TIDMOBOR
RNS Number : 3047X
Starcrest Education The Belt & Road
29 April 2019
For immediate release
29 April 2019
Starcrest Education The Belt & Road Limited
("Starcrest" or the "Company" or the "Group")
Final Results
Starcrest Education The Belt & Road Limited (LSE: OBOR), the
international developer and operator of education services in
Europe, is pleased to announce its audited final results for the
period ended 31 December 2018.
Highlights
-- Incorporated and registered as a private company on 23 May 2018
-- Cash balance of GBP4,020,320 as at 31 December 2018
-- Operating loss of GBP189,698 for the period ended 31 December 2018
Post-period Highlights
-- Raised equity of approximately GBP4.1 million (net proceeds
of approximately GBP3.6 million) via a Subscription
-- Successful admission to trading on the London Stock Exchange's Main Market on 31 January 2019
-- First Board meeting held in Guizhou, China in March 2019
John McLean OBE, Non-Executive Chairman, commented:
"We are delighted to announce Starcrest's audited final results
since the Company's successful admission to the London Stock
Exchange's Main Market on 31 January 2019.
"The Company was incorporated in May 2018 as the Directors noted
a significant opportunity arising from the One Belt, One Road
("OBOR") initiative, a foreign policy and economic strategy of the
Chinese Government. Starcrest is fully aware of the enormous
potential and fast changing nature of the international education
industry and the opportunities arising from the OBOR initiative.
Our strategy is therefore to undertake the acquisition of one or
more European based schools that implement the International
Baccalaureate program and participate in the management of the
acquired businesses, adopting an operational strategy with the aim
of generating value for its shareholders.
"We hope that the successful listing of the Company's shares on
the London Stock Exchange's main market should now provide
Starcrest with access to the UK equity markets and position the
Company in Britain, where education is well-recognised as the gold
standard in China.
"Through its vast network of contacts and experience across the
education sector and in capital markets, the Board believes it is
well placed to add value to the acquisitions it hopes to make, and
subsequently to the Company's shareholders. This process of
searching for potential acquisition targets has now been commenced
and we look forward to updating the market of our progress in due
course."
- Ends -
Enquires:
Starcrest Education
John McLean OBE, Non-Executive Chairman +44 (0) 7768 031454
Allenby Capital Limited (Financial
Adviser and Broker)
John Depasquale +44 (0) 20 3328 5657
Yellow Jersey PR (Financial PR)
Sarah Hollins +44 (0) 7764 947137
Henry Wilkinson +44 (0) 7951 402336
Notes to editors:
Starcrest Education The Belt & Road Limited ("Starcrest") is
an international developer and operator of education services in
Europe. The newly formed entity has been established to seek
acquisition opportunities in the international education
sector.
The Company intends to capture opportunities arising from the
"One Belt, One Road" ("OBOR") initiative, a foreign policy and
economic strategy of the Chinese Government. The term derives from
the Silk Road, the ancient trade route, and encompasses the
overland 'Silk Road Economic Belt' and the '21st-Century Maritime
Silk Road,' concepts introduced by Chinese President Mr Xi Jinping
in 2013. These are the two major axes along which China proposes to
economically link Europe to China through countries across Eurasia
and the Indian Ocean. The OBOR initiative also links to Africa and
Oceania.
Starcrest listed on the Main Market of the London Stock Exchange
on 31 January 2019 under the ticker symbol (LSE: OBOR). Further
information can be found on the Company's website at
https://www.starcresteducation.com
Chairman's Statement
Introduction
I am pleased to report the final results for the period ended 31
December 2018, since Starcrest Education The Belt & Road
Limited ("Starcrest") became a newly formed entity on 23 May 2018.
The Company's objective is to provide top quality education
services and products to countries in Europe through seeking
acquisition opportunities in the international education sector
arising from the "One Belt, One Road" ("OBOR") initiative, a
foreign policy and economic strategy of the Chinese Government.
The Board will utilise its extensive experience in the education
industry, particularly in the higher education sector in Europe,
the network of contacts it has established internationally, as well
as relevant corporate acquisition and capital market expertise, to
best position Starcrest to benefit from this Chinese investment
initiative.
Post the period end, on 31 January 2019, Starcrest successfully
commenced trading on the London Stock Exchange's Main Market,
raising approximately GBP4 million. The Company's listing will
enhance our profile and provide access to the UK equity markets to
support future growth. The proceeds of the fund raising are to be
used in the first instance for the initial acquisition of relevant
businesses.
