TIDMCGO
RNS Number : 7374A
Contango Holdings PLC
13 September 2018
Contango Holdings Plc / Index: LSE / Epic: CGO / Sector: Natural
Resources
13 September 2018
Contango Holdings Plc
("Contango" or "the Company")
Final Results
Contango Holdings Plc, a London listed natural resources
company, is pleased to present its final results for the year ended
31 May 2018.
Highlights:
-- Listed on the standard list of the London Stock Exchange on 1 November 2017 ("IPO")
-- The Company raised a total of GBP1 million prior and during
the IPO, for the purposes of identifying a and acquiring a natural
resources business or project
-- Entered into a Memorandum of Understanding ("MOU") on 22
December 2017 to acquire an interest in a near term producing asset
in Zimbabwe from Consolidated Growth Holdings
-- The Company is currently undertaking due diligence on the asset
A copy of the Annual Report and Financial Statements for the
year ended 31 May 2018 will be made available shortly on the
Company's website at www.contango-holdings-plc.co.uk.
Statement from the Chairman
Dear Shareholder,
We have pleasure in presenting the financial statements for the
year end 31 May 2018 and to provide you with a summary of our first
full year of operation.
Operating Review
Our first year has been one of considerable activity, with the
Company's Initial Public Offering ("IPO") on the Standard List of
the Main Board of the London Stock Exchange in November 2017
proving one of the key highlights. The Company was able to
successfully raise capital through a pre-IPO financing round, which
was subsequently followed up by a capital raise of GBP763,500 in
the IPO. In total the Company raised a little over GBP1 million,
which in turn provided the platform to review a number of projects
in the natural resources sector with the intent of identifying
undervalued and capital starved projects that fulfilled the
investment criteria we set out during the time of the IPO.
In December 2017, we notified our shareholders that we had
entered into a Memorandum of understanding with Consolidated Growth
Holdings to acquire a mining asset in Zimbabwe. Through its broad
network of relationships, the Board had previously reviewed a
series of projects before deciding on the identified transaction,
believing it has the potential to offer significant value to all
Contango shareholders. Moreover, given the recent changes in the
political climate in Zimbabwe the Board is of the opinion that
future opportunities in the country may also become available to
complement the existing proposed acquisition, which is focusing on
a near-term production.
The nature of the transaction constituted a Reverse Takeover and
our shares were subsequently suspended pending the publication of a
new prospectus. The Company and its advisers are now progressing
the transaction through the final due diligence and documentation
phases and look forward to updating the shareholders in due
course.
Financial
Funding
The Company is funded through investment from its Shareholders.
During the year, the Company successfully completed its Standard
Listing IPO onto the London Stock Exchange, raising GBP1.06million
before costs over the year.
Revenue
The Company has generated no revenue during the year, however is
focussing on acquisition targets that will ultimately generate
revenue for the Company.
Expenditure
Since completing the successful listing during the year, the
Company has continued to maintain low ongoing overheads, ensuring
that the spending of any monies has been dedicated towards the
transaction costs related to the transaction noted above.
Liquidity, cash and cash equivalents
At 31 May 2018, the Company held GBP637,558 (2017: GBP51,750),
which is all denominated in pounds sterling.
Dividend
The Directors do not intend to declare a dividend in respect of
the period under review.
Outlook
The mining sector has generally continued to improve with the
capital markets more accessible and there has been a notable rise
in merger and acquisition activity by major and mid-tier companies
seeking new opportunities.
Against this background of recovery in the sector and increasing
appetite for risk, Contango has remained diligent in its objective
of acquiring a robust mining project, that can weather the
commodity cycle and deliver value for its shareholders. On 22
December 2017 the Directors of the Company were pleased to enter
into a Memorandum of Understanding with regards to the possible
acquisition of Consolidated Growth Holdings Limited's interest in a
near-term producing mining asset in Zimbabwe ('Proposed
Acquisition'). The Proposed Acquisition is conditional on the
completion of legal due diligence and re-admission of the enlarged
entity on the Main Market.
The headline terms of the Memorandum of understanding propose
for transaction to take place at 5 pence per share, representing a
33% premium to the mid-market share price of Contango at time of
suspension and a 66% premium to the IPO price.
