TIDMOCT
RNS Number : 1856T
Octagonal PLC
13 November 2019
13 November 2019
Octagonal plc
("Octagonal" or the "Company")
Interim Results
Octagonal (AIM: OCT), announces its unaudited half-year results
for the six months to 30 September 2019. These include the trading
results for the Company's principle trading subsidiary Global
Investment Strategy UK Ltd (GIS) which are being announced along
with the consolidated figures for the Group.
Summary of Octagonal PLC Financial highlights for the six months
to 30 September 2019
-- Unaudited revenues for the six months to 30 September 2019
were GBP3.4 million ("m") (September 2018: GBP3.0m), the increase
is partly due to providing further ancillary services to our
clients around their existing activity
-- Unaudited operating profit for the group for six months to 30
September 2019 was GBP1.12m (September 2018: GBP0.97m)
-- Unaudited operating profit excluding costs associated with
Synergis Capital PLC and GIS HK for the six months to 30 September
2019 was GBP1.4m (2018: GBP1.2m)
-- Net Assets as at 30 September 2019 was GBP10.20m (September 2018: GBP9.20m)
-- Group cash balance as at 30 September 2019 was GBP6.08m (September 2018: GBP5.72m)
This announcement contains inside information for the purposes
of Article 7 of Regulation (EU) 596/2014.
For further information please visit www.octagonalplc.com or
contact:
+44 (0) 20 7048
Octagonal Plc 9400
John Gunn, Chairman
Beaumont Cornish Limited (Nominated Adviser
and Broker) +44 (0) 20 7628
James Biddle / Roland Cornish 3396
www.beaumontcornish.com
Chairman Statement and update on group activities
Global Investment Strategy UK Ltd (GIS)
GIS, the Company's principle trading subsidiary, was pleased to
report revenue of GBP3.36m and profits of GBP1.5m for the 6 months
to 30th September 2019. This was an increase of 12% in revenue and
16.3% in profit compared with the corresponding period last year
(revenue of GBP3m and profits of GBP1.29m for the 6 months to 30th
September 2018).
These improvements have mainly come as a result of improvements
in operating systems and processing efficiencies, giving us the
ability to provide further ancillary services to our clients around
their existing activity. These efficiencies will provide a
long-term benefit for the business as we strive towards greater
costs reductions and expansion of services to clients.
We have further established a new outsourced facility in Mumbai,
which has given us access to system developers at a competitive
cost, enabling us to build logically minded business tools which
have improved our liquidity management and treasury functions.
GIS has also recently engaged with Euroclear/CREST to become a
CREST participant and will shortly engage, under our existing
permissions, in marketing to professional and regulated customers
in the UK market, where we have traditionally not been very active.
We wish to present ourselves as a global settlements and custody
partner to small/medium sized stockbrokers, hedge funds,
proprietary traders and family offices. The addition of our SFC
regulated Hong Kong office has enabled us to expand these services
to offering 24/5 trade execution, settlement and post trade
operations to an international client base. As China starts to
become a global player in equity and debt markets, coupled with the
expansion of the Asia-Pacific (APAC) securities markets GIS and
GISHK will be well placed to offer a service level seldom seen
outside of the bulge bracket Tier 1 banks.
We hope that our shareholders will appreciate that management
has placed considerable time and effort into the development of
improving systems and processes, which has come at the expense of
short-term growth, but this strategy paves a foundation for long
term reward.
Global Investment Strategy Hong Kong
GIS HK is now operational and soft product marketing has
commenced. We had some initial success in attracting both existing
customers to the APAC securities markets and local business looking
for a global reach. The immediate goal is to ensure that the
respective offices support each other and develop with a common
strategy. The HK office made a loss of GBP143,000 for the 6 months
to September 2019 which was pre revenue, so we will be very focused
on seeing an improvement as revenues start to materialise over the
remainder of the year.
SynerGIS
Synergis reported a loss of GBP65,000, after a Research and
Development tax refund of GBP82,000 in relation to the fintech
development from inception of the division and was included in the
6 months to 30(th) September 2019.
We continue our dialogue with the regulator, and we will further
update shareholders as soon as we have anything material to
share.
The business remains operationally ready and ready to commence a
product launch as soon as the regulatory process is complete. The
board remain committed to this enterprise and feel that it sits
well within our operational capabilities and will provide with long
term benefits.
Recent high-profile failures of business offering consumer bonds
have caused concerns for the FCA, so it is only natural that all
new participants need to demonstrate strong competencies. The
recent appointment of Chris Rollason, who was former head of
capital and regulation for Jaywing PLC, to the board of GIS brings
added skills to the Synergis team of market professionals. Chris is
a chartered accountant, and has been a money market trader, before
spending some 20 years in senior roles within strategy, risk and
finance across a range of large banks and financial institutions.
This unique skillset comes at a time when GIS are expanding their
regulatory footprint both within the UK and in Hong Kong and
compliments the existing Board configuration as the business
continues to grow throughout this year and beyond.
