Black Sea Property - Half-year Report
RNS Number : 3025S
Black Sea Property PLC
05 November 2019
 

 

BLACK SEA PROPERTY PLC

("Black Sea Property" or the "Company")

 

Half-yearly report for the period ended 30 June 2019

 

The Board of Black Sea Property PLC is pleased to announce its interim report for the six-month period ended 30 June 2019.

 

Electronic copies of the interim report will be available at the Company's website http://www.blackseapropertyplc.com

 

 

- END -

 

BLACK SEA PROPERTY PLC

Alex Borrelli -  Chairman

 

+44(0) 774 702 0600

PETERHOUSE CAPITAL LIMITED

NEX Exchange Corporate Adviser

Mark Anwyl/ Allie Feuerlein

+44 (0) 207 469 0930

 

 

 

 

Chairman's Statement

 

 

I am pleased to present the unaudited interim financial statements of the Company for the six months ended 30 June 2019.

 

The unaudited net asset value as at 30 June 2019 was €9.48 million or 0.75 cents per share (31 December 2018: €12.0 million or 0.95 cents per share).

 

During the period, the Company continued its re-construction of Camping South Beach EOOD ("CSB") while also marketing the development as a destination for luxury camping holidays which resulted in further revenue generation in the period.  While the value of CSB has been accounted for at its valuation at 31 December 2018, the investment in the project during the period, which amounted to €1.897 million, has been expensed.  The Directors will seek a further valuation at the year-end date of 31 December 2019 which they expect will result in a material uplift reflecting the investment made during the year.

 

We are currently preparing further development proposals for the UniCredit Building which will be submitted for further approvals in due course. There is currently no letting of the building and we expect to be in a position shortly to advance its refurbishment significantly.

 

The Directors were disappointed by the delays in completing the accounts for the year ended 31 December 2018, which were published on 1 November 2019.  This was a result of concerns raised by the auditors over the relatively high levels of unbanked cash at CSB at the time of its acquisition and unsatisfactory accounting procedures for recording bookings and reservations which were not appropriate for the Company as a listed entity and trading in the Company's shares was suspended.

 

All recommendations of the auditors have since been addressed and implemented promptly:

 

1.   The Company has since adopted an internationally recognised reservations system.

2.   The accounting function has been outsourced to Crowe Bulgaria, the Bulgarian member of Crowe Global which is one of the leading international accounting networks, the eighth largest accounting network in the world in order to improve the accounting and internal control function.

3.   Available cash resources have been utilised in the Company's normal business operations for settlement of liabilities to contractors and suppliers.

 

Following publication of these unaudited interim results to 30 June 2019, we expect trading in the Company's shares to re-commence in the near future.

 

We are experiencing increasing demand for our luxury camping business at CSB and are confident that the development on completion will become a popular holiday destination during the summer season.  We are also confident that our plans for the UniCredit building will enhance its valuation on completion of its refurbishment.

 

I look forward to reporting on further progress with the full year results.

 

 

Alex Borrelli

Chairman

04 November 2019

 

 

 

Consolidated Statement of Comprehensive Income
for the period ended 30 June 2019

 

 

 

 

 

 

 

 

 

 

(Unaudited)

 

(Unaudited)

 

(Audited)

 

 

6 months to

 

6 months to

 

Year to

 

 

30 June 2019

 

30 June 2018

 

31 December 2018

 

Notes

 

 

Total revenue

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenue

 

312,459

 

272,374

 

433,410

Property operating expenses

 

(294,481)

 

(143,904)

 

(382,146)

Net rental and related income

 

17,978

 

128,470

 

51,264

 

 

 

 

 

 

 

Bargain purchase on acquisition

 

-

 

5,338,623

 

3,759,352

Loss on revaluation of investment properties

 

(1,896,721)

 

-

 

(497,881)

Other income

 

-

 

2

 

-

 

 

 

 

 

 

 

Net (loss)/gain on investment property

 

(1,896,721)

 

5,338,625

 

3,261,471

 

 

 

 

 

 

 

Operating expenses

 

 

 

 

 

 

 

 

 

 

 

 

 

Other operating expenses

5

(386,472)

 

(298,573)

 

