TIDMZEG
RNS Number : 8801N
Zegona Communications PLC
27 September 2019
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DISTRIBUTION, PUBLICATION OR RELEASE WOULD BE UNLAWFUL.
ZEGONA COMMUNICATIONS PLC ("Zegona")
LEI: 213800ASI1VZL2ED4S65
27 SEPTEMBER 2019
Interim report for the six months ended 30 June 2019
Zegona announces its interim results for the six months ended 30
June 2019.
Enquiries
Tavistock (Public Relations adviser - UK)
Tel: +44 (0)20 7920 3150
Jos Simson - jos.simson@tavistock.co.uk
Lulu Bridges - lulu.bridges@tavistock.co.uk
IMPORTANT NOTICES
This announcement has been prepared in accordance with English
law, the Listing Rules and the Disclosure Guidance and Transparency
Rules and information disclosed may not be the same as that which
would have been prepared in accordance with the laws of
jurisdictions outside England.
The distribution of this announcement in jurisdictions outside
the United Kingdom may be restricted by law and therefore persons
into whose possession this announcement comes should inform
themselves about, and observe such restrictions. Any failure to
comply with the restrictions may constitute a violation of the
securities law of any such jurisdiction.
About Zegona
Zegona was established in 2015 with the objective of investing
in businesses in the European Telecommunications, Media and
Technology sector and improving their performance to deliver
attractive shareholder returns. Zegona is listed on the standard
listing segment of the Official List of the Financial Conduct
Authority and the Main Market for listed securities of the London
Stock Exchange, and is led by former Virgin Media executives Eamonn
O'Hare and Robert Samuelson.
About Euskaltel
Zegona's principal asset is its investment in Euskaltel.
Euskaltel is the leading converged telecommunications provider in
the North of Spain, with a network covering nearly 2.3 million
households. It provides high speed broadband, data rich mobile,
advanced TV and fixed communications services to residential and
business customers under the Euskaltel, R Cable and Telecable
brands. Euskaltel is listed on the Madrid stock exchange.
ZEGONA COMMUNICATIONS PLC
Unaudited Condensed Consolidated Interim Financial
Statements
For the six months ended 30 June 2019
MANAGEMENT REPORT
Investment in Euskaltel
A positive movement in Euskaltel's share price from EUR6.99 at
31 December 2018 to EUR8.15 at 30 June 2019 generated a gain on the
fair value of Zegona's investment in Euskaltel of EUR30.0 million
for the six months ended 30 June 2019 (2018: EUR25.9 million). We
also received EUR3.8 million of dividend income from Euskaltel
during the period (2018: EUR3.4 million).
In early 2019 we raised more than GBP100 million of new equity
and entered into flexible financing facilities to fund an increase
in our Euskaltel ownership. Following this, we have become the
largest shareholder in Euskaltel, increasing our ownership from 15%
to over 20% as at 30 June 2019 through market purchases.
Zegona is working constructively with the Euskaltel board of
directors to improve the performance of the business. This has
resulted in Euskaltel making a number of changes that Zegona
believes are advantageous for the business. In particular, José
Miguel García (the ex-CEO of Jazztel) was appointed as CEO of
Euskaltel by its board with unanimous agreement on 5 June 2019, and
his appointment was overwhelmingly endorsed by Euskaltel's
shareholders at the Extraordinary Shareholder Meeting on 10 July
2019. At the same shareholder meeting, Zegona's Chief Executive
Officer Eamonn O'Hare and Chief Operating Officer Robert Samuelson
were also confirmed as proprietary directors on Euskaltel's
board.
In his first months as CEO, José Miguel has made a fast start
with significant progress in implementing a new plan for the
business. Highlights include:
Integrating three operating companies into one business. This is
designed to simplify operations and reduce costs. A new
organisation structure is already in place, with key hires on board
and a streamlined senior executive team. This has created clearer
accountability for results and a stronger and more agile
leadership. José Miguel is also creating a single technical
platform, whilst integrating the sales strategies of the three
brands, taking best practice from each and expanding the more
efficient on-line/direct channels.
