TIDMWBI
RNS Number : 8855L
Woodbois Limited
11 September 2019
11 September 2019
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES
OF ARTICLE 7 OF THE MARKET ABUSE REGULATION (EU) 596/2014.
Woodbois Limited
("Woodbois", the "Group" or the "Company")
(AIM: WBI)
Interim Results for the six months to 30 June 2019
CEO's STATEMENT
I am pleased to present the interim report and consolidated
financial statements for Woodbois Limited (the "Company" or the
"Group") for the half year ended 30 June 2019.
-- Name change to Woodbois Limited
-- H1 2019 Revenue $9.3m vs H1 2018 Revenue $6.6m, a 41%
increase YOY with growth from both Forestry and Trading
divisions
-- H1 Gross profit $1.3m vs H1 2018 Gross Profit 0.7m, 83% increase YOY
-- H1 2019 total loss $3.4m vs H1 2018 total loss $5.5m
-- GBP5m equity investment by 1798 Volantis Fund
-- $8.4m net inflows to Internal Trading Fund (ITF)
-- 25% stake in Montara Continental purchased to complete corporate restructuring
-- 5% Perpetual preference shares to be re-structured into 4% convertible bonds
-- Civil works for kilns completed and on schedule to be operational in Q3 2019
-- Civil works to house new sawmill equipment in progress
-- Strong showing in SPOTT report
-- 2018 Sustainability Report released
-- Kevin Milne becomes acting Chairman as Miles Pelham steps down
-- Henry Turcan and Graeme Thomson join board as NED's
Strong Revenue Growth
Following the 60% Year-on-Year revenue growth achieved in 2018,
a further 41% revenue growth over the same period in 2018 was
delivered during H1 2019. Notable revenue increases were recorded
within both Forestry (+30%) and Trading (+45%) divisions. The
strong start to 2019 was assisted by further inflows into our ITF,
providing management with a high level of confidence that as
additional ITF is secured the trading division can deliver further
growth during 2019 and beyond.
This growth in revenue has been achieved with minimal additional
operating expenses, which are annualising just 3% above the FY 2018
run-rate. The cost reduction programme embarked upon 12 months ago
is now largely complete and has resulted in administration expenses
for the first six months of 2019 annualising at 28% below that of
the FY 2018. Operating and administration costs combined total 38%
of revenue for H1 2019 vs 57% of revenue for FY 2018, a distinct
improvement. Every component of costs within the business will
remain under close review with the objective of driving bottom line
performance.
Corporate Consolidation and Institutional Investment
The Group made a dynamic start to 2019, announcing the disposal
of its agricultural assets in Tanzania and the acquisition of the
25% of Montara Continental Limited that it did not own (from Africa
Resource Investment Limited ("ARI")). At that time, the directors
expressed their belief that simplifying the corporate structure and
narrowing the Group's focus to timber trading and production, would
make the Group more attractive to potential investors and trade
finance providers.
Although we had not anticipated immediate institutional grade
investment, these changes taken together with Woodbois' rapid
growth and strong sustainability credentials put the Group on the
radar of the 1798 Volantis Fund, a team within the Lombard Odier
Asset Management group dedicated to UK Small Cap Investment. During
Q1, Volantis invested approximately GBP5m in new ordinary shares as
well as committing to the provision of a loan of $5m for the
purposes of trade finance through the ITF.
We are delighted to have attracted this capital investment, and
with our newly consolidated corporate structure, streamlined
business activities, strengthened balance sheet and continued
growth prospects, we look forward to attracting additional
institutional shareholders to our share register in the future.
Capital structure consolidation
Having dramatically rationalised the corporate structure over
the previous 18 months, including the elimination of 27 subsidiary
companies, one of the board's aims in 2019 was to simplify the
Group's capital structure with the intention of aligning the
interest of all investors.
With that in mind, the Group has proposed to restructure the 5%
perpetual preference share class in Woodbois subsidiary Argento by
buying it back and issuing its holders instead with a convertible
bond issued by Woodbois. The Woodbois convertible bond will have a
5 year tenure, 4% coupon and conversion price of 8p. 100% of the
current preference shareholders have accepted the terms of the
proposed switch. The switch is from a preference share with
variable conversion terms linked to a subsidiary company, to a bond
convertible into Woodbois common stock at a fixed rate. This
simplifies the capital structure and serves to more closely align
management, bondholders and shareholders' interest, as well as
making the Group more investible and easier to value for
institutional investors. The Company will make a separate
announcement upon entering into definitive documentation and the
transaction is expected to complete during October 2019. Full
details of the convertible bond will be available on our website at
www.woodbois.com thereafter.
Forestry division
H1 2019 revenue $3.6m vs full year 2018 revenue $5.6m
The increased levels of production at our production facilities
in Gabon achieved during H2 2018 were largely maintained during H1
2019 despite the inevitable disruption caused by the civil works
being undertaken to house the new kilns and sawmilling equipment.
Disruption at the port in Libreville described in some detail in
the Q2 update of 11 July 2019 led to a back-log of shipments to
customers that started to clear as operations at the port
normalised during August. Gross profit margin of 21% for H1 2019
was in line with FY 2018.
Sawmill
The new 'Techdry' kilns arrived in Gabon from China in March,
and by the end of June all civil works required to accommodate the
kilns was completed. At the time of writing the kilns have just
become operational, comfortably within the timeline forecast.
Bringing kiln-drying onsite rather than outsourcing as done to
date, provides a perfect example of the potential to enhance
margins via investments with very short-term payoffs. As announced
on 14 January 2019, this installation of our own kilns will
directly add $700,000 to the bottom line annually, assuming
existing levels of production.
During Q1 2019, management visited numerous sawmills, veneer and
plywood factories and equipment manufacturers in Gabon, Slovenia,
Turkey, Spain and Morocco to conduct research ahead of placing
orders for new equipment. An entire new sawmilling line combining
Chinese and Slovenian sawmilling equipment was placed on order and
we expect these new lines to become operational before the 2019
year end. These investments will not only increase current levels
of production but are expected also to improve margins by enhancing
recovery levels by at least 10% from the 33% currently being
achieved. Thorough planning by our on-site factory managers has
ensured that the sawmill has maintained consistent output despite
the mechanics and logistics of relocating heavy machinery whilst
simultaneously undertaking substantial construction and civil works
activity in preparation for the arrival of all of the new
equipment.
Veneer factory
The new equipment that arrived at the end of Q1, namely a
debarking machine, two hydraulic lifters and a hydraulic press,
have all been commissioned and are operational. Research is
underway into optimizing the veneer factory via an additional
veneer line or plywood line, but analysis of several months' worth
of data from the factory while working at full capacity must first
be undertaken in order for decisions to be made.
