TIDMADSS
RNS Number : 3065Z
Atlas Dev & Support Services Ltd
17 September 2015
Atlas Development & Support Services Limited / Ticker: ADSS
/ Index: AIM / Sector: Support Services
17 September 2015
Atlas Development & Support Services Limited
('Atlas Development' or the 'Company')
Interim Results
Atlas Development (AIM, NSE: ADSS), the Kenyan headquartered,
African focussed support services and logistics company, provides
interim results for the 12 month period ended 30 June 2015.
CHAIRMAN'S STATEMENT
Atlas Development was established to take advantage of the lack
of international standard oil and gas services companies operating
in Africa. With a platform put in place to deliver a full spectrum
of services, the Company was able to build a business that was
generating both revenue and a significant pipeline of
opportunities.
However, as investors will be aware the oil and gas market has
been through a tumultuous period; as reported, this directly
impacted the Company. In light of this the Board implemented
initiatives aimed at further diversifying the Company's offering,
identifying new sectors of operation, targeting additional
jurisdictions and reducing costs. There has been progress on some
of these fronts but the securing of contracts which offer the right
margins has been difficult in the short term, particularly in the
oil and gas space.
On a positive note, the Company's business in Ethiopia has been
improving. Contracts with major potash project developers have been
negotiated and renewed as they look to advance their exploration
and mining operations. The Ethiopian business pipeline is also
improving in the natural resource and infrastructure spaces. With a
positive market dynamic and a growth in requirements for
international standard support services the Board is hopeful that
the Ethiopian operations will generate positive returns.
With the pick-up in activity in Ethiopia and also ongoing
operations in Tanzania much of the Company's resources have been
diverted from Kenya. The reason for this re-allocation of resources
is that in Kenya, and particularly in the Turkana region, activity
in the oil and gas space has significantly reduced. The Company has
agreements in place to provide support services across the delivery
spectrum but these are dependent on each client and impacted when
they reduce activities. Accordingly, revenue visibility is not easy
to predict at this time. Tenders are being offered by a number of
parties throughout the East African region but the Board believes
that the terms being demanded from service providers are not
sustainable. Indeed in a number of recent cases contracts were
agreed but terms then adjusted by the clients, causing the work to
be unprofitable and therefore unattractive to the Company.
The Company has been successful in expanding its sectoral
coverage and has tendered for a number of substantial and
transformational infrastructure projects. Given the large scale of
these projects, implementation is dependent on a number of national
and regional political variables being resolved. These factors have
a knock-on effect as regards timing and therefore although the
prospects remain exciting it is hard to assess likely delivery
schedules. As a result, the Company has conducted a full review of
operations in Kenya and dramatically reduced costs and overheads to
preserve the balance sheet whilst maintaining a presence to ensure
the capabilities are in place to deliver these potentially
transformational projects when the time arises or market sentiment
changes.
In Tanzania, although the Company has a number of small
contracts, the operations are heavily centred on the oil and gas
sector where, as in Kenya, the general environment remains
challenging. Again, the Board has initiated heavy cost reduction
exercises to preserve capital. Operations continue in Western
Sahara. The exploration projects of two London listed companies and
the potential for engagement in relation to these, as referred to
in previous announcements, have unfortunately been shelved due to
reallocation of resources in the oil and gas arena. However, if, as
and when strategy changes are seen in the wider industry, the
Company retains its prime position.
FINANCIAL REVIEW
The Company is reporting revenues for H1 2015 in line with
expectations with turnover of US$11.5 million. As a result of the
reduced contract base and restructuring costs incurred during the
downscale of operations the Company experienced comprehensive
losses during H1 2015 of US$2.6 million, which included exchange
rate losses of US$0.7 million (resulting from the 9% fall in the
USD:KES exchange rate which heavily impacted the USD equivalent
cash balances which were held in KES) and non-recurring
restructuring costs of US$1.1 million.
At 30 June 2015 the Company had cash and cash equivalents of
US$6.1m.
OUTLOOK
With the general economic and operational environment in East
Africa being mixed the Board has focused on the preservation of
capital through prudent cost cutting and streamlining initiatives.
With capital in the bank and a significant asset inventory there
remains opportunity; both within Africa and potentially beyond. In
this vein, the Board is in discussion with a number of asset
financing banks with regards to potential acquisitions and
expansion opportunities. The conclusion of any transaction due to
market dynamics and the current valuations is more challenging but
the Board, as I said, believes there remains opportunity.
