Report Publication Announcement • Aug 30, 2014
Report Publication Announcement
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COMPANY ANNOUNCEMENT
Approval of half yearly report
Date of Announcement 30 August 2014 Reference 103/2014 Listing Rule LR 5.16.20
The Board of Directors approved the half yearly report of the Company for the financial period 1 January 2014 to 30 June 2014, a copy of which is attached hereto and is available for public inspection in electronic form on the Company's website (www.cnmarinas.com).
Signed:
________________________
Louis de Gabriele Company Secretary
Grand Harbour Marina p.l.c.
Half-Yearly Report
For the six months ended 30 June 2014
Company Registration Number C 26891
| Directors' Report 1 | |
|---|---|
| Condensed Consolidated Financial Statements | |
| Condensed Consolidated Statement of Financial Position 5 | |
| Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income 6 |
|
| Condensed Consolidated Statement of Changes in Equity 7 | |
| Condensed Consolidated Statement of Cash Flows 8 | |
| Notes to the Condensed Consolidated Financial Statements 9 | |
| Directors' Statements on the Half-Yearly Report 18 |
The Directors are pleased to issue their Report pursuant to the Malta Financial Services Authority Listing Rules 5.81 to 5.84. This report shall be read in conjunction with the Condensed Consolidated Interim Financial Statements of the Group, of which Grand Harbour Marina p.l.c is the parent, for the six months ended 30 June 2014.
The principal activities of Grand Harbour Marina p.l.c ("Company") and its 45% interest in a joint arrangement, IC Cesme Marina Yatirim, Turizm ve Isletmeleri Anonim Sirketi ("IC Cesme"), are largely the development, operation and management of marinas. The Company is geared towards providing a high quality service to yachts, with a particular emphasis on super-yachts, which by their very nature, demand high level marina related services. Currently the Company owns Grand Harbour Marina in Malta and a 45% beneficial interest in IC Cesme in Turkey. The Marinas are operated and managed in association with the internationally well-known company Camper & Nicholsons Marinas Limited, a company involved in the management and operation of marinas worldwide.
The Condensed Consolidated Financial Statements as at and for the six months ended 30 June 2014 include the results of the wholly owned subsidiary of Maris Marine Limited, which are immaterial, and the 45% beneficial interest of the Company in IC Cesme. These have been prepared using the equity method of accounting as required by International Financial Reporting Standard ("IFRS") 11.
As reported in the 2013 annual report, on the 11 March 2014 the Board of Directors approved a dividend amounting to €840,000 (€0.084 per share) which was paid in April 2014.
The performance of the Group has improved in the first six months of this year when compared to the corresponding period in 2013. The combined revenues of Grand Harbour Marina and IC Cesme improved from €3.3 million in the first six months of 2013 to €3.6 million in the corresponding period this year.
Group profit before tax for the period ended 30 June 2014, which includes our 45% share of the profits of IC Cesme, improved to €0.02 million (2013: €0.15 million loss).
During the period ended 30 June 2014 the Group generated net cash flows from operating activities of €0.7 million (2013: €1.4 million).
The Group's share price has traded in a range of €1.82 to €1.87 during the first 8 months of 2014 and the market capitalisation was €18.6 million as at 29 August 2014.
The equity method requires the recognition of the 45% share in IC Cesme post-acquisition profit/loss together with the initial cost of the investment and the equity reserves of the Company. This is disclosed under 'Equity-accounted investee' on the Asset section and under 'Total Equity' on the Equity and Liabilities section of the Condensed Consolidated Statement of Financial Position. As at 30 June 2014, this amounted to a share of cumulative losses post-acquisition of €0.46 million (as at 31 December 2013: €0.52 million).
The corresponding equity method adjustment in the Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income is disclosed under 'Share of loss of equity-accounted investee' and relates to the 45% share in IC Cesme profit/loss for the period being reported. For the period ended 30 June 2014, this amounted to a share of profit of €0.06 million when compared to a share of loss of €0.08 million for the same period last year. All other movements between the current reporting period and their comparatives are related solely to the Company.