Trading division
H1 2019 revenue $5.7m vs FY 2018 revenue $7.9m
Trading revenues increased by 46% over the 2018 outturn, fuelled
by inflows to our Internal Trading Fund (ITF) detailed previously
in the Q1 report. We expect some margin contraction as we scale the
trading business and gross profit margin of 10% for H1 2019, whilst
down from 12% in FY 2018, is well within our anticipated range. The
final remaining tranche of $2.5m of previously reported ITF
subscription was drawn down at the beginning of June 2019. Revenues
generated from business with third party suppliers increased during
Q2 to a record $3.2m, providing a 60% YOY increase vs Q2 2018
trading revenues. The increased volumes have come largely from
existing suppliers, but with increased levels of trade finance now
in place, we continue to seek relationships with reliable suppliers
of high quality sawn timber and veneers across the Congo basin to
match the global demand for traceable, sustainable hardwood
products generated by our sales team.
Having chosen Mauritius to become a key trading and
administrative hub due to its premier ranking across most African
indices for business and corporate governance, and its geographic
and time zone location between our teams in sub-Saharan Africa and
Europe, we are actively looking to add experienced, high calibre
personnel to our team and to increase trading activity and business
development in Mauritius. In line with this strategy, we have added
two traders to the Mauritius business during Q3 (2019).
Tanzania
Envision, the Tanzanian entity which purchased the Tanzanian
agriculture business from us, has not yet paid the initial proceeds
in accordance with the payment schedule agreed in the Sale and
Purchase agreement ("SPA"). Under the SPA the consideration is
payable by Envision in 12 quarterly instalments. The first
instalment of $250,000 was payable on 30 April 2019. The remainder
is to be paid in 11 equal instalments. The Group has commenced
legal action against Envision to recover the amounts due. The Group
is still settling outstanding creditors (circa $182,000 at 30 June
2019) and apart from minimal winding up expenses the Group has no
ongoing cost commitment in Tanzania.
Board changes
Woodbois received notice on 11 July 2019 from its Non-Executive
Chairman, Miles Pelham, that he would be stepping down with
immediate effect. Since leaving banking in 2017 Mr Pelham has built
Diginex Limited, a start-up blockchain company, into a diversified
global leader in the blockchain arena. Its growth is such that it
will be listed on the Nasdaq with Mr Pelham serving as its
Executive Chairman. Mr Pelham remains fully committed to Woodbois'
future success and remains its largest stakeholder but acknowledged
that he could not adequately service the needs of the Group with
another Chairmanship of a listed entity.
The Board has appointed Kevin Milne as interim Chairman whilst
candidates are vetted, and a replacement found. The Group does not
expect this change to have any material effect on the performance
of the Group. Kevin, who has been NED since August 2015, is a
Chartered Fellow of the CISI and has held leadership and senior
management positions in the UK, Europe, Asia and Australia. Kevin
has extensive experience operating in highly regulated environments
including being a member of the Executive Committee of the London
Stock Exchange Group.
As reported in the RNS of 13 May 2019, Henry Turcan, 45, joined
the Board as Non-Executive Director. Henry has worked in financial
services since 1996, with a focus on equity capital markets. Having
spent the majority of his career advising growth companies within
investment banking, he joined the Volantis team at Henderson Global
Investors in 2015, which subsequently transferred to Lombard Odier
Investment Management in 2017 becoming known as 1798 Volantis.
Henry is a representative of the funds managed or sub-advised by
Lombard Odier Investments Manager group entities, collectively the
Company's largest shareholder.
I am also pleased report that after a wide search Graeme Thomson
has agreed to become Independent Non-Executive Director and
Chairman of the audit committee. Graeme, 62, is a Fellow of the
Institute of Chartered Accountants in England and Wales and has
been a public company director for many decades, as a CEO,
CFO/Company Secretary and as a Non-Executive. His varied commercial
experience, including of Audit and Remuneration Committees, as well
as internationally and of financial matters, will be of
considerable benefit to the Group as we continue to expand.
Mozambique
Following the previously disclosed issues with cutting and
export licenses over the last two years our operation in Mozambique
is now a far leaner and more flexible animal. Operations in
Mozambique typically increase in the second half of the year as
there is a no harvesting period from January to March, and often
into later in the year. Encouragingly, licenses were issued during
April this year.
While the rest of the Group enjoys an aggressive growth mindset,
our recent experience in Mozambique naturally sees us adopt a more
cautious approach there. Our sales team has therefore focused
largely on the domestic market where dunnage for the LNG industry
and housing for workers is starting to create demand for timber and
timber products. The discovery of massive natural gas deposits,
some of the most significant in the world in recent years, and the
advancement of the multi-billion dollar Mozambique LNG project led
by Anadarko will require significant infrastructure enhancement.
This is expected to promote the development of local businesses and
is something we are well placed to capitalise upon.
SPOTT report published by ZSL
As management continues to grow the business, we are keen to be
at the forefront of transparency within the forestry industry.
In its inaugural year of assessment, Woodbois has been placed
7th out of 97 companies on the SPOTT timber producers table, as one
of only 9 other companies which were ranked in the 'higher' segment
of the transparency score range this year. Interestingly perhaps,
all of the other public companies that were placed within the top
20 have a market capitalisation in excess of $2bln.
SPOTT, Sustainability Policy Transparency Toolkit, is an online
platform created by the Zoological Society of London to assess
commodity producers and traders on the public disclosure of each
company's policies and operations, as well as their commitments to
environmental, social and governance (ESG) best practice.
As sustainable forestry management becomes an ever-increasing
focal point in the discussion to mitigate climate change and
deforestation, Woodbois is dedicated to working alongside
organisations such as the ZSL to help assess companies that are at
the forefront of managing tropical forests. That our ESG practices
and the transparency of our operational conduct should be of the
highest standards, remains central to management's medium-term
goals on behalf of all our stakeholders and we look forward to
working with the SPOTT team for the 2019 iteration of Woodbois'
assessment.
To see the SPOTT assessment for all 97 companies, please click
here.
Sustainability report released
The modus operandi at Woodbois has always been to operate in a
sustainable way, engaging with all relevant stakeholders while
building a commercially and developmentally successful business.
The publication of the Woodbois Sustainability Report for 2018
builds on the excellent foundation laid down by last year's
inaugural report and aims to be informative, enhance transparency
and provide data relating to the economic, environmental and social
impacts of our operations. The report also serves to establish a
clear link between the values driving our business and the ways in
which our operations contribute to achieving the United Nations
Sustainable Development Goals. The publication helps to identify
areas that, as a business, we can improve on to further establish
Woodbois as a leader in the sustainable timber space. It can be
found on our website at www.woodbois.com.
To see Woodbois' 2018 Sustainability Report, please click
here.
Looking forward
The Group continues to improve on all fronts and has delivered
further demonstrable progress in the first half of 2019, with
further rapid revenue growth, reduction in administration expenses
and rationalization of the corporate structure.
