TIDMHNG
RNS Number : 4797N
Hawkwing PLC
01 June 2022
1 June 2022
Hawkwing plc
("Hawkwing", or the "Company")
2021 Final Results
Hawkwing plc (LSE: HNG) announces its audited financial results
for the year ended 31 December 2021.
Financial Highlights
-- Operating loss from continuing operations of GBP0.39 million (2020 loss: GBP0.34 million)
-- Loss before tax of GBP0.39 million (2020 loss: GBP0.34 million)
-- Loss per share from continuing operations of GBP0.0004 (2020 loss: GBP0.019)
-- Raised GBP16.5 million through the issue of Convertible Unsecured Loan Notes
-- Provided a GBP13.7 million loan to IFG to fund the
acquisitions of Northcore Limited and Shade Limited
Keith Sadler, Senior Independent Non-Executive Director,
commented: "Our strategy is to identify opportunities for
acquisition, targeting sectors such as digital marketing, medical
applications, business and financial services and the sports
sector. We are committed to maintaining careful cost controls to
preserve cash as we continue to search for and review various
prospects. On behalf of the Board, I would like to thank
shareholders for their support and we will provide a further update
as and when appropriate opportunities arise."
This announcement contains inside information for the purposes
of Article 7 of EU Regulation 596/2014.
Enquiries:
Hawkwing plc
Keith Sadler Senior Independent Non-Executive
Director +44 20 7618 9100
-----------------
Luther Pendragon
Harry Chathli, Alexis Gore +44 20 7618 9100
-----------------
About Hawkwing plc
Hawkwing is a Standard List Cash Shell. It intends to pursue a
reverse takeover transaction, with the aim of delivering
shareholder value. The board intends to seek a business with the
prospects of being profitable and cash generative. For more
information, please visit www.hawkwing.co
STRATEGIC REPORT
2021 Full Year Results
The Company's headline results are set out as follows:
HEADLINE RESULTS Year ended
31 December Year ended
2021 31 December
2020
GBP000 GBP000
Revenue - -
Operating loss (388) (340)
Headline EBITDA(1) (388) (235)
Loss before tax (90) (340)
Loss per share (GBP)(2) (0.0004) (0.019)
1. Headline EBITDA is operating loss adjusted to remove the
impact of exceptional income/costs. 2020 costs relate to the move
from AIM to the Standard List of the Main Market.
BALANCE SHEET
31 December 31 December
2021 2020
GBP000 GBP000
Non-current assets
Investments in financial assets 14,414 -
Current assets
Trade and other receivables 1,577 43
Cash and cash equivalents 2,311 1,060
Current liabilities
Trade and other payables (90) (32)
Non-current liabilities
Convertible loan notes (15,283) -
Deferred tax (417) -
Net assets 2,512 1,071
Principal Activities And Business Review
As a cash shell, the principal activity of the business in the
year has been to identify potential acquisition opportunities. On
12 July 2021 we announced the potential reverse takeover of
Internet Fusion Group ("IFG"), and on 12 August 2021 the Company
issued GBP16.5 million of Convertible Unsecured Loan stock
("CULS"). GBP13.7 million of the net proceeds of the CULS were then
loaned to IFG on 17 September to acquire Northcore Limited and
Shade Limited (t/a Shade Station). The loan to IFG was secured
against the assets of the two acquisitions and guaranteed by IFG;
it was for a three-year term carrying an 8% per annum interest
rate. In addition, there was a redemption premium depending on when
the loan is repaid. On 13 December 2021, IFG withdrew from the
potential reverse takeover. As set out in the Company's
announcement on 24 December, the Company is in discussions with IFG
to unwind the loan. The Company's listing is currently suspended as
a result of the loan to IFG.
The Company's strategy continues to be to consider opportunities
with an initial focus on acquiring one or more companies in
industries such as digital marketing, medical applications,
business and financial services and the sports sector. T he Board
will continue to review potential targets and will update
shareholders when appropriate, as and when appropriate
opportunities arise. Whilst an acquisition is being sought, the
Board intends to keep costs to a minimum to preserve cash.
PRINCIPAL RISKS AND UNCERTAINTIES
The management of the Company and the execution of the Company's
strategies are subject to certain risks, and the main new areas of
risks the Company faces are in connection with the convertible loan
notes and secured loan receivable. These and the other key business
risks are detailed below.
