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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Adamas Finance Asia Limited | LSE:ADAM | London | Ordinary Share | VGG008271246 | ORD NPV (DI) |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 24.50 | 23.00 | 26.00 | 0.00 | 01:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| 0 | 0 | N/A | 0 |
From Apr 2019 to Apr 2024
TIDMADAM
RNS Number : 5767J
Adamas Finance Asia Limited
29 June 2017
Adamas Finance Asia Limited
("Adamas Finance Asia", "ADAM" or the "Company")
Final Results for the year ended 31 December 2016
Highlights:
-- 125% increase in dividend and interest income received to US$911,000 (2015: US$404,000) -- Operating expenses down 16% to US$1.9 million (2015: US$2.3 million)
-- Loss for the year of US$37.2 million as a result of write-downs in the value of legacy assets (2015: US$3.8 million)
-- Year-end cash of US$1.3 million (2015: US$3.6 million) -- Consolidated net asset value at 31 December 2016 of US$77.8 million (2015: US$115.1 million) -- Consolidated net asset value per share at 31 December 2016 of 40.5c per share (2015: 59.9c) -- Post year-end cash receipts totaling US$15.6 million -- Intention to introduce dividend payments in due course
Adamas Finance Asia Chairman John Croft commented: "Overall, 2016 was a disappointing year in terms of financial results, driven primarily by impairments in the Company's asset portfolio. However, recent developments, including the appointment of a new Investment Manager along with a broadening of the Investing Policy approved by shareholders in May 2017, has provided us with a much firmer and more positive platform from which to grow the business. Significantly, since the year end, the Company has also received cash totaling US$15.6 million resulting from the disposal of its investment in the Tian Tong Shan Villa Project and a distribution from its investment in the Greater China Credit Fund. That cash is now available to invest in line with the revised Investing Policy. We also hope to be making announcements in the near future regarding new appointments to strengthen the Board in preparation for the next phase of the Company's development. Finally, it is important to note that it remains the Board's intention to start making dividend distributions as soon as is practical."
Enquiries:
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Adamas Finance Asia Limited
John Croft +44 (0) 1825 830587
WH Ireland Limited - Nominated Adviser
+44 (0) 113 394
6600
Tim Feather +44 (0) 117 945
Ed Allsopp 3444
finnCap Limited - Broker
William Marle +44 (0) 20 7220
Grant Bergman 0500
First City Public Relations
(Hong Kong) +852 2854 2666
Allan Piper +44 (0) 7438 148968
CHAIRMAN'S STATEMENT
Events during the year to 31 December 2016 showed once again that investments made by the Group continued to produce cash in line with the Group's long-term income-generation strategy. At the same time, ongoing setbacks to the planned disposal of its legacy assets meant the Group during the year remained without the large cash holdings needed to bolster its investment programme.
Encouragingly, that picture has started to change significantly within the past few weeks, with the arrival of US$15.6 million in cash, comprising US$15.1 million in near-complete payment for the Company's disposal of Changtai Jinhongbang Real Estate Development Co. Ltd ("CJRE"), announced in January 2017. The decision to dispose of CJRE was taken by the Board as an opportunity to exit this investment arose albeit at a significant book value loss. The Board decided that it was preferable to have immediate cash to reinvest in income generating assets, rather than retain a 15% holding in an asset which was illiquid and could take many years to realise a successful exit. Additionally a distribution of US$500,000 was received from the Greater China Credit Fund ("GCCF"). During the year, income from existing investments rose 125% to US$911,000 (2015: US$404,000), while administrative expenses were trimmed by 16% to US$1.9 million (2015: US$2.3 million).
While existing income-generating assets yielded healthy returns over the course of the year, the Group also received US$840,000 from the redemption of its original US$800,000 holding in the BRJ Fund, along with a capital redemption of US$700,000 from GCCF, plus interest of US$120,000. The Group continues to hold a stake of approximately US$2.7 million in GCCF.
