REABOLD RESOURCES PLC — Interim / Quarterly Report 2014

Sep 30, 2014

National Storage Mechanism | Additional information

You don't have Javascript enabled. For full functionality this page requires javascript to be enabled.

RNS Number : 0729T

Reabold Resources PLC

30 September 2014

30 September 2014

REABOLD RESOURCES PLC

("the Company")

Unaudited Interim Results for six months ended 30 June 2014

Reabold Resources plc (AIM: RBD) the AIM quoted resources investment company announces its unaudited interim results for the six months ended 30 June 2014 ("the Period").

For further information, contact:

Reabold Resources plc Jeremy Edelman (Executive Chairman) Anthony Samaha (Executive Director)	+44 (0) 20 7460 2353
Beaumont Cornish Limited Roland Cornish	+44 (0) 20 7628 3396

CHAIRMAN'S STATEMENT

As announced on 20 December 2013, the Company identified a proposed acquisition which would constitute a reverse takeover, however, given that the proposed acquisition was not completed by 19 December 2013, trading in the Company's shares under AIM Rule 15 were suspended on 20 December 2013, pending the publication of an admission document.  As set out in the Audited Accounts published on 13 June 2014, this transaction was terminated due to the target company pursuing a non-public strategy rather than proceeding with the AIM flotation process. 

Subsequently, the Board has decided to implement the Company's investing policy through a broader portfolio of investments, specifically focusing on the natural resources sector, which, in the opinion of the Directors, represents a positive cyclical recover opportunity.

On 23 June 2014, the Company announced:

1.    Subscription agreements totalling £325,000 for 65,000,000 new Ordinary Shares of 0.1p each in the Company at a price of 0.5p per share, to provide funds to make investments in accordance with the Company's investing policy and for working capital purposes. 

The Company had entered into a stock margin service financing facility with Barclays Bank Plc to provide a facility with an initial drawdown of circa £400,000 to support the Company's listed investment programme.  The initial term of the facility is 12 months, with interest payable quarterly at the TM (TomNext) rate applicable to low-volatility currency plus 1.35 per cent.  The facility may be repaid in whole or part without penalty prior to the expiry of the term.

2.    The investment of £200,000 in the form of £50,000 in cash and the issue of 5 million new Ordinary Shares issued at a deemed price of 3p per share to purchase 1,480,000  shares in Mogul Ventures Corp. ("Mogul"), representing approximately a 1.3% interest.   Mogul is a private company and focuses on exploration, development and production of metals and coal in Mongolia. The main Khar Tolgoi property is a 34,055 ha Mining License located in Dundgovi Province.at Oortsog Ovoo project which has no AIM compliance resources.  However historical exploration work at the Oortsog Ovoo deposit is reported to have resulted in the discovery of eight separate tin skarn mineralization zones.  Soviet geologists completed detailed exploration at Oortsog Ovoo between 1985 and 1989, culminating in completion of an historic (non-AIM compliant) tin mineral resource estimate with respect to the five largest mineralized zones.

3.    The Company had instructed its bankers to purchase circa £200,000 in shares in each of Rio Tinto, BHP Billiton and BP.  As a means of protecting the downside market risk in respect of these investments, the Company will acquire a series of "zero collars", established by buying a protective put while writing an out of the money covered call with a strike price at which the premium received is equal to the premium of the protective put purchased.  The Company will review these financial instruments on a regular basis and may adjust those to maximise the return from the underlying portfolio.     

On 25 June 2014, the Company announced the implementation of its investing policy, with the acquisition of the following listed securities:

Company	Number of Shares	Purchase Price per Share	Total Amount	Put Strike  Price	Call Strike Price
Rio Tinto	7,000	£31.05	£217,315	£29.00	£32.00
BHP Billiton	10,000	£19.32	£193,225	£18.50	£19.50
BP	38,000	£5.26	£199,769	£5.00	£5.40

With the implementation of the arrangements set out above, the Company raised £875,000 in new equity and debt and made investments with a cost of £810,000.

Post the financial reporting date of 30 June 2014, all of the covered call options written in respect to the Company's investment in shares in Rio Tinto, BHP Billiton and BP were exercised resulting in their divesture.  This resulted in a net loss on the Company's investments in listed securities in Rio Tinto, BHP Billiton and BP of circa £11,000. 

The loss of the Company for the 6 months ended 30 June 2013 was £76,000 (2013: loss of £86,000) in line with expectations. The net assets as at 30 June 2014 were £370,000 (2013: deficiency of £179,000). 

The Board looks forward to updating shareholders further in due course on the results of the investing policy towards the objective of driving the creation of value for all stakeholders.

