TIDMLDG
RNS Number : 2344J
Logistics Development Group PLC
20 August 2021
Logistics Development Group plc
(the "Company")
Interim Results for six months ended 31 May 2021
Logistics Development Group plc, the AIM-quoted investing
company, announces its unaudited interim results for the six months
ended 31 May 2021.
This period precedes the sale of the Company's indirect interest
in GreenWhiteStar Acquisitions Limited ("GWSA") group, the holding
company for the Eddie Stobart, The Pallet Network, iForce, Eddie
Stobart Europe and The Logistics People businesses, as announced on
1 July 2021.
Summary for the reporting period
-- At the reporting date of 31 May 2021, the Company continued
to hold an indirect 49 per cent equity investment in GWSA Group (1)
, a leading UK end-to-end supply chain, transport and logistics
group.
-- In the reporting period, the Company acquired for GBP6m an
indirect 10.9 per cent equity interest in an 18 per cent PIK loan
note with indirect exposure to the performance of GWSA.
-- On 31 May 2021, the Company revalued its indirect investment
in GWSA to GBP57.9m (thus incurring a GBP22.1m gain) to reflect the
market capitalisation of the Company at period end. This valuation
is stated after adjusting for the recently acquired indirect
investment in the 18 per cent PIK loan note.
-- During the reporting period the GWSA Group trading entities
continued to deliver excellent service to its customers and since
the start of the HY21 period, despite the challenging operational
environment due to Covid-19, had won substantial new contracts and
made further progress in filling available warehouse space. The
financial performance of the businesses continued to improve
throughout the period, and senior debt was reduced on the back of
improved cash flow generation.
-- Underlying Profit(2) before tax substantially improved vs the
comparative period at GBP21.5m (2020: loss of GBP16.4m) before
exceptional items of GBP0.1m (2019: GBP3.4m) and the statutory
profit before tax was GBP21.6m (2020: loss of GBP12.9m).
-- On 29 December 2020, in line with its previously communicated
intentions, the Board announced the successful fund raising of
GBP16.2m (before expenses of GBP1.5m) and its conversion to an AIM
Investing Company. The Company appointed DBAY Advisors Limited
("DBAY") as its Investment Manager.
-- On 9 February 2021, the Company announced a change of name to
the Logistics Development Group plc.
-- On 1 April 2021, David Facey joined the board as a
non-executive director and chair of the Audit Committee.
Subsequent events
-- On 1 July 2021, the Company announced the disposal of its
indirect interest in GWSA, the holding company for the Eddie
Stobart, The Pallet Network, iForce, Eddie Stobart Europe and The
Logistics People businesses, to Culina Group Limited ("Culina")
(the "Transaction").
-- As at 31 May 2020, the fair value of Company's investment in
a parent company of GWSA was GBP57.9m (2020: GBP35.8m). The Company
announced that it expected to receive a net cash inflow from the
Transaction of not less than GBP125m.
-- At the date of this report the Company has received a net
cash inflow of GBP125m, including repayment of the recent GBP6m
investment in the PIK loan. Further amounts may be received when
the completion accounts for the Transaction are finalised.
-- The investment return of not less than GBP125m implies a
multiple of approximately 3.5x compared to the NAV of GBP35.8m as
at 30 November 2020, or an increase of 2.2x compared to the NAV at
the end of the reporting period of GBP57.9 million.
-- As at the date of this announcement, following the
Transaction, the Company holds no material investment assets, is
debt free and has an available cash balance in excess of GBP130m or
18.5p per share.
-- The Board has been informed by the Investment Manager that it
is reviewing a number of investment opportunities, and the Board
and Investment Manager remain committed to generating attractive
investment returns for shareholders.
1 For the purposes of these results the "GWSA Group" means
GreenWhiteStar Acquisitions Limited and its subsidiaries at 31 May
2020, which were subsidiaries of the Company prior to the
transaction with DBAY in December 2019 (2) Underlying profit/loss
before tax is defined as profit/loss before tax adding back
exceptional items.
2 Underlying profit/loss before tax is defined as profit/loss
before tax adding back exceptional items.