Further afield the Company has been approached by a number of
parties about potentially forming joint ventures with regard to the
provision of wide ranging support services, particularly in the oil
and gas space. Additionally there are a number of businesses which
require the expertise that we can offer as regards restructuring
and delivering an international standard offering. The Board is
assessing a number of opportunities in this context in
jurisdictions which are newly opening up for oil and gas, where our
ability to operate in challenging environments is recognised and
valued. Furthermore, with our primary London listing and dual
listing in Kenya the Company is seen as having strong credentials
and therefore an attractive operational partner.
The Board understands the frustration of shareholders during
this period but is working tirelessly to adapt and improve the
situation to generate revenue. The pipeline of opportunities
remains in place although conversion timings are hard to predict in
the current environment. With cash at bank of US$6.1m, a highly
experienced proven operational team, a strategic plan in place and
prudent cost management, the Company appreciates continued
shareholders support as we look to rebuild value.
Ian H. Mann
Non-Executive Chairman
17 September 2015
For further information please visit www.atlassupport.com or
contact:
Carl Esprey Atlas Development Tel: +44 (0) 20 7408
9200
Callum Stewart Stifel Nicolaus Europe Tel: +44 (0) 20 7710
Limited 7600
Ashton Clanfield Stifel Nicolaus Europe Tel: +44 (0) 20 7710
Limited 7600
Edward Burbidge Burbidge Capital Tel: +254 (0) 202
100 102
Charlotte Heap St Brides Partners Ltd Tel: +44 (0) 20 7236
1177
FINANCIAL STATEMENTS
Consolidated Interim Income Statement
Notes 2015 2014 2014
Year
to
12 month 6 month
period to period to
30 June 31 December 30 June
2015 2014 2014
$ '000 $ '000 $ '000
CONTINUING OPERATIONS
=============================== ====== ================ ============= =========
Revenue 8 14,635 3,148 -
=============================== ====== ================ ============= =========
Cost of sales 8 (9,171) (2,116) -
=============================== ====== ================ ============= =========
Gross Profit 5,464 1,032 -
Operating expenses (11,345) (4,075) (2,528)
=============================== ====== ================ ============= =========
Share option charge 14 (2,458) (2,376) -
=============================== ====== ================ ============= =========
Share of results of associate 7 182 182 1,075
=============================== ====== ================ ============= =========
Operating loss (8,157) (5,237) (1,453)
Investment revenues - - 28
=============================== ====== ================ ============= =========
Finance cost (1,381) (532) -
=============================== ====== ================ ============= =========
Loss before taxation (9,538) (5,769) (1,425)
Taxation (80) (69) -
=============================== ====== ================ ============= =========
Loss for the period (9,618) (5,838) (1,425)
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=============================== ====== ================ ============= =========
Attributable to:
=============================== ====== ================ ============= =========
Owners of the Company (9,618) (5,838) (1,425)
=============================== ====== ================ ============= =========
Non-controlling interests - - -
=============================== ====== ================ ============= =========
Earnings per Share
From continuing operations
=============================== ====== ================ ============= =========
Basic (2.4c) (1.5c) (0.4c)
=============================== ====== ================ ============= =========
Diluted (2.4c) (1.5c) (0.4c)
=============================== ====== ================ ============= =========
Consolidated Interim Statement
of Comprehensive income
Loss for the period (9,618) (5,838) (1,425)
======================================== =============== ======== ========
Exchange differences on translation
of foreign operations (255) (34) (7)
======================================== =============== ======== ========
Other Comprehensive Income:
======================================= =============== ======== ========
Revaluation of Tangible Assets 1,425 - -
======================================= =============== ======== ========
Total comprehensive loss for
the year (8,448) (5,872) (1,432)
======================================== =============== ======== ========
Total comprehensive loss attributable
to
======================================= =============== ======== ========
Owners of the parent company (8,448) (5,872) (1,432)
======================================== =============== ======== ========
Non-controlling interests - - -
======================================== =============== ======== ========
Consolidated Interim Statement of Financial Position
30 June 30 June
31 December
2015 2014 2014
Notes $ '000 $ '000 $ '000
ASSETS
Non-current assets
Property, plant & equipment 6 10,037 5,373 174
--------------------------------------- ------ ---------------- ------------ --------
Investments in associate 7 5,257 5,257 5,075
--------------------------------------- ------ ---------------- ------------ --------
Loans and other receivables 5,790 8,063 8,545