Jeremy Edelman

Chairman

30 September 2014

STATEMENT OF COMPREHENSIVE INCOME

FOR THE PERIOD ENDED 30 JUNE 2014

				Unaudited	Unaudited	Audited
	6 months to	6 months to	12 months to
	30-Jun-14	30-Jun-13	31-Dec-13
Notes	£'000	£'000	£'000
Net capital loss on financial assets at fair value through profit or loss			3	(4)	-	-
Other operating income				5	15	15
Administration expenses				(77)	(95)	(205)
Operating (loss)/profit				(76)	(80)	(190)
Finance income				-	-	-
Finance costs				-	(6)	(6)
(Loss)/profit on ordinary activities before taxation				(76)	(86)	(196)
Taxation on (loss)/profit on ordinary activities				-	-	-
(Loss)/profit for the financial period				(76)	(86)	(196)
Other comprehensive income				-	-	-
Total comprehensive income for the period				(76)	(86)	(196)
Attributable to:
Equity holders				(76)	(86)	(196)
				(76)	(86)	(196)
Earnings per share
Basic and diluted (loss)/earnings per share (pence)			2	(0.04)	(0.1)	(0.2)

STATEMENT OF FINANCIAL POSITION

AS AT 30 JUNE 2014

		Unaudited	Unaudited	Audited
		30-Jun-14	30-Jun-13	31-Dec-13
	Notes	£'000	£'000	£'000
ASSETS
Non-current assets
Investments at fair value through profit & loss	3	200	-	-
		200
Current assets
Cash		77	33	16
Trade and other receivables		11	23	5
Investments at fair value through profit & loss	3	606	-	-
		694	56	21
Total assets		894	56	21
EQUITY
Capital and reserves
Share capital	5	355	181	285
Share premium account		8,131	7,570	7,726
Shares held by EBT		-	(8)	-
Capital redemption reserve		200	200	200
Other reserves		-	20	-
Retained earnings		(8,316)	(8,142)	(8,240)
Total equity		370	(179)	(29)
LIABILITIES
Current liabilities
Trade and other payables		108	27	50
Borrowings	4	416	-	-
Convertible loan notes		-	208	-
		524	235	50
Total liabilities		524	235	50
Total equity and liabilities		894	56	21

CASH FLOW STATEMENT

FOR THE PERIOD ENDED 30 JUNE 2014

		Unaudited		Unaudited		Audited
		6 months to		6 months to		12 months to
		30-Jun-14		30-Jun-13		31-Dec-13
	Note	£'000		£'000		£'000
Cash flows from operating activities
Operating (loss)/profit		(76)		(86)		(190)
Adjustments for:
Net unrealised (loss)/gain on investments		4		-		-
Accrued interest		-		6		-
Operating cash flows before movement in working capital		(72)		(80)		(190)
Increase in receivables		(6)		(12)		6
Increase in payables		58		(64)		(41)
Cash (expended)/generated by operations		(20)		(156)		(225)
Interest paid		-		-		(6)
Net cash from operating activities		(20)		-		(231)
Cash flows from investing activities
Purchase of listed securities		(610)		-		-
Purchase of unlisted securities		(50)		-		-
Net cash (used) in investment activities		(660)		-		500
Cash flows from financing activities
Borrowings		416		-		-
Loan notes		-		-		58
Share placement		325		-		-
Net cash (used in)financing activities		741		-		58
Net (decrease)/increase in cash and cash equivalents		61		(156)		(173)
Cash and cash equivalents at the beginning of the period		16		189		189
Cash and cash equivalents at the end of the period		77		33		16

Cash and cash equivalents comprises the following:
Cash and cash equivalents			77				33		16
		77				33			16

STATEMENT OF CHANGES IN EQUITY

FOR THE PERIOD ENDED 30 JUNE 2014

		Share Capital	Share Premium	Capital Redemption Reserve	Shares Held by EBT	Share based transactions	Retained Earnings	Total
		£'000	£'000	£'000	£'000	£'000	£'000	£'000
Balance 31 December 2012 -audited		181	7,570	220	(8)	-	(8,056)	(93)
Total comprehensive income		-	-	-	-	-	(86)	(86)
Changes in equity
Period to 30 June 2013
Issue of share capital		-	-	-	-	-	-	-
Balance 30 June 2013 - unaudited		181	7,570	220	(8)	-	(8,142)	(179)
Total comprehensive income		-	-	-	-	-	(110)	(110)
Changes in equity
Period to 31 December 2013
Issue of share capital		104	156	-	-	-	-	260
Loss on disposal of treasury shares		-	-	-	8	-	(8)	-
Lapse of share options		-	-	(20)	-	-	20	-
Balance 31 December 2013 - audited		285	7,726	200	-	-	(8,240)	(29)
Total comprehensive income		-	-	-	-	-	(76)	(76)
Changes in equity
Period to 30 June 2014
Issue of share capital		70	405	-	-	-	-	475
Balance 30 June 2014 - unaudited		355	8,131	200	-	-	(8,316)	(370)