The Proposed Acquisition, if completed, would constitute a
reverse takeover under the Listing Rules. As the Company is
currently unable to provide a full disclosure under Listing Rule
5.6.15, it has requested a suspension of listing in its shares
whilst negotiations proceed.
Whilst the board is resolute in its efforts to execute this
acquisition, documentation and due diligence is still underway and
accordingly, the Board cannot at this stage guarantee its
completion.
Brian McMaster
Executive Chairman
13 September 2018
For further information, please visit
www.contango-holdings-plc.co.uk or contact:
Contango Holdings plc E: info@contango-holdings-plc.co.uk
Brandon Hill Capital Limited T: +44 (0)20 3463 5000
Financial Adviser & Broker
Jonathan Evans
St Brides Partners Ltd T: +44 (0)20 7236 1177
Financial PR & Investor Relations
Susie Geliher
Statements of comprehensive income
For the year ended 31 May 2018
Period ended
Year ended 31 May 2017
31 May 2018
Notes GBP GBP
Administrative fees and other expenses 4 (326,676) -
------------- ------------
Operating loss (326,676) -
Finance revenue - -
Finance expense - -
------------- ------------
Loss before tax (326,676) -
Income tax - -
Loss for the period and total comprehensive loss for the period (326,676) -
------------- ------------
Basic and diluted loss per Ordinary Share (pence) 5 (1.00) -
The notes to the financial statements form an integral part of
these financial statements.
Statements of financial position
For the year ended 31 May 2018
As at As at
Notes 31 May 2018 31 May 2017
GBP GBP
Current assets
Other receivables 9 12,188 17,000
Cash and cash equivalents 10 637,558 51,750
Total current assets 649,746 68,750
Current liabilities
Trade and other payables 11 93,070 68,749
------------ ------------
Total current liabilities 93,070 68,749
Net assets 556,676 -
------------ ------------
Equity
Share capital 7 429,500 1
Share premium 7 368,978 -
Warrant reserve 7 84,874 -
Retained earnings 7 (326,676) -
------------ ------------
Total equity 556,676 1
------------ ------------
The notes to the financial statements form an integral part of
these financial statements.
Statements of changes in equity
For the year ended 31 May 2018
Warrant Total
Share Capital Share premium Reserve Retained earnings Equity
GBP GBP GBP GBP
Comprehensive income for the period
Loss for the period - - - - -
------------- ------------- -------- ----------------- ---------
Total Comprehensive Loss for the period - - - - -
------------- ------------- -------- ----------------- ---------
Transactions with owners
Shares issued on incorporation 1 - - - 1
Balance as at 31 May 2017 1 - - 1
Loss for the year - - - (326,676) (326,676)
Ordinary Shares and warrants issued (note 7) 429,499 549,126 84,874 - 1,063,499
Ordinary Share issue costs (note 7) - (180,148) - - (180,148)
------------- -------------
Balance as at 31 May 2018 429,500 368,978 84,874 (326,676) 556,676
------------- ------------- -------- ----------------- ---------
The notes to the financial statements form an integral part of
these financial statements.
Statements of cash flows
For the year ended 31 May 2018
Year ended Period ended
Notes 31 May 2018 31 May 2017
GBP GBP
Operating activities
Loss after tax (326,676) -
Changes in working capital
(Increase)/decrease in trade and other receivables 4,812 (17,000)
(Decrease) in trade and other payables 24,320 68,749
------------- ------------
Net cash inflows/(outflows) flows from operating activities (297,544) 51,749
Financing activities
Ordinary Shares issued (net of issue costs) 7 883,352 1
------------- ------------
Net cash flows from financing activities 883,352 -
Increase in cash and short-term deposits 585,808 51,750
Cash and short-term deposits as at the start of the period 51,750 -
Cash and short-term deposits at the end of the period 637,558 51,750
------------- ------------
The notes to the financial statements form an integral part of
these financial statements.
Notes to the Financial Statements
For the year ended 31 May 2018
1 General information
The Company was incorporated in England under the Laws of
England and Wales with registered number 10186111 on 18 May 2016.
All of the Company's Ordinary Shares were admitted to the London
Stock Exchange's Main Market and commenced trading on 1 November
2017. The company was re-registered as a public company under
Companies Act 2006 on 1 June 2017, by the name Contango Holdings
plc.