Identifying suitable acquisition opportunities
The success of the Company's business strategy is dependent on
its ability to identify sufficient suitable acquisition
opportunities. The Company cannot estimate how long it will take to
identify suitable acquisition opportunities or whether it will be
able to identify any suitable acquisition opportunities at all
within one year after the date of admission. If the Company fails
to complete a proposed acquisition (for example, because it has
been outbid by a competitor) it may be left with substantial
unrecovered transaction costs, potentially including fees, legal
costs, accounting costs, due diligence or other expenses to allow
it to pursue further opportunities. Furthermore, even if an
agreement is reached relating to a proposed acquisition, the
Company may fail to complete such acquisition for reasons beyond
its control. Any such event will result in a loss to the Company of
the related costs incurred, which could materially adversely affect
subsequent attempts to identify and acquire another target
business. In lieu of the fact that an acquisition has not been
announced within the first 12 months of Admission the Board will
ask Shareholders to approve to continue pursuing an acquisition for
a further 12 months at its AGM.
Risk management
The risks that the Company faces have been considered and
policies have been implemented to best deal with each risk. The
most significant risks are set out as follows:
Interest rate risk
The Company has both interest-bearing assets and
interest-bearing liabilities. Interest bearing assets comprise of
cash balances which earn interest at floating rates and a loan on
which interest is charged at a fixed rate, plus a redemption
premium. Interest bearing liabilities consist of convertible loan
notes which attract interest at a fixed rate.
The Company's policy is to minimise interest charges through
active cash management. Interest charges on the Company's financial
assets and liabilities form part of a pre-planned and structured
arrangements, and these arrangements are kept under regular
review.
Credit risk
The Company has no trade receivable balances, and the other
receivable balances predominantly relate to the costs of issuing
the convertible loan notes and granting the secured loan receivable
which are due to be reimbursed to the Company under the terms of
the secured loan arrangement. The IFG loan is secured against the
assets of the loan counterparty. In view of the security in place
there is considered to be no significant risk of non-payment.
Liquidity risk
The Company's approach to managing its liquidity risk is to
maintain sufficient cash and other working capital to always meet
its liabilities when they fall due. Liquidity risk and cash
requirements are regularly reviewed by reference to short term cash
flow forecasts and medium-term working capital projections.
Currency risk
The Company's only current exposure to currency risk is with
regard to amounts held in foreign currency bank accounts. The
non-sterling cash balances at 31 December 2021 were US$60 (2020:
US$130).
COVID-19
Trading conditions are likely to remain dynamic amid social and
market uncertainty related to the Covid-19 pandemic. The Company
continues to monitor the situation however, the full impact of the
Covid-19 pandemic on the Company will depend on a variety of
factors including the length of time any restrictions on social
movement are in place and the extent to which further measures are
required. The Company is of the opinion that the operations and
business model of the Company should be able to accommodate a
relatively high degree of variability.
Key Performance Indicators (" KPI's")
Following the divestment of all its investments in group
undertakings, the Company no longer has any operational businesses
using KPI's. As a result, performance against KPIs is not presented
within these financial statements.
The Company's immediate future performance criteria relate to a
successful future acquisition/reverse takeover.
Environmental policy
The Company is committed to minimising the environmental impact
of the activity of its employees through the application of modern
working practices to reduce business miles travelled.
Employees
The Company is an Equal Opportunities Employer and no job
applicant or employee receives less favourable treatment on the
grounds of age, sex, marital status, sexual orientation, race,
colour, religion or belief.
It is the policy of the Company that individuals with
disabilities, whether registered or not should receive full and
fair consideration for all job vacancies for which they are
suitable applicants. Employees who become disabled during their
working life will be retained in employment whenever possible and
will be given help with any rehabilitation and retraining.
Corporate and social responsibility
The Board recognises the growing awareness of social,
environmental and ethical matters and it endeavours to take account
of the interest of the Company's stakeholders when operating the
business.
Human rights
Whilst the Company does not have a specific human rights policy,
it takes seriously the responsibility to respect human rights.
Fairness and integrity are an important part of the way the
business is run and employees are encouraged to raise any concerns
in this area to management at the earliest opportunity.
Anti-corruption and anti-bribery
The Company takes seriously the risks of its operations
associated to corruption and fraud. The Company has implemented up
to date internal control procedures to mitigate the risks of
corruption and fraud and the Board acknowledges its responsibility
for maintaining these improved processes.
Engagement with employees
The Company currently does not have any employees (other than
directors) or customers but recognises that the long-term success
of the business relies on effective engagement with customers and
employees.
Engagement with suppliers
The Company's only suppliers currently are those supplying
professional services. The Company manages relationships with
suppliers as closely as possible to ensure the services provided
meet the Company's high standards.
Engagement with shareholders
The Board recognises the importance of effective communication
with its shareholders. A range of corporate information is
available on the Company's website, and this statement and the
information within the Company's Annual Report provide details to
stakeholders on how the Company is governed. Company performance is
communicated to its shareholders and the market in its results
announcements, with further trading updates made where required and
appropriate.