The next target for the board is for our operations to become
cash-flow positive while maintaining focus on delivering high
quality products and services to our customer base and continuing
to drive the high levels of revenue growth delivered over the last
two years. Achieving this objective will require us to operate our
production facilities with enhanced efficiency and at full
capacity, to scale the trading business while optimising the
deployment of all available trade finance and to continue to manage
costs aggressively across the group. The management team is fully
committed to each of these goals and is highly motivated and
incentivized to pursue them relentlessly.
It is appropriate at this time for me to offer a sincere thank
you to Miles Pelham for his leadership, energy and direction
throughout the last three years. Thanks to his considerable
efforts, the Group is almost unrecognizable from the organization
that he took Chairmanship of in 2016 and the changes in that time
have been overwhelmingly positive. As the largest individual
stakeholder, we anticipate that Miles will continue to monitor the
Group with keen interest while remaining a strong supporter of its
management team.
Special thanks must also go to our outstanding team in Mouila
for their efforts in constructing and commissioning our new kilns
which are available to view at www.woodbois.com/products/lumber
.
The momentum we have built during the first two quarters of 2019
is extremely encouraging and bodes well for the future of the
Group.
Paul Dolan
CEO
Woodbois Limited
Paul Dolan - CEO
Kevin Milne - Interim Chairman
www.woodbois.com +44 (0)20 7099 1940
Arden Partners Plc (Nominated adviser and broker)
Tom Price +44 (0)20 7614 5900
This announcement contains information which was previously
inside information for the purposes of Article 7 of the Market
Abuse Regulation EU Regulation 596/2014.
WOODBOIS LIMITED
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the six month period ended 30 June 2019
Six months to 30 June
Notes 2019 Six months to 30 June Year to 31 December 2018
(Unaudited) 2018 (Unaudited) (Audited)
Continuing operations $'000 $'000 $'000
-------------------------------- --------- ---------------------- ---------------------- -------------------------
Turnover 9,331 6,609 13,448
Cost of Sales (7,988) (5,877) (11,334)
-------------------------------- --------- ---------------------- ---------------------- -------------------------
Gross profit 1,343 732 2,114
Other income 60 23 160
Gain on fair value of
Biological assets - - 1,611
Operating costs (2,763) (1,259) (5,356)
Administrative expenses (759) (2,523) (2,106)
Depreciation (141) (386) (474)
Share based payment expense (173) (634) (658)
Operating loss (2,433) (4,047) (4,709)
Contingent acquisition expense (478) (574) (860)
Gain on sale of Tanzanian
business - - 176
Foreign exchange gain 187 29 263
Finance income - 49 -
Finance costs 5 (631) (198) (444)
-------------------------------- --------- ---------------------- ---------------------- -------------------------
Loss before tax (3,355) (4,741) (5,574)
Taxation 6 24 (23) (951)
-------------------------------- --------- ---------------------- ---------------------- -------------------------
Total loss for the period from
continuing operations (3,331) (4,764) (6,525)
-------------------------------- --------- ---------------------- ---------------------- -------------------------
Discontinued Operations 7 (63) (778) (1,446)
-------------------------------- --------- ---------------------- ---------------------- -------------------------
Loss for the year (3,394) (5,542) (7,971)
-------------------------------- --------- ---------------------- ---------------------- -------------------------
Attributable to:
Owners of the parent (3,394) (4,820) (6,736)
Non-controlling interests - (722) (1,235)
-------------------------------- --------- ---------------------- ---------------------- -------------------------
(3,394) (5,542) (7,971)
-------------------------------- --------- ---------------------- ---------------------- -------------------------
Other comprehensive income:
Currency translation
differences, net of tax (387) (401) (798)
Gain on buy-out of minorities - - 14,373
-------------------------------- --------- ---------------------- ---------------------- -------------------------
Total comprehensive (loss)/
income for the period: (3,781) (5,943) 5,604
Attributable to:
Owners of the parent (3,781) (5,221) 6,839
Non-controlling interests - (722) (1,235)
-------------------------------- --------- ---------------------- ---------------------- -------------------------
(3,781) (5,943) 5,604
-------------------------------- --------- ---------------------- ---------------------- -------------------------
Loss per share from continuing
operations
Basic (cents) 9 (0.92) (1.49) (2.03)
Loss per share from discontinued
operations
Basic (cents) (0.01) (0.25) (0.44)
WOODBOIS LIMITED
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the six month period ended 30 June 2019
Share
Preference Foreign based
Share Share Merger share exchange payment Retained Non-controlling Total
capital premium reserve capital reserve reserve Earnings Total interests equity
$000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000
--------------- -------- -------- --------- ----------- --------- -------- ----------------- -------- ---------------- --------
At 1 January
2018 4,500 22,340 44,487 14,318 (3,918) 979 31,841 114,547 20,608 135,155
--------------- -------- -------- --------- ----------- --------- -------- ----------------- -------- ---------------- --------
Loss for the
period - - - - - - (4,820) (4,820) (722) (5,542)
Other
comprehensive
income
Currency
translation
differences (401) (401) (401)
--------------- -------- -------- --------- ----------- --------- -------- ----------------- -------- ---------------- --------
Total
comprehensive
loss for the
period - - - - (401) - (4,820) (5,221) (722) (5,943)
Issue of
ordinary
shares 483 5,036 - - - - - 5,519 - 5,519
Preference
share
dividend - - - - - - (656) (656) - (656)
Share based
payment
expense - - - - - 634 - 634 - 634
At 30 June
2018 4,983 27,376 44,487 14,318 (4,319) 1,613 26,365 114,823 19,886 134,709
--------------- -------- -------- --------- ----------- --------- -------- ----------------- -------- ---------------- --------
Loss for the
period - - - - - - (1,916) (1,916) (513) (2,429)
Other
comprehensive
income
Gain on
buy-out of
minorities 14,373 14,373 (19,373) (5,000)
Currency
translation
differences - - - - (397) - - (397) - (397)
--------------- -------- -------- --------- ----------- --------- -------- ----------------- -------- ---------------- --------
Total
comprehensive
income for
the period - - - - (397) - 12,457 12,060 (19,886) (7,826)
Transactions
with owners:
Issue of
ordinary
shares 634 2,578 - 3,212 - 3,212
Preference
share
dividend (657) (657) - (657)
Share options
forfeited - - - - - (679) 679 - - -
Share based
payment
expense - - - - - 78 - 78 - 78
At 31 December
2018 5,617 29,954 44,487 14,318 (4,716) 1,012 38,844 129,516 - 129,516
--------------- -------- -------- --------- ----------- --------- -------- ----------------- -------- ---------------- --------
Loss for the
period - - - - - - (3,394) (3,394) - (3,394)
Other
comprehensive
income:
Currency
translation
differences - - - - (387) - - (387) - (387)
--------------- -------- -------- --------- ----------- --------- -------- ----------------- -------- ---------------- --------
Total
comprehensive
loss for the
period - - - - (387) - (3,394) (3,781) - (3,781)