Dividend
On 25th September 2019, the Company declared a dividend of 0.1
pence per share which was paid on 18th October 2019.
John Gunn
Chairman
Unaudited Group Income Statement and statement of comprehensive
income
For the 6 months ended 30 September 2019
Unaudited Unaudited Audited
----------------------- ----------------------- ----------
30-Sep-19 30-Sep-18 31-Mar-19
--------------------------------------
GBP'000 GBP'000 GBP'000
-------------------------------------- ----------------------- ----------------------- ----------
Revenue 3,315 3,006 5,311
Cost of sales (710) (643) (1,308)
Gross profit 2,605 2,363 4,003
Administrative expenses (1,482) (1,391) (2,998)
Share based payment expense (63)
-------------------------------------- ----------------------- ----------------------- ----------
Operating profit 1,123 972 942
Other gains and losses - - (16)
Finance income - - -
-------------------------------------- ----------------------- ----------------------- ----------
Profit before tax 1,123 972 926
Taxation 82 (185) 1
-------------------------------------- ----------------------- ----------------------- ----------
Profit for the year 1,205 787 927
-------------------------------------- ----------------------- ----------------------- ----------
Attributable to:
Shareholders in the Parent Company 1,220 869 1,061
Non-controlling Interests (15) (82) (134)
1,205 787 927
-------------------------------------- ----------------------- ----------------------- ----------
Earnings per share attributable
to owners of the parent company
(see Note 3. Below)
Basic and diluted (pence per share)
From continuing and total operations 0.215 0.154 0.187
Fully diluted 0.210 0.150 0.182
-------------------------------------- ----------------------- ----------------------- ----------
Unaudited Group Statement of Financial Position
As at 30 September 2019
Unaudited Unaudited Audited
---------- ---------- ----------
30-Sep-19 30-Sep-18 31-Mar-19
--------------------------------------
GBP'000 GBP'000 GBP'000
-------------------------------------- ---------- ---------- ----------
Non-Current assets
Goodwill 2,869 2,869 2,869
Other Intangibles 723 503 657
Property, plant and equipment 44 68 40
Deferred Tax asset - 67 -
3,636 3,507 3,566
-------------------------------------- ---------- ---------- ----------
Current assets
Available for sale investments 266 31 266
Trade and other receivables 853 796 708
Cash and cash equivalents 6,076 5,717 5,466
7,195 6,544 6,440
TOTAL ASSETS 10,831 10,051 10,006
Current liabilities
Trade and other payables 457 225 532
Current tax liabilities 182 626 561
Borrowings - - -
639 851 1,093
-------------------------------------- ---------- ---------- ----------
Non-Current liabilities
NET ASSETS/(LIABILITIES) 10,192 9,200 8,913
-------------------------------------- ---------- ---------- ----------
Equity
Share capital 285 284 285
Share premium account 171 171 171
Reverse acquisition reserve 679 679 679
Share option and warrant reserve 162 99 162
Retained earnings 8,814 7,841 7,558
-------------------------------------- ---------- ---------- ----------
Equity attributable to owners of the
company 10,111 9,074 8,855
Non- Controlling interests 81 126 58
-------------------------------------- ---------- ---------- ----------
Total Equity 10,192 9,200 8,913
-------------------------------------- ---------- ---------- ----------
Unaudited Group Statement of Changes in Equity
For the 6 months ended 30 September 2019
Share Share Reverse Share Retained Equity Non-controlling Total
capital Premium acquisition option earnings attributable interests equity
reserve reserve to owners
of the
Company
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
----------------- --------- --------- ------------ --------- --------- ------------- ---------------- --------
Balance at
31 March 2017 1,104 3,669 679 - 1,148 6,600 37 6,637
Total
comprehensive
income for
the year - - - - 1,276 1,276 (251) 1,025
Capital
reduction (824) (3,669) - - 4,493 - - -
Dividend Paid - - - - (568) (568) - (568)
Shares issued 4 171 175 - 175
Share based
payment expense - - - 99 - 99 - 99
Adjustment
arising from
change in
non-controlling
interest - - - - 623 623 422 1,045
----------------- --------- --------- ------------ --------- --------- ------------- ---------------- --------
Balance at
31 March 2018 284 171 679 99 6,972 8,205 208 8,413
Total
comprehensive
income for
the year - - - - 1,060 1,060 (134) 926
Capital - - - -
reduction
Dividend paid - - - - (568) (568) - (568)
Share issues 1 - - - 1 - 1
Share based
payment expense - - - 63 - 63 - 63
Adjustment
arising from
change in
non-controlling
interest - - - - 94 94 (16) 78
----------------- --------- --------- ------------ --------- --------- ------------- ---------------- --------
Balance at
31 March 2019 285 171 679 162 7,558 8,855 58 8,913
Total
comprehensive
income for
the year - - - - 1,220 1,220 (15) 1,205
Adjustment
arising from
change in
non-controlling
interest - - - - 36 36 38 74
Balance at
30 September
2019 285 171 679 162 8,814 10,111 81 10,192
----------------- --------- --------- ------------ --------- --------- ------------- ---------------- --------
Unaudited Group Statement of Cash flows
For the 6 months ended 30 September 2019
Unaudited Unaudited Audited
---------- ---------- ----------
30-Sep-19 30-Sep-18 31-Mar-19
GBP'000 GBP'000 .
