TIDMBSP

RNS Number : 2005O

Black Sea Property PLC

29 September 2023

Friday 29 September, 2023

Black Sea Property

Half-year Report

RNS Number :2005O

Black Sea Property PLC

29 September 2023

BLACK SEA PROPERTY PLC

("Black Sea Property" or the "Company")

Half-yearly report for the period ended 30 June 2023

The Board of Black Sea Property PLC is pleased to announce its interim report for the six-month period ended 30 June 2023.

Electronic copies of the interim report will be available at the Company's website http://www.blackseapropertyplc.com

 
BLACK SEA PROPERTY PLC            simon.hudd@d3ainvestments.com 
 Simon Hudd, Chairman 
 
  PETERHOUSE CAPITAL LIMITED 
  Aquis Corporate Adviser 
  Heena Karani and Duncan Vasey     +44 (0) 20 7469 0930 
 

Market Abuse Regulation (MAR) Disclosure

This announcement contains inside information for the purposes of Article 7 of the Market Abuse Regulation EU 596/2014 as it forms part of retained EU law (as defined in the European Union (Withdrawal) Act 2018).

Black Sea Property PLC

HALF-YEARLY REPORT

FOR THE SIX MONTH PERIODED

30 JUNE 2023

Contents

Chairman's Statement

Consolidated Statement of Comprehensive Income

Consolidated Statement of Financial Position

Consolidated Statement of Changes in Equity

Consolidated Statement of Cash Flows

Notes to the Consolidated Financial Statements

Chairman's Statement

As at 30 June 2023 the significant shareholders of Black Sea Property Plc ("the Company") were as follows:

 
 Beneficial shareholder        Holding   Percentage 
 Neo London Capital 
  Plc                      515,126,806       28.41% 
 Compass Capital JSC       304,354,182       16.78% 
 Mamferay Holdings 
  Limited                  449,957,562       24.81% 
 Capman AM                  92,000,000        5.07% 
 Interfund Investments 
  Plc                       89,500,000        4.94% 
 

The shareholder structure as at 31 December 2022 is the following:

 
 Beneficial shareholder        Holding   Percentage 
 Neo London Capital 
  Plc                      515,126,806       28.41% 
 Compass Capital JSC       304,354,182       16.78% 
 Mamferay Holdings 
  Limited                  449,957,562       24.81% 
 Capman AM                  92,000,000        5.07% 
 Interfund Investments 
  Plc                       89,500,000        4.94% 
 

Chairman's statement

I am pleased to present the unaudited interim financial statements of the Company for the six months ended 30 June 2023.

The unaudited net asset value as at 30 June 2023 was EUR28.7 million or 1.58 cents per share (31 December 2022: EUR28.8 million or 1.59 cents per share).

During the period, the Company generated revenues of EUR264,835 (June 2022: EUR152,646) which resulted in a loss before taxation of EUR74,412 (June 2022: EUR553,150). The results reflected other income of EUR678,836 (June 2022: EUR106,798), property operating expenses of EUR283,729 (June 2022: EUR132,856), other operating expenses of EUR328,293 (June 2022: EUR458,473) and interest payable and other charges of EUR406,061 (June 2022: EUR215,287). Loss per share amounted to EUR0.01 cents (June 2022: EUR0.03 cents).

Camping South Beach EOOD ("CSB")

The summer season in 2023 marked a positive development, despite the challenging environment arising from the military conflict in Ukraine. Camping South Beach preserved its prime position as a destination for luxury camping holidays and beach houses. Following the trend from the previous seasons most of the guests were Bulgarian citizens, as well as tourists from the EU.

Camping South Beach achieved occupancy levels of around 58% in July and 51% in August 2023. On yearly basis the occupancy increase is approx. 5 %, compared to 2022.

Despite the slight increase in occupancy, they still remain below the targeted levels, based on the overall economic uncertainty arising from the war in Ukraine.

In 2023, the third active season under the Concession Agreement ("Agreement") for the beach in front of CSB, has provided additional value to the property and has enabled synergy with the campsite. The term of the Concession Agreement is 20 years, and all requirements and obligations specified in the Agreement have been fulfilled.

The long-term strategy of CSB is to develop the whole Gradina area including the newly acquired adjacent real estate and Black Sea Star hotel into an exclusive summer resort meeting the highest standards.

Ivan Vazov 1 Building

During the period, the reconstruction works for the historic Ivan Vazov building were ongoing. The renovation of the roof has been completed and all construction works were executed to a high standard in line with the approved designs.

Chairman's Statement (continued)

The building consists of a basement floor, five floors and an attic floor with total buil t -up area of 9 , 107 m2. The attic floor will be converted into a mansard floor following the reconstruction of the roof.

As the building is recogni z ed as a historical monument by the National Institute of Cultural Monuments in Bulgaria, both the exterior and interior of the building will undergo renovation. This includes elements such as the columns, profiled cornices, figures of Atlanteans, the mask of the Goddess on the façade, and the ornamental ironwork of the entrance doors. The Company is carrying out all of the works in accordance with applicable regulations. The construction of the beautiful copper covered roof has been finalized and thus the building will be preserved according to the highest standards. We hope to receive permission from the local authorities for using the top floor and reconstructing the roof in November 2023 .