The Interim Results are also available to be viewed on, or
downloaded from, the Company's corporate website at
www.ldgplc.com
Further enquiries:
Logistics Development Group plc Via FTI Consulting
FTI Consulting +44 (0) 20 3727 1340
Nick Hasell / Alex Le May
Strand Hanson Limited
(Financial and Nominated Adviser)
James Dance / James Spinney +44 (0) 02 7409 3494
Investec Bank plc
(Broker)
Gary Clarence / Harry Hargreaves +44 (0) 20 7597 5970
Business update
As highlighted in the Company's announcements in December 2020,
the conversion of the Company to an AIM quoted Investing company
was overwhelmingly approved by shareholders following the
successful fund raising of GBP16.2m before fees of GBP1.5m.
Following the conversion to an AIM quoted Investing company, DBAY
was appointed as Investment Manager to the Company.
At the reporting date the Company continued to hold an
investment in GWSA Group which was held through the Company's 49
per cent. stake in Marcelos Limited ("Marcelos") and Marcelos'
wholly owned subsidiary Alpha Cassiopeiae Limited ("Alpha C"). GWSA
is the holding company for the Eddie Stobart, The Pallet Network,
iForce, Eddie Stobart Europe and The Logistics People businesses.
In early May 2021 the Company acquired for GBP6m a 10.9 per cent
legal and beneficial interest in Alpha Persei Limited ("Alpha P"),
which is the holder of an 18 per cent PIK loan note issued by Alpha
C.
The Company has elected to measure its investments in Marcelos
and Alpha P at fair value through profit and loss. The election is
taken on the basis of the investment being a 'venture capital'
investment under IAS 28 'Investments in Associates and Joint
Ventures'. The strategy of the Company as an Investing company is
to generate value though holding investments for the short to
medium term. Therefore, the Directors believe that the fair value
method of accounting for the investments is in line with the
strategy of the Company.
Throughout the reporting period, the GWSA Group companies
continued to thrive and to deliver excellent service to its
customers. Since the start of the HY21 period, despite the
challenging operational environment due to Covid-19, the trading
entities won substantial new contracts and made further progress in
filling available warehouse space. The financial performance of the
GWSA Group continued to improve and senior debt was reduced on the
back of improved cash flow generation.
Outlook and investment update
On 1 July 2021, the Company announced the disposal of its
indirect interest in GWSA, the holding company for the Eddie
Stobart, The Pallet Network, iForce, Eddie Stobart Europe and The
Logistics People businesses. Alpha C completed the sale of its
wholly owned subsidiary, GWSA, to Culina Group Limited ("Culina")
for an undisclosed consideration (the "Transaction") and the
Company consented to the Transaction pursuant to the Marcelos
shareholders' agreement. As at 31 May 2021, the fair value of LDG's
investment in Marcelos was GBP57.9m (2020: GBP35.8m). The Company
announced that it expected to receive a net cash inflow from the
Transaction of not less than GBP125m.
At the date of this report the Company has received a net cash
inflow of GBP125m, including repayment of the recent GBP6m
investment in the PIK loan held by Alpha P Limited. Further amounts
may be received when the completion accounts for the Transaction
are finalised.
The investment return of not less than GBP125m implies a
multiple of approximately 3.5x compared to the NAV of GBP35.8m as
at 30 November 2020, or an increase of 2.2x compared to the NAV at
the end of the reporting period of GBP57.9 million.
As at the date of this announcement, following the Transaction,
the Company holds no material investment assets, is debt free and
has an available cash balance in excess of GBP130m or 18.5p per
share.
The Board has been informed by DBAY Advisors Limited, the
Company's Investment Manager, that it is reviewing a number of
investment opportunities, and the Board and Investment Manger
remain committed to generating attractive investment returns for
all LDG shareholders.
Interim review for the six months ended 31 May 2021
Background
As at 31 May 2021, the Company indirectly owned 49 per cent of
the GreenWhiteStar Acquisitions Limited ("GWSA") Group via its 49
per cent equity interest in Marcelos Limited ("Marcelos"). The
Company also held a 10.9 per cent equity interest in Alpha Persei
Limited, the holder of an 18 per cent PIK note issued by Alpha
Cassiopeiae Limited, which it acquired in early May 2021.
