TIDMWCH

RNS Number : 7927H

Wilmcote Holdings PLC

27 March 2020

LEI number: 2138004EUUU11OVHZW75

Wilmcote Holdings plc

("Wilmcote" or the "Company")

Interim Report for the six months ended 31 December 2019

27 March 2020

Wilmcote announces its interim results for the six months ended 31 December 2019.

The Interim Report is also available on the 'Shareholder Documents' page of the Company's website at www.wilmcoteplc.com .

Enquiries:

Wilmcote

Tel: +44(0)207 004 2700

Mark Brangstrup Watts

James Corsellis

Numis Securities Limited

Tel: +44(0)207 260 1000

Kevin Cruickshank

Jamie Loughborough

WILMCOTE HOLDINGS PLC

Unaudited Interim

Condensed Consolidated Financial Statements

for the six months ended 31 December 2019

MANAGEMENT REPORT

I present to shareholders the unaudited interim condensed consolidated financial statements of Wilmcote Holdings plc (the "Company") for the six months ended 31 December 2019 (the "Consolidated Interim Financial Statements"), consolidating the results of Wilmcote Holdings plc, WHJ Limited, Wilmcote Group Limited, WCH Group Limited, Arrow US Holdings Inc and Arrow Canadian Holdings Limited (collectively, the "Group" or "Wilmcote") .

Strategy

Wilmcote was established and admitted to trading on AIM with the objective of creating value for its shareholders through the acquisition and subsequent development of target businesses, initially considering opportunities in the downstream and specialty chemicals sector.

Since listing on AIM in 2017, we have reviewed and engaged with a substantial number of potential acquisition opportunities in the specialty chemicals sector, including businesses with links to the construction, building products and broader industrial sectors. During this period, we progressed two potential acquisitions, under exclusivity, to within days of a successful completion. The financial consequences of these aborted transactions have been significant, and these have accounted for the vast majority of the Group's expenditure.

During the period of due diligence and negotiation with these two potential acquisitions in particular, we had significant ongoing dialogue with existing and potential investors (in both cases with more than 50 investors wall-crossed for material periods of time). While we were not able to subsequently conclude either of these acquisitions, each of them, remain in our view, high quality businesses in specialist segments.

While we recognise that there remains a risk of future losses arising from the pursuit of future transactions, a key priority for us will be to manage the Company's exposure to the financial costs of progressing and securing a successful acquisition. Alongside the existing risk procedures, we will further mitigate these risks by:

-- reducing the target size of potential acquisitions to consider taking one or more controlling or non-controlling stakes, in businesses with an enterprise value generally expected to be up to GBP500 million;

-- seeking appropriate risk-sharing measures with professional service providers and, to the extent possible, with vendors;

-- continuing the model of early stage market sounding and consultation with potential investors throughout the transaction process; and

-- maintaining a flexible attitude to which international capital markets/exchanges would provide the optimal environment for initial and future capital raising.

In December 2019, we secured additional equity funding of GBP6.5 million through an open offer to existing shareholders. This included support both from our cornerstone investor, Marwyn, as well as from other existing shareholders. These funds have secured a platform from which to respond quickly to opportunistic investment prospects which we continue to see in the specialty chemicals sector, as well as in the market in general, while also providing a listed vehicle to attract a new sector-leading management team in advance of an acquisition.

At the December 2019 AGM, shareholders also approved expanding the Company's investment policy to consider opportunities in adjacent sectors, reflecting the breadth of deal flow seen and a broader range of potential investment structures.

Revised Investment Policy

It is anticipated that the Company will acquire controlling or non-controlling stakes in one or more businesses or companies (quoted or private) on a long-term basis. The investments made may be in the form of equity or other types of capital investment. Subject to the structure of the transaction, the Company may need to raise additional funds for the acquisition in the form of equity and/or debt. Depending on the composition of the Company's share register at that time, it is possible that any equity fundraising for those purposes will, subject to the necessary shareholder approval, be carried out on a non-pre-emptive basis to allow for the diversification of the Company's shareholder register and to obtain sufficient equity funding.