Byala Plots of Land ("Byala")

The public procedure for the Urban Master Plan of Byala municipality region by the authorities has commenced, but the approval process is not yet finished.

The Company is planning the development of plots of land at Byala as a camping site with luxury bungalows, which is anticipated to be complementary to existing investments at CSB. The project will add value to the portfolio of the Company, reflecting the high demand of close-to-nature camp sites offering a safe and secure environment for visitors.

Received final payment for the sale of ECDC Group

During the period Black Sea Property has received the final payment for the sale of the remaining assets of ECDC Group which the Company sold on 30 September 2021, for a cash consideration of EUR4.5 million.

Events after reporting date

Signed agreement for acquisition of Grand Hotel Varna AD

Black Sea Property PLC has signed an agreement to acquire 98.27% of Grand Hotel Varna AD (the "Acquisition").

Grand Hotel Varna AD wholly owns GHV-Dolphins EAD, a Bulgarian company which holds the title to real estate comprising three hotels and a beach marina resort (together, the "Resort"), situated in a prime location on the Black Sea Coast, with excellent accessibility.

The primary purpose of the Acquisition is to strengthen Black Sea Property's hospitality investments, by adding desirable hotels to its existing investment in Camping South Beach.

The consideration payable for the Acquisition is EUR 28 million in cash, of which an initial non-refundable deposit of EUR 1.6 million was paid upon signing of the agreement. The property assets being acquired have been independently valued at EUR 19 million, and the mutual fund portfolio is currently valued at EUR 12 million.

BSP has raised EUR12million through the issue of unsecured loan notes to certain existing shareholders. The proceeds of the issue of the Loan Notes have been used to pay tranches of the consideration for the Acquisition.

To satisfy the balance of the consideration, the Company will need to raise additional funds. Subject to securing the required funding, which the Directors are confident of achieving, the Acquisition is expected to be completed by 30 October 2023.

The Directors of the Company are responsible for the contents of this announcement.

Simon Hudd

Chairman

29.09.2023

Consolidated Statement of Comprehensive Income

for the period ended 30 June 2023

 
                                                 (Unaudited)    (Unaudited)     (Audited) 
                                                    6 months       6 months    Year ended 
                                                          to             to 
                                                     30 June        30 June   31 December 
                                                        2023           2022          2022 
                                          Note           EUR            EUR           EUR 
 Total revenue 
 
 Revenue                                             264,835        152,646     1,159,445 
 Property operating expenses                       (283,729)      (132,856)   (1,409,106) 
                                                ------------  -------------  ------------ 
 Net rental income/(expense)                        (18,894)         19,790     (249,661) 
                                                ------------  -------------  ------------ 
 
 (Loss)/gain on revaluation of 
  investment properties                                    -        (3,430)       724,708 
 Net (loss)/gain on investment 
  property                                                 -        (3,430)       724,708 
                                                ------------  -------------  ------------ 
 
 
 Administration and other expenses         5       (328,293)      (458,473)     (800,340) 
 Total operating profit/(loss)                     (347,187)      (442,113)     (325,293) 
                                                ------------  -------------  ------------ 
 
 Other income                              6         678,836        106,798     3,449,267 
 Bargain purchase                          11                             -     2,127,765 
 (Losses)/Profit from investments 
  accounted for using the equity 
  method                                                   -        (2,548)       (2,548) 
 Interest payable and similar 
  charges                                          (406,061)      (215,287)     (862,551) 
 (Loss)/profit before tax                           (74,412)      (553,150)     4,386,640 
 
 Tax expense                               8               -       (62,266)     (537,399) 
 
 (Loss)/profit and total comprehensive 
  income for the period                             (74,412)      (615,416)     3,849,241 
                                                ============  =============  ============ 
 
 (Loss)/Profit and total comprehensive 
  income attributable to the: 
 - shareholders of the parent 
  company                                           (74,412)      (615,416)     3,849,241 
 - non-controlling interest                                -              -             - 
 
 (Loss)/earnings per share 
 Basic & Diluted(loss)/earnings 
  per share (cents)                        7          (0.01)         (0,03)          0,22 
 

The notes form an integral part of these financial statements.

The financial statements were approved and authorised for issue by the Board of Directors on 28.09.2023

and were signed on their behalf by:

Chairman Director

Simon Hudd Ventsislava Altanova

Consolidated Statement of Financial Position at 30 June 2023

 
                                                (Unaudited)       (Audited) 
                                                    30 June     31 December 
                                                       2023            2022 
                                       Note             EUR             EUR 
 Non-current assets 
 Investment properties                  9        47,517,500      47,517,500 
 Intangible assets                      10          433,126         450,390 
 Property, plant and equipment                    1,224,043         517,952 
 Long term Deposit                                  102,258               - 
 Total non-current assets                        49,277,927      48,485,842 
                                             --------------  -------------- 
 