Summary of HY21 results
The Company reported an underlying profit before tax of GBP21.5m
(2020: loss of GBP16.4m) in the period before exceptional items of
GBP0.1m (2020: GBP3.4m). On a statutory basis, the reported profit
before tax was GBP21.6m (2020: loss of GBP12.9m). Administrative
expenses are significantly lower than in the corresponding period
because the Company no longer incurs a share-based payment charge,
attracts significantly reduced insurance costs and also much lower
professional fees (legal/audit).
Earnings per share
Statutory basic and diluted earnings per share were a profit of
4.2p (2020: loss of 3.4p).
Exceptional items
During the reporting period the Company recognised a GBP0.1m
income in respect of a VAT refund. During the comparable period,
the Company recognised income in relation to the transition costs
of GBP2.9m associated with the disposal of GWSA and audit fees of
GBP0.6m. The costs were ultimately borne by GWSA in accordance with
the DBAY transaction deal arrangements.
Dividends
The Company did not pay a final dividend for the year ended 30
November 2020 and the Board has decided not to recommend an interim
dividend payment.
Tax
For the six months to 31 May 2021, the Company has incurred tax
losses and is no longer part of a tax group. Therefore, the Company
did not recognise current and deferred assets as the Directors do
not consider that there is sufficient certainty over their
recovery.
Accounting matters
Investment in GreenWhiteStar Acquisitions Group
At the reporting date, the Company had as its significant
investment its indirect ownership of a 49 per cent of GWSA Group
via its ownership of 49 per cent of Marcelos. The Directors have
elected to measure investments held at fair value through profit or
loss rather than to equity account.
The Company has revalued its investment in Marcelos to GBP57.9m
(thus incurring a GBP22.1m gain) to reflect the market
capitalisation of the Company as at 31 May 2021 after adjusting for
other material investments and cash balances. The Directors believe
that using observable market inputs at the period end represents
the most suitable valuation methodology given the short trading
period since the acquisition and the continuing dislocating effects
of Covid-19. In addition, the Directors have reviewed other
valuation metrics such as peer group trading multiples. Based on
these metrics the Directors believe the valuation of GBP57.9m is
justifiable, albeit at the lower end of the range of possible
values.
Statement of Comprehensive Income
for the six months ended 31 May 2021
Six months Six months
ended ended
31 May 31 May
2021 2020
Unaudited Unaudited
Notes GBP'000 GBP'000
--------------------------------------------- ------ ----------- -----------
Gain/(loss) on investments measured
at fair value through profit or loss 2 22,175 (15,000)
--------------------------------------------- ------ ----------- -----------
Administrative expenses: before exceptional
items (657) (1,345)
Administrative expenses: exceptional
items 3 90 3,445
--------------------------------------------- ------ ----------- -----------
Total administrative expenses (567) 2,100
Profit/(loss) from operating activities 21,608 (12,900)
--------------------------------------------- ------ ----------- -----------
Profit/(loss) before tax 21,608 (12,900)
--------------------------------------------- ------ ----------- -----------
Income tax charge 5 - -
Profit/(loss) and total comprehensive
expense for the period 21,608 (12,900)
--------------------------------------------- ------ ----------- -----------
Earnings per share
Basic profit/(loss) 6 4.2p (3.4p)
Diluted profit/(loss) 6 4.2p (3.4p)
--------------------------------------------- ------ ----------- -----------
There are no items of other comprehensive income to be
disclosed.
The above Statement of Comprehensive Income should be read in
conjunction with the accompanying notes which form part of these
extracts of the financial statements.
Statement of Financial Position
as at 31 May 2021
30 Nov
31 May 2021 2020
Unaudited Audited
Notes GBP'000 GBP'000
------------------------------------ ------ ------------ ----------
Assets
Non-current assets
Investments at fair value through
profit or loss 2 64,023 35,848
64,023 35,848
------------------------------------ ------ ------------ ----------
Current assets
Other receivables 7 88 28
Cash and cash equivalents 7,943 652
------------------------------------ ------ ------------ ----------
8,031 680
------------------------------------ ------ ------------ ----------
Total assets 72,054 36,528
------------------------------------ ------ ------------ ----------
Liabilities
Current liabilities
Amounts owed to group undertakings 7 (910) (1,235)
Other payables 7 (247) (2,184)
------------------------------------ ------ ------------ ----------
(1,157) (3,419)
------------------------------------ ------ ------------ ----------
Total liabilities (1,157) (3,419)
Net assets 70,897 33,109
------------------------------------ ------ ------------ ----------
Equity
Share capital 8 7,022 3,793
Share premium 8 157,439 146,002
Own shares (857) (2,611)
Retained earnings (92,707) (114,075)
Total equity 70,897 33,109
------------------------------------ ------ ------------ ----------
The above Statement of Financial Position should be read in
conjunction with the accompanying notes which form part of these
extracts of the financial statements.
