TIDMDCI
RNS Number : 9700M
Dolphin Capital Investors Limited
27 September 2021
27 September 2021
DOLPHIN CAPITAL INVESTORS LIMITED
("DCI" or "Dolphin" or the "Company"
and together with its subsidiaries the "Group")
Half Year Results for the six months ended 30 June 2021 and
Trading Update
Summary
-- Total Group Net Asset Value ("NAV") of EUR152.0 million and
EUR145.0 million before and after Deferred Tax Liabilities ("DTL").
This represents a decrease of EUR4.2 million and EUR3.9 million
(2.7% and 2.6%) respectively compared to 31 December 2020. The NAV
reduction is principally due to operational, finance, corporate and
management expenses.
-- Sterling NAV per share as at 30 June 2021 stood at 15p before
DTL and 14p after DTL, versus 16p and 15p, a 7.6% and 7.5% decrease
before and after DTL respectively, compared to 31 December 2020.
The Sterling NAV per share reduction mainly reflects the factors
mentioned above and was enhance d by the 5.0% depreciation of the
Euro versus the Sterling during the period.
-- Total Debt of EUR7.7 million with a Group total debt to gross
asset ratio of 3.7% as at 30 June 2021 (31 December 2020:
3.0%).
-- On 3 June 2021 Dolphin entered into a loan facility of
EUR15.0 million with two institutional private credit providers.
The first tranche of EUR1.75 million was drawn down on 4 June 2021
and the second tranche of EUR13.25 million was drawn down on 16
July 2021. An amount of EUR1.5 million has been already repaid
through the proceeds generated from the sale of the Company's
interests in the LaVanta project.
-- Construction works at the One&Only Kea Island ("OOKI")
continue with a target of completion for the 2022 tourist season.
Internal roads, and structural works are well advanced and the
works have shifted to mechanical, electrical and architectural
finishes. Furthermore, procurement for FF&E and OS&E has
also begun. In parallel, we have been able to source significant
demand for the Private Homes available at the project through real
estate agents, DCP's network, as well as dedicated social media
campaigns and related PR activities in co-operation with
One&Only. We have already signed and received deposits from
nine sales on an off-plan basis. We are currently in advanced
discussions with several other potential purchasers and expect a
number of additional sales to be signed by the end of the year.
-- At our Kilada Country Club, Golf and Residences development
("Kilada"), construction works continued with a ll key contractors
having been appointed. Earthworks in approximately half the project
area are complete with the specialized golf contractor working in
those areas. Most roads of the first phase have also been opened
and key infrastructure works have also been installed. In addition
to the above, the final notarial Deed for the acquisition of 24
founder plots in Kilada by Amanzoe for a EUR10.0 million
consideration was concluded on 2 August 2021 which, together with
the preferred equity investment agreement entered into on 19
December 2019, fully cover the Kilada first phase development
costs. During the period, two new reservation agreements for the
sale of residential plots have been signed.
-- Gross sales of Aristo Developers Ltd ("Aristo"), a 47.9% DCI
affiliate, d uring the six months to June 2021 declined by 12%
compared to the 2020 corresponding period, primarily due to the
termination of the Cyprus citizenship investment programme and the
worldwide travel restrictions imposed following the COVID-19
pandemic which made it impossible for Chinese and other Asian
purchasers (formerly Aristo's core client market) to travel to
Cyprus.
-- For the remaining assets progress is being made to advance permitting.
-- As reported on 1 July 2021, the Company's Board of Directors
was changed with the appointment of three new Board members, namely
Martin Adams, Nicholas Paris and Nicolai Huls, who joined the Board
as non-executive Directors, with Martin Adams becoming Chairman. In
addition, the composition of the following Board committees has
been revised:
o Audit Committee: to provide oversight of the financial
reporting process, the audit process, the system of internal
controls, overall compliance with laws and regulations and the
review of the budgetary process. The Audit Committee is chaired by
Nick Paris.
o Nomination and Corporate Governance Committee: to evaluate the
Company's corporate governance policies and programmes and
principles. The Corporate Governance Committee is chaired by
Nicolai Huls.
-- Since their appointment, the Directors have also undertaken,
in co-operation with the Company's Investment Manager, a strategic
review of DCI's overall investment portfolio and realisation
processes, the investment management arrangements, corporate
governance, operating costs and cash flows. The strategic review
has progressed and its conclusions will be disclosed in the coming
weeks.
For further information, please contact:
Dolphin Capital Investors
Martin Adams martin@vietnamfund.com
Dolphin Capital Partners
Miltos E Kambourides miltos@dolphincp.com
Panmure Gordon (Broker)
Dominic Morley +44 (0) 20 7886 2500
Grant Thornton UK LLP (Nominated Adviser)
Philip Secrett +44 (0) 20 7383 5100
A. Chairman's Statement
Dear Shareholder ,
Three new independent directors, Nicolai Huls, Nick Paris and I,
were appointed to the Board of Dolphin Capital Investors Plc (the
"Company" or "DCI") on 30 June 2021 to replace the three resigning
directors. The first three months of our appointment has been
somewhat of a baptism of fire. We have climbed a steep learning
curve thanks in large part to our colleague, Miltos Kambourides,
who has been a non-independent director since DCI's launch in 2005
, and his colleagues at Dolphin Capital Partners ("DCP"), the
investment manager. We have already travelled to Greece and Cyprus
on several occasions, including visits to the key assets, met with
the auditors and valuers and held two board meetings, two audit
committee meetings and a corporate governance committee meeting as
well as many informal discussions with DCP's senior management
team.
As we were not board members during the 6 month period to which
the half year financial statements relate, we have relied on the
valuations carried out for the 2020 annual report, updated for
developments reported to the Company by DCP. As DCP, in effect,
prepares the Group's consolidated financial statements, we have
relied on their systems and processes to ensure integrity and
consistency with past practice.
Summary of Financial Performance & Challenges
The half year financial statements show a 7.6 % decline in
Sterling net asset value ("NAV") per share before DTL from 16p per
share on 31 December 2020 to 15p per share on 30 June 2021. The net
loss after tax in the first half of 2021 was EUR 3.0 million (first
half of 2020: EUR 5.4 million). Net cash inflow in the first half
of 2021 was EUR 1.8 million.
As at 30 June 2021, the DCI Group had three principal
liabilities:
-- EUR 1.7 million (now EUR 13.5 million following a further
drawdown and partial repayment in July 2021) under a term loan
facility, repayable no later than 3 December 2022 , unless extended
by a further 6 months at the option of the Company;
-- EUR 4.3 million owed to DCP in the form of accrued but unpaid
investment management fees (now EUR 3.2 million); and
-- EUR 6.3 million owed to PBZ, the Croatian lender to the Livka
Bay investment (now EUR 5.1 million).
The principal immediate financial challenge facing DCI is
meeting the Company's cash flow obligations towards creditors while
maximising the equity value upon realisation of the individual
assets. The EUR 15.0 million term loan facility signed in June 2021
is expensive and has a relatively short maturity. DCP remains
optimistic that a balance can be struck between early realisations
of investments to raise funds to meet liabilities; and disposals at
attractive prices.
Investment Environment
Greece
After a decade in which Greece found itself enduring three
bail-out programmes and economic collapse, the pragmatic policies
advocated by centre-right prime minister Kyriakos Mitsotakis since
2019 have significantly bolstered Brussels' confidence in the Greek
economy.
Fitch has affirmed Greece's long term debt rating at 'BB' with a
stable outlook. Much of Greece's public debt is concessional in
nature, resulting in relatively low debt-servicing costs and a long
average maturity of 19 years. The inclusion by the European Central
Bank of Greek government bonds in its pandemic emergency purchase
programme, will support availability and low cost of finance for
the Greek Government.
The European Commission projects that Greece's economy will grow
by 4.3% in 2021 and 6.0% in 2022, with inflation remaining muted.
The easing of travel restrictions and social distancing measures
are supporting services activity, in particular tourism, and
exports. The importance of tourism to the Greek economy makes
Greece's economic outlook especially reliant on the successful
rollout of vaccination campaigns in the EU and internationally.
Substantial disbursements under the EU-funded EUR31 billion
Recovery and Resilience Plan for Greece are expected to underpin
investment in 2021 and 2022. Greek initiatives such as a common
COVID-19 certificate were readily taken up throughout the European
Union.
On the downside, the financial system remains weak and the high
levels of non-performing loans ("NPLs") will continue to constrain
new bank lending to the private sector. The Greek e conomic
recovery could stall if there is a renewed rise in COVID-19
infections, which will discourage foreign tourism, and if labour
market reforms are rolled back.
Cyprus
The European Commission projects that Cyprus' economy will grow
by 4.3% in 2021 and 3.8% in 2022. The easing of travel restrictions
and social distancing measures are providing a boost to tourism,
which occupies a dominant position in the economy. The EU's EUR1.2
billion Recovery and Resilience Plan for Cyprus will provide
significant support for Cyprus' continued economic growth. Downside
risks to the economic recovery are mainly related to COVID-19
infections, new variants and vaccination coverage, which could
exacerbate pressures on public finances and banks' NPLs. Fitch
continues to rate Cypriot long term bonds and banks at BBB-, with a
stable outlook for public debt and a negative outlook for banks.
Cyprus' open economy makes it vulnerable to external shocks, but,
in the past, this flexibility has also contributed to quick
economic turnarounds and recovery.
Unlike elsewhere in the EU, residential property prices in
Cyprus fell during the pandemic, largely because of a collapse in
foreign demand caused by the difficulties of international travel
and the scrapping of the country's controversial citizenship scheme
in late 2020. Residential property prices in Cyprus fell by an
average of 2.7% in the first quarter of 2021. Given attractive
rental yields, there are positive indications of a recovery in
residential property prices as the number of foreign visitors picks
up.
Croatia
According to the European Commission, the Croatian economy is
projected to grow by 5.4% in 2021 and 5.9% in 2022. Rising domestic
and foreign demand are underpinning Croatia's economic recovery.
The service sector represents almost 60% of Croatia's economy, of
which tourism is by far the most important component, comprising
almost a quarter of GDP.
Croatia is entitled to draw up to EUR6.3 billion (12.8% of 2020
GDP) in grants and loans from the EU Recovery and Resilience
Facility, in addition to EUR1 billion (2% of GDP) from the EU
Solidarity Fund for earthquake reconstruction and EUR EUR12.6
billion (25.6% of GDP) in the 2021-27 Multi-Annual Funding
Facility. As such, annual EU fund inflows could reach up to 5% of
Croatia's GDP. However, the rapidly tightening labour market and a
stalled economic reform programme could delay Croatia's ability to
draw on the EU funds. There is also increasing concern that
Croatia's capacity to absorb the funds lags behind the EU average.
Fitch rates Croatia's long term debt at 'BBB-' with a stable
outlook.
Despite the pandemic and the two major earthquakes that struck
the Zagreb area in 2020, a limited supply of new residential
property in Croatia and low transaction volumes have caused
property prices to remain resilient.
Investment Portfolio
During the short period since the board changes occurred, we
have witnessed first-hand the economic effects summarised above on
the investment portfolio.
From a portfolio perspective, the Board is of the view that
DCI's real value lies in the One&Only Kea Island ("OOKI") and
the Kilada Hills Golf Resort ("Kilada") developments. The optimum
time to sell each of these investments will be following the
completion and opening of the first phase of each of the
developments and after a significant number of individual property
sales have been completed to evidence the level of achievable
disposal prices, which is currently expected to be from mid to late
2022 onwards. To date, the demand to purchase villas at OOKI has
been promising and there is increasing interest from potential
buyers of land plots at Kilada.
Aristo Developers has an enviable track record in Cyprus and
remains one of the island's principal residential property
developers. The slump in foreign purchases of property in Cyprus
under the now-suspended citizenship scheme hit Aristo Developers
hard and demand and prices have yet to recover. As long term
residency for foreign property buyers in Cyprus remains available,
there is some hope of a recovery in demand from overseas for
higher-end properties. The Company's relationship with Aristo
Developers is long and complicated. DCI owns a 48.3 % minority
interest in the company. In order to capture the most value from a
sale of the investment, the Board and DCP are working with the
controlling shareholder, Mr. Theodoros Aristodemou, with a view to
aligning the interests of the two shareholders. The relationship is
further complicated by a final payment of EUR 3.5 million from
Aristo Ktimatiki, a company owned by Mr. Aristodemou, in respect of
the sale by DCI of its investment in Venus Rock being in default.
