Share Name Share Symbol Market Type Share ISIN Share Description
Pme Afr. LSE:PMEA London Ordinary Share IM00B1WSL611 ORD USD0.01
  Price Change % Change Share Price Bid Price Offer Price High Price Low Price Open Price Shares Traded Last Trade
  +$0.00 +0.00% $0.105 $0.06 $0.15 $0.105 $0.105 $0.105 0 07:30:11
Industry Sector Turnover (m) Profit (m) EPS - Basic PE Ratio Market Cap (m)
General Financial 0.0 0.4 1.0 10.5 10.76

PME African Infrastructure Opps PLC Half-year Report

14/09/2016 7:00am

UK Regulatory (RNS & others)


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TIDMPMEA

RNS Number : 7433J

PME African Infrastructure Opps PLC

14 September 2016

14 September 2016

PME African Infrastructure Opportunities plc

("PME" or the "Company")

(AIM: PMEA.L)

Interim Results for the six months ended 30 June 2016

PME African Infrastructure Opportunities plc, an investment company established to invest in sub-Saharan African infrastructure and infrastructure related industries, announces its unaudited interim results for the six months ended 30 June 2016.

Financial Highlights

   --      Net Asset Value of US$8.7 million (31 December 2015: US$9.1 million) 
   --      Net Asset Value per share of US$0.21 (31 December 2015: US$0.22 per share) 

-- Loss for the six months ended 30 June 2016 was US$0.4 million (H1 2015: loss of US$1.34 million)

   --      Basic and diluted loss per share of US$0.0095 (H1 2015: loss per share of US$0.0174) 

For further information please contact:

 
 Smith & Williamson Corporate 
  Finance Limited 
  Nominated Adviser 
  Azhic Basirov / Ben Jeynes       +44 20 7131 4000 
 Stifel Nicolaus Europe Limited 
  Broker 
  Neil Winward / Tom Yeadon        +44 20 7710 7600 
 

Chairman's Statement

On behalf of the Board of Directors (the "Board"), I am pleased to present the interim results for PME African Infrastructure Opportunities plc ("PME" or the "Company" and together with its subsidiaries the "Group") for the six months ended 30 June 2016.

The remit of the Company's directors (the "Directors") under the Company's investing policy is to seek to realise the remaining assets of the Company and to return both existing cash reserves and the proceeds of realisation of the remaining assets to shareholders. The Company has two assets, namely, three C30 locomotives and a building in Dar-es-Salaam, Tanzania (the "Dar-es-Salaam Property").

Investments

PME Locomotives (Mauritius) Limited ("PME Locomotives") has a put option to require Sheltam (Mauritius) Limited ("Sheltam") (formerly known as "PME RSACO (Mauritius) Limited") to purchase any one or more of the three C30 locomotives that it owns at exercise of the option for US$1,416,666 per locomotive (the "Option"). The Option is exercisable at any point during a 90 day period commencing on 6 November 2016 (the "Option Period").

Prior to and during the Option Period, Sheltam has agreed to use its reasonable endeavours to secure for the Group third party buyers, for any one or more of the three C30 locomotives still owned by the Group. In consideration for this, PME Locomotives will pay to Sheltam a sum equal to 50% of the amount by which any cash purchase price exceeds a hurdle price of US$1,500,000 per C30 locomotive. To date, there has been no enquiry for the purchase of any of the C30 locomotives.

In the six months to 30 June 2016 PME has been in active discussions with Sheltam in respect of the early sale of the three C30 locomotives to Sheltam however no early sale has been agreed and the Directors currently do not anticipate an early sale in advance of the Option Period starting on 6 November 2016. PME Locomotives can expect US$4.25 million from exercising the Option for the three remaining C30 locomotives. Once the Option is exercised, completion of the sale of the relevant C30 locomotive(s) should take place within five business days.

The Dar-es-Salaam Property, which is managed by a local managing agent, is currently fully let and the investment continues to trade profitably. In 2010 PME Properties Limited acquired the property from Dovetel (T) Limited ("Dovetel"), the Company's former telecommunication investment in Tanzania. Dovetel is also a tenant of part of the Dar-es-Salaam Property but has been in default on the payment of rent. As previously reported to shareholders, the Company served a winding-up petition on Dovetel in January 2013 and has separately been pursuing proceedings to evict Dovetel from the Dar-es-Salaam Property.