Signed on behalf of the Board on
A J Collins
19 August 2021
Director
Company Number: 8922456
Statement of Changes in Equity
for the six months ended 31 May 2021
Share
Share Share Merger Own options Retained Total
capital premium reserve shares reserve earnings equity
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
------------------------ --------- --------- --------- -------- --------- ---------- ---------
Balance as at 30
November 2019 3,793 146,002 7,950 (2,700) 4,218 (117,269) 41,994
------------------------ --------- --------- --------- -------- --------- ---------- ---------
Loss for the period - - - - - (12,900) (12,900)
Share based payment
expense - - - - 491 - 491
Transfers (see notes
8 and 9) - - (7,950) - (4,709) 12,659 -
Balance at 31 May
2020 3,793 146,002 - (2,700) - (117,510) 29,585
------------------------ --------- --------- --------- -------- --------- ---------- ---------
Share
Share Share Merger Own options Retained Total
capital premium reserve shares reserve earnings equity
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
------------------------ --------- --------- --------- -------- --------- ---------- ---------
Balance as at 30
November 2020 3,793 146,002 - (2,611) - (114,075) 33,109
------------------------ --------- --------- --------- -------- --------- ---------- ---------
Profit for the period - - - - - 21,608 21,608
Issue of share capital 3,229 12,951 - - - - 16,180
Transfers (see notes
8 and 9) - (1,514) - 1,754 - (240) -
Balance at 31 May
2021 7,022 157,439 - (857) - (92,707) 70,897
------------------------ --------- --------- --------- -------- --------- ---------- ---------
Cash Flow Statement
for the six months ended 31 May 2021
Six months
Six months ended
ended 31 May
31 May 2021 2020
Unaudited Unaudited
Notes GBP'000 GBP'000
--------------------------------------- ------ ------------- -----------
Cash flows from operating activities
Profit/(loss) for the period 21,608 (12,900)
Adjustments for:
Equity settled share-based payment
expense 9 - 491
(Gain)/loss on investments measured
at fair value through profit or
loss 2 (22,175) 15,000
Changes in:
Other receivables 7 (60) 53,336
Other payables 7 (1,937) (56,027)
--------------------------------------- ------ ------------- -----------
Cash used in operating activities (2,564) (100)
--------------------------------------- ------ ------------- -----------
Cash flows from investing activities:
Purchase of investment (6,000) -
--------------------------------------- ------ ------------- -----------
Net cash outflow from investing
activities (6,000) -
--------------------------------------- ------ ------------- -----------
Cash flows from financing activities:
Issue of share capital 16,180 -
Repayment of related party loan (325) -
--------------------------------------- ------ ------------- -----------
Net cash inflow from financing
activities 15,855 -
--------------------------------------- ------ ------------- -----------
Increase/(Decrease) in cash and
cash equivalents 7,291 (100)
--------------------------------------- ------ ------------- -----------
Cash and cash equivalents at the
start of the financial period 652 362
Cash and cash equivalents at the
end of the financial period 7,943 262
--------------------------------------- ------ ------------- -----------
The above Statement of Changes in Equity and Cash Flow Statement
should be read in conjunction with the accompanying notes which
form part of these extracts of the financial statements.
Notes to the Financial Statements
for the six months ended 31 May 2021
1. General information
The Directors of Logistics Development Group plc (the "Company")
present their interim report and the unaudited financial statements
for the period ended 31 May 2021 ("Interim Financial Statements").
The Company is a public company limited by shares and incorporated
and domiciled in the UK. Its registered address is 3 More London
Riverside, 4(th) Floor, London SE1 2AQ. The Company changed its
name on 9 February 2021.
