TIDMOBT
RNS Number : 2678L
Obtala Limited
30 September 2016
30 September 2016
Obtala Limited
("Obtala", the "Group" or the "Company")
(AIM: OBT)
Interim Results for the six months to 30 June 2016
CHAIRMAN'S STATEMENT
I am pleased to present the interim report and consolidated
financial statements for Obtala Limited (the "Company" or the
"Group") for the half year ended 30 June 2016.
The Company continued to make progress in its transition to
becoming a highly focussed African agriculture and forestry company
through the half year ended 30 June 2016. We continued to develop
the asset platform with improvements to production facilities and
processes in both Tanzania and Mozambique. Development of, and
access to both a local and global customer base has been thoroughly
reviewed and analysed with encouraging results.
The focus for the agribusiness has been on our farms in the
Morogoro district of Tanzania, which over the last three years have
created an aspiring horticultural farming enterprise for fresh
produce to supply domestic and international markets. This is
complemented with an on-site processing facility, to produce a
range of high-quality dried fruits, which are packaged and branded
under our own "Mama Jo's" label. Having gained Global GAP and BRC
certification in late 2015, attention has turned towards
development of an export model, with our competitive advantage of
close proximity to Middle Eastern markets being of particular
focus.
Investment in the farms in Tanzania has not to date been
rewarded by any substantial increase in output, including in the
first half of 2016, although it must be noted that the
traditionally rainy season of February to May is not expected to be
one of high output. In April 2016 we welcomed a new, highly
experienced farm manager, Graham Impey, who has spent the majority
of his 28 year farming career in Zimbabwe and Angola. Graham has
exhibited first class planning, communication and execution skills
and we are confident that under his stewardship the farms will
start to deliver significant returns on previous and future
investment. As noted in my statement of June 30(th) 2016, the
investment required to establish the necessary infrastructure for
the agri business was executed without the need to secure external
investment or dilute shareholders at the holding company level.
The focus for our forestry business remains the operations in
Mozambique. We continue, as in previous years, to supply timber
products for national infrastructure upgrade programmes and for the
domestic market. We also continue to develop export market
opportunities for our timber.
We are aiming to capitalise on the market dynamic of increasing
global demand for high quality timber products, whilst supply is
becoming more constrained as sustainable harvesting practices
cannot meet either current or predicted demand. We now have over
312,000 hectares of forestry concessions all with required
management plans either agreed on or in advanced stages of being
agreed upon with Mozambican government and local authorities. Our
international "cut to order" pipeline continues to grow, with
initial orders received from South Africa, Asia and the Middle
East. These orders suggest healthy margins, and we are confident
that the international market that has been opened via our Joint
Venture with Basic Materials of Hong Kong will lead to a
significant acceleration in the growth of our forestry business.
Global appetite for high quality and high value timber products is
buoyant and we are well positioned through our access to
significant, environmentally sustainable supplies of desirable
timber species.
Our conviction remains that the equity market has not recognised
the value of the Company's assets, which is true of many companies,
particularly on the AIM market. We believe that the Company's
strong focus on the two synergistic business platforms of
agriculture and forestry will deliver strong growth, high margins
and significantly increased, long-term, shareholder value. The
businesses we are building are based on long-term investment
programmes which, as we move from development to execution phase,
will provide a platform to deliver profitability and growth,
generating revenues with a focus on strong margins. Over the
reporting period to 30(th) June 2016 we have continued to make
capital investment into operations within Mozambique.
Financial results
The Group generated revenues of GBP264,000 ($382,000) (June
2015: GBP2.26m/$3.6m) during the six-month period, across the
Group.
The six-month period generated a loss of GBP2.63m ($3.8m) (June
2015: profit GBP3.0m/$4.7m, which included the independent
valuation of forestry assets).
Group net assets increased by GBP1.62m ($2.35m) from December
2015 Year end at GBP83.2m ($120.7m) with a net cash and equivalent
position of GBP547,000 ($793,000) (December 2015 GBP660,000/$1.02m)
including non-controlling interests of GBP18.5m (December 2015
GBP18.9m).