Discussions to collect this balance are ongoing.
The OOKI, Kilada and Aristo Developers investments were together
valued at EUR 112.0 million at 30 June 2021.
Each of the Company's picturesque land holdings at Scorpio Bay,
Lavender Bay, Apollo Heights, Plaka Bay and Livka Bay are at
various stages of permitting. The special purpose companies holding
each asset are clean, well-documented and unencumbered by long term
contracts, which should allow for straightforward sales processes
after buyers have been identified and prices agreed. A non-recourse
loan of EUR 5.1 million from Croatian bank PBZ to the Livka Bay
investment remains outstanding. These investments were together
valued at EUR 36.0 million at 30 June 2021.
Given the ongoing process for Greek and Cypriot banks to resolve
their NPLs, debt financing for development of these assets is
currently unavailable for a financial investor such as DCI.
However, given the economic significance of the tourism sector and
the revival of demand from foreign visitors to Greece, Cyprus and
Croatia, debt finance for credible new resort developers and/ or
owner-operators on land currently held by DCI are an attractive
prospect for lenders' growing capacity as the NPLs are gradually
resolved.
Further details of the developments with respect to each
investment are provided in the Investment Manager's report under
section C.
There is no easy solution to realising any of DCI's investments.
However, since our appointment, the Board and DCP have been working
together to try to formulate strategies to achieve realisations
that will enable the Company's liabilities gradually to be
extinguished. The Company and DCP intend to initiate formal
realisation processes in relation to at least two investments
before the end of 2021.
Operations of the Company
The structure and operations of DCI have changed little since
the Company was launched in 2005 . Internal systems and controls
are centralised and entrenched within DCP in Athens. The
independent non-executive Directors are of the view that, after 16
years, fresh oversight is desirable, both in terms of bringing best
practices to the operation and control of DCI and to reducing the
Group's cost base. The Company will be announcing in the near
future various changes in this regard.
New valuations of all investments will be carried out effective
31 December 2021 in the context of revised instructions provided by
the audit committee. The valuation approaches and proposed carrying
values/ ranges, will be closely scrutinised by the audit committee
before being incorporated into the Company's annual report for
2021.
Strategic Review, Extraordinary General Meeting ("EGM") and
Shareholder Consultations
Immediately following the appointment of the new independent
non-executive Directors, the Company announced that a strategic
review would be undertaken, focused principally on:
o the investment portfolio and realisation processes;
o the investment management arrangements;
o corporate governance;
o operating costs; and
o cash flows.
The strategic review, which also includes consideration of the
Company's operating structure and service providers, has progressed
and its conclusions will be disclosed in the coming weeks.
The Company has committed to holding an EGM before the end of
2021. The Board is proposing that Shareholders consider, inter
alia:
- The length of life of the Company in order to maximize
recoverability of value for Shareholders;
- Amendments to the Investment Management Agreement, with a view
to better aligning the interests of DCP and Shareholders;
- An amended Realisation Resolution to provide clarity as to the
investment strategy and framework for the Company during its
remaining life; and
- Adoption of new Memorandum and Articles of Association to
provide Shareholders with increased powers and oversight over the
Board.
Lengthy discussions have been held with DCP since July with a
view to reaching a consensus on the possible future terms,
structure and operations of the Company. The Board intends to
consult with Shareholders in the coming weeks on the outline
proposals, with a view to holding the EGM in late November or
December 2021.
The Board is most appreciative of the confidence and support
expressed to date by Shareholders and we look forward to our
discussions in the coming weeks.
Martin M. Adams
Chairman
Dolphin Capital Investors
27 September 2021
B. Directors' report
The Directors present their report together with the unaudited
financial statements of the Company and its subsidiary undertakings
(together the "Group") for the six months ended 30 June 2021.
Principal Activities
The principal activity of the Group is the development of
beachfront properties in the Eastern Mediterranean - Greece, Cyprus
and Croatia.
Business Review for the period and Future Developments
The consolidated statement of comprehensive income for the six
month period and the statement of net assets as at 30 June 2021 are
set out under section G of this report. The assets of the Group are
principally development properties and these are valued twice a
year by the Directors based on recommendations from the Investment
Manager. In addition, external valuers are contracted in each
relevant country at the financial year end to assess the current
value of those properties.
A review of the development and performance of the Group and of
expected future developments has been set out in the Chairman's
Statement.
No dividends were declared or paid during the financial period
under review.
Principal Risks and Uncertainties
The Group's business is property development in the Eastern
Mediterranean. Its principal risks are therefore related to the
property market in these countries in general, and also the
particular circumstances of the property development projects that
it is undertaking.
The Directors seek to mitigate and manage these risks through
continual review, policy setting and enforcement of contractual
rights and obligations. They also regularly monitor the economic
and investment environment in countries that the Group operates in
and the management of the Group's property development
portfolio.
Directors
The Directors of the Company who held office throughout the
financial period and up to the date of this report were as
follows:
-- Andrew Coppel - appointed 5 October 2015 , resigned 30 June 2021
-- Miltos Kambourides
-- Mark Townsend - appointed 24 February 2015, resigned 30 June 2021
-- Graham Warner - appointed 24 February 2015 , resigned 30 June 2021
-- Martin Adams - appointed 30 June 2021
-- Nicolai Huls - appointed 30 June 2021
-- Nicholas Paris - appointed 30 June 2021
On 30 June 2021, Andrew Coppel resigned as Chairman of the Board
of Directors and Martin Adams was elected to that role.
All Directors are or were independent non-executive Directors
except Miltos Kambourides, who is considered to be non-independent
because of his role as the founder and majority owner of Dolphin
Capital Partners Limited, the Company's Investment Manager.
Directors' remuneration during the six months ended 30 June
2021
The Directors remuneration details during the period of this
report were as follows :
Director Director's Termination payment Total
fees (Euros) (Euros) (Euros)
-------------------- -------------- -------------------- ---------
Andrew Coppel * 71,455 32,155 103,610
-------------------- -------------- -------------------- ---------
Miltos Kambourides -- -- --
**
-------------------- -------------- -------------------- ---------
Mark Townsend * 25,009 3, 750 28,759
-------------------- -------------- -------------------- ---------
Graham Warner * 53,592 8,039 61,631
*Andrew Coppel, Mark Townsend and Graham Warner resigned as
Directors on 30 June 2021 and the Board on which they served
awarded them termination payments in exchange for each of them
waiving any rights that they had to make claims against the
Company.
**Miltos Kambourides continued to waive his right to collect a
Director's fee from the Company in light of his involvement as the
founder and majority owner of the Company's Investment Manager.
*** Martin Adams, Nicola Huls and Nicholas Paris were appointed
as Directors by the outgoing Directors on 30 June 2021 and
therefore no fees were due to them in the period under review. On 1
July 2021, the new Directors announced that the aggregate
remuneration henceforth of all Directors would be limited to Euros
200,000 compared to remuneration paid of Euros 379,000 in the year
ended 31 December 2020 and Euros 496,000 in the year ended 31
December 2019.
Directors' interests
The interests of the Directors in the Company's shares as at 20
September 2021 were as follows:
Director Numbers of Common Shares of
Euros 0.01 each held
--------------------------------------------------------------------------- ----------------------------
Nicolai Huls
- direct shareholding
- Director of Discover Investment Company which owns 30,026,849 shares
775,000
Miltos Kambourides
- indirect shareholding*
*75% shareholder of Dolphin Capital Partners that owns 88,025,342 shares 66,019,00 6
Board committees
The Directors have appointed an Audit Committee to oversee the
financial reporting of the Group and ensure that adequate internal
controls are in place to manage the risks associated with the
business. Until their resignation as Directors on 30 June 2021,
Graham Warner and Mark Townsend served on the Audit Committee with
Graham Warner being the Chair of it. From 1 July 2021, Nicholas
Paris and Nicolai Huls have served on the Audit Committee with
Nicholas Paris being its Chair.
In addition, the Directors have appointed a Nomination &
Corporate Governance Committee to review the effectiveness of the
Board and recommend any changes to it and oversee the corporate
governance policies of the Company. Until their resignations as
Directors, Mark Townsend and Andrew Coppel served on the Committee
with Mark Townsend being the Chairman. From 1 July 2021, Nicola
Huls, Martin Adams and Nicholas Paris have served on the Committee
with Nicola Huls being the Chairman.
Management of the Group
The Directors delegated the investment management of the Group
to Dolphin Capital Partners Limited in accordance with an agreement
dated 9 April 2019, which is due to expire on 31 December 2021.
Substantial Shareholders
The Directors are aware of the following direct and indirect
interests comprising more than 3% of the issued share capital of
the Company as at 31 August 2021, which is the latest practicable
date before the publication of this report:
Number of Percentage of
Common Shares held issued Share Capital
(%)
------------------------------ -------------------- ----------------------
JO Hambro Capital Mgt
Ltd 93,386,413 10.32%
------------------------------ -------------------- ----------------------
Fortress Investment Group 88,997,152 9.84%
------------------------------ -------------------- ----------------------
Dolphin Capital Holdings* 88,025,342 9.73%
------------------------------ -------------------- ----------------------
683 Capital Mgt LLC 83,210,181 9.20%
------------------------------ -------------------- ----------------------
Peter Gyllenhammar 70,000,000 7.74%
------------------------------ -------------------- ----------------------
Forager Funds Mgt 64,100,000 7.09%
------------------------------ -------------------- ----------------------
Progressive Capital Partners
Ltd 53,787,814 5.95%
------------------------------ -------------------- ----------------------
Lars Bader 50,480,600 5.58%
------------------------------ -------------------- ----------------------
Oak Hill Advisors 39,924,828 4.41%
------------------------------ -------------------- ----------------------
Discover Investment Company
** 30,026,849 3.32%
------------------------------ -------------------- ----------------------
*Miltos indirectly holds 66,019,006 shares
**Nicolai Huls is a Director of Discover Investment Company
Continuation of the Company
At an Extraordinary General Meeting ("EGM") of Shareholders held
on 2 May 2019, Shareholders approved the continuation of the
Company until 31 December 2021 in order to continue to pursue the
New Asset Strategy, which had been adopted in December 2016, of
disposing of all of the assets of the Company. In addition, they
approved a revised Investment Management Agreement ("IMA") reducing
the fixed management fees to EUR3 .6 million per annum and
introducing a variable management fee whose level would be tied to
distributions made to Shareholders. A performance fee arrangement
from the previous IMA also continues to apply.
The Board intends to convene an EGM before 31 December 2021, at
which a number of resolutions will be proposed .
On behalf of the Board
Dolphin Capital Investors
27 September 2021
C. Investment Manager's Report
C.1. Business Overview
During the first nine months of 2021 we focused on enhancing the
value of our portfolio assets, while addressing the day-to-day
challenges of COVID-19 :
-- progressing construction works at OOKI and Kilada;
-- adjusting our retail and project sales and marketing
strategies at a time of travel restrictions and social distancing
measures;
-- securing liquidity at the DCI level to meet all our
operational expenses for at least 12 months;
-- making permitting advances across our asset portfolio; and
-- monitoring our operational budgets and reducing overhead costs.
Following the drawdown of the EUR15.0 million bridge financing,
Dolphin's liquidity is secured for at least 12 months , allowing us
to focus on the implementation of the Company's strategy to realise
the value of our diverse asset portfolio in order to maximise cash
returns for our shareholders.
C.2. Major Assets Review
-- One&Only at Kea Island, Greece - www.oneandonlyresorts.com/kea-island
o Works continued in all areas of the project. The majority of
the structural works related to the hotel area of the project have
been completed, with the structure of the main building having been
completed with only the roof remaining to be poured. Approximately
two thirds of the guest room structural works are complete, with an
aim to complete all guest room structures prior to the end of 2021.