Issue of
ordinary
shares 1,143 5,717 - - - - - 6,860 - 6,860
Reserve
transfer - - (44,487) - - - 44,487 - - -
Preference
share
dividend - - - - - - (656) (656) - (656)
Share options
forfeited - - - - - (109) 109 - - -
Share based
payment
expense - - - - - 173 - 173 - 173
At 30 June
2019 6,760 35,671 - 14,318 (5,103) 1,076 79,390 132,112 - 132,112
--------------- -------- -------- --------- ----------- --------- -------- ----------------- -------- ---------------- --------
WOODBOIS LIMITED
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
As at 30 June 2019
Notes 30 June 2019 30 June 2018 31 December 2018
(Unaudited) (Unaudited) (Audited)
$'000 $'000 $'000
------------------------------------------------ -------- ------------- ------------- -----------------
ASSETS
Non-current assets
Consideration receivable 7 2,547 - 1,841
Biological assets 10 194,708 192,501 194,708
Property, plant and equipment 17,650 20,059 17,081
------------------------------------------------ -------- ------------- ------------- -----------------
Total non-current assets 214,905 212,560 213,630
Current assets
Trade and other receivables 11 6,912 3,349 5,924
Inventory 7,124 6,602 6,738
Cash and cash equivalents 4,269 1,151 1,910
------------------------------------------------ -------- ------------- ------------- -----------------
Total current assets 18,305 11,102 14,572
TOTAL ASSETS 233,210 223,662 228,202
------------------------------------------------ -------- ------------- ------------- -----------------
LIABILITIES
Current liabilities
Trade and other payables 12 (5,303) (4,738) (5,751)
Borrowings 13 (1,909) (5,150) (5,024)
Consideration payable - - (5,000)
Contingent acquisition liability (1,122) (1,024) (1,269)
------------------------------------------------ -------- ------------- ------------- -----------------
Total current liabilities (8,334) (10,912) (17,044)
------------------------------------------------ -------- ------------- ------------- -----------------
Non-current liabilities
Deferred tax 6 (62,655) (61,741) (62,655)
Preference share liability 15 (14,557) (13,244) (13,901)
Borrowings 13 (15,552) (3,056) (5,086)
Total non-current liabilities (92,764) (78,041) (81,642)
------------------------------------------------ -------- ------------- ------------- -----------------
TOTAL LIABILITIES (101,098) (88,953) (98,686)
------------------------------------------------ -------- ------------- ------------- -----------------
NET ASSETS 132,112 134,709 129,516
------------------------------------------------ -------- ------------- ------------- -----------------
EQUITY
Share capital 14 6,760 4,983 5,617
Share premium 35,671 27,376 29,954
Merger reserve 16 - 44,487 44,487
Preference share capital 15 14,318 14,318 14,318
Foreign exchange reserve (5,103) (4,319) (4,716)
Share based payment reserve 1,076 1,613 1,012
Retained earnings 16 79,390 26,365 38,844
------------------------------------------------ -------- ------------- ------------- -----------------
Equity attributable to the owners of the parent 132,112 114,823 129,516
---------------------------------------------------- ---- ------------- ------------- -----------------
Non-controlling interests - 19,886 -
---------------------------------------------------- ---- ------------- ------------- -----------------
TOTAL EQUITY 132,112 134,709 129,516
---------------------------------------------------- ---- ------------- ------------- -----------------
Approved by the board and authorised for issue on 10 September
2019
K Milne
Chairman
WOODBOIS LIMITED
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
For the six month period ended 30 June 2019
Notes Six months to 30 June
Six months to 30 June 2019 2018 Year to 31 December 2018
(Unaudited) (Unaudited) (Audited)
$'000 $'000 $'000
----------------------------------- ---- --------------------------- ---------------------- -------------------------
OPERATING ACTIVITIES
Loss before taxation - continuing
operations (3,355) (4,741) (5,574)
Loss before taxation -
discontinued operations (63) (778) (1,446)
----------------------------------- ---- --------------------------- ---------------------- -------------------------
Loss before taxation (3,418) (5,519) (7,020)
Adjustment for non-cash items:
Movement in foreign exchange (187) (29) (263)
Fair value adjustment of
biological asset - - (1,611)
Depreciation of property, plant
and equipment 614 805 1,625
Movement in inventory provision (149) 665 295
Contingent acquisition expense (147) 450 695
Profit on disposal of Tanzanian
assets - - (176)
Share based payment expense /
reserve transfer 173 634 658
Increase in trade and other
receivables (1,674) (166) (1,852)
(Decrease)/Increase in trade and
other payables (475) 721 1,708
Decrease in consideration payable (5,000) - -
Increase in inventory (237) (1,783) (1,764)
Finance income - (49) -
Finance expense 631 198 444
Cash outflow from continuing
operations (9,869) (4,073) (7,261)
----------------------------------- ---- --------------------------- ---------------------- -------------------------
Income taxes paid (29) - (52)
Interest paid (224) (96) (257)
Net cash flow from operating
activities (10,122) (4,169) (7,570)
INVESTING ACTIVITIES
Purchases of property, plant and
equipment (151) (2,240) (2,825)
Cash outflow for assets under
construction (1,208) - (420)
Net cash inflow/(outflow) from
investing activities (1,359) (2,240) (3,245)
----------------------------------- ---- --------------------------- ---------------------- -------------------------
FINANCING ACTIVITIES
Repayment of loans and borrowings (1,502) (1,448) (1,771)
Proceeds from the issue of
ordinary shares 6,896 5,519 8,731
Proceeds from trade finance
facility 8,446 1,400 3,676
Net cash inflow from financing
activities 13,840 5,471 10,636
----------------------------------- ---- --------------------------- ---------------------- -------------------------
Increase/(Decrease) in cash and
cash equivalents 2,359 (938) (179)
Cash and cash equivalents at start
of period 1,910 2,089 2,089
----------------------------------- ---- --------------------------- ---------------------- -------------------------
Net cash and cash equivalents at
end of period 4,269 1,151 1,910
----------------------------------- ---- --------------------------- ---------------------- -------------------------
WOODBOIS LIMITED
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL
STATEMENTS
1. BASIS OF PREPARATION
The interim financial statements of Woodbois Limited are
unaudited condensed consolidated financial statements for the six
months to 30 June 2019. These include unaudited comparatives for
the six month period to 30 June 2018 together with audited
comparatives for the year to 31 December 2018.
2. SIGNIFICANT ACCOUNTING POLICIES
The condensed consolidated financial statements have been
prepared under the historical cost convention except for the
revaluation of certain financial investments, available for sale
investments and financial assets and liabilities which are included
at fair value.
The condensed interim financial statements have been prepared in
accordance with the requirements of the AIM Rules for Companies. As
permitted, the Group has chosen not to adopt IAS 34 "Interim
Financial Statements" in preparing this interim financial
information. The condensed interim financial statements should be
read in conjunction with the annual financial statements for the
year ended 31 December 2018, which have been prepared in accordance
with International Financial Reporting Standards (IFRS) as adopted
by the European Union.