The Company's focus is to identify, acquire and scale projects
focused on mining. At present, the Company is looking to reverse a
mining business into the Company. The Company had no employees
during the period other than the Directors.
2 Summary of Significant Accounting Policies
The Board has reviewed the accounting policies set out below and
considers them to be the most appropriate to the Company's business
activities.
a) Basis of Preparation
The Company Financial Information has been prepared in
accordance with and comply with IFRS as adopted by the European
Union, International Financial Reporting Interpretations Committee
interpretations and the Companies Act 2006. The financial
statements have been prepared under the historical cost convention
as modified for financial assets carried at fair value.
The financial information of the company is presented in British
Pound Sterling ("GBP").
b) Going concern
The Company is an investment company, and currently has no
income stream until a suitable acquisition is identified, it is
therefore dependent on its cash reserves to fund ongoing costs.
The Directors have reviewed the Company's ongoing activities
including its future intentions in respect of acquisitions and
having regard to the Company's existing working capital position
and its ability to potentially raise finance, if required, the
Directors are of the opinion that the Company has adequate
resources to enable it to continue in existence for a period of at
least 12 months from the date of the approval of these financial
statements.
c) Standards and interpretations issued but not yet applied
At the date of authorisation of this Document, the Directors
have reviewed the accounting standards in issue by the
International Accounting Standards Board and the International
Financial Reporting Interpretations Committee, which are effective
for annual accounting periods ending on or after the stated
effective date. In their view, none of these standards would have a
material impact on the financial reporting of the Company.
d) Comparative Figures
The comparative figures shown for 2017 cover the 13-month period
from the date of incorporation to 31 May 2017.
e) Earnings per share
The Company presents basic and diluted earnings per share data
for its ordinary shares. Basic earnings per share are calculated by
dividing the profit or loss attributable to Shareholders by the
weighted average number of Ordinary Shares outstanding during the
period. Diluted earnings per share are calculated by adjusting the
earnings and number of Ordinary Shares for the effects of dilutive
potential Ordinary Shares.
f) Cash and cash equivalents
The Company considers any cash no short-term deposits and other
short-term investments to be cash equivalents.
g) Taxation
The tax currently payable is based on the taxable profit for the
period. Taxable profit differs from net profit as reported in the
income statement because it excludes items of income or expense
that are taxable or deductible in other periods and it further
excludes items that are never taxable or deductible. The Company's
liability for current tax is calculated using tax rates that have
been enacted or substantively enacted by the balance sheet
date.
Deferred income tax is provided for using the liability method
on temporary timing differences at the balance sheet date between
the tax basis of assets and liabilities and their carrying amounts
for financial reporting purposes. Deferred income tax liabilities
are recognised in full for all temporary differences. Deferred
income tax assets are recognised for all deductible temporary
differences carried forward of unused tax credits and unused tax
losses to the extent that it is probable that taxable profits will
be available against which the deductible temporary differences and
carry-forward of unused tax credits and unused losses can be
utilised. The carrying amount of deferred income tax assets is
assessed at each balance sheet date and reduced to the extent that
it is no longer probable that sufficient taxable profits will be
available to allow all or part of the deferred income tax asset to
be utilised. Unrecognised deferred income tax assets are reassessed
at each balance sheet date and are recognised to the extent that is
probable that future taxable profits will allow the deferred income
tax asset to be recovered.
h) Financial Assets
Financial Assets within the scope of IAS 39 are classified as
either:
i. Financial assets at fair value through profit and loss
ii. Loans and receivables
iii. Held-to-maturity investments
iv. Available-for-sale Financial assets
The classification depends on the purpose for which the
financial assets were acquired. Management determines the
classification of its financial assets at initial recognition and
re-evaluates this classification at every reporting date.
As at the balance sheet date, the company did not have any
financial assets at fair value through profit or loss, and in the
categories of held-to-maturity investments and
available-for-financial assets.
i) Financial liabilities and equity instruments
Classification as debt or equity
Financial liabilities and equity instruments issued by the
company are classified according to the substance of the
contractual arrangements entered into and the definitions of a
financial liability and an equity instrument.
Equity instruments
An equity instrument is any contract that evidences a residual
interest in the assets of the company after deducting all of its
liabilities. Equity instruments are recorded at the proceeds
received, net of direct issue costs.