Within the guest room structures the mechanical, electrical and
finishes works are underway, while in the site areas infrastructure
services are being installed as well as stone steps and walls are
being erected. Following the approval of the mock up room,
procurement of loose and fixed furniture has also begun. The marine
works of the dock are complete. In addition, the construction works
of the spa commenced in Q2 2021 with excavation and foundation
works in progress. The beach club design is progressing in
coordination with the operator requirements, with an aim to
commence on site works prior to the end of 2021, while works for
the first sold villas also commenced, and will proceed in
conjunction with the construction of the resort.
o The raising of the profile of the project and more
specifically of the One&Only Kea Island Private Homes ("OOKI
PHs") continues, in close co-operation with the One&Only sales
and marketing teams and through several marketing activities. A
website has been created within the general One&Only website (
www.oneandonlyresorts.com/kea-island ), including online enquiries,
alongside a series of marketing collateral (printed and digital)
showcasing the OOKI PHs available for sale as well as the
destination. The international PR campaign is underway with ongoing
extensive publicity in high profile publications such as The Times,
Robb Report, Vogue and Tatler. A number of initiatives are underway
in collaboration with Sotheby's Realty UK, who act as advisors.
Furthermore, several promotional activities for the OOKI PH are
underway in collaboration with One&Only and their resorts which
are currently in operation. Most activities are online targeted
promotional sales actions, via social media, newsletters, EDMs,
webinars, presentations to journalists and digital presentations to
potential clients. Several site visits have been conducted in the
last few months.
o A total of nine sales of Private Homes have been concluded to
date, including all five one-bedroom units available for sale with
a guaranteed yield. Most buyers come from Western European
countries and are very familiar with the One & Only brand.
Sales officially launched in June 2020 and a number of promotional
activities to showcase the OOKI Private Homes have been undertaken
with One & Only, agents and via connectors. An additional four
Private Homes are expected to be signed by the end of the year
which will bring total aggregate sales value to over EUR45
million.
-- Kilada, Greece - www.mykilada.com
o Construction works at the Kilada golf course are progressing,
albeit there were some delays due to the presence of antiquities
for which coordination with the archaeological department was
required. The rough earthworks in approximately half the golf
fairways have been completed, together with the excavation and
lining of the irrigation lake. In parallel, the infrastructure
works for the residential lots have advanced. Furthermore, the
specialized golf contractor has been mobilized and is working in
the areas where rough earthworks are complete. The golf clubhouse
contractor has also been appointed and expected to mobilize on site
within Q3 2021.
o The notarial Deed for the acquisition of 24 founder plots in
Kilada by Amanzoe for a consideration of EUR10.0 million was
concluded on 2 August 2021. Together with the EUR12.0 million
preferred equity investment into Kilada injected by an
international family office, these are expected to fully meet all
project development costs for phase one.
o The project's PR, sales and marketing activities commenced in
May 2021 and are underway with our network of consultants as well
as with specific real estate agents. An advertising campaign is
also underway.
-- Aristo (a 47.9% affiliate) - www.aristodevelopers.com
o The termination of the Cyprus citizenship investment programme
and the travel restrictions imposed in both China and Cyprus in the
aftermath of the COVID-19 breakout continue to create a major
obstacle to Aristo's sales efforts.
o 42 homes and plots were sold during the first six months of
2021, representing total sales of EUR8.6 million, down 12% compared
to EUR9.8 million for the same period in 2020.
o 50 homes and plots were sold in total up to the end of August
2021, representing total sales of EUR11.7 million, up 8% compared
to EUR10.8 million for the same period in 2020.
Six months Six months Eight months Eight months
to 30 June to 30 June to 31 August to 31 August
2021 2020 2021 2020
RETAIL SALES
-------------------- ------------ ------------ -------------- --------------
EUR 8.6 EUR9 .8 EUR 11.7
New sales booked m m m EUR10.8m
% change (12) % 8 %
Units sold 42 31 50 34
% change 35 % 47 %
CLIENT ORIGIN
-------------------- ------------ ------------ -------------- --------------
Cyprus & Other EU 81% -- 68% --
China & Other Asia 8 % 81% 9 % 83%
MENA 5 % 11% 11 % 10%
UK 6 % -- 4% --
Russia -- 8% 8% 7%
o As announced on 15 October 2020, the Cyprus government
cancelled the Cyprus citizenship investment programme with effect
from 1 November 2020. The programme allowed foreign investors to
apply for Cypriot citizenship upon making a minimum EUR2.0 million
investment in, inter alia, Cyprus property. Aristo had a total of
EUR6.1 million in blocked/escrowed funds as at 30 June 2021 (EUR9.6
million at YE 2020) relating to the sale of properties under the
Cyprus citizenship investment programme and expects to deliver the
respective properties to purchasers so that it can draw on these
funds within the next 18 months.
D. Group Assets
A summary of Dolphin's current investments is presented
below.
PROJECT Land site DCI's Debt Real estate value Loan to real estate Net Asset Value
(hectares) stake (EURm) * (EURm) asset value (%) (% of total)
--------------- ----------- ------- --------- ------------------ -------------------- ----------------
GREECE
1 OOKI 65 33% --
2 Kilada 224 93% --
3 Scorpio Bay 172 100% --
4 Lavender Bay 310 100% --
5 Plaka Bay 442 100% --
--------------- ----------- ------- --------- ------------------ -------------------- ----------------
TOTAL GREECE 1,213 -- 122 -- 55%
------------------- ----------- ------- --------- ------------------ -------------------- ----------------
CYPRUS
6 Apollo Heights 447 100% --
Aristo 474 47.90% --
TOTAL CYPRUS 921 -- 55 ** -- 35%
------------------- ----------- ------- --------- ------------------ -------------------- ----------------
OTHER
7 Livka Bay 63 100% 6.2
8 LaVanta*** 7 100% --
Itacaré n/a 13% --
--------------- ----------- ------- --------- ------------------ -------------------- ----------------
TOTAL OTHER 70 6.2 24 26% 10%
------------------- ----------- ------- --------- ------------------ -------------------- ----------------
GRAND TOTAL 2,204 6.2 201 **** 3% 100%
------------------- ----------- ------- --------- ------------------ -------------------- ----------------
* Further details on debt maturities are set out under note 22
of the financial statements.
**DCI's portfolio in Cyprus includes its equity investment in
Aristo Developers Ltd (book value), which owns assets in Cyprus
that are subject to Aristo's debt and other obligations.
*** LaVanta was sold on 10 March 2021, to a local investor for a
net consideration of EUR3.2 million.
****Total real estate value includes equity investments (book
value) in OOKI, Aristo and Itacare.
E. Market Dynamics
The COVID-19 pandemic adverse effect on the travel, real estate
and hospitality industry continues during 2021, although recovery
is on track as the vaccination programmes picked up.
During the first nine months of the year, the foreign travel
intent picked up. International travel restrictions and
governmental lock-down measures imposed on hotels and resorts in
Greece and Cyprus and supply chain delays which impacted our
ongoing construction activities continued albeit in milder
forms.
Provisional data for the summer tourism traffic in Greece are
positive and the recent figures released by the Bank of Greece -
showing that more than 6 million tourists from abroad have visited
Greece - confirm the gradual increase in arrivals and recovery of
the sector. In January-June 2021, the balance of travel services
marked a surplus of EUR826 million up from a surplus of EUR256.0
million in the same period in 2020, while travel receipts rose by
51% compared to the same period of 2020, reaching to EUR1,108
million.
International arrivals in July and August exceeded 65% and 80%
respectively, compared to arrivals recorded during the respective
months of 2019.
In addition to the above, according to the Alpha Bank's
bulletin, strong activity was recorded in the short-term rental
market since April 2021 along with the countless guest reviews of
excellent feedback. The bulletin also stated that business
expectations in the sectors related to tourism (accommodation,
F&B, travel agencies, etc.) have returned to positive ground
and even to levels recorded before the pandemic.
In Cyprus, for the period of January - June 2021, tourist
arrivals totalled 340,984, increased by 33.4% compared to the 2020
corresponding period, while tourism revenue is estimated at
EUR259.0 million (112% higher than 2020 corresponding period of
2020).
With regards to real estate industry, the PWC Emerging Trends
Europe report reveals that COVID-19 and the widespread problems
around have encouraged increasing numbers of investors and
investment managers to look beyond real estate's bond-like
credentials and to assess the underlying operational risk of the
occupiers. And though it is too early to draw conclusions on the
consequences for values, it is clear that the movement towards
property as a service, or operational asset class, is an
accelerating trend.
In addition to that and according to Savills (Impacts, 2021),
the pandemic has had an impact on what High-net-worth individuals s
and Ultra-High-Net-Worth Individuals have wanted from their primary
residences and second homes and outlines the desire for more space,
both inside and out.
F. Outlook
The Company's main objectives for the remainder of 2021 remain
to:
1. execute further portfolio asset disposals;
2. advance construction at OOKI and achieve more residential sales;
3. progress construction at Kilada and generate plot/villa sales;
4. progress planning and permitting selectively for the remaining portfolio; and
5. effectively manage COVID-19 related challenges.
Miltos Kambourides
Managing Partner
Dolphin Capital Partners
27 September 2021
G . Financial results for the first half of 2021
G.1. Consolidated statement of profit or loss for the first half
of 2021
Financial Results
Loss after tax for the period ended 30 June 2021 attributable to
owners of the Company amounted to EUR3.0 million (H1 2020: loss of
EUR5.4 million). Loss per share was EUR0.003 compared to EUR0.006
in the same period last year.
Consolidated statement of profit or loss and other comprehensive
income
For the six-month period ended 30 June 2021
From 1 January 2021 From 1 January 2020
to 30 June 2021 to 30 June 2020
EUR'000 EUR'000
---------------------------------------------------------------------- -------------------- --------------------
CONTINUING OPERATIONS
---------------------------------------------------------------------- -------------------- --------------------
Revenue 3,049 2,007
----------------------------------------------------------------------- -------------------- --------------------
Cost of sales (2,046) (1,697)
----------------------------------------------------------------------- -------------------- --------------------
Gross profit 1,003 310
----------------------------------------------------------------------- -------------------- --------------------
Disposal of investments in subsidiaries - 336
----------------------------------------------------------------------- -------------------- --------------------
Change in valuations (228) (2,144)
----------------------------------------------------------------------- -------------------- --------------------
Investment Manager remuneration (1,800) (1,800)
----------------------------------------------------------------------- -------------------- --------------------
Directors' remuneration (194) (205)
----------------------------------------------------------------------- -------------------- --------------------
Depreciation charge (38) (19)
----------------------------------------------------------------------- -------------------- --------------------
Professional fees (1,045) (1,061)
----------------------------------------------------------------------- -------------------- --------------------
Administrative and other expenses (517) (505)
----------------------------------------------------------------------- -------------------- --------------------
Total operating and other expenses (3,822) (5,398)
----------------------------------------------------------------------- -------------------- --------------------
Results from operating activities (2,819) (5,088)
----------------------------------------------------------------------- -------------------- --------------------
Finance income 112 -
---------------------------------------------------------------------- -------------------- --------------------
Finance costs (819) (623)
----------------------------------------------------------------------- -------------------- --------------------
Share of losses of equity-accounted investees, net of tax 12 (515)
----------------------------------------------------------------------- -------------------- --------------------
Loss before taxation (3,514) (6,226)
----------------------------------------------------------------------- -------------------- --------------------
Taxation 360 641
----------------------------------------------------------------------- -------------------- --------------------
Loss (3,154) (5,585)
----------------------------------------------------------------------- -------------------- --------------------
Other comprehensive income
---------------------------------------------------------------------- -------------------- --------------------
Items that are or may be reclassified subsequently to profit or loss
---------------------------------------------------------------------- -------------------- --------------------
Share of revaluation on equity-accounted investees 6 -
---------------------------------------------------------------------- -------------------- --------------------
Foreign currency translation differences (886) (271)
----------------------------------------------------------------------- -------------------- --------------------
Other comprehensive income, net of tax (880) (271)
----------------------------------------------------------------------- -------------------- --------------------
Total comprehensive income (4,034) (5,856)
----------------------------------------------------------------------- -------------------- --------------------
Loss attributable to:
---------------------------------------------------------------------- -------------------- --------------------
Owners of the Company (3,007) (5,375)
----------------------------------------------------------------------- -------------------- --------------------
Non-controlling interests (147) (210)
----------------------------------------------------------------------- -------------------- --------------------
(3,154) (5,585)
---------------------------------------------------------------------- -------------------- --------------------
Total comprehensive income attributable to:
---------------------------------------------------------------------- -------------------- --------------------
Owners of the Company (3,889) (5,646)
----------------------------------------------------------------------- -------------------- --------------------
Non-controlling interests (145) (210)
----------------------------------------------------------------------- -------------------- --------------------
(4,034) (5,856)
---------------------------------------------------------------------- -------------------- --------------------
Loss per share
---------------------------------------------------------------------- -------------------- --------------------
Basic and diluted loss per share (EUR) (0.003) (0.006)
----------------------------------------------------------------------- -------------------- --------------------
Further analysis of individual revenue and expense items is
provided below.