With the natural tendency to earn more after the rainy season
and an increase of activity in our forestry and agricultural
divisions, we anticipate revenues will increase significantly for
the remainder of 2016.
Directorate changes
I joined the Board as a Non-Executive Director in August 2015,
becoming Chairman in April this year in place of Francesco Scolaro
who relinquished that role but remains on the Board as a
Non-Executive Director. In July 2016, Paul Dolan was appointed to
the board as Chief Executive Officer and Kevin Milne who joined in
August 2015 as Deputy Chairman stepped down to the role of
Non-Executive Director. In June we announced our intention to
appoint Warren Deats as Chief Operating Officer and Warren took up
this role effective 1(st) August 2016. Emma Priestley, who was
appointed to the Board in March 2015 relinquished her position in
April this year due to other commitments. Simon Rollason, Philippe
Cohen and Jean du Lac remain on the board in their roles as
Managing Director, Finance Director and Non-Executive Director
respectively.
Corporate social responsibility
The Group's approach to the continued development of its
business units directly and indirectly generate a wide range of
benefits to the host community and host country as a whole. In
addition to the community participation benefits, development of
the project areas provides a number of core benefits such as
employment generation, training and skills transference,
infrastructure improvement, support for localised industries and
improved food security. The Group is also committed, where
possible, to provide educational and vocational training facilities
and programmes in the communities in which we operate.
We are proud of our listing on the Social Stock Exchange in
London, to which we were accepted after a rigorous application
process that included an independent assessment of our social
impact activities and commitment, and an independent admissions
panel hearing. This gives the Company a high profile within the
social impact investment community as well as being a great
endorsement of our business practices and commitment to working
with local communities. As our businesses expand, we expect the
reach of our social impact programmes to grow in tandem to the
benefit of our employees and their communities.
Outlook
As a long term shareholder in your company, I have a keen
appreciation of the deep value embedded within its asset base. I
became non-executive Chairman midway through this period with an
open mind regarding the correct strategy to begin to release this
value. A thorough review of all operations beneath the Obtala
umbrella was initiated immediately upon my appointment in April
2016, with detailed analysis conducted within every business line.
H2 will see the execution of decisions made as a result of this
substantial body of work. There is no question however that there
will be relentless focus on delivering sustainable, profitable
production from the valuable assets within our core businesses.
In the three months since I signed off my last Chairman's
statement the pace of change within the company has been frenetic
and I look forward to updating you with a quarterly progress report
and outlook for the remainder of 2016 shortly.
It only remains for me to thank the board of directors and all
of our employees for their dedication and diligence during this
transitional period.
Miles Pelham
Chairman
Obtala Limited
Miles Pelham - Chairman
Paul Dolan - CEO
www.obtala.com +44 (0)20 7099 1940
ZAI Corporate Finance Limited
(Nomad)
Peter Trevelyan-Clark/John
Treacy/Jamie Spotswood +44 (0)20 7060 2220
Brandon Hill Capital (Broker)
Jonathan Evans +44 (0)20 3463 5000
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the six-month period to 30 June 2016
Six months to 30 June Six months to 30 June
Notes 2016 2015 Year to 31 December 2015
(Unaudited) (Unaudited) (Audited)
Continuing operations GBP'000 GBP'000 GBP'000
---------------------------------- ------- ---------------------- ---------------------- -------------------------
Turnover 264 2,257 3,692
Cost of Sales (231) (1,585) (2,614)
---------------------------------- ------- ---------------------- ---------------------- -------------------------
Gross profit 33 672 1,078
Operating costs (387) (584) (675)
Administrative expenses (1,179) (1,220) (2,905)
Impairment of Intangible Asset - - (16,080)
Gain/(loss)Loss on derivative
financial instruments - (1,556) (1,083)
Depreciation (205) (100) (340)
Operating profit/(loss) (1,738) (2,788) (20,005)
Revaluation of Biological asset - 8,600 8,600
Gain on Fair Value of Investment - - 1,046
Finance income/(costs) (-) (44) (39)
---------------------------------- ------- ---------------------- ---------------------- -------------------------
