First Sentinel Plc - Half-year Report PR Newswire

26 September 2018

First Sentinel PLC

(the “Company” or “First Sentinel”; NEX:FSEN”)

Interim results for the period ended 30 June 2018

First Sentinel is pleased to announce its interim accounts for the six months ended 30 June 2018 (the “Accounts”).  The Interims are set out below.

END

For further corporate information, please contact:

Mr. Kris Kottmeier
VP Corporate Development
UK/Euro Tel: +44 (0) 20 3637 6522
North America Tel: +1 (604) 506-2502
Email:  Kris@first-sentinel.com

Mr. Brian Stockbridge
CEO
First Sentinel Plc
Tel: + 44 (0) 7876 888 011

NEX Corporate Advisor
Beaumont Cornish Limited
James Biddle / Roland Cornish
Tel: +44(0)20 7628 3396

First Sentinel PLC

Interim report for the six months ended 30 June 2018.

The Chairman’s Report

I am delighted to present the results for First Sentinel PLC, for the six months ended 30 June 2018. The Company listed a Bond on NEX Exchange to raise up to £4m and raised £1,689,455 during the period.  Shortly following the period end a further £360,000 was raised.  The proceeds of the Bond issues were used to fund the invoice purchasing business of its subsidiary, Perennial Enterprise PTY, Ltd (trading as First Sentinel Business Finance) in Sydney, Australia.  This business is performing well and has expanded considerably since its acquisition by First Sentinel PLC, which was made in December 2017, just before the start of the period.  At the time of acquisition, Perennial Enterprise PTY Ltd had purchased AUD $54m of invoices for that year.  First Sentinel PLC also made a further key director appointment of Colin Maltby during the period and the group made a loss of £99,000 after tax.

Investments

The Group made a convertible loan investment to Amur Minerals, an AIM quoted company, during the period amounting to approximately $250,000First Sentinel PLC also invested in two equity transactions amounting to £93,500 and a total of £1,689,455 was invested into First Sentinel Business Finance invoice purchasing activities during the period.  This presents the Company with a more stable, predictable and high return investment opportunity than investing in structured debt and equity investments alone.  It is expected that there will be a strong focus on investing further in this area.

Amur Minerals Corporation (AIM:AMC)

Amur Minerals is a nickel-copper sulphide mineral exploration and resource development company focused on the far east of Russia.

On 13 February 2018, Amur Minerals Corporation announced that it had entered into up to a £10 million loan facility (“Loan”) with Cuart Investments PCC Ltd and YA II PN Ltd (“Investors”), an investment consortium arranged by Riverfort Global Capital Ltd. First Sentinel entered into a participation certificate with a cell of Cuart Investments PCC Ltd to invest $250,000.

The Convertible Loan of up to US$10 million consists of three advances. Each advance is repayable by Amur Minerals Corporation in 12 monthly instalments. If Amur Minerals Corporation elects not to repay any instalment on the applicable monthly repayment date, then the Investors can elect to convert that outstanding instalment at any time into new ordinary shares in the Company. The conversion price of any part of an advance will either be made by reference to the lower of 130% of the price at the date of the advance or 90% of the lowest daily VWAP over the 5 trading days immediately prior to conversion. In conjunction with each advance, the Investors will be issued with warrants to the value of 30% of the value of each advance at an exercise price which is at a 30% premium to the price of each advance. Each set of warrants will be exercisable for a period of 3 years.

Union Jack Oil Plc (AIM: UJO)

Union Jack Oil plc is an AIM-traded onshore oil and gas exploration company with a focus on drilling, development and investment opportunities in the United Kingdom hydrocarbon sector.  The company currently has interests in six licences in the East Midlands Basin and one licence in the Weald Basin.

On 5 March 2018, Union Jack Oil Plc announced a placing and subscription to raise £1.25m at a price of 0.085p per share.  First Sentinel plc subscribed £43,500 for 51,176,470 shares.

Titan FM Limited (“Titan”)

Titan is a private acquisitive company operating in the facilities management sector. Titan aims to become a leading property service outsourcing platform for its clients. Titan’s specific area of focus is within compliance driven critical services across the built environment spectrum, ensuring transparency for all stakeholders on the legal status of any asset.

Titan are experts at providing services which are essential to its customers operations and invariably covered by strict regulation or legislation. Following a sustained period of investment into developing a solid and scalable technology-led operating platform, Titan is now embarking on its next stage of growth. It will achieve this by concentrating on the demand for regulation driven compliance services accessed by strategic bolt-on acquisitions and investment in organic expansion.