The condensed consolidated financial statements do not
constitute statutory accounts, as defined under section 244 of the
Companies (Guernsey) Law 2008. It has been prepared on a going
concern basis in accordance with the recognition and measurement
criteria of International Financial Reporting Standards (IFRS) as
adopted by the European Union.
The Directors are satisfied that the Group has sufficient
resources to continue its operations and to meet its commitments
for the immediate future. The Group has therefore adopted the going
concern basis in preparing its condensed interim financial
statements.
The statutory accounts for the period to 31 December 2018 were
approved by the Board of Directors on 7 May 2019 have been reported
on by the Group's auditors, which have been delivered to the
Guernsey Registrar of Companies. The report of the auditors on
those financial statements was unqualified.
IFRS 16, Leases
IFRS 16, Leases, supersedes IAS 17, Leases, IFRIC 4, Determining
whether an Arrangement contains a Lease, SIC-15, Operating
Leases-Incentives and SIC-27, Evaluating the Substance of
Transactions involving the Legal Form of a Lease. The standard sets
out the principles for the recognition, measurement, presentation
and disclosure of leases and requires lessees to account for most
leases under a single on-balance sheet.
Lessor accounting under IFRS 16 is substantially unchanged from
IAS 17. Lessors will continue to classify leases as either
operating or finance leases using similar principles as in IAS 17.
Therefore, IFRS 16 did not have an impact for leases where the
Group is the sublessor.
The Group adopted IFRS 16 using the modified retrospective
method of adoption with the date of initial application of 1
January 2019. Under this method, the standard is applied
retrospectively with the cumulative effect of initially applying
the standard recognized at the date of initial application. The
Group elected to use the transition practical expedient allowing
the standard to be applied only to contracts that were previously
identified as leases applying IAS 17 and IFRIC 4 at the date of
initial application. The Group also elected to use the recognition
exemptions for lease contracts that, at the commencement date, have
a remaining lease term of 12 months or less and do not contain a
purchase option ("short--term leases"), and lease contracts for
which the underlying asset is of low value ("low--value
assets").
a) Nature of the effect of adoption of IFRS 16
The Group has lease contracts for various property, plant and
equipment. Before the adoption of IFRS 16, the Group classified
each of its leases (as lessee) at inception date either as a
finance lease or an operating lease. A lease was classified as a
finance lease, if it transferred substantially all of the risks and
rewards incidental to ownership of the leased assets to the Group;
otherwise it was classified as an operating lease. Finance leases
were capitalised at the commencement of the lease at the inception
date fair value of the leased property or, if lower, at present
value of the minimum lease payments. Lease payments were
apportioned between interest (recognized as finance costs) and the
reduction in lease liability. In an operating lease the leased
property was not capitalised, and the lease payments were
recognised as expense in the consolidated statement of income
(loss) on a straight line basis over the term of the lease. Any
prepaid rent and accrued rent were recognised under trade and other
receivables and trade and other payables, retrospectively.
Under the adoption of IFRS 16, the Group applied a single
recognition and measurement approach for all leases, except for
short-term leases and leases of low-value assets. The standard
provides specific transition requirements and practical expedients,
which have been applied by the Group.
Lease previously classified as finance leases
The Group did not change the initial carrying amounts of
recognised assets and liabilities as the date of initial
application for leases previously classified as finance leases
(i.e., the right-of-use assets and lease liabilities equal the
leased assets and liabilities recognized under IAS 17). The
requirements of IFRS 16 were applied to these leases from 1 January
2019.
Leases previously classified as operating leases
The Group recognised right-of-use assets and liabilities for
those leases previously classified as operating lease, except for
short term leases and leases of low-value assets. The right-of-use
assets for most leases were recognised based on the carrying amount
as if the standard had always been applied, apart from the use of
incremental borrowing rate at the date of initial application. In
some leases, the right-of-use assets were recognised based on the
amount equal to the lease liabilities, adjusted for any related
prepaid and accrued lease payments previously recognised. Lease
liabilities were recognised based on the present value of the
remaining lease payments, discounted using the incremental
borrowing rate at the date of initial application.
The Group has also applied the available practical expedients
wherein it:
- Applied the short-term lease exemptions to leases with lease
term that ends within 12 months at the date of initial
application;
- Used hindsight in determining the lease term where the
contract contains options to extend or terminate the lease.
The Board has evaluated the effect of adopting IFRS 16 on the
Group's consolidated balance sheet and consolidated statement of
comprehensive income (loss) as at 1 January 2019 and has concluded
that the impact is not material.
b) Summary of new accounting policies
Set out below are the new accounting policies of the Group upon
adoption of IFRS 16:
Right--of--use assets
The Group recognizes right--of--use assets at the commencement
date of the lease (i.e., the date the underlying asset is available
for use). Right--of--use assets are measured at cost, less any
accumulated depreciation and impairment losses, and adjusted for
any remeasurement of lease liabilities. The cost of right--of--use
assets includes the amount of lease liabilities recognized, initial
direct costs incurred, and lease payments made at or before the
commencement date less any lease incentives received. Unless the
Group is reasonably certain to obtain ownership of the leased asset
at the end of the lease term, the recognized right--of--use assets
are depreciated on a straight--line basis over the shorter of its
estimated useful life and the lease term. Right--of--use assets are
subject to impairment.
Lease liabilities
At the commencement date of the lease, the Group recognizes
lease liabilities measured at the present value of lease payments
to be made over the lease term. The lease payments include fixed
payments (including in--substance fixed payments) less any lease
incentives receivable, variable lease payments that depend on an
index or a rate, and amounts expected to be paid under residual
value guarantees, if applicable. The lease payments also include
the exercise price of a purchase option reasonably certain to be
exercised by the Group and payments of penalties for terminating a
lease, if the lease term reflects the Group exercising the option
to terminate. The variable lease payments that do not depend on an
index or a rate are recognized as occupancy expense in the period
on which the event or condition that triggers the payment
occurs.
In calculating the present value of lease payments, the Group
uses the incremental borrowing rate at the lease commencement date
if the interest rate implicit in the lease is not readily
determinable. After the commencement date, the amount of lease
liabilities is increased to reflect the accretion of interest and
reduced for the lease payments made. In addition, the carrying
amount of lease liabilities is remeasured if there is a
modification, a change in the lease term, a change in the
in--substance fixed lease payments or a change in the assessment to
purchase the underlying asset.
Short--term leases and leases of low--value assets
The Group applies the short--term lease recognition exemption to
its short--term leases (i.e., those leases that have a lease term
of 12 months or less from commencement date and do not contain a
purchase option). It also applies the lease of low--value assets
recognition exemption to leases of equipment that are considered of
low value (i.e., below $5). Lease payments on short--term leases
and leases of low--value assets are recognized as occupancy expense
on a straight--line basis over the lease term.