Improving the customer proposition. Euskaltel is focussed on
reducing churn and enabling ARPU growth. A new mobile offer has
been launched in partnership with Samsung, giving customers a
high-quality handset and large data allowance at highly attractive
rates. In addition, Euskaltel has increased broadband speed for its
customers at no extra cost. A carefully targeted 'more-for-more'
price rise has also been implemented.
Expanding nationally. With its more efficient operating
platform, a new highly-experienced management team, and the option
of utilising the Virgin brand, the company is well-placed to grow
in the 85% of Spanish households where it currently does not
compete. Winning a small share of this large and growing market can
be transformative for the company's financial performance. Detailed
planning has commenced, and discussions initiated with key
partners.
Euskaltel's new CEO and strategy have been well received by
local and national Spanish media, with significant press
coverage.
With José Miguel now running the Euskaltel business and our
strengthened position on the board, we are confident that
Euskaltel's new direction will drive value for Zegona's
shareholders.
Outlook
In addition to supporting Euskaltel's performance improvement
through our representation on the Euskaltel board, we continue to
see many attractive investment opportunities both in Spain and the
wider European TMT market. These are driven by a number of
underlying trends that create attractive opportunities across a
broad range of assets which Zegona believes it is well placed to
capitalise on. We are looking forward to discussing some of the
opportunities available to Zegona shareholders, both through the
investment in Euskaltel and other opportunities, on a conference
call to be held at 15:00 BST on 3 October 2019.
Dividend
Zegona has made two dividend payments in 2019, with 2.5 pence
per share paid on 1 March and a further 2.5 pence per share on 6
September. In total, 5.0 pence per share or GBP8.7 million has been
paid to shareholders in 2019.
Zegona has been consistent in its commitment to paying
dividends, with more than GBP30 million being paid to shareholders
since 2016. We remain committed to our policy of passing 100% of
all Euskaltel dividends received to our shareholders.
Risks
The principal risks and uncertainties faced by the Group have
not changed significantly since our annual report for the year
ended 31 December 2018 (the "2018 Annual Report").
Risk title Risk rating Change in risk assessment
since the 2018 Annual Report
-------------------------------- ------------ ------------------------------
Risks related to the investment High <--> No change
in Euskaltel
Acquisition of targets Moderate <--> No change
Key management Moderate <--> No change
Disposal of investment Moderate <--> No change
Brexit Moderate <--> No change
Foreign exchange Low <--> No change
These risks have the potential to affect the Group's results and
financial position during the remainder of 2019. A more detailed
explanation of risks and uncertainties is set out on pages 7 to 10
of the 2018 Annual Report.
RESPONSIBILITY STATEMENT
Statement of Directors' Responsibility
We confirm to the best of our knowledge:
-- the unaudited condensed consolidated interim financial
statements have been prepared in accordance with IAS 34 Interim
Financial Reporting; and
-- the interim management report includes a fair review of the
information required by Disclosure and Transparency Rule 4.2.7R and
Disclosure and Transparency Rule 4.2.8R.
Neither the Company nor the directors accept any liability to
any person in relation to the half-year financial report except to
the extent that such liability could arise under English law.
Accordingly, any liability to a person who has demonstrated
reliance on any untrue or misleading statement or omission shall be
determined in accordance with section 90A and schedule 10A of the
Financial Services and Markets Act 2000.
Details on the Company's Board of Directors can be found on the
Company website at www.zegona.com.
By order of the Board
Eamonn O'Hare
Chairman and CEO
26 September 2019
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the six months ended
30 June
2019 2018
------------- ------------
Unaudited
---------------------------
Note EUR000 EUR000
Continuing operations
Administrative and other operating
expenses:
Corporate costs (1,898) (1,829)
Significant project costs (280) (61)
------------- ------------
Operating loss (2,178) (1,890)
Finance income 4 33,911 29,270
Finance costs 4 (326) (146)
Exchange differences 2,321 (488)
------------- ------------
Profit for the period before
income tax 33,728 26,746
Income tax - (34)
------------- ------------
Profit for the period attributable
to equity holders of the parent 33,728 26,712
============= ============
cents cents
Earnings per share
Basic and diluted earnings per
share attributable to ordinary
equity holders of the parent 16.8 21.2
The accompanying notes are an integral part of the unaudited
condensed consolidated interim financial statements.
