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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| European Conv. | LSE:ECPC | London | Ordinary Share | GB00B0B7ZC68 | ORD EUR1.00 |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 0.00105 | 0.00 | 01:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| 0 | 0 | N/A | 0 |
Hot Features
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TIDMECPC
RNS Number : 1627P
European Convergence Property CoPLC
20 March 2009
20 March 2009
EuroPean convergence PROPERTY company plc
("ECPC" OR "THE COMPANY")
Interim Results for the period ended 31 December 2008
European Convergence Property Company PLC ("ECPC", the "Company" or the "Group")
announces its interim results for the six month period ended 31 December 2008.
In accordance with AIM Rule 20, the Interim Report has today been posted to
shareholders and can be downloaded from the Company's website at
www.europeanconvergence.com.
Enquiries:
+-------------------------------+----------------------------------+
| Charlemagne Capital (UK) | +44 (0)207 518 2100 |
| Limited | |
+-------------------------------+----------------------------------+
| Varda Lotan / Christopher | marketing@charlemagnecapital.com |
| Fitzwilliam Lay | www.charlemagnecapital.com |
+-------------------------------+----------------------------------+
| | |
+-------------------------------+----------------------------------+
| Galileo Fund Services Limited | +44 (0)1624 692600 |
+-------------------------------+----------------------------------+
| Ian Dungate, Company | |
| Secretary | |
+-------------------------------+----------------------------------+
| | |
+-------------------------------+----------------------------------+
| Panmure Gordon (UK) Limited | +44 (0)20 7459 3600 |
+-------------------------------+----------------------------------+
| Hugh Morgan | |
+-------------------------------+----------------------------------+
| Stuart Gledhill | |
+-------------------------------+----------------------------------+
| | |
+-------------------------------+----------------------------------+
| Smithfield Consultants | +44 (0)20 7360 4900 |
+-------------------------------+----------------------------------+
| John Kiely | |
+-------------------------------+----------------------------------+
| Gemma Froggatt | |
+-------------------------------+----------------------------------+
Highlights
Since the sale of the Company's Romanian property holding subsidiaries in the
last reporting year, and the subsequent return of capital to shareholders, the
Company has continued to hold its one remaining investment asset, Mall Veliko
Turnovo, in Bulgaria.
During the interim period and to the date of this report there were two events
of note specific to the Company.
Independent valuations of Mall Veliko Turnovo by the independent firms SHM Smith
Hodgkinson (a firm of chartered surveyors) and Jones Lang Lasalle (one of the
world's leading services and investment management firms) were carried out as at
31 December 2008. Given the difficulty in assessing the value of investment
property in the current market conditions, the Board was reassured by the
similarity in the two valuations and adopted the marginally lower valuation,
which has been reflected in the Interim Financial Statements. This valuation
showed a decrease of EUR3.7m from the previous valuation, reflecting the impact on
the retail property investment market in Bulgaria resulting from the current
global credit restrictions and economic conditions.
On 27 January 2009 the Company announced that the purchaser of the three
properties had made claims totalling up to EUR4.5 million against the deferred
proceeds of sale for alleged breaches of warranties contained in the sale and
purchase agreements. The Company's Investment Manager is assessing these claims
and is taking both legal and technical advice but, with the exception of a claim
for EUR0.8 million for which provision was made in the accounts for financial year
ended 30 June 2008, the Directors do not believe that the claims, which were in
any event made after the contractual deadline, have been or can be adequately
substantiated and are vigorously resisting them.
Mall Veliko Turnovo has now been operational for over two years and continues to
enjoy near full occupancy for the retail business. The deterioration in the
local market, which is expected to continue through 2009, is putting pressure on
rental and occupancy levels but the Company will continue to do all that it
considers reasonably necessary to see the asset through to an improved
investment market.
The consolidated net assets of the Company as at 31 December 2008 were EUR12.995m,
giving a net asset value of EUR0.21 per share.