The Company intends to focus on the industrials, manufacturing, engineering, construction, building products and support services sectors. We believe that opportunities exist to create value for shareholders through a properly executed, acquisition-led strategy in one of these sectors. We may either seek to recruit sector-leading executive management in advance of an acquisition, or alternatively may consider identifying acquisition opportunities with impressive incumbent management teams that require a catalyst to unlock growth.

Following the completion of an acquisition, the Directors intend to use their multiple years of experience alongside an executive ma nagement team to deliver value through the application of a strategy to achieve attractive, compounding returns for shareholders.

Since listing on AIM in August 2017, the Group has pursued its stated strategy to identify and analyse potential acquisition targets and consequently the Group has no reported revenue. Although the Company has not completed an acquisition to date, we are confident that the Company will be able to implement the revised investment policy in the medium term, with the proceeds from the open offer used to fund future operating expenses and due diligence to continue to pursue acquisition opportunities.

Results

The Group's loss after taxation for the six months to 31 December 2019 was GBP1,721,000 (six months to 31 December 2018: loss of GBP1,681,000). The Group held a cash balance at the period end of GBP6,450,000 (As at 30 June 2019: GBP7,525,000).

Dividend Policy

The Company has not yet acquired a trading operation and it is therefore inappropriate to make a forecast of the likelihood of any future dividends. The Directors intend to determine the Company's dividend policy following completion of a platform acquisition and, in any event, will only commence the payment of dividends when it becomes commercially prudent to do so.

Corporate Governance

In line with the London Stock Exchange's AIM Rules for Companies requiring all AIM-quoted companies to adopt a recognised corporate governance code, explain how the company complies with that code's requirements and identify and explain areas of non-compliance, the Board has adopted the Quoted Companies Alliance Corporate Governance Code (the "QCA Code"). There have been no significant changes to the Corporate Governance Report presented in the Group's Annual Report and Consolidated Financial Statements for the period ended 30 June 2019, which is available on the Company's website, www.wilmcoteplc.com . Additional information in respect of the Company's compliance with the QCA Code can also be found on the Company's website.

The Company intends to re-evaluate its corporate governance code framework upon the earlier of the completion of a platform acquisition, or on appointment of an executive management team.

Risks

The Directors have carried out a robust assessment of the principal risks facing the Group including those that would threaten its business model, future performance, solvency or liquidity. There have been no significant changes to the principal risks described on pages 47-53 of the Group's Annual Report and Consolidated Financial Statements for the period ended 30 June 2019. The Directors are of the opinion that the risks are applicable to the six month period to 31 December 2019, as well as the remaining six months of the current financial year.

Outlook

In the period since the recapitalisation, the Company has continued to receive inbound leads with regards to potential platform acquisitions as well as introductions to sector-leading management teams looking to deploy a buy-and-build strategy utilising a listed vehicle. While there is no certainty these discussions will lead to a new executive team being appointed, or a platform acquisition being completed, we look forward to updating shareholders with our progress in due course.

The directors believe that the recent market disruption, due primarily to the Coronavirus pandemic, will provide opportunities to deploy capital at more reasonable valuations, where the Company is able to provide an innovative solution to public or private businesses, unlocking growth potential and delivering exceptional shareholder value through a buy-and-build strategy.

RESPONSIBILITY STATEMENT

Each of the Directors confirms that, to the best of their knowledge:

(a) these Consolidated Interim Financial Statements, which have been prepared in accordance with IAS 34 "Interim Financial Reporting" as adopted by the European Union, give a true and fair view of the assets, liabilities, financial position and profit or loss of Wilmcote; and

(b) these Consolidated Interim Financial Statements comply with the requirements of Rule 18 of the AIM Rules for Companies and Article 106 of the Companies (Jersey) Law 1991.

