ROSS GROUP PLC

Interim / Quarterly Report • Sep 15, 2021

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RNS Number : 9007L

Ross Group PLC

15 September 2021

Ross Group Plc Half Yearly Financial Report 30th June 2021

HALF YEARLY FINANCIAL REPORT

FOR THE SIX MONTHS ENDED 30 JUNE 2021

Financial Summary (6 months to  30 June 2021)	2021		2020
	£'000		£'000		Change
Group Revenue	-		-		-
Gross Profit/(Loss)	-		-		-
Profit/(Loss) before tax	(267)		(830)		67.8%
Basic earnings per share	-0.122p		-0.379p		67.8%
Diluted earnings per share	-0.122p		-0.379p		67.8%

Chairman's Statement

It is once again my pleasure to report to you on both the business activities and the financial interim results of the Ross Group PLC ("Group") for the six month period ended 30th June 2021.

Throughout the COVID pandemic period, the Group has continued diligently researching and exploring specific supply chain management strategic opportunities; primarily involving potential start-ups, mergers, acquisitions and/or business alliances.

Our existing Chitin investment is progressing in accordance with the expectation of RGP-525 and whilst RGP-525 is continuing its research and development into mass production of Chitin, your Board is confident that this has the potential to become a worthy business in the future. 

In addition, the Group is still deploying our specialist supply chain management services on a project-by-project basis.

Since becoming Chairman, I have always been mindful - even while our Board of Directors were constantly conducting such exploratory and research work - that our operating businesses and Premium Listing Company status should always be capable of generating sufficient profit and/or cashflow from its traditional specialist supply chain management services, in order to primarily cover running costs of the business on a potentially worst-case scenario and/or to be able to finance due diligences of potentially feasible opportunities.

Also, especially given the continuation of COVID into this exceptionally unusual year, we have had to rightfully continue to incur such significant restructuring expenses - all of which are considered to be reasonable given our previous years of careful and conservative costings - which throughout this particular period, we are also pleased to announce that the Board has responded as best as possible through taking diligent and prudent measures accordingly. 

In this respect, our 2021 interim result of a £267,000 loss (2020: £830,000 loss) is considered both understandable and justifiable.

As the Group is still undergoing a research, development and exploratory mode, there has subsequently been no income during this period. Costs and overhead have progressively decreased over 2020 - Largely due to the implementation, effect and relative success of our various restructuring strategies. 

We continue to be prudent and focused in our supply chain management and also our Board remains conservatively confident that we will be progressively focusing in on identifying and being able to put forward an appropriate specialist supply chain strategy and/or appropriate acquisition for due consideration and to hopefully be able to then recommend to our Shareholders at some stage in the foreseeable future.

As a result, your Board has recently also decided to place an additional amount of equity equal to 6% of its existing shareholding as per the Announcement released on the London Stock Exchange's RNS website on 10th September 2021 which we believe will be able to better support detailed discussions and due diligences; especially in the second half of this year.

The Board and myself are satisfied with the progress that we have made over this period in identifying, initiating, and implementing our emergency short-term strategic plans; including, but not limited to, the ongoing restructuring of the Group and, in particular, specific businesses, in order to be able to both maintain running an efficient supply chain management operation, while also being capable of capturing any considered appropriate opportunity; as and when or if it is presented. 

Regarding the consequential subject of Brexit, given the departure from the EU, the timing, terms and impact of the United Kingdom's exit are still somewhat difficult to evaluate; especially with the combined confluence and continuation of COVID. 

Regardless of the time scale, terms and conditions of the United Kingdom's exit from the European Union, the result with regard to the political and economic outlook of the United Kingdom and the European Union, has been largely not resulted in any major volatility on the exchange rate between the Pound Sterling ("£") and the Euro ("€") and more generally, between the £/Pound and other international currencies such as the US Dollar ("US$")

Because the operating subsidiaries of RGP are presently based both in the United States and also outside of Europe, they are therefore predominately in a US$ currency environment and while this could lead to adverse consequences in terms of US$/£ exchange rates, our respective subsidiaries and/or joint ventures are not yet fully trading or selling products, and therefore we do not anticipate any material negative impact and do not intend to take specific measures to cover fluctuations of the currency market at this stage.