--------------------------------------- ------ ---------------- ------------ --------
Total non-current assets 21,084 18,693 13,794
--------------------------------------- ------ ---------------- ------------ --------
Current assets
Inventories 508 126 -
--------------------------------------- ------ ---------------- ------------ --------
Trade and other receivables 9 8,454 3,361 2,372
--------------------------------------- ------ ---------------- ------------ --------
Cash and cash equivalents 10 6,110 12,872 3,132
--------------------------------------- ------ ---------------- ------------ --------
Total current assets 15,072 16,359 5,504
--------------------------------------- ------ ---------------- ------------ --------
TOTAL ASSETS 36,156 35,052 19,298
======================================= ====== ================ ============ ========
LIABILITIES
Current liabilities
Trade and other payables 11 (4,291) (3,505) (262)
--------------------------------------- ------ ---------------- ------------ --------
Current tax liabilities (24) (68) -
--------------------------------------- ------ ---------------- ------------ --------
Borrowings 11 (2,915) (60) (115)
--------------------------------------- ------ ---------------- ------------ --------
Total current liabilities (7,230) (3,633) (377)
--------------------------------------- ------ ---------------- ------------ --------
TOTAL LIABILITIES (7,230) (3,633) (377)
======================================= ====== ================ ============ ========
NET ASSETS 28,926 31,419 18,921
======================================= ====== ================ ============ ========
EQUITY
Issued capital 12 36,502 36,502 20,508
--------------------------------------- ------ ---------------- ------------ --------
Foreign exchange reserve (261) (41) (7)
--------------------------------------- ------ ---------------- ------------ --------
Retained earnings 13 (7,315) (5,042) (1,580)
======================================= ====== ================ ============ ========
Total equity attributable to the
equity holders of the parent company 28,926 31,419 18,921
Non-controlling interests - - -
--------------------------------------- ------ ---------------- ------------ --------
TOTAL EQUITY 28,926 31,419 18,921
======================================= ====== ================ ============ ========
Consolidated Interim Statement of Changes in Equity
Share capital Retained Foreign Total attributable
earnings Exchange to equity
Reserve holders
of the parent
$ '000 $ '000 $ '000 $ '000
================ ================ ================= ===================
Balance at 1st July 2013 9,652 (155) - 9,497
----------------------------------- ---------------- ---------------- ----------------- -------------------
Loss for the period - (1,425) - (1,425)
----------------------------------- ---------------- ---------------- ----------------- -------------------
Other comprehensive income - - (7) (7)
----------------------------------- ---------------- ---------------- ----------------- -------------------
Total comprehensive income
for the period - (1,425) (7) (1,432)
----------------------------------- ---------------- ---------------- ----------------- -------------------
Transactions with owners
Share issues - cash received 11,392 - - 11,392
----------------------------------- ---------------- ---------------- ----------------- -------------------
Share issue costs (536) - - (536)
----------------------------------- ---------------- ---------------- ----------------- -------------------
Total transactions with owners 10,856 - - 10,856
----------------------------------- ---------------- ---------------- ----------------- -------------------
Balance at 30(th) June 2014 20,508 (1,580) (7) 18,921
----------------------------------- ---------------- ---------------- ----------------- -------------------
Loss for the period - (5,838) - (5,838)
----------------------------------- ---------------- ---------------- ----------------- -------------------
Other comprehensive income - - (34) (34)
----------------------------------- ---------------- ---------------- ----------------- -------------------
Total comprehensive income
for the period - (5,838) (34) (5,872)
----------------------------------- ---------------- ---------------- ----------------- -------------------
Transactions with owners
----------------------------------- ---------------- ---------------- ----------------- -------------------
Share issues - cash received 16,836 - - 16,836
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----------------------------------- ---------------- ---------------- ----------------- -------------------
Share issue costs (842) - - (842)
----------------------------------- ---------------- ---------------- ----------------- -------------------
Charge in relation to share-based
payments - 2,376 - 2,376
----------------------------------- ---------------- ---------------- ----------------- -------------------
Total transactions with owners 15,994 2,376 - 18,370
----------------------------------- ---------------- ---------------- ----------------- -------------------
Balance at 31st December 2014 36,502 (5,042) (41) 31,419
Loss for the period - (3,780) (3,780)