 Current assets 
 Trade and other receivables            12        3,685,698       6,331,172 
 Cash and cash equivalents                          384,599         239,409 
 Total current assets                             4,070,297       6,570,581 
                                             --------------  -------------- 
 
 Total assets                                    53,348,224      55,056,423 
                                             ==============  ============== 
 
 Equity and liabilities 
 Issued share capital                   13       70,699,442      70,699,442 
 Retained deficit                              (40,461,277)    (40,386,865) 
 Foreign exchange reserve                       (1,553,086)     (1,533,086) 
                                             --------------  -------------- 
 Total equity                                    28,705,079      28,779,491 
                                             --------------  -------------- 
 
 Non-current liabilities 
 Bank loans                             14       18,161,392      18,185,200 
 Trade and other payables               15          528,775         539,929 
 Deferred tax liability                 8         2,407,965       2,407,965 
                                             --------------  -------------- 
 Total non-current liabilities                   21,098,132      21,133,094 
                                             --------------  -------------- 
 
 Current liabilities 
 Trade and other payables               15        1,082,172         726,326 
 Tax liability                          15          153,796          80,425 
 Bank loans                             14        2,084,062       1,771,278 
 Related party payables                 16          115,199               - 
 Shareholder loan                       16          109,784       2,565,808 
 Total current liabilities                        3,545,013       5,143,838 
                                             --------------  -------------- 
 
 Total liabilities                               24,643,145      26,276,932 
                                             --------------  -------------- 
 
 Total equity and liabilities                    53,348,224      55,056,423 
                                             ==============  ============== 
 
 
 Number of ordinary shares in issue           1,813,323,603   1,813,323,603 
 NAV per ordinary share (cents)         17             1.58            1.59 
 

The notes form an integral part of these financial statements.

The financial statements were approved and authorised for issue by the Board of Directors on 28.09.2023

and were signed on their behalf by:

Chairman Director

Simon Hudd Ventsislava Altanova

Consolidated Statement of Changes in Equity for the period ended 30 June 2023

 
                           Share capital       Retained        Foreign     Total equity   Non-controlling        Total 
                                               earnings       currency     attributable         interests 
                                                           translation    to the parent 
                                                               reserve          company 
                                     EUR            EUR            EUR              EUR               EUR          EUR 
 
 At 1 January 2022            70,699,442   (44,236,106)    (1,533,086)       24,930,250                 -   24,930,250 
 
 Loss for the period                   -      (615,416)              -        (615,416)                 -    (615,416) 
                          --------------  -------------  -------------  ---------------  ----------------  ----------- 
 Total comprehensive 
  income                               -      (615,416)              -        (615,416)                 -    (615,416) 
                          --------------  -------------  -------------  ---------------  ----------------  ----------- 
 At 30 June 2022 
  (unaudited)                 70,699,442   (44,851,522)    (1,533,086)       24,314,834                 -   24,314,834 
                          --------------  -------------  -------------  ---------------  ----------------  ----------- 
 
 At 1 January 2022            70,699,442   (44,236,106)    (1,533,086)       24,930,250                 -   24,930,250 
 
 Transactions with                     -              -              -                -                 -            - 
 owners 
 Profit for the year                   -      3,849,241              -        3,849,241                 -    3,849,241 
 Total comprehensive 
  income                               -      3,849,241              -        3,849,241                 -    3,849,241 
                          --------------  -------------  -------------  ---------------  ----------------  ----------- 
 At 31 December 2022 
  (audited)                   70,699,442   (40,386,865)    (1,533,086)       28,779,491                 -   28,779,491 
                          ==============  =============  =============  ===============  ================  =========== 
 
 At 1 January 2023            70,699,442   (40,386,865)    (1,533,086)       28,779,491                 -   28,779,491 
 
 Loss for the period                   -       (74,412)              -         (74,412)                 -     (74,412) 
 Total comprehensive 
  income                               -       (74,412)              -         (74,412)                 -     (74,412) 
                          --------------  -------------  -------------  ---------------  ----------------  ----------- 
 At 30 June 2023 
  (unaudited)                 70,699,442   (40,461,277)    (1,533,086)       28,705,079                 -   28,705,079 
                          ==============  =============  =============  ===============  ================  =========== 
 

The notes form an integral part of these financial statements.

The financial statements were approved and authorised for issue by the Board of Directors on 28.09.2023

and were signed on their behalf by:

Chairman Director

Simon Hudd Ventsislava Altanova

Consolidated Statement of Cash Flows

for the period ended 30 June 2023

 
                                            (Unaudited)   (Unaudited)     (Audited) 
                                               6 months      6 months    Year ended 
                                                     to            to 
                                                30 June       30 June   31 December 
                                                   2023          2022          2022 
                                                    EUR           EUR           EUR 
 Operating activities 
 (Loss)/profit before tax                      (74,412)     (553,150)     4,386,640 
 