Neither the Company nor the Directors accept any liability to any person in relation to the interim financial report except to the extent that such liability could arise under applicable law.

Details on the Company's Board of Directors can be found on the Company website at www.wilmcoteplc.com .

James Corsellis

Chairman

26 March 2020

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

 
                                         Six months    Six months 
                                              ended         ended 
                                        31 December   31 December 
                                               2019          2018 
                                 Note     Unaudited     Unaudited 
                                            GBP'000       GBP'000 
 
 Administrative expenses         7          (1,721)       (1,695) 
                                       ------------  ------------ 
 Total operating loss                       (1,721)       (1,695) 
 
 Finance income                  5                -            14 
 Income tax                      8                -             - 
                                       ------------  ------------ 
 Loss for the period                        (1,721)       (1,681) 
                                       ------------  ------------ 
 Total other comprehensive                        -             - 
  income 
                                       ------------  ------------ 
 Total comprehensive loss 
  for the period attributable 
  to owners of the parent                   (1,721)       (1,681) 
                                       ============  ============ 
 
 Loss per ordinary share 
 Basic and diluted (GBP)         9          (0.020)       (0.081) 
 

The Group's activities derive from continuing operations.

The Notes on pages 10 to 17 form an integral part of these Consolidated Interim Financial Statements.

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

 
                                            As at     As at 
                                      31 December   30 June 
                                             2019      2019 
                               Note     Unaudited   Audited 
                                          GBP'000   GBP'000 
Assets 
Non-current assets 
Property, plant & equipment                     -         2 
                                     ------------  -------- 
Total non-current assets                        -         2 
 
Current assets 
Trade and other receivables     11            147       285 
Cash and cash equivalents       12          6,450     7,525 
Total current assets                        6,597     7,810 
 
Total assets                                6,597     7,812 
                                     ============  ======== 
 
Equity and liabilities 
Equity 
Stated capital                  14         30,870    24,370 
Share-based payment reserve                   205       288 
Accumulated losses                       (24,652)  (23,362) 
                                     ------------  -------- 
Total equity                                6,423     1,296 
 
Current liabilities 
Trade and other payables        13            174     6,516 
                                     ------------  -------- 
Total liabilities                             174     6,516 
 
Total equity and liabilities                6,597     7,812 
                                     ============  ======== 
 

The Notes on pages 10 to 17 form an integral part of these Consolidated Interim Financial Statements.

The financial statements were approved by the Board of Directors on 26 March 2020 and were signed on its behalf by:

James Corsellis Mark Brangstrup Watts

Chairman Director

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

 
                                              Share based 
                                     Stated       payment       Accumulated                            Total 
                                    capital       reserve            losses                           equity 
                                 ----------  ------------  ----------------  ------------------------------- 
                                    GBP'000       GBP'000           GBP'000                          GBP'000 
 Balance as at 1 July 
  2019                               24,370           288          (23,362)                            1,296 
 Issue of shares                      6,500             -                 -                            6,500 
 Loss and total comprehensive 
  loss for the period                     -             -           (1,721)                          (1,721) 
 Share-based payment 
  expense                                 -           348                 -                              348 
 Cancellation of shares                   -         (431)               431                                - 
                                 ----------  ------------  ----------------  ------------------------------- 
 Balance as at 31 
  December 2019                      30,870           205          (24,652)                            6,423 
                                 ==========  ============  ================  =============================== 
 
 
                                              Share based       Accumulated                            Total 
                                     Stated       payment            losses                           equity 
                                    capital       reserve 
                          -----------------  ------------  ----------------  ------------------------------- 
                                    GBP'000       GBP'000           GBP'000                          GBP'000 
 Balance as at 1 July 
  2018                               24,370           285          (13,196)                           11,459 
 Loss and total 
  comprehensive 
  loss for the period                     -             -           (1,681)                          (1,681) 
 Share-based payment 
  expense                                 -            35                 -                               35 
                          -----------------  ------------  ----------------  ------------------------------- 
 Balance as at 31 
  December 2018                      24,370           320          (14,877)                            9,813 
                          =================  ============  ================  =============================== 
 

The Notes on pages 10 to 17 form an integral part of these Consolidated Interim Financial Statements.