Profit/(loss) before tax (1,738) 5,768 (10,392)
Taxation 5 (892) (2,752) (4,504)
---------------------------------- ------- ---------------------- ---------------------- -------------------------
Total profit/loss for the
period/year (2,630) 3,016 (14,896)
Attributable to:
Owners of the parent (2,196) 1,707 (16,805)
Non-controlling interests (434) 1,309 1,909
---------------------------------- ------- ---------------------- ---------------------- -------------------------
(2,630) 3,016 (14,896)
Other comprehensive income:
Exchange differences of
re-translation of foreign
operations 2,787 (513) 3,242
Total comprehensive income for
the period: 157 2,503 (11,654)
---------------------------------- ------- ---------------------- ---------------------- -------------------------
Attributable to:
Owners of the parent 591 1,194 (13,563)
Non-controlling interests (434) 1,309 1,909
---------------------------------- ------- ---------------------- ---------------------- -------------------------
157 2,503 (11,654)
---------------------------------- ------- ---------------------- ---------------------- -------------------------
Earnings/(loss) per share
From continuing operations
Basic and diluted (pence) 6 (0,83) 0.65 (6,38)
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the period from 1 January 2015 to 30 June 2016
Share Non-controlling
Foreign based Revenue interests
Share Share Merger exchange payment reserve/ Total
capital premium reserve reserve reserve (deficit) Total equity
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
--------------- -------- -------- -------- --------- -------- ---------- --------- ---------------- ---------
At 1 January
2015 2,633 11,528 28,543 1,515 1,014 31,072 76,305 17,037 93,342
--------------- -------- -------- -------- --------- -------- ---------- --------- ---------------- ---------
Profit/(loss)
for the
period - - - - - 1,707 1,707 1,309 3,016
Exchange
differences
on
retranslation
of foreign
operations - - - (544) - - (544) 32 (512)
--------------- -------- -------- -------- --------- -------- ---------- --------- ---------------- ---------
Total
comprehensive
income for
the
period - - - (544) - 1,707 1,163 1,341 2,504
Issue of - - - - - - - - -
shares
Share based - - - - - - - - -
payment
Purchase of - - - - - - - - -
own shares
Dilution of - - - - - - - - -
interest in
subsidiary
--------------- -------- -------- -------- --------- -------- ---------- --------- ---------------- ---------
At 30 June
2015 2,633 11,528 28,543 971 1,014 32,779 77,468 18,378 95,846
--------------- -------- -------- -------- --------- -------- ---------- --------- ---------------- ---------
Profit/(loss)
for the
period - - - - - (18,512) (13,153) (560) (13,713)
Exchange
differences
on
retranslation
of foreign
operations - - - 3786 - - 640 415 (1,055)
--------------- -------- -------- -------- --------- -------- ---------- --------- ---------------- ---------
Total
comprehensive
income for
the
period - - - 3786 - (18,512) (12,513) (145) (12,658)
Transactions
with owners
Reserve
transfer - - - (2,740) - 2,740 (77) - (77)
At 31 December
2015 2,633 11,528 28,543 2,017 1,014 17,007 62,742 18,946 81,688
--------------- -------- -------- -------- --------- -------- ---------- --------- ---------------- ---------
Profit/(loss)
for the
period - - - - - (2,196) (2,196) (434) (2,630)
Exchange
differences
on
retranslation
of foreign
operations - - - 4,249 - - 4,249 - 4,249
--------------- -------- -------- -------- --------- -------- ---------- --------- ---------------- ---------
Total
comprehensive
income for
the
period - - - 4,249 - (2,196) 2,053 (434) 1,619
Transactions
with owners
Reserve
transfer - - - (2,787) - 2,787 - - -
At 30 June
2016 2,633 11,528 28,543 3,479 1,014 17,598 64,795 18,512 83,307
--------------- -------- -------- -------- --------- -------- ---------- --------- ---------------- ---------
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
As at 30 June 2016
Notes 30 June 2016 30 June 2015 31 December 2015
(Unaudited) (Unaudited) (Audited)
GBP'000 GBP'000 GBP'000
------------------------------------------------- ------ ------------- ------------- -----------------
ASSETS
Non-current assets
Available for sale investments 90 53 90
Intangible exploration and evaluation assets - 16,080 -
Biological asset 7 121,007 112,432 118,220
Plant and equipment 1,697 2,447 1,902
------------------------------------------------- ------ ------------- ------------- -----------------
Total non-current assets 122,794 131,012 122,557
Current assets
Trade and other receivables 108 1,181 275
Inventory 378 1,169 579
Cash and cash equivalents 547 1,409 660
------------------------------------------------- ------ ------------- ------------- -----------------