 Loss/(gain) on revaluation of 
  investment properties                               -         3,430     (724,708) 
 Bargain Purchase on Acquisition                      -             -   (2,127,765) 
 Materials from disposal of subsidiaries              -             -       232,737 
 Loss from investments accounted                      -         2,548             - 
  for using the equity method 
 Impairment of intangible fixed                       -     (142,499)             - 
  assets 
 Amortization of intangible fixed 
  assets                                         17,264        49,191        62,987 
 Depreciation of property, plant 
  and equipment                                   1,859         1,586         3,444 
 Interest received                            (662,944)      (94,882)     (898,689) 
 Bad debt recovered                                   -             -   (2,550,578) 
 Interest paid                                  298,399       215,288       862,551 
 Changes in the working capital               (419,834)     (518,488)     (753,381) 
 Decrease/(increase) in receivables           2,729,479     (254,811)   (1,451,996) 
 (Decrease)/increase in payables                459,891       715,094       431,565 
                                           ------------ 
 Cash used in operation                       2,769,536      (58,205)   (1,773,812) 
 Tax refund/(paid)                               73,370             -         6,190 
                                           ------------  ------------  ------------ 
 Net cash outflow from operating 
  activities                                  2,842,906      (58,205)   (1,767,622) 
 
 Investing activities 
 Investment property additions 
  and acquisitions                                    -   (1,526,600)   (1,470,562) 
 Property, plant and equipment                (708,950)             -     (496,513) 
 Star Mill acquisition                                -             -   (5,150,001) 
 Bad debt recovered                                   -             -     2,550,578 
 Loans granted                                 (84,005)      (29,235)             - 
 Loan repayments                                      -        38,244             - 
 Interest received                              662,944        84,466       898,689 
 Long term deposit                            (102,258)             -             - 
 Cash held by the (disposed)/acquired 
  subsidiary                                          -             -           151 
 Net cash (outflow)/ from investing 
  activities                                  (232,269)   (1,433,125)   (3,667,658) 
 
 Financing activities 
 Loans issued/(repaid)                      (2,167,048)     2,939,083     6,211,052 
 Interests paid and other charges             (298,399)     (215,943)     (862,551) 
 Other flows from financing activities                -      (49,305)             - 
 Net cash inflow/(outflow) from 
  financing activities                      (2,465,447)     2,673,835   (5,348,501) 
 
 Net increase/(decrease) in cash 
  and cash equivalents                          145,190     1,182,505      (86,779) 
 Cash and cash equivalents at 
  beginning of period                           239,409       326,188       326,188 
 
 Cash and cash equivalents at 
  end of period                                 384,599     1,508,693       239,409 
                                           ============  ============  ============ 
 

The notes form an integral part of these financial statements.

The financial statements were approved and authorised for issue by the Board of Directors on 28.09.2023

and were signed on their behalf by:

Chairman Director

Simon Hudd Ventsislava Altanova

Notes to the Financial Statements for the period ended 30 June 2023

   1.         General information 

Black Sea Property Plc (the Company) is a company incorporated and domiciled in the Isle of Man whose shares are publicly traded on the Aquis Stock Exchange in London.

   2.         Statement of compliance 

These interim consolidated financial statements have been prepared in accordance with IAS 34 Interim Financial Reporting. They do not include all of the information required for full annual financial statements, and should be read in conjunction with the consolidated financial statements of the Group as at and for the year-ended 31 December 2022.

The consolidated financial statements of the Group as at and for the year ended 31 December 2022 are available upon request from the Company's registered office at 6th Floor, Victory House, Prospect Hill, Douglas, Isle of Man or at www.blackseapropertyplc.com .

These interim consolidated financial statements were approved by the Board of Directors on 28 September 2023 .

   3.         Significant accounting policies 

The accounting policies applied in these interim financial statements, except for the ones listed below, are the same as those applied in the Group's consolidated financial statements as at and for the year ended 31 December 2022.

   4.         Financial risk management policies 

The principal risks and uncertainties are consistent with those disclosed in preparation of the Group's annual financial statements for the year ended 31 December 2022.

   5.         Administration and other expenses 
 
                                             (Unaudited)   (Unaudited)     (Audited) 
                                                6 months      6 months    Year ended 
                                                      to            to 
                                                 30 June       30 June   31 December 
                                                    2023          2022          2022 
                                                     EUR           EUR           EUR 
 
 Directors' remuneration                          27,824        27,818        54,208 
 Administration fees - Isle of Man                     -             -        64,579 
 Administration fees - Bulgaria                   37,322             -        28,279 
 Legal and professional fees                     108,012       309,746       301,063 
 Auditors' remuneration                                -             -        53,477 
 Foreign currency expenses                         2,051             -         3,262 
 Other administration and sundry expenses         54,876        13,551       229,041 
 Investment advisory fees                         98,208       107,358        66,431 
                                                 328,293       458,473       800,340 
                                            ------------  ------------  ------------ 
 

Notes to the Financial Statements for the period ended 30 June 2023 (continued)

   6.         Other income 
 
                                          (Unaudited)   (Unaudited)     (Audited) 
                                             6 months      6 months    Year ended 
                                                   to            to 
                                              30 June       30 June   31 December 
                                                 2023          2022          2022 
                                                  EUR           EUR           EUR 
 
 Interest income - receivable balances        662,944        94,882       303,952 
 Bad debts recovered                                -             -     2,550,578 
 Others                                        15,892        11,916       594,737 
                                              678,836       106,798     3,449,267 
                                         ------------  ------------  ------------ 
 
   7.         (Loss)/earnings per share 

The basic (loss)/earnings per ordinary share is calculated by dividing the net (loss)/profit attributable to the ordinary shareholders of the Company by the weighted average number of ordinary shares in issue during the period.

