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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Argo Group Limited | LSE:ARGO | London | Ordinary Share | IM00B2RDSS92 | 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% | 5.50 | 4.00 | 7.00 | 5.50 | 5.50 | 5.50 | 0.00 | 01:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| Finance Services | 1.46M | -3.4M | -0.0872 | -0.63 | 2.14M |
From Apr 2021 to Apr 2024
TIDMARGO
RNS Number : 9848G
ARGO Group Limited
30 July 2021
Argo Group Limited
("Argo" or the "Company")
Interim Results for the six months ended 30 June 2021
Argo today announces its interim results for the six months ended 30 June 2021.
The Company will today make available its interim report for the six months period ended 30 June 2021 on the Company's website www.argogrouplimited.com.
Key highlights for the six months period ended 30 June 2021
This report sets out the results of Argo Group Limited (the "Company") and its subsidiaries (collectively "the Group" or "Argo") covering the six months ended 30 June 2021.
- Revenues US$1.6 million (six months to 30 June 2020: US$1.4 million) - Operating loss US$0.7 million (six months to 30 June 2020: US$0.4 million) - Loss before tax US$0.2 million (six months to 30 June 2020: profit before tax US$0.2 million) - Net assets US$22.6 million (31 December 2020: US$22.8 million)
Commenting on the results and outlook, Kyriakos Rialas, Chief Executive Officer of Argo said:
" Argo Group is pleased to present its six months results for the period ending 30 June 2021. Income derived from management fees remains stable reflecting assets under management but excludes any potential performance fees that would crystallise at year end provided the NAV of The Argo Fund does not fall below the highwater mark. Costs have gone up slightly due to some exceptional non-repetitive expenses but additional AUM are needed to comfortably cover running expenses.
Argo is currently focusing on its single Emerging Markets Fund with different share classes to reflect its strategies. A new share class was launched earlier this year to attract investors looking for distressed situations in Emerging market bonds."
Enquiries
Argo Group Limited
Andreas Rialas
020 7016 7660
Panmure Gordon
Dominic Morley
020 7886 2500
This announcement contains inside information for the purposes of Article 7 of the Market Abuse Regulation (EU) No 596/2014 (as amended) as it forms part of the domestic law of the United Kingdom by virtue of the European Union (Withdrawal) Act 2018 (as amended) ("MAR").
The Group and its investment objective
Argo's investment objective is to provide investors with absolute returns in the funds that it manages by investing in multi strategy investments in emerging markets.
Argo was listed on the AIM market in November 2008 and has a performance track record dating back to 2000.
Business and operational review
For the six months ended 30 June 2021 the Group generated revenues of US$1.6 million (six months to 30 June 2020: US$1.4 million) with management fees accounting for US$1.2 million (six months to 30 June 2020: US$1.2 million). The Group does not accrue for performance fees until they are crystalized at the year end. Unrecognised performance fees at 30 June 2021 amounted to US$0.9 million (2020: US$ nil).
Total operating costs for the period, ignoring bad debt provisions, are US$2.0 million compared to US$1.6 million for the six months to 30 June 2020 . The Group has provided against management fees of US$0.4 million due from the Designated share class in The Argo Fund ("TAF") (six months to 30 June 2020: US$0.2 million). In the Directors' view these amounts are fully recoverable however they have concluded that it would only be appropriate to recognise income without provision from these investment management services once a liquidity event occurs in this share class.
Overall, the financial statements show an operating loss for the period of US$0.7 million (six months to 30 June 2020: US$0.4 million) and a loss before tax of US$0.2 million (six months to 30 June 2020: profit before tax of US$0.2 million). Net loss on investments of US$0.04 million (six months to 30 June 2020: net profit on investments US$0.2 million) and interest income of US$0.5 million (six months to 30 June 2020: US$0.4 million).
At the period end, the Group had net assets of US$22.6 million (31 December 2020: US$22.8 million) and net current assets of US$8.4 million (31 December 2020: US$8.8 million) including cash reserves of US$1.2 million (31 December 2020: US$0.7 million).
Net assets include investments in The Argo Fund ("TAF") at fair values of US$7.1 million (31 December 2020: US$6.8 million)
At the period end TAF owed the Group total fees of US$1.1 million ( 31 December 2020 : US$1.0 million). At 30 June 2021, a provision for US$0.9 million was made against this amount as the timing of the receipt of the fees from the designated share class in TAF is unknown.