The Directors visited Tanzania in June 2015, November 2015 and March 2016 to review the legal strategy being followed in relation to Dovetel. As previously announced, following these visits, the Company changed its strategy in regards to Dovetel seeking to focus on the eviction of them as a tenant, rather than seeking a wind up of Dovetel itself. PME's lawyers have attended a number of status hearings on the withdrawal of the Dovetel winding up petition including a number of meetings in 2016 with a new judge. A judgement was handed down by the Court of Appeal of Tanzania on 16 August 2016 to bring Dovetel back into the hands of its Administrator. This judgement should allow the new judge to agree to our withdrawal from the wind up proceedings.

It is the Directors' intention, following the withdrawal of the winding up petition, to progress the eviction of Dovetel and the collection of outstanding debt due from Dovetel (provided it makes economic and legal sense to do so). The original lease with Dovetel has expired and the Directors will progress the eviction of Dovetel. An experienced operator will be appointed to carry out the eviction.

A number of necessary investments have been carried out and further work to enhance the appearance of the building has been authorised. Notwithstanding Dovetel's partial occupation of the building, the Dar-es-Salaam Property has three tenants. One tenant will reduce the space occupied by it from November of this year, but has extended its lease on the remaining part of the building at higher rents for a further three years. The lease with the second tenant has been extended for five years with rental increases built into the agreement. The third tenant has terminated its lease as at the end of August 2016.

The new president of Tanzania is making significant changes and in his first budget indicated increasing spend on development and infrastructure. He is paying for the increase by cutting current expenditure and extracting more revenues from private companies. He has also taken steps to stamp out corruption and has indicated that he will move the seat of Government. The speed of change and the number of changes has resulted in some uncertainty. This has resulted in investment decisions being postponed which in turn has reduced the demand for high end offices. It may therefore take some time until the vacant space in the Dar-es-Salaam Property is rented and the prospect of selling the building in the short term for a reasonable price has receded.

The Directors have maintained the value of the Dar-es-Salaam Property at US$3.8 million to reflect the current vacancy levels and the general uncertainty in the country. The latest valuation by a local expert for the year end 31 December 2015 put a market value of US$6.5 million on the Dar-es-Salaam Property.

Financial Results

The loss for the six months to 30 June 2016 was US$0.40 million (2015: loss of US$1.34 million), representing a US$0.0095 loss per Ordinary Share (2015: loss per Ordinary Share US$0.0174). The loss for the period was made up of ongoing operating and administrative costs (including the costs relating to the discussions with Sheltam in respect of the early sale of the three locomotives) reduced by the net gain in the fair value of assets.

The Directors, having considered the value of the Option and the latest valuation of the Dar-es-Salaam Property, together with the current uncertainty regarding re-letting the vacant space, are of the opinion that the rail assets and the Dar-es-Salaam Property are reflected in the balance sheet at realistic fair values.

As at 30 June 2016, PME's Net Asset Value attributable to ordinary shareholders in accordance with IFRS was US$8.7 million (US$0.21 per share), compared to the US$9.1 million (US$0.22 per share) that was reported as at 31 December 2015.

Return of Cash and Outlook

The Directors intend to exercise the Option for the three remaining C30 locomotives in the last quarter of 2016. In addition the Directors will start the marketing process for the sale of the Dar-es-Salaam Property in 2017, provided the local economic uncertainty has receded, outstanding legal issues have been resolved, Dovetel has been evicted, necessary repairs concluded and the vacant space has been relet.

Based on the results of these actions, the Directors continue to anticipate that another tender offer will be proposed to shareholders in the second half of 2017.

Paul Macdonald

Chairman

13 September 2016

 
 Statement of Comprehensive Income             (Unaudited) Period from 1 January     (Unaudited) Period from 1 January 
                                                            2016 to 30 June 2016                  2015 to 30 June 2015 
                                       Note                              US$'000                               US$'000 
------------------------------------  -----  -----------------------------------  ------------------------------------ 
 
 Net gains/(losses) on financial 
  assets at fair value through 
  profit or loss                        10                                    75                                 (214) 
 Operating and administration 
  expenses                              5                                  (454)                                 (568) 
 Project related expenses               6                                      -                                 (594) 
 Foreign exchange (loss)/gain                                               (12)                                    70 
------------------------------------  -----  -----------------------------------  ------------------------------------ 
 Operating loss                                                            (391)                               (1,306) 
 
 Finance income                         7                                      -                                     3 
 Finance costs                          7                                      -                                  (36) 
------------------------------------  -----  -----------------------------------  ------------------------------------ 
 Loss before income tax                                                    (391)                               (1,339) 
 
 Income tax                             8                                      -                                     - 
------------------------------------  -----  -----------------------------------  ------------------------------------ 
 Loss and total comprehensive 
  expense for the period                                                   (391)                               (1,339) 
 