CONSOLIDATED STATEMENT OF CASH FLOWS

 
                                              For six months   For six months 
                                                       ended            ended 
                                                 31 December      31 December 
                                                        2019             2018 
                                       Note        Unaudited        Unaudited 
                                      -----  ---------------  --------------- 
                                                     GBP'000          GBP'000 
 
 Operating activities 
 Loss for the period                                 (1,721)          (1,681) 
 
 Adjustments to reconcile total 
  operating loss to net cash flows: 
 Deduct finance income                                     -             (14) 
 Add back depreciation expense                             2                1 
 Add back share based payment 
  expense                                                348               35 
 Working capital adjustments: 
        Decrease in trade and other 
         receivables and 
         prepayments                                      83              305 
        Decrease in trade and other 
         payables                                    (6,251)          (7,891) 
 Interest received                                         -               14 
                                             ---------------  --------------- 
 Net cash flows used in operating 
  activities                                         (7,539)          (9,231) 
                                             ---------------  --------------- 
 
 Financing activities 
 Proceeds from issue of ordinary 
  share capital                          14            6,500                - 
 Payment on cancellation of WHJ 
  Limited A Shares                                      (36)                - 
 Net cash flows from financing 
  activities                                           6,464                - 
                                             ---------------  --------------- 
 
 Net (decrease)/increase in cash 
  and cash equivalents                               (1,075)          (9,231) 
 Cash and cash equivalents at 
  the beginning of the period                          7,525           19,473 
                                             ---------------  --------------- 
 Cash and cash equivalents at 
  the end of the period                  12            6,450           10,242 
                                             ===============  =============== 
 

The Notes on pages 10 to 17 form an integral part of these Consolidated Interim Financial Statements.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

   1.     GENERAL INFORMATION 

Wilmcote Holdings plc (the "Company"), an "investing company" for the purposes of the AIM Rules for Companies ("AIM Rules"), is incorporated in Jersey (company number 123424) and domiciled in the United Kingdom. It is a public limited company with registered office at One Waverley Place, Union Street, St Helier, Jersey, JE1 1AX and a UK Establishment (BR019423) address of 11 Buckingham Street, London, WC2N 6DF. The Company is the holding company of a number of subsidiaries (together with the Company, collectively "Wilmcote" or the "Group"), as detailed in Note 10.

   2.     ACCOUNTING POLICIES 
   (a)    Basis of preparation 

The Consolidated Interim Financial Statements have been prepared in accordance with the IAS 34 Interim Financial Reporting and are presented on a condensed basis. The Consolidated Interim Financial Statements do not constitute statutory accounts within the meaning of Article 105 of the Companies (Jersey) Law 1991. All values are rounded to the nearest thousand (GBP000) except where otherwise indicated.

The Consolidated Interim Financial Statements do not include all the information and disclosures required in the annual financial statements, and should be read in conjunction with the Group's Annual Report and Consolidated Financial Statements for the year ended 30 June 2019, which is available on the Company's website, www.wilmcoteplc.com .

   (b)   Going concern 

The Consolidated Interim Financial Statements have been prepared on a going concern basis, which assumes that the Group will continue to be able to meet its liabilities as they fall due within the next 12 months.

   (c)    New standards and amendments to International Financial Reporting Standards 

Standards, amendments and interpretation effective and adopted by the Group

The accounting policies adopted in the preparation of these Consolidated Interim Financial Statements are consistent with those followed in the preparation of the Group's audited consolidated financial statements for the period ended 30 June 2019, which were prepared in accordance with the International Financial Reporting Standards ("IFRS"), as adopted by the European Union, updated to adopt those standards which became effective for periods starting on or before 1 January 2019. None of the new standards have had a material impact on the Group.