 
                                             (Unaudited)     (Unaudited)       (Audited) 
                                                6 months        6 months      Year ended 
                                                      to              to 
                                                 30 June         30 June     31 December 
                                                    2023            2022            2022 
                                                     EUR             EUR             EUR 
 
 (Loss)/earnings attributable to owners 
  of parent EUR                                 (74,412)       (615,416)       3,849,241 
 Weighted average number of ordinary 
  shares in issue                          1,813,323,603   1,813,323,603   1,783,601,434 
 Basic (loss)/earnings per share 
  (cents)                                         (0.01)          (0.03)            0.22 
                                          --------------  --------------  -------------- 
 

The Company has no potential dilutive ordinary shares; the diluted (loss)/earnings per share is the same as the basic (loss)/earnings per share.

Notes to the Financial Statements for the period ended 30 June 2023 (continued)

   8.         Taxation 

Isle of Man

There is no taxation payable on the Company's or its Jersey subsidiaries' results as they are based in the Isle of Man and in Jersey respectively where the Corporate Income Tax rates for resident companies are 0% (2022: 0%). Additionally, neither the Isle of Man nor Jersey levies tax on capital gains.

Consequently, shareholder's resident outside of the Isle of Man and Jersey will not incur any withholding tax in those jurisdictions on any distributions made to them.

Bulgaria

Subsidiaries of the Company incorporated in Bulgaria are taxed in accordance with the applicable tax laws of Bulgaria. The Bulgarian corporate tax rate for the year was 10% (2022: 10%).

No deferred tax assets are recognised on trading losses in the subsidiary companies as there is significant uncertainty as to whether sufficient future profits will be available in order to utilise these losses.

A reconciliation of the tax charge for the year to the standard rate of corporation tax for the Isle of Man of 0% (2022: 0%) is shown below.

 
                                                 (Unaudited)      (Audited) 
                                                     30 June    31 December 
                                                                       2022 
                                                        2023            EUR 
                                                         EUR 
---------------------------------------------  -------------  ------------- 
 (Loss)/Profit before tax                           (74,412)      3,849,241 
---------------------------------------------  -------------  ------------- 
 
 Profit on ordinary activities multiplied                  -              - 
  by the standard rate in the Isle of Man 
  of 0% (2021: 0%) 
 Effect of different tax rates in different 
  countries                                                -         74,236 
 Deferred tax liability movement                           -        463,163 
---------------------------------------------  -------------  ------------- 
 Current charge for the year                               -        537,399 
---------------------------------------------  -------------  ------------- 
 
 Bulgarian tax losses brought-forward at 
  10%                                              (183,943)      (183,943) 
 Tax losses utilised in the year                           -              - 
---------------------------------------------  -------------  ------------- 
 Bulgarian tax losses carried-forward at 
  10%                                              (183,943)      (183,943) 
---------------------------------------------  -------------  ------------- 
 
 Deferred tax liability 
 Opening deferred tax liability balance            2,407,965      1,944,802 
 Deferred tax liability on fair value uplift               -              - 
  of investment property on 
  Acquisition/(disposal) of a subsidiary 
 Bulgarian deferred tax liability charge                   -              - 
 Deferred tax liability on fair value uplift 
  of investment property                                   -        463,163 
 Closing deferred tax liability balance            2,407,965      2,407,965 
---------------------------------------------  -------------  ------------- 
 

Notes to the Financial Statements for the period ended 30 June 2023 (continued)

   9.         Investment properties 
 
                                    (Unaudited)    (Audited) 
                                        30 June  31 December 
                                           2023         2022 
                                            EUR          EUR 
Beginning of year                    47,517,500   38,144,730 
Additions                                     -    7,177,500 
Additions - further plot CSB                  -    1,470,562 
Disposals                                     -            - 
Fair value adjustment                         -      724,708 
                                    -----------  ----------- 
Total investment property            47,517,500   47,517,500 
                                    -----------  ----------- 
 
Ivan Vazov 1 Building                11,550,000   11,550,000 
Camp South Beach                     16,430,000   16,430,000 
Camp South Beach additional plots     1,500,000    1,500,000 
Byala Land                           10,860,000   10,860,000 
Star Mill                             7,177,500    7,177,500 
Total investment property            47,517,500   47,517,000 
                                    -----------  ----------- 
 

The Directors confirm that there are no material changes in the valuation of investments as of 30 June 2023.

The valuations of the other Group properties at 31 December 2022 were based on the most recent independent valuation received for each property. The valuations were performed by external accredited independent valuers with recognised professional qualifications and with recent experience in the location and category of the investment properties being valued.

The fair value of completed investment property has been determined on a market value basis in accordance with the RICS "Red Book". In arriving at their estimates of market values, the valuers have used their market knowledge and professional judgement, historical transactional comparable and discounted cash flow forecasts. The highest and best use of the investment properties is not considered to be different from its current use.