CONDENSED CONSOLIDATED STATEMENT OF OTHER COMPREHENSIVE
INCOME
For the six months
ended 30 June
2019 2018
----------- --------
Unaudited
---------------------
EUR000 EUR000
Profit for the period 33,728 26,712
Other comprehensive (loss)/income -
items that will or may be reclassified
subsequently to profit or loss
Exchange differences on translation
of foreign operations (2,565) 479
Total comprehensive income for the period,
net of tax, attributable to equity holders
of the parent 31,163 27,191
=========== ========
The accompanying notes are an integral part of the unaudited
condensed consolidated interim financial statements.
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
As at 30 As at 31
June 2019 December
2018
----------- ----------
Unaudited Audited
----------- ----------
Note EUR000 EUR000
Assets
Non-current assets
Property, plant and equipment 1 2
Intangible assets - 1
Non-current financial assets 6 303,587 187,332
303,588 187,335
Current assets
Trade and other receivables 90 2,128
Other current financial assets 7 4,966 4,826
Cash and cash equivalents 34,579 3,138
----------- ----------
39,635 10,092
----------- ----------
Total assets 343,223 197,427
=========== ==========
Equity and liabilities
Equity
Share capital 2,855 1,763
Other reserves 310,743 205,623
Share-based payment reserve 105 105
Foreign currency translation reserve (5,941) (3,376)
Retained earnings 23,672 (10,056)
----------- ----------
Total equity attributable to equity
holders of the parent 331,434 194,059
Current liabilities
Trade and other payables 881 3,368
881 3,368
Non-current liabilities
Bank borrowings 10,908 -
----------- ----------
10,908 -
Total equity and liabilities 343,223 197,427
=========== ==========
The accompanying notes are an integral part of the unaudited
condensed consolidated interim financial statements.
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Foreign
Share-based currency Available
Share Other payment translation for sale Retained
capital reserves reserve reserve reserve earnings Total equity
------------- ------------ ------------ ------------ ---------- ---------- -------------
Note EUR000 EUR000 EUR000 EUR000 EUR000 EUR000 EUR000
Balance at 1
January
2019 1,763 205,623 105 (3,376) - (10,056) 194,059
Profit for the
period - - - - - 33,728 33,728
Other
comprehensive
loss - - - (2,565) - - (2,565)
Issue of
shares,
net of
directly
attributable
costs 1,092 108,793 - - - - 109,885
Dividend paid 9 - (3,673) - - - - (3,673)
------------- ------------ ------------ ------------ ---------- ---------- -------------
Balance at 30
June
2019
(unaudited) 2,855 310,743 105 (5,941) - 23,672 331,434
============= ============ ============ ============ ========== ========== =============
Balance at 31
December
2017 1,763 215,158 105 (891) (41,360) 21,390 196,165
Adjustments on
initial
application
of IFRS
9 - - - - 41,360 (41,360) -
Balance at 1
January
2018 1,763 215,158 105 (891) - (19,970) 196,165
Profit for the
period - - - - - 26,712 26,712
Other
comprehensive
income - - - 479 - - 479
Dividend paid - (5,622) - - - - (5,622)
------------- ------------ ------------ ------------ ---------- ---------- -------------
Balance at 30
June
2018
(unaudited) 1,763 209,536 105 (412) - 6,742 217,734
============= ============ ============ ============ ========== ========== =============
The accompanying notes are an integral part of the unaudited
condensed consolidated interim financial statements.