Income from pontoon fees and from ancillary services for the 6 months ended 30 June 2014 amounted to €1.58 million (2013: €1.50 million) which was 5% higher than the same period of last year. There were no super yacht berth sales during the period ended 30 June 2014 (2013: €nil)
The Company's operating costs including depreciation for the six months ended 30 June 2014 remained at €1.23 million (2013: €1.23 million). Profit before interest, tax, depreciation and amortisation (EBITDA) for the six months ended 30 June 2014 rose from €0.43 million to €0.51 million.
Net finance costs increased to €0.40 million (2013: €0.34 million) and mainly relate to the interest costs of the bond issued in February 2010 together with premium paid on the first bond buybacks which occurred during the reporting period.
Total non-current assets of €13.7 million comprise tangible fixed assets employed in the marina business, the investment in IC Cesme, the pledged cash amount of €3.84 million (note 7), the investment of the bond proceeds in Malta Government stocks of €0.53 million at fair value and €0.76 million held under trust (note 12). Non-current assets also include the deferred tax asset of the Company of €0.28 million (note 8) that has been recognised on the basis that it is probable that future taxable profit will allow the deferred tax asset to be recovered as further explained later.
Current assets include trade and other receivables of the marina business and other cash balances. Current liabilities are mainly trade related and include deferred revenue of €0.96 million. Non-current liabilities relate to the unsecured bond of the Company.
Management carried out a reassessment of the Company's deferred tax asset previously recognised and concluded that it continues to be probable that future taxable profit will be sufficient to recover the deferred tax asset. The assessment of the deferred tax position as at 30 June 2014 generated an income tax charge for the period of €0.07 million which resulted in a net tax charge of €0.05 million with the benefit of a small tax credit from interest on prior year overpayments. Subsequently, the deferred tax asset as at 30 June 2014 stood at €0.28 million as outlined in note 8.
Overall, the results of Grand Harbour Marina for the 6 months ended 30 June 2014 show a loss before tax of €0.04 million compared to a loss before tax of €0.07 million in the same period of 2013. After tax, the Company registered a loss of €0.10 million compared to a loss of €0.14 million in 2013.
The results of the first six months demonstrate the continuing progress being made by Cesme Marina and that, with the strong support provided by Camper & Nicholsons and our local joint venture partners IC Holdings Ltd ('IC'), the marina has generated a profit before tax during this period. In the first half of the year, Cesme generated revenues of €2.0 million (2013: €1.8 million) with all of the increase coming from seaside revenues. After deducting direct cost of sales and normal operating costs but before depreciation, Cesme made an operating profit of €0.8 million (2013: €0.5 million). After finance charges and depreciation, Cesme generated a €0.1 million PBT profit as compared with the €0.2 million loss in 2013. Operating expenses were maintained at the same level as last year.
Seaside revenues continued to grow with 347 berths either let or reserved on annual contracts at the end of June 2014 as compared with 325 at the same time last year. This is a very satisfactory result as 49 boats have not renewed their contracts primarily because of boat owners wishing to change location or because the boat has been sold. Water area utilisation has been reviewed and during the period an additional 6 berths of up to 20 m in length have been created. Six and two month seasonal contracts have also been popular with an average of 20 boats per month in the marina on seasonal contracts. The business is strengthened by IC's management and support of the related landside operations.
During the period the marina has hosted successful yacht races and rallies with well attended jazz and pop concerts on the landside. In February the marina collected the prestigious Jack Nicol Award for Marina Design Excellence. In May the marina hosted EU Economic Counsellors during their Cesme – Chios tour with a welcome cocktail party in the marina attended by the mayor.
Market conditions for berth sales remain challenging. However there remain a number of current prospects which are being actively pursued.
During the period both Grand Harbour Marina and IC Cesme have reported improved operational performance, reflecting the Directors' strengthened focus to deliver value to the shareholders. There is increased competition from other premium marinas in the Mediterranean but we are confident we are able to compete, as we continue to give priority to increasing revenue whilst maintaining operating expenditure at a sustainable level. We will also continue with our efforts to maximise the return on assets of the Company.