The Interim Financial Statements have not been audited and were
approved by the Board of Directors on 21 August 2021. The
information for the period ended 31 May 2021 does not constitute
statutory accounts within the meaning of section 434 of the
Companies Act 2006. The Interim Financial Statements should be read
in conjunction with the annual financial statements for the year
ended 30 November 2020, which were prepared in accordance with
International Accounting Standards in conformity with the
requirements of the Companies Act 2006. Those accounts have been
reported on by the Company's auditors and delivered to the
Registrar of Companies. The report of the auditors was (i)
unqualified and (ii) did not contain a statement under section
498(2) or (3) of the Companies Act 2006.
The Interim Financial Statements were prepared in accordance
with International Financial Reporting Standards ("IFRS") and those
parts of the Companies Act 2006 applicable to companies reporting
under IFRS.
Basis of preparation
The interim financial statements for the period ended 31 May
2021 have been prepared in accordance with Accounting Standard IAS
34 Interim Financial Reporting. The interim financial statements do
not include all the notes of the type normally included in an
annual financial report. Accordingly, this report is to be read in
conjunction with the annual report for the year ended 30 November
2020 and any public announcements made by the Company during the
interim reporting period.
The Interim Financial Statements are presented in pounds
sterling, rounded to the nearest thousand, unless otherwise stated.
They were prepared under the historical cost convention, except for
financial assets recognised at fair value through profit or loss,
which have been measured at fair value.
Prior to the year ended 30 November 2020 the Company presented
consolidated financial statements. In the comparative period on 9
December 2019, the Company disposed of its only subsidiary
undertaking, GreenWhiteStar Acquisitions Limited ("GWSA"), as
discussed further in note 2. At the reporting date of 31 May 2021,
the Company has no subsidiaries and, as such, no consolidated
financial statements have been presented. The Interim Financial
Statements therefore present Company only information for the
current and comparative periods.
Going concern
On 1 July 2021, the Company announced the disposal of its
indirect interest in GWSA and the Company currently holds no
investments and a cash balance in excess of GBP125m and has minimal
liabilities at the reporting date, The Directors therefore expect
that the Company has sufficient resources to continue in operation
for the foreseeable future, a period of at least 12 months from the
date of this report. The Directors have prepared a cash flow
forecast for period of 3 years which indicate that available funds
significantly exceed anticipated expenditure. Consequently, the
Directors of the Company continue to adopt the going concern basis
of accounting in preparing the annual financial statements.
Accounting policies
The accounting policies adopted in the preparation of the
Interim Financial Statements are consistent with those applied in
the preparation of the Company's financial statements for the year
ended 30 November 2020 .
(a) Fair value measurement of the Company's investments utilises
market observable inputs and data as far as possible. Inputs used
in determining fair value measurements are categorised into
different levels based on how observable the inputs used in the
valuation technique utilised are (the 'fair value hierarchy'):
- Level 1: Quoted prices in active markets for identical items
(unadjusted);
- Level 2: Observable direct or indirect inputs other than Level
1 inputs;
- Level 3: Unobservable inputs (i.e. not derived from market
data and may including using multiples of trading results or
information from recent transactions).
The classification of an item into the above levels is based on
the lowest level of the inputs used that has a significant effect
on the fair value measurement of the item. Transfers of items
between levels are recognised in the period they occur.
(b) Financial instruments
- Financial assets - other receivables and amounts owed to
related undertakings. Such assets are recognised initially at fair
value plus any directly attributable transaction costs. Subsequent
to initial recognition, such assets are measured at amortised cost
using the effective interest method, less any impairment
losses.
- Cash and cash equivalents - in the Statement of Financial
Position, cash includes cash and cash equivalents excluding bank
overdrafts. No expected credit loss provision is held against cash
and cash equivalents as the expected credit loss is negligible.
- Financial liabilities - other payables and amounts owed to
related undertakings. Such liabilities are initially recognised on
the date that the Company becomes party to contractual provisions
of the instrument. The Company derecognised a financial liability
when its contractual obligations are discharged, cancelled or
expire. Such financial liabilities are recognised initially at fair
value less any directly attributable transaction costs. Subsequent
to initial recognition, these financial liabilities are measured at
amortised cost using the effective interest method.
Share capital - Ordinary shares are classified as equity.
Incremental costs directly attributable to the issue of ordinary
shares are recognised as a deduction from equity, net of any tax
effects.