Events since the year end
There have been no significant events since the year end.
Section 172 Statement
The Directors set out their statement of compliance with s172
(1) of the Companies Act 2006 which should be read in conjunction
with the rest of the annual report.
The Directors of the Company have a duty to promote the success
of the Company. A director of the Company must act in a way they
consider, in good faith, to promote the success of the Company for
the benefit of its members and in doing so have regards (amongst
other matters) to:
-- The likely consequence of any decision in the long term;
-- The interest of the Company's employees;
-- The need to foster the Company's business relationships with
suppliers, customers and others;
-- The impact of the Company's operations on the community and the environment;
-- The desirability of the Company to maintain a reputation for
highest standards of business conduct; and
-- The need to act fairly between members of the Company.
The Directors are committed to developing and maintaining a
governance framework that is appropriate to the business and
supports effective decision making coupled with robust oversight of
risk and internal controls.
Dividends
The Directors, having consideration to the cash resources of the
Company, do not propose to pay a dividend for the financial year
(2020: Nil).
Cash flow and net debt
The Company's cash balance as at 31 December 2021 was GBP2.3
million (2020: GBP1.1 million) and it had GBP16.5 million of
Convertible Unsecured Loan Notes as at 31 December 2021.
Approved by the Board of Directors and signed on its behalf
by:
Dwight Mighty
Director
Extracted from directors' responsibilities statement pursuant to
the Disclosure and Transparency Rules
Each of the Directors; being Keith Sadler; Ken Wotton; Ian
Robinson and Dwight Mighty (all Non-Executive) confirm that, to the
best of each person's knowledge:
a. the financial statements, prepared in accordance with the
applicable set of accounting standards, give a true and fair review
of the assets, liabilities, financial position and profit or loss
of the Company; and
b. the Strategic Report contained in the Annual Report includes
a fair review of the development and performance of the business
and the position of the Company, together with a description of the
principal risks and uncertainties that it faces.
The directors are responsible for the maintenance and integrity
of the corporate and financial information included on the Hawkwing
plc website. Legislation in the United Kingdom governing the
preparation and dissemination of financial statements may differ
from legislation in other jurisdictions.
By order of the Board
Keith Sadler
Senior Independent Non-Executive Director
Condensed Income statement
Income Statement
For the year ended 31 December 2021
2021 2020
Note GBP000 GBP000
Administrative expenses (410) (340)
Other operating income 22 -
______
-------
Operating loss 3 (388) (340)
Headline EBITDA (388) (235)
Exceptional costs 3 - (105)
______
-------
Operating loss (388) (340)
Other gains and losses 1,029 -
Finance costs (731) -
______
-------
Loss before taxation (90) (340)
Income tax 4 70 -
______
-------
Loss for the year (20) (340)
(Loss per share from continuing operations:
Basic 2 (0.0004) (0.019)
Diluted 2 (0.0004) (0.019)
No statement of Comprehensive Income has been produced as all
items pass through the Income Statement
Condensed Balance Sheet
As at 31 December 2021
2021 2020
Note GBP000 GBP000
Non-current assets
Investments in financial assets 14,414 -
---------- ----------
Current assets
Trade and other receivables 1,577 43
Cash and cash equivalents 2,311 1,060
__________ __________
Total current assets 3,888 1,103
Current liabilities
Trade and other payables (90) (32)
Net current assets 3,798 1,071
Non-current liabilities
Convertible loan notes (15,283) -
Deferred tax liabilities (417) -
---------- ----------
(15,700) -
---------- ----------
Net assets 2,512 1,071
========== ==========
Equity
Share capital 5 3,731 3,731
Share premium 30,056 30,056
Option premium reserve 1,461 -
Merger reserve 251 251
Retained loss (32,987) (32,967)
Total equity 2,512 1,071
========== ==========
Condensed Statement of Changes in Equity
For the year ended 31 December 2021 and 2020
Share Share Option Merger Retained Total
capital premium premium reserve loss
reserve
GBP000 GBP000 - GBP000 GBP000 GBP000
Balance at 1 January
2020 2,869 29,648 - 251 (32,627) 141
---------- ---------- ---------- ---------- ---------- --------
Total comprehensive
expense for the year - - - - (340) (340)
Issue of share capital 862 408 - - - 1,270
Balance at 31 December
2020 3,731 30,056 - 251 (32,967) 1,071
Total comprehensive
expense for the year - - - - (20) (20)
Equity component of
convertible loan notes - - 1,948 - - 1,948
Deferred tax on equity
component of convertible
loan notes - - (487) - - (487)
Balance at 31 December
2021 3,731 30,056 1,461 251 (32,987) 2,512
========== ========== ========== ========== ========== ========
Condensed Statement of Cash Flows
For the year ended 31 December 2021
2021 2020
Note GBP000 GBP000
Net cash flows used in operating activities 6 (1,549) (338)
Investing activities
Advance of loan receivable (13,700) -
Net cash used in investing activities (13,700) -
Financing activities
Net proceeds on issue of shares - 1,227
Proceeds on issue of convertible loan notes 16,500 -
Net cost from financing activities 16,500 1,227
Net increase in cash and cash equivalents 1,251 889
Cash and cash equivalents at beginning of the year 1,060 171
Cash and cash equivalents at end of the year 2,311 1,060
Principal accounting polices
General information
Hawkwing PLC (the "Company") is incorporated and domiciled in
the England and Wales under the Companies Act. The Company is a
public limited company and the registered office address is: The
Walbrook Building, 25 Walbrook, London, England, EC4N 8AF. The
Company's principal activity is set out as part of the Strategic
Report.