In recognition of our newly listed status, Starcrest is in the
process of joining the Quoted Companies Alliance (QCA), the
independent membership organisation that champions the interests of
small to mid-size quoted companies.
Results
Further to the fund raise, as of 31 December 2018, the Group had
cash balances of GBP4,020,320. Loss before tax for the period ended
31 December 2018 was GBP189,698.
Strategy and Market
Starcrest's overall strategic objective is to provide innovative
solutions that add value to students, employers and the wider
society in OBOR countries primarily.
The Company's acquisition targets will initially be schools
based in Europe implementing the International Baccalaureate (IB)
programme that offer the potential for long-term growth. As China
is currently seeing an increase in the number of students that are
unsuccessful in their applications to higher education
establishments, the Starcrest Board has noted a significant
opportunity to provide these students with access to improved
education and best in-class services that they require to pursue
better-paying jobs in China. This human capital problem has been
recently noted in a series of documents published by the Chinese
government in February 2019, which outline the country's policy
priorities for modernising China's education sector for the coming
years.
Our intention is therefore to be considered as a responsible and
sustainable investor into each of the local markets in which we
hope to operate, and as a guiding force for the improvement of the
livelihoods of the individual students who receive education as a
result of our efforts. In doing so, we will remain focused on the
provision of high quality education services to each of the
Company's acquired businesses.
Summary and Outlook
We believe that Starcrest is well placed to capitalise on the
enormous potential and fast-changing nature of the international
education industry and the opportunities arising from the OBOR
initiative.
The Board's vast experience in the education sector, corporate
acquisitions and in capital markets will provide the Company with
exposure to potential appropriate targets. The first meeting of the
Starcrest Board since the Company's listing was held in March 2019
in Guizhou, China in order to formally commence the acquisition
process. We believe that, with a currently uncertain investment
climate in Europe, a notable opportunity has presented itself to
develop business in the East where there is the likelihood of
further significant growth.
The Company's operations will focus upon the management and
growth of the portfolio across Europe with the ultimate intention
of generating significant value for Starcrest's shareholders. The
Directors look forward to updating our existing and prospective
investors with our progress in due course.
John McLean OBE
Non-Executive Chairman
STATEMENT OF COMPREHENSIVE INCOME
For the period from incorporation on 23 May 2018 to 31 December
2018
Note Period Ended
31 December
2018
GBP
Administrative expenses (189,698)
Operating loss 10 (189,698)
-------------
Finance income -
Loss before taxation (189,698)
Taxation 12 -
-------------
Total comprehensive loss attributable
to equity holders of the Company
for the period (189,698)
-------------
Loss per share - basic and diluted
(pence per share) 13 (319)
-------------
STATEMENT OF FINANCIAL POSITION
As at
31 December
2018
Note GBP
------------------------------------ ----- -------------
Assets
Current assets
Cash and cash equivalents 14 4,020,320
-------------
Total current assets 4,020,320
-------------
Total assets 4,020,320
=============
Equity and liabilities
Capital and reserves attributable
to owners of the company
Share capital 16 8,000
Other reserve 17 3,773,141
Retained earnings (189,698)
-------------
Total equity 3,591,443
Liabilities
Current liabilities
Trade and other payables 15 428,877
-------------
Total current liabilities 428,877
Total equity and liabilities 4,020,320
=============
STATEMENT OF CHANGES IN EQUITY
For the period from incorporation on 23 May 2018 to 31 December
2018
Share Other Retained Total
capital Reserve earnings equity
Note GBP GBP GBP GBP
----------------------------- ----- --------- ----------- ---------- -----------
Issue of shares on
incorporation on
23 May 2018 16 7,519 - - 7,519
Repurchase and cancellation
of the issued ordinary
share capital 16 (7,519) - - (7,519)
Proceeds from shares
issued
16 8,000 - - 8,000
Consideration for
shares to be issued 17 - 4,064,363 - 4,064,363
Transaction costs
deducted from equity 17 - (291,222) - (291,222)
Total comprehensive
loss for the financial
period - - (189,698) (189,698)
Balance as at 31
December 2018 8,000 3,773,141 (189,698) 3,591,443
========= =========== ========== ===========
STATEMENT OF CASH FLOWS
For the period from incorporation on 23 May 2018 to 31 December
2018
Period Ended
31 December
2018
GBP
------------------------------------------- ---- ---- ---- ---- -------------
Cash flows from operating activities
Operating loss (189,698)
Increase in payables 185,757
-------------
Net cash used in operating activities (3,941)
Cash flows from financing activities
Proceeds from issue of ordinary shares 8,000
Proceeds from ordinary shares to be
issued 4,064,363
Expenses paid on share issue (48,102)
-------------
Net cash generated from financing
activities 4,024,261
Net increase in cash and cash equivalents 4,020,320
Cash and cash equivalents at beginning
of the financial period -
-------------
Cash and cash equivalents at end of
financial period 4,020,320
=============
NOTES TO THE FINANCIAL INFORMATION
For the period from incorporation on 23 May 2018 to 31 December
2018
1. GENERAL INFORMATION
Starcrest Education The Belt & Road Limited ("the Company")
was incorporated and registered in the Cayman Islands as a private
company limited by shares on 23 May 2018 under the Companies Law
(as revised) of The Cayman Islands, with the name Starcrest
Education The Belt & Road Limited, and registered number
337619.