The loss for the year was US$37.2 million (2015: US$3.8 million) which was due primarily to write-downs in the value of the Group's legacy assets totaling US$36.3 million. The substantial majority of the write-downs related to the Group's interest in the Tian Tong Shan Villa Project, the proposed sale of which was announced on 4 January 2017. Further details on the write-downs are set out below.
The significant loss demonstrates the difficulties arising from the Group's ownership of its legacy assets. On the one hand the Group is able to identify solid income-generating investments with realisable exits. Yet at the same time, it continues to face difficulties in achieving value for its older legacy assets so that the resulting cash can be deployed into income-generating opportunities.
In the light of the past disappointments experienced by the Group and a desire to focus on broader investment opportunities away from predominantly China, the Board sought Shareholder approval for a broadening of the Investing Policy. As a result, the Group is now positioned to take advantage of a wider range of investment opportunities not only more broadly across Asia, but also across the capital structure of investment targets. The details of the new Investing Policy were announced on 2 May 2017, and are designed to allow the Group's Investment Manager to navigate changes in the relative attractiveness of various financing asset classes.
The Group also announced the appointment of a new independent Investment Manager, Harmony Capital Investors Limited ("Harmony"). Harmony brings wide Asian experience and a strong team with proven success in identifying and managing high-return opportunities across a wide range of Asian asset classes, and I believe the Group is now more strongly positioned than ever before to move forward successfully.
The principal investment assets held by the Group at the year-end, together with their valuations, were:
Portfolio at 31 December 2016
Core Assets Effective Interest Instrument type Valuation as at 31 December
2016
US$ million
Changtai Jinhongbang Real
Estate Development Co. Ltd 15.00% Structured equity 16.4
Global Pharm Holdings Group
Inc - Redeemable convertible bond 17.3
Fortel Technology / I-Buying
Loan - Interest bearing loan 11.3
Hong Kong Mining Holdings
Limited 10.95% Structured equity 8.8
Meize Energy Industrial Redeemable convertible
Holdings Ltd 7.9% preference shares 8.2
GCCF Investment Fund 2.7
Other investments 11.9
Cash 1.3
Total net book value 77.9
Changtai Jinhongbang Real Estate Development Co. Ltd ("CJRE") is the owner of the Tian Tong Shan Villa Project, a luxury resort and residential development in Xiamen, Eastern China. Sales of villas and serviced apartments have been very slow and consequently the Board took the decision to dispose of this asset as otherwise realisation of the Group's investment could have taken many years to materialise. The sale proceeds have required the Group to recognise an impairment equivalent to US$32 million at 31 December 2016, but has, subsequent to the year end, generated cash that may now be reinvested and thereby start to generate income.
Cash from the disposal process totaling US$15.1 million has now been received, with the remaining balance of US$1.7 million being converted into a two-year, zero coupon loan to the purchaser.
Global Pharm Holdings Group Inc. ("Global Pharm") is involved in pharmaceuticals, the cultivation of herbs for Traditional Chinese Medicine ("TCM") and TCM processing and distribution. As announced previously, Global Pharm did not meet the original redemption payment plan agreed in December 2014. Global Pharm has been investing in the planned launch of an online Ginseng Exchange in Jilin Province. This resulted in its cash flow being adversely impacted as it invested in building a stockpile of ginseng in readiness for the launch of the exchange. In view of the continuing delays in receipt of payments from Global Pharm, the Directors have decided to make an impairment, amounting to US$1.9 million in the 2016 accounts equivalent to 10% of the previous US$19.2 million carrying value. The Directors remain hopeful that a full recovery of the outstanding payments may be obtained and are working closely with the Investment Manager to ensure this is achieved.
Fortel Technology Holdings Limited ("Fortel") During 2016 the Group agreed to convert its equity holding in Fortel to an interest-bearing loan in order to facilitate the IPO for its Chinese subsidiary on the NEEQ exchange in Beijing. The conversion was completed in October 2016.
Hong Kong Mining Holdings Limited ("HKMH") is a resources company whose primary asset is a large dolomite magnesium limestone mine in the province of Shanxi, China. HKMH's application to list on the Hong Kong Exchange was rejected by the exchange as previously announced. ADAM's Investment Manager is exploring various alternatives for restructuring this asset and/or seeking buyers for its stake.