The cost of the investment properties comprises their purchase price and directly attributable expenditure. Directly attributable expenditure includes professional fees for legal services and stamp duty land tax.

In November 2022, CSB acquired several plots behind the camp site for total consideration of EUR1,470,562, with the aim to achieve synergy and optimization with the joint development and management of CSB, the newly acquired Black Sea Star Hotel and future developments on the plots.

Notes to the Financial Statements for the period ended 30 June 2023 (continued)

   10.       Intangible assets 

At the end of 2020, after participating in an open concession award procedure, the Group through Camping South Beach received the concession rights over the sea beach "Camping Gradina". During the active summer season of 2021, the beach is managed by CSB under the terms of a lease agreement. The concession agreement enters into force on 17.10.2020, and at the beginning of 2021 the handover of the sea beach by the grantor Ministry of Tourism to the concessionaire was carried out. The term of the contract is 20 years. The concession contract of CSB grants the right to operate the sea beach, performing alone or through subcontractors providing visitors to the sea beach of the following services: beach services, including the provision of umbrellas and sunbeds, services in fast food restaurants, sports and entertainment services, water attraction services, health and rehabilitation services and other events, after prior agreement with the grantor. A condition for operation of the concession site is the implementation of mandatory activities, which include provision of water rescue activities, security of the adjacent water area, health and medical services for beach users, sanitary and hygienic maintenance of the beach, maintenance for use of the elements of

the technical infrastructure, the temporary connections, the movable objects, the facilities and their safe functioning.

In 2020 the Group has paid the first due concession fee, which provides the period from the date of entry into force of the concession agreement until the end of the same calendar year and the period from January 1 of the last calendar year in which the concession agreement is valid until the date upon expiration of the contract.

According to the financial model presented by the Company, which is accepted by the grantor and is an integral part of the concession agreement, for the concession period the Group will make additional investments related to the implementation of mandatory activities and investments to improve access to the beach. After the expiration of the concession contract, all constructed sites remain the property of the grantor. The activities related to the operation of the concession site are performed by the concessionaire at his risk and at his expense. The cost of the acquired intangible assets was EUR655,876 and no amortization expenses were recognized in 2020. The acquired intangible asset was amortized by EUR17,264 (2022: EUR49,191) in the current period.

   11.        Acquisition of a subsidiary 

On 18 July 2022, the Company through its owned subsidiary, BSPF Project 1 EAD, acquired 100% of share capital Star Mil EOOD ("Star Mil") including all its assets and liabilities. Star Mil owns the Black Sea Star hotel complex, located in a prime location on the Black Sea Coast, behind the Company's existing site at Camping Gradina. The Acquisition of Star Mil provides opportunities for synergies and economies of scale with the joint development and management of Camping Gradina and Black Sea Star.

The consideration for this acquisition was EUR5.15 million. BSPF Project 1 EAD acquired EUR7.83 million worth of outstanding loans due to the company's previous parent company.

On 24 July 2022, the transaction for the shares was finalized and the acquisition recorded in the Trade Register in Bulgaria. This is the date that the group obtained control of Star Mil.

The property was deemed to have a fair value at acquisition of EUR7,177,500.

Since the acquisition Star Mill has contributed EUR20,740 to group revenue and loss of EUR429,377 to group profit. If the acquisition had occurred on 1 January 2022, group revenue would have been EUR1,159,445 and group profit for the year would have been EUR3,832,081.

Notes to the Financial Statements for the period ended 30 June 2023 (continued)

   11.       Acquisition of a subsidiary (continued) 

The fair value of the identifiable assets and liabilities of Star Mil as at the date of acquisition were:

 
                                       Pre- acquisition     Fair value     Recognised 
                                               carrying    adjustments       value on 
                                                  value                   acquisition 
                                                    EUR            EUR            EUR 
 Investment property                          3,270,579      3,906,921      7,177,500 
  Plant and equipment                                 -              -              - 
 Materials                                      232,738              -        232,738 
 Trade and other receivables                     27,575              -         27,575 
 Cash and cash equivalents                          151              -            151 
 Trade and other payables                     (138,775)              -      (138,775) 
 Long/short loans                           (7,855,597)      7,834,174       (21,423) 
------------------------------------  -----------------  -------------  ------------- 
 
 Total net identifiable assets              (4,463,329)     11,741,095      7,277,766 
------------------------------------  -----------------  -------------  ------------- 
 
 Purchase consideration transferred                                         5,150,001 
                                                                        ------------- 
 Bargain purchase on acquisition                                          (2,127,765) 
                                                                        ------------- 
 
   12.        Trade and other receivables 
 
                                                (Unaudited)     (Audited) 
                                                    30 June   31 December 
                                                       2023          2022 
                                                        EUR           EUR 
 
 Trade receivables*                               1,613,957     1,798,839 
 Amount receivable from the sale of the ECDC 
  group*                                          2,000,000     4,500,000 
 Prepayments                                         71,741        32,333 
                                                  3,685,698     6,331,172 
                                               ------------  ------------ 
 

*All amounts are due within one year. The expected credit losses (ECL) for this amount is nil. On 30 May 2023 Black Sea Property received EUR2.5million from the price. The remaining balance were received on 6 July 2023.