The Company's registered office is located at Cricket Square,
Hutchins Drive PO Box 2681, Grand Cayman KY1-1111, Cayman
Islands.
2. PRINCIPAL ACTIVITIES
The principal activity of the Company is to seek education
related acquisition opportunities in Europe.
3. RECENT ACCOUNTING PRONOUNCEMENTS
Standards and interpretations in issue but not yet effective
IFRS 16 'Leases' is effective for annual periods beginning on or
after 1 January 2019 with earlier application permitted, as long as
IFRS 15 is also applied.
The Company has no leases as at the period end and therefore the
impact on adopting this standard on the financial statements will
be minimal.
4. BASIS OF PREPARATION
The financial information has been prepared in accordance with
International Financial Reporting Standards ("IFRS") as adopted by
the European Union and prepared under the historic cost
convention.
The Company's functional currency is USD. The Company listed
it's shares on the Main market of the London Stock Exchange on 31
January 2019 (See Note 20). The directors have decided to present
the financial information in Pounds Sterling (GBP), which is the
Company's presentation currency, as the Company is listed in the
UK.
No comparative figures have been presented as the financial
information covers the period from incorporation of the Company on
23 May 2018 to 31 December 2018.
5. SIGNIFICANT ACCOUNTING POLICIES
5.1 Foreign currency translation
Transactions in currencies other than the Company's functional
currency (foreign currencies) are recognised at the rates of
exchange prevailing on the dates of the transactions. At each
reporting date, monetary assets and liabilities that are
denominated in foreign currencies are retranslated at the rates
prevailing at that date. Non-monetary items carried at fair value
that are denominated in foreign currencies are translated at the
rates prevailing at the date when the fair value was determined.
Non-monetary items that are measured in terms of historical cost in
a foreign currency are not retranslated.
Exchange differences are recognised in profit or loss in the
period in which they arise.
5. SIGNIFICANT ACCOUNTING POLICIES (Continued)
5.2 Financial instruments
A financial asset or a financial liability is recognised only
when the Company becomes a party to the contractual provisions of
the instrument.
Financial instruments are initially recognised at the
transaction price, unless the arrangement constitutes a financing
transaction, where it is recognised at the present value of the
future payments discounted at a market rate of interest for a
similar instrument.
Financial assets
All financial assets are recognised and derecognised on a trade
date where the purchase or sale of a financial asset is under a
contract whose terms require delivery of the financial asset within
the timeframe established by the market concerned, and are
initially measured at fair value.
Financial assets are subsequently classified into the following
specified categories: Financial assets measured at fair value
through profit and loss (FVTPL), Financial assets measured at
amortised cost and Financial assets measured at fair value through
other comprehensive income (FVOCI).
Financial liabilities
Financial liabilities are initially recognised at fair value.
Subsequent to initial recognition, they are recorded at amortised
cost.
5.3 Share Capital
Ordinary shares are classified as equity. Incremental costs
directly attributable to the issue of ordinary shares or options in
relation to ordinary shares are shown in equity as a deduction, net
of taxation, from the proceeds.
5.4 Cash and cash equivalents
Cash and cash equivalents include cash in hand, deposits held on
call with banks and other short term highly liquid investments that
are readily convertible into known amounts of cash and which are
subject to an insignificant risk of changes in value.
