AfriAg Global Plc - Interim Results to 30 June 2019 PR Newswire

For immediate release 26 September 2019



AfriAg Global PLC
(“AfriAg Global”, the “Group” or the “Company”)

Unaudited Interim Results for the six months to 30 June 2019

AfriAg Global PLC (NEX: AFRI), today announces its interim results for the 6-month period ended 30 June 2019.

Investment policy change to include Medical Cannabis investments:

On 12 September 2018, shareholder approval was obtained at a general meeting for the expansion of the Company’s investment strategy to include medicinal cannabis. The Company has now expanded its existing investment strategy to also include investments in companies, projects or products that are progressing research in and development of medicinal cannabis and its derivatives, producing or cultivating medicinal cannabis, producing or supplying products derived from or related to cannabis (including, but not limited to, hemp and cannabidiol products); and/or commercialising or marketing medicinal cannabis and its derivatives. The Company sees tremendous opportunities in the sector.

The Company has already made a number of investments into this medical cannabis sector and going forward, the Company is likely to increase its exposure in this sector by looking to acquire control of certain target companies, although it may also consider acquiring non-controlling shareholdings in legal medical cannabis companies.

Future investments to be considered by the Company may be in either quoted or unquoted securities and may be made by direct acquisition of an interest in companies, partnerships or joint ventures, or direct interests in projects and these investments can be at any stage of development. Accordingly, the Company’s proposed future equity interests in proposed investments may range from a minority position all the way up to 100 percent ownership. The Directors primary objective is to achieve the best possible value over time for Shareholders, primarily through capital growth.

The Company’s Medical Cannabis Investments:

During the period the Company announced it had agreed with Apollon Formularies Ltd (“AFL” or “Investee”) a UK incorporated company, to: (1) subscribe for 1.2 million shares in AFL at a price per share of £0.25 representing approximately 0.71 per cent. of AFL’s issued share capital for an aggregate investment amount of £300,000; and (2) subscribe for 2.8 million shares at a price per share of £0.25 representing approximately 1.63 per cent. of AFL’s issued share capital for an aggregate investment amount of £700,000, which investment was approved by shareholders at the General Meeting on 19 June 2019 (the “Investments”).

The Company raised £1.25m during the period to assist with the acquisition of this Investment and now owns a total of 4.0 million shares in AFL, representing circa 2.325 per cent. of AFL’s issued share capital.

The Company is working diligently with its legal advisors on the complicated and necessary due diligence to potentially acquire all of AFL. Further announcements will be made with respect to this as legal and accounting work progresses. As previously announced to shareholders, the Company is in detailed discussions and negotiations with the major shareholders of AFL, with which it has been granted a right of first refusal to acquire all the issued and outstanding shares owned by those shareholders in consideration for the issue and allotment to those shareholders of new ordinary shares in the capital of the Company at a price of 0.1 pence per new ordinary share (“ Right of First Refusal ”) which values the transaction at circa £40,000,000.

Following exercise of the Right of First Refusal, which will be subject to approvals from (as applicable) (1) all the necessary government authorities, including the Cannabis Licencing Authority (in Jamaica ); (2) all necessary regulatory authorities; (3) the necessary approvals from the Company’s shareholders; and (4) approvals from the shareholders of AFL, the existing shareholders of AFL will hold circa 93.54 per cent. of the issued share capital of the Company. Following completion of the Investments and should the Company exercise the Right of First Refusal, the resulting enlarged group will be a vertically integrated medicinal cannabis group with operations in Jamaica and with plans to expand elsewhere throughout the world.

Agriculture Investments:

Sadly, the market has not considered what has been achieved with our investments in the agricultural sector well, even though these investments continue to perform in a difficult global environment. We, as a Company, will assess whether further or continued investment in the sector is warranted, as we move towards the medical cannabis focus. To this extent, the Company has decided that no further investment will be made in to our current agri-logistics investments as we now move our investment focus to the legal medical cannabis sector.

Financial Results:

During the period, the Company generated revenues to £1,323,000 (6 months ended 30 June 2018: £1,501,000) and made a gross profit of £163,000 (6 months ended 30 June 2018: £38,000). The operating loss for the period was £30,000 (6 months ended 30 June 2018: loss £118,000). Loss before tax was £867,000 (6 months ended 30 June 2018: loss £97,000) mainly attributable to the impairment of associate of £850,000.