 Basic and diluted loss per share 
  (cents) attributable to the equity 
  holders of the Company 
  during the period                     9                                 (0.95)                                (1.74) 
------------------------------------  -----  -----------------------------------  ------------------------------------ 
 
 
 Balance Sheet                                                           (Unaudited)                 (Audited) 
                                                                  As at 30 June 2016    As at 31 December 2015 
                                                          Note               US$'000                   US$'000 
-------------------------------------------------------  -----  --------------------  ------------------------ 
 Assets 
 Current assets 
 Financial assets at fair value through profit or loss     10                  7,984                     7,856 
 Trade and other receivables                               11                     68                        32 
 Cash and cash equivalents                                 12                    813                     1,331 
-------------------------------------------------------  -----  --------------------  ------------------------ 
 Total current assets                                                          8,865                     9,219 
-------------------------------------------------------  -----  --------------------  ------------------------ 
 Total assets                                                                  8,865                     9,219 
-------------------------------------------------------  -----  --------------------  ------------------------ 
 
 Equity and liabilities 
 Equity 
 Issued share capital                                      13                    410                       410 
 Capital redemption reserve                                                    1,395                     1,395 
 Retained earnings                                                             6,880                     7,271 
-------------------------------------------------------  -----  --------------------  ------------------------ 
 Total equity                                                                  8,685                     9,076 
-------------------------------------------------------  -----  --------------------  ------------------------ 
 
 Current liabilities 
 Secured loan                                              16                      -                         - 
 Trade and other payables                                  17                    180                       143 
-------------------------------------------------------  -----  --------------------  ------------------------ 
 Total current liabilities                                                       180                       143 
-------------------------------------------------------  -----  --------------------  ------------------------ 
 Total liabilities                                                               180                       143 
-------------------------------------------------------  -----  --------------------  ------------------------ 
 Total equity and liabilities                                                  8,865                     9,219 
-------------------------------------------------------  -----  --------------------  ------------------------ 
 
 

The interim financial statements on pages 4 to 16 were approved and authorised for issue by the Board of Directors on 13 September 2016 and signed on its behalf by:

   Paul Macdonald                    Lawrence Kearns 
   Director                                   Director 

Statement of Changes in Equity

 
                                            Share capital   Capital redemption reserve   Retained earnings       Total 
                                                  US$'000                      US$'000             US$'000     US$'000 
-----------------------------------------  --------------  ---------------------------  ------------------  ---------- 
 Balance at 1 January 2015                            768                        1,037              16,528    18,333 
-----------------------------------------  --------------  ---------------------------  ------------------  -------- 
 Comprehensive expense 
 Loss for the period                                    -                            -             (1,339)   (1,339) 
-----------------------------------------  --------------  ---------------------------  ------------------  -------- 
 Total comprehensive expense for the 
  period                                                -                            -             (1,339)   (1,339) 
-----------------------------------------  --------------  ---------------------------  ------------------  -------- 
 Balance at 30 June 2015                              768                        1,037              15,189    16,994 
-----------------------------------------  --------------  ---------------------------  ------------------  -------- 
 
 
 Balance at 1 January 2016                     410   1,395   7,271   9,076 
--------------------------------------------  ----  ------  ------  ------ 
 Comprehensive expense 
 Loss for the period                             -       -   (391)   (391) 
--------------------------------------------  ----  ------  ------  ------ 
 Total comprehensive expense for the period      -       -   (391)   (391) 
--------------------------------------------  ----  ------  ------  ------ 
 Balance at 30 June 2016                       410   1,395   6,880   8,685 
--------------------------------------------  ----  ------  ------  ------ 
 

Cash Flow Statement

 
                                               (Unaudited) Period from 1 January     (Unaudited) Period from 1 January 
                                                            2016 to 30 June 2016                  2015 to 30 June 2015 
                                       Note                              US$'000                               US$'000 
------------------------------------  -----  -----------------------------------  ------------------------------------ 
 Cash flows from operating 
 activities 
 Purchase of financial assets - 
  loans to investee companies           10                                  (53)                                 (231) 
 Proceeds from sale of financial 
  assets - return of capital            10                                     -                                11,500 
 Interest paid                                                                 -                                  (36) 
 Operating expenses paid                                                   (462)                               (1,470) 
------------------------------------  -----  -----------------------------------  ------------------------------------ 
 Net cash (used in)/generated from 
  operating activities                                                     (515)                                 9,763 
------------------------------------  -----  -----------------------------------  ------------------------------------ 
 
 Financing activities 
 Repayment of secured loan              16                                     -                                 (651) 
------------------------------------  -----  -----------------------------------  ------------------------------------ 
 Net cash used in financing 
  activities                                                                   -                                 (651) 
------------------------------------  -----  -----------------------------------  ------------------------------------ 
 