Revenue
Revenues of EUR 3.0 million (31 June 2020: EUR2.0 million), were
derived from the following sources:
H1 2021 H1 2020
EUR million EUR million
----------------------------------------- ------------- -------------
Sale of trading & investment properties 3.0 1.5
Other income - 0.5
TOTAL 3.0 2.0
Sale of trading & investment properties is attributable to
Lavanta sales while in H1 2020 it was attributable to the sale of a
land plot located outside the Kilada development perimeter.
Cost of sales
Cost of sales comprises the following:
H1 2021 H1 2020
EUR million EUR million
--------------------------------------------- ------------- -------------
Cost of sales related to:
Sales of trading and investment properties 2.0 1.7
TOTAL 2.0 1.7
Professional Fees
The charge for the period was EUR 1. 0 million (H1 2019: EUR1.1
million) and comprises the following:
H1 2021 H1 2020
EUR million EUR million
------------------------------------- ------------- -------------
Legal & Administrator fees 0.3 0.3
Auditors' remuneration 0.1 0.1
Accounting expenses 0.1 0.1
Project design and development fees 0.3 0.4
Consultancy fees 0.1 0.1
Other professional fees 0.1 0.1
------------------------------------- ------------- -------------
TOTAL 1.0 1.1
Administrative and other expenses
The administrative and other expenses amounted to EUR 0. 5
million (H1 2020: EUR0.5 million) and are analysed as follows:
H1 2021 H1 2020
EUR million EUR million
------------------------------------ -------------- --------------
Marketing and advertising expenses 0.0 0.1
Personnel expenses 0.3 0.2
Other 0. 2 0.2
------------------------------------ -------------- --------------
TOTAL 0. 5 0.5
G.2. Consolidated statement of financial position as at 30 June
2021
30 June 2021 31 December 2020
--------------------------------------------- ------------ ----------------
EUR'000 EUR'000
--------------------------------------------- ------------ ----------------
Assets
--------------------------------------------- ------------ ----------------
Property, plant and equipment 5,864 4,855
---------------------------------------------- ------------ ----------------
Investment property 76,326 76,303
---------------------------------------------- ------------ ----------------
Equity-accounted investees 60,696 60,674
---------------------------------------------- ------------ ----------------
Other investments 445 655
---------------------------------------------- ------------ ----------------
Non-current assets 143,331 142,487
---------------------------------------------- ------------ ----------------
Trading properties 57,632 59,769
---------------------------------------------- ------------ ----------------
Receivables and other assets 1,171 1,330
---------------------------------------------- ------------ ----------------
Cash and cash equivalents 3,525 1,661
---------------------------------------------- ------------ ----------------
C urrent assets 62,328 62,760
---------------------------------------------- ------------ ----------------
Total assets 205,659 205,247
============================================== ============ ================
Equity
--------------------------------------------- ------------ ----------------
Share capital 9,046 9,046
---------------------------------------------- ------------ ----------------
Share premium 569,847 569,847
---------------------------------------------- ------------ ----------------
Retained deficit (442, 054 ) (439,047)
============================================== ============ ================
Other reserves 7,922 8,802
============================================== ============ ================
Equity attributable to owners of the Company 144, 7 6 1 148,648
---------------------------------------------- ------------ ----------------
Non-controlling interests 6,895 6,523
---------------------------------------------- ------------ ----------------
Total equity 151, 6 5 6 155,171
---------------------------------------------- ------------ ----------------
Liabilities
--------------------------------------------- ------------ ----------------
Loans and borrowings 4,861 2,802
---------------------------------------------- ------------ ----------------
Lease liabilities 3,384 3,376
---------------------------------------------- ------------ ----------------
Deferred tax liabilities 7,652 8,000
---------------------------------------------- ------------ ----------------
Trade and other payables 20,2 2 5 20,366
---------------------------------------------- ------------ ----------------
Prepayments from clients - 109
---------------------------------------------- ------------ ----------------
Non-current liabilities 36,122 34,653
---------------------------------------------- ------------ ----------------
Loans and borrowings 7,657 6,244
---------------------------------------------- ------------ ----------------
Lease liabilities 28 29
---------------------------------------------- ------------ ----------------
Trade and other payables 10, 0 8 3 9,150
---------------------------------------------- ------------ ----------------
Prepayments from clients 113 -
---------------------------------------------- ------------ ----------------
Current liabilities 17, 8 8 1 15,423
---------------------------------------------- ------------ ----------------
Total liabilities 54, 0 0 3 50,076
---------------------------------------------- ------------ ----------------
Total equity and liabilities 205,659 205,247
---------------------------------------------- ------------ ----------------
Net asset value ('NAV') per share (EUR) 0.16 0.16
---------------------------------------------- ------------ ----------------
The reported NAV as at 30 June 2021 is presented below:
As at As at Variation since
30 June 2021 31 December 2020 31 December 2020
EUR GBP EUR GBP EUR% GBP%
--------------------------------- -------- ------- --------------------- ----------- --------
Total NAV before DTL (million) 152 131 157 142 (2. 7 ) (7.6)
--------------------------------- -------- ------- ---------- --------- ----------- --------
Total NAV after DTL (million) 145 124 149 135 (2. 6 ) (7.5)
--------------------------------- -------- ------- ---------- --------- ----------- --------
NAV per share before DTL 0.17 0.15 0.17 0.16 (2. 7 ) (7.6)
--------------------------------- -------- ------- ---------- --------- ----------- --------
NAV per share after DTL 0.16 0.14 0.16 0.15 (2. 6 ) (7.5)
___________
Notes:
1. Euro/GBP rate 0.85946 as at 30 June 2021 and 0.90453 as at 31 December 2020.
2. NAV per share has been calculated on the basis of 904,626,856
issued shares as at 30 June 2021 and as at 31 December 2020.
Total Group NAV as at 30 June 2021 was EUR152.0 million and EUR145.0 million before and after DTL respectively. This represents a decrease of EUR4.2 million (2.7%) and EUR3.9million (2.6%) respectively, from the 31 December 2020 figures. Given that no valuation of the Company's portfolio took place as at 30 June 2021, the NAV reduction is mainly due to Dolphin's regular operational, corporate, finance and management expenses.
Sterling NAV per share as at 30 June 2021 was 0.15p before DTL
and 0.14p after DTL and decreased by 7.6% and 7.5% before and after
DTL respectively, compared to the 31 December 2020 figures. The
depreciation of Euro versus the Sterling during the period of
approximately 5.0 % enhance d the Euro decrease in NAV.
The Company's consolidated assets of EUR206.0 million include
EUR140.0 million of real estate assets, EUR61.0 million of
equity-accounting investees (which reflects our 33 % shareholding
in OOKI as well as the Company's 47.9% interest in Aristo), EUR1.0
million of trade and other receivables, and EUR4.0 million in
cash.
The figure of EUR140.0 million of real estate assets (property,
plant and equipment, trading properties and investment property)
represents the fair market valuations conducted as at 31 December
2020 for both freehold and long leasehold interests.
The Company's consolidated liabilities (excluding DTL) total
EUR46.0 million and mainly comprise EUR30.0 million of trade and
other payables as well as EUR16.0 million of interest bearing loans
and finance lease obligations. Trade and other payables comprise
mainly EUR21.0 million of option contracts to acquire land in the
Company's Lavender Bay project.
The consolidated financial statements have been reviewed by KPMG
in accordance with the International Standard on Review Engagements
2410, 'Review of Interim Financial Information Performed by the
Independent Auditor of the Entity'.
Condensed consolidated interim statement of financial
position
As at 30 June 2021
30 June 2021 31 December 2020
Note EUR'000 EUR'000
---------------------------------------------- ----- ------------- -----------------
Assets
---------------------------------------------- ----- ------------- -----------------
Property, plant and equipment 14 5,864 4,855
---------------------------------------------- ----- ------------- -----------------
Investment property 15 76,326 76,303
---------------------------------------------- ----- ------------- -----------------
Equity-accounted investees 17 60,696 60,674
---------------------------------------------- ----- ------------- -----------------
Other investments 16 445 655
---------------------------------------------- ----- ------------- -----------------
Non-current assets 143,331 142,487
---------------------------------------------- ----- ------------- -----------------
Trading properties 18 57,632 59,769
---------------------------------------------- ----- ------------- -----------------
Receivables and other assets 19 1,171 1,330
---------------------------------------------- ----- ------------- -----------------
Cash and cash equivalents 20 3,525 1,661
---------------------------------------------- ----- ------------- -----------------
Current assets 62,328 62,760
---------------------------------------------- ----- ------------- -----------------
Total assets 205,659 205,247
============================================== ===== ============= =================
Equity
---------------------------------------------- ----- ------------- -----------------
Share capital 21 9,046 9,046
---------------------------------------------- ----- ------------- -----------------
Share premium 21 569,847 569,847
---------------------------------------------- ----- ------------- -----------------
Retained deficit (442,054) (439,047)
============================================== ===== ============= =================
Other reserves 7,922 8,802
============================================== ===== ============= =================
Equity attributable to owners of the Company 144,761 148,648
---------------------------------------------- ----- ------------- -----------------
Non-controlling interests 6,895 6,523
---------------------------------------------- ----- ------------- -----------------
Total equity 151,656 155,171
---------------------------------------------- ----- ------------- -----------------
Liabilities
---------------------------------------------- ----- ------------- -----------------
Loans and borrowings 22 4,861 2,802
---------------------------------------------- ----- ------------- -----------------
Lease liabilities 23 3,384 3,376
---------------------------------------------- ----- ------------- -----------------
Deferred tax liabilities 24 7,652 8,000
---------------------------------------------- ----- ------------- -----------------
Trade and other payables 2 5 20,225 20,366
---------------------------------------------- ----- ------------- -----------------
Prepayments from clients - 109
---------------------------------------------- ----- ------------- -----------------
Non-current liabilities 36,122 34,653
---------------------------------------------- ----- ------------- -----------------
Loans and borrowings 22 7,657 6,244
---------------------------------------------- ----- ------------- -----------------
Lease liabilities 2 3 28 29
---------------------------------------------- ----- ------------- -----------------
Prepayments from clients 113 -
---------------------------------------------- ----- ------------- -----------------
Trade and other payables 2 5 10,083 9,150
---------------------------------------------- ----- ------------- -----------------
Current liabilities 17,881 15,423
---------------------------------------------- ----- ------------- -----------------
Total liabilities 54,003 50,076
---------------------------------------------- ----- ------------- -----------------
Total equity and liabilities 205,659 205,247
---------------------------------------------- ----- ------------- -----------------
Net asset value ('NAV') per share (EUR) 26 0.16 0.16
---------------------------------------------- ----- ------------- -----------------
Condensed consolidated interim statement of profit or loss and
other comprehensive income
For the six-month period ended 30 June 2021
From 1 January 2021 From 1 January 2020
to 30 June 2021 to 30 June 2020
Note EUR'000 EUR'000
------------------------------------------------------------------ ------ -------------------- --------------------
Continuing operations
------------------------------------------------------------------ ------ -------------------- --------------------
Revenue 6 3,049 2,007
------------------------------------------------------------------ ------ -------------------- --------------------
Cost of sales 7 (2,046) (1, 697 )
------------------------------------------------------------------ ------ -------------------- --------------------
Gross profit 1,003 310
------------------------------------------------------------------ ------ -------------------- --------------------
Disposal of investments in subsidiaries 8A - 336
------------------------------------------------------------------ ------ -------------------- --------------------
Change in valuations 8 B (228) (2,144)
------------------------------------------------------------------ ------ -------------------- --------------------
Investment Manager remuneration 27 .2 (1,800) (1,800)
------------------------------------------------------------------ ------ -------------------- --------------------
Directors' remuneration 27 .1 (194) (205)
------------------------------------------------------------------ ------ -------------------- --------------------
Depreciation charge (38) (19)
------------------------------------------------------------------ ------ -------------------- --------------------
Professional fees 1 0 (1,045) ( 1,061 )
------------------------------------------------------------------ ------ -------------------- --------------------
Administrative and other expenses 11 (517) ( 505 )
------------------------------------------------------------------ ------ -------------------- --------------------
Total operating and other expenses (3,822) ( 5 , 398 )
------------------------------------------------------------------ ------ -------------------- --------------------
Results from operating activities (2,819) ( 5 , 088 )
------------------------------------------------------------------ ------ -------------------- --------------------
Finance income 112 -
------------------------------------------------------------------ ------ -------------------- --------------------
Finance costs (819) (6 23 )