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
For the six months ended
30 June
2019 2018
Unaudited
-----------------------------
EUR000 EUR000
Operating activities
Profit before income tax 33,728 26,746
Adjustments to reconcile profit before
income tax to operating cash flows:
Depreciation of property, plant and equipment 1 1
Net foreign exchange differences (2,321) 488
Finance income (33,911) (29,270)
Finance costs 326 146
Working capital adjustments:
Decrease in trade and other receivables
and prepayments 2,038 99
Decrease in trade and other payables (2,587) (2,003)
Interest received 19 4
Interest paid (140) -
-------------- -------------
Net cash flows used in operating activities (2,847) (3,789)
============== =============
Investing activities
Net proceeds from loans receivable - 616
Market purchases of shares in Euskaltel (86,255) -
Dividends received 3,752 3,404
-------------- -------------
Net cash flows (used in)/from investing
activities (82,503) 4,020
============== =============
Financing activities
Dividend paid to shareholders (3,673) (5,622)
Issue of shares, net of directly attributable 109,885 -
costs
Loan drawdown, net of borrowing costs 10,824 -
-------------- -------------
Net cash flows from/(used in) financing
activities 117,036 (5,622)
============== =============
Net increase/(decrease) in cash and cash
equivalents 31,686 (5,391)
Net foreign exchange difference (245) (9)
Cash and cash equivalents at 1 January 3,138 10,224
Cash and cash equivalents at 30 June 34,579 4,824
============== =============
The accompanying notes are an integral part of the unaudited
condensed consolidated interim financial statements.
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL
STATEMENTS
1. GENERAL INFORMATION
The unaudited condensed consolidated interim financial
statements of Zegona Communications plc (the "Company" or the
"Parent") and its subsidiaries (collectively, the "Group" or
"Zegona") for the six months ended 30 June 2019 (the "Interim
Financial Statements") were authorised for issue in accordance with
a resolution of the directors on 26 September 2019. The Company is
incorporated in England and Wales and domiciled in the United
Kingdom. It is a public limited company with company number
09395163 and has its registered office at 20 Buckingham Street,
London, WC2N 6EF.
2. SIGNIFICANT ACCOUNTING POLICIES
(a) Basis of preparation
The Interim Financial Statements have been prepared in
accordance with IAS 34 Interim Financial Reporting and are
presented on a condensed basis. The Interim Financial Statements do
not constitute statutory accounts within the meaning of section
434(3) of the Companies Act 2006 (the "Companies Act").
The Interim Financial Statements do not include all the
information and disclosures required in the annual financial
statements, and should be read in conjunction with the Group's
annual financial statements as at 31 December 2018 which are
available on the Company's website, www.zegona.com. However,
selected explanatory notes are included to explain events and
transactions that are significant to an understanding of the
changes in the Group's financial position and performance since the
last annual financial statements.
Information from 31 December 2018 is based on the statutory
accounts for the year ended 31 December 2018, which were delivered
to the Registrar of Companies and on which the auditor's report was
unqualified and did not contain a statement under section 498(2) or
498(3) of the Companies Act.
(b) Going concern
The Interim Financial Statements have been prepared on the going
concern basis, which assumes that the Group will continue to be
able to meet its liabilities as they fall due for the foreseeable
future.
(c) New standards, interpretations and amendments adopted by the Group
The accounting policies adopted in the preparation of the
Interim Financial Statements are consistent with those followed in
the preparation of the Group's annual consolidated financial
statements for the year ended 31 December 2018, which were prepared
in accordance with International Financial Reporting Standards as
adopted by the European Union. The Group has not early adopted any
other standard, interpretation or amendment that has been issued
but is not yet effective.
Standards issued but not yet effective
The Group intends to adopt the following standards, amendments
and interpretations, if applicable, when they become effective and
endorsed by the European Union. Adopting these standards will not
have a material impact on the Group.
Standard Effective date
Amendments to IFRS 3 Business Combinations 1 January 2020
Amendments to IAS 1 and IAS 8: Definition of 1 January 2020
Material
IFRS 17 Insurance Contracts 1 January 2021
(d) Critical accounting judgements and estimates
The preparation of the Interim Financial Statements requires the
Directors to consider estimates and assumptions that affect the
reported amounts of assets and liabilities and the disclosure of
contingent assets and liabilities. Estimates and judgements are
continually evaluated and are based on historical experience and
other factors including expectations of future events that are
believed to be reasonable under the circumstances. Actual results
may differ from these estimates.