Erwin Brunner
Chairman
16 March 2009
Consolidated Income Statement
+------------------------------------------------+---------+-------------------------+-------------------------+
| | | (Unaudited) | (Unaudited) |
+------------------------------------------------+---------+-------------------------+-------------------------+
| | Note | 1 July 2008 to | 1 July 2007 to |
| | | 31 December 2008 | 31 December 2007 |
+------------------------------------------------+---------+-------------------------+-------------------------+
| | | EUR'000 | EUR'000 |
+------------------------------------------------+---------+-------------------------+-------------------------+
| | | | |
+------------------------------------------------+---------+-------------------------+-------------------------+
| Realised gain on sale of | | - | 6,871 |
| investment property | | | |
+------------------------------------------------+---------+-------------------------+-------------------------+
| Net loss from fair value adjustment on | 9 | (3,660) | - |
| investment property | | | |
+------------------------------------------------+---------+-------------------------+-------------------------+
| | | | |
+------------------------------------------------+---------+-------------------------+-------------------------+
| Net rent and related income | | 1,467 | 9,429 |
+------------------------------------------------+---------+-------------------------+-------------------------+
| | | | |
+------------------------------------------------+---------+-------------------------+-------------------------+
| Manager's fees credit/(expense) | | 425 | (2,354) |
+------------------------------------------------+---------+-------------------------+-------------------------+
| Audit and professional fees | | (203) | (1,433) |
+------------------------------------------------+---------+-------------------------+-------------------------+
| Other expenses | | (428) | (7,615) |
+------------------------------------------------+---------+-------------------------+-------------------------+
| Administrative expenses | | (206) | (11,402) |
+------------------------------------------------+---------+-------------------------+-------------------------+
| | | | |
+------------------------------------------------+---------+-------------------------+-------------------------+
| Net operating (loss)/profit before net | | (2,399) | 4,898 |
| financing expense | | | |
+------------------------------------------------+---------+-------------------------+-------------------------+
| | | | |
+------------------------------------------------+---------+-------------------------+-------------------------+
| Financial income | | 35 | 648 |
+------------------------------------------------+---------+-------------------------+-------------------------+
| Financial expenses | | (651) | (3,074) |
+------------------------------------------------+---------+-------------------------+-------------------------+
| Net financing expense | | (616) | (2,426) |
+------------------------------------------------+---------+-------------------------+-------------------------+
| | | | |
+------------------------------------------------+---------+-------------------------+-------------------------+
| (Loss)/profit before tax | | (3,015) | 2,472 |
+------------------------------------------------+---------+-------------------------+-------------------------+
| | | | |
+------------------------------------------------+---------+-------------------------+-------------------------+
| Income tax credit | 16 | 181 | 4,715 |
+------------------------------------------------+---------+-------------------------+-------------------------+
| | | | |
+------------------------------------------------+---------+-------------------------+-------------------------+
| Retained (loss)/profit for the period | | (2,834) | 7,187 |
+------------------------------------------------+---------+-------------------------+-------------------------+
| | | | |
+------------------------------------------------+---------+-------------------------+-------------------------+
| Basic and diluted (loss)/profit per share (EUR) | 8 | (0.0452) | 0.1146 |
+------------------------------------------------+---------+-------------------------+-------------------------+
Consolidated Balance Sheet
+------------------+--------+-------------+-----------+
| | | (Unaudited) | (Audited) |
+------------------+--------+-------------+-----------+
| | Note | At 31 | At 30 |
| | | December | June |
| | | 2008 | 2008 |
+------------------+--------+-------------+-----------+
| | | EUR'000 | EUR'000 |
+------------------+--------+-------------+-----------+
| | | | |
+------------------+--------+-------------+-----------+
| Investment | 9 | 27,900 | 31,560 |
| property | | | |
+------------------+--------+-------------+-----------+
| Property, | | 7 | - |
| plant and | | | |
| equipment | | | |
+------------------+--------+-------------+-----------+
| Total | | 27,907 | 31,560 |
| non-current | | | |
| assets | | | |
+------------------+--------+-------------+-----------+
| | | | |
+------------------+--------+-------------+-----------+
| Trade | 10 | 4,592 | 4,510 |
| and | | | |
| other | | | |
| receivables | | | |
+------------------+--------+-------------+-----------+
| Cash | 11 | 2,415 | 2,552 |
| and | | | |
| cash | | | |
| equivalents | | | |