IFRIC Interpretation 23, Uncertainty over Income Tax
Treatment
The Interpretation addresses the accounting for income taxes
when tax treatments involve uncertainty that affects the
application of IAS 12, Income Taxes. It does not apply to taxes or
levies outside the scope of IAS 12, nor does it specifically
include requirements relating to interest and penalties associated
with uncertain tax treatments. The Interpretation specifically
addresses the following:
-- Whether an entity considers uncertain tax treatments separately;
-- The assumptions an entity makes about the examination of tax
treatments by taxation authorities;
-- How an entity determines taxable profit (tax loss), tax
bases, unused tax losses, unused tax credits and tax rates; and
-- How an entity considers changes in facts and circumstances.
An entity has to determine whether to consider each uncertain
tax treatment separately or together with one or more other
uncertain tax treatments. The approach that better predicts the
resolution of the uncertainty needs to be followed.
The Group applies significant judgment in identifying
uncertainties over income tax treatments. Since the Group operates
in a complex multinational environment, it assessed whether the
Interpretation had an impact on its consolidated financial
statements.
Upon adoption of the Interpretation, the Group considered
whether it has any uncertain tax positions, particularly those
relating to transfer pricing. The Group's tax filings in different
jurisdictions include deductions related to transfer pricing and
the taxation authorities may challenge those tax treatments. The
Group determined, based on its tax compliance and transfer pricing
study, that it is probable that its tax treatments (including those
for the subsidiaries) will be accepted by the taxation authorities.
The Interpretation did not have a material impact on the interim
financial statements.
Other Accounting Pronouncements and Amendments
IAS 12, Income Taxes
The amendments apply for annual reporting periods beginning on
or after January 1, 2019 and clarify that the income tax
consequences of dividends are linked more directly to past
transactions or events that generated distributable profits than to
distributions to owners. Therefore, an entity recognizes the income
tax consequences of dividends in profit or loss, other
comprehensive income or equity according to where it originally
recognized those past transactions or events.
Since the Group's current practice is in line with this
amendment, it had no impact on the interim financial
statements.
Other accounting pronouncements and amendments
Other accounting pronouncements, and amendments proposed as part
of the Annual Improvements 2015--2017 Cycle that are assessed to
have no impact on the interim financial statements are:
-- Amendments to IFRS 9: Prepayment Features with Negative
Compensation
-- Amendments to IAS 19: Plan Amendment, Curtailment or
Settlement
-- Amendments to IAS 28: Long--term Interests in Associates and
Joint Ventures
-- IFRS 3, Business Combinations
-- IFRS 11, Joint Arrangements
-- IAS 23, Borrowing Costs
3. CRITICAL ACCOUNTING ESTIMATES AND AREAS OF JUDGEMENT
The preparation of the consolidated financial statements
requires management to make estimates and judgements and form
assumptions that affect the reported amounts of the assets,
liabilities, revenue and costs during the periods presented
therein, and the disclosure of contingent liabilities at the date
of the financial statements. Estimates and judgements are
continually evaluated and based on management's historical
experience and other factors, including future expectations and
events that are believed to be reasonable.
Significant items subject to such estimates are set out in the
notes of the Group's 2018 Annual Report and Financial Statements.
The nature and amounts of such estimates have not changed
significantly during the interim period.
4. SEGMENTAL REPORTING
The reportable segments are identified by the Board (which is
considered to be the Chief Operating Decision Maker) by the way
management has organised the Group. The Group operates within two
separate operational divisions comprising forestry and trading.
The Directors review the performance of the Group based on total
revenues and costs, for these two divisions and not by any other
segmental reporting. Please see Note 8 for the segment report.
5. FINANCE COST
6 months 6 months Year to
30 June 30 June 31 December
2019 2018 2018
(Unaudited) (Unaudited) (Audited)
$'000 $'000 $'000
-------------------------------------------- ------------- ------------- --------------
Interest expense (224) (145) (202)
Interest accrued on trade finance facility (407) (53) (242)
Total (631) (198) (444)
-------------------------------------------- ------------- ------------- --------------
6. TAXATION
The accrued tax charge for the six month interim period is based
on an estimated worldwide average effective tax rate of nil per
cent, after allowance for utilisation of tax losses brought forward
in UK and Denmark based subsidiaries (six months to 31 June 2018:
nil per cent).
The Group has recognised a net deferred tax liability of $62.655
million at 30 June 2019 (30 June 2018: $61.741 million, 31 December
2018: $62.655 million) which mainly arose on the revaluation of a
biological asset.
7. DISCONTINUED OPERATIONS
At 31 December 2018 the Group disposed of the agricultural
business and assets in Tanzania, namely Magole Agriculture Limited,
Milama Processing Company Limited, Magole Land Limited and Wami
Agriculture Co. Limited (together the disposal group). Mama Jo's
Fresh Limited was deregistered on 21(st) July 2018.
Results of disposal group:
6 months 6 Months Year to
30 June 2019 30 June 2018 31 December 2018
(Unaudited) (Unaudited) (Audited)
$000 $000 $000
--------------------------------- ------------------ -------------- -------------------
Turnover - 25 109
Cost of sales - (411) (931)
----------------------------------------- ---------- -------------- -------------------
Gross profit / (loss) - (386) (822)
Other income - 13 116
Operating costs - (98) (533)
Administrative expenses (11) (150) (146)
Depreciation - (165) -
Share based payments (60) - (54)
Foreign exchange gain / (loss) 8 8 (7)
Loss before tax (63) (778) (1,446)
Taxation - - -
----------------------------------------- ---------- -------------- -------------------
Loss after tax (63) (778) (1,446)
----------------------------------------- ---------- -------------- -------------------
For the year ended 31 December 2018, $0.238 million depreciation
was included in Cost of Sales (period ended 30 June 2018 $0.105
million).
The total identifiable assets disposed of amounted to $2.324
million and the total consideration was $2.5 million, payable in
cash of $2.015 million and non-cash consideration (assuming a loan)
of $0.485 million. This resulted in a gain on disposal of $0.176
million.
Under the Sale and Purchase Agreement ("SPA") the consideration
is payable by the buyer in 12 quarterly instalments. The first
instalment of $250,000 was payable on 30 April 2019. The remainder
is to be paid in 11 equal instalments. At the time of writing, the
buyer had not yet paid the initial instalment and so the Group has
commenced legal action. Given the uncertainty over the timing of
when it will receive the consideration due, the Group has
classified the consideration as non-current (31 December 2018:
non-current, $1.84 million and current portion $0.659 million).
Expenses incurred post disposal for the account of the buyer
amount to $0.047 million.
8. SEGMENT REPORTING
Segmental information is presented on the basis of the
information provided to the Chief Operating Decision Maker
("CODM"), which is the Board of Directors.
The Group is currently focused on forestry and timber trading.
These are the Group's primary reporting segments. For the six
months ended 30 June 2019 sales made to one customer accounted for
14% of the total turnover. Sales made to a second customer during
the same period accounted for 13% of the total turnover.