5.5 Earnings per share
Basic earnings per share is computed using the weighted average
number of shares outstanding during the period. Diluted earnings
per share is computed using the weighted average number of shares
during the period plus the dilutive effect of dilutive potential
ordinary shares outstanding during the year.
6. ACCOUNTING ESTIMATES AND JUDGEMENTS
Preparation of financial information in conformity with IFRS
requires management to make judgements, estimates and assumptions
that affect the application of accounting policies and the reported
amounts of assets, liabilities, income and expenses. The estimates
and associated assumptions are based on historical experience and
various other factors that are believed to be reasonable under the
circumstances, the results of which form the basis of making
judgements about carrying values of assets and liabilities that are
not readily apparent from other sources.
The Directors have applied judgement in determining the
appropriate split of professional costs incurred in connection with
the listing between profit or loss and equity. The Directors have
made this assessment based on the proportion of shares in issue
before and after the listing.
The Directors have applied judgement in determining whether the
proceeds received prior to the period and relating to the listing
of the Company's shares are appropriately classified as equity. The
Directors' view is that the admission of the Company's shares to
the London Stock Exchange was within the Company's control as at 31
December 2018, and accordingly, the proceeds received have been
classified as equity.
7. FINANCIAL RISK MANAGEMENT
The Company has exposure to the liquidity risk, foreign currency
risk and capital risks from its use of financial instruments.
Credit, interest rate and market risks are not considered to be
material to the Company. The Company is not subject to any external
imposed capital requirements.
The Company's financial instruments consist mainly of accounts
receivable and payable.
a) Liquidity risk
Liquidity risk is the risk that the Company will encounter
difficulty in meeting the obligations associated with its financial
liabilities. The Company's approach to managing liquidity is to
ensure, as far as possible, that it will always have sufficient
liquidity to meet its liabilities when due, under both normal and
stressed conditions, without incurring unacceptable losses or
risking damage to the Company's reputation.
The Company's financial liabilities comprise amounts due to the
parent company and accruals. The Company's financial assets
comprise cash and cash equivalents
b) Foreign currency risk
The Company's operations expose it primarily to the financial
risks of variations in foreign currency exchange rates. The Company
undertakes transactions denominated in currencies which are
different to its presentation currency. Consequently, the Company's
financial performance is affected by exchange rate
fluctuations.
The carrying amounts of the balances and transactions
denominated in a currency other than the Company's presentation
currency at the reporting date were as follows:
2018 United States Dollar RMB
Cash at bank 4,020,320 -
Amounts due to the parent company (33,988) (170,637)
-------------------------------- ---------------
Total 3,986,332 (170,637)
================================ ===============
A ten percent strengthening of GBP (GBP) against the following
currencies at 31 December would have (decreased)/increased reported
equity and profit or loss by the following amounts:
2018
Profit or loss Equity
United States Dollar (363,062) (363,062)
RMB 15,512 15,512
A ten percent weakening of GBP (GBP) against the following
currencies at 31 December would have (decreased)/increased reported
equity and profit or loss by the following amounts:
2018
Profit or loss Equity
United States Dollar 443,743 443,743
RMB (18,960) (18,960)
7. FINANCIAL RISK MANAGEMENT (Continued)
c) Credit risk
Credit risk refers to the risk that counterparty will default on
its contractual obligations resulting in financial loss to the
Company. Credit allowances are made for estimated losses that have
been incurred by the reporting date.
The Company's cash balances were all held with Oversea-Chinese
Banking Corporation Limited (OCBC). Per Standard & Poor's, the
Short Term Foreign / Local Currency Deposit Rating is A-1+.
8. CAPITAL MANAGEMENT
The Company actively manages the capital available to fund the
Company, comprising equity and reserves. The Company's objectives
when maintaining capital is to safeguard the entity's ability to
continue as a going concern, so that it can continue to provide
returns for shareholders.
9. SEGMENT REPORTING
IFRS 8 defines operating segments as those activities of an
entity about which separate financial information is available and
which are evaluated by the Board of Directors to assess performance
and determine the allocation of resources. The Board of Directors
are of the opinion that under IFRS 8 the Company has only one
operating segment. The Board of Directors assess the performance of
the operating segment using financial information which is measured
and presented in a manner consistent with that in the Financial
Statements. Segmental reporting will be reviewed and considered in
light of the development of the Company's business over the next
reporting period.