 Net (decrease)/increase in cash and 
  cash equivalents                                                         (515)                                 9,112 
 Cash and cash equivalents at 
  beginning of period                                                      1,331                                   144 
 Foreign exchange losses on cash and 
  cash equivalents                                                           (3)                                  (27) 
------------------------------------  -----  -----------------------------------  ------------------------------------ 
 Cash and cash equivalents at end of 
  period                                12                                   813                                 9,229 
------------------------------------  -----  -----------------------------------  ------------------------------------ 
 

Notes to the Interim Financial Statements

   1          General Information 

PME African Infrastructure Opportunities plc (the "Company") was incorporated and is registered and domiciled in the Isle of Man under the Isle of Man Companies Acts 1931 to 2004 on 19 June 2007 as a public limited company with registered number 120060C. The investment objective of PME African Infrastructure Opportunities plc and its subsidiaries (the "Group") was to achieve significant total return to investors through investing in various infrastructure projects and related opportunities across a range of countries in sub-Saharan Africa. On 19 October 2012 the shareholders approved the revision of the Company's Investing Policy which is now to realise the remaining assets of the Company and to return both existing cash reserves and the proceeds of realisation of the remaining assets to shareholders.

The Company's investment activities were managed by PME Infrastructure Managers Limited (the "Investment Manager") to 6 July 2012. No alternate has been appointed therefore the Board of Directors has assumed responsibility for the management of the Company's remaining assets. The Company's administration is delegated to Galileo Fund Services Limited (the "Administrator"). The registered office of the Company is Millennium House, 46 Athol Street, Douglas, Isle of Man, IM1 1JB.

Pursuant to its AIM admission document dated 6 July 2007, there was an original placing of up to 180,450,000 Ordinary Shares with Warrants attached on the basis of 1 Warrant for every 5 Ordinary Shares. Following the close of the placing on 12 July 2007, 180,450,000 Shares and 36,090,000 Warrants were issued. The Warrants lapsed in July 2012. The Shares of the Company were admitted to trading on AIM, a market of the London Stock Exchange, on 12 July 2007 when dealings also commenced.

Financial Year End

The financial year end for the Company is 31 December in each year.

Going concern

In assessing the going concern basis of preparation of the interim financial statements for the period ended 30 June 2016, the Directors have taken into account the status of current negotiations on the realisation of the remaining assets. The Directors consider that the Group has sufficient funds for its ongoing operations and therefore have continued to adopt the going concern basis in preparing these interim financial statements.

   2          Summary of Significant Accounting Policies 
   2.1        Basis of preparation 

The accounting policies applied by the Company in the preparation of these condensed financial statements are the same as those applied by the Company in its financial statements for the year ended 31 December 2015.

These interim financial statements have been prepared in accordance with IAS 34 'Interim Financial Reporting' as adopted by the European Union. They do 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 2015, which have been prepared in accordance with International Financial Reporting Standards ("IFRS") as adopted by the European Union.

In accordance with IFRS 10, 'Consolidated financial statements', the Directors have concluded that the Company meets the definition of an investment entity and therefore no longer consolidates its subsidiaries, instead it is required to account for these subsidiaries at fair value through profit or loss in accordance with IAS 39, 'Financial instruments: recognition and measurement' and prepares separate company financial statements only.

The interim financial statements for the six months ended 30 June 2016 are unaudited. The comparative interim figures for the six months ended 30 June 2015 are also unaudited.

   2.2        Critical accounting estimates 

The Company makes estimates and assumptions concerning the future. The resulting accounting estimates will, by definition, seldom equal the related actual results. The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial period are in relation to the financial assets at fair value through profit or loss, see note 10.

   3          Risk Management 

The Company's activities expose it to a variety of financial risks: market risk (including foreign currency risk and interest rate risk), credit risk and liquidity risk. The financial risks relate to the following financial instruments: financial assets at fair value through profit or loss, loans and receivables, cash and cash equivalents, secured loan and trade and other payables. There has been no material change in the market, credit or liquidity risk profile since the year ended 31 December 2015.

There have been no changes in risk management policies or responsibilities since the year end. The risk management is carried out by the executive Directors.

These interim financial statements do not include all financial risk management information and disclosures 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 2015.

The Company has a number of financial instruments which are not measured at fair value in the balance sheet. The fair values of these instruments are not materially different to their carrying amounts as the interest rates are close to current market rates or the instruments are short-term in nature.