The Board of directors as at 30 June 2014 was:
Mr Lawrence Zammit - Chairman Mr Franco Azzopardi Mr David Martin Bralsford Sir Christopher Lewinton Mr Roger Lewis Mr Clive Whiley
Approved by the Board of Directors on 29 August 2014 and signed on its behalf by:
Lawrence Zammit Chairman
| At 30 June 2014 |
At 31 December 2013 |
||
|---|---|---|---|
| Notes | € | € | |
| ASSETS | |||
| Deferred tax asset | 8 | 276,906 | 349,086 |
| Property, plant and equipment | 9 | 6,096,791 | 6,196,664 |
| Deferred costs | 490,769 | 490,769 | |
| Equity-accounted investee | 11 | 1,714,187 | 1,654,840 |
| Parent company loan * | 7 | 3,837,000 | 3,837,000 |
| Available-for-sale investments | 526,711 | 793,002 | |
| Assets held under trust | 12 | 755,853 | 853,860 |
| Non-current assets | 13,698,217 | 14,175,221 | |
| Trade and other receivables | 963,243 | 844,786 | |
| Cash and cash equivalents | 1,939,788 | 2,512,029 | |
| Current assets | 2,903,031 | 3,356,815 | |
| Total assets | 5 | 16,601,248 | 17,532,036 |
| EQUITY | |||
| Total equity | 2,606,815 | 3,488,594 | |
| LIABILITIES | |||
| Non-current liabilities | 13 | 11,379,640 | 11,692,797 |
| Current liabilities | 2,614,793 | 2,350,645 | |
| Total liabilities | 5 | 13,994,433 | 14,043,442 |
| Total equity and liabilities | 16,601,248 | 17,532,036 |
* The Parent Company loan represents the assumption of the Parent Company's cash pledge relating to IC Cesme as explained further in note 7.
| 1 January 2014 to 30 June 2014 |
1 January 2013 to 30 June 2013 |
||
|---|---|---|---|
| Notes | € | € | |
| CONTINUING OPERATIONS | |||
| Revenue Personnel expenses Directors' emoluments Depreciation Other operating expenses |
5 | 1,577,390 (208,374) (24,488) (156,797) (836,058) |
1,501,766 (196,200) (18,681) (159,377) (852,991) |
| Results from operating activities | 351,673 | 274,517 | |
| Finance income Finance costs |
67,297 (462,521) |
97,381 (438,991) |
|
| Net finance costs | (395,224) | (341,610) | |
| Share of profit/(loss) of equity-accounted investee | 59,346 | (81,060) | |
| Profit/(loss) before income tax | 5 | 15,795 | (148,153) |
| Income tax expense | 8 | (53,953) | (68,156) |
| Loss for the period | (38,158) | (216,309) | |
| OTHER COMPREHENSIVE INCOME | |||
| Items that are or may be reclassified to profit or loss | |||
| Net change in fair value of available-for-sale financial assets |
(3,628) | 38,849 | |
| Other comprehensive income | (3,628) | 38,849 | |
| Total comprehensive income for the period | (41,786) | (177,460) | |
| Loss per share (rounded) | NIL | (2 cents) |
| Share capital |
Fair value reserve |
Retained earnings |
Total | |
|---|---|---|---|---|
| € | € | € | € | |
| At 1 January 2013 | 2,329,370 | 36,601 | 2,423,321 | 4,789,292 |
| Total comprehensive income for the period |
||||
| Loss for the period | – | – | (216,309) | (216,309) |
| Other comprehensive income | – | 38,849 | – | 38,849 |
| Transactions with owners of the company |
||||
| Dividends paid | – | – | (1,200,000) | (1,200,000) |
| Balance at 30 June 2013 | 2,329,370 | 75,450 | 1,007,012 | 3,411,832 |
| At 1 January 2014 | 2,329,370 | 31,480 | 1,127,744 | 3,488,594 |
| Total comprehensive income for the period |
||||
| Loss for the period | – | – | (38,158) | (38,158) |
| Other comprehensive income | – | (3,621) | – | (3,621) |
| Transactions with owners of the company |
||||
| Dividends paid | – | – | (840,000) | (840,000) |
| Balance at 30 June 2014 | 2,329,370 | 27,859 | 249,586 | 2,606,815 |
| 1 January 2014 to 30 June 2014 |
1 January 2013 to 30 June 2013 |
|
|---|---|---|
| € | € | |
| Net cash generated from operating activities | 698,202 | 1,422,805 |
| Net cash used in investing activities | (6,995) | (390,405) |
| Net cash used in financing activities | (422,737) | (425,004) |
| Dividends paid | (840,000) | (1,200,000) |