(c) Share-based payments - the Company operated a number of
equity-settled, share-based compensation plans, under which GWSA
and the Company received services from employees as consideration
for equity instruments (options) of the Company. The fair values of
the employee services received in exchange for the grant of the
options was recognised as an expense. The cancellation of
equity-settled plans is accounted for as an acceleration of the
vesting period and therefore any amount unrecognised that would
otherwise have been charged should be recognised immediately.
(d) Exceptional items - items that are material in size or
nature and non-recurring are presented as exceptional items in the
Statement of Comprehensive Income. The Directors are of the opinion
that the separate recording of exceptional items provides helpful
information about the Company's underlying business performance.
Events which may give rise to the classification of items as
exceptional include restructuring of business units and the
associated legal and employee costs, costs associated with business
acquisitions, impairments and other significant gains or
losses.
(e) Alternative performance measures (APMs) - APMs, such as
underlying results, are used in the day-to-day management of the
Company, and represent statutory measures adjusted for items which,
in the Directors' view, could influence the understanding of
comparability and performance of the Company year on year. These
items include non-recurring exceptional items and other material
unusual items.
(f) Tax - tax expense comprises current and deferred tax.
Current tax and deferred tax are recognised in profit or loss
except to the extent that it relates to items recognised directly
in equity or in other comprehensive income. Deferred tax assets are
recognised only to the extent that it is probable that future
taxable profit will be available against which the temporary
differences can be utilised.
(g) Operating segments - the Company now has a single operating
segment on a continuing basis, namely investment in the logistics
services business.
(h) Fund raise costs - transaction costs incurred in
anticipation of an issuance of equity instruments are recorded as a
deduction from the retained earnings reserve in accordance with IAS
32 and the Companies Act 2006.
(i) Own shares reserve - transfer of shares from the trust to
employees is treated as a realised loss and recognised as a
deduction from the retained earnings reserve.
New and amended standards adopted by the Company
There are no IFRS standards or IFRIC interpretations that are
mandatory for the period ending 31 May 2021 that have a material
impact on the financial statements of the Company.
Significant accounting judgements
In the application of the Company's accounting policies, the
Directors are required to make judgements, estimates and
assumptions about the carrying amounts of assets and liabilities
that are not readily apparent from other sources. The estimates and
associated assumptions are based on historical experience and other
factors that are relevant. Actual results may differ from these
estimates.
The estimates and underlying assumptions are reviewed on an
ongoing basis. Revisions to accounting estimates are recognised in
the period in which the estimate is revised if the revision affects
only that period, or in the period of the revision and future
periods if the revision affects both current and future
periods.
Critical judgements in applying the Company's accounting
policies
In applying the Company's accounting policies, the Directors
have made the following judgements that have the most significant
effect on the amounts recognised in the financial statements (apart
from those involving estimations, which are dealt with below) and
have been identified as being particularly complex or involve
subjective assessments.
(i) Measurement of the investments - the Company has elected to
measure its investments in Marcelos Limited, the new intermediate
holding company of Eddie Stobart Group, and Alpha Persei Limited,
the holder of an 18 per cent loan note, at fair value through
profit and loss. The election is taken on the basis of the
investments being 'venture capital' investments under IAS 28
'Investments in Associates and Joint Ventures'.
On 29 December 2020, the Company completed its transition to
become an Investing company on AIM with an investment manager in
place. The strategy of the Company as an Investing company is to
generate value though holding investments for the short to medium
term. Therefore, the Directors believe that the fair value method
of accounting for the investments is in line with the strategy of
the Company.
Had the election not been made, the investments in Marcelos
Limited and Alpha Persie Limited would have been subject to equity
accounting that involves recognition of the investment at cost and
subsequent measurement at cost plus a share of profits and losses
of those companies less dividends received.
Key sources of estimation in applying the Company's accounting
policies
The Directors believe that there are no key assumptions
concerning the future, and other key sources of estimation
uncertainty at the balance sheet date that have a significant risk
of causing a material adjustment to the carrying amounts of assets
and liabilities within the next financial year.
2. Investments at fair value through profit or loss
Investment of 100 per cent shares of GWSA, held at cost less
impairment, was disposed on 9 December 2019. No gain or loss was
recognised on disposal as the investment had been written down to
its recoverable value in the second half of 2019.