At this time, I would like to particularly personally thank our Board of Directors, our specialist contractors, consultants and advisors, for all their excellent support, commitment and hard work in helping the Group towards achieving its aims.

Also, as always, I would also like to personally thank our extraordinary loyal shareholders for their continued patience and understanding.

We would like to wish all of them and everyone else the very best of health during these continuing difficult and dangerous COVID times.

Sincerely,

Barry Richard Pettitt Chairman and Group Managing Director Approved 15th September 2021
CONDENSED CONSOLIDATED INCOME STATEMENT UNAUDITED
	6 months			6 months			Year
	ended 30 June			ended 30 June			ended  31 Dec
	2021			2020			2020
	£'000			£'000			£'000
Group Revenue	-			-			43
Gross Profit	-			-			4
Profit / (Loss) before Finance Cost	82			(559)			(925)
Finance Cost	349			271			538
(Loss) before Taxation	(267)			(830)			(1,463)
Taxation	-			-			-
(Loss) for the Period	(267)			(830)			(1,463)
Earnings per share (pence)	-0.122			-0.379			-0.669
Adjusted earnings per share (pence)	-0.122			-0.379			-0.669

Earnings per share from continuing operations(pence)	-0.122		-0.379		-0.669
Adjusted earnings per share (pence)	-0.122		-0.379		-0.669

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY UNAUDITED

		Share Capital		Accumulated Losses		Other Reserves		Total
		£'000		£'000		£'000		£'000
Balance at 1 Jan 2020		11,218		(39,175)		24,019		(3,938)
(Loss) / Profit for the period				(830)				(830)
Foreign exchange adjustment		-		(196)		-		(196)
Total comprehensive income / (deficit)		-		(1,026)		-		(1,026)
Movement on convertible loans		-		-		318		318
Balance at 30 June 2020		11,218		(40,201)		24,337		(4,646)
(Loss) / Profit for the period				(633)				(633)
Foreign exchange adjustment		-		260		-		260
Total comprehensive income / (deficit)		-		(373)		-		(373)
Value of conversion rights on convertible loans		-		-		8		8
Balance at 31 Dec 2020		11,218		(40,574)		24,345		(5,011)
Balance at 1 Jan 2021		11,218		(40,574)		24,345		(5,011)
(Loss) / Profit for the period				(267)				(267)
Foreign exchange adjustment		-		32		-		32
Total comprehensive income / (deficit)		-		(235)		-		(235)
Movement on convertible loans		-		-		170		170
Balance at 30 June 2021		11,218		(40,809)		24,515		(5,076)

CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION UNAUDITED

	6 months		6 months		Year Ended
	ended 30 June		ended 30 June		31 Dec
	2021		2020		2020
	£'000		£'000		£'000
Non Current Assets	838		1,322		1,090
Current Assets:
Inventories	-		41		-
Trade and Other Receivables	88		70		269
Cash and Cash Equivalents	307		345		91
	395		456		360
Total Assets	1,233		1,778		1,450
Equity and Liabilities
Shareholders' Equity:
Share Capital	11,218		11,218		11,218
Share Premium Account	3,146		3,146		3,146
Other Reserves	15,384		15,384		15,384
Convertible debentures	5,985		5,650		5,815
Retained Earnings	(40,809)		(40,201)		(40,574)
Total Equity	(5,076)		(4,803)		(5,011)
Non-Current Liabilities:
Lease Liabilities	28		300		183
Long Term Borrowings	1,727		1,866		1,705
Current Liabilities:
Trade and Other Payables	3,178		3,300		3,408
Shareholders funds in advance	378		-		-
Lease Liabilities	35		249		208
Bank Overdraft and Loans	963		866		957
Total Liabilities	6,309		6,581		6,461
Total Equity and Liabilities	1,233		1,778		1,450