------------------------------------------------------------------ ------ -------------------- --------------------
Share of profits/(losses) of equity-accounted investees, net of
tax 12 (51 5 )
------------------------------------------------------------------ ------ -------------------- --------------------
Loss before taxation (3,514) ( 6 , 226 )
------------------------------------------------------------------ ------ -------------------- --------------------
Taxation 12 360 6 41
------------------------------------------------------------------ ------ -------------------- --------------------
Loss (3,154) ( 5 , 585 )
------------------------------------------------------------------ ------ -------------------- --------------------
Other comprehensive income
------------------------------------------------------------------ ------ -------------------- --------------------
Items that are or may be reclassified subsequently to profit or
loss
------------------------------------------------------------------ ------ -------------------- --------------------
Share of revaluation on equity-accounted investees 6 -
------------------------------------------------------------------ ------ -------------------- --------------------
Foreign currency translation differences (886) ( 271 )
------------------------------------------------------------------ ------ -------------------- --------------------
Other comprehensive income, net of tax (880) ( 271 )
------------------------------------------------------------------ ------ -------------------- --------------------
Total comprehensive income (4,034) ( 5 , 856 )
------------------------------------------------------------------ ------ -------------------- --------------------
Loss attributable to:
------------------------------------------------------------------ ------ -------------------- --------------------
Owners of the Company (3,007) ( 5 , 375 )
------------------------------------------------------------------ ------ -------------------- --------------------
Non-controlling interests (147) ( 210 )
------------------------------------------------------------------ ------ -------------------- --------------------
(3,154) ( 5,585 )
================================================================== ====== ==================== ====================
Total comprehensive income attributable to:
------------------------------------------------------------------ ------ -------------------- --------------------
Owners of the Company (3,889) ( 5 , 646 )
------------------------------------------------------------------ ------ -------------------- --------------------
Non-controlling interests (145) ( 210 )
================================================================== ====== ==================== ====================
(4,034) ( 5 , 856 )
================================================================== ====== ==================== ====================
Loss per share
------------------------------------------------------------------ ------ -------------------- --------------------
Basic and diluted loss per share (EUR) 13 (0.003) (0.006)
------------------------------------------------------------------ ------ -------------------- --------------------
Condensed consolidated interim statement of changes in
equity
For the six-month period ended 30 June 2021
Attributable to owners of the Company
--------------------------------------------------------------
Share Share Translation Revaluation Retained Non-controlling Total
capital premium reserve reserve deficit Total interests equity
EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000
---------------------------- ------- ------- ----------- ----------- --------- ------- --------------- -------
Balance at 1 January 2020 9,046 569,847 8,233 326 (417,905) 169,547 5,681 175,228
---------------------------- ------- ------- ----------- ----------- --------- ------- --------------- -------
TOTAL COMPREHENSIVE INCOME
Loss - - - - (5,375) (5,375) (210) (5,585)
---------------------------- ------- ------- ----------- ----------- --------- ------- --------------- -------
Other comprehensive income
---------------------------- ------- ------- ----------- ----------- --------- ------- --------------- -------
Foreign currency
translation differences - - (271) - - (271) - (271)
============================ ======= ======= =========== =========== ========= ======= =============== =======
Total other comprehensive
income - - (271) - - (271) - (271)
---------------------------- ------- ------- ----------- ----------- --------- ------- --------------- -------
Total comprehensive income - - (271) - (5,375) (5,646) (210) (5,856)
---------------------------- ------- ------- ----------- ----------- --------- ------- --------------- -------
TRANSACTIONS WITH OWNERS OF
THE COMPANY
---------------------------- ------- ------- ----------- ----------- --------- ------- --------------- -------
Changes in ownership
interests in subsidiaries
---------------------------- ------- ------- ----------- ----------- --------- ------- --------------- -------
Disposal of interests
without a change in control - - - - - - 414 414
---------------------------- ------- ------- ----------- ----------- --------- ------- --------------- -------
Total transactions with
owners of the Company - - - - - - 414 414
---------------------------- ------- ------- ----------- ----------- --------- ------- --------------- -------
Balance at 30 June 2020 9,046 569,847 7,962 326 (423,280) 163,901 5,885 169,786
---------------------------- ------- ------- ----------- ----------- --------- ------- --------------- -------
Balance at 1 January 2021 9,046 569,847 8,337 465 (439,047) 148,648 6,523 155,171
---------------------------- ------- ------- ----------- ----------- --------- ------- --------------- -------
TOTAL COMPREHENSIVE INCOME
---------------------------- ------- ------- ----------- ----------- --------- ------- --------------- -------
Loss - - - - (3,007) (3,007) (147) (3,154)
---------------------------- ------- ------- ----------- ----------- --------- ------- --------------- -------
Other comprehensive income
---------------------------- ------- ------- ----------- ----------- --------- ------- --------------- -------
Share of revaluation on
equity accounted
investees - - - 6 - 6 2 8
---------------------------- ------- ------- ----------- ----------- --------- ------- --------------- -------
Foreign currency
translation differences - - (886) - - (886) - (886)
---------------------------- ------- ------- ----------- ----------- --------- ------- --------------- -------
Total other comprehensive
income - - (886) 6 - (880) 2 (878)
---------------------------- ------- ------- ----------- ----------- --------- ------- --------------- -------
Total comprehensive income - - (886) 6 (3,007) (3,887) (145) (4,032)
---------------------------- ------- ------- ----------- ----------- --------- ------- --------------- -------
TRANSACTIONS WITH OWNERS OF
THE COMPANY
Changes in ownership
interests in subsidiaries
---------------------------- ------- ------- ----------- ----------- --------- ------- --------------- -------
Disposal of interests
without a change in control - - - - - - 517 517
---------------------------- ------- ------- ----------- ----------- --------- ------- --------------- -------
Total transactions with
owners of the Company - - - - - - 517 517
---------------------------- ------- ------- ----------- ----------- --------- ------- --------------- -------
Balance at 30 June 2021 9,046 569,847 7,451 471 (442,054) 144,761 6,895 151,656
---------------------------- ------- ------- ----------- ----------- --------- ------- --------------- -------
Condensed consolidated interim statement of cash flows
For the six-month period ended 30 June 2021
From 1 January 2021 From 1 January 2020
to 30 June 2021 to 30 June 2020
EUR'000 EUR'000
------------------------------------------------------------------------- ------------------- -------------------
Cash flows from operating activities
------------------------------------------------------------------------- ------------------- -------------------
Loss (3,154) (5,585)
-------------------------------------------------------------------------- ------------------- -------------------
Net change in fair value of investment property - 2,144
-------------------------------------------------------------------------- ------------------- -------------------
Gain on disposal of investment in subsidiaries - (336)
-------------------------------------------------------------------------- ------------------- -------------------
Share of (profits)/losses in equity-accounted investees (12) 515
-------------------------------------------------------------------------- ------------------- -------------------
Other adjustments (594) (256)
-------------------------------------------------------------------------- ------------------- -------------------
(3,760) (3,518)
------------------------------------------------------------------------- ------------------- -------------------
Changes in:
------------------------------------------------------------------------- ------------------- -------------------
Receivables 159 144
-------------------------------------------------------------------------- ------------------- -------------------
P ayables 792 157
-------------------------------------------------------------------------- ------------------- -------------------
Prepayments from clients 4 228
-------------------------------------------------------------------------- ------------------- -------------------
Cash used in operating activities (2,805) (2,989)
-------------------------------------------------------------------------- ------------------- -------------------
Tax paid (3) (46)
-------------------------------------------------------------------------- ------------------- -------------------
Net cash used in operating activities (2,808) (3,035)
-------------------------------------------------------------------------- ------------------- -------------------
Cash flows from investing activities
------------------------------------------------------------------------- ------------------- -------------------
Proceeds from disposal of subsidiaries, net of cash disposed of - (1)
-------------------------------------------------------------------------- ------------------- -------------------
Net (acquisitions)/disposals of investment property (23) 1,602
-------------------------------------------------------------------------- ------------------- -------------------
Net acquisitions of property, plant and equipment (1,047) (723)
-------------------------------------------------------------------------- ------------------- -------------------
Net change in trading properties 2,100 -
-------------------------------------------------------------------------- ------------------- -------------------
Net cash from investing activities 1,030 878
-------------------------------------------------------------------------- ------------------- -------------------
Cash flows from financing activities
------------------------------------------------------------------------- ------------------- -------------------
Change in loans and borrowings 3,656 1,925
========================================================================== =================== ===================
Change in lease liabilities (14) 8
========================================================================== =================== ===================
Interest paid - (170)
========================================================================== =================== ===================
Net cash from financing activities 3,642 1,763
-------------------------------------------------------------------------- ------------------- -------------------
Net increase/(decrease) in cash and cash equivalents 1,864 (394)
-------------------------------------------------------------------------- ------------------- -------------------
Cash and cash equivalents at the beginning of the period 1,661 2,854
-------------------------------------------------------------------------- ------------------- -------------------
Cash and cash equivalents at the end of the period 3,525 2,460
-------------------------------------------------------------------------- ------------------- -------------------
For the purpose of the condensed consolidated interim statement of cash
flows, cash and cash
equivalents consist of the following:
------------------------------------------------------------------------- ------------------- -------------------
Cash in hand and at bank 3,525 2,460
-------------------------------------------------------------------------- ------------------- -------------------
Cash and cash equivalents at the end of the period 3,525 2,460
-------------------------------------------------------------------------- ------------------- -------------------
Notes to the condensed consolidated interim financial
statements
For the six-month period ended 30 June 2021
1. REPORTING ENTITY
Dolphin Capital Investors Limited (the 'Company') was
incorporated and registered in the British Virgin Islands ('BVIs')
on 7 June 2005. The Company is a real estate investment company
focused on the early-stage, large-scale leisure-integrated
residential resorts in south-east Europe and managed by Dolphin
Capital Partners Limited (the 'Investment Manager' or 'DCP'), an
independent private equity management firm that specialises in real
estate investments, primarily in south-east Europe. The shares of
the Company were admitted to trading on the AIM market of the
London Stock Exchange ('AIM') on 8 December 2005.
The condensed consolidated interim financial statements of the
Company as at and for the six-month period ended 30 June 2021
comprise the financial statements of the Company and its
subsidiaries (together referred to as the 'Group') and the Group's
interests in associates.
2. Basis of preparation
(a) Statement of compliance
These condensed consolidated interim financial statements for
the six-month period ended 30 June 2021 have been prepared in
accordance with IAS 34 'Interim Financial Reporting', and should be
read in conjunction with the Group's last annual consolidated
financial statements as at and for the year ended 31 December 2020
('last annual financial statements'). They do not include all of
the information required for a complete set of financial statements
prepared in accordance with IFRS Standards. However, selected
explanatory notes are included to explain events and transactions
that are significant to an understanding of the changes in the
Group's financial position and performance since the last annual
financial statements. They are presented in euro (EUR), rounded to
the nearest thousand.
These condensed consolidated interim financial statements were
authorised for issue by the Board of Directors on 24 September
2021.
(b) Basis of preparation
The condensed consolidated interim financial statements of the
Company for the six-month period ended 30 June 2021 have been
prepared taking into account the Board's decision to convene a
meeting of DCI shareholders before 31 December 2021 to consider and
adopt a resolution to extend the life of the Company for a number
of years from 1 January 2022, as further explained below. The basis
of preparation used continues to be in accordance with IAS 34.