There have been no material changes to the significant
judgements and estimates made by the Directors as at and for the
year ended 31 December 2018.
The Directors have continued to assess their conclusion on the
accounting treatment for Zegona's investment in Euskaltel of 37.2
million shares, or approximately 20.85% of its ordinary shares and
voting rights, as detailed in note 6.
3. SEGMENT INFORMATION
Central Investment
Six months to 30 June 2019 costs in Euskaltel Consolidated
-------- -------------- -------------
EUR000 EUR000 EUR000
Depreciation and amortisation (1) - (1)
Other operating expenses (2,177) - (2,177)
-------- -------------- -------------
Operating loss (2,178) - (2,178)
Finance income 159 33,752 33,911
Finance costs (326) - (326)
Exchange differences 2,321 - 2,321
(Loss)/profit for the period (24) 33,752 33,728
======== ============== =============
Central Investment
Six months to 30 June 2018 costs in Euskaltel Consolidated
-------- -------------- -------------
EUR000 EUR000 EUR000
Depreciation and amortisation (1) - (1)
Other operating expenses (1,889) - (1,889)
-------- -------------- -------------
Operating loss (1,890) - (1,890)
Finance income 4 29,266 29,270
Finance costs (146) - (146)
Exchange differences (488) - (488)
-------- -------------- -------------
(Loss)/profit before tax (2,520) 29,266 26,746
Income tax (34) - (34)
-------- -------------- -------------
(Loss)/profit for the period (2,554) 29,266 26,712
======== ============== =============
4. FINANCE INCOME AND COSTS
For the 6 months ended
30 June
2019 2018
Note EUR000 EUR000
Dividend income 3,752 3,404
Gain on fair value of investment
in Euskaltel 30,000 25,862
Gain on fair value of contingent
consideration 7 140 -
Interest on loans - 2
Bank interest 19 2
------------ -----------
Finance income 33,911 29,270
============ ===========
Loss on fair value of contingent
consideration 7 - (146)
Costs of bank borrowings (326) -
------------ -----------
Finance costs (326) (146)
============ ===========
Dividend income
The Group received a dividend on 7 February 2019 from Euskaltel
at a rate of EUR0.140 per share, totalling EUR3.75 million. In the
comparative period, the Group received a dividend on 1 February
2018 from Euskaltel at a rate of EUR0.127 per share, totalling
EUR3.40 million.
Gain on fair value of investment in Euskaltel
The change in fair value incorporates the increase in the
Euskaltel share price from EUR6.99 at 31 December 2018 to EUR8.15
at 30 June 2019.
5. FINANCIAL INSTRUMENTS
The classification by category of the financial instruments held
by the Group at 30 June 2019 is as follows:
Note Current Non-current
EUR000 EUR000
Financial assets measured at amortised
cost
Cash and cash equivalents 34,579 -
-------- -------------
34,579 -
Financial assets measured at fair value
through profit or loss
Investment in Euskaltel (level 1) 6 - 303,587
Contingent consideration (level
3) 7 4,966 -
-------- -------------
4,966 303,587
Total financial assets 39,545 303,587
======== =============
Financial liabilities measured at
amortised cost
Trade and other payables 881 -
Bank borrowings 8 - 10,908
-------- -------------
Total financial liabilities 881 10,908
======== =============
For the financial assets measured at fair value, the Directors
have determined that no transfers have occurred between levels in
the fair value hierarchy from 31 December 2018 to 30 June 2019. The
Directors consider that the carrying amounts of the financial
instruments measured at amortised cost equate to their fair
values.