The accounting policies set out below have, unless otherwise
stated, been applied consistently to all periods presented in the
financial statements. Judgements made by the Directors in the
application of these accounting policies that have a significant
effect on the financial statements together with estimates with
significant risk of material adjustment in the next year are set
out within these accounting policies.
Basis of preparation
The financial statements have been prepared in accordance with
IFRS, as adopted by the United Kingdom, including interpretations
issued by the International Financial Reporting Interpretations
Committee, applicable to companies reporting under IFRS and the
Companies Act 2006 applicable to companies reporting under
IFRS.
The financial statements have been prepared under the historical
cost convention, except where fair value accounting is used.
Functional, presentational and foreign currency translation
The functional and presentational currency of the Company is
Sterling. Transactions in currencies other than the Company's
functional and presentational currency are recorded at the rate of
exchange at the date of the transaction or, if hedged, at the
forward contract rate.
Standards and interpretations in issue not yet adopted
There are no new standards or amendments in issue but not yet
adopted that are either applicable to the financial statements of
the Company or that would have any material impact on the financial
statements of the Company.
Application of new standards in issue
For the preparation of these financial statements, the following
new or amended standards have been adopted for the financial year
beginning 1 January 2021:
-- Amendments to IFRS 9, IAS 39, IFRS 4, IFRS 7 and IFRS 16
Interest Rate Benchmark (effective 1 January 2021)
-- IFRS 16 Leases Covid-19 Related Rent Concessions beyond 30
June 2021 (effective 1 April 2021)
The adoption and implementation of these new or amended
standards has had no impact on the Company's financial
statements.
Going concern
The Company raised GBP1.3m, before costs, in September 2020 and
issued convertible loan notes for proceeds of GBP16.5m in August
2021. After an onward secured loan of GBP13.7m in September 2021
the Company has GBP2.3m in cash on its balance sheet at the year
end. The directors consider that the security arrangements in place
on the loan receivable are such that loan and associated interest
and redemption premium will be fully recoverable. The Company has
minimal ongoing costs which reflect the costs of administrating its
listing on the London Stock Exchange.
Based on the current cash availability and predicted expenditure
levels, the directors believe the Company's resources are
sufficient to allow the Company to meet its obligations as they
fall due for the foreseeable future, and as a minimum for a period
of at least 12 months from the date of approval of these financial
statements. Consequently, the Directors will continue to prepare
the financial statements on a going concern basis.
1. Segmental analysis
The Company's single reportable segment is that of its
activities as an investment holding company. This activity takes
place wholly in the United Kingdom.
2. Loss per share attributable to ordinary shareholders
2021 2020
per share per share
GBP GBP
Basic loss per share (0.0004) (0.019)
Diluted loss per share (0.0004) (0.019)
The loss attributable to ordinary shareholders and weighted
average number of ordinary shares for calculating diluted earnings
per ordinary share are identical to those used for basic loss per
ordinary share for the years ended 31 December 2020 and 2021. All
share options formerly in issue had expired.
The calculation of loss per share is based on the following
data:
2021 2020
GBP000 GBP000
Loss for the purposes of basic earnings
per share being net loss attributable
to owners of the Company (20) (340)
Number of Shares
Weighted average number of shares
in issue: 50,288,019 18,127,232
There were no shares with a dilutive, or potentially dilutive,
impact (2020: nil).