Total current assets 1,033 3,759 1,514
TOTAL ASSETS 123,827 134,771 121,726
------------------------------------------------- ------ ------------- ------------- -----------------
LIABILITIES
Current liabilities
Trade and other payables (1,818) (2,245) (2,228)
Financial investment liabilities - (700) (-)
Current tax liabilities 20 (2) 20
------------------------------------------------- ------ ------------- ------------- -----------------
Total current liabilities (1,798) (2,947) (2,208)
------------------------------------------------- ------ ------------- ------------- -----------------
Non-current liabilities
Deferred tax 5 (38,722) (35,978) (37,830)
Loans (-) (-) -
Total non-current liabilities (38,722) (35,978) (37,830)
------------------------------------------------- ------ ------------- ------------- -----------------
TOTAL LIABILITIES (40,520) (38,925) (40,038)
------------------------------------------------- ------ ------------- ------------- -----------------
NET ASSETS 83,307 95,846 81,688
------------------------------------------------- ------ ------------- ------------- -----------------
EQUITY
Share capital 8 2,633 2,633 2,633
Share premium 9 11,528 11,528 11,528
Merger reserve 28,543 28,543 28,543
Foreign exchange reserve 3,479 971 2,017
Share based payment reserve 1,014 1,014 1,014
Revenue reserve/(deficit) 10 17,598 32,779 17,007
------------------------------------------------- ------ ------------- ------------- -----------------
Equity attributable to the owners of the parent 64,795 77,468 62,742
------------------------------------------------- ------ ------------- ------------- -----------------
Non-controlling interests 11 18,512 18,378 18,946
------------------------------------------------- ------ ------------- ------------- -----------------
TOTAL EQUITY 83,307 95,846 81,688
------------------------------------------------- ------ ------------- ------------- -----------------
Approved by the board and authorised for issue on 30(th)
September 2016
M Pelham P Cohen
Chairman Finance Director
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
For the period from 1 January 2015 to 30 June 2016
Notes Six months
to 30
June
Six months Year to
to 30 31 December
June 2016 2015 2015
(Unaudited) (Unaudited) (Audited)
GBP'000 GBP'000 GBP'000
--------------------------------- ------- ------------- ------------- -------------
OPERATING ACTIVITIES
Operating profit/(loss) (1,738) 5,768 (10,392)
Adjustment for non-cash
items:
(Gains)/loss on fair
value of investments - (589) (1,046)
Foreign exchange (gains)/losses 1,462 - (2,500)
Valuation of biological
asset - (8,600) (8,600)
Depreciation of plant
and equipment 205 100 340
Impairment of Intangible
Assets - - 16,080
Decrease/(increase)
in trade and other receivables 167 (351) 555
(Decrease)/increase
in trade and other payables (410) (2,244) (209)
Decrease/(Increase)
in inventory 201 182 772
Finance expense/(income) - 44 (39)
Losses on investments - 1,601 1,083
------------------------------------------ ------------- ------------- -------------
Cash outflow from continuing
operations (113) (4,089) (3,956)
------------------------------------------ ------------- ------------- -------------
Income taxes paid - - -
--------------------------------- ------- ------------- ------------- -------------
Net cash flow from operating
activities (113) (4,089) (3,956)
INVESTING ACTIVITIES
Purchases of property,
plant and equipment - (8) (10)
Net cash inflow/(outflow)
from investing activities - (8) (10)
------------------------------------------ ------------- ------------- -------------
FINANCING ACTIVITIES
Proceeds from sale of
investments - 2,237 1,357
Finance expense - - -
--------------------------------- ------- ------------- ------------- -------------
Net cash inflow from
financing activities - 2,237 1,357
------------------------------------------ ------------- ------------- -------------
(Decrease)/Increase
in cash and cash equivalents (113) (1,860) (2,609)
Cash and cash equivalents
at start of period 660 3,269 3,269
Effect of foreign exchange
rate variation - - -
--------------------------------- ------- ------------- ------------- -------------
Net cash and cash equivalents
at end of period 547 1,409 660
------------------------------------------ ------------- ------------- -----------------
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL
STATEMENTS
1. BASIS OF PREPARATION
The interim financial statements of Obtala Limited are unaudited
condensed consolidated financial statements for the six months to
30 June 2016. These include unaudited comparatives for the
six-month period to 30 June 2015 together with audited comparatives
for the year to 31 December 2015.