----------------------------------- ---------------- ---------------- ----------------- -------------------
Other comprehensive income 1,425 (220) 1,205
----------------------------------- ---------------- ---------------- ----------------- -------------------
Total comprehensive income
for the period - (2,355) (220) (2,575)
----------------------------------- ---------------- ---------------- ----------------- -------------------
Transactions with owners
----------------------------------- ---------------- ---------------- ----------------- -------------------
Share issues - cash received - - - -
----------------------------------- ---------------- ---------------- ----------------- -------------------
Share issue costs - - - -
----------------------------------- ---------------- ---------------- ----------------- -------------------
Charge in relation to share-based
payments - 82 - 82
----------------------------------- ---------------- ---------------- ----------------- -------------------
Total transactions with owners - 82 - 82
----------------------------------- ---------------- ---------------- ----------------- -------------------
Balance at 30(th) June 2015 36,502 (7,315) (261) 28,926
----------------------------------- ---------------- ---------------- ----------------- -------------------
Consolidated Interim Cash Flow Statement
2015 2014 2014
Year
to
12 month 6 month period
period to to 31 December 30 June
30 June 2015 2014 2014
$ '000 $ '000 $ '000
-------------- ---------------- ---------
CASH FLOWS FROM OPERATING ACTIVITIES
Loss before tax (9,538) (5,769) (1,425)
--------------------------------------------- -------------- ---------------- ---------
Working Capital Adjustments:
- Depreciation of property, plant
and equipment 880 152 7
--------------------------------------------- -------------- ---------------- ---------
- Share of Associates profit (182) (182) (1,075)
--------------------------------------------- -------------- ---------------- ---------
* Share option charge 2,458 2,376 -
--------------------------------------------- -------------- ---------------- ---------
- Net interest cost / (income) 1,381 532 (28)
--------------------------------------------- -------------- ---------------- ---------
Operating cash flow before movements
in working capital (5,001) (2,891) (2,521)
--------------------------------------------- -------------- ---------------- ---------
Working capital adjustments:
* Decrease/(Increase) in inventories (508) 126 -
--------------------------------------------- -------------- ---------------- ---------
- (Increase) in receivables (6,032) (992) (1,498)
--------------------------------------------- -------------- ---------------- ---------
- Increase / (decrease) in payables 3,138 2,993 (159)
--------------------------------------------- -------------- ---------------- ---------
Cash used in operations (8,403) (764) (4,178)
--------------------------------------------- -------------- ---------------- ---------
Net Interest (cost) / received (23) (9) 28
--------------------------------------------- ============== ================ =========
Net cash used in operating activities (8,426) (774) (4,150)
--------------------------------------------- -------------- ---------------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of property, plant and equipment (7,915) (5,351) (181)
--------------------------------------------- -------------- ---------------- ---------
Purchase of subsidiary, net of cash
received - - (3)
--------------------------------------------- -------------- ---------------- ---------
Decrease /(Increase) in loans to associate 2,755 482 (8,545)
--------------------------------------------- -------------- ---------------- ---------
Net cash used in investing activities (5,160) (4,869) (8,729)
--------------------------------------------- -------------- ---------------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issue of share capital 16,836 16,836 7,392
--------------------------------------------- -------------- ---------------- ---------
Share issue costs (842) (842) (536)
--------------------------------------------- -------------- ---------------- ---------
Borrowings / (Repayment of borrowings) 1,835 (55) -
--------------------------------------------- ============== ================ =========
Net cash flow from financing activities 17,829 15,939 6,856
--------------------------------------------- -------------- ---------------- ---------
Net increase / (decrease) in cash
and cash equivalents 4,243 10,296 (6,023)
--------------------------------------------- -------------- ---------------- ---------
Cash and cash equivalents at start
of the period 3,132 3,132 9,162
--------------------------------------------- -------------- ---------------- ---------
Effect of foreign exchange rate changes (1,265) (556) (7)
--------------------------------------------- ============== ================ =========
Cash and cash equivalents at end of
the period 6,110 12,872 3,132
--------------------------------------------- -------------- ---------------- ---------
Notes to the Interim Financial Statements
1. General Information
Atlas Development & Support Services Limited is incorporated
and domiciled in Guernsey. The nature of the Group's operations and
its principal activities are set out in the Chairman's
Statement.