+------------------+--------+-------------+-----------+
| Total | | 7,007 | 7,062 |
| current | | | |
| assets | | | |
+------------------+--------+-------------+-----------+
| Total | | 34,914 | 38,622 |
| assets | | | |
+------------------+--------+-------------+-----------+
| | | | |
+------------------+--------+-------------+-----------+
| Issued | | 3,682 | 3,762 |
| share | | | |
| capital | | | |
+------------------+--------+-------------+-----------+
| Retained | | 9,309 | 12,070 |
| earnings | | | |
+------------------+--------+-------------+-----------+
| Foreign | | 4 | - |
| currency | | | |
| translation | | | |
| reserve | | | |
+------------------+--------+-------------+-----------+
| Total | | 12,995 | 15,832 |
| equity | | | |
+------------------+--------+-------------+-----------+
| | | | |
+------------------+--------+-------------+-----------+
| Interest-bearing | 12 | 19,172 | 19,232 |
| loans and | | | |
| borrowings | | | |
+------------------+--------+-------------+-----------+
| Deferred | | 10 | 187 |
| tax | | | |
| liability | | | |
+------------------+--------+-------------+-----------+
| Total | | 19,182 | 19,419 |
| non-current | | | |
| liabilities | | | |
+------------------+--------+-------------+-----------+
| | | | |
+------------------+--------+-------------+-----------+
| Trade | 13 | 2,737 | 3,371 |
| and | | | |
| other | | | |
| payables | | | |
+------------------+--------+-------------+-----------+
| Total | | 2,737 | 3,371 |
| current | | | |
| liabilities | | | |
+------------------+--------+-------------+-----------+
| Total | | 21,919 | 22,790 |
| liabilities | | | |
+------------------+--------+-------------+-----------+
| Total | | 34,914 | 38,622 |
| equity | | | |
| & | | | |
| liabilities | | | |
+------------------+--------+-------------+-----------+
Consolidated Statement of Changes in Equity
+-------------+---------+----------+-------------+--------+
| | Share | Retained | Foreign | Total |
| | capital | earnings | currency | |
| | | | translation | |
| | | | reserve | |
+-------------+---------+----------+-------------+--------+
| | EUR'000 | EUR'000 | EUR'000 | EUR'000 |
+-------------+---------+----------+-------------+--------+
| | | | | |
+-------------+---------+----------+-------------+--------+
| Balance | 62,696 | 3,235 | 1,758 | 67,689 |
| at 1 | | | | |
| July | | | | |
| 2007 | | | | |
+-------------+---------+----------+-------------+--------+
| Foreign | - | - | 1,556 | 1,556 |
| exchange | | | | |
| translation | | | | |
| differences | | | | |
+-------------+---------+----------+-------------+--------+
| Retained | - | 7,187 | - | 7,187 |
| profit | | | | |
| for the | | | | |
| period | | | | |
+-------------+---------+----------+-------------+--------+
| Balance | 62,696 | 10,422 | 3,314 | 76,432 |
| at 31 | | | | |
| December | | | | |
| 2007 | | | | |
+-------------+---------+----------+-------------+--------+
+--------------+----------+--------+---------+----------+
| Balance | 62,696 | 3,235 | 1,758 | 67,689 |
| at 1 | | | | |
| July | | | | |
| 2007 | | | | |
+--------------+----------+--------+---------+----------+
| Capital | (58,934) | - | - | (58,934) |
| distribution | | | | |
+--------------+----------+--------+---------+----------+
| Foreign | - | - | (1,758) | (1,758) |
| exchange | | | | |
| translation | | | | |
| differences | | | | |
+--------------+----------+--------+---------+----------+
| Retained | - | 8,835 | - | 8,835 |
| profit | | | | |
| for the | | | | |
| year | | | | |
+--------------+----------+--------+---------+----------+
| Balance | 3,762 | 12,070 | - | 15,832 |
| at 30 | | | | |
| June | | | | |
| 2008 | | | | |
+--------------+----------+--------+---------+----------+
+-------------+--------+---------+--------+---------+
| Balance | 3,762 | 12,070 | - | 15,832 |
| at 1 | | | | |
| July | | | | |
| 2008 | | | | |
+-------------+--------+---------+--------+---------+
| Shares | (80) | 73 | | (7) |
| cancelled | | | | |
| following | | | | |
| market | | | | |
| purchases | | | | |
+-------------+--------+---------+--------+---------+
| Foreign | - | - | 4 | 4 |
| exchange | | | | |
| translation | | | | |
| differences | | | | |
+-------------+--------+---------+--------+---------+
| Retained | - | (2,834) | - | (2,834) |
| loss for | | | | |
| the | | | | |
| period | | | | |
+-------------+--------+---------+--------+---------+
| Balance | 3,682 | 9,309 | 4 | 12,995 |
| at 31 | | | | |
| December | | | | |
| 2008 | | | | |
+-------------+--------+---------+--------+---------+
Consolidated Cash Flow Statement
+---------------------+--------+-------------+-------------+
| | | (Unaudited) | (Unaudited) |
+---------------------+--------+-------------+-------------+
| | | For | For |
| | | the | the |
| | | period | period |
| | | from | from |
| | | 1 | 1 July |
| | | July | 2007 |
| | | 2008 | to |
| | | to | 31 |
| | | 31 | December |
| | | December | 2007 |
| | | 2008 | |
+---------------------+--------+-------------+-------------+
| | | EUR'000 | EUR'000 |
+---------------------+--------+-------------+-------------+
| | | | |
+---------------------+--------+-------------+-------------+
| Operating | | | |
| activities | | | |
+---------------------+--------+-------------+-------------+
| Group | | (2,834) | 7,187 |
| (loss)/profit | | | |
| for the | | | |
| period | | | |
+---------------------+--------+-------------+-------------+
| Adjustments | | | |