There was a weighted loss per share of 0.047p (30 June 2018: loss per share 0.007p).

The unaudited interim results to 30 June 2019 have not been reviewed by the Company’s auditor.

In Conclusion:

We have a very unique ability, being one of the few companies listed in London and indeed Europe, to actually undertake investments in the fast-growing legal medical cannabis sector. It has taken a great deal of management and legal work to achieve this, and this will be a big focus for the management over the coming year. Having recently completed our initial investment in Apollon Formularies Ltd, we are actively pursuing to further increase our stake in this key investment further as discussed above. We fully appreciate that time is of the essence, and your board, its lawyers and indeed the AFL team are working tirelessly to wrap up this transaction as soon as possible.

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.

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

David Lenigas
Executive Chairman
26 September 2019

For further information, please contact:

AfriAg Global plc:             +44 (0) 20 7440 0640
David Lenigas

Corporate Adviser and Broker:
Peterhouse Capital Limited       +44 (0) 20 7469 0930
Guy Miller / Allie Feuerlein


Condensed Consolidated Statement of Comprehensive Income (unaudited)
for the 6 months ended 30 June 2019


                                           6 months to 6 months to  Year ended

                                               30 June     30 June 31 December

                                                  2019        2018        2018

                                             Unaudited   Unaudited     Audited

                                      Note     GBP’000     GBP’000     GBP’000

Revenue                                          1,323       1,501       2,236

Cost of sales                                  (1,160)     (1,463)     (2,170)

Gross Profit                                       163          38          66

Administration expenses                          (193)       (156)       (430)

Share Based Payment Charge                           -           -           -

Operating (loss)                                  (30)       (118)       (364)

Share of associate result                           12          19          97

Impairment of associate                          (850)           -           -

Investment income                                    1           2        (51)

(Loss) before tax                                (867)        (97)       (318)

Tax                                                  -           -           -

Retained (loss) for the period                   (867)        (97)       (318)

Other comprehensive income

Transfer to income statement                         -          22          22

Translation exchange gain/(loss)                     2         (7)        (51)

                                                     2          15        (29)
Total comprehensive income

Total comprehensive (loss) for the               (865)        (82)       (347)
period attributable to equity holders
of the parent

(Loss) per share (pence)                 2

Basic                                          (0.047)     (0.007)     (0.017)

Diluted                                        (0.047)     (0.007)     (0.017)



All of the revenues and loss above derived from continuing operations.



Condensed Consolidated Statement of Financial Position (unaudited)
At 30 June 2019


                             30 June 2019 30 June 2018 31 December 2018

                                Unaudited    Unaudited          Audited

                                  GBP’000      GBP’000          GBP’000

Non-current assets

Property, plant & equipment             4            8                5

Investments in associates             848        1,609            1,687

Total non-current assets              852        1,617            1,692

Current assets

Inventory                               3            -                -

Trade and other receivables         1,659          866              925

Available for sale assets           1,030            -               30

Cash and cash equivalents             487          246              101

Total current assets                3,179        1,112            1,056

Total assets                        4,031        2,729            2,748

Current liabilities

Trade and other payables          (1,806)        (842)            (844)

Total current liabilities         (1,806)        (842)            (844)

Net current assets                  1,373          270              213

Net assets                          2,225        1,887            1,904

Equity

Share capital                       3,011        1,461            1,761

Share premium account               8,566        8,648            8,630

Share based payment reserve           279          279              279

Foreign currency reserve             (15)           27             (17)

Retained earnings                 (9,616)      (8,528)          (8,749)

Total equity                        2,225        1,887            1,904





Condensed Consolidated Statement of Changes in Equity (unaudited)
for the 6 months ended 30 June 2019


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

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

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

(Loss) for          -       -           -        -           -       (9   (318)
the period

Currency            -       -           -     (51)           -        -    (51)
translation
(loss)

Transfer to         -       -           -        -          22        -      22
income
statement

Total               -       -           -     (51)          22    (318)   (347)
Comprehensive
Income

Shares issued     300       -           -        -           -        -     300

Share issue         -    (18)           -        -           -        -    (18)
costs