(628,599)

 

 

 

 

 

 

 

Total operating expenses

 

(2,265,215)

 

5,168,522

 

2,684,136

 

 

 

 

 

 

 

Operating loss before interest and tax

 

 

 

 

 

 

Foreign currency exchange differences

 

-

 

(3,542)

 

420,847

Interest Income

 

8,082

 

-

    

-

Bank charges and interest payable

 

 

(317,964)

 

(58,397)

 

     (740,646)

 

 

 

 

 

 

 

(Loss)/profit before tax

 

(2,575,097)

 

5,106,583

 

2,364,337

Tax expense

 

49,310

 

-

 

(23,645)

(Loss)/profit and total comprehensive income attributable to shareholders

 

(2,525,787)

 

5,106,583

 

2,340,692

 

 

 

 

 

 

 

Earnings/(loss) per share

 

 

 

 

 

 

Basic and Diluted earnings/(loss) per share (cents)

8

(0.20)

 

0.40

 

0.18

 

 

 

The notes form an integral part of these financial statements.

Consolidated Statement of Financial Position
at 30 June 2019

 

 

(Unaudited)

 

(Unaudited)

 

(Audited)

 

 

30 June 2019

 

30 June 2018

 

31 December

2018

 

Notes

 

 

Non-current assets

 

 

 

 

 

 

Investment properties

6

27,566,766

 

28,254,024

 

27,566,766

 

 

 

28,254,024

 

27,566,766

 

 

 

 

 

 

 

Current assets

 

 

 

 

 

 

Other receivables

 

1,304,568

 

335,065

 

566,263

Cash and cash equivalents

 

978,406

 

3,811,844

 

3,698,239

 

 

 

 

 

 

 

 

 

 

4,146,909

 

4,264,502

 

 

 

 

 

 

 

Total assets

 

29,849,740

 

32,400,933

 

31,831,268

 

 

 

 

 

 

 

Equity and liabilities

 

 

 

 

 

 

Issued share capital

 

64,774,886

 

64,774,886

 

64,774,886

Retained deficit

 

(53,765,198)

 

(48,473,520)

 

(51,239,411)

Foreign exchange reserve

 

(1,533,086)

 

(1,533,086)

 

(1,533,086)

 

 

 

 

 

 

 

Total equity

9

9,476,602

 

14,768,280

 

12,002,389

 

 

 

 

 

 

 

Non-current liabilities

 

 

 

 

 

 

Bank loans

7

16,576,585

 

17,445,368

 

16,535,339

Deferred tax liability

 

1,466,552

 

41,932

 

1,509,773

 

 

18,043,137

 

17,487,300

 

18,045,112

Current liabilities

 

 

 

 

 

 

Trade payables

 

587,532

 

139,678

 

234,261

Other payables

 

150,000

 

5,675

 

 

Bank loans

7

1,592,469

 

-

 

1,549,506

 

 

 

145,353

 

1,783,767

 

 

 

 

 

 

 

Total equity and liabilities

 

29,849,740

 

32,400,933

 

31,831,268

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Number of ordinary shares in issue

9

1,269,407,896

 

1,296,407,896

 

1,269,407,896

 

 

 

 

 

 

 

NAV per ordinary share (cents)

9

0.75

 

1.16

 

0.95

 

The notes form an integral part of these financial statements.

 

The financial statements were approved and authorised for issue by the Board of Directors on 04 November 2019 and were signed on their behalf by:

 

 

 

 

 

Chairman                                                                      Director

Alex Borrelli                                                                   Ventsislava Altanova

 

 

Consolidated Statement of Changes in Equity
for the period ended 30 June 2019

 

 

Share capital

 

Retained deficit

 

Foreign exchange reserve

 

Total

 

 

 

 

 

 

 

 

 

 

 

 

At 1 January 2018

64,774,886

 

(53,580,103)

 

(1,533,086)

 

9,661,697

 

 

 

 

 

 

 

 

Profit for the six-month period

-

 

5,106,583

 

-

 

5,106,583

 

 

 

 

 

 

 

 

At 30 June 2018 (unaudited)

64,774,886

 

(48,473,520)

 

(1,533,086)

 

14,768,280

 