Standards issued but not yet effective

The following standards are issued but not yet effective. The Group intends to adopt these standards, if applicable, when they become effective. It is not expected that these standards will have a material impact on the Group .

 
 Standard                                                    Effective date 
 Amendments to IFRS 9, IAS 39 and IFRS 7: Interest           1 January 2020 
  Rate Benchmark Reform 
 Amendments to IAS 1 and IAS 8: Definition of Material       1 January 2020 
 Amendments to References of the Conceptual Framework        1 January 2020 
  in IFRS Standards 
 IFRS 14 Regulatory Deferral Accounts                        To be confirmed* 
 Amendments to IFRS 3 Business Combinations                  To be confirmed** 
 Amendments to IAS 1 Presentation of Financial Statements:   To be confirmed** 
  Classification of Liabilities as Current or Non-current 
 IFRS 17 Insurance Contracts                                 To be confirmed** 
 

* the EU has decided not to endorse the interim standard and to wait for the final standard

** subject to EU endorsement

   3.     CRITICAL ACCOUNTING JUDGEMENTS AND ESTIMATES 

The preparation of the Consolidated Interim Financial Statements under IFRS requires the Directors to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities. Estimates and judgements are continually evaluated and are based on historical experience and other factors including expectations of future events that are believed to be reasonable under the circumstances. Actual results may differ from these estimates.

For the period and at the period end, the Directors do not consider that they have made any significant estimates, judgements or assumptions which would affect the balances and results reported in these financial statements.

   4.     SEGMENT INFORMATION 

The Board of Directors is the Group's chief operating decision-maker. As the Group has not yet commenced trading, the Board of Directors considers the Group as a whole for the purposes of assessing performance and allocating resources, and therefore the Group has one reportable operating segment.

   5.     FINANCE INCOME 
 
                                For six months      For six months 
                             ended 31 December   ended 31 December 
                                          2019                2018 
                                       GBP'000             GBP'000 
Interest on bank deposits                    -                  14 
                            ------------------  ------------------ 
                                             -                  14 
                            ==================  ================== 
 
   6.     EMPLOYEES AND DIRECTORS 
   (a)   Staff costs for the Group during the period: 
 
                                     For six months      For six months 
                                  ended 31 December   ended 31 December 
                                               2019                2018 
                                            GBP'000             GBP'000 
Wages and salaries                              604                 383 
Social security costs                            83                  51 
Short term employment benefits                    3                   4 
Other employment related costs                    -                  50 
                                 ------------------  ------------------ 
Total employment cost expense                   690                 488 
                                 ==================  ================== 
 
   (b)   Key management compensation 

The Board considers the Directors of the Company, along with certain senior employees, to be the key management personnel of the Group.

The following table details the aggregate compensation due to key management personnel over the period.

 
                                            For six months      For six months 
                                         ended 31 December   ended 31 December 
                                                      2019                2018 
                                                   GBP'000             GBP'000 
Salaries, bonus, termination payments 
 and short term employee benefits                      594                 307 
                                        ------------------  ------------------ 
                                                       594                 307 
                                        ==================  ================== 
 
   7.     EXPENSES BY NATURE 
 
                                        For six months       For six months 
                                              ended 31    ended 31 December 
                                         December 2019                 2018 
                                               GBP'000              GBP'000 
 Group expenses by nature 
 Employment costs                                  690                  488 
 Non-recurring project, professional 
  and diligence costs                               96                  326 
 Travel and entertaining                            11                   30 
 Office costs                                       29                   34 
 Professional support                              540                  760 
 Share based payment expense                       348                   35 
 Other expenses                                      7                   22 
                                       ---------------  ------------------- 
                                                 1,721                1,695 
                                       ===============  =================== 
 