NOTES TO THE INTERIM FINANCIAL STATEMENTS

FOR THE PERIOD ENDED 30 JUNE 2014

1.     Basis of preparation

These interim financial statements have been prepared using policies based on International Financial Reporting Standards (IFRS and IFRIC interpretations) issued by the International Accounting Standards Board ("IASB") as adopted for use in the EU. They do not include all disclosures that would otherwise be required in a complete set of financial statements and should be read in conjunction with the 2013 Annual Report. The financial information for the half years ended 30 June 2014 and 30 June 2013 does not constitute statutory accounts within the meaning of Section 434(3) of the Companies Act 2006 and is unaudited.

The annual financial statements of Reabold Resources Plc are prepared in accordance with IFRSs as adopted by the European Union. The comparative financial information for the year ended 31 December 2013 included within this report does not constitute the full statutory accounts for that period. The statutory Annual Report and Financial Statements for 2013 have been filed with the Registrar of Companies. The Independent Auditors' Report on that Annual Report and Financial Statement for 2013 was unqualified, did not draw attention to any matters by way of emphasis, and did not contain a statement under 498(2) or 498(3) of the Companies Act 2006.

After making enquiries, the directors have a reasonable expectation that the Company have adequate resources and support from key shareholders to continue in operational existence for the foreseeable future. Accordingly, they continue to adopt the going concern basis in preparing the half-yearly financial statements.

The same accounting policies, presentation and methods of computation are followed in these condensed financial statements as were applied in the Company's latest annual audited financial statements, with additional information in respect of significant accounting policies disclosed below.

The IASB has issued a number of IFRS and IFRIC amendments or interpretations since the last annual report was published. It is not expected that any of these will have a material impact on the Company.

Investments at fair value through profit or loss

Classification

The Company classifies its investments as financial assets at fair value through profit or loss ("financial assets"). The financial assets are designated by the Company at fair value through profit or loss at inception.

Recognition

Purchases and sales of investments are recognised on the trade date - the date on which the Company commits to purchase or sell the investments.

Measurement

Financial assets at fair value are initially recognised at cost, being the fair value of consideration given. Subsequent to initial recognition, all financial assets at fair value through profit or loss are measured at fair value. Gains and losses arising from changes in the fair value of the 'financial assets at fair value' category are presented in the Statement of Comprehensive Income in the period in which they arise.

Fair value estimation

Marketable (Listed) Securities - Where an active market exists for the security, the value is stated at the bid price on the last trading day in the period. Marketability discounts are not applied unless there is some contractual, governmental or other legally enforceable restriction preventing realisation at the reporting date.

Unlisted Investments - are carried at such fair value as the Directors consider appropriate given the performance of each investee company and after taking account of the effect of dilution, the exercise of ratchets, options or other incentive schemes. Warrants are carried at fair value using standard Black Scholes valuation models.

2.     Basis of preparation (continued)

Fair value hierarchy

IFRS 13 requires disclosure of fair value measurements by level of the following fair value hierarchy:

Level 1 - inputs are quoted prices (unadjusted) in active markets for identical assets and liabilities that the entity can readily observe;

Level 2 - inputs are inputs other than quoted prices included within Level 1 that are observable for the asset, either directly or indirectly; and

Level 3 - inputs that are not based on observeable market data (unobservable inputs).

3.         Loss per share

The calculations of the basic and diluted earnings per share are based on data the following:	Unaudited 6 months to 30-Jun-14 £'000	Unaudited 6 months to 30-Jun-13 £'000	Audited 12 months to 31-Dec-13 £'000
(Loss)/profit for the year	(76)	(86)	(196)
(Loss)/profit for the purpose of basic earnings per share	(76)	(86)	(196)
Number of shares
Weighted average number of ordinary shares in issue during the year	172,688,585	66,915,896	106,160,633
Effect of dilutive options	-	-	-
Effect of dilutive long-term incentive plan	-	-	-
Effect of dilutive deferred consideration	-	-	-
Effect of shares held in treasury	-	-	-
Diluted weighted average number of ordinary shares in issue during the year	172,688,585	66,915,896	106,160,633
(Loss)/profit/earnings per share
Basic (loss)/profit/earnings per share (pence)	(0.04)	(0.1)	(0.2)