The following table shows the segment analysis of the Group's
loss before tax for the six months to and net assets at 30 June
2019:
Unallocated head office costs, discontinued
Forestry Trading operations and intra-group eliminations Total
$000 $000 $000 $000
--------------------------------- --------- --------- -------------------------------------------------- ---------
Income statement
Turnover 3,602 5,729 - 9,331
Cost of Sales (2,847) (5,141) - (7,988)
--------------------------------- --------- --------- -------------------------------------------------- ---------
Gross profit 755 588 - 1,343
--------------------------------- --------- --------- -------------------------------------------------- ---------
Other income 43 3 14 60
Operating costs (2,025) (738) - (2,763)
Administrative expenses - (5) (754) (759)
Depreciation (105) (32) (4) (141)
Share based payment expense (75) (92) (6) (173)
Foreign exchange gain 47 108 32 187
Contingent acquisition expense (239) (239) - (478)
--------------------------------- --------- --------- -------------------------------------------------- ---------
Segment operating (loss)/profit (1,599) (407) (718) (2,724)
Finance costs (208) (423) - (631)
--------------------------------- --------- --------- -------------------------------------------------- ---------
Loss before taxation (1,807) (830) (718) (3,355)
Taxation 24 - - 24
--------------------------------- --------- --------- -------------------------------------------------- ---------
Loss after taxation (1,783) (830) (718) (3,331)
NET ASSETS
Assets: 214,466 40,550 (21,806) 233,210
Liabilities: (19,232) (35,300) 16,089 (38,443)
Deferred tax liability (62,655) - - (62,655)
Net assets 132,579 5,250 (5,717) 132,112
--------------------------------- --------- --------- -------------------------------------------------- ---------
The following table shows the segment analysis of the Group's
loss before tax for the year and net assets at 31 December
2018:
Unallocated head office costs and
Forestry Trading intra-group eliminations Total
$000 $000 $000 $000
----------------------------------- ---------------- -------- ------------------------------------------ ---------
Income statement
Turnover 5,579 7,869 - 13,448
Cost of Sales (4,397) (6,937) - (11,334)
------------------------------------------- -------- -------- ------------------------------------------ ---------
Gross profit 1,182 932 - 2,114
------------------------------------------- -------- -------- ------------------------------------------ ---------
Other income 5 - 155 160
Operating costs (3,443) (1,330) (583) (5,356)
Administrative expenses - (290) (1,816) (2,106)
Depreciation (408) (66) - (474)
Share based payment expense (422) (151) (85) (658)
Foreign exchange (losses) / gains (38) (411) 712 263
Gain on disposal of Tanzanian business - - 176 176
Contingent acquisition expense - (860) - (860)
Gain on fair value of Biological assets 1,611 - - 1,611
------------------------------------------- -------- -------- ------------------------------------------ ---------
Segment operating loss (1,513) (2,176) (1,441) (5,130)
------------------------------------------- -------- -------- ------------------------------------------ ---------
Finance costs - (201) (243) (444)
------------------------------------------- -------- -------- ------------------------------------------ ---------
Loss before taxation (1,513) (2,377) (1,684) (5,574)
------------------------------------------- -------- -------- ------------------------------------------ ---------
Taxation (585) (366) - (951)
------------------------------------------- -------- -------- ------------------------------------------ ---------
Loss after taxation (2,098) (2,743) (1,684) (6,525)
------------------------------------------- -------- -------- ------------------------------------------ ---------
NET ASSETS
Assets: 205,205 11,104 11,893 228,202
Liabilities: (17,303) (9,692) (9,036) (36,031)
Deferred tax (liability) / asset (62,655) - - (62,655)
Net assets 125,246 1,412 2,858 129,516
----------------------------------- ---------------- -------- ------------------------------------------ ---------
9. EARNINGS PER SHARE
Basic earnings per share is based on a loss for the six months
of $4.050 million (being the loss for the six months of $3.394
million adjusted for preference share dividends accrued, classified
as equity, of $0.656 million) attributable to equity holders of the
parent, divided by the weighted average number of ordinary shares
in issue during the period of 432,019,220 (which is exclusive of
99,378 treasury shares). During the period 88,000,000 shares were
issued (see note 14).
10. BIOLOGICAL ASSETS
30 June 30 June 31 December
2019 2018 2018
(Unaudited) (Unaudited) (Audited)
Standing timber $'000 $'000 $'000
------------------------------------------- ------------- ------------- ------------
Carrying value at beginning of the period 194,708 192,501 192,501
Additions - - 596
Fair value adjustment - - 1,611
------------------------------------------- ------------- ------------- ------------
Carrying value at end of period 194,708 192,501 194,708
------------------------------------------- ------------- ------------- ------------
Valuation of the biological assets is reviewed by the Directors
once a year however, nothing has come to our attention since the
last review and the date of issue of these accounts, to indicate
that the assets are potentially impaired or have materially
increased in value since the last review.
The methods and assumptions used in determining the fair value
of standing timber within the forestry concessions held has been
based on discounted cash flow models which require a number of
significant judgements to be made by the Directors in respect of
sales price, production levels, operational cost and discount
rates. Please refer to note 13 of the financial statements for the
year ended 31 December 2018 for more details.
11. TRADE AND OTHER RECEIVABLES
30 June 31 December
2019 30 June 2018 2018
(Unaudited) (Unaudited) (Audited)
$'000 $'000 $'000
----------------------------------------------------- ------------- ------------- ------------
Trade receivables 3,605 942 2,874
Other receivables 237 1,126 824
Deposits 33 28 35
Current tax receivable* 50 25 -
Sales tax recoverable 408 131 242
Consideration due - sale of Tanzanian business -
current portion - - 659
Related party receivable re discontinued operations 58 - -
Prepayments and accrued income 2,521 1,097 1,290
----------------------------------------------------- ------------- ------------- ------------
Total 6,912 3,349 5,924
----------------------------------------------------- ------------- ------------- ------------
*A portion ($0.032 million) of the VAT receivable balance
relates to refunds owing to our operations in Mozambique. According
to VAT legislation in Mozambique, the Group should be able to
obtain a cash refund of the input VAT owing however, our experience
has been that it is only recoverable through utilisation against
Vatable sales. Given that local (VATable) sales in Mozambique is
difficult to predict, it may be that a portion of the balance is
not going to be recovered within 12 months (and should therefore be
classified as long term instead). If we see local sales dropping,
we shall reclassify the amount.
12. TRADE AND OTHER PAYABLES
30 June 31 December
2019 30 June 2018 2018
(Unaudited) (Unaudited) (Audited)
$'000 $'000 $'000
-------------------------------- ------------- ------------- ------------
Trade payables 2,271 3,046 2,621
Contract liabilities 1,968 261 1,249
Accruals 68 402 588
Current tax payable 24 - 27
Other payables 667 506 905
Other related party loans 7 112 -
Provisions 24 60 -
Debt due to concession holders 274 351 361
-------------------------------- ------------- ------------- ------------
Total 5,303 4,738 5,751
-------------------------------- ------------- ------------- ------------
The Directors consider that the carrying amount of trade and
sundry payables approximates to their fair value.