   8.     INCOME TAX EXPENSE 
 
                                             For six months         For six months 
                                          ended 31 December      ended 31 December 
                                                       2019                   2018 
                                                    GBP'000                GBP'000 
 Analysis of tax in period 
 Current tax on profits for the period                    -                      - 
                                        -------------------    ------------------- 
 Total current tax                                        -                      - 
                                        ===================    =================== 
 

Reconciliation of effective rate and tax charge:

 
                                               For six months       For six months 
                                            ended 31 December    ended 31 December 
                                                         2019                 2018 
                                                      GBP'000              GBP'000 
 Loss on ordinary activities before 
  tax                                                 (1,721)              (1,681) 
                                          -------------------  ------------------- 
 Loss on ordinary activities multiplied 
  by the rate of corporation tax in 
  the UK of 19% (2018: 19%)                             (327)                (319) 
 Effects of: 
 Losses carried forward for which 
  no deferred tax recognised                              327                  319 
 Total taxation charge                                      -                    - 
                                          ===================  =================== 
 

As at 31 December 2019, cumulative tax losses available to carry forward against future trading profits were GBP24,652,000 subject to agreement with HM Revenue & Customs. Prior to a Platform Acquisition, there is no certainty as to future profits and no deferred tax asset is recognised in relation to these carried forward losses.

   9.     LOSS PER ORDINARY SHARE 

Basic EPS is calculated by dividing the profit attributable to equity holders of a company by the weighted average number of ordinary shares in issue during the year. Diluted EPS is calculated by adjusting the weighted average number of ordinary shares outstanding to assume conversion of all dilutive potential ordinary shares. The weighted average number of shares has not been adjusted in calculating diluted EPS as there are no instruments which have a current dilutive effect.

Refer to Note 17 of the Group's Annual Report and Consolidated Financial Statements for the period ended 30 June 2019 for instruments that could potentially dilute basic EPS in the future.

 
                                            For six months   For six months 
                                         ended 31 December         ended 31 
                                                      2019         December 
                                                                       2018 
 Loss attributable to owners of the 
  parent (GBP'000)                                 (1,721)          (1,681) 
 Weighted average number of ordinary 
  shares in issue                               87,952,901       20,833,336 
 Weighted average number of ordinary 
  shares for diluted EPS                        87,952,901       20,833,336 
 

10. INVESTMENTS

Principal subsidiary undertakings of the Group

The Company owns, directly or indirectly, the whole of the issued and fully paid ordinary share capital of its subsidiary undertakings.

Principal subsidiary undertakings of the Group as at 31 December 2019 are presented below:

 
                                                                      Proportion      Proportion 
                                                                     of ordinary     of ordinary 
                                   Nature of              Country    shares held     shares held 
   Subsidiary                       business     of incorporation      by parent    by the Group 
-------------------------  -----------------  -------------------  -------------  -------------- 
 
                                   Incentive 
 WHJ Limited                         vehicle               Jersey           100%            100% 
 WCH Group Limited           Dormant company              England           100%            100% 
 Wilmcote Group Limited      Dormant company              England             0%            100% 
 Arrow US Holdings               Acquisition 
  Inc                                vehicle        United States             0%            100% 
 Arrow Canadian Holdings 
  Limited                    Dormant company               Canada             0%            100% 
 

There are no restrictions on the Company's ability to access or use the assets and settle the liabilities of the Company's subsidiaries.

The registered office of WHJ Limited is One Waverley Place, Union Street, St Helier, Jersey, JE1 1AX. The registered office of Wilmcote Group Limited and WCH Group Limited is 11 Buckingham Street, London, WC2N 6DF. The registered address for Arrow US Holdings Limited is 1209 Orange Street, Wilmington, New Castle, Delaware, 19801. The registered address for Arrow Canadian Holdings Limited is 1055 West Hastings Street, Suite 1700, Vancouver, BC, V6E 2E9.