| for: | | | |
+---------------------+--------+-------------+-------------+
| | | - | (6,871) |
| Net | | | |
| gain | | | |
| from | | | |
| sale | | | |
| of | | | |
| investment | | | |
| property | | | |
+---------------------+--------+-------------+-------------+
| | | 3,660 | - |
| Net | | | |
| loss | | | |
| from | | | |
| fair | | | |
| value | | | |
| adjustment | | | |
| on | | | |
| investment | | | |
| property | | | |
+---------------------+--------+-------------+-------------+
| | | (35) | (648) |
| Financial | | | |
| income | | | |
+---------------------+--------+-------------+-------------+
| | | 651 | 3,074 |
| Financial | | | |
| expenses | | | |
+---------------------+--------+-------------+-------------+
| | | 4 | 1,556 |
| Foreign | | | |
| currency | | | |
| translated | | | |
+---------------------+--------+-------------+-------------+
| | | - | 18 |
| Depreciation | | | |
+---------------------+--------+-------------+-------------+
| | | (181) | (4,715) |
| Income | | | |
| tax | | | |
| credit | | | |
+---------------------+--------+-------------+-------------+
| Operating | | 1,265 | (399) |
| profit/(loss) | | | |
| before | | | |
| changes in | | | |
| working | | | |
| capital | | | |
+---------------------+--------+-------------+-------------+
| | | | |
+---------------------+--------+-------------+-------------+
| Increase | | (82) | (2,517) |
| in trade | | | |
| and | | | |
| other | | | |
| receivables | | | |
+---------------------+--------+-------------+-------------+
| Decrease | | (641) | (2,431) |
| in trade | | | |
| and | | | |
| other | | | |
| payables | | | |
+---------------------+--------+-------------+-------------+
| | | | |
+---------------------+--------+-------------+-------------+
| Cash | | 542 | (5,347) |
| generated | | | |
| from/(used | | | |
| in) | | | |
| operations | | | |
+---------------------+--------+-------------+-------------+
| Interest | | (651) | (3,074) |
| paid | | | |
+---------------------+--------+-------------+-------------+
| Income | | 11 | (50) |
| and | | | |
| corporation | | | |
| tax | | | |
| received/(paid) | | | |
+---------------------+--------+-------------+-------------+
| Interest | | 35 | 648 |
| received | | | |
+---------------------+--------+-------------+-------------+
| Cash | | (63) | (7,823) |
| flows | | | |
| used | | | |
| in | | | |
| operating | | | |
| activities | | | |
+---------------------+--------+-------------+-------------+
| | | | |
+---------------------+--------+-------------+-------------+
| Investing | | | |
| activities | | | |
+---------------------+--------+-------------+-------------+
| Sale | | - | 106,292 |
| of | | | |
| investment | | | |
| property | | | |
+---------------------+--------+-------------+-------------+
| Purchase | | (7) | - |
| of | | | |
| property, | | | |
| plant and | | | |
| equipment | | | |
+---------------------+--------+-------------+-------------+
| Cash | | (7) | 106,292 |
| flows | | | |
| (used | | | |
| in)/generated | | | |
| from | | | |
| investing | | | |
| activities | | | |
+---------------------+--------+-------------+-------------+
| | | | |
+---------------------+--------+-------------+-------------+
| Financing | | | |
| activities | | | |
+---------------------+--------+-------------+-------------+
| Purchase | | (7) | - |
| of own | | | |
| shares | | | |
+---------------------+--------+-------------+-------------+
| Repayment | | (60) | (60,933) |
| of long | | | |
| term | | | |
| loans | | | |
+---------------------+--------+-------------+-------------+
| Cash | | (67) | (60,933) |
| flows | | | |
| used | | | |
| in | | | |
| financing | | | |
| activities | | | |
+---------------------+--------+-------------+-------------+
| | | | |
+---------------------+--------+-------------+-------------+
| Net | | (137) | 37,536 |
| (decrease)/increase | | | |
| in cash and cash | | | |
| equivalents | | | |
+---------------------+--------+-------------+-------------+
| Cash | | 2,552 | 23,107 |
| and | | | |
| cash | | | |
| equivalents | | | |
| at | | | |
| beginning | | | |
| of period | | | |
+---------------------+--------+-------------+-------------+
| Cash | 11 | 2,415 | 60,643 |
| and | | | |
| cash | | | |
| equivalents | | | |
| at end of | | | |
| period | | | |
+---------------------+--------+-------------+-------------+
1 The Company
European Convergence Property Company plc (the "Company") was incorporated and
registered in the Isle of Man under the Isle of Man Companies Acts 1931 to 2004
on 1 June 2005 as a public company with registered number 113616C. On 21
December 2007 with the approval of Shareholders in general meeting, the Company
was re-registered as a company under the Isle of Man Companies Act 2006 with
registered number 002085v.
Pursuant to a prospectus dated 15 June 2005 there was an original placing of up
to 100,000,000 Ordinary Shares. Following the close of the placing on 24 June
2005 62,696,333 Shares were issued.
The Shares of the Company were admitted to trading on the Alternative Investment
Market of the London Stock Exchange ("AIM") on 28 June 2005 when dealings also
commenced. During the period the Company purchased for cancellation 80,000
Ordinary Shares in the Company at a price before expenses of EUR0.09. The buyback
was effected through retained reserves. As at 31 December 2008 there are
62,616,333 Ordinary Shares in issue.