Meize Energy Industries Holdings Limited ("Meize") is a privately-owned company that designs and manufactures blades for wind turbines. It has a strong order book and its financial performance has been in line with expectations. Negotiations regarding the partial sale and restructuring of this investment are ongoing.
The recent cash receipts totaling US$15.6 million have, as at 28 June 2017, altered the year-end asset valuation only slightly, but have also, more significantly, transformed the Company's ability to look seriously at new income-generation investment opportunities across Asia.
Portfolio at 28 June 2017 (unaudited)
Core Assets Effective Instrument type Valuation
Interest as at
28 June
2017
US$ million
Global Pharm Holdings Redeemable convertible
Group Inc - bond 17.3
Fortel Technology Interest bearing
/ I-Buying Loan - loan 11.6
Hong Kong Mining
Holdings Limited 10.95% Structured equity 8.8
Meize Energy Industrial Redeemable convertible
Holdings Ltd 7.9% preference shares 8.2
GCCF Investment Fund 2.7
Other investments 14.8
Cash 15.1
Total net book value 78.5
John Croft
Chairman of the Board
28 June 2017
Consolidated Statement of Comprehensive Income
For the year ended 31 December 2016
2016 2015
US$'000 US$'000
Realised gain on disposal 5 -
of investments
Fair value changes on financial
assets at fair value through
profit or loss (34,094) (2,265)
Loan written off (2,238)
Administrative expenses (1,948) (2,306)
--------- ----------
Operating loss (38,275) (4,571)
Finance income 80 467
Finance expense (98) (216)
Dividend income 911 404
Other income 220 -
--------- ----------
Loss before taxation (37,162) (3,916)
Taxation - -
--------- ----------
Loss for the year (37,162) (3,916)
Other comprehensive expense:
Items that will or may be
reclassified to profit or
loss:
Exchange differences arising - -
on translation of foreign
operations
--------- ----------
Total comprehensive expense
for the year (37,162) (3,916)
========= ==========
Loss per share
Basic 19.36 2.02
cents cents
Diluted 19.36 2.02
cents cents
The results reflected above relate to continuing operations.
Consolidated Statement of Changes in Equity
For the year ended 31 December 2016
Share
based Foreign
Share payment translation Accumulated
capital reserve reserve losses Total
US$'000 US$'000 US$'000 US$'000 US$'000
Group balance
at 1 January
2016 129,528 42 - -10,717 118,853
Loss for the
year - - - -3,916 -3,916
Other comprehensive
income
Exchange differences
arising on translation
of foreign operations - - - - -
--------- --------- ------------- ------------ ---------
Total comprehensive
expense for the
year - - - (3,916) (3,916)
--------- --------- ------------- ------------ ---------
Issue of shares 15 - - - 15
--------- --------- ------------- ------------ ---------
Share-based payments - (41) - 41 -
--------- --------- ------------- ------------ ---------
Group balance
at 31 December
2015 and 1 January
2016 129,543 1 - (14,592) 114,952
Loss for the
year - - - (37,162) (37,162)
Other comprehensive
income
Exchange differences - - - - -
arising on translation
of foreign operations
--------- --------- ------------- ------------ ---------
Total comprehensive
expense for the
year 129,543 1 - (51,754) 77,790
--------- --------- ------------- ------------ ---------
Issue of shares - - - - -
--------- --------- ------------- ------------ ---------
Share-based payments - (1) - - (1)
--------- --------- ------------- ------------ ---------
Group balance
at 31 December
2016 129,543 - - (51,754) 77,789
--------- --------- ------------- ------------ ---------
Consolidated Statement of Financial Position
As at 31 December 2016
2016 2015
US$'000 US$'000
Assets
Unquoted financial assets
at fair value through
profit or loss 75,044 110,593
Loans and other receivables 1,514 3,496
Cash and cash equivalents 1,308 3,644
--------- ------------
Total assets 77,866 117,733
--------- ------------
Liabilities
Loan payables and interest
payables - 2,518
Other payables and accruals 77 263
--------- ------------
Total liabilities 77 2,781
--------- ------------
Net assets 77,789 114,952
========= ============