   4          Segment Information 

The chief operating decision-makers have been identified as the Board of Directors. The Board reviews the Company's internal reporting in order to assess performance and allocate resources. It has determined the operating segments based on these reports. The Board considers the business on a project by project basis by type of business. The type of business is transport (railway) and leasehold.

 
 Six months ended 30 June 2016                                       Transport   Leasehold      Other*       Total 
                                                                                  Property 
                                                               PME Locomotives      PME TZ 
                                                                                  Property 
                                                                       US$'000     US$'000     US$'000     US$'000 
------------------------------------------------------------  ----------------  ----------  ----------  ---------- 
 Net losses on financial assets at fair value through profit 
  or loss                                                                 (37)         124        (12)          75 
 Loss for the period                                                      (37)         124       (478)       (391) 
------------------------------------------------------------  ----------------  ----------  ----------  ---------- 
 
 

* Other refers to income and expenses of the Company not specific to any specific sector such as income on un-invested funds.

 
 Six months ended 30 June 2015                                Transport                  Leasehold   Other**     Total 
                                                                                          Property 
                                                     PME RSACO   PME Locomotives   PME TZ Property 
                                                       US$'000           US$'000           US$'000   US$'000   US$'000 
--------------------------------------------------  ----------  ----------------  ----------------  --------  -------- 
 Net losses on financial assets at fair value 
  through profit or loss                                  (34)             (336)               164       (8)     (214) 
 Finance income                                              -                 -                 -         3         3 
 Finance costs                                               -                 -                 -      (36)      (36) 
 Loss for the period                                      (34)             (336)               164   (1,133)   (1,339) 
--------------------------------------------------  ----------  ----------------  ----------------  --------  -------- 
 

** Other refers to income and expenses of the Company not specific to any specific sector such as income on un-invested funds.

 
 30 June 2016                 Transport   Leasehold      Other*       Total 
                                           Property 
                        PME Locomotives      PME TZ 
                                           Property 
                                US$'000     US$'000     US$'000     US$'000 
---------------------  ----------------  ----------  ----------  ---------- 
 Segment assets                   3,980       4,004         881       8,865 
 Segment liabilities                  -           -       (180)       (180) 
---------------------  ----------------  ----------  ----------  ---------- 
 
 

* Other assets comprise cash and cash equivalents US$812,813 and other assets US$68,301.

 
 31 December 2015          Transport   Leasehold      Other*       Total 
                                        Property 
                                 PME      PME TZ 
                         Locomotives    Property 
                             US$'000     US$'000     US$'000     US$'000 
---------------------  -------------  ----------  ----------  ---------- 
 Segment assets                3,988       3,868       1,363       9,219 
 Segment liabilities               -           -       (143)       (143) 
---------------------  -------------  ----------  ----------  ---------- 
 
 

** Other assets comprise cash and cash equivalents US$1,330,692 and other assets US$31,655.

   5          Operating and Administration Expenses 
 
                                            Period ended    Period ended 
                                            30 June 2016    30 June 2015 
                                                 US$'000         US$'000 
---------------------------------------  ---------------  -------------- 
 Administration expenses                              77              81 
 Administrator and Registrar fees                     43              50 
 Audit fees                                           32              46 
 Directors' fees                                     113             156 
 Professional fees                                   174             207 
 Other                                                15              28 
---------------------------------------  ---------------  -------------- 
 Operating and administration expenses               454             568 
---------------------------------------  ---------------  -------------- 
 

Administrator and Registrar fees

The Administrator receives a fee of 10 basis points per annum of the net assets of the Company between GBP0 and GBP50 million; 8.5 basis points per annum of the net assets of the Company between GBP50 million and GBP100 million and 7 basis points per annum of the net assets of the Company in excess of GBP100 million, subject to a minimum monthly fee of GBP4,000 and a maximum monthly fee of GBP12,500 payable quarterly in arrears.

Administration fees expensed by the Company for the period ended 30 June 2016 amounted to US$38,573 (30 June 2015: US$45,292).

Administrator and Registrar fees (continued)

The Administrator provides general secretarial services to the Company, for which it receives a minimum annual fee of GBP5,000. Additional fees, based on time and charges, 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 GBP750 per day or part thereof is charged. The fees payable by the Company for general secretarial services for the period ended 30 June 2016 amounted to US$4,018 (30 June 2015: US$4,718).

From 26 October 2010 the Administrator has been appointed to oversee the administration of the Mauritian subsidiaries. The minimum annual fee for each of these companies is GBP5,000 per annum. Administration fees of the Mauritian subsidiaries for the period ended 30 June 2016 amounted to US$14,432 (30 June 2015: US$24,402).