The Company's agents and the Manager perform all significant functions.
Accordingly, the Company itself has no employees.
Capital Distribution
Following approval of the Company's Shareholders in general meeting and as a
consequence of the Directors having determined not to invest surplus cash or
reinvest monies received from the sale of certain property assets an amount of
approximately EUR58.9m or EUR0.94 per share was returned to shareholders pro rata by
way of a capital distribution on 31 January 2008.
2 The Subsidiaries
For efficient portfolio management purposes, the Company established the
following subsidiary companies:-
+--------------+---------------+------------+
| | Country | Percentage |
| | of | of |
| | incorporation | shares |
| | | held |
+--------------+---------------+------------+
| European | Bulgaria | 100% |
| Convergence | | |
| Property | | |
| Company | | |
| Bulgaria | | |
| EOOD | | |
+--------------+---------------+------------+
| European | Bulgaria | 100% |
| Property | | |
| Acquisitions | | |
| EOOD (1) | | |
+--------------+---------------+------------+
| European | Cayman | 100% |
| Convergence | Islands | |
| Property | | |
| Company | | |
| (Cayman) | | |
| Limited | | |
+--------------+---------------+------------+
| ECPC | Cyprus | 100% |
| (Cyprus) | | |
| Limited | | |
+--------------+---------------+------------+
| European | Malta | 100% |
| Convergence | | |
| Property | | |
| Company | | |
| (Malta) | | |
| Limited | | |
+--------------+---------------+------------+
| European | Romania | 100% |
| Property | | |
| Imobiliar | | |
| Invest | | |
| SRL | | |
+--------------+---------------+------------+
| European | Romania | 100% |
| Property | | |
| Development | | |
| Corporation | | |
| SRL | | |
+--------------+---------------+------------+
| Orange | The | 100% |
| Convergence | Netherlands | |
| Finance BV | | |
+--------------+---------------+------------+
| European | Turkey | 100% |
| Convergence | | |
| Property | | |
| Company | | |
| Real Estate | | |
| Trading and | | |
| Management | | |
| Limited | | |
+--------------+---------------+------------+
1 During the period to 31 December 2008, European Property Acquisitions EOOD, a
dormant company, was sold for nominal value.
3 Significant Accounting Policies
The accounting policies applied by the Group in these condensed consolidated
interim financial statements are the same as those applied by the group in its
consolidated financial statements for the year ended 30 June 2008. The Interim
report of the Company for the period ending 31 December 2008 comprises the
Company and its subsidiaries (together referred to as the "Group"). The interim
consolidated financial statements are unaudited.
These interim financial statements have been prepared in accordance with
International Financial Reporting Standard (IFRS) IAS 34: Interim Financial
Reporting. They do not include all of the information required for full annual
financial statements and should be read in conjunction with the consolidated
financial statements of the Group as at and for the year ended 30 June 2008.
4Segment Reporting
Segment information is presented in respect of the Group's business and
geographical segments. The segments are managed on a worldwide basis, but
operate in three principal geographical areas, Bulgaria, Romania and Turkey. The
location of the customers is the same as the location of the assets.
+-------------+----------+---------+--------+-------------+---------+
| 6 | Bulgaria | Romania | Turkey | Unallocated | Total |
| months | | | | | |
| ended | | | | | |
| 31 | | | | | |
| December | | | | | |
| 2008 | | | | | |
+-------------+----------+---------+--------+-------------+---------+
| | EUR'000 | EUR'000 | EUR'000 | EUR'000 | EUR'000 |
+-------------+----------+---------+--------+-------------+---------+
| Net | 1,467 | - | - | - | 1,467 |
| rent | | | | | |
| and | | | | | |
| associated | | | | | |
| income | | | | | |
+-------------+----------+---------+--------+-------------+---------+
| Segment | (3,238) | - | - | 404 | (2,834) |
| results | | | | | |
+-------------+----------+---------+--------+-------------+---------+
| Segment | 29,734 | 4,270 | - | 910 | 34,914 |
| assets | | | | | |
+-------------+----------+---------+--------+-------------+---------+
| Segment | (19,226) | (800) | - | (1,893) | 21,919 |
| liabilities | | | | | |
+-------------+----------+---------+--------+-------------+---------+
+-------------+----------+---------+--------+-------------+----------+
| 6 | Bulgaria | Romania | Turkey | Unallocated | Total |
| months | | | | | |
| ended | | | | | |
| 31 | | | | | |
| December | | | | | |
| 2007 | | | | | |
+-------------+----------+---------+--------+-------------+----------+
| | EUR'000 | EUR'000 | EUR'000 | EUR'000 | EUR'000 |
+-------------+----------+---------+--------+-------------+----------+
| Net | 1,303 | - | - | 8,126 | 9,429 |
| rent | | | | | |
| and | | | | | |
| associated | | | | | |