11. TRADE AND OTHER RECEIVABLES

 
                                    As at 31 December   As at 30 June 
                                                 2019            2019 
                                              GBP'000         GBP'000 
 Amounts receivable in one year: 
 Prepayments                                       26              45 
 Other receivables                                  -              55 
 VAT receivable                                   121             185 
                                   ------------------  -------------- 
                                                  147             285 
                                   ==================  ============== 
 

Other receivables are all current.

There is no material difference between the book value and the fair value of the receivables. Receivables are considered to be past due once they have passed their contracted due date.

12. CASH AND CASH EQUIVALENTS

 
                              As at 31 December   As at 30 June 
                                           2019            2019 
                                        GBP'000         GBP'000 
 Cash and cash equivalents 
 Cash at bank                             6,450           7,525 
                             ------------------  -------------- 
                                          6,450           7,525 
                             ==================  ============== 
 

Credit risk is managed on a group basis. Credit risk arises from cash and cash equivalents and deposits with banks and financial institutions. For banks and financial institutions, only independently rated parties with a minimum short-term credit rating of P-1, as issued by Moody's, are accepted. The utilisation of credit limits is regularly monitored.

13. TRADE AND OTHER PAYABLES

 
                                       As at 31 December  As at 30 June 
                                                    2019           2019 
                                                 GBP'000        GBP'000 
Amounts falling due within one year: 
Trade payables                                        91          1,113 
Accruals                                              83          5,312 
A1 share liability                                     -             91 
                                                     174          6,516 
                                       =================  ============= 
 

There is no material difference between the book value and the fair value of the trade and other payables.

14. STATED CAPITAL

 
                                      As at 31 December  As at 30 June 
                                                   2019           2019 
Authorised 
Unlimited ordinary shares of no par 
 value 
 
Issued 
Ordinary shares of no par value             670,833,336     20,833,336 
Stated capital (GBP'000)                         30,870         24,370 
 

On 13 December 2019 a further 650,000,000 ordinary shares of no par value were issued at GBP0.01 for an aggregate consideration of GBP6,500,000.

The holders of ordinary shares are entitled to receive dividends as declared and are entitled to one vote per share at meetings of the Company.

15. FINANCIAL INSTRUMENTS AND ASSOCIATED RISKS

The Group has the following categories of financial instruments at the period end:

 
                                           As at 31 December   As at 30 June 
                                                        2019            2019 
                                                     GBP'000         GBP'000 
 Financial assets measured at amortised 
  cost 
 Cash and cash equivalents                             6,450           7,525 
 Other receivables                                         -              55 
                                          ------------------  -------------- 
                                                       6,450           7,580 
                                          ------------------  -------------- 
 
 Financial liabilities measured at 
  amortised cost 
 Trade and other payables                                174           6,516 
                                          ------------------  -------------- 
                                                         174           6,516 
                                          ==================  ============== 
 

The fair value and book value of the financial assets and liabilities are materially equivalent.

The Group's risk management policies are established to identify and analyse the risks faced by the Group, to set appropriate risk limits and controls, and to monitor risks and adherence limits. Risk management policies and systems are reviewed regularly to reflect changes in market conditions and the Group's activities.

Treasury activities are managed on a Group basis under policies and procedures approved and monitored by the Board. These are designed to reduce the financial risks faced by the Group which primarily relate to movements in interest rates.

As the Group's assets are predominantly cash and cash equivalents, market risk and liquidity risk are not currently considered to be material risks to the Group.

16. RELATED PARTY TRANSACTIONS

The AIM Rules define a related party as any (i) director of the Company or its subsidiary, (ii) a substantial shareholder, being any shareholders holding at least 10 per cent. of a share class or (iii) an associate of those parties identified in (i) or (ii).