3. Operating loss
The following are included in operating loss for the year:
2021 2020
GBP000 GBP000
Exceptional costs (see analysis
below) - 105
Staff costs 176 18
Auditor's remuneration (see note
4) 38 33
Lease payments 2 2
Foreign exchange losses 1 -
The exceptional costs/(income) relate to:
2021 2020
GBP000 GBP000
Costs relating to the move to the LSE
Standard List - 105
Exceptional costs - 105
The Company's lease payments entirely relate to short term
leases which, in accordance with IFRS 16 Leases, are recognised as
an expense on a straight-line basis over the lease term.
4. Tax
2021 2020
GBP000 GBP000
Current taxation
UK corporation tax - -
Deferred tax
Origination and reversal of timing (70) -
differences
Total tax credit (70) -
The charge for the year can be reconciled to the income
statement as follows:
2021 2020
GBP000 GBP000
Loss before tax (90) (340)
Tax credit at the UK corporation
tax rate of 19% (2020: 19%) (17) (65)
Effects of:
Losses (utilised)/not recognised (36) 65
Adjustment for changes in tax rate (17) -
Tax (credit) / charge for the year (70) -
The Company has tax losses carried forward of GBP982,784 (2020:
GBP1,284,693) in respect of which no deferred tax asset has been
recognised due to uncertainty of the Company's expected future
profitability.
Changes to UK corporation tax rates were substantively enacted
by the Finance Bill 2021 on 24 May 2021. These included an increase
of the corporation tax rate to 25% from 1 April 2023. As this
change was substantively enacted at the balance sheet date,
deferred tax is recognised at a rate of 25% in the current
year.
5. Share capital
The issued share capital of the Company is as follows:
Share Capital Share Capital
Ordinary Deferred
Shares Shares
GBP000' GBP000'
---------------------------- --------------
At 1 January 2020 2,869 -
Sub division and issue of
shares on 29 June 2020 (2,725) 2,725
Ordinary shares issued on
30 September 2020 862 -
Share capital as at 31 December
2020 and
31 December 2021 1,006 2,725
5. Share capital (continued)
The movement in share capital is set out below.
Number Number
Ordinary Deferred
Shares Shares
------------------------------- ---------------------
Ordinary shares of GBP0.001
each
At 1 January 2020 143,427,199 -
Issue of shares on 29 June
at GBP0.02 1 -
Sub division of shares on
29 June 2020 into ordinary
shares of GBP0.02 (136,255,840) -
Issue of deferred shares
on 29 June 2020 at GBP0.019
per share - 143,427,200
Ordinary shares issued on
30 September 2020 43,116,659
Share capital as at 31 December
2020 and
31 December 2021 50,288,019 143,427,200
On the 29 June 2020 the Company completed a 20:1 share
consolidation.
On 30 September 2020 the Company moved to the Standard Segment
of the Official List and raised GBP1.293 million by placing
43,116,659 at 3p per share.
The ordinary shares confer the right to receive a dividend, the
right to one vote per share and the right to participate in a
distribution on a winding up of the Company or a return of
capital.
The deferred shares confer no rights to receive a dividend or
other distribution, no right to participate in income or profit and
no right to receive notice or speak or vote at a general meeting.
They solely confer the right on the return of capital after the
nominal value together with the GBP100,000,000 has been paid to the
ordinary shareholders.
6. Notes of Cash Flow Statement
2021 2020
GBP000 GBP000
Loss before taxation (90) (340)
Adjustments for:
Other gains and losses (1,029) -
Finance costs 731 -
Foreign exchange 1 -
Expenses paid with issue of shares - 43
Operating cash flows before movements
in working capital (387) (297)
(Increase)/decrease in receivables (1,188) 20
Increase/(decrease) in payables 26 (61)
Net cash flows used in operating
activities (1,549) (338)
6. Notes of Cash Flow Statement (continued)
Cash and cash equivalents comprise cash and short-term bank
deposits with an original maturity of three months or less. The
carrying amount of these assets is approximately equal to their
fair value.
The Company's net cash has moved as follows during the year:
1 January Cash flow Non-cash 31 December
2021 Movements 2021
GBP000 GBP000 GBP000 GBP000
----------- ----------- ----------- -------------
Cash and bank
balances 1,060 1,251 - 2,311
Net cash 1,060 1,251 - 2,311
7. Annual report and accounts
The Company will shortly be publishing its annual report and
accounts including a notice of AGM. These will be made available on
the Company's investor relations website at www.hawkwing.co . The
AGM is to be held at the offices of DAC Beachcroft LLP, 25
Walbrook, London EC4N 8AF at 11 a.m. on 24 June 2022.
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(END) Dow Jones Newswires
June 01, 2022 02:01 ET (06:01 GMT)
Hawkwing (LSE:HNG)
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