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS UNAUDITED

	6 months		6 months		Year Ended
	ended 30 June		ended 30 June		31 Dec
	2021		2020		2020
	£'000		£'000		£'000
Net Cash From/(Used In) Operating Activities	(281)		(222)		(168)
Net Cash Used In Investing Activities	567		(53)		(19)
Cash Flows From Financing Activities:
Amount withdrawn by Directors	5		(11)		(38)
Net Increase/(Decrease) In Borrowings and Lease Liabilities	(75)		(18)		(333)
Net Cash Flow From Financing Activities	(70)		(29)		(371)
Net Increase/(Decrease) In Cash and Cash Equivalents	216		(304)		(558)
Cash and Cash Equivalent at Beginning of Period	91		649		649
Cash and Cash Equivalent at End of Period	307		345		91

Notes to the Interim Report

(1)      The financial information contained in these statements for the six months ended

30 June 2021 and 30 June 2020 is unaudited and does not constitute statutory

accounts as defined in section 434 of the Companies Act 2006.

These statements are prepared in accordance with International Financial Reporting Standards (IFRS) as adopted by the UK.

The interim financial statements have been prepared on the basis of the

accounting policies set out in the audited statutory accounts for the year ended

31 December 2020.

(2)      Reconciliation of Operating (Loss) / Profit to Net Cash Flows From Operating

Activities

	6 months		6 months		Year Ended
	ended 30 June		ended 30 June		31 Dec
	2021		2020		2020
	£'000		£'000		£'000
Operating Profit / (Loss)	82		(2,926)		(925)
Profit on sale of fixed assets	(578)		-		40
Exchange differences	29		(9)		92
Depreciation and Amortisation	260		1,478		279
(Increase)/ Decrease In Inventories	-		(1,311)		39
(Increase)/ Decrease In Trade and Other Receivables	176		(102)		(146)
Increase/(Decrease) In Trade and Other Payables	(250)		14,619		453
Net Cash Generated From/(Used In) Operations	(281)		11,749		(168)

(3)       No ordinary interim dividend is proposed for 2021 (2020 - £Nil).

(4)      The comparative cash flow for the year ended 31 December 2020 has been

extracted from the audited accounts. The cash flows for the six months ended 30

June 2020 and 30 June 2021 are unaudited.

(5)       Reconciliation of Movements In Equity

	6 months		6 months		Year Ended
	ended 30 June		ended 30 June		31 Dec
	2021		2020		2020
	£'000		£'000		£'000
Share Premium Account
Brought Forward	3,146		3,146		3,146
Movement	-		-		-
Carried Forward	3,146		3,146		3,146
Other Reserves
Brought Forward	15,384		15,384		15,384
Movement	-		-		-
Carried Forward	15,384		15,384		15,384
Retained Earnings
Brought Forward	(40,574)		(39,175)		(39,175)
(Loss) / Profit for the Period	(267)		(830)		(1,463)
Foreign exchange adjustment	32		(196)		64
Carried Forward	(40,809)		(40,201)		(40,574)
Convertible Debenture
Brought Forward	5,815		5,489		5,489
Movement	170		161		326
Carried Forward	5,985		5,650		5,815

(6)       Non Current Assets

			Right of use assets		Property, Plant &
	Investments		Land & Buildings		Equipment		Total
	£'000		£'000		£'000		£'000
Cost
At 1 January 2021	424		699		359		1,482
Foreign exchange adjustment	-		(3)		-		(3)
Additions	-		-		11		11
Impairment reversal	-		-		2,969		2,969
Disposals	-		(558)		(2,969)		(3,527)
At 30 June 2021	424		138		370		932
Depreciation / Amortisation
At 1 January 2021	-		388		4		189
Charge for the period	-		251		9		97
On disposals	-		(558)		-		-
At 30 June 2021	-		81		13		94
Net Book Value
At 30 June 2021	424		57		357		838
At 1 January 2021	424		311		355		1,090

(7)       Inventory	30 June	31 Dec	30 June
	2021	2020	2020
	£'000	£'000	£'000
Raw materials	-	-	41
	-	-	41

(8)       Current Assets

	30 June	31 Dec	30 June
	2021	2020	2020
	£'000	£'000	£'000
Trade receivables	-	83	-
Prepayments and accrued income	11	109	11
Other debtors	6	-	8
Directors loan	58	63	36
Loans to associated undertakings	13	14	15
	88	269	70

Interest is charged on the Directors loan at a commercial rate.