James Corsellis and Mark Brangstrup Watts are the managing partners of the Marwyn Group. Funds managed by Marwyn Asset Management Limited, of which James Corsellis and Mark Brangstrup Watts are both non-executive directors and of which they are the ultimate beneficial owners, hold 95.36% of the Company's issued ordinary shares.

James Corsellis and Mark Brangstrup Watts have a beneficial interest in the A2 Shares as described in note 17 of the Group's Annual Report and Consolidated Financial Statements for the year ended 30 June 2019 .

James Corsellis and Mark Brangstrup Watts are the managing partners of Marwyn Capital LLP which provides corporate finance advice and various office and finance support services to the Company. During the period Marwyn Capital LLP charged GBP370,000 (excluding VAT) (2018: GBP390,000) in respect of services supplied, GBP8,000 (excluding VAT) (2018: GBP7,000) for James Corsellis' and Mark Brangstrup Watts' directors' fees and GBP1,000 (2018: GBP3,000) in respect of expenses incurred on behalf of the Group. Marwyn Capital LLP was owed an amount of GBP52,000 (30 June 2019: GBP73,000) at the balance sheet date.

James Corsellis and Mark Brangstrup Watts are the ultimate beneficial owners of Axio Capital Solutions Limited which provides financial and accounting services, transactional support, company secretarial and administrative services to the Group. During the period Axio Capital Solutions Limited charged GBP253,000 (2018: GBP270,000) in respect of services supplied and GBP3,000 (2018: GBP2,000) in respect of expenses incurred on behalf of the Group. Axio Capital Solutions Limited was owed an amount of GBP30,000 (30 June 2019: GBP27,000) at the balance sheet date.

James Corsellis and Mark Brangstrup Watts are the ultimate beneficial owners of Marwyn Partners Limited and Marwyn Investment Management LLP which both incurred costs on behalf of the Group which they recharged. During the period Marwyn Partners Limited charged GBP6,000 (2018: GBP36,000) in respect of recharged costs and Marwyn Investment Management LLP charged GBP39,000 (2018: GBP27,000) in respect of recharged costs. Marwyn Investment Management LLP was owed an amount of GBP9,000 (30 June 2019: GBP19,000) at the balance sheet date and there was no outstanding balance with Marwyn Partners Limited (30 June 2019: GBP17,000).

Key management personnel remuneration is disclosed in Note 6.

17. COMMITMENTS AND CONTINGENT LIABILITIES

There were no commitments or contingent liabilities outstanding at 31 December 2019 that requires disclosure or adjustment in these financial statements.

18. POST BALANCE SHEET EVENTS

There have been no material post balance sheet events that would require disclosure or adjustment to these financial statements.

ADVISERS

 
  Nominated Adviser and Broker           Company Secretary and Administrator 
   Numis Securities Limited               Axio Capital Solutions Limited 
   The London Stock Exchange Building     One Waverley Place 
   10 Paternoster Square                  Union Street 
   London, EC4M 7LT                       St Helier, Jersey, JE1 1AX 
  Registrar                              Solicitors to the Company 
   Link Registrars (Jersey) Limited       (as to English law) 
   12 Castle Street                       Covington & Burling LLP 
   St Helier, Jersey, JE2 3RT             265 Strand 
                                          London, WC2R 1BH 
  Principal Bankers                      Solicitors to the Company 
   Barclays Bank plc                      (as to Jersey law) 
   39/41 Broad Street                     Ogier 
   St Helier Jersey, JE4 8PV              44 Esplanade 
                                          St Helier, Jersey, JE4 9WG 
  Auditor                                Corporate Finance Adviser 
   PricewaterhouseCoopers LLP             Marwyn Capital LLP 
   1 Embankment Place                     11 Buckingham Street 
   London, WC2N 6RH                       London, WC2N 6DF 
 

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END

IR PPUCGWUPUPUQ

(END) Dow Jones Newswires

March 27, 2020 03:00 ET (07:00 GMT)

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