In exchange for the sale of the shares in GWSA, an investment of
49 per cent of shares of Marcelos Limited, the new intermediate
holding company of Eddie Stobart Group, was received and this
investment was recognised. The Directors elected to measure the
investment at fair value through profit or loss and categorised it
within Level 2 of the fair value hierarchy.
Alpha Persei
Marcelos Limited Limited
Unaudited
GBP'000 GBP'000 GBP'000
30 November 2020 35,848 - 35,848
Disposals during the
period - -
Additions during the
period - 6,000 6,000
Change in fair value 22,101 74 22,175
31 May 2021 57,949 6,074 64,023
---------------------- ----------------- ------------- ----------
The fair value of the investment in Marcelos Limited was
calculated on the basis of the market capitalisation of Logistics
Development Group plc after adjusting for the investment in Alpha
Persei Ltd and cash balances, as the Directors considered this best
represents the value of the GWSA Group. This is because, as at the
31 May 2021, the investment in Marcelos Limited was the material
asset held by the Company and therefore the Directors believe it is
reasonable to infer a fair value for the GWSA Group based upon the
Company's market capitalisation. The Directors will be reviewing
whether the valuation method is appropriate at 30 November 2021
depending on the number of investments held by the Company.
The following inputs were used when calculating market
capitalisation
30 November 31 May
2020 2021
Number of shares '000 379,347 702,206
Share price, p 9.45 10.10
Market capitalisation 35,848 70,923
----------------------- ------------ --------
The share price of 10.10p (2020: 9.45p) represents the price of
Logistics Development Group plc shares at the reporting date.
3. Exceptional items
During the reporting period, the Company recognised income in
relation to exceptional charges with respect to the fund-raising
activities concluded in December 2020 of GBP90,000.
During the comparative period, the Company recognised income in
relation to the transition costs of GBP2,875,000 associated with
the disposal of GWSA and 2019-related audit fees of GBP570,000. The
costs were ultimately borne by GWSA in accordance with the deal
arrangements.
4. Dividends
The Company did not pay a final dividend for the year ended 30
November 2020 and the Board has decided not to recommend an interim
dividend payment.
5. Taxation
The Company did not recognise current and deferred income tax
charge or credit. The deferred tax asset of GBP363,000 (2020:
GBP57,000) was not recognised as the Directors do not consider that
there is sufficient certainty over its recovery. This unrecognised
asset can be carried forward indefinitely.
6. Earnings per share
Basic earnings per share amounts are calculated by dividing
profit/(loss) for the period attributable to ordinary equity
holders of the Company by the weighted average number of ordinary
shares outstanding during the 12 months to the period end.
Diluted earnings per share amounts are calculated by dividing
the loss attributable to ordinary equity holders of the Company by
the weighted average number of ordinary shares outstanding during
the year plus the weighted average number of ordinary shares that
would be issued on conversion of all the potentially dilutive
instruments into ordinary shares. The Company's share options were
considered anti-dilutive and were cancelled on 9 December (see note
9) and hence there are no dilutive instruments to be included in
the calculation.
Six months Six months
ended ended
31 May 31 May
2021 2020
Unaudited Unaudited
GBP'000 GBP'000
------------------------------------------------- ----------- -----------
Profit/(loss) attributed to equity shareholders 21,608 (12,900)
-------------------------------------------------- ----------- -----------
Weighted average number of Ordinary
Shares - Basic 514,683 379,347
-------------------------------------------------- ----------- -----------
Weighted average number of Ordinary
Shares - Diluted 514,683 379,347
-------------------------------------------------- ----------- -----------
Basic profit/(loss) per share for total
operations 4.2p (3.4p)
Diluted profit/(loss) per share for
total operations 4.2p (3.4p)
-------------------------------------------------- ----------- -----------
7. Financial assets and liabilities
Six months Year ended
ended 30 November
31 May 2021 2020
Unaudited Audited
GBP'000 GBP'000
------------------------------------ ------------- -------------
Financial assets at fair value
through the profit or loss
Investments at fair value through
profit or loss 64,023 35,848
Financial assets at amortised
cost
Amounts owed by group undertakings - -
Other receivables 88 28
Total financial assets 64,111 35,876
------------------------------------- ------------- -------------
Financial liabilities at amortised
cost
Amounts owed to group undertakings 910 1,235
Other payables 247 2,184
------------------------------------- ------------- -------------
Total financial liabilities 1,157 3,419
Cash (7,943) (652)
Net (cash)/debt (7,033) 583
------------------------------------- ------------- -------------
All financial assets and liabilities mature within one year. The
fair value of those assets and liabilities approximates their book
value. The net (cash)/debt figure above reflects the net of cash
and related party borrowings.