2. SIGNIFICANT ACCOUNTING POLICIES
The condensed consolidated financial statements have been
prepared under the historical cost convention except for the
revaluation of certain financial investments, available for sale
investments and financial assets and liabilities which are included
at fair value.
The accounting policies adopted are consistent with those
followed in the preparation of the Group's annual financial
statements for the period ended 31 December 2015.
The financial information contained in this announcement does
not constitute statutory accounts as defined under section 244 of
the Companies (Guernsey) Law 2008. The auditors have reported on
the 2015 financial statements which have been delivered to the
Guernsey Registrar of Companies; their report was unqualified but
did contain an emphasis of matter paragraph on the fair value of
biological assets and in respect of going concern. It contained no
statement under sections 263(2) or 263(3) of the Companies
(Guernsey) Law 2008.
3. GAINs/(Loss) ON INVESTMENTS
Six months Six months Year to
to 30 June to 30 June 31 December
2016 2015 2015
GBP000 GBP000 GBP000
------------------------- ------------- ------------ -------------
Gain/(loss) on disposal
of investments - (1,601) (1,083)
(Decrease)/increase - - -
in fair value of
financial investments
------------------------- ------------- ------------ -------------
Gain/(loss) from
investing activities - (1,601) (1,083)
------------------------- ------------- ------------ -------------
4. SEGMENTAL REPORTING
The Group is currently in agriculture and forestry as well as
retail. In addition, the Group undertakes investing activities,
which are based in Guernsey. These are the Group's primary
reporting segments.
5. TAXATION
The accrued tax charge for the six-month interim period is based
on an estimated worldwide average effective tax rate of nil per
cent, after allowance for utilisation of tax losses brought forward
in UK based subsidiaries (six months to 31 June 2015: nil%)
The Group has recognised a deferred tax liability of
GBP38,722,000 at 30 June 2016 (30 June 2015: GBP35,978,000, 31
December 2015: GBP37,830,000) which arose on the difference between
the book value and the fair value of assets acquired on the
acquisition of a subsidiary and the revaluation of a biological
asset.
6. EARNINGS PER SHARE
Basic earnings per share is based on the loss for the six months
of GBP2,196,000 attributable to equity holders of the parent
divided by the number of ordinary shares in issue during the period
of 263,260,664 exclusive of ordinary shares purchased by the Obtala
Resources Employee Share Trust and held jointly by the Trust and
certain employees. No shares were issued during the period
7. BIOLOGICAL ASSET
GBP'000
----------------------------- --------
At 1 January 2015 103,832
Fair Value Adjustment 8,600
----------------------------- --------
At 30 June 2015 112,432
----------------------------- --------
Foreign Exchange Adjustment 5,788
----------------------------- --------
At 31 December 2015 118,220
----------------------------- --------
Foreign Exchange adjustment 2,787
----------------------------- --------
At 30 June 2016 121,007
----------------------------- --------
With the work conducted in the 2015 year to ascertain a more
accurate measure of timber specie within the concessions and to
ensure operational viability to enable extraction of the timber to
the local market, 2015 was the second year in which a fair value
can be reliably assessed and therefore the standing timber can be
fair valued. The Group's main class of biological assets comprise
forestry concessions which hold a range of hardwoods. Biological
asset are carried at fair value less estimated costs to sell. The
biological assets were fair valued by Crispin Golding MICFor of
Honour Capital Limited with additional two blocks, totalling 35,000
hectares included in June 2015 fairly valued by Edward
Anderson-Bickley MRICS both of Honour Capitol Limited. They are
secured on a 50 year concession basis (renewable thereafter for a
further 50 years) from the Mozambique government.