Based on the Company's asset strategy, the Company's objective
has been to dispose of all of the Company's assets by 31 December
2021. The allocation of any additional capital investment into any
of the Company's projects will be substantially sourced from third
party capital providers and with the sole objective of enhancing
the respective asset's realisation potential until 31 December
2021. However, as it is clear that not all assets will be sold by
this date, the Board has decided to call a shareholders' meeting in
late November 2021 or early December 2021 to approve a further
extension of the Company's life. The Board expects to return the
proceeds from asset disposals to shareholders as the orderly
realisation of the Company's assets progresses after taking into
account the Company's liquidity position and working capital
requirements.
3. SIGNIFICANT ACCOUNTING POLICIES
The accounting policies applied by the Group in these condensed
consolidated interim financial statements are the same as those
applied by the Group in its consolidated financial statements as at
and for the year ended 31 December 2020. A number of new standards
are effective from 1 January 2021, but they do not have a material
effect on the Group's financial statements.
4. USE OF JUDGEMENTS AND ESTIMATES
The preparation of interim financial statements requires
management to make judgements, estimates and assumptions that
affect the application of accounting policies and the reported
amounts of assets and liabilities, income and expense. Actual
results may differ from these estimates.
In preparing these condensed consolidated interim financial
statements, the significant judgements made by management in
applying the Group's accounting policies and the key sources of
estimation and uncertainty were the same as those applied to the
consolidated financial statements as at and for the year ended 31
December 2020.
Going concern assumptions
The Group's cash flow forecasts for the foreseeable future
involve uncertainties related primarily to the exact disposal
proceeds and timing of disposals of the assets expected to be
disposed of. Management believes that the proceeds from forecast
asset sales will be sufficient to maintain the Group's cash flow at
a positive level. Should the need arise, management is confident
that it can secure additional banking facilities and/or obtain
waivers on existing ones, until planned asset sales are realised
and proceeds received.
As stated in note 9, the slowdown in economic activity and
transportation restrictions in all the countries where the Group
operates due to COVID-19 outbreak, is expected to have a
significant impact on both its ability to complete the construction
of its ongoing projects in a timely manner as well as hinder its
efforts to realise transactions for the disposal of its portfolio
assets.
If for any reason the Group is unable to continue as a going
concern, then this could have an impact on the Group's ability to
realise assets at their recognised values and to extinguish
liabilities in the normal course of business at the amounts stated
in the condensed consolidated interim financial statements.
5. PRINCIPAL SUBSIDIARIES
As at 30 June 2021, the Group's most significant subsidiaries
were the following:
Country Shareholding
of
Name Project incorporation interest
--------------------------------------- ------------------- --------------- -------------
Scorpio Bay
Scorpio Bay Holdings Limited Resort Cyprus 100%
======================================= =================== =============== =============
Scorpio Bay
Scorpio Bay Resorts S.A. Resort Greece 100%
======================================= =================== =============== =============
Lavender Bay
Xscape Limited Resort Cyprus 100%
======================================= =================== =============== =============
Lavender Bay
Golfing Developments S.A. Resort Greece 100%
======================================= =================== =============== =============
MindCompass Overseas One Limited Kilada Hills
('MCO 1') Golf Resort Cyprus 93%
======================================= =================== =============== =============
Kilada Hills
MindCompass Overseas S.A. Golf Resort Greece 93%
======================================= =================== =============== =============
Kilada Hills
MindCompass Overseas Two S.A. Golf Resort Greece 100%
======================================= =================== =============== =============
Kilada Hills
MindCompass Parks S.A. Golf Resort Greece 100%
======================================= =================== =============== =============
Dolphin Capital Greek Collection Kilada Hills
Limited Golf Resort Cyprus 100%
======================================= =================== =============== =============
DCI Holdings One Limited ('DCI
H1') Aristo Developers BVIs 100%
======================================= =================== =============== =============
D.C. Apollo Heights Polo and Apollo Heights
Country Resort Limited Resort Cyprus 100%
======================================= =================== =============== =============
Apollo Heights
Symboula Estates Limited ('Symboula') Resort Cyprus 100%
======================================= =================== =============== =============
Azurna Uvala D . o . o . ('
Azurna ') Livka Bay Resort Croatia 100%
======================================= =================== =============== =============
Eastern Crete Development
Company S.A. Plaka Bay Resort Greece 100%
======================================= =================== =============== =============
DolphinLux 2 S.a.r.l. La Vanta Luxembourg 100%
======================================= =================== =============== =============
Kalkan Yapi ve Turizm A.S.
('Kalkan') La Vanta Turkey 100%
======================================= =================== =============== =============
Single Purpose Vehicle Ten One&Only Kea
Limited ('SPV 10') Resort Cyprus 67%
======================================= =================== =============== =============
The above shareholding interest percentages are rounded to the
nearest integer.
6. revenue
From 1 January From 1 January
2021 2020
to 30 June to 30 June
2021 2020
EUR'000 EUR'000
------------------------------------------- --------------- ---------------
Sale of trading and investment properties 3,000 1,500
------------------------------------------- --------------- ---------------
Income from DCI H2 (see note 17) - 500
------------------------------------------- --------------- ---------------
Other income 49 7
------------------------------------------- --------------- ---------------
Total 3,049 2,007
------------------------------------------- --------------- ---------------
7. COST OF SALES
From 1 January From 1 January
2021 2020
to 30 June to 30 June
2021 2020
EUR'000 EUR'000
--------------------------------------------- --------------- ---------------
Cost of sales related to:
--------------------------------------------- --------------- ---------------
Sales of trading and investment properties 2,046 1,697
--------------------------------------------- --------------- ---------------
Total 2,046 1, 697
--------------------------------------------- --------------- ---------------
8. INCOME AND EXPENSES
. Disposal of investments in subsidiaries
From 1 January From 1 January
Note 2021 2020
to 30 June to 30 June
2021 2020
EUR'000 EUR'000
-------------------------------- ------- --------------- ---------------
Gain on disposal of investment
in subsidiaries 28 - 336
-------------------------------- ------- --------------- ---------------
Total - 336
================================ ======= =============== ===============
. Change in valuations
From 1 January From 1 January
2021 2020
to 30 June to 30 June
2021 2020
EUR'000 EUR'000
----------------------------------------------- --------------- ---------------
Net change in fair value of other investments (228) -
----------------------------------------------- --------------- ---------------
Net change in fair value of investment
property - (2,144)
----------------------------------------------- --------------- ---------------
Total (228) (2,144)
=============================================== =============== ===============
9. SEGMENT REPORTING
Operating segments
As at 30 June 2021 and 30 June 2020, due to the latest disposals
that took place in its asset portfolio, the Group is not considered
to have reportable operating segments that require disclosure.
Country risk developments
The COVID-19 pandemic continues to present a major adverse
effect on the travel, real estate and hospitality industry. During
2020, we have witnessed a significant reduction in foreign travel
intent, international travel restrictions, governmental lock-down
measures imposed on hotels and resorts in Greece and Cyprus and
supply chain delays which impacted our ongoing construction
activities.
Restrictions remained during 2021, however the hospitality
industry's recovery and growth started once the vaccination
programmes picked up. In Greece and Cyprus 60% and 70% of total
population respectively has been fully vaccinated.
Provisional data for the summer tourism traffic in Greece are
positive and the recent figures released by the Bank of Greece -
showing that more than 6 million tourists from abroad have visited
Greece - confirming the gradual increase in arrivals and recovery
of the sector. In January-June 2021 travel receipts rose by 51%
compared to the same period of 2020, reaching to EUR1,108
million.
In Cyprus, for the period of January - June 2021 revenue from
tourism is estimated at EUR259 million compared to EUR122 million
in the corresponding period of 2020, recording an increase of
112%.
With regards to real estate industry, PWC Emerging Trends Europe
report reveals that COVID-19 and the widespread problems around
have encouraged increasing numbers of investors and investment
managers to look beyond real estate's bond-like credentials and to
assess the underlying operational risk of the occupiers. And though
it is too early to draw conclusions on the consequences for values,
it is clear that the movement towards property as a service, or
operational asset class, is an accelerating trend. In addition to
that and according to Savills (Impacts, 2021) the pandemic has had
an impact on what HNWIs and UHNWIs have wanted from their primary
residences and second homes and outlines the desire for more space,
both inside and out.
Despite the encouraging news we continue to closely monitor
developments in this sphere and will adjust our operational
processes and divestment strategies accordingly so that we can
successfully navigate our business through the coming months.
10. PROFESSIONAL FEES
From 1 January From 1 January
2021 2020
to 30 June to 30 June
2021 2020
EUR'000 EUR'000
------------------------------------- --------------- ---------------
Legal fees 295 231
------------------------------------- --------------- ---------------
Auditors' remuneration (see below) 143 125
------------------------------------- --------------- ---------------
Accounting expenses 81 106
------------------------------------- --------------- ---------------
Project design and development fees 330 37 3
------------------------------------- --------------- ---------------
Consultancy fees 68 60
------------------------------------- --------------- ---------------
Administrator fees 29 29
------------------------------------- --------------- ---------------
Other professional fees 99 137
------------------------------------- --------------- ---------------
Total 1,045 1,061
------------------------------------- --------------- ---------------
From 1 January From 1 January
2021 2020
to 30 June to 30 June
2021 2020
EUR'000 EUR'000
---------------------------------------- --------------- ---------------
Auditors' remuneration comprises the
following fees:
---------------------------------------- --------------- ---------------
Audit and other audit related services 143 105
---------------------------------------- --------------- ---------------
Tax and advisory - 20
---------------------------------------- --------------- ---------------
Total 143 125
---------------------------------------- --------------- ---------------
11. ADMINISTRATIVE AND OTHER EXPENSES
From 1 January From 1 January
2021 2020
to 30 June to 30 June
2021 2020
EUR'000 EUR'000
------------------------------------ --------------- ---------------
Personnel expenses (see below) 331 22 9
------------------------------------ --------------- ---------------
Travelling and accommodation 9 26
------------------------------------ --------------- ---------------
Insurance 34 17
------------------------------------ --------------- ---------------
Marketing and advertising expenses 19 72
------------------------------------ --------------- ---------------
Rents 32 3 2
------------------------------------ --------------- ---------------
Other 92 129
------------------------------------ --------------- ---------------
Total 517 505
------------------------------------ --------------- ---------------
Personnel expenses
From 1 January From 1 January
2021 2020
to 30 June to 30 June
2021 2020
EUR'000 EUR'000
------------------------------------------ --------------- ---------------
Wages and salaries 243 178
------------------------------------------ --------------- ---------------
Compulsory social security contributions 83 45
------------------------------------------ --------------- ---------------
Other personnel costs 5 6
------------------------------------------ --------------- ---------------
Total 331 22 9
------------------------------------------ --------------- ---------------
The average number of employees during
the period was 30 16
========================================== =============== ===============
12. Taxation
From 1 From 1 January
January 2020
2021 to 30 June
to 30 June 2020
2021
EUR'000 EUR'000
Income tax 3 2
------------------ ------------ ---------------
Net deferred tax (363) (643)
================== ============ ===============
Total (360) (6 41 )
------------------ ------------ ---------------
13. LOSS per share
Basic loss per share
Basic loss per share is calculated by dividing the loss
attributable to owners of the Company by the weighted average
number of common shares outstanding during the period.
From 1 January From 1 January
2021 2020
to 30 June to 30 June
2021 2020
'000 '000
------------------------------------------ --------------- ---------------
Loss attributable to owners of the (5 , 375
Company (EUR) (3,007) )
------------------------------------------ --------------- ---------------
Number of weighted average common shares
outstanding 904,627 904,627
------------------------------------------ --------------- ---------------
Basic loss per share (EUR) (0.003) (0.006)
------------------------------------------ --------------- ---------------
Weighted average number of common shares outstanding
From 1 January From 1 January
2021 2020
to 30 June to 30 June
2021 2020
'000 '000
-------------------------------------------- --------------- ---------------
Outstanding common shares at the beginning
and end of the period 904,627 904,627
-------------------------------------------- --------------- ---------------
Diluted loss per share
Diluted loss per share is calculated by adjusting the loss
attributable to owners and the number of common shares outstanding
to assume conversion of all dilutive potential shares. As of 30
June 2021 and 30 June 2020, the diluted loss per share is the same
as the basic loss per share, due to the fact that no dilutive
potential ordinary shares were outstanding during these
periods.