| Net decrease in cash and cash equivalents | (571,530) | (592,604) |
| Cash and cash equivalents 1 January | 2,511,318 | 2,989,200 |
| Cash and cash equivalents 30 June | 1,939,788 | 2,396,596 |
Grand Harbour Marina p.l.c. (the "Company") is a public limited liability company domiciled and incorporated in Malta. The Condensed Consolidated Financial Statements as at and for the six months ended 30 June 2014 comprise the Company and its subsidiary and the Group's interest in its joint arrangement, IC Cesme Marina Yatirim, Turizm ve Isletmeleri Anonim Sirketi ("IC Cesme").
The financial statements of the Company as at and for the year ended 31 December 2013 are available on the Company's website at www.cnmarinas.com/ghm-investor-relations/notifications-publications and also upon request from the Company's registered office at "The Capitanerie", Vittoriosa Wharf, Vittoriosa BRG 1721, Malta.
The Condensed Consolidated Financial Statements (the "Report") of the Group is being published in terms of Listing Rule 5.74 issued by the Listing Authority and has been prepared in accordance with the applicable Listing Rules and EU adopted International Accounting Standard 34, 'Interim Financial Reporting'. Selected explanatory notes are included to explain events and transactions that are significant to an understanding of the changes in financial position and performance of the Group since the last annual consolidated financial statements as at and for the year ended 31 December 2013. The Report does not include all of the information required for full annual financial statements, and should be read in conjunction with the financial statements of the Company as at and for the year ended 31 December 2013.
This Report has not been audited nor reviewed by the Company's Independent Auditors.
The preparation of the Report requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets and liabilities, income and expenses. Actual results may differ from these estimates.
In preparing the Report, the significant judgements made by management in applying the Group's accounting policies and key sources of estimation uncertainty were the same as those that applied to the financial statements as at and for the year ended 31 December 2013.
The accounting policies applied in these interim financial statements are the same as those applied in the Group's consolidated financial statements as at and for the year ended 31 December 2013.
The Group's financial risk management objectives and policies are consistent with those disclosed in the financial statements as at and for the year ended 31 December 2013.
| Grand Harbour Marina € |
IC Cesme Marina € |
Total for Reportable Segments € |
|
|---|---|---|---|
| For the six months ending 30 June 2013 | |||
| External revenues | 1,501,766 | 1,777,633 | 3,279,399 |
| Reportable segment loss before tax | (67,093) | (180,134) | (247,227) |
| For the six months ending 30 June 2014 | |||
| External revenues | 1,577,390 | 1,997,802 | 3,575,192 |
| Reportable segment (loss)/profit before tax | (43,551) | 131,881 | 88,330 |
| As at 31 December 2013 | |||
| Reportable segment assets | 18,051,109 | 16,852,553 | 34,903,662 |
| Reportable segment liabilities | (14,043,441) | (17,086,372) | (31,129,813) |
| As at 30 June 2014 | |||
| Reportable segment assets | 17,060,972 | 16,335,545 | 33,396,517 |
| Reportable segment liabilities | (13,994,433) | (16,427,637) | (30,422,070) |
| Total for Reportable Segments |
Elimination of Joint Venture segment |
Consolidated External Revenues |
|---|---|---|
| € | € | € |
| 3,279,399 | (1,777,633) | 1,501,766 |
| 3,575,192 | (1,997,802) | 1,577,390 |
| 2014 | 2013 | |
| € | € | |
| 1,501,766 | ||
| Reconciliation to Consolidated Amounts 1,577,390 |
| Total for Reportable Segments |
Elimination of Joint Venture's Share |
Consolidated Profit/(Loss) before Tax |
|
