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) |
Total comprehensive income |
|
2 |
15 |
(29) |
Total
comprehensive (loss) for the period attributable to equity holders
of the parent |
|
(865) |
(82) |
(347) |
|
|
|
|
|
(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 capital |
Share premium |
Share based payment
reserve |
Foreign currency reserve |
Revaluation reserves |
Retained earnings |
Total |
|
GBP’000 |
GBP’000 |
GBP’000 |
GBP’000 |
GBP’000 |
GBP’000 |
GBP’000 |
At 31 December 2017 |
1,461 |
8,648 |
279 |
34 |
(22) |
(8,431) |
1,969 |
|
|
|
|
|
|
|
|
(Loss) for the
period |
- |
- |
- |
- |
- |
(9 |
(318) |
Currency translation
(loss) |
- |
- |
- |
(51) |
- |
- |
(51) |
Transfer to income
statement |
- |
- |
- |
- |
22 |
- |
22 |
Total Comprehensive
Income |
- |
- |
- |
(51) |
22 |
(318) |
(347) |
Shares issued |
300 |
- |
- |
- |
- |
- |
300 |
Share issue costs |
- |
(18) |
- |
- |
- |
- |
(18) |
Total contributions
by and distributions to owners of the Company |
300 |
(18) |
- |
- |
- |
- |
282 |
At 31 December
2018 |
1,761 |
8,630 |
279 |
(17) |
- |
(8,749) |
1,904 |
|
|
|
|
|
|
|
|
(Loss) for the period |
- |
- |
- |
- |
- |
(867) |
(867) |
Currency translation gain |
- |
- |
- |
2 |
- |
- |
2 |
Transfer to income statement |
- |
- |
- |
- |
- |
- |
- |
Total Comprehensive
Income |
- |
- |
- |
2 |
- |
(867) |
(865) |
Share issues |
1,250 |
- |
- |
- |
- |
- |
1,250 |
Shares issue costs |
- |
(64) |
- |
- |
- |
- |
(64) |
Total contributions by and
distributions to owners of the Company |
1,250 |
(64) |
- |
- |
- |
- |
1,186 |
At 30 June 2019 |
3,011 |
8,566 |
279 |
(15) |
- |
(9,616) |
2,225 |
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 receivables |
(734) |
(20) |
38 |
Increase/(decrease) in
trade & other payables |
962 |
(77) |
(75) |
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 investment |
(1,000) |
- |
(62) |
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 cash equivalents |
384 |
(212) |
(291) |
Cash and cash
equivalents at the beginning of period |
101 |
443 |
443 |
Effect of foreign
exchange on cash and cash equivalents |
2 |
15 |
(51) |
Cash and cash
equivalents at the end of period |
487 |
246 |
101 |
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 Group |
(867) |
(97) |
(318) |
|
|
|
|
Weighted average
number of ordinary shares (‘000s) |
1,835,863 |
1,461,001 |
1,592,510 |
|
|
|
|
(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.