financing activities                   200           -

Net increase in cash and cash equivalents                    80           4

Cash and cash equivalents at beginning of period             43          39

Cash and cash equivalents at end of period                  123          43