TIDMOBOR
RNS Number : 5390N
Starcrest Education The Belt & Road
25 September 2019
25 September 2019
Starcrest Education The Belt & Road Limited
("Starcrest" or the "Company" or the "Group")
Interim Results for the six months to 30 June 2019
Starcrest Education The Belt & Road Limited (LSE: OBOR), the
international developer and operator of education services in
Europe, is pleased to announce its unaudited results for the six
months to 30 June 2019.
Highlights
-- Raised equity finance 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
Post-period Highlights
-- On 17 September 2019, the Company signed non-legally binding
heads of terms ("Heads of Terms") to acquire sixty per cent. of the
issued share capital of The London School of Science and Technology
Limited
John McLean OBE, Non-Executive Chairman, commented:
"We are pleased to announce Starcrest's interim results for the
six months to 30 June 2019 since the Company's successful admission
to the London Stock Exchange's Main Market on 31 January 2019.
Upon admission, Starcrest aimed to identify a suitable
acquisition target as per the Company's search criteria. We are
delighted to confirm that we have identified a suitable candidate
which presents a valuable opportunity for Starcrest.
The Company announced its intention to join the Quoted Companies
Alliance (QCA) in April 2019 and membership is now confirmed.
Starcrest is also proud to continue its support in sponsoring the
UK-China Charity Initiative launched by The Lord Mayor's Appeal
(LMA) and China Chamber of Commerce in the UK (CCCUK) to raise
funds for the LMA's charities in the UK (50%) and CCCUK poverty
alleviation projects in China (50%).
We look forward to updating the market on our progress and the
Proposed Transaction in due course."
- Ends -
Enquiries:
Starcrest Education The Belt & Road Limited
John McLean OBE, Non-Executive Chairman +44 (0) 7768 031454
Allenby Capital Limited (Financial Adviser
and Broker) +44 (0) 20 3328
John Depasquale / Nicholas Chambers 5657
Yellow Jersey PR (Financial PR)
Sarah Hollins +44 (0) 7764 947137
Henry Wilkinson +44 (0) 7951 402336
Notes to editors:
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 very pleased to report the Company's interim results for
the period ended 30 June 2019.
Starcrest's strategic objective, as announced upon admission to
trading on the London Stock Exchange's Main Market in January 2019
and reiterated at the Company's final results on 29 April 2019, has
been to provide innovative solutions that add value to students,
employees and the wider society in One Belt One Road (OBOR)
countries.
Utilising the Board's considerable contacts and experience
across the education sector and in capital markets, we have been
proactively seeking relevant acquisition opportunities that fit
with the Company's search criteria and that offer attractive growth
potential. As a result, on 18 September 2019, Starcrest was pleased
to announce the signing of the non-legally binding Heads of Terms
to acquire sixty per cent. of the issued share capital of The
London School of Science and Technology Limited (the "Target").
Under the Heads of Terms, the Company has also agreed to a put
option, subject to the satisfaction of certain conditions, to
require it to purchase the remaining forty per cent. shareholding
in the Target following completion of the Proposed Transaction.
Although the consideration for the Proposed Transaction has yet to
be determined, the Company will need to undertake a fundraise to
satisfy it. The potential acquisition of the Target is subject to,
amongst other things, legal and financial due diligence, therefore
the Company is unable to provide further information at this early
stage about the terms of the Proposed Transaction. If the Proposed
Transaction is successful, it will amount to a reverse takeover
under the Listing Rules.
We believe that the Target provides a valuable opportunity for
Starcrest and its shareholders.
Following our announcement in April 2019 that the Company was 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, we are pleased to confirm that
Starcrest is now a member.
Starcrest is also proud to continue its support in sponsoring
the UK-China Charity Initiative launched by The Lord Mayor's Appeal
(LMA) and China Chamber of Commerce in the UK (CCCUK) to raise
funds for the LMA's charities in the UK (50%) and CCCUK poverty
alleviation projects in China (50%).
Results
Further to the initial fund raise, as of 30 June 2019, the Group
had cash balances of GBP3,435,902. Loss before tax for the period
ended 30 June 2019 was GBP438,563.
The majority of the losses reported in this period, representing
approximately GBP300,000, are attributed to professional fees and
associated costs relating to the listing on 31 January 2019 and the
search for acquisition targets. The remaining expenditure related
to Directors fees, administration and other costs.
Summary and Outlook
We believe that Starcrest is entering an exciting period as the
Company focuses on its strategy to capitalise on the enormous
potential of the Chinese education sector and the opportunities
arising from China's OBOR initiative.
The Company will continue to seek acquisition targets across
Europe, which will add value and support the strategy. In the
interim, Starcrest's focus will be on completing the acquisition of
our identified Target. The Directors look forward to updating the
market with our overall progress.