---------------------------------------- ---------- ---------- ----------
OPERATING ACTIVITIES
Profit/(loss) for the year before
taxation 1,123 972 925
Adjusted for:
Share based payment - - 63
Depreciation 7 7 31
Investment impairment - - 15
Gain on disposal of investment - -
---------------------------------------- ---------- ---------- ----------
Operating cash flows before movements
in working capital 1,130 979 1,034
(Increase)/Decrease in trade and
other receivables (145) (275) (209)
Increase/(Decrease) in trade and
other payables (76) (60) 246
---------------------------------------- ---------- ---------- ----------
Net cash from / (used in) operating
activities 909 644 1,071
Tax paid (262) - -
Net cash used in operating activities 647 644 1,071
---------------------------------------- ---------- ---------- ----------
INVESTING ACTIVITIES
Purchase of property, plant and
equipment (4) (8) -
Development costs (66) (94) (248)
Purchase of investments - - (250)
Related party repayment of loan - (14)
---------------------------------------- ---------- ---------- ----------
Net cash from/ (used in) investing
activities (70) (102) (512)
---------------------------------------- ---------- ---------- ----------
FINANCING ACTIVITIES
Non-controlling interest investment 33 (149) 150
Dividend paid - - (568)
---------------------------------------- ---------- ---------- ----------
Net cash from/ (used in) financing
activities 33 (149) (418)
---------------------------------------- ---------- ---------- ----------
Net (decrease)/increase in cash
and cash equivalents 610 393 142
Cash and cash equivalents at beginning
of the period 5,466 5,324 5,324
Cash and cash equivalents at end
of the period 6,076 5,717 5,466
---------------------------------------- ---------- ---------- ----------
Notes to the interim statement
For the 6 months ended 30 September 2019
1. General information
Octagonal plc is a company incorporated in the England and Wales
with number 6214926, and whose registered office is: 2(nd) Floor, 2
London Wall Buildings, London EC2M 5PP, under the Companies Act
2006. The Company's main activity is that of a financial services
business offering a wide range of services to institutional, family
office and high net worth clients.
The Company's functional currency is Sterling. The Company's
financial statements are presented in Sterling, which is the
Company's presentational currency.
2. Basis of preparation
The financial information set out in this interim report for the
six months ended 30 September 2019 is unaudited and does not
constitute statutory accounts as defined in Section 434 of
Companies Act (2006).
The Company's statutory financial statements for the period
ended 31 March 2019, prepared under IFRS, have been filed with the
Registrar of Companies. The auditor's report on those financial
statements was unqualified and did not contain a statement under
section 498 (2) or (3) of the Companies Act 2006.
These financial statements have been prepared on a going concern
basis under the historical cost convention. The Directors believe
that the going concern basis is appropriate for the preparation of
these interim financial statements as the Company is in a position
to meet all its liabilities as they fall due. These interim
financial statements for the six months to 30 September 2019 were
approved by the Board on 12 November 2019.
3. Earnings per share
The basic earnings per share is based on the profit for the year
divided by the weighted average number of shares in issue during
the year. The weighted average number of ordinary shares for the
period ended year ended 30 September 2019 assumes that all shares
have been included in the computation based on the weighted average
number of days since issue.
Unaudited Unaudited Audited
------------ ------------ ------------
30-Sep-19 30-Sep-18 31-Mar-19
-------------------------------------
GBP'000 GBP'000 GBP'000
------------------------------------- ------------ ------------ ------------
Profit attributable to owners
of the Group 1,220,000 869,000 1,060,000
------------------------------------- ------------ ------------ ------------
Weighted average number of ordinary
shares in issue for basic 568,576,886 564,706,598 567,866,749
------------------------------------- ------------ ------------ ------------
Weighted average number of ordinary
shares in issue for fully diluted
earnings 582,326,886 578,453,598 581,616,749
------------------------------------- ------------ ------------ ------------
Earnings per share (pence per
share)
Basic 0.215 0.154 0.187
Fully diluted 0.210 0.150 0.182
------------------------------------- ------------ ------------ ------------
4. Dividend and post balance sheet events
On 25(th) September 2019, the Company declared a dividend of 0.1
pence per share which was paid on 18(th) October 2019.
5. Distribution
The half yearly report for the six-month period ended 30
September 2019 will shortly be available on the Company's website
(www.octagonalplc.com) or directly from the Company at its
registered address.
-ends-
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END
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