| income | | | | | |
+-------------+----------+---------+--------+-------------+----------+
| Segment | (111) | 3,041 | (2) | 4,259 | 7,187 |
| results | | | | | |
+-------------+----------+---------+--------+-------------+----------+
| Segment | 31,371 | - | - | 68,360 | 99,731 |
| assets | | | | | |
+-------------+----------+---------+--------+-------------+----------+
| Segment | (19,817) | - | (23) | (3,459) | (23,299) |
| liabilities | | | | | |
+-------------+----------+---------+--------+-------------+----------+
+-------------+----------+---------+--------+-------------+----------+
| Year | Bulgaria | Romania | Turkey | Unallocated | Total |
| ended | | | | | |
| 30 | | | | | |
| June | | | | | |
| 2008 | | | | | |
+-------------+----------+---------+--------+-------------+----------+
| | EUR'000 | EUR'000 | EUR'000 | EUR'000 | EUR'000 |
+-------------+----------+---------+--------+-------------+----------+
| Net | 2,777 | 1,597 | - | - | 4,374 |
| rent | | | | | |
| and | | | | | |
| associated | | | | | |
| income | | | | | |
+-------------+----------+---------+--------+-------------+----------+
| Segment | 3,147 | 9,654 | (5) | (3,961) | 8,835 |
| results | | | | | |
+-------------+----------+---------+--------+-------------+----------+
| Segment | 33,064 | - | - | 5,558 | 38,622 |
| assets | | | | | |
+-------------+----------+---------+--------+-------------+----------+
| Segment | (19,497) | - | - | (3,293) | (22,790) |
| liabilities | | | | | |
+-------------+----------+---------+--------+-------------+----------+
5 Net Asset Value per Share
The net asset value per share as at 31 December 2008 is EUR0.2075 based on net
assets of EUR13.0 million and 62,616,333 ordinary shares in issue (30 June 2008:
EUR0.2525 based on 62,696,333 shares in issue).
6 Related Party Transactions
6.1 Directors of the Company
Anderson Whamond is a director of the Manager, Charlemagne Capital (IOM)
Limited. Mr Whamond is a director and shareholder of Charlemagne Capital Limited
("CCL") the parent of the Manager and the Placing Agent.
Charlemagne Capital (Investments) Limited, an entity associated with the
Manager, holds 97,478 ordinary shares in the Company.
Save as disclosed above, none of the Directors had any interest during the
period in any material contract for the provision of services which was
significant to the business of the Company.
6.2 Directors of the Subsidiaries
James Houghton and Jane Bates are directors of the Manager and have been
appointed director(s) to a number of the Group subsidiaries. In compliance with
local regulations, certain subsidiaries have appointed directors who are
employees of or are associated with, the relevant registered office service
provider.
6.3 Manager fees
Annual fees
The Manager is entitled to an annual management fee of 1.25% of the net asset
value of the Company from time to time plus borrowings of the Group, payable
quarterly in arrears.
The Manager shall also be entitled to recharge to the Company all and any costs
and disbursements reasonably incurred by it in the performance of its duties
including costs of travel save to the extent that such costs are staff costs or
other internal costs of the Manager. Accordingly, the Company shall be
responsible for paying all the fees and expenses of all valuers, surveyors,
legal advisers and other external advisers to the Company in connection with any
investments made on its behalf. All amounts payable to the Manager by the
Company shall be paid together with any value added tax, if applicable.
Annual management fees payable for the period ended 31 December 2008 amounted to
EUR223,294 (31 December 2007: EUR812,889).
Performance fees
The Manager is entitled to a performance fee equal to 15% of the total profits
generated by the Company. In order for the performance fee to be payable, the
Company must firstly have returned to its Shareholders an amount equal to the
amount subscribed pursuant to the Placing (ignoring any initial charge paid by
Shareholders). Thereafter the Manager shall be entitled to 15% of any further
distributions of profit or capital. In determining amounts paid to Shareholders
and the amount payable to the Manager pursuant to the performance fee full
account will be taken of any dividends paid, other distributions made and
distributions made on a winding up of the Company.
Payment of the Manager's annual fees and any performance fees shall be paid by a
subsidiary of the Company.
Performance fee accrual released during the period ended 31 December 2008
amounted to EUR647,772 (31 December 2007: accrued EUR1,541,211).
7 Charges and Fees
7.1 Nominated Adviser and Broker fees
As Nominated Adviser and Broker to the Company for the purposes of the AIM
Rules, the nominated advisor and broker is entitled to receive an annual fee of
GBP30,000.
In the previous period the Nominated Adviser also received a one-off fee of
GBP25,000 for work carried out in relation to the fundamental business change.