6. NON-CURRENT FINANCIAL ASSETS
As at 30 As at 31
June 2019 December
2018
EUR000 EUR000
Investment in Euskaltel 303,587 187,332
Total 303,587 187,332
=========== ==========
Investment in Euskaltel
Euskaltel is listed on the Bilbao, Madrid, Barcelona and
Valencia Stock Exchanges through the Stock Market Interconnection
System (Continuous Market). As part of the purchase agreement for
the Euskaltel shares acquired on 26 July 2017, Zegona agreed to
standard lock-in provisions in relation to those shares. These
provisions fully lapsed on 26 July 2019.
For all periods up to 30 June 2019, Zegona concluded that the
ability it had to contribute to Euskaltel's board and committees
did not confer the power to participate in Euskaltel's financial
and operating policy decisions and therefore the criteria for
equity accounting within IAS 28 Investments in Associates and Joint
Ventures were not met. Zegona had therefore accounted for its
investment in Euskaltel as a financial asset measured at fair value
through profit or loss in accordance with IFRS 9 Financial
Instruments. Zegona will continue to re-evaluate this conclusion in
future periods, including assessing the impact of developments in
recent months around Zegona's increased investment, board
representation and Euskaltel management changes, and may conclude
that it is appropriate to apply equity accounting.
Zegona has granted security to Euskaltel by a share pledge over
1,663,158 of its shares in Euskaltel with respect to certain
credits generated in favour of Telecable. At 30 June 2019,
3,431,268 shares are unpledged, with the remainder granted as
security to Barclays by a share pledge with respect to the loan
facility as described in note 8.
7. OTHER CURRENT FINANCIAL ASSETS
The other current financial assets balance of EUR5.0 million (31
December 2018: EUR4.8 million) comprises solely the contingent
consideration receivable from the sale of Telecable. This compares
to a base case model present value of EUR6.9 million (31 December
2018: EUR6.7 million) and Zegona's best estimate of the
undiscounted cash flow that it will receive of EUR7.1 million (31
December 2018: EUR7.1 million). The contingent consideration is
payable by Euskaltel in cash up to a maximum amount of EUR15
million upon confirmation that a range of net tax assets are
available to Euskaltel and may be used to offset its future tax
payments.
Note EUR000
Balance at 31 December 2018 4,826
Change in unrealised fair value recognised
in profit or loss 4 140
Balance at 30 June 2019 4,966
=======
The eventual amount to be received depends on several factors
that are entirely specific to Euskaltel. These factors include the
availability of tax assets, the extent to which there will be
sufficient taxable profits to utilise these assets, and assumptions
around the outcome of certain open interactions with the Spanish
tax authorities. There have been no material updates to these
significant unobservable inputs since 31 December 2018.
The fair value of the contingent consideration has been
calculated using a probability-weighted discounted cash flow model
that calculates the present value of the expected cash flows for 12
different plausible combinations of outcomes. The fair value was
determined by calculating a weighted average of those cash flows
according to the probability of each scenario occurring. As a
result of this analysis, a fair value of EUR5.0 million (31
December 2018: EUR4.8 million) was assigned to the contingent
consideration. This value recognises the possibility of certain
material downside cases that Zegona currently considers to be
unlikely to occur (particularly in relation to the merger approval
discussed below not being granted) and therefore the eventual
amount received could be greater than this fair value.
The significant unobservable inputs used in the base case (which
had a present value of EUR6.9 million (31 December 2018: EUR6.7
million), being management's assessment of the present value of the
most likely outcome) and the impact of each input on the value of
the base case at the reporting date, holding the other inputs
constant, are shown below:
Merger approval:
--------------------------------------------------------------------
The likelihood of receiving a binding ruling by the Spanish
General Directorate of Taxation confirming certain tax assets
are eligible for use upon a qualifying merger of the Telecable
entities.
Input used in the base case model: Sensitivity of the base case:
Successful If the merger is unsuccessful,
the revised base case present
value would be EUR1.0 million
Usability of available assets:
---------------------------------------------------------------------
The proportion of the available net tax assets that are deemed
to be usable by the Telecable entities in future periods to
offset future taxable profits according to the terms of the
SPA.