10. OPERATING LOSS
The operating loss is stated after charging:
Period ended
31 December
2018
GBP
Foreign exchange losses 272
-------------
11. AUDITORS' REMUNERATION
The following remuneration was received by the Company's
auditors:
Period ended
31 December
2018
GBP
Remuneration for the audit of the Company's
financial statements 17,500
Corporate finance services 50,000
12. TAXATION
The Company is incorporated in the Cayman Islands, and its
activities are subject to taxation at a rate of 0%.
13. EARNINGS PER SHARE
The Company presents basic and diluted earnings per share
information for its ordinary shares. Basic earnings per share is
calculated by dividing the loss attributable to ordinary
shareholders of the Company by the weighted average number of
ordinary shares in issue during the reporting period.
There is no difference between the basic and diluted loss per
share.
Period ended
31 December
2018
Loss attributable to ordinary shareholders
(GBP) (189,698)
Weighted average number of shares 59,375
Loss per share (expressed as pence
per share) (319)
The loss per share for the period has been calculated using the
weighted average number of shares during the period. The Company
issued new Ordinary shares in January 2019 (See note 20) and the
new issues will significantly increase the weighted average number
of shares and subsequently reduce loss per share.
14. CASH AND CASH EQUIVALENTS
31 December
2018
GBP
Cash at bank 4,020,320
--------------------------
Cash at bank earns interest at floating rates based on
daily bank deposit rates.
15. OTHER PAYABLES
31 December
2018
GBP
Amounts due to the parent company 249,451
Accruals 179,426
428,877
------------
All payables are financial liabilities measured at amortised
cost.
Amounts due to the parent company are unsecured, interest free
and repayable on demand.
16. SHARE CAPITAL
Number of shares Nominal
value
GBP
Authorised
Ordinary shares of GBP0.01 each 1,000,000,000 10,000,000
Issued and fully paid
Issue of ordinary shares of
GBP0.01 each 800,000 8,000
----------------- -----------
On incorporation, the Company had an authorised share capital of
US$50,000 divided into 50,000 ordinary shares of a par value of
US$1.00 each.
On 18 December 2018 the Company repurchased and cancelled the
issued ordinary share capital of US$10,000 of US$1 each.
Separately, the Company's authorised share capital became
1,000,000,000 ordinary shares of GBP0.01 each. On the same date the
Company issued 800,000 ordinary shares at nominal value.
17. OTHER RESERVE
The Other Reserve comprises GBP4,064,363 in cash consideration
received during the period for the new Ordinary shares to be issued
in January 2019 (See Note 20).
Transaction costs of GBP291,222 that are incremental and
directly attributable to the issue of these shares have been
deducted from the Other Reserve.
18. RELATED PARTY TRANSACTIONS
On 23 May 2018, the Company issued 10,000 ordinary shares at par
value of US$1 each to Mr Xingcheng Zhu, who is also a Company
director. On 18 December, the Company repurchased and cancelled
these 10,000 ordinary shares and issued 800,000 ordinary shares of
GBP0.01 each to Starcrest Education Management Company Ltd, a
company registered in China and controlled by Mr Zhu, (See Note
16).
As at 31 December 2018, an amount of GBP249,451 was owed to
Starcrest Education Management Company Ltd, the parent company.
This amount mainly arose from business expenses paid on behalf of
the Company by the parent company.
During the year a Director advanced $50,000 to the Company on
behalf of Starcrest Education Management Company Ltd, as
consideration for shares to be issued. This was repaid subsequent
to the period end.
Key management has not been remunerated in the period hence no
key management personnel compensation information is disclosed.
19. ULTIMATE CONTROLLING PARTY
The immediate parent company is Starcrest Education Management
Company Ltd. The ultimate parent company is Shenzhen Xing Chen
Investment Holdings Limited. The ultimate controlling party is Mr
Xingchen Zhu, who is also a director of the Company.
20. SUBSEQUENT EVENTS
On 31 January 2019, a total of 20,760,000 ordinary shares of
nominal value GBP0.01 each were issued by way of placing at a price
of GBP0.20 per share on the London Stock Exchange. Total cash
consideration of $5,190,000 was received by the Company. The
financial effect of this transaction is an increase to share
capital of GBP162,575 and the recognition of share premium of
GBP3,610,566.
Cash consideration of GBP4,064,363 was received in advance from
the shareholders during the period and has been recognised as Other
Reserve as at 31 December 2018 (See Note 17).
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
FR CKADQPBKDNQB
(END) Dow Jones Newswires
April 29, 2019 02:00 ET (06:00 GMT)
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