Incremental cost directly attributable to the issue of ordinary
shares, net of any tax effects, are recognised as a deduction from
equity.
Financial liabilities
Financial liabilities are classified as either financial
liabilities at fair value through profit or loss or financial
liabilities measured at amortised cost.
Financial liabilities are classified as at fair value through
profit or loss if the financial liability is either held for
trading or it is designated as such upon initial recognition
Other financial liabilities
Trade and other payables are initially measured at fair value,
net of transaction costs, and are subsequently measured at
amortised cost, where applicable, using the effective interest
method, with interest expense recognised on an effective yield
basis.
Warrants
Warrants classified as equity are recorded at fair value as of
the date of issuance on the Company's Balance Sheet and no further
adjustments to their valuation are made. Management estimates the
fair value of these liabilities using option pricing models and
assumptions that are based on the individual characteristics of the
warrants or instruments on the valuation date, as well as
assumptions for future financing, expected volatility, expected
life, yield, and risk-free interest rate.
j) Derecognition of financial liabilities
The Company derecognises financial liabilities when, and only
when, the company's obligations are discharged, cancelled or they
expire.
k) Financial Risk Management Objectives and Policies
The Company's major financial instruments include bank balances,
trade payables and accruals. Details of these financial instruments
are disclosed in respective notes. The risks associated with these
financial instruments, and the policies on how to mitigate these
risks are set out below. The management manages and monitors these
exposures to ensure appropriate measures are implemented on a
timely and effective manner.
Liquidity Risk - the Company raises funds as required on the
basis of budgeted expenditure and inflows. When funds are sought,
the Company balances the costs and benefits of equity and debt
financing. When funds are received they are deposited with banks of
high standing in order to obtain market interest rates.
3 Critical accounting estimates and judgements
The preparation of financial statements in conformity with IFRS
requires management to make estimates and assumptions that affect
the reported amounts of income, expenditure, assets and
liabilities. Estimates and judgements are continually evaluated,
including expectations of future events to ensure these estimates
to be reasonable.
The estimates and associated assumptions are based on historical
experience and various other factors that are believed to be
reasonable under the circumstances, the results of which form the
basis of making the judgements about carrying values of assets and
liabilities that are not readily apparent from other sources.
Actual results may differ from these estimates.
The Company's nature of operations is to act as a special
purpose acquisition company. This significantly reduces the level
of estimates and assumptions required other than the allocation of
joint costs between the issuing of equity and acquiring the
exchange listing as part of the admission process. The Directors
had regard to the number of shares issued on listing as a
proportion of the total shares in issue after the listing. As the
shares issued prior to the listing was 41% of the total shares
listed, GBP180,648 was recognised in equity.
4 Loss before taxation
Loss before income tax is stated
after charging: Year Period
ended ended
31 May 2018 31 May 2017
GBP GBP
Directors' remuneration 48,000 -
Fee payable to the Company's 15,000 -
auditor for the audit of the
company's annual accounts
Fee payable to the Company's 28,650 -
auditor in respect of all other
services
The Company did not employ any staff during the period under
review other than the Directors. The Directors are the only members
of key management and their remuneration related solely to
short-term employee benefits.
5 Loss per Ordinary Share
The calculation of the basic and diluted loss per Ordinary Share
is based on the following data:
Year ended Period ended
31 May 2018 31 May 2017
Earnings
Loss from continuing operations for the period attributable to the equity holders of the
Company (326,676) -
Number of Ordinary Shares
Weighted average number of Ordinary Shares for the purpose of basic and diluted earnings
per
Ordinary Share (number) 32,596,294 100
------------ ------------
Basic and diluted loss per Ordinary Share (pence) (1.00) -
------------ ------------
There are no potentially dilutive Ordinary Shares in issue.
The number of ordinary shares as at period ended 31 May 2017,
were subdivided into 100 1p shares on 1 June 2017.
6 Income tax
Corporation tax is calculated at 19% of the estimated taxable
loss for the period.