Input used in the base case model: Sensitivity of the base case:
84% usable Usability scenarios ranged
from 48% to 100%, causing the
present value of the base case
to range from EUR4.0 million
to EUR8.2 million
Timing of merger approval:
---------------------------------------------------------------------
The time it will take to receive a positive tax ruling on the
merger described above (which is not relevant for scenarios
where the merger is not approved).
Input used in the base case model: Sensitivity of the base case:
6 months If the timing is increased
to 18 months, the revised base
case present value would be
EUR6.5 million
8. BANK BORROWINGS
The Company has been provided with facilities of up to GBP30
million by Barclays Bank plc and Virgin Holdings Limited.
During the period, the Company has drawn down GBP10 million
under the Barclays facility. Interest is payable quarterly in
arrears on the drawn amount at a rate of 2.6% per annum above the
3-month LIBOR interest rate. A commitment fee of 0.6% per annum is
payable on the undrawn amount of GBP20 million. The Company has the
right to prepay the loan at any time, but if it does so before the
first anniversary of the date of the draw down, it must pay a make
whole amount calculated at 2.6% per annum multiplied by the prepaid
amount for the period between the date of prepayment and that first
anniversary.
The Barclays facility matures on 14 January 2021, and any
amounts owed will become immediately repayable on the occurrence of
certain events of default including a drop in the value of
Euskaltel shares to EUR3.42 or below, a change of control of
Euskaltel or Zegona and other customary events of default. The
Barclays facility is secured by a charge over some Euskaltel shares
as detailed in note 6.
The Company has not drawn down any amounts under the Virgin
facility. From the date on which funds are drawn down, interest
will accrue daily at an annual interest rate of LIBOR plus 5%,
payable quarterly in arrears. The Virgin facility matures on 30
April 2020.
9. DIVIDEND PAID
The Company declared an interim dividend on 31 January 2019 at a
rate of 2.5p per share, totalling EUR3.7 million. The dividend was
paid on 1 March 2019. In the comparative period, the Company
declared an interim dividend on 22 March 2018 at a rate of 3.9p per
share, totalling EUR5.6 million, which was paid on 24 April
2018.
10. RELATED PARTY TRANSACTIONS
Mark Brangstrup Watts is a designated member of Marwyn Capital
LLP ("Marwyn"), which provides corporate finance advice and various
office services to the Company. During the period, services
totalling EUR34k were received from Marwyn (2018: EUR34k). In
addition, Mark's Non-Executive Director fees are paid to Marwyn.
Marwyn was owed a total amount of EUR12k at 30 June 2019 (2018:
EUR12k), which was unsecured.
Mark Brangstrup Watts is an ultimate beneficial owner of Axio
Capital Solutions Limited ("Axio"), which provides company
secretarial, administrative and accounting services to the Group.
During the period, services totalling EUR235k were received from
Axio (2018: EUR302k). Axio was owed an amount of EUR19k at 30 June
2019 (2018: EUR22k), which was unsecured.
11. CONTINGENT LIABILITY
The European Commission issued a press release on 2 April 2019
announcing that, in certain circumstances, the UK Controlled
Foreign Company Financing Exemptions unduly exempted some
multinational groups from these rules. The actions that the UK tax
authorities will take in response to this press release are
uncertain and Zegona continues to monitor the situation. No
provision has been made as it is not currently deemed probable that
Zegona will be required to settle its possible obligation in
relation to this matter. Zegona is still evaluating its potential
exposure which could be up to a theoretical maximum of EUR5
million.
12. POST BALANCE SHEET EVENTS
Interim dividends
Zegona received a dividend on 9 July 2019 from Euskaltel at a
rate of EUR0.17 per share, totalling EUR6,332,498.
Zegona declared an interim dividend on 2 August 2019 at a rate
of 2.5 per share, totalling GBP5,548,379, equivalent to
EUR6,083,880 on the date of announcement. The dividend was paid on
6 September 2019.
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 UNSURKRAKUUR
(END) Dow Jones Newswires
September 27, 2019 02:01 ET (06:01 GMT)
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