|---|---|---|---|
| € | € | € | |
| For the six months ending 30 June 2013 | |||
| Reportable segment loss before tax | (247,227) | 99,074 | (148,153) |
| For the six months ending 30 June 2014 | |||
| Reportable segment profit before tax | 88,330 | (72,535) | 15,795 |
| 2014 | 2013 | ||
| € | € | ||
| Consolidated profit/(loss) before tax | 11 | 15,795 | (148,153) |
| Total for Reportable Segments |
Elimination of Joint Venture's Share |
Consolidated Assets |
||
|---|---|---|---|---|
| € | € | € | ||
| As at 31 December 2013 | ||||
| Reportable segment assets | 34,903,662 | (16,852,553) | 18,051,109 | |
| Reportable segment liabilities | (31,129,813) | 17,086,371 | (14,043,442) | |
| As at 30 June 2014 | ||||
| Reportable segment assets | 33,396,517 | (16,335,545) | 17,060,972 | |
| Reportable segment liabilities | (30,422,070) | 16,427,637 | (13,994,433) | |
| 30 June | 31 December | |||
| 2014 | 2013 | |||
| € | € | |||
| Assets | ||||
| Total assets for reportable segments | 17,060,972 | 18,051,109 | ||
| Share of post-acquisition losses of joint venture | ||||
| brought forward Share of profits of joint venture for the period |
(519,184) 59,346 |
(552,463) 33,276 |
||
| Share of post-acquisition profit | ||||
| of subsidiary brought forward | 114 | 114 | ||
| Consolidated assets | 16,601,248 | 17,532,036 |
| 30 June 2014 |
31 December 2013 |
|
|---|---|---|
| Liabilities | € | € |
| Total liabilities for reportable segments | (13,994,433) | (14,043,442) |
| [N3] Consolidated liabilities | (13,994,433) | (14,043,442) |
The Company and its joint venture derive their income from different types of revenue streams, including annual, seasonal and visitor berthing fees. During the summer months, revenue generation is higher, but whilst the increase is a relatively small proportion of the overall level of revenue, it makes a significant contribution to the profitability of the Group. The timing of long-term super-yacht berth sales, which are neither seasonal by nature nor capable of accurate prediction, can have a more significant impact on the level of both revenues and net results.
Included in the reportable segment liabilities of IC Cesme (note 5) are a term loan of €6,528,978 and a subordinated loan of €8,495,000. The subordinated loan provided by Isbank to IC Cesme is secured by cash pledges made by its shareholders. As at 30 June 2014 Camper & Nicholsons Marina Investments Limited's ("CNMI") cash pledge in relation to the subordinated loan amounted to €3,837,000 (December 2013 : €3,837,000). The Company advanced an equivalent amount in cash to CNMI at an interest rate of 1% per annum.
Income tax expense is recognised based on management's best estimate of the weighted average annual income tax rate expected for the full financial year applied to the pre-tax income of the interim period.
The charge for income tax for the period ended 30 June 2014 was €72,180 (2013: €68,156) which has been offset against the deferred tax asset as at 31 December 2013. As a result, the deferred tax asset as at 30 June 2014 stood at €276,906 (December 2013: €349,086). Its continued recognition was confirmed on the basis of management's assessment that it is still probable that future taxable income will allow the available capital allowances to be absorbed.
The deferred tax asset as at 30 June 2014 therefore comprises:
| 30 June | 31 December | |
|---|---|---|
| 2014 | 2013 | |
| € | € | |
| Grand Harbour Marina plc: | ||
| Deferred tax at 1 January | 349,086 | 489,951 |
| Income tax expense based on the annual effective tax rate | (72,180) | - |
| Actual income tax expense for the period/year | – | (140,865) |
| Deferred tax asset at the end of the period/year | 276,906 | 349,086 |
During the period ended 30 June 2014 the Company also received interest of €18,227 on tax which was overpaid in prior years.