The charge for the period can be reconciled to the loss in the
Statement of Comprehensive Income as follows:
Year ended Period ended
31 May 2018 31 May 2017
GBP GBP
Loss before tax on continuing operations (326,676) -
============ ============
Tax at the UK corporation tax rate of
19% (62,068) -
Tax effect of expenses that are not deductible
in determining taxable profit 9,120 -
Deferred tax asset not recognised 52,948
Tax charge for the period - -
============ ============
The Company has accumulated tax losses of GBP278,676 (2017 -
GBPnil). No deferred tax asset was recognised in respect of these
accumulated tax losses as there is insufficient evidence that the
amount will be recovered in future years.
7 Share capital
Number Share Share premium Warrants Share issue Total share
of Ordinary Capital Reserve costs capital
Shares
issued
and fully
paid
GBP GBP GBP GBP GBP
As at 18 and 31
May 2016 1 - - - - -
GBP1 shares subdivided 99 - - - -
into 100 1p shares
Issue of Ordinary 4,999,900 50,000 - - - 50,000
Shares and Warrants
1 June 2017 12,500,000 125,000 76,906 48,094 - 250,000
26 October 2017
1 November 2017 25,449,987 254,500 472,220 36,780 (180,148) 583,352
As at 31 May 2018 42,949,987 429,500 549,126 84,874 (180,148) 883,352
------------ --------- ------------- -------- ----------- -----------
The Ordinary Shares issued by the Company have par value of 1p
each and each Ordinary Share carries one vote on a poll vote.
On incorporation on 18 May 2016, the Company issued 1 Ordinary
Share issued to the Founders at par of GBP1. These were subdivided
into 100 1p shares on 1(st) June 2017.
On 1 June 2017 the Company issued 4,999,999 Ordinary Shares at
1p, par value, each for cash consideration of GBP50,000.
On 26 October 2017 the Company issued 12,500,000 Ordinary Shares
of 1p par value at 2p each for a cash consideration of
GBP250,000.
On 1 November 2017 on admission to the Main Market of the London
Stock Exchange, the Company issued 25,449,987 Ordinary Shares of 1p
par value at 3p each for cash consideration of GBP763,500.
8 Financial instruments
As at 31 May As at 31 May
2018 2017
GBP GBP
Financial assets
Cash and cash equivalents 637,558 51,750
Financial liabilities
At amortised cost 93,070 68,749
Financial liabilities held at amortised cost on 31 May 2018 were
made up of trade and other payables of GBP48,000 (31 May 2017:
GBPnil) and accruals of GBP45,070 (31 May 2017: GBP68,749).
9 Other receivables
2018 2017
GBP GBP
Prepayments 12,188 17,000
12,188 17,000
============ ==========
10 Cash and Cash Equivalents
2018 2017
GBP GBP
Cash at Bank 637,558 51,750
============= ==========
11 Trade and other payables
2018 2017
GBP GBP
Trade payables 48,000 -
Accruals and other payables 45,070 68,749
93,070 68,749
============ ==========
12 Events after the reporting date
There were no significant subsequent events.
13 Related Party Transactions
The four serving directors all purchased shares and received
warrants in relation to those shares as disclosed on pages 11 and
12 in the Directors' Remuneration Report.
14 Warrant Reserve
The following information is relevant in the determination of
the fair value of the warrants issued during the year on 26 October
and 1 November 2017.
Option pricing model used Black-Scholes
Price at grant date 3p
Outstanding Life of Warrants 1.4
Expected Volatility 58.216%
Expected Dividend Yield -
Risk Free Interest Rate 0.73%
Calculation of volatility involves significant judgement by the
Directors. Volatility number was estimated based on the range of
30-month end volatilities of the main market mining index.
The aggregate fair value related to the share warrants granted
during the year has been allocated to share premium as share issue
costs in the amount of GBP84,874 (2017 nil).
15 Warrants
During the year ended 31 May 2018 the Company issued the
following warrants to subscribe for shares:
Warrant exercise Number of warrants Vesting Date Expiry Date Fair value
Price granted of individual
option
GBP0.03 18,666,667 26 Oct 2017 31 Oct 2019 GBP0.0026
GBP0.05 11,666,650 1 Nov 2017 31 Oct 2019 GBP0.0032
Total granted during
the year 30,333,317
The weighted average fair value of each warrant granted during
the year was GBP0.0028 (2017: nil).
No warrants have been exercised in the Company.
**ENDS**
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contact rns@lseg.com or visit www.rns.com.
END
FR SFSFLDFASEDU
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