Advisory fees payable to the Nominated Adviser and Broker for the period ended
31 December 2008 amounted to EUR22,855 (31 December 2007: EUR26,197).
7.2 Custodian fees
The Custodian is entitled to receive fees calculated as 1 basis point per annum
of the value of the debt securities held on behalf of the Company, subject to a
minimum monthly fee of EUR500, payable quarterly in arrears.
The Custodian expects to review and, subject to written agreement between the
Company and the Custodian, may amend the foregoing fees six months after
Admission and annually thereafter.
Custodian fees payable for the period ended 31 December 2008 amounted to EUR3,488
(31 December 2007: EUR3,525).
7.3 Administrator and Registrar fees
The Administrator is entitled to receive a fee of 4 basis points of the net
assets of the Company plus borrowings, subject to a minimum monthly fee of
EUR5,000, payable quarterly in arrears.
The Administrator shall assist in the preparation of the financial statements of
the Company for which it shall receive a fee of EUR2,500 per set.
The Administrator shall provide general secretarial services to the Company for
which it shall receive a minimum annual fee of EUR7,500. Additional fees based on
time and charges, will apply where the number of Board meetings exceeds four per
annum. For attendance at meetings not held in the Isle of Man, an attendance fee
of EUR500 per day or part thereof will be charged.
The Administrator may utilise the services of a CREST accredited registrar for
the purposes of settling share transactions through CREST. The cost of this
service will be borne by the Company. It is anticipated that the cost will be in
the region of GBP6,000 per annum subject to the number of CREST settled
transactions undertaken.
The Administrator expects to review and, subject to written agreement between
the Company and the Administrator, may amend the foregoing fees on an annual
basis.
Administration fees payable for the period ended 31 December 2008 amounted to
EUR34,875 (31 December 2007: EUR35,250).
7.4 Other operating expenses
It is anticipated that the costs of managing any properties in the Company's
investment portfolio will be satisfied out of the service charges generated by
tenants. However, to the extent that this is not the case, all such costs, to
include the costs of all other third party service providers, shall be
chargeable to and payable by the Company. The costs associated with maintaining
the Company's subsidiaries, to include the costs of incorporation and third
party service providers shall be chargeable to each subsidiary and payable by
the Company.
7.5 Audit fees
Audit fees payable for the period ended 31 December 2008 amounted to EUR33,759 (31
December 2007: EUR25,594).
8 Basic and Diluted (Loss)/Earnings per Share
Basic and diluted (loss)/earnings per share are calculated by dividing the
(loss)/profit attributable to equity holders of the Company by the weighted
average number of ordinary shares in issue during the period:
+-----------------+----------+----------+
| | 31 | 31 |
| | December | December |
| | 2008 | 2007 |
+-----------------+----------+----------+
| | | |
+-----------------+----------+----------+
| (Loss)/Profit | (2,834) | 7,187 |
| attributable | | |
| to equity | | |
| holders of | | |
| the Company | | |
| (EUR'000) | | |
+-----------------+----------+----------+
| Weighted | 62,688 | 62,696 |
| average | | |
| number | | |
| of | | |
| ordinary | | |
| shares | | |
| in issue | | |
| (thousands) | | |
+-----------------+----------+----------+
| Basic | (0.0452) | 0.1146 |
| and | | |
| diluted | | |
| (loss)/earnings | | |
| per share (EUR | | |
| per share) | | |
+-----------------+----------+----------+
9 Investment Property
+-------------+----------+----------+
| | 31 | 30 |
| | December | June |
| | 2008 | 2008 |
+-------------+----------+----------+
| | EUR'000 | EUR'000 |
+-------------+----------+----------+
| At | 31,560 | 131,971 |
| beginning | | |
| of period | | |
+-------------+----------+----------+
| Additions | - | - |
| | | |
+-------------+----------+----------+
| Disposals | - | (99,471) |
+-------------+----------+----------+
| Net | (3,660) | (940) |
| loss | | |
| from | | |
| fair | | |
| value | | |
| adjustments | | |
| on | | |
| investment | | |
| property | | |
+-------------+----------+----------+
| Balance | 27,900 | 31,560 |
| at end | | |
| of | | |
| period | | |
+-------------+----------+----------+
The Group's investment properties were revalued at 31 December 2008 by two
independent valuation agents, SHM Smith Hodgkinson ("SHM") and Jones Lang
Lasalle ("JLL"). The two valuations were EUR27.9 million and EUR28 million
respectively. The Company adopted the lower valuation for the purposes of these
interim financial statements.
Security
At 31 December 2008, there was a first rank mortgage on the above properties
securing the bank loans of EUR19.2 million (see Note 12).