13. BORROWINGS
30 June 31 December
30 June 2018 2018
2019 (Unaudited) (Unaudited) (Audited)
$'000 $'000 $'000
------------------------- ------------------- ------------- ------------
Non-current liabilities
------------------------- ------------------- ------------- ------------
Bank facility 1,998 - -
Business loan 877 1,567 1,256
Internal trade fund 12,657 1,453 3,804
Car loans 20 36 26
------------------------- ------------------- ------------- ------------
15,552 3,056 5,086
------------------------- ------------------- ------------- ------------
Current Liabilities
------------------------- ------------------- ------------- ------------
Bank facility 1,252 3,908 4,394
Business Loan 640 1,225 613
Car loans 17 17 17
------------------------- ------------------- ------------- ------------
1,909 5,150 5,024
------------------------- ------------------- ------------- ------------
Total 17,461 8,206 10,110
------------------------- ------------------- ------------- ------------
During the six-month period ending 30 June 2019, the Group
raised additional trade finance to the value of $8.4 million net of
accrued interest. The internal trade fund accrues interest at a
rate of 11.5% per annum. Interest accrued at 30 June 2019 was
$0.407 million (30 June 2018: $0.053 million, 31 December 2018:
$0.242 million). Other than 1798 Volantis Fund Limited (who
invested $5 million in the fund), who under the terms of the Deed
of Variation, signed in July 2019, will not request repayments
prior to 16 July 2020, investors in the internal trade fund are
required to give 120 days' notice of a request for repayment. At
the time of writing, no investor has given notice of a request for
repayment and as such, the entire fund has been classified as
non-current. Should such notice be received, the relevant portion
would be reclassified as current.
Except for a portion of $5 million that is unsecured, the
internal trade fund is secured by either the trade debtor or
inventory item that it financed.
The bank facility is repayable at $0.313 million a quarter.
14. SHARE CAPITAL
Number $'000
---------------------------------- ------------ ----------
Authorised:
Ordinary shares of 1 penny each Unlimited Unlimited
---------------------------------- ------------ ----------
Allotted, issued and fully paid:
Ordinary shares of 1 penny each
At 1 January 2018 293,279,267 4,500
Issued in the period 34,436,781 483
---------------------------------- ------------ ----------
At 30 June 2018 327,716,048 4,983
Issued in the period 49,735,883 634
---------------------------------- ------------ ----------
At 31 December 2018 377,451,931 5,617
Issued in the period 88,000,000 1,143
---------------------------------- ------------ ----------
At 30 June 2019 465,451,931 6,760
---------------------------------- ------------ ----------
Balances classified as share capital include the nominal value
on issue of the Company's equity share capital, comprising ordinary
shares of 1p each.
During the period ended 30 June 2019, 88,000,000 ordinary shares
with a nominal value of $1.143 million were issued for a cash
consideration of $6.9 million.
As at 31 December 2018 there were existing warrants in issue of
34,436,781 held by third parties, including Miles Pelham
(ex-Chairman) who holds 5,714,286 warrants. The subscription price
for these warrants is 20p and they expire on 28 February 2020.
In January 2019 the Company accepted subscription to 40,000,000
new Woodbois Limited warrants at 10p, from 1798 Volantis Fund
Limited, acting through its discretionary investment manager
Lombard Odier Asset Management (USA) Corp. In July 2019, a deed of
variation amended the subscription price to 8p.
Volantis will be entitled to exercise 50% of the warrants at any
time during the period commencing on the first anniversary of the
drawdown date of the trade finance loan being 1 April 2020 and
expiring on the third anniversary of the drawdown date of the Loan
Agreement. Up to 50% of the warrants will also be exercisable at
any time following the initial drawdown date provided that Volantis
has owned 10% or more of the issued share capital of Woodbois prior
to exercise.
15. PREFERENCE SHARES
31 December
30 June 2019 30 June 2018 2018
(Unaudited) (Unaudited) (Audited)
$'000 $'000 $'000
----------------------------------- ------------- ------------- ------------
Preference share liability 13,901 11,932 13,901
Preference share capital 14,318 14,318 14,318
----------------------------------- ------------- ------------- ------------
Total 28,219 26,250 28,219
----------------------------------- ------------- ------------- ------------
Preference share liability 13,901 12,588 11,932
Preference share dividend accrued 656 656 1,969
----------------------------------- ------------- ------------- ------------
Total 14,557 13,244 13,901
----------------------------------- ------------- ------------- ------------
As at 31 December 2018, the Group had issued 75,000 preference
shares, in Argento Limited (Mauritius subsidiary) at a par value of
$350 per share. The preference shares are convertible into either
ordinary Woodbois Limited shares at a current ratio of 1:2,537 as
of 30 June 2019 or ordinary Argento Limited shares (1:1), at any
time, at the option of the shareholder. Conversion ratios will
continue to be adjusted for any dilution.
The preference shares have priority for an annual dividend
equivalent to 5% of the amount subscribed for the Shares (which
will compound until paid), and paid pro rata for any period up to a
liquidity event and will also participate pro-rata in any further
dividend paid on the ordinary shares. The preference shares have no
maturity date.
The preference shares do not carry the right to vote.
The preference shares have been determined to contain both a
host liability and an equity component and is therefore classified
as a compound financial instrument. In valuing the preference
shares, the fair value of the liability component was determined
first by valuing the preferred shares at the market rate that would
apply to an identical financial instrument without the conversion
option. The average market rate used in determining the fair value
of the liability portion was 11%.
As explained in more detail in the CEO's report, the Group
proposed to restructure the 5% perpetual preference shares in
Woodbois subsidiary Argento by buying them back and issuing the
holders instead with a convertible bond, issued by Woodbois. The
Woodbois convertible bond will have a 5 year tenure, 4% coupon and
conversion price of 8p. 100% of Preference shareholders have
accepted the conversion terms.
16. MERGER RESERVE
As voted on and approved by the Shareholders at the last Annual
General Meeting (19 June 2019), the balance on the merger reserve
was transferred to retained earnings.
17. POST BALANCE SHEET EVENTS
Other than the events related to the missed payment due for the
sale of the Tanzanian business (see note 7) and the conversion of
the preference shares to convertible bonds (see note 15), the
directors are not aware of any events that occurred between the
reporting date and the date of issue of these accounts that require
further disclosure or adjustment.
18. INTERIM FINANCIAL REPORT
A copy of this interim report as well as the full Annual Report
for the year ended 31 December 2018 can be found on the Company's
website at www.woodbois.com.
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 BLGDCIXBBGCG
(END) Dow Jones Newswires
September 11, 2019 02:00 ET (06:00 GMT)
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