The presentational currency of the Group is US Dollars as this
reflects the Group's business activities in the support services
sector in sub-Saharan Africa and therefore the Group's financial
position and financial performance.
The interim financial statements have been prepared in
accordance with International Financial Reporting Standards
("IFRS") as adopted by the European Union.
2. BASIS OF PREPARATION
The results presented in this announcement are unaudited and
they have been prepared in accordance with the recognition and
measurement principles of International Financial Reporting
Standards ('IFRS') as adopted by the EU that are expected to be
applicable to the financial statements for the period ended 31
December 2015 and on the basis of the accounting policies to be
used in those financial statements.
The interim financial information does not include all of the
information required for full annual financial statements and
accordingly, whilst the interim financial information has been
prepared in accordance with the recognition and measurement
principles of IFRS, it cannot be construed as being in full
compliance with IFRS. The financial information contained in this
announcement does not constitute statutory accounts as defined by
the Companies (Guernsey) Law 2008.
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The audited financial information for the year ended 30 June
2014 is based on the statutory accounts for the financial year
ended 30 June 2014. The auditors reported on those accounts: their
report was (i) unqualified, and (ii) did not contain statements
where the auditor is required to report by exception.
Going concern
The board has prepared forecasts for the Group covering the
period of 12 months from the date of approval of these interim
financial statements.
The directors believe that, the Group is well placed to manage
its business risks successfully despite the current uncertain
economic outlook. The directors have a reasonable expectation that
the Group has adequate resources to continue in operational
existence for the foreseeable future. Thus they continue to adopt
the going concern basis of accounting in preparing the annual
financial statements.
These interim financial statements have been prepared in
accordance with the IFRS principles applicable to a going concern,
which contemplate the realisation of assets and liquidation of
liabilities during the normal course of operations. Having carried
out a going concern review in preparing these interim financial
statements, the Directors have concluded that there is a reasonable
basis to adopt the going concern principle.
Consolidation of Subsidiaries
Subsidiary undertakings are consolidated in accordance with IFRS
10 when the parent entity controls an investee and it is exposed,
or has rights, to variable returns from its involvement with the
investee and has the ability to affect those returns through its
power over the investee.
Investment in Associates
Associates are entities over which the group has significant
influence but not control or joint control, generally accompanying
a shareholding of between 20% and 50% of the voting rights.
Investments in associates are accounted for by the equity method of
accounting. Under this method the investment is initially
recognised at cost and the carrying amount is increased or
decreased to recognise the investor's share of the profit or loss
of the investee after the date of acquisition.
The group's share of post-acquisition profit or loss is
recognised in the income statement, and its share of
post-acquisition movements in other comprehensive income is
recognised in other comprehensive income with a corresponding
adjustment to the carrying amount of the investment. When the
group's share of losses in an associate equals or exceeds its
interest in the associate, including any other unsecured
receivables, the group does not recognise further losses, unless it
has incurred legal or constructive obligations or made payments on
behalf of the associate.
The group determines at each reporting date whether there is any
objective evidence that the investment in the associate is
impaired. If this is the case, the group calculates the amount of
impairment as the difference between the recoverable amount of the
associate and its carrying value and recognises the amount as part
of its 'share of profit/ (loss) of associates in the income
statement.
3. Critical Accounting Estimates Judgments
The preparation of the interim consolidated financial statements
is in conformity with IFRS as adopted in the EU requires the use of
certain critical accounting estimates. It also requires management
to exercise its judgement in the process of applying the Group's
accounting policies. The estimates and assumptions that have a
significant risk of causing a material adjustment to the carrying
amounts of assets and liabilities within the next financial period
are discussed below.
Acquisition of Ardan Logistics Kenya
The board has considered whether the exercise of the option in
respect of Ardan Logistics Kenya Limited on 22 October 2014 should
be accounted for as a business combination under IFRS 3. They have
concluded that, since the transaction comprised an acquisition of
assets or group assets rather than a business, it was outside the
scope
of IFRS 3.
Given the existence of the unexercised option prior to 22
October 2014, the board have considered whether the existence of an
option constituted control under IAS 24 (in respect of the year to
30 June 2014) or IFRS 10 (subsequent to 1 July 2014) gave rise to a
need to consolidate the entity. Since the group has no voting
rights prior to 22 October 2014, the board have concluded that it
is appropriate to recognise Ardan Logistics Kenya Limited as a
subsidiary with effect from 22 October 2014.