John McLean OBE
Non-Executive Chairman
CONDENSED STATEMENT OF COMPREHENSIVE INCOME
6 months ended 30/06/2019 23/05/2018
Unaudited to
Note GBP 30/06/2018
Unaudited
GBP
Administrative expenses (436,963) (148,587)
--------------------------------- ---------------
Operating loss 10 (436,963) (148,587)
--------------------------------- ---------------
-
Finance income -
Finance costs (1,600) -
--------------------------------- ---------------
Loss before taxation (438,563) (148,587)
--------------------------------- ---------------
Income tax expense - -
--------------------------------- ---------------
Loss for the period (438,563) (148,587)
================================= ---------------
Loss per share - basic and
diluted (pence per share) 12 2.44 1,485.87
CONDENSED STATEMENT OF FINANCIAL POSITION
Note As at As at
30/06/2019 31/12/2018
Unaudited
GBP GBP
Non-current assets
Right-of-use assets 84,330 -
------------- ------------------
Total non-current assets 84,330 -
------------- ------------------
Current assets
Cash and cash equivalents 13 3,435,902 4,020,320
------------- ------------------
Total current assets 3,435,902 4,020,320
------------- ------------------
Total assets 3,520,232 4,020,320
============= ==================
Equity and liabilities
Capital and reserves
attributable to owners
of the company
Ordinary shares 14 215,600 8,000
Share premium 15 3,454,364 -
Other reserves - 3,773,141
Retained earnings (628,261) (189,698)
------------- ------------------
Total equity 3,041,703 3,591,443
------------- ------------------
Current liabilities
Trade and other payables 417,760 428,877
Lease liabilities 60,769 -
------------- ------------------
Total current liabilities 478,529 428,877
------------- ------------------
Total equity and liabilities 3,520,232 4,020,320
============= ------------------
CONDENSED STATEMENT OF CHANGES IN EQUITY
FOR THE PERIODED 30 JUNE 2019
Note Share capital Share Other Retained Total
premium reserves earnings equity
GBP GBP GBP GBP GBP
Balance at 1 January
2019 8,000 - 3,773,141 (189,698) 3,591,443
Proceeds from shares
issued
14 207,600 - (207,600) - -
Transferred from
other
reserves to share
premium - 3,565,541 (3,565,541) - -
Transaction costs
deducted
from 15
equity - (111,177) - - (111,177)
Total comprehensive
income
for the financial
period - - - (438,563) (438,563)
-------------------- -------------------- -------------------- -------------- -----------
Balance at 30 June
2019
(Unaudited) 215,600 3,454,364 - (628,261) 3,041,703
-------------------- -------------------- -------------------- -------------- -----------
FOR THE PERIODED 30 JUNE 2018
Share capital Share premium Other Retained Total
reserves earnings equity
GBP GBP GBP GBP GBP
Issue of shares on
incorporation
on 23 May 2018 7,519 - - - 7,519
Total comprehensive
income
for the financial
period - - - (148,587) (148,587)
-------------------- -------------------- -------------------- -------------- -----------
Balance at 30 June
2018
(Unaudited) 7,519 - - (148,587) (141,068)
-------------------- -------------------- -------------------- -------------- -----------
CONDENSED STATEMENT OF CASH FLOWS
23/05/2018
30/06/2019 to
Unaudited 30/06/2018
Unaudited
GBP GBP
Cash flows from operating activities
Operating loss (438,563) (148,587)
Depreciation 34,865 -
Interest paid on lease liabilities 1,600 -
Increase/(decrease) in payables (11,337) 148,587
---------------------- ----------------
Net cash generated from operating activities (413,435) -
---------------------- ----------------
Cash flows from financing activities
and in condensed interim report
Transaction costs deducted from equity (111,177) -
Principal paid on lease liabilities (58,206) -
Interest paid on lease liabilities (1,600) -
---------------------- ----------------
Net cash used in financing activities (170,983) -
---------------------- ----------------
Net decrease in cash, cash equivalents (584,418) -
and bank overdrafts
Cash, cash equivalents and bank overdrafts
at beginning of the year 4,020,320 -
---------------------- ----------------
Cash, cash equivalents and bank overdrafts
at end of the period 3,435,902 -
====================== ----------------
NOTES TO THE UNAUDITED CONDENSED INTERIM FINANCIAL
STATEMENTS
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 PRONOUNCEMENT
a) New interpretations and revised standards effective for the
period ended 30 June 2019
The Company has applied the same accounting policies and methods
of computation in its interim financial statements as in its 2018
annual financial statements, except for those that relate to new
standards and interpretations effective for the first time for
periods beginning on (or after) 1 January 2019, and will be adopted
in the 2019 annual financial statements. New standards impacting
the Company that will be adopted in the annual financial statements
for the year ended 31 December 2019, and which have given rise to
changes in the Company's accounting policies are:
-- IFRS 16 Leases
Effective 1 January 2019, IFRS 16 has replaced IAS 17 Leases and
IFRIC 4 Determining whether an Arrangement Contains a Lease.