In April 2018, Titan made its first acquisition of a specialist provider of air conditioning and refrigeration services and its second acquisition was made in June 2018 of a provider of specialist water treatment and gas services.  Titan has a demonstrable pipeline of further opportunities with further acquisitions planned in 2018 and beyond.

First Sentinel invested £50,000 of equity in a pre-IPO transaction. Titan aims to list its shares on NEX Exchange Growth Market during 2018.

Outlook

The Six months to 30 June 2018 have been an important period for First Sentinel plc. The success of the fund raising, investments made, and deployment of capital into First Sentinel Business Finance have positioned the Group well for the next stage of its development where the focus is on gaining critical mass and size so that the Group is no longer considered to be sub scale. Our short-term strategy is to increase value by deploying further funding into our invoice purchasing business and to consider expanding these or similar activities within the UK.  I am optimistic about the Group’s growth potential and we look to the future with significant confidence.

Brian Stockbridge
25 September 2018


Interim Condensed Statement of Comprehensive Income


                            6 months Ended 9 months Ended
                                   30 June        30 June Year ended 31 December
                                      2018           2017                   2017
                     Notes       Unaudited      Unaudited                Audited

                                     £’000          £’000                  £’000

Revenue                                963              -                    156

Cost of sales                        (403)              -                   (22)

Gross Profit                           560              -                    134

Administrative         4             (515)          (143)                  (237)
expenses

Other Losses                          (68)              -                    (9)

Operating loss                        (23)          (143)                  (112)

Finance Costs                         (23)              -                    (5)

Admission expenses                       -                                  (65)

Loss on ordinary                      (46)          (143)                  (182)
activities before
taxation

Tax on loss on                        (53)              -                   (10)
ordinary activities

Loss after taxation                   (99)          (143)                  (192)

Other comprehensive                      -              -                      -
income

Total Comprehensive                   (99)          (143)                  (192)
loss for the period

Loss and total
comprehensive
attributable

the owners of the                     (99)          (143)                  (199)
company

Non-controlling                          -              -                      7
interests

                                      (99)          (143)                  (192)

Basic and diluted      5           (0.71p)        (5.32p)                (2.75p)
loss per share
(expressed in pence
per share)




Interim Condensed Statement of Changes in Equity


                                              Share Non-Controlling    Foreign
                  Share   Share Accumulated   Based        interest   Exchange  Total
                Capital Premium     Deficit Payment                 Difference Equity

                  £’000   £’000       £’000   £’000           £’000      £’000  £’000

Balance at 30        71     528       (155)       -               -          -    444
June 2017

Issue of shares      71       -           -       -               -          -     71

Cost of issue         -     782           -       -               -          -    782
of shares

Share based           -       -           -      13               -          -     13
payment Reserve

Non-controlling       -       -           -       -              10          -     10
interest

Loss and total        -       -        (56)       -               -          -   (56)
comprehensive
loss for the
period

Balance at 31       142   1,310       (211)      13              10          -  1,264
December 2017

Issue of shares       9       -           -       -               -          -      9

Share issue           -     134           -       -               -          -    134
costs

Non-Controlling       -       -           -       -            (53)          -   (53)
Interest

Foreign               -       -           -       -               -       (11)   (11)
Exchange
Difference

Loss and total        -       -        (99)       -               -          -   (99)
comprehensive
loss for the
period

Balance at 30       151   1,444       (310)      13            (43)       (11)  1,244
June 2018



Share capital is the amount subscribed for shares at nominal value.

Share premium is the amount subscribed for shares in excess of nominal value.

Accumulated deficit represents the cumulative loss of the Group attributable to equity shareholders.


Interim Condensed Statement of the Financial Position


                                  6 months Ended 9 months Ended
                            Notes        30 June        30 June       Year ended
                                            2018           2017 31 December 2017
                                       Unaudited      Unaudited          Audited

                                           £’000          £’000            £’000

Assets

Non-Current Assets

Intangible Asset                             145              -              145

Property, Plant & equipment                    5              -               27

Total non-Current Assets                     150              -              172

Current assets

Trade Receivables                          2,997              -              658

Other Receivables                            203            229              126

Other investment                              50              -                -

Financial assets at fair      6            1,003            112            1,119
value through profit or
loss