14. Property, plant and equipment
Under construction Land and buildings
EUR'000 EUR'000 Other Total
EUR'000 EUR'000
30 June 2021
------------------------------------ ------------------- ------------------- ---------- ----------
Cost or revalued amount
------------------------------------ ------------------- ------------------- ---------- ----------
At beginning of period 2,054 20,445 400 22,899
------------------------------------ ------------------- ------------------- ---------- ----------
Direct acquisitions 1,037 5 5 1,047
------------------------------------ ------------------- ------------------- ---------- ----------
At end of period 3,091 20,450 405 23,946
------------------------------------ ------------------- ------------------- ---------- ----------
Depreciation and impairment losses
------------------------------------ ------------------- ------------------- ---------- ----------
At beginning of period - 17,665 379 18,044
------------------------------------ ------------------- ------------------- ---------- ----------
Depreciation charge for the period - 31 7 38
==================================== =================== =================== ========== ==========
At end of period - 17,696 386 18,082
------------------------------------ ------------------- ------------------- ---------- ----------
Carrying amounts 3,091 2,754 19 5,864
------------------------------------ ------------------- ------------------- ---------- ----------
Under construction Land and buildings
EUR'000 EUR'000 Other Total
EUR'000 EUR'000
31 December 2020
------------------------------------ ------------------- ------------------- ---------- ----------
Cost or revalued amount
------------------------------------ ------------------- ------------------- ---------- ----------
At beginning of year 117 20, 064 386 20,567
------------------------------------ ------------------- ------------------- ---------- ----------
Direct acquisitions 1,937 381 14 2,332
------------------------------------ ------------------- ------------------- ---------- ----------
At end of year 2,054 20, 445 400 2 2 , 899
------------------------------------ ------------------- ------------------- ---------- ----------
Depreciation and impairment losses
------------------------------------ ------------------- ------------------- ---------- ----------
At beginning of year - 17,550 370 17,920
------------------------------------ ------------------- ------------------- ---------- ----------
Impairment loss - 80 - 80
==================================== =================== =================== ========== ==========
Depreciation charge for the year - 35 9 44
==================================== =================== =================== ========== ==========
At end of year - 17, 665 37 9 1 8 , 044
------------------------------------ ------------------- ------------------- ---------- ----------
Carrying amounts 2,054 2 , 780 21 4 , 855
------------------------------------ ------------------- ------------------- ---------- ----------
Fair value hierarchy
The fair value of land and buildings has been categorised as a
Level 3 fair value based on the inputs to the valuation techniques
used.
Valuation techniques and significant unobservable inputs
The valuation techniques used in measuring the fair value of
land and buildings, as well as the significant unobservable inputs
used , are the same as those used as at 31 December 2020.
15. Investment property
30 June 31 December
2021 2020
EUR'000 EUR'000
--------------------------------- -------- ------------
At beginning of period/year 76,303 96,601
---------------------------------- -------- ------------
Net direct additions/ disposals 23 (1,605)
---------------------------------- -------- ------------
Fair value adjustment - (18,295)
---------------------------------- -------- ------------
Exchange differences - (398 )
---------------------------------- -------- ------------
At end of period/year 76,326 76,303
---------------------------------- -------- ------------
Fair value hierarchy
The fair value of investment property has been categorised as a
Level 3 fair value based on the inputs to the valuation techniques
used.
Valuation techniques and significant unobservable inputs
The valuation techniques used in measuring the fair value of
investment property, as well as the significant unobservable inputs
used, are the same as those used as at 31 December 2020.
16. OTHER INVESTMENTS
Other investments consists of the valuation of the Company's
holding of 9.6 million shares, equivalent to 13% of Itacare's share
capital. Itacare is a real estate investment company formerly
listed on AIM. Itacare's shareholders have decided to dispose of
all its assets after a series of asset sales/swaps. Itacare as of
30 June 2021 has managed to s ell all of its real estate assets. On
21 July 2021 Itacare has paid interim dividend of US$0.04 per share
or a total of EUR323 thousand to the Group.
17. equity-accounted investees
Single Purpose
30 June 2021 Vehicle
Fourteen
Limited
('SPV 14'
DCI H2 ) Total
EUR'000 EUR'000 EUR'000
----------------------------- ------- -------------- -------
Balance as at 1 January
20 2 1 42,694 17,980 60,674
------------------------------ ------- -------------- -------
Share of revaluation
surplus - 10 10
------------------------------ ------- -------------- -------
Share of profits/ ( losses),
net of tax - 12 12
------------------------------ ------- -------------- -------
Balance as at 30 June
2021 42,694 18,002 60,696
------------------------------ ------- -------------- -------
31 December 2020
DCI H2 SPV 14 Total
EUR'000 EUR'000 EUR'000
--------------------------- ------- --------- --------
Balance as at 1 January
20 20 42,694 17,249 59 , 943
---------------------------- ------- --------- --------
Share of (losses)/profits,
net of tax (9,415) 523 (8,892)
---------------------------- ------- --------- --------
Share of revaluation
surplus - 208 208
---------------------------- ------- --------- --------
Reversal of impairment
loss 9,415 - 9,415
---------------------------- ------- --------- --------
Balance as at 31 December
2020 42,694 1 7 , 980 60 , 674
---------------------------- ------- --------- --------
SPV14
In 2019, SPV 10 entered into a joint venture agreement pursuant
to which the Group's shareholding interest in SPV 14 (owner of
'One&Only Kea Resort') was decreased from 67% to 33%, as a
result of dilution. The Group accounted for the remaining 33%
interest as an equity-accounted investee.
DCI H2
As at 30 June 2021 and 31 December 2020, the Company's holding
of 47.9% in DCI H2, has been classified as an equity accounted
investee. Pursuant to the terms of the transaction executed in
August 2019, for the sale of 37 hectares in the area referred to as
'Atlantis', in the north of the Venus Rock project which was
formerly owned by Aristo, to Aristo Ktimatiki (an entity controlled
by Mr. Theodoros Aristodemou, chairman of Aristo), the Company as
of 30 December 2020 received EUR0.5 million cash consideration from
Aristo Ktimatiki. The remaining EUR3.5 million that was due by 30
June 2020 is expected to be received during 2022. The corresponding
preferred shares are being transferred by the Company to Aristo
Ktimatiki on a prorated basis in line with the receipt of the
commensurate instalment.
Following the impairment loss recognised in 2016, the investment
in DCI H2 as at 30 June 2021 is presented at its recoverable amount
of EUR42.7 million (31 December 2020: EUR42.7 million) which is
equal to its carrying amount.
The details of the above investments are as follows:
Shareholding
interest
Name Country of Principal activities 30 June 31 December
incorporation 2020 2020
-------- ---------------- ------------------------------ -------- ------------
Development of Kea
SPV 14 Cyprus Resort (Greece) 33% 33%
-------- ---------------- ------------------------------ -------- ------------
Acquisition and holding
of real estate investments
DCI H2 BVIs in Cyprus 48% 48%
-------- ---------------- ------------------------------ -------- ------------
The above shareholding interest percentages are rounded to the
nearest integer.
As at 30 June 2021, SPV 14 had EUR31,070 thousand (31 December
2020: EUR33,060 thousand) contractual capital commitments on
property, plant and equipment. Also, as at 30 June 2021, DCI H2 had
EUR3,500 thousand (31 December 2020: EUR3,500 thousand) contractual
capital commitments on investment property.
18. Trading properties
30 June 31 December
2021 2020
EUR'000 EUR'000
---------------------------------- ------- -----------
At beginning of period/year 59,769 60,826
----------------------------------- ------- -----------
Net direct (disposals)/ additions (2,100) 212
----------------------------------- ------- -----------
Exchange difference (37) -
----------------------------------- ------- -----------
Impairment loss - (1,269)
----------------------------------- ------- -----------
At end of period/year 57,632 59,769
----------------------------------- ------- -----------
19. RECEIVABLES AND OTHER ASSETS
30 June 31 December
2021 2020
EUR'000 EUR'000
------------------------------------ ------- -----------
Trade receivables 247 122
------------------------------------ ------- -----------
VAT receivables 289 771
------------------------------------ ------- -----------
Other receivables 565 425
------------------------------------ ------- -----------
Total trade and other receivables 1,101 1,318
------------------------------------ ------- -----------
Prepayments and other assets 70 12
------------------------------------ ------- -----------
Total 1,171 1.330
------------------------------------ ------- -----------
20. Cash and cash equivalents
30 June 31 December
2021 2020
EUR'000 EUR'000
---------------- ------- -----------
Bank balances 3,517 1,652
---------------- ------- -----------
Cash in hand 8 9
---------------- ------- -----------
Total 3,525 1,661
---------------- ------- -----------
During the period, the Group had no fixed deposits.
21. CAPITAL AND RESERVES
Capital
Authorised share capital
30 June 2021 31 December 2020
------------------ ------------------
'000 of '000 of
shares EUR'000 shares EUR'000
------------------------- --------- ------- --------- -------
Common shares of EUR0.01
each 2,000,000 20,000 2,000,000 20,000
------------------------- --------- ------- --------- -------
Movement in share capital and premium
Shares in Share Share premium
issue capital
'000 EUR'000 EUR'000
------------------------------- ---------- --------- --------------
Capital at 1 January 2020 and
30 June 2021 904,627 9,046 569,847
------------------------------- ---------- --------- --------------
Reserves
Translation reserve
Translation reserve comprises all foreign currency differences
arising from the translation of the interim financial statements of
foreign operations.
Revaluation reserve
Revaluation reserve relates to the revaluation of property,
plant and equipment from both subsidiaries and equity-accounted
investees, net of any deferred tax.
22 . LOANS AND BORROWINGS
Within one Within two to
Total year five years
-------------------- -------------------- --------------------
30 June 31 December 30 June 31 December 30 June 31 December
2021 2020 2021 2020 2021 2020
---------------------- ------- ----------- ------- ----------- ------- -----------
EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000
---------------------- ------- ----------- ------- ----------- ------- -----------
6 , 2 6, 24
Loans in Euro 6,295 44 6,295 4 - -
---------------------- ------- ----------- ------- ----------- ------- -----------
Loan facility in
Euro 1,362 - 1,362 - - -
---------------------- ------- ----------- ------- ----------- ------- -----------
Redeemable preference
shares 4,861 2,802 - - 4,861 2,802
---------------------- ------- ----------- ------- ----------- ------- -----------
6, 2
Total 12,518 9,046 7,657 44 4,861 2,802
---------------------- ------- ----------- ------- ----------- ------- -----------
As of 30 June 2021, there were no significant changes in terms
and conditions of the outstanding loans, compared to 31 December
2020.
On 18 December 2019, the Company signed an agreement with an
international investor for a EUR12 million investment in the Kilada
Hills Project. The investor has agreed to subscribe for both common
and preferred shares. The total EUR12 million investment is payable
in 24 monthly instalments of EUR500 thousand each. Under the terms
of the agreement, the investor will be entitled to a priority
return of the total investment amount from the net disposal
proceeds realised from the project and will retain a 15%
shareholding stake in Kilada. As of 30 June 2021, 7.5% (31 December
2020: 4.38%) of the ordinary shares have been transferred to the
investor.
As of 30 June 2021, 6,000 redeemable preference shares (31
December 2020: 3,500) were issued as fully paid with value of
EUR1,000 per share. The redeemable preference shares are issued
with a zero-coupon rate and are discounted with a 0.66% effective
monthly interest rate, do not carry the right to vote and are
redeemable when net disposal proceeds are realised from the
Project. As at 30 June 2021, the fair value of the redeemable
preference shares was EUR4,861 thousand (31 December 2020: EUR2,802
thousand).
On 3 June 2021 the Company entered into a EUR15 million senior
secured term loan facility agreement with two institutional private
credit providers acting on behalf of their managed and advised
funds. The nominal interest rate is 12.5% and the initial maturity
date falls 18 months from the loan draw-down and is subject to a
six-month extension at Company's option with a 2% interest step-up.
The facility agreement includes mandatory prepayment clauses with
regard to revenues realized by the Company from the disposal of its
assets as well as standard event of default provisions including,
inter alia, borrower change of control, termination of investment
management agreement and cancelation of existing borrower
securities listing. As of 30 June 2021, an amount of EUR1,750
thousand has been drawn down and arrangement and commitment fees
amounting to EUR406 thousand have been prepaid. The second tranche
amounting to EUR13,250 thousand was drawn down on 16 July 2021.