4. Loss for the period
Operating expenses include:
2015 2014 2014
12 month 6 month period Year to
period to to 31(st) 30
30(th) June December
2015 2014
$ '000 $ '000 June
2014
$ '000
================================== ============== ================ =========
Foreign exchange losses /(gains) 1,010 521 (406)
================================== ============== ================ =========
Consultancy fees 968 386 446
================================== ============== ================ =========
Senior Staff Costs 1,637 708 315
================================== ============== ================ =========
5. Loss per Share
The calculation of the basic and diluted loss per share is based
on the following data:
2015 2014 2014
12 month 6 month period Year to 30(th)
period to to 31(st)
30(th) June December
2015
$ '000 2014 June
$ '000 2014
$ '000
================================ ============== ================ ================
Loss for the purposes of basic
loss per share (9,618) (5,838) (1,425)
================================ ============== ================ ================
Number of shares
2015 2014 2014
12 month 6 month period Year to 30(th)
period to to 31(st)
30(th) June December
2015
$ '000 2014 June
$ '000 2014
$ '000
===================================== ============== ================ ================
Weighted average number of ordinary
shares for
the purposes of basic and diluted
loss per share 405,218,434 377,565,443 283,720,834
===================================== ============== ================ ================
Loss per Share - basic (2.4c) (1.5c) (0.5c)
===================================== ============== ================ ================
Loss per share - diluted (2.4c) (1.5c) (0.5c)
===================================== ============== ================ ================
6. Property, Plant and Equipment
30 June 2015 Furniture Plant, Total
Equipment Vehicles
COST $ '000 $ '000 $ '000
==================================== =================== ================= =======================
As at 1 Jul 2014 7 174 181
==================================== =================== ================= =======================
Additions - 5,351 5,351
==================================== =================== ================= =======================
As at 31 Dec 2014 7 5,525 5,532
==================================== =================== ================= =======================
Additions 75 3,892 3,967
==================================== =================== ================= =======================
Revaluations - 1,425 1,425
==================================== =================== ================= =======================
As at 30 Jun 2015 82 10,842 10,924
==================================== =================== ================= =======================
DEPRECIATION
==================================== =================== ================= =======================
As at 1 Jul 2014 (1) (6) (7)
==================================== =================== ================= =======================
Charge for the period (1) (151) (152)
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==================================== =================== ================= =======================
As at 31 Dec 2014 (2) (157) (159)
==================================== =================== ================= =======================
Charge for the period (8) (720) (728)
==================================== =================== ================= =======================
As at 30 Jun 2015 (10) (877) (887)
==================================== =================== ================= =======================
NET BOOK VALUE AT 31 December 2014 72 9,965 10,037
==================================== =================== ================= =======================
NET BOOK VALUE AT 31 December 2014 5 5,368 5,373
==================================== =================== ================= =======================
NET BOOK VALUE AT 30 JUNE 2014 6 168 174
==================================== =================== ================= =======================
7. Interest in Associate companies
30 June 31 December 30 June
2015 2014 2014
$ '000 $ '000 $ '000
============================ ======== ============ ========
Investment in Associate 5,075 5,075 4,000
============================ ======== ============ ========
Share of Profit for Period 182 182 1,075
============================ ======== ============ ========
TOTAL 5,257 5,257 5,075
============================ ======== ============ ========
Set out below are the associates of the group as at 30 June
2015, which, in the opinion of the directors, are material to the
group. The associates listed have share capital consisting solely
of ordinary shares, which are held directly by the group.
Country of registration
/ incorporation Shares held
==========================================
Class %
=============================== ========================================== ======================== ===========
Ardan Risk & Support Services
(K) Ltd Kenya Ordinary 49
=============================== ========================================== ======================== ===========
Ardan Risk & Support Services
Ltd Mauritius Ordinary 49
=============================== ========================================== ======================== ===========
Principal Activity
=================================================================================================================
Ardan Risk & Support Services Provision of services at oil and
(K) Ltd gas exploration sites
=============================== =================================================================================
Ardan Risk & Support Services Provision of services at oil and
Ltd gas exploration sites
=============================== =================================================================================
The above companies (together "ARSS") are private companies and
there is no quoted market price available for the shares.