Cash and Cash Equivalents                    805            147              297

Total Current Assets                       5,058            488            2,200

Total Assets                               5,208            488            2,372

Equity and Liabilities

Share Capital                 7              151             71              142

Share Premium                 7            1,444            528            1,310

Share based payment reserve                   13              -               13

Non-controlling interest                    (43)              -               10

FX Reserve                                  (11)              -                -

Accumulated deficit                        (310)          (155)            (211)

Total Equity                               1,244            444            1,264

Current Liabilities

Accounts Payable                               7              -               75

Accruals                                      36              -               15

Directors Loan                                67              -              148

Tax and other social                         110              -               80
security

Borrowings                                     -              -              558

Other Payables                               212             44               75

Total Current Liabilities                    432             44              951

Non-current Liabilities

Borrowings                                 3,532              -              157

Total non-current                          3,532              -              157
Liabilities

Total Liabilities                          3,964             44            1,108

Total Equity and                           5,208            488            2,372
Liabilities




Interim Condensed Cash Flow Statement


                                  6 months Ended 9 Months Ended
                                         30 June        30 June       Year ended
                                            2018           2017 31 December 2017
                             Notes     Unaudited      Unaudited          Audited

                                           £'000          £’000            £’000

Cash flows from operating
activities

Operating loss                              (23)          (143)            (112)

Changes in working capital

(Increase) / decrease in                 (2,214)              3            (240)
receivables

Increase / (decrease) in                   (204)             27              215
payables

Other Adjustments                              -              -               14

Depreciation                                   5              -                -

Fair value adjustments                        68              -                -

Share based payment                           75              -               11

Admission Expenses                             -              -             (65)

Interest Paid                               (23)              -              (5)

Net cash flow from operating             (2,316)          (113)            (177)
activities

Investing Activities

Decrease / (Increase) in        6          (137)          (112)          (1,119)
financial assets

Acquisition of Subsidiary                      -              -            (122)

Cash acquired on acquisition of                -              -              275
Subsidiary

Decrease / (Increase) in Loans  6              -          (229)                -

Net cash flow from investing               (137)          (341)            (966)
activities

Cash flows from financing
activities:

Net proceeds from issue of      7            144            598            1,451
shares

Increase / (Repayments) of                 2,817              -              (9)
Loans

Net cash flow from financing               2,961            598            1,442
activities

Net cash flow for the period                 508            144              294

Opening Cash and cash                        297              3                3
equivalents

Closing Cash and cash                        805            147              297
equivalents



Notes to the Interim Condensed Financial Statements

1.            General Information

First Sentinel plc (‘the Company’) is an investment company incorporated in the United Kingdom with company number 10183367 and quoted on the NEX Exchange Growth Market.

2.            Basis of Preparation

The annual financial statements of the Company and its subsidiaries (together referred to as the “Group”) are prepared in accordance with International Financial Reporting Standards (IFRSs) as adopted by the European Union. The condensed set of financial statements included in this interim financial report has been prepared in accordance with IAS 34 ‘Interim Financial Reporting’, as adopted by the European Union. The accounting policies and methods of computation used are consistent with those used in the Group’s latest audited financial statements for the year ended 31 December 2017.

A copy of the statutory accounts for the year ended 31 December 2017 has been delivered to the Registrar of Companies. The auditor’s report on these accounts was unqualified, did not draw attention to any matters by way of emphasis and did not contain a statement under section 498(2) or (3) of the Companies Act 2006.

These interims results have not been reviewed by the Company’s auditors.

3.            Segmental Reporting

The Group’s management has determined the operating segments based on the reports reviewed by the executive directors that are used to make strategic decisions. They consider the business from a geographical perspective and the group has two reportable segments, the UK and Australia. The Group’s main lines of business are that of making investments and invoice purchasing.


For the period ended 30 June 2018:           UK Australia Total

                                          £’000     £’000 £’000

Segment revenue and results

Reportable revenue                           42       921   963

Revenue from external customers              42       921   963

Cost of Sales                                 -     (403) (403)

Unallocated corporate income and expenses (231)     (375) (606)

Tax expense                                   -      (53)  (53)

Loss                                                       (99)

Segment assets and liabilities

Reportable segment assets                 1,182     3,934 5,116

Goodwill                                                     92

Consolidated total assets                                 5,208

Reportable segment liabilities            1,708     2,256 3,964

Consolidated total liabilities                            3,964

Other segment information

Interest expense                             21         2    23

Depreciation                                  -         4     4




For the period ended 31 December 2017:       UK Australia Total

                                          £’000     £’000 £’000

Segment revenue and results

Reportable revenue                           88        66   156

Revenue from external customers              88        66   156

Cost of Sales                                 -      (22)  (22)