4.        Investments at fair value through profit & loss

For the period ended 30 June 2014 - Unaudited

	Level 1 £'000	Level 2 £'000	Level 3 £'000	Total £'000
Opening cost	-	-	-	-
Additions at cost - cash	610	50	-	660
Additions at cost - in specie	-	150	-	150
Closing portfolio cost	610	200	-	810
Net unrealised (loss)/gain on investments	(4)	-		(4)
Closing valuation	606	200	-	806
Net unrealised (loss)/gain on investments	(4)	-	-	(4)
Net capital (loss)/gain on fair value of financial assets designated at fair value through profit or loss	(4)	-	-	(4)
Investment income	-	-	-	-
Total (losses)/gains on Financial Assets at fair value through profit or loss	(4)	-	-	(4)

4.    Investments at fair value through profit & loss (continued)

For the period ended 31 December 2013 - Audited

	Level 1 £'000	Level 2 £'000	Level 3 £'000	Total £'000
Opening cost	-	-	-	-
Additions at cost - cash	-	-	-	-
Additions at cost - in specie	-	-	-	-
Closing portfolio cost	-	-	-	-
Net unrealised (loss)/gain on investments	-	-		-
Closing valuation	-	-	-	-
Net unrealised (loss)/gain on investments	-	-	-	-
Net capital (loss)/gain on fair value of financial assets designated at fair value through profit or loss	-	-	-	-
Investment income	-	-	-	-
Total (losses)/gains on Financial Assets at fair value through profit or loss	-	-	-	-

5.        Called up share capital

	30-Jun-14 No. shares	30-Jun-13 No. shares	31-Dec-13 No. shares
Ordinary shares
Opening ordinary shares of 0.10 pence each	170,915,896	66,915,896	6,915,896
Issue of new ordinary shares of 0.10 pence each	70,000,000	-	104,000,000
Closing ordinary shares of 0.10 pence each	240,915,896	66,915,896	170,915,896
"A" Deferred Share
Opening "A" Deferred Share of 1.65 pence each	6,915,896	6,915,896	6,915,896
Capital reorganisation and consolidation	-	-	-
Closing "A" Deferred Share of 1.65 pence each	6,915,896	6,915,896	6,915,896
	30-Jun-14 £'000	30-Jun-13 £'000	31-Dec-13 £'000
Ordinary shares
Opening ordinary shares of 0.10 pence each	171	67	67
Issue of new ordinary shares of 0.10 pence each	70	-	104
Closing ordinary shares of 0.10 pence each	241	67	171
"A" Deferred Share
Opening "A" Deferred Share of 1.65 pence each	114	114	114
Capital reorganisation and consolidation	-	-	-
Closing "A" Deferred Share of 1.65 pence each	114	114	114

At 30 June 2014 no share options were outstanding (2013: nil).

On 23 June 2014, the Company issued 65,000,000 new ordinary shares of 0.1p each at a price of 0.5p per share raising £325,000 in funds to make investments in accordance with the Company's investing policy and for working capital purposes.

On 23 June 2014, the Company issued 5,000,000 new ordinary shares of 0.1p each at a deemed price of 3p per share to Mogul Ventures Corp ("Mogul"), as part of the consideration for the acquisition of 1,480,000 shares in Mogul.

6.    Borrowings

During the reporting period, the Company entered into a stock margin service financing facility with Barclays Bank Plc to provide a facility with an initial drawdown of circa £400,000 to support the Company's listed investment programme. The initial term of the facility is 12 months, with interest payable quarterly at the TM (TomNext) rate applicable to low-volatility currency plus 1.35 per cent.  The facility may be repaid in whole or part without penalty prior to the expiry of the term. 

7.    Events after the reporting period

Post the financial reporting date of 30 June 2014, all of the covered call options written in respect to the Company's investment in shares in Rio Tinto, BHP Billiton and BP were exercised resulting in their divesture.  This resulted in a net loss on the Company's investments in listed securities in Rio Tinto, BHP Billiton and BP of circa £11,000.

8.    General Information

Reabold Resources Plc is a company registered in England and Wales under the Companies Act. Registered in England number 3542727 at 200 Strand, London WC2R 1DJ. The principal activity of the Company is that of an investing company in accordance with the AIM Rules for Companies.

9.    Availability of this announcement

Copies of this announcement are available from the Company's website www.reabold.com.

This information is provided by RNS

The company news service from the London Stock Exchange

END

IR URRNRSWAKOAR