TAF ended the period with Assets under Management ("AUM") at US$126.7 million (2020: US$130.4 million). The current level of AUM remains below that required to ensure sustainable profits on a recurring management fee basis in the absence of performance fees. This has necessitated an ongoing review of the Group's cost basis. Nevertheless, the Group has ensured that the operational framework remains intact and that it retains the capacity to manage additional fund inflows as and when they arise.
The average number of permanent employees of the Group for the six months to 30 June 2021 was 19 ( 30 June 2020 : 20).
Fund performance
The Argo Funds
Hot Features
Premium
30 June 30 June 2020
Launch 2021 2020 year Sharpe Down
Since Annualised
Fund date 6 months 6 months total inception performance ratio months AUM
% % % % CAGR % US$m
------- --------- --------- ------ ---------- ------------ ------ -------- -----
The Argo Fund 82 of
- A class Oct-00 4.28 4.55 5.53 256.95 7.06 0.51 249 90.1
------- --------- --------- ------ ---------- ------------ ------ -------- -----
The Argo Fund
- Other classes 36.6
--------- --------- ------ ---------- ------------ ------ -------- -----
Total 126.7
--------- --------- ------ ---------- ------------ ------ -------- -----
Following the wild gyrations in financial markets in the first half of 2020 due to Covid-19, the first six months of this year were relatively calm. Business sentiment and equity markets rose as vaccination campaigns got underway and then accelerated in most developed economies, especially in the US, UK and Europe. In addition, many governments also began to ease Covid-related mobility restrictions and activity levels picked up. Economic data in the period has generally been very strong, especially in the US, which posted an annualised growth rate of 6.4% in the first quarter. Although the eurozone economy contracted in the first quarter, indicators point to a strong economic rebound having taken place in Europe. After an estimated contraction of over 3% in 2020, the IMF have upgraded their global growth forecast to 6% in 2021, before moderating in 2022.
However, the reopening of economies and the quick rebound in activity that has followed has fuelled inflation in some countries. In June, the US consumer price index increased by 5.4% year on year, although some of the underlying details suggest that there are temporary factors at play, such as the rise in used car prices. The US Federal Reserve continues to see this inflation increase as transitory but has acknowledged that tapering is being discussed as are two rate hikes sometime in 2023. Notwithstanding the concerns about inflationary pressure, 10-year US Treasury yields have dropped by 50 bps from the end of March, falling to 1.25%.
The Covid recession has had - so far at least - less impact than the 2008 global financial crisis due to an unprecedented policy response in the major economies, combining accommodative monetary measures with the running of large fiscal deficits. However, some emerging market economies have been hit harder and are expected to suffer more significant medium-term losses, for example countries that rely on tourism and for those with limited policy space to respond. Efforts to relieve financial strain on these countries such as the Debt Service Suspension Initiative and the allocation of additional SDR reserves by the IMF together with enhanced vaccine rollout should help emerging markets growth to rebound towards the end of 2021.
The NAV of the Class A shares of the TAF increased by 4.28% in the first half of 2021, compared to a rise of 4.55% in the same period of the previous year; the benchmark JP Morgan EMBI+ bond index fell by 3.12% in the first six months. The fund benefitted from the effect of higher oil prices on several long bond positions but was held back by various macro hedges and the failure of Argentine sovereign bonds to attract a bid post-restructuring. Class A shares issued by TAF continue to be invested in a diversified debt and macro positions which seek to capture alpha through long and short investment in liquid EM corporate and sovereign bonds and FX. In addition, there are other share classes within the TAF master/feeder structure which offer investors exposure to distressed debt portfolio and also special situations where the timeline to investment realisation will be longer.
Dividends and share purchase programme
The Group did not pay a dividend during the current or prior period . The Directors intend to restart dividend payments as soon as the Group's performance provides a consistent track record of profitability.
Outlook
The Board remains optimistic about the Group's prospects based on the transactions in the pipeline and the Group's initiatives to increase AUM. A significant increase in AUM is still required to ensure sustainable profits on a recurring management fee basis and the Group is well placed with capacity to absorb such an increase in AUM with negligible impact on operational costs.
Boosting AUM will be Argo's top priority in the next six months. The Group's marketing efforts continue to focus on TAF which has a 20-year track record as well as identifying acquisitions that are earnings enhancing.
Over the longer term, the Board believes there is significant opportunity for growth in assets and profits and remains committed to ensuring the Group's investment management capabilities and resources are appropriate to meet its key objective of achieving a consistent positive investment performance in the emerging markets sector.