Unallocated corporate income and expenses (252)      (64) (316)

Tax expense                                   -      (10)  (10)

Loss                                                      (192)

Segment assets and liabilities

Reportable segment assets                 1,211     1,069 2,280

Goodwill                                                     92

Consolidated total assets                                 2,372

Reportable segment liabilities               94     1,015 1,108

Consolidated total liabilities                            1,108

Other segment information

Interest expense                              4         1     5

Depreciation                                  -         1     1

For the period ended 30 June 2017:           UK Australia Total

                                          £’000     £’000 £’000

Segment revenue and results

Reportable revenue                            -         -     -

Revenue from external customers               -         -     -

Unallocated corporate income and expenses  (12)         -  (12)

Loss before taxation                                       (12)

Segment assets and liabilities

Reportable segment assets                     6         -     6

Consolidated total assets                                     6

Reportable segment liabilities               18         -    18

Consolidated total liabilities                               18

Other segment information

Interest expense                              -         -     -

Depreciation                                  -         -     -



4.            Group Result for the period

The current period operating loss incorporated the following main items:


                                 6 months Ended 9 Months Ended
                                        30 June        30 June       Year ended
                                           2018           2017 31 December 2017
                                      Unaudited      Unaudited          Audited

                                          £'000          £’000            £’000

Accounting and administration                36              3               14
fees

Foreign Exchange debits                       1             11               44

Directors’ Remuneration and Fees             61             22               71

Legal and professional fees                 112             97               38

Other expenses                              305             10               70

                                            515            143              237



5.            Loss per Share

Loss per share data is based on the Group result for the nine months and the weighted average number of shares in issue.

Basic loss per share is calculated by dividing the loss attributable to equity shareholders by the weighted average number of ordinary shares in issue during the period:


                           6 months Ended 9 Months Ended
                                  30 June        30 June Year ended 31 December
                                     2018           2017                   2017
                                Unaudited      Unaudited                Audited

                                        £              £                      £

Loss after tax                   (99,000)      (143,000)              (192,000)

Weighted average number of      13,992690      2,695,464              7,007,478
ordinary shares in issue

Basic and diluted loss per        (0.71p)        (5.32p)                (2.75p)
share (pence)



Basic and diluted earnings per share are the same, since where a loss is incurred the effect of outstanding share options and warrants is considered anti-dilutive and is ignored for the purpose of the loss per share calculation. There were 8,736,524 potential dilutive shares in issue during the period for share options and warrants.

6.            Financial assets

During the period the Group had the following movements in investments:


                                                   Year ended 31 December 2017
                           30 June At 30 June 2017                     Audited
                              2018       Unaudited
                         Unaudited

                             £’000           £’000                       £’000

Included within other          203
receivables:                                   229                         402
Secured loan notes

Financial assets through     1,003
profit and loss:                               112                         717
UK AIM listed equity
securities

Total financial assets       1,206             341                       1,119



7.            Share Capital

Ordinary shares are classified as equity. Proceeds from issuance of ordinary shares are classified as equity. Incremental costs directly attributable to the issuance of new ordinary shares are deducted against share capital.


Allotted, called up and fully paid      Number of shares  Share  Share Premium
ordinary shares of 0.01p each                            Capital

                                                               £             £

Balance at 17 May 2016                               100       1             -

Balance at 30 June 2016                              100       1             -

Share issue at £0.10 – 15 March 2017           6,309,794  63,098       511,233

Share issue at £0.10 – 24 March 2017              50,000     500         4,500

Share issue at £0.10 – 18 April 2017             727,273   7,273        72,727

Balance at 30 June 2017                        7,087,167  70,872       588,460

Share issue at £0.10 – 05 July 2017            6,363,636  63,636       636,364

Share issue at £0.10 – 04 December 2017          707,937   7,079        84,952

Balance at 31 December 2017                   14,158,740 141,587     1,309,776

Share issue at £0.10 – 21 March 2018             192,308   1,923        23,077

Share issue at £0.10 – 21 March 2018             345,722   3,457        41,487

Share issue at £0.10 – 04 June 2018              500,000   5,000        70,000

Balance at 30 June 2018                       15,196,770 151,968     1,444,340



8.            Events Subsequent to 30 June 2018

No events after end of the period.