IFRS 16 provides a single lessee accounting model, requiring the
recognition of assets and liabilities for all leases, together with
options to exclude leases where the lease term is 12 months or
less, or where the underlying asset is of low value. IFRS 16
substantially carries forward the lessor accounting in IAS 17, with
the distinction between operating leases and finance leases being
retained. The Company does not have significant leasing activities
acting as a lessor.
On adoption of IFRS 16, the Company recognised right-of-use
assets and lease liabilities in relation to leases of office space,
which started during the period.
The lease liabilities were measured at the present value of the
remaining lease payments, discounted using the Company's
incremental borrowing rate as at 1 January 2019. The Company's
incremental borrowing rate is the rate at which a similar borrowing
could be obtained from an independent creditor under comparable
terms and conditions. The weighted-average rate applied was
4.5%.
b) Standards and interpretations in issue but not yet
effective
There are a number of standards and interpretations which have
been issued by the International Accounting Standards Board that
are effective for periods beginning subsequent to 31 December 2019
(the date on which the company's next annual financial statements
will be prepared up to) that the Company has decided not to adopt
early. The Directors do not believe these standards and
interpretations will have a material impact on the financial
statements once adopted.
4. BASIS OF PREPARATION
These interim financial statements have been prepared in
accordance with IAS 34 Interim Financial Reporting as adopted by
the European Union and prepared under the historic cost convention.
The comparative figures as at 31 December 2018 have been extracted
from the Company's Financial Statements for that financial year,
but do not constitute these accounts.
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 14). 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.
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.
5.2 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.
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
externally 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:
2019 GBP RMB
Cash at bank 3,435,902 -
Amounts due to the parent
company - (171,770)
--------------------------------- ----------------
Total 3,435,902 (171,770)
================================= ----------------
A ten percent strengthening of GBP (GBP) against the following
currencies at 30 June would have (decreased)/increased reported
equity and profit or loss by the following amounts:
2019
Profit or (loss) Equity
USD (312,355) (312,355)
RMB 15,615 15,615
A ten percent weakening of GBP (GBP) against the following
currencies at 30 June would have (decreased)/increased reported
equity and profit or loss by the following amounts:
2019
Profit or (loss) Equity
USD 381,767 381,767
RMB (19,086) (19,086)
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 (crediting)/charging:
6 months ended 23/05/2018
30 June 2019 to
GBP 30/06/2018
GBP
Foreign exchange (gains)/losses (1,824) 272
11. TAXATION
The Company is incorporated in the Cayman Islands, and its
activities are subject to taxation at a rate of 0%.
12. EARNINGS PER SHARE
The Company presents basic and diluted earnings per ordinary
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.
6 months ended 23/05/2018
30/06/2019 to
30/06/2018
---------------------------------------------- ------------------ ---------------
Loss attributable to ordinary shareholders 438,563 148,587
Weighted average number of shares 18,004,420 10,000
Losses per share (expressed as pence
per share) 2.44 1,485.87
13. CASH AND CASH EQUIVALENTS
30/06/2019 31/12/2018
GBP GBP
Cash at bank equivalents 3,435,902 4,020,320
------------------------- ----------
Cash at bank earns interest at floating rates based
on daily bank deposit rates.
14. SHARE CAPITAL
Number of Nominal
shares value
GBP
Authorised
Ordinary shares of GBP 0.01 each 1,000,000,000 10,000,000
Issued and fully paid
Issue of ordinary shares of GBP0.01 each 21,560,000 215,600
---------------------- ----------
As at 30 June 2019 21,560,000 215,600
---------------------- ----------
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.
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.
15. SHARE PREMIUM
Transaction costs of GBP111,177 from the period ended 30 June
2019 and GBP291,222 for the period from 23 May 2018 to 31 December
2018 have been deducted from equity. These costs are incremental
and directly attributable to the issue of shares.
The remaining balance of GBP3,454,364 is recognised as share
premium after the issue of the new shares on 31 January 2019.
16. 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
14).
As at 30 June 2019, an amount of GBP212,310 (31 December 2018:
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.
17. 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.
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
IR EAPNLALPNEFF
(END) Dow Jones Newswires
September 25, 2019 02:00 ET (06:00 GMT)
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