8. SHARE CAPITAL
Number GBP'000
------------------------------------------------------------------ ------------ ----------
Authorised ordinary shares of GBP0.01 each:
At 1 January 2014, 31 December 2015 and 30 June 2016 Unlimited Unlimited
------------------------------------------------------------------ ------------ ----------
Allotted, issued and fully paid ordinary shares of GBP0.01 each:
At 1 January 2015 263,260,664 2,633
Issued in the period - -
------------------------------------------------------------------ ------------ ----------
At 30 June 2015 263,260,664 2,633
Issued in the period - -
------------------------------------------------------------------ ------------ ----------
At 31 December 2015 263,260,664 2,633
Issued in the period - -
------------------------------------------------------------------ ------------ ----------
At 30 June 2016 263,260,664 2,633
------------------------------------------------------------------ ------------ ----------
9. SHARE PREMIUM
GBP'000
---------------------------- --------
At 1 January 2015 11,528
Premium on issue of shares -
---------------------------- --------
At 30 June 2015 11,528
---------------------------- --------
Premium on issue of shares -
---------------------------- --------
At 31 December 2015 11,528
---------------------------- --------
Premium on issue of shares -
---------------------------- --------
At 30 June 2016 11,528
---------------------------- --------
10. MOVEMENT IN REVENUE RESERVE AND OWN SHARES
Retained earnings/(deficit) Own shares Revenue Reserve
GBP'000 GBP'000 GBP'000
-------------------------------- ---------------------------- ----------- ----------------
At 1 January 2015 33,369 (2,297) 31,072
-------------------------------- ---------------------------- ----------- ----------------
Profit for the period 1,707 - 1,707
Purchase of own shares - -
Part disposal of Subsidiary - - -
-------------------------------- ---------------------------- ----------- ----------------
At 30 June 2015 35,076 (2,297) 32,779
-------------------------------- ---------------------------- ----------- ----------------
Profit for the period (18,512) - (18,512)
Transfer from foreign exchange 2,740 - 2,740
Part disposal of Subsidiary - - -
-------------------------------- ---------------------------- ----------- ----------------
At 31 December 2015 19,304 (2,297) 17,007
-------------------------------- ---------------------------- ----------- ----------------
Profit for the period (2,196) - (2,196)
Purchase of own shares - -
Transfer from Foreign Exchange 2,787 - 2,787
-------------------------------- ---------------------------- ----------- ----------------
At 30 June 2016 19,895 (2,297) 17,598
-------------------------------- ---------------------------- ----------- ----------------
11. NON-CONTROLLING INTEREST
GBP'000
---------------------------------------------------------------- --------
At 1 January 2015 17,037
---------------------------------------------------------------- --------
Non-controlling interests in share of losses post acquisition 1,309
Non-controlling interests in foreign exchange gains 32
---------------------------------------------------------------- --------
At 30 June 2015 18,378
---------------------------------------------------------------- --------
Non-controlling interests in share of losses post acquisition (560)
Non-controlling interests in foreign exchange gains 415
---------------------------------------------------------------- --------
At 31 December 2015 18,946
---------------------------------------------------------------- --------
Non-controlling interests in share of profits post acquisition (434)
Non-controlling interests in foreign exchange gains
---------------------------------------------------------------- --------
At 30 June 2016 18,512
---------------------------------------------------------------- --------
12. INTERIM FINANCIAL REPORT
A copy of this interim report will be distributed to
shareholders and is also available on the Company's website at
www.obtala.com
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR LLMRTMBJTBJF
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