CONDENSED CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER
COMPREHENSIVE INCOME
FOR THE SIX MONTHSED 30 JUNE 2021
Six months Six months
ended ended
30 June 30 June
2021 2020
Note US$'000 US$'000
Management fees 1,250 1,227
Performance fees 283 -
Other income 131 144
============================================= ===== =========== ===========
Revenue 1,664 1,371
============================================= ===== =========== ===========
Legal and professional expenses (249) (267)
Management fees payable (157) -
Operational expenses (339) (335)
Employee costs (1,129) (1,202)
9,
Bad debt provision 10 (365) (203)
Foreign exchange profit/(loss) (4) 313
Depreciation 7 (103) (97)
Operating loss (682) (420)
============================================= ===== =========== ===========
Interest income 519 409
Realised and unrealised (loss)/gain
on investments (38) 205
============================================= ===== =========== ===========
(Loss)/profit on ordinary activities
before taxation (201) 194
============================================= ===== =========== ===========
Taxation 5 - -
============================================= ===== =========== ===========
(Loss)/profit for the period after
taxation attributable to members of
the Company 6 (201) 194
Other comprehensive income
Items that may be reclassified subsequently
to profit or loss:
Exchange differences on translation
of foreign operations (10) (15)
============================================= ===== =========== ===========
Total comprehensive income for the
period (211) 179
============================================= ===== =========== ===========
Six months Six months
Ended Ended
30 June 30 June
2021 2020
US$ US$
Earnings per share (basic) 6 (0.005) 0.005
============================================= ===== =========== ===========
Earnings per share (diluted) 6 (0.005) 0.004
============================================= ===== =========== ===========
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2021
30 June 31 December
2021 2020
Note US$'000 US$'000
Assets
Non-current assets
Land, fixtures, fittings and
equipment 7 386 484
Loans and advances receivable 10 13,837 13,645
================================ ===== ========== ============
Total non-current assets 14,223 14,129
================================ ===== ========== ============
Current assets
Financial assets at fair value
through profit or loss 8 7,110 6,818
Loan and advances receivable 10 12 13
Trade and other receivables 9 351 1,669
Cash and cash equivalents 1,236 675
Total current assets 8,709 9,175
================================ ===== ========== ============
Total assets 22,932 23,304
================================ ===== ========== ============
Equity and liabilities
Equity
Issued share capital 11 390 390
Share premium 25,353 25,353
Revenue reserve (79) 122
Foreign currency translation
reserve (3,065) (3,055)
================================ ===== ========== ============
Total equity 22,599 22,810
================================ ===== ========== ============
Current liabilities
Trade and other payables 333 415
Total current liabilities 333 415
-------------------------------- ----- ---------- ------------
Non-current liabilities
Trade and other payables 15 - 79
-------------------------------- ----- ---------- ------------
Total non-current liabilities - 79
-------------------------------- ----- ---------- ------------
Total equity and liabilities 22,932 23,304
-------------------------------- ----- ---------- ------------
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY
FOR THE SIX MONTHSED 30 JUNE 2021
Foreign
Issued currency
share Share Revenue translation
capital premium reserve reserve Total
2020 2020 2020 2020 2020
US$'000 US$'000 US$'000 US$'000 US$'000
As at 1 January 2020 390 25,353 (1,546) (2,932) 21,265
Total comprehensive
income
Profit for the period
after taxation - - 194 - 194
Other comprehensive
income - - - (15) (15)
As at 30 June 2020 390 25,353 (1,352) (2,947) 21,444
======================= ========== ========== ========== ================ ========
Foreign
Issued currency
share Share Revenue translation
capital premium reserve reserve Total
2021 2021 2021 2021 2021
US$'000 US$'000 US$'000 US$'000 US$'000
As at 1 January 2021 390 25,353 122 (3,055) 22,810
Total comprehensive income
Loss for the period after
taxation - - (201) - (201)
Other comprehensive income - - - (10) (10)
As at 30 June 2021 390 25,353 (79) (3,065) 21,599
============================ ========== ========== ========== ================ ========
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE SIX MONTHSED 30 JUNE 2021
Six months Six months
ended ended
30 June 30 June
2021 2020
Note US$'000 US$'000
Net cash (outflow)/inflow from
operating activities 12 (300) 195
========================================= ===== =========== ===========
Cash flows used in investing activities
Interest received on cash and
cash equivalents 1 3
Purchase of fixtures, fittings
and equipment 7 (2) (1)
Proceeds from sale of financial
assets at fair value through profit
or loss 1,001 11,779
Loan investments - (11,200)
Net cash generated from investing
activities 1,000 581
========================================= ===== =========== ===========
Cash flows from financing activities
Payment of lease liabilities (119) (44)
Repurchase of own shares - -
Net cash used in financing activities (119