10 Trade and Other Receivables
+-------------+----------+--------+
| | 31 | 30 |
| | December | June |
| | 2008 | 2008 |
+-------------+----------+--------+
| | EUR'000 | EUR'000 |
+-------------+----------+--------+
| Trade | 294 | 208 |
| receivables | | |
+-------------+----------+--------+
| Deferred | 4,276 | 4,276 |
| sale | | |
| proceeds | | |
+-------------+----------+--------+
| Other | 22 | 26 |
+-------------+----------+--------+
| Total | 4,592 | 4,510 |
+-------------+----------+--------+
The deferred sales proceeds were due to be received by the Group by 24 October
2008, in respect of the three properties sold in 2007. The acquiring company
failed to release the proceeds on time, and failed to notify the Company of any
claims that it had under the sales agreements for each of the properties until
January 2009. The Directors do not believe that the Company is liable to make
any payments under the SPA, other than an estimated EUR800,000 in respect of one
item for one building, which was fully provided in the accounts to 30 June 2008
and is included in accruals (See note 13).
11 Cash and Cash Equivalents
+-------------+----------+--------+
| | 31 | 30 |
| | December | June |
| | 2008 | 2008 |
+-------------+----------+--------+
| | EUR'000 | EUR'000 |
+-------------+----------+--------+
| | | |
+-------------+----------+--------+
| Bank | 2,415 | 2,552 |
| balances | | |
+-------------+----------+--------+
| Bank | - | - |
| overdrafts | | |
+-------------+----------+--------+
| Cash | 2,415 | 2,552 |
| and | | |
| cash | | |
| equivalents | | |
+-------------+----------+--------+
12 Interest-Bearing Loans and Borrowings
This note provides information about the contractual terms of the Group's
interest-bearing loans and borrowings.
Non-current liabilities:
+---------+----------+--------+
| | 31 | 30 |
| | December | June |
| | 2008 | 2008 |
+---------+----------+--------+
| | EUR'000 | EUR'000 |
+---------+----------+--------+
| Secured | 19,172 | 19,232 |
| bank | | |
| loans | | |
+---------+----------+--------+
Terms and debt repayment schedule:
+-------------+--------+-----------+----------+
| Loan | Bank | Effective | Final |
| Amount | | interest | Maturity |
| | | rate | date |
+-------------+--------+-----------+----------+
| | | 31 | |
| | | December | |
| | | 2008 | |
+-------------+--------+-----------+----------+
| EUR19,172,470 | Alpha | EURIBOR | October |
| | Bank | 1M+1.955% | 2011 |
| | Sofia | | |
| | SA | | |
+-------------+--------+-----------+----------+
13 Trade and Other Payables
+----------+----------+--------+
| | 31 | 30 |
| | December | June |
| | 2008 | 2008 |
+----------+----------+--------+
| | EUR'000 | EUR'000 |
+----------+----------+--------+
| Taxation | 18 | 11 |
+----------+----------+--------+
| Trade | 104 | 131 |
| payables | | |
+----------+----------+--------+
| Accruals | 2,615 | 3,229 |
+----------+----------+--------+
| Total | 2,737 | 3,371 |
+----------+----------+--------+
Accruals include a provision of EUR800,000 against the deferred proceeds (see note
10) for one of the property holding subsidiaries which was sold in 2007.
14 Exchange Rates
The following exchange rates were used to translate assets and liabilities into
the reporting currency at 31 December 2008:
+--------------+--------+
| Bulgarian | 1.9558 |
| Lev | |
+--------------+--------+
| Turkish Lira | 2.1437 |
+--------------+--------+
15 Directors' Remuneration
The Company
The maximum amount of remuneration payable to the Directors permitted under the
Articles of Association is EUR300,000 p.a. Each Director currently is paid a fee
of EUR22,500 p.a. The Directors are each entitled to receive reimbursement of any
expenses incurred in relation to their appointment. Total fees and expenses paid
to the Directors for the period ended 31 December 2008 amounted to EUR45,000 (31
December 2007: EUR45,000).
The Subsidiaries
No fees are paid to the directors of the subsidiaries except in circumstances
where a director is appointed in compliance with local regulations and in such
cases the fees payable are nominal.
16 Taxation
Income tax expense
+----------+----------+----------+
| | 6 | 6 |
| | months | months |
| | to 31 | to 31 |
| | December | December |
| | 2008 | 2007 |
+----------+----------+----------+
| | EUR'000 | EUR'000 |
+----------+----------+----------+
| Current | - | 50 |
| tax | | |
+----------+----------+----------+
| Deferred | (181) | (4,765) |
| tax | | |
+----------+----------+----------+
| | (181) | (4,715) |
+----------+----------+----------+
Deferred income tax is based on temporary differences between revalued amounts
of investment property in the books of the subsidiaries and their respective tax
bases. The deferred tax position is based on the capital gains tax rate of 16%
in Romania and 10% in Bulgaria.
17Commitments at the Balance Sheet Date
There were no material commitments as at the balance sheet date.
18 Post Balance Sheet Events
There were no significant post balance sheet events.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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