Total             300    (18)           -        -           -        -     282
contributions
by and
distributions
to owners of
the Company

At 31           1,761   8,630         279     (17)           -  (8,749)   1,904
December 2018

(Loss) for          -       -           -        -           -    (867)   (867)
the period

Currency            -       -           -        2           -        -       2
translation
gain

Transfer to         -       -           -        -           -        -       -
income
statement

Total               -       -           -        2           -    (867)   (865)
Comprehensive
Income

Share issues    1,250       -           -        -           -        -   1,250

Shares issue        -    (64)           -        -           -        -    (64)
costs

Total           1,250    (64)           -        -           -        -   1,186
contributions
by and
distributions
to owners of
the Company

At 30 June      3,011   8,566         279     (15)           -  (9,616)   2,225
2019





Condensed Consolidated Statement of Cash Flows (unaudited)
for the 6 months ended 30 June 2019


                                       6 months to  6 months to       Year ended

                                      30 June 2019 30 June 2018 31 December 2018

                                         Unaudited    Unaudited          Audited

                                           GBP’000      GBP’000          GBP’000

Cash flows from operations

Operating (loss)                              (30)        (118)            (364)

(Increase)/decrease in inventories             (3)            3                3

(Increase)/decrease in trade & other         (734)         (20)               38
receivables

Increase/(decrease) in trade & other           962         (77)             (75)
payables

Depreciation                                     2            -                3

Share option charge                              -            -                -

Net cash used in operating activities          197        (212)            (395)

Investing activities

Investment income                                1            2                3

Loan advanced to related party                   -            -            (117)

Receipts on sale of AFS investments              -            1                1

Payments on purchase of AFS                (1,000)            -             (62)
investment

Payments for PPE assets                          -          (3)              (3)

Net cash from investing activities           (999)            -            (178)

Financing activities

Issue of share capital                       1,250            -              300

Issue costs                                   (64)            -             (18)

Net cash from financing activities           1,186            -              282

Net increase/(decrease) in cash and            384        (212)            (291)
cash equivalents

Cash and cash equivalents at the               101          443              443
beginning of period

Effect of foreign exchange on cash               2           15             (51)
and cash equivalents

Cash and cash equivalents at the end           487          246              101
of period




Notes to the Condensed Consolidated Interim Financial Information (unaudited)

1.General information

The condensed consolidated interim financial information for the period ended 30 June 2019 has not been audited or reviewed in accordance with the International Standard on Review Engagements 2410 issued by the Auditing Practices Board. The figures were prepared using applicable accounting policies and practices consistent with those adopted in the statutory accounts for the period ended 31 December 2018. The figures for the period ended 31 December 2018 have been extracted from these accounts, which have not been required to be delivered to the Isle of Man Registrar of Companies and do however contained an unqualified audit report.

The condensed consolidated interim financial information contained in this document does not constitute statutory accounts. In the opinion of the directors the financial information for this period fairly presents the financial position, result of operations and cash flows for this period.

The Condensed Consolidated Interim Financial Information was approved by the Board of Directors on 26 September 2019.

Statement of compliance

These condensed consolidated interim financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS) as adopted by the European Union with the exception of International Accounting Standard (‘IAS’) 34 – Interim Financial Reporting. Accordingly, the interim financial statements do not include all of the information or disclosures required in the annual financial statements and should be read in conjunction with the Group’s 2018 annual financial statements.

2.(Loss) per share

The calculation of the (loss) per share is based on the (loss) attributable to ordinary shareholders divided by the weighted average number of shares in issue during the period.


                                             6 months to 6 months to        Year

                                                 30 June     30 June 31 December

                                                    2019        2018        2018

                                               Unaudited   Unaudited     Audited

                                                 GBP’000     GBP’000     GBP’000

(Loss) attributable to equity holders of the       (867)        (97)       (318)
Group

Weighted average number of ordinary shares     1,835,863   1,461,001   1,592,510
(‘000s)

(Loss) per share – basic                         (0.047)     (0.007)     (0.017)

(Loss) per share – diluted                       (0.047)     (0.007)     (0.017)



3.Events after the end of the reporting period

On 9 August 2019, the Company announced Mr Anthony Samaha had resigned as a Director of the Company.

4.A copy of this interim financial statement is available on the Company’s website: www.afriagglobal.com.