   13.        Issued share capital 
 
                                             (Unaudited)      (Audited) 
   Authorised                                      As at          As at 
                                                 30 June    31 December 
                                                    2023           2022 
 Founder shares of no par value                       10             10 
 Founder shares of no par value                Unlimited      Unlimited 
 
   Issued and fully paid                             EUR            EUR 
 2 Founders shares of no par value (2022:              -              - 
  2) 
 1,813,323,603 ordinary shares of no par 
  value (2022: 1,813,323,603)                 70,699,442     70,699,442 
 

The Founders shares do not carry any rights to dividends or profits and on liquidation they will rank behind Shares for the return of the amount paid up on each of them. The shares carry the right to receive notice of and attend general meetings, but carry no right to vote thereat unless there are no Participating Shares in issue.

Capital management

The Directors consider capital to be the net assets of the Group. The capital of the Company will be managed in accordance with the Investment Strategy documented on the Company's website.

Notes to the Financial Statements for the period ended 30 June 2023 (continued)

   14.        Bank Loans 
 
                                   (Unaudited)    (Audited) 
                                       30 June  31 December 
                                          2023         2022 
                                           EUR          EUR 
 
 Loan from UniCredit (a & c)         8,057,661    7,795,499 
 Loan from BACB (b)                  3,971,036    3,968,384 
 Central Cooperative Bank (d)        8,216,757    8,192,595 
                                  ------------  ----------- 
                                    20,245,454   19,956,478 
                                  ------------  ----------- 
 Long term bank loans               18,161,392   18,185,200 
 Current bank loans                  2,084,062    1.771.278 
                                  ------------  ----------- 
 
 Reconciliation of bank loans 
 Beginning of year (gross loan)     19,956,478   16,289,811 
 Bank loan arrangement fees            (2,515)            - 
 Loan received                         354,902    5,099,630 
 Interest charged                      314,338      472,617 
 Principal repayments                 (79,350)  (1,366,680) 
 Interest payments                   (298,399)    (538,900) 
 Total bank loans                   20,245,454   19,956,478 
--------------------------------  ------------  ----------- 
 

a) In October 2017, the Company entered into a secured debt funding of EUR7 million from UniCredit Bulbank AD ("UniCredit"), a leading Bulgarian commercial bank which was used to complete the acquisition of the Ivan Vazov 1 Building. The debt funding from UniCredit is secured by a commercial mortgage on the property valued at EUR11,550,000 (see note 10). The term of the debt funding is thirty-six months from date of execution of the loan documentation. The repayment shall be made as a one-off payment on the repayment deadline. The company renegotiated the terms of the loan, extending the repayment period until 30 November 2033 and changed the margin to the interest rate to 2%.

The interest on the loan is now the internal interest percentage by the bank plus 2.00% (2022: 2%).

The company entered into an agreement with Unicredit Bulbank AD ("UniCredit"), a leading Bulgarian commercial bank, which involved revised and extended lending terms for the construction of the Ivan Vazov 1 Building.

b) In 2022, the BSPF Project 1 received financing from a commercial bank in the amount of EUR 4,167,028. The financing was granted in connection with the acquisition of an investment in Star Mill EOOD. The loan is repayable by October 20, 2030 in instalments according to a repayment plan. The loan is charged a floating interest sum of LEONIA Plus and a risk allowance. The loan is secured by the following assets:

   --           Receivables of the BSPF Project 1 from Star Mill EOOD; 

-- Bank deposit of the BSPF Project 1 of EUR 102,258, which will be released after full payment to the creditor;

   --           Mortgage of the real estate of Star Mill EOOD 

-- Current and future funds of the BSPF Project 1 and Star Mill EOOD on current accounts opened with the creditor bank,

Notes to the Financial Statements for the period ended 30 June 2023 (continued)

   14.        Bank Loans (continued) 

c) In November 2021, the Company entered into a secured debt funding of up to EUR2.3 million from UniCredit Bulbank AD ("UniCredit"), a leading Bulgarian commercial bank which was used to partly finance the construction costs for the planned renovation of the roof and overhaul of the administrative building known as the Ivan Vazov 1 Building. The secured debt funding is made up of an investment limit of up to EUR1.8 million and a revolving limit of up to EUR0.5 million. The debt funding from UniCredit is secured by a commercial mortgage on the property valued at EUR11,550,000 (see note 10). The debt funding is also secured by a first rank pledge of all the receivables, claims, rights and interests, both current and future, of the company along with a second ranking registered pledge of the commercial enterprise of the company and a second ranking pledge of 100% of the shares of the capital of the company. The utilization deadline of EUR1.5 million of the investment limit is no later than 30 November 2023 while the utilization deadline of the remaining EUR0.3 million is no later than 30 November 2024. There is a grace period on the repayment of the principal amount due until 30 November 2023. After this date the principal will be repaid in equal monthly instalments. Interest is also repayable monthly with no grace period agreed. The repayment period is up until 30 November 2033. The utilization deadline of EUR0.5 million of the revolving limit is no later than 30 November 2023.The repayment of the revolving limit is made within 6 months of each utilized amount and the repayment period is up until 30 May 2024.