From 31 January 2013, the Administrator has been appointed to act as administrator of PME Properties Limited and to provide accounting, valuation and certain other administrative services to that company. The minimum annual administration fee of this company is GBP2,500 per annum. Administration fees of PME Properties Limited for the period ended 30 June 2016 amounted to US$21,742 (30 June 2015: US$15,752).

Directors' Remuneration

The maximum amount of basic remuneration payable by the Company by way of fees to the Non-executive Directors permitted under the Articles of Association is GBP200,000 per annum. The Directors are each entitled to receive reimbursement of any expenses incurred in relation to their appointment. The Executive Directors are entitled to receive annual basic salaries of GBP75,000.

Total fees and basic remuneration (including VAT where applicable) and expenses payable by the Company for the period ended 30 June 2016 amounted to US$112,735 (30 June 2015: US$155,787) and was split as below. Directors' insurance cover payable amounted to US$14,918 (30 June 2015: US$14,877).

 
                           Period ended    Period ended 
                           30 June 2016    30 June 2015 
                                US$'000         US$'000 
-----------------------  --------------  -------------- 
 Paul Macdonald                      50              59 
 Lawrence Kearns                     56              66 
 Expense reimbursement                7              31 
                                    113             156 
-----------------------  --------------  -------------- 
 
   6          Project Related Expenses 

On 17 April 2015 the Company entered into an agreement to sell the majority of the Group's rail assets for an aggregate cash consideration of US$11.5 million (the "Sale Transaction") and also entered into an option agreement in respect of the Company's remaining rail assets.

The sale included the Company's interest in the share capital of PME RSACO (Mauritius) Limited, together with certain intercompany loans and seven of the ten C30 locomotives which were subject to the finance lease held by PME Locomotives (Mauritius) Limited. The Group continues to own the remaining three C30 locomotives but holds a put option for US$1 to require the buyer to purchase one or more of the remaining C30 locomotives for US$1,416,666 per locomotive at any point during a 90 day period commencing on 6 November 2016, being the date 18 months following the completion of the disposal. All conditions of the disposal were met by the end of April 2015 and as a result the Sale Transaction completed on 5 May 2015.

Transaction costs in relation to the Sale Transaction for the six months ended 30 June 2015 totalled $593,583.

   7          Net Finance Expense 
 
                                            Period ended            Period ended 
                                    30 June 2016 US$'000    30 June 2015 US$'000 
 Bank interest income                                  -                       3 
-------------------------------  -----------------------  ---------------------- 
 Finance income                                        -                       3 
-------------------------------  -----------------------  ---------------------- 
 Interest charge (see note 16)                         -                    (36) 
-------------------------------  -----------------------  ---------------------- 
 Finance expense                                       -                    (36) 
-------------------------------  -----------------------  ---------------------- 
 Net finance expense                                   -                    (33) 
-------------------------------  -----------------------  ---------------------- 
 
   8          Income Tax Expense 

The Company is resident for taxation purposes in the Isle of Man and is subject to income tax at a rate of zero per cent (2015: zero per cent).

   9          Basic and Diluted Loss per Share 

Basic loss per share is calculated by dividing the loss attributable to equity holders of the Company by the weighted average number of Ordinary Shares in issue during the period.

 
 
                                                                      Period ended     Period ended 
                                                                      30 June 2016     30 June 2015 
-----------------------------------------------------------------  ---------------  --------------- 
 Loss attributable to equity holders of the Company (US$'000)                (391)          (1,339) 
 Weighted average number of Ordinary Shares in issue (thousands)            40,973           76,754 
-----------------------------------------------------------------  ---------------  --------------- 
 Basic loss per share (cents) from loss for the period                      (0.95)           (1.74) 
-----------------------------------------------------------------  ---------------  --------------- 
 

There is no difference between basic and diluted Ordinary Shares as there are no potential dilutive Ordinary Shares.

   10         Financial Assets at Fair Value through Profit or Loss 

The following subsidiaries of the Company are held at fair value in accordance with IFRS 10:

 
                                         Country of incorporation   Percentage of shares held 
-------------------------------------  --------------------------  -------------------------- 
 PME Locomotives (Mauritius) Limited                    Mauritius                        100% 
 PME TZ Property (Mauritius) Limited                    Mauritius                        100% 
-------------------------------------  --------------------------  -------------------------- 
 

The Company's 100% owned subsidiary PME Tanco (Mauritius) Limited appointed a liquidator on 28 June 2016.