(9)       Current Liabilities

	30 June	31 Dec	30 June
	2021	2020	2020
	£'000	£'000	£'000
Trade payables	245	461	243
Other creditors	496	377	427
Accruals and deferred income	191	344	226
Amounts owed to associated undertakings	2,246	2,226	2,404
Lease creditor	35	208	249
Other loans	8	3	-
Debentures	955	954	866
Shareholders funds in advance	378	-	-
	4,554	3,833	4,415

(10)       Non Current Liabilities

	30 June	31 Dec	30 June
	2021	2020	2020
	£'000	£'000	£'000
Lease creditor	28	183	300
Debentures	-	-	86
Other loans	1,727	1,705	1,780
	1,755	1,888	29,767

(11)  On 27 September 2018 two convertible loan debentures were issued for £4,010,000 and £2,062,172 with a coupon rate of 5%.

The loan notes are convertible into Ordinary shares of the parent entity in three years after the date of issue. The convertible loan debenture will give right to a percentage of the issued share capital of the parent company at the date of conversion. Each tranche of £1 million debenture owed by the long term holders correspond to 4.925% of the issued share capital at the date of conversion, resulting in a fixed percentage of the issued share capital of the company to be allotted to the loan holders regardless of the value / amount of the share capital of the company.

	30 June	31 Dec
	2021	2020
	£'000	£'000
Face value of notes issued	6,072	6,072
Value of conversion rights	5,985	5,815
Convertible loan debenture liability	954	954
Interest expense recognized in period	171	329

The other loans have been advanced to the company from One World Limited. The funding was provided for a three year period, and interest is charged on these loans at 6%.

(12)  On 10 September 2021 the company made an announcement to the London Stock Exchange confirming the issue of 13,126,051 shares equivalent to 6% of its existing shareholding at a fixed price of 2.8 pence per new ordinary share.

(13)  As no revenue has been generated throughout the group in this period and the amount in the prior year was minimal and was through the subsidiary Ross Diversified Trading Limited, the Chief Operating Decision Maker believes the information already disclosed in the interim financial statements is adequate to fulfill the requirements of IFRS8 segmental reporting.  This will be reconsidered at the year end and in future periods as the group begins to trade.

(14)  The Interim Report will be sent by mail to all registered shareholders

and copies will be available from the Company's registered office at 71-75 Shelton Street, London, WC2H 9JQ. A downloadable copy will also be posted on the Company's website www.ross-group.co.uk

Responsibility statement:

The Directors confirm that, to the best of their knowledge: -

a)    the condensed set of financial statements has been prepared in accordance with International Financial Reporting Standards (IFRS) and IAS 34 'Interim Financial Reporting';

b)    the financial statements give a true and fair view of the assets, liabilities, financial position and loss of the company:

c)    the interim management report includes a fair review of the information required by DTR 4.2.7R (indication of important events during the first six months and description of principal risks and uncertainties for the remaining six months of the year); and

d)    the interim management report includes a fair review of the information required by DTR 4.2.8R (disclosure of related parties' transactions and changes therein).

On behalf of the Board

B Pettitt                          

Chief Executive Officer                        

Ross Group plc

Registered Office

71 - 75 Shelton Street

London WC2H 9JQ

Contact - M Simon, Non Executive Director

Tel. - 07887  628152

Email - michael@simonsilvermyer.com

Website - www.ross-group.co.uk

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