Other receivables represent prepayments. Other payables include
accruals of GBP178,000 (2020: GBP595,000). The prior period
accruals balance of GBP595,000 consisted predominantly of
exceptional accruals utilised in the current period.
8. Capital and reserves
No of Share
shares capital Share premium Own shares
'000 GBP'000 GBP'000 GBP'000
------------------------------- -------- --------- -------------- -----------
Ordinary shares in issue
at 30 November 2020 379,347 3,793 146,002 (2,611)
Issued of share capital in
the period 322,859 3,229 12,951 -
Adjustment - exceptional
charges - - (37) -
Transfers - retained earnings - - (1,477) 1,754
Ordinary shares in issue
at 31 May 2021 702,206 7,022 157,439 (857)
------------------------------- -------- --------- -------------- -----------
Following a successful fund-raising exercise completed in
December 2020, the Company issued a further 322.9m shares for gross
proceeds including share premium of GBP16.2m. The costs incurred in
relation to this fund-raising exercise of GBP1.5m were initially
charged to Retained earnings in the prior period but are now
reclassified in the current period to Share premium in line with
accepted accounting practise.
The Own shares reserve of GBP2.6m was created at the inception
of Company share award plans (see Note 9) and were held in an
employee benefit trust. During the reporting period the qualifying
conditions for the share awards were met and consequently the
relevant shares were physically transferred to those qualifying
employees resulting in a GBP1.8m transfer to Retained earnings from
Own shares reserve.
9. Share based payments
On 9 December 2019, the Company cancelled all of its share award
plans: Long-term incentive plan (LTIP) and Share incentive plan
(SIP). Accelerated charges in respect of both award plans were
recognised in 2020; no charges have been recognised in respect of
either plan in the reporting period. The balance of the share
option reserve was transferred into retained earnings in the 2020
reporting year. SIP shares that remained in the employee benefit
trust at the beginning of this reporting period end have, when
qualifying conditions were met, now been transferred to those
qualifying individuals concerned. The balance remaining in the
employee benefit trust represents shares awarded to individuals who
did not meet the qualifying conditions and these shares will now be
dealt with by the trustees in accordance with the scheme rules and
accepted accounting practise.
10. Significant non-cash transactions
No significant non-cash transactions took place in the reporting
period of six months to 31 May 2021.
11. Contingent liabilities
As at 30 November 2019, the Company was part of an unlimited
bank cross guarantee arrangement with other subsidiary undertakings
with a maximum potential liability of GBP124m.
On 9 December 2019, the Company was excluded from the
arrangement as, due to the terms of the agreement with the bank, it
was no longer part of the GWSA Group. As a result, the Company had
no contingent liabilities as at 31 May 2021.
12. Subsequent events
On 1 July 2021, the Company announced the disposal of its
interest in the GWSA Group, which is held through the Company's 49
per cent. stake in Marcelos and Marcelos' wholly owned subsidiary
Alpha C. GWSA is the holding company for the Eddie Stobart, The
Pallet Network, iForce, Eddie Stobart Europe and The Logistics
People businesses.
Alpha C has agreed to sell its wholly owned subsidiary, GWSA
(the company that heads the GWSA Group), to Culina Group Limited
("Culina") for an undisclosed consideration (the "Transaction") and
the Company has consented to the Transaction pursuant to the
Marcelos shareholders' agreement.
As at 31 May 2021, the fair value of the Company's investment in
Marcelos was GBP57.9 million (2020: GBP35.8m).
The Company now expects to receive a net cash inflow of not less
than GBP125 million, including repayment of the recent GBP6m
investment in the PIK loan held by Alpha Persei Limited.
Following the transaction, the Company will hold no material
investment assets and an available cash balance in excess of
GBP130m.
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END
IR QKLFFFVLLBBE
(END) Dow Jones Newswires
August 20, 2021 02:00 ET (06:00 GMT)
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