The following company is an indirect investment of the Company and is included within the fair value of the direct investments:

 
                          Country of incorporation   Percentage of shares held                        Parent company 
-----------------------  -------------------------  --------------------------  ------------------------------------ 
 PME Properties Limited                   Tanzania                        100%   PME TZ Property (Mauritius) Limited 
-----------------------  -------------------------  --------------------------  ------------------------------------ 
 

The following table shows a reconciliation of the opening balances to the closing balances for fair value measurements:

 
                                               30 June 2016   31 December 2015 
                                                    US$'000            US$'000 
--------------------------------------------  -------------  ----------------- 
 Start of the period/year                             7,856             19,560 
 Increase in loans to investee companies                 53                237 
 Return of capital*                                       -           (11,500) 
 Movement in fair value of financial assets              75              (441) 
 End of the period/year                               7,984              7,856 
--------------------------------------------  -------------  ----------------- 
 

* The return of capital relates to a share buyback conducted by PME Locomotives (Mauritius) Limited in May 2015

During the year ended 31 December 2015 the Group disposed of its holding in PME RSACO (Mauritius) Limited (which included the Group's indirect holding in Sheltam Holdings) for total consideration of US$1. This resulted in a loss on disposal of US$10,576 which is included in the movement in fair value of financial assets.

Assets carried at amounts based on fair value are defined as follows:

   --      Quoted prices (unadjusted) in active markets for identical assets or liabilities (Level 1). 

-- Inputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly (that is, as prices) or indirectly (that is, derived from prices) (Level 2).

-- Inputs for the asset or liability that are not based on observable market data (that is, unobservable inputs) (Level 3).

The fair values of all financial assets at fair value through profit or loss are determined using valuation techniques using significant unobservable inputs. Accordingly, the fair values are classified as level 3. There were no transfers between levels during the year. The key inputs and most significant unobservable inputs are shown below.

 
                      Fair value as at    Fair value as at   Valuation          Significant        Sensitivity to 
                          30 June 2016    31 December 2015   technique          unobservable       significant 
                                                   US$'000                      inputs             unobservable inputs 
                               US$'000 
------------------  ------------------  ------------------  -----------------  -----------------  -------------------- 
 Rail assets (PME                3,980               3,988   Agreed/ proposed   Estimated          N/A 
 Locomotives                                                 transaction        recovery value 
 (Mauritius)                                                 terms less value 
 Limited)                                                    of other net 
                                                             liabilities 
 Real estate                     4,004               3,868   Adjusted           Discount rate      If the discount 
 investments (PME                                            discounted cash                       rate were 1% 
 TZ Property                                                 flow property                         higher/lower the 
 (Mauritius)                                                 valuation                             estimated fair 
 Limited)                                                    plus value of      Estimated          value would 
                                                             other net assets   adjustment for     (decrease)/increase 
                                                                                caveat and non     by US$27,000 
                                                                                rent paying 
                                                                                tenant (Dovetel)   N/A 
------------------  ------------------  ------------------  -----------------  -----------------  -------------------- 
 Total                           7,984               7,856 
------------------  ------------------  ------------------  -----------------  -----------------  -------------------- 
 

Commitments under operating leases relating to PME Properties Limited are disclosed in note 18.

   11         Trade and Other Receivables 
 
                                30 June 2016   31 December 2015 
                                     US$'000            US$'000 
-----------------------------  -------------  ----------------- 
 Prepayments                              19                 32 
 Other receivables                        49                  - 
 Trade and other receivables              68                 32 
-----------------------------  -------------  ----------------- 
 
   12         Cash and Cash Equivalents 
 
                              30 June 2016   31 December 2015 
                                   US$'000            US$'000 
---------------------------  -------------  ----------------- 
 Bank balances                         813              1,331 
 Cash and cash equivalents             813              1,331 
---------------------------  -------------  ----------------- 
 
   13         Share Capital 
 
 Ordinary Shares of US$0.01 each    31 December 2015 and   31 December 2015 and 
                                            30 June 2016           30 June 2016 
                                                  Number                US$'000 
---------------------------------  ---------------------  --------------------- 
 Authorised                                  500,000,000                  5,000 
---------------------------------  ---------------------  --------------------- 
 
 
 C Shares of US$1 each    31 December 2015 and   31 December 2015 and 
                                  30 June 2016           30 June 2016 
                                        Number                US$'000 
-----------------------  ---------------------  --------------------- 
 Authorised                          5,000,000                  5,000 
 Issued                                      -                      - 
-----------------------  ---------------------  --------------------- 
 
 
 Ordinary Shares of US$0.01 each                              30 June 2016   31 December 2015 US$'000 
                                                                   US$'000 
-----------------------------------------------------------  -------------  ------------------------- 
 40,973,236 (31 December 2015: 40,973,236) Ordinary Shares 
  in issue, with full voting rights                                    410                        410 
                                                                       410                        410 
-----------------------------------------------------------  -------------  ------------------------- 
 

At incorporation the authorised share capital of the Company was US$10,000,000 divided into 500,000,000 Ordinary Shares of US$0.01 each and 5,000,000 C Shares of US$1.00 each. The holders of Ordinary Shares are entitled to receive dividends as declared from time to time and are entitled to one vote per share at meetings of the Company.