There are no contingent liabilities relating to the group's
interest in the associates.
The Board identified the above named associate as an appropriate
acquisition target and on 5 August 2013 the Company entered into an
acquisition agreement pursuant to which the Company agreed to
acquire a 49% interest in the associate for a consideration of
US$4m, satisfied by the issue of new Ordinary Shares. In addition,
the Company was granted a period of exclusivity with a view to
entering into an agreement to acquire the remaining 51% interest in
ARSS.
On 28 March 2014, the Company entered into a Framework and
Option Agreement pursuant to which the associate, overseen by the
Company, undertook a corporate and contractual restructuring
programme to rationalise operational management, and
implementation, planning and reporting. The Company was also
granted a three year conditional call option to acquire 100% of
ALK, a separate and new 'shell' company from which the restructured
business would be operated.
On 26 September 2014 the Company exercised the call option
granted to it pursuant to the framework and option agreement
announced on 28 March 2014, to acquire the entire issued share
capital of ALK. Following receipt of shareholder approval for the
Acquisition granted at a general meeting held on 22 October 2014
the Company completed the acquisition of ALK.
Completion of the transfer of business (including the novation
of contracts and the transfer of net assets etc.) into ALK is
targeted for completion during the first half of 2015, although
certain contracts have transferred in the period to 31 December
2014. Upon completion of the formalities of transfer, and the
Company being satisfied that the entire economic value has been
transferred into ALK, the Company's 49% interest in ARSS will be
returned to the seller.
8. InVESTMENTS IN SUBSIDIARIES
Investments include
Country of registration
/ incorporation Shares held
=========================
Class %
==================================== ========================= =========== ====
ADSS Holdings Limited
(previously Ardan Risk Holdings
Limited) Mauritius Ordinary 100
==================================== ========================= =========== ====
Ardan Servicos Logisticos Limitada Mozambique Ordinary 100
==================================== ========================= =========== ====
Ardan Servicos Medicos Limitada Mozambique Ordinary 100
==================================== ========================= =========== ====
Principal Activity
=================================================================================
ADSS Holdings Limited Investment Holding
(previously Ardan Risk Holdings
Limited)
==================================== ============================================
Ardan Servicos Logisticos Limitada Investment Holding
==================================== ============================================
Ardan Servicos Medicos Limitada Investment Holding
==================================== ============================================
The transfer of business from ARSS to ALK (including the
novation of contracts and the transfer of net assets etc.) began in
October 2014, and as such, from this date, revenue and associated
expenses within this subsidiary have been consolidated and
recognised during the period.
9. TRade and other receivables
All non-current receivables are due within five years from the
end of the reporting period.
2015 2014 2014
12 month 6 month period Year to
period to to 31st December 30th
30th June 2014
2014
$ '000 $ '000 June
2014
$ '000
================================= ============ =================== =========
Trade receivables 5,638 863 -
================================= ============ =================== =========
Other Receivables 2,028 2,393 2,372
================================= ============ =================== =========
Prepayments 736 105 -
================================= ============ =================== =========
Loans to associate 5,790 8,063 8,545
================================= ============ =================== =========
14,244 11,424 10,917
================================= ============ =================== =========
Less non-current portion: loans
to associate (5,790) (8,063) (8,545)
================================= ============ =================== =========
TOTAL CURRENT ASSETS 8,454 3,361 2,372
================================= ============ =================== =========
The effective interest rates on non-current receivables were
2.2%.
The directors consider that the carrying amount of trade and
other receivables approximates their fair value.
There are no significant amounts past due.
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10. CaSH AND CASH EQUIVALENTS
2015 2014 2014
12 month 6 month period Year
to 31(st) to 30(th)
December
2014
period to $ '000 June
30(th) June
2014
$ '000 2014
$ '000
=========================== ============== ================ ============
Cash and cash equivalents 6,110 12,872 3,132
=========================== ============== ================ ============
11. Financial Liabilities
2015 2014 2014
12 month 6 month Year to
period to 30(th)
31(st) December
2014
period to $ '000 June
30(th) June
2014
$ '000 2014
$ '000
================================ ============== ================== =========
Trade Payables 3,674 2,347 262
================================ ============== ================== =========
Other Payables 617 1,158 -
================================ ============== ================== =========
Current Tax Liabilities 24 68 -
================================ ============== ================== =========
Borrowings 2,915 60 115
================================ ============== ================== =========
TOTAL TRADE AND OTHER PAYABLES 7,230 3,633 377
================================ ============== ================== =========
Trade and other payables principally comprise amounts
outstanding for trade purchases and ongoing costs. The increase
during the current period in payables relates to ALK which has now
been consolidated.