1 January New Capital Interest Transaction Other 30 June
2020 issues repayments paid costs movements 2021
EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000
----------------------- ---------- -------- ------------ --------- ------------ ----------- --------
Loans in E uro 6,244 - (250) - - 301 6,295
----------------------- ---------- -------- ------------ --------- ------------ ----------- --------
Loan facility in
Euro - 1,750 - - (406) 18 1,362
----------------------- ---------- -------- ------------ --------- ------------ ----------- --------
Redeemable preference
shares 2,802 2,500 - - (75) (366) 4,861
----------------------- ---------- -------- ------------ --------- ------------ ----------- --------
Total 9,046 4,250 (250) - (481) (47) 12,518
----------------------- ---------- -------- ------------ --------- ------------ ----------- --------
Securities
As at 30 June 2021, the Group's loans and borrowings were
secured as follows:
-- Mortgage against the immovable property of the Croatian
subsidiary, Azurna, with a carrying amount of EUR20.9 million (31
December 2020: EUR20.9 million), two promissory notes, a debenture
note and a letter of support from its parent company Single Purpose
Vehicle Four Limited.
-- Upon transfer of the entire amount of EUR12 million from the
investor in accordance with the terms of the agreement, a mortgage
will be set against the immovable property of the Kilada Hills
Project, in the amount of EUR15 million.
-- Fixed and floating charge over all of the Company's assets,
pledges over the shares of subsidiaries in Kilada Hils and Apollo
Project and assignments and charges over intercompany loans.
23. lease LIABILITIES
30 June 2021 31 December 2020
-------------------------------- ---------------------------------
Present Present
Future value Future value
minimum of minimum minimum of minimum
lease lease lease lease
payments Interest payments payments Interest payments
EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000
--------------------- --------- -------- ----------- --------- -------- ------------
Less than one year 29 1 28 30 1 29
--------------------- --------- -------- ----------- --------- -------- ------------
Between two and five
years 688 11 677 283 10 273
--------------------- --------- -------- ----------- --------- -------- ------------
More than five years 3,854 1,147 2,707 4,302 1.199 3,103
--------------------- --------- -------- ----------- --------- -------- ------------
Total 4,751 1,159 3,412 4,615 1,210 3,405
--------------------- --------- -------- ----------- --------- -------- ------------
The major lease liabilities comprise leases in Greece with
99-year lease terms.
24. Deferred tax liabilities
30 June 31 December
2021 2020
EUR'000 EUR'000
-------------------------------------------- ------- -----------
Balance at the beginning of the period/year 8,000 11, 027
-------------------------------------------- ------- -----------
( 2,990
Recognised in profit or loss (363) )
-------------------------------------------- ------- -----------
Exchange differences 15 (37)
============================================ ======= ===========
Balance at the end of the period/year 7,652 8,000
-------------------------------------------- ------- -----------
Deferred tax liabilities are attributable to the following:
30 June 31 December
2021 2020
EUR'000 EUR'000
------------------------------ ------- -----------
Investment property 3,653 3,638
------------------------------ ------- -----------
Trading properties 3,936 4,299
------------------------------ ------- -----------
Property, plant and equipment 63 63
============================== ======= ===========
Total 7,652 8,000
------------------------------ ------- -----------
25 . Trade and other payables
30 June 31 December
2021 2020
EUR'000 EUR'000
------------------------------------ ------- -----------
Land creditors 20,761 20,758
==================================== ======= ===========
Investment Manager fees (Note 27.2) 4,264 3,498
==================================== ======= ===========
Other payables and accrued expenses 5,283 5,260
------------------------------------ ------- -----------
Total 30,308 29,516
------------------------------------ ------- -----------
30 June 31 December
2021 2020
EUR'000 EUR'000
------------- -------- ------------
Non-current 20,225 20,366
------------- -------- ------------
Current 10,083 9,150
============= ======== ============
Total 30,308 29,516
------------- -------- ------------
Land creditors relate to contracts in connection with the
purchase of land at Lavender Bay. The above outstanding amount
bears an annual interest rate equal to the inflation rate, which
cannot exceed 2%. Full settlement is due on 31 December 2025.
26. NAV per share
30 June 31 December
2021 2020
'000 '000
--------------------------------------- ------- -----------
Total equity attributable to owners of
the Company (EUR) 144,761 148,648
--------------------------------------- ------- -----------
Number of common shares outstanding at
end of period/year 904,627 904,627
--------------------------------------- ------- -----------
NAV per share (EUR) 0.16 0.16
--------------------------------------- ------- -----------
27. Related party transactions
27.1 Directors' interest and remuneration
Directors' interest
Miltos Kambourides is the founder and managing partner of the
Investment Manager.
On 30 June 2021, Mr. Martin Adams, Mr. Nicholas Paris and Mr.
Nicolai Huls joined the Board as non-executive Directors, with Mr.
Martin Adams becoming Chairman. On the same date, Mr. Andrew
Coppel, Mr.Graham Warner and Mr. Mark Townsend stepped down from
the Board as non-executive Directors.
The interests of the Directors as at 30 June 2021, all of which
are beneficial, in the issued share capital of the Company as at
this date were as follows:
Shares
'000
---------------------------------------------- -------
Miltos Kambourides (indirect holding) 66,019
---------------------------------------------- -------
Nicolai Huls 775
---------------------------------------------- -------
Mark Townsend (stepped down on 30 June 2021) 1,532
---------------------------------------------- -------
Andrew Coppel (stepped down on 30 June 2021) 942
---------------------------------------------- -------
Directors' remuneration
Save as disclosed, none of the Directors had any interest during
the period in any material contract for the provision of services
which was significant to the business of the Group.
From 1 January From 1 January
2021 2020
to 30 June to 30 June
2021 2020
EUR'000 EUR'000
-------------------- --------------- ---------------
Remuneration 194 205
-------------------- --------------- ---------------
Total remuneration 194 205
==================== =============== ===============
The Directors' remuneration details for the six-month period
ended 30 June 2021 and 30 June 2020 were as follows:
From 1 January From 1 January
2021 2020
to 30 June to 30 June
2021 2020
EUR'000 EUR'000
----------------------------------- --------------- ---------------
Andrew Coppel (stepped down on 30
June 2021) 104 96
----------------------------------- --------------- ---------------
Graham Warner (stepped down on 30
June 2021) 61 7 3
----------------------------------- --------------- ---------------
Mark Townsend (stepped down on 30
June 2021) 29 36
----------------------------------- --------------- ---------------
Total 194 205
=================================== =============== ===============
Mr. Miltos Kambourides has waived his fees.
27.2 Investment Manager remuneration
From 1 January From 1 January
2021 2020
to 30 June to 30 June
2021 2020
EUR'000 EUR'000
---------------------- --------------- ---------------
Fixed management fee 1,800 1,800
---------------------- --------------- ---------------
Total remuneration 1,800 1,800
====================== =============== ===============
As at 30 June 2021, the outstanding amount in relation to
Investment Manager fees was EUR4,264 thousand (31 December 2020:
EUR3,498 thousand) (see note 25).
On 9 April 2019, the Company signed an Amended and Restated
Investment Management Agreement ('IMA'), effective from 1 January
2019, as follows:
i. Fixed management fee
The annual management fees for the period from 1 January 2019 to
31 December 2019 were EUR4 million and have been further reduced to
EUR3.6 million per annum for 2020 and 2021.
Additionally, the IMA will expire at the earlier of 31 December
2021 or the sale of all of the Company's assets. There will be no
fixed management fee due after 31 December 2021.
ii. Variable management fee
The variable management fee for the period from 1 January 2020
to 31 December 2021 shall be equal to a percentage of the actual
distribution made by the Company to its shareholders, as shown
below:
Aggregate shareholder distributions % applied
on distributions
Up to but excluding EUR30 million Nil
------------------------------------- ------------------
EUR30 million up to but excluding
EUR50 million 2.0%
-------------------------------------- ------------------
EUR50 million up to but excluding
EUR75 million 3.0%
-------------------------------------- ------------------
EUR75 million up to but excluding
EUR100 million 4.0%
-------------------------------------- ------------------
EUR100 million up to but excluding
EUR125 million 5.0%
-------------------------------------- ------------------
EUR125 million or more 6.0%
-------------------------------------- ------------------
iii. Performance fee
The Investment Manager is entitled to a performance fee payable
subject to certain conditions, under the terms of the IMA. However,
any performance fees earned under this arrangement will be fully
deducted from any future annual management fees and variable
management fees payable over the term of the IMA. No performance
fee is payable to the Investment Manager for the six-month period
ended 30 June 2021 (30 June 2020: EUR Nil).
27.3 Other related parties
DCP owns an effective 5% equity interest in SPV14 Ltd (an
equity-accounted investee and the holding company of the OOKI
project). Under the relevant shareholders agreement dated 27 May
2019, DCP, One&Only and Exactarea have priority returns for an
amount equal to 75% of their equity investment, following the
payment of which DCI becomes entitled to a priority catch-up for
the same amount. DCP also has an asset management agreement dated 1
November 2017 with OOKI and provided management services during the
period amounting to EUR120 thousand (30 June 2020: EUR450
thousand).
DCP retains a 4.8% equity interest in AZOE Holdings Ltd, the
company that owns Amanzoe resort and it also has an asset
management agreement dated 3 October 2018 for the resort. Amanzoe
Resort S.A. has entered on 2 August 2021 into a contract to buy 24
founder plots in the Company's Kilada project for a price of EUR10
million payable in instalments in accordance with the achievement
of certain construction milestones.
AXIA Ventures Group Limited, which is 20% owned by an affiliate
of DCP and on whose Board of Directors Miltos Kambourides serves,
was appointed by DCI to undertake a process for the sale of DCI's
equity interest in OOKI dated 29 September 2020 but no transaction
was concluded and therefore no fee was due or paid.
During the period ended 30 June 2021 and 30 June 2020, the Group
did not enter into any new related party transactions.
28. Business combinations
On 30 January 2020, the Group finalised the sale of the one
remaining Seafront Villa (owned by the Collection Group), creating
a net gain on disposal of EUR336 thousand.
Collection
EUR'000
-------------------------------- -----------
Trading properties (1,124)
---------------------------------- -----------
Cash and cash equivalents (1)
---------------------------------- -----------
Trade and other payables 1,461
---------------------------------- -----------
Net liabilities 336
---------------------------------- -----------
Net assets disposed of - 100 % 336
---------------------------------- -----------
Net proceeds on disposal -
-------------------------------- -----------
Gain on disposal recognised in
profit or loss 336
---------------------------------- -----------
Cash effect on disposal:
-------------------------------- -----------
Net proceeds on disposal -
-------------------------------- -----------
Cash and cash equivalents (1)
---------------------------------- -----------
Net cash outflow on disposal (1)
---------------------------------- -----------
29. FINANCIAL RISK MANAGEMENT
The Group's financial risks and risk management objectives and
policies are consistent with those disclosed in the consolidated
financial statements as at and for the year ended 31 December
2020.
Fair values
The fair values of the Group's financial assets and liabilities
approximate their carrying amounts at the statement of financial
position date.
30. Commitments
As of 30 June 2021, the Group had a total of EUR17,203 thousand
contractual capital commitments on property, plant and equipment
(31 December 2020: EUR1,395 thousand).
31. Contingent liabilities
Companies of the Group are involved in pending litigation. This
principally relates to day-to-day operations as a developer of
second-home residences and largely derives from certain clients and
suppliers. Based on advice from the Group's legal advisers, the
Investment Manager believes that there is sufficient defence
against any claim and does not expect that the Group will suffer
any material loss. All provisions in relation to these matters
which are considered necessary have been recorded in these
condensed consolidated interim financial statements.
In addition to the tax liabilities that have already been
provided for in the condensed consolidated interim financial
statements based on existing evidence, there is a possibility that
additional tax liabilities may arise after the examination of the
tax and other matters of the companies of the Group in the relevant
tax jurisdictions.
The Group, under its normal course of business, guaranteed the
development of properties in line with agreed specifications and
time limits in favour of other parties.
32. SUBSEQUENT EVENTS
There were no material events after the reporting period which
have a bearing on the understanding of the condensed consolidated
interim financial statements as at 30 June 2021 other than as
disclosed.
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END
IR BLGDCLSDDGBS
(END) Dow Jones Newswires
September 27, 2021 02:00 ET (06:00 GMT)
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