 

 

 

 

 

 

 

At 1 January 2018

64,774,886

 

(53,580,103)

 

(1,533,086)

 

9,661,697

 

 

 

 

 

 

 

 

Profit for the year

-

 

2,340,692

 

-

 

2,340,692

 

 

 

 

 

 

 

 

At 31 December 2018 (audited)

64,774,886

 

(51,239,411)

 

(1,533,086)

 

12,002,389

 

 

 

 

 

 

 

 

At 1 January 2019

 64,774,886

 

 (51,239,411)

 

 (1,533,086)

 

 12,002,389

 

 

 

 

 

 

 

 -  

Loss for the six-month period

 -  

 

 (2,525,787)

 

 -  

 

 (2,525,787)

 

 

 

 

 

 

 

 

At 30 June 2019 (unaudited)

 64,774,886

 

 (53,765,198)

 

 (1,533,086)

 

 9,476,602

 

 

The notes form an integral part of these financial statements.

 

 

Consolidated Statement of Cash Flows
for the period ended 30 June 2019

 

 

(Unaudited)

 

(Unaudited)

 

(Audited)

 

6 months to

 

6 months to

 

Year to

 

30 June 2019

 

30 June 2018

 

31 December 2018

 

 

 

Operating activities

 

 

 

 

 

 

 

 

 

 

 

(Loss)/profit before tax

(2,575,097)

 

5,106,583

 

2,364,337

Loss on revaluation of investment properties

1,896,721

 

-

 

497,881

Bargain purchase on acquisition

-

 

(5,338,623)

 

(3,759,352)

Finance expense

317,964

 

58,397

 

740,646

 

 

 

 

 

 

Movement in net cash outflow from operating activities

(360,412)

 

(173,643)

 

(156,488)

 

 

 

 

 

 

(Increase)/decrease in receivables

(695,342)

 

4,618,777

 

(628,870)

Increase/(decrease) in payables

353,271

 

(2,521,901)

 

(323,539)

 

 

 

 

 

 

 

(342,071)

 

2,096,876

 

(952,409)

 

 

 

 

 

 

Withholding tax paid

6,089

 

(943)

 

(85,309)

 

 

 

 

 

 

Net cash (outflow)/inflow from operating activities

(696,394)

 

1,922,290

 

(1,194,206)

 

 

 

 

 

 

Investing activities

 

 

 

 

 

 

 

 

 

 

 

Investment property additions

(1,896,721)

 

-

 

(540,035)

Fixed assets additions

-

 

(470,650)

 

 

Cash held by the acquired subsidiary

-

 

780,231

 

4,154,758

Cash advance pre-acquisition

-

 

-

 

-

Net cash (outflow)/ from investing activities

(2,593,115)

 

2,231,871

 

3,614,723

 

 

 

 

 

 

Financing activities

 

 

 

 

 

 

 

 

 

 

 

Loans and interest repaid

(317,964)

 

(658,838)

 

(720,719)

Bank loan received

41,246

 

-

 

(240,370)

Loans received

150,000

 

-

 

-

Net cash (outflow)/inflow from financing activities

(126,718)

 

(658,838)

 

(961,089)

 

 

 

 

 

 

Net decrease/increase in cash and cash equivalents

(2,719,833)

 

(1,573,033)

 

1,459,428

 

 

 

 

 

 

Cash and cash equivalents at beginning of period

3,698,239

 

2,238,811

 

2,238,811

 

 

 

 

 

 

Cash and cash equivalents at end of period

978,406

 

3,811,844

 

3,698,239

 

 

The notes form an integral part of these financial statements.

Notes to the Financial Statements
for the period ended 30 June 2019

 

1.        General information

Black Sea Property Plc (the Company) is a company incorporated and domiciled in the Isle of Man whose shares are publicly traded on NEX Exchange.

2.        Statement of compliance

These interim consolidated financial statements have been prepared in accordance with IAS 34 Interim Financial Reporting. They do not include all of the information required for full annual financial statements, and should be read in conjunction with the consolidated financial statements of the Group as at and for the year-ended 31 December 2018.