   d)    Central Cooperative bank loan and overdraft 
 
                                             (Unaudited)     (Audited) 
                                                 30 June   31 December 
                                                    2023          2022 
                                                     EUR           EUR 
 
 Central Cooperative Bank overdraft (i)          667,665       664,234 
 Central Cooperative Bank overdraft (ii)       6,192,155     6,178,112 
 Central Cooperative Bank investment loan 
  (ii)                                         1,356,937     1,350,248 
                                            ------------  ------------ 
                                               8,216,757     8,912,594 
                                            ------------  ------------ 
 

(i) This is an overdraft with Central Cooperative Bank. The interest on the account is 4% and was repayable on 24 June 2020 however the terms of the contract were extended to 24 June 2022. At the date these financial statements were signed the Company made an extension of the credit repayment period by 12 months.

(ii) The interest rate on the overdraft and the investment loan is 3.6%. The maturity date for both the overdraft and the investment loan is 21 January 2028.

In March 2020, the Group successfully negotiated reduction of the interest rates on the loans due to Central Cooperative Bank to 2.8%. The loan is secured by the commercial property of South Beach (Gradina) Camp which includes all the tangible fixed assets of the property along with the mortgage on the land.

Notes to the Financial Statements for the period ended 30 June 2023 (continued)

   15.       Trade and other payables 

Non-current trade and other payables can be presented as follows:

 
                       (Unaudited)     (Audited) 
                           30 June   31 December 
                              2023          2022 
                               EUR           EUR 
 
 Concession payable        528,775       539,929 
                           528,775       539,929 
                      ------------  ------------ 
 

The current trade and other payables can be presented as follows:

 
                       (Unaudited)     (Audited) 
                           30 June   31 December 
                              2023          2022 
                               EUR           EUR 
 
 Trade creditors           429,806       188,499 
 Concession payable         23,822        23,823 
 Other payables            628,544       514,004 
                      ------------  ------------ 
                         1,082,172       726,326 
                      ------------  ------------ 
 Tax liability             153,796        80,426 
                      ------------  ------------ 
 
   16.        Related party transactions 

In 2022 the Group obtained a short-term loan of EUR 2,500,000 from Neo London Capital AD at a fixed interest rate of 4.25% which the principal amount was paid. However, at the end of the period the interest amount was still payable of EUR109,784 (2022: EUR65,808).

In July 2017, the Company appointed Phoenix Capital Management JSC as its investment adviser with responsibility for advising on the investment of the Company's property portfolio. Phoenix Capital Holding Plc owns 79.99% of the Phoenix Capital Management JSC shares. Phoenix Capital Holding Plc, through its wholly owned subsidiary Mamferay Holdings Ltd, holds 24.81% (31.12.2022: 24.81%) of the issued share capital of the Company. Phoenix Capital Management JSC received fees of EUR98,208 (2022: EUR107,358). The amount outstanding as at 30.06.2023 is EUR115,199 (31.12.2022: EUR268,062).

Notes to the Financial Statements for the period ended 30 June 2023 (continued)

   17.        Net asset value per share 
 
                                                    (Unaudited)    (Unaudited) 
                                                        30 June        30 June 
                                                           2023           2022 
                                                            EUR            EUR 
 
Net assets attributable to owners of the parent 
 (EUR)                                               28,705,079     24,314,834 
Number of ordinary shares outstanding             1,813,323,603  1,813,323,603 
Net Asset Value (cents)                                    1.58           1.34 
                                                  -------------  ------------- 
 
   18.        Events after reporting date 

Signed agreement for acquisition of Grand Hotel Varna AD

Black Sea Property PLC has signed an agreement to acquire 98.27% of Grand Hotel Varna AD (the "Acquisition").

Grand Hotel Varna AD wholly owns GHV-Dolphins EAD, a Bulgarian company which holds the title to real estate comprising three hotels and a beach marina resort (together, the "Resort"), situated in a prime location on the Black Sea Coast, with excellent accessibility.

The primary purpose of the Acquisition is to strengthen Black Sea Property's hospitality investments, by adding desirable hotels to its existing investment in Camping South Beach.

The consideration payable for the Acquisition is EUR 28 million in cash, of which an initial non-refundable deposit of EUR 1.6 million was paid upon signing of the agreement. The property assets being acquired have been independently valued at EUR 19 million, and the mutual fund portfolio is currently valued at EUR 12 million.

BSP has raised EUR12million through the issue of unsecured loan notes to certain existing shareholders. The proceeds of the issue of the Loan Notes have been used to pay tranches of the consideration for the Acquisition.

To satisfy the balance of the consideration, the Company will need to raise additional funds. Subject to securing the required funding, which the Directors are confident of achieving, the Acquisition is expected to be completed by 30 October 2023.

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September 29, 2023 07:47 ET (11:47 GMT)

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