The directors consider that the carrying amount of financial
liabilities approximates their fair value.
12. Share Capital
Allotted and fully
paid
Ordinary shares of no par value Number $'000
================================= ============ =======
At 30 June 2014 315,773,366 20,508
================================= ============ =======
Issue of shares 117,289,827 15,994
================================= ============ =======
Total share Capital:
================================= ============ =======
At 30 June 2015 433,063,193 36,502
================================= ============ =======
The Company has one class of ordinary share which carries no
right to fixed income.
On 15 August 2014, 77.8 million ordinary shares were issued for
cash at a price of 9.0 pence per ordinary share.
On 23 October 2014, the Company issued 350,000 ordinary shares
in part payment for services rendered by an adviser.
On 17 December 2014, the Company issued 39.1 million ordinary
shares at a price of 8.13 pence per ordinary share.
During December 2014, 350,000 shares were issued to the
Company's Kenyan nominated adviser at a price of GBP0.10/shares in
lieu of professional fees of GBP35,000.
13. Movement in Retained Earnings
2015 2014 2014
12 month 6 month Year to
period to period to 30(th)
30(th) June 31(st) December
2014 2014
$ '000 $ '000 June
2014
$ '000
============================ ============== ================== =========
Retained earnings bfwd (1,580) (1,580) (155)
============================ ============== ================== =========
Loss for the period (9,618) (5,838) (1,425)
============================ ============== ================== =========
Other Comprehensive Income 1,425
============================ ============== ================== =========
Share option charge 2,468 2,376 -
============================ ============== ================== =========
Retained Earnings (7,315) (5,042) (1,580)
============================ ============== ================== =========
14. Share-based payments
The Group operates a share plan relating to shares in the parent
company known as the AOL Share Option Scheme 2013.
The Group recognised a total share based payment of
US$82,015related to equity-settled share based payment transactions
in the six month period to 30 June 2015, (Dec 2014:
US$2,375,829).
The exercise price of the options granted under the share option
scheme is determined at every grant date and set for each grant.
There is generally no vesting period but in certain instances
vesting periods of 6-30 months have been included. Options are
forfeited if the employee leaves the Group before the options
vest.
The following information relates to the share option
scheme:
2014 2014
Options Weighted
average
exercise
price (in
GBP)
========================================== =========== ===========
Outstanding at beginning of period - -
========================================== =========== ===========
Granted during the period 64,000,000 0.07
========================================== =========== ===========
Lapsed during the period - -
========================================== =========== ===========
Exercised during the period - -
========================================== =========== ===========
Outstanding at the end of the period 64,000,000 0.07
========================================== =========== ===========
Exercisable at the end of the year 30,000,000 0.06
========================================== =========== ===========
Weighted average remaining contractual
life 10.2 10.2
========================================== =========== ===========
Weighted average share price for options - -
exercised at the date of exercise
========================================== =========== ===========
The fair values of the options were calculated using the Monte
Carlo and Black Scholes models. In valuing the options, the
following assumptions were used:
2014
================================= ==========
Weighted average share price 9.12pence
================================= ==========
Weighted average exercise price 9.35pence
================================= ==========
Expected volatility 31.53%
================================= ==========
Risk-free rate 1.80%
================================= ==========
Expected volatility was determined by calculating the historical
volatility of the Group's share price over the previous three
years. The expected life used in the model has been adjusted, based
on management's best estimate, for the effects of
non-transferability, exercise restrictions, and behavioural
considerations.
15. Controlling Party
The Directors believe that there is no ultimate controlling
party.
16. Post Balance Sheet Events
There are no post balance sheet events.
17. Interim Segmental reporting
Segment information about these businesses is presented
below:
Kenya Mauritius Unallocated Total
12 month period to 30 June 2015 $ '000 $'000 $ '000 $ '000
==================================== ================ ================ ================ ================
Revenue
==================================== ================ ================ ================ ================
External Sales 10,965 1,467 2,203 14,635
==================================== ================ ================ ================ ================
Inter-segment sales - - - -
==================================== ================ ================ ================ ================
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