 

The consolidated financial statements of the Group as at and for the year ended 31 December 2018 are available upon request from the Company's registered office at IOMA House, Hope Street, Douglas, Isle of Man or at www.blackseapropertyplc.com.

 

These interim consolidated financial statements were approved by the Board of Directors on 04 November 2019.

3.        Significant accounting policies

The accounting policies applied in these interim financial statements, except for the ones listed below, are the same as those applied in the Group's consolidated financial statements as at and for the year ended 31 December 2018.

 

Changes in significant accounting policies

 

The Group has initially adopted IFRS 15 Revenue from Contracts with Customers and IFRS 9 Financial Instruments from 1 January 2018. There were no material effects of initially applying IFRS 15 and IFRS 9 Financial Instruments.

4.        Financial risk management policies

The principal risks and uncertainties are consistent with those disclosed in preparation of the Group's annual financial statements for the year ended 31 December 2018.

5.        Other administration fees and expenses

 

(Unaudited)

(Unaudited)

(Audited)

 

6 months to

6 months to

Year to

 

30 June 2019

30 June 2018

31 December 2018

 

 

 

 

 

Directors' remuneration

40,547

32,535

84,247

Administration fees - Isle of Man

23,975

23,867

47,334

Administration fees - Jersey

17,685

19,126

39,358

Administration fees - Bulgaria

89,342

66,678

126,464

Investment advisory fees

53,568

107,136

214,272

Legal and professional fees

55,828

16,550

19,361

Auditors' fee

24,490

2,404

32,404

Registrar fees

1,290

1,102

2,212

Broker fees

17,118

16,994

33,933

Other administration and professional fees

62,629

12,181

29,014

 

386,472

298,573

628,599

6.        Investment properties

 

(Unaudited)

(Unaudited)

(Audited)

 

30 June

2019

30 June

2018

31 December

2018

 

 

 

 

 

Beginning of year

27,566,766

11,229,740

11,229,740

Acquisition

-

16,294,920

16,294,872

Fair value adjustment

(1,896,721)

-

(497,881)

Additions

1,896,721

729,364

540,035

 

 

 

 

End of year

27,566,766

28,254,024

27,566,766

 

The Directors confirm that there are no material changes in the valuation of investments as of 30 June 2019.

7.        Bank Loans

 

 

(Unaudited)

(Unaudited)

(Audited)

 

30 June

2019

30 June

2018

31 December

2018

 

 

 

 

 

Loan and interest accrued from UniCredit

7,066,023

7,000,000

6,975,121

Loan and interest accrued from Central Cooperative Bank

11,103,031

10,445,368

11,109,724

 

 

 

 

 

18,169,054

17,445,368

18,084,845

         

8.        Earnings per share

The basic earnings/(loss) per ordinary share is calculated by dividing the net profit/(loss) attributable to the ordinary shareholders of the Company by the weighted average number of ordinary shares in issue during the period.

 

 

(Unaudited)

(Unaudited)

(Audited)

 

6 months to

6 months to

Year to

 

30 June

2019

30 June

2018

31 December

2018

 

 

 

 

Earnings/(loss) attributable to owners of parent (€)

(2,525,787)

5,106,583

2,340,692

Weighted average number of ordinary shares in issue

1,269,407,896

1,269,407,896

1,269,407,896

 

 

 

 

Basic (loss)/earnings per share (cents)

(0.20)

0.40

0.18

 

The Company has no potential dilutive ordinary shares; the diluted earnings/(loss) per share is the same as the basic earnings/(loss) per share.

9.        Net asset value per share

 

 

(Unaudited)

(Unaudited)

(Audited)

 

30 June

2019

30 June

2018

31 December

2018

 

 

 

 

 

Net assets attributable to owners of the parent (€)

9,476,602

14,768,280

12,002,389

Number of ordinary shares outstanding

1,269,407,896

1,269,407,896

1,269,407,896

 

 

 

 

Net Asset Value (cents)

0.75

1.16

0.95

 

10.      Events after reporting date

There are no significant events after reporting date.

 

 

 

Market Abuse Regulation (MAR) Disclosure

The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulation (EU) No. 596/2014. Upon the publication of this announcement via a Regulatory Information Service, this inside information is now considered to be in the public domain.

 


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