The holders of C Shares would be entitled to one vote per share at the meetings of the Company. The C Shares can be converted into Ordinary Shares on the approval of the Directors. On conversion each C share would be sub-divided into 100 C Shares of US$0.01 each and will be automatically converted into New Ordinary Shares of US$0.01 each.

On 12 July 2007, the Company raised a gross amount of US$180,450,000 following the admission of the Company's Ordinary Shares to AIM. The Company placed 180,450,000 Ordinary Shares of US$0.01 par value, at an issue price of US$1.00 per share, and 36,090,000 Warrants on a 1 Warrant per 5 Ordinary Shares basis.

The Warrants lapsed in July 2012. No subscription rights were exercised prior to the Warrants lapsing.

   14        Capital Redemption Reserve 

The capital redemption reserve is created on the cancellation of shares equal to the par value of shares cancelled. This reserve is not distributable.

   15         Net Asset Value per Share 
 
                                                                       As at 30 June        As at 31 December 2015 
                                                                                2016 
--------------------------------------------------------------------  --------------  ---------------------------- 
 Net assets attributable to equity holders of the Company (US$'000)            8,685                         9,076 
 Shares in issue (thousands)                                                  40,973                        40,973 
--------------------------------------------------------------------  --------------  ---------------------------- 
 NAV per share (US$)                                                            0.21                          0.22 
--------------------------------------------------------------------  --------------  ---------------------------- 
 

The NAV per share is calculated by dividing the net assets attributable to equity holders of the Company by the number of Ordinary Shares in issue.

   16         Secured Loan 

On 10 October 2014 the Company entered into a secured loan agreement with Helvetica Deutschland GmbH ("Helvetica") for EUR600,000 to assist with general working capital (the "Initial Helvetica Loan"). The Initial Helvetica Loan was secured on the Company's cash receivables, was repayable at par on 10 October 2015 and attracted interest at a rate of 10% per annum.

On 12 February 2015 the Company entered into a further secured loan agreement with Helvetica for a further loan of EUR400,000 on the same terms as the Initial Helvetica Loan.

Interest payable by the Company for the six months ended 30 June 2015 amounted to US$36,105.

Paul Macdonald holds 40% of Helvetica's issued share capital, therefore Helvetica is deemed to be a related party of the Company and the loans provided to the Company by Helvetica were related party transactions.

The loans and all outstanding interest were settled in full on completion of the disposal of rail assets in May 2015.

   17         Trade and Other Payables 
 
                                       30 June 2016   31 December 2015 
                                            US$'000            US$'000 
------------------------------------  -------------  ----------------- 
 Administration fees payable                     19                 24 
 Audit fee payable                               31                 69 
 CREST service provider fee payable               5                 10 
 Directors' fees payable                          -                  - 
 Legal fees payable                              99                 15 
 Other sundry creditors                          26                 25 
                                                180                143 
------------------------------------  -------------  ----------------- 
 

The fair value of the above financial liabilities approximates their carrying amounts.

   18         Contingent Liabilities and Commitments 

PME Properties Limited has entered into a number of operating lease agreements in respect of properties. The lease terms are between one and ten years and the majority of the lease agreements are renewable at the end of the lease period at market rates.

The Group's future aggregate minimum lease payments, by virtue of its indirect investment in PME Properties Limited, under operating leases are as follows:

 
                                            30 June 2016   31 December 2015 
                                                 US$'000            US$'000 
-----------------------------------------  -------------  ----------------- 
 Amounts payable under operating leases: 
 Within one year                                      40                  - 
 In the second to fifth years inclusive              220                200 
 Beyond five years                                 1,220              1,280 
-----------------------------------------  -------------  ----------------- 
                                                   1,480              1,480 
-----------------------------------------  -------------  ----------------- 
 
   19         Related Party Transactions 

Parties are considered to be related if one party has the ability to control the other party or to exercise significant influence over the other party in making financial or operational decisions. Key management is made up of the Board of Directors.

The Directors of the Company are considered to be related parties by virtue of their influence over making operational decisions. Directors' remuneration is disclosed in note 5 and the related party loan is disclosed in note 16.

This information is provided by RNS

The company news service from the London Stock Exchange

END

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September 14, 2016 02:00 ET (06:00 GMT)

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