During the six months ended 30 June 2014 the Group acquired assets at a cost of €56,923 (2013: €118,271).
The Group's capital commitments as at 30 June 2014 were €nil (2013: €nil).
The equity-accounted investee as at 30 June 2014 comprises:
| 30 June | 31 December | |
|---|---|---|
| 2014 | 2013 | |
| € | € | |
| Acquisition of beneficial interest in IC Cesme | 1,930,000 | 1,930,000 |
| Group's share of increase in share capital | 243,796 | 243,796 |
| Share of post-acquisition loss | (459,609) | (518,956) |
| 1,714,187 | 1,654,840 |
In accordance with the terms of the Trust Deed for Grand Harbour Marina's ("GHM") unsecured 7% Bond, GHM is required to establish a sinking fund to support repayment of the Bond in 2020.
The sinking fund as at 30 June 2014 comprises:
| 30 June | 31 December | |
|---|---|---|
| 2014 | 2013 | |
| € | € | |
| Grand Harbour Marina plc: | ||
| Sinking fund at 1 January | 853,860 | - |
| Transfers to the sinking fund | 267,425 | 853,860 |
| GHM bond buybacks of €340,900 (nominal) | ||
| at prices ranging between 105% and 107% | (365,432) | - |
| Sinking fund at the end of the period/year | 755,853 | 853,860 |
| Currency | Nominal interest rate |
Year of maturity |
30 June 2014 |
31 December 2013 |
|
|---|---|---|---|---|---|
| % | € | € | |||
| Unsecured 7% bonds | Euro | 7.00 | 2017-2020 | 11,379,640 | 11,692,797 |
| Bank overdrafts | Euro | 5.00 | on demand | 1,342 | 713 |
| Total | 11,380,982 | 11,693,510 | |||
| Non-current | 11,379,640 | 11,692,797 | |||
| Current | 1,342 | 713 | |||
| 11,380,982 | 11,693,510 |
There were no changes in contingent liabilities as at 30 June 2014 when compared to those previously reported in the financial statements for the year ended 31 December 2013.
The Group is a subsidiary of Camper & Nicholsons Marina Investments Limited ("CNMI"), the registered office of which is situated at Island House, Grand Rue, St Martins, Guernsey.
Other than the directors' compensation amounting to €24,488 (June 2013: €18,681), key management compensation amounted to €62,224 (June 2013: €62,836).
Companies forming part of the CNMI Group are considered by the directors to be related parties as these companies are ultimately owned by CNMI. The transactions and balances with such parties are as follows:
| 30 June | 31 December | |
|---|---|---|
| 2014 | 2013 | |
| € | € | |
| As per Marina Services Agreement: | ||
| Balance payable at 1 January | (92,021) | (250,816) |
| Transactions incurred during the period | (166,680) | (311,371) |
| Cash movements | 201,784 | 470,166 |
| Balance payable | (56,917) | (92,021) |
| 30 June | 31 December | |
|---|---|---|
| 2014 | 2013 | |
| € | € | |
| Balance (payable)/receivable at 1 January | (6,119) | 47,383 |
| Transactions incurred during the period | (4,256) | (12,060) |
| Cash movements | 7,220 | (41,442) |
| Balance payable | (3,155) | (6,119) |
| 30 June | 31 December | |
|---|---|---|
| 2014 | 2013 | |
| € | € | |
| Balance receivable at 1 January | 3,932,959 | 3,499,245 |
| Further cash pledged (note 7) | - | 391,500 |
| Interest receivable | 19,027 | 38,273 |
| Transactions incurred during the period | 917 | 3,941 |
| Cash movements | 2,099 | – |
| Balance receivable | 3,955,002 | 3,932,959 |
The above balance includes €3,837,000 (December 2013: €3,837,000) receivable from Camper & Nicholsons Marina Investments Limited as described in note 7.
There were no material subsequent events between the end of June 2014 and the date of this Report.
I confirm that to the best of my knowledge:
Lawrence Zammit Chairman 29 August 2014
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