Equity and reserves
Share capital 129,543 129,543
Share based payment
reserve - 1
Accumulated losses (51,754) (14,592)
--------- ------------
Total equity and reserves
attributable to owners
of the parent 77,789 114,952
========= ============
Consolidated Cash Flow Statement
For the year ended 31 December 2016
2016 2015
US$'000 US$'000
Cash flows from operating activities
Loss before taxation (37,162) (3,916)
Adjustments for :
Depreciation - -
Dividend income (911) (404)
Finance income (80) (467)
Finance expense 98 216
Loan written off 2,238 -
Fair value changes on unquoted
financial assets at fair value
through profit or loss 34,094 2,265
Fair value changes on quoted financial
assets at fair value through profit
or loss - -
Realised gain on disposal of investments (5) -
Share-based expenses (1) -
(Increase) / Decrease in other
receivables (12) 431
Increase / (Decrease) in other
payables and accruals (186) 79
--------- --------
Net cash used in operating activities (1,927) (1,796)
--------- --------
Cash flows from investing activities
Dividend income received 1,611 324
Sale proceeds of quoted financial 756 -
assets at fair value through profit
or loss
Purchase of unquoted financial
assets at fair value through profit
or loss (2,560) (440)
Loans granted (655)
Proceeds from repayment of loan
granted 2,400 5,813
--------- --------
Net cash used in investing activities 2,207 5,042
--------- --------
Cash flows from financing activities
Finance expense paid (216) (109)
Loans repaid (2,400) -
Net proceeds from issue of shares - 15
Net cash generated from financing
activities (2,616) (94)
--------- --------
Net increase / (decrease) in cash
and cash equivalents (2,336) 3,152
Cash and cash equivalent at the
beginning of the year 3,644 492
Cash and cash equivalent at the
end of the year 1,308 3,644
========= ========
Notes to the Financial Statements
For the year ended 31 December 2016
1. Board Approval and 2016 Annual Report and Financial Statements
The financial information included in this report has been extracted from the Group Financial Statements for the year ended 31 December 2016 which were approved by the Board of Directors on 28 June 2017. The Group Financial Statements have been prepared in accordance with the accounting policies set out therein and in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board.
The auditors have reported on the 2016 Financial Statements and their report is unqualified. The information included does not constitute the Company's statutory accounts. The full financial statements will be included in the Group's annual report.
The annual report will be posted to shareholders on 30 June 2017 and be available from the Company's website at www.adamasfinance.com from 30 June 2017.
2. Unquoted financial assets at fair value through profit and loss
Group Company
US$'000 US$'000
Balance as at 1 January 2015 117,576 117,576
Fair value changes through
profit or loss (2,265) (2,265)
Additions 1,097 1,097
Disposals (5,815) (5,815)
---------- ----------
Balance as at 1 January 2016 110,593 110,593
Fair value changes through
profit or loss (34,094) (34,094)
Additions 2,480 2,480
Disposals (3,935) (3,935)
Balance as at 31 December 2016 75,044 75,044
---------- ----------
3. Loss per Share
The calculation of the basic and diluted loss per share attributable to the ordinary equity holders of the Group is based on the following:
2016 2015
US$'000 US$'000
Numerator
Basic/Diluted
: Net loss (37,162) (3,916)
--------- --------
No. of No. of
shares shares
'000 '000
Denominator
Weighted average
Basic: shares 191,967 191,963
Effect of diluted
securities:
Share options - 150
Warrant - -
--------- --------
Adjusted weighted
Diluted: average shares 191,967 192,113
--------- --------
For the year ended 31 December 2016 and 2015, the share options are anti-dilutive and therefore the weighted average shares in issue are 191,967,000 and 191,963,000 respectively.
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR OKCDNCBKKNAB
(END) Dow Jones Newswires
June 29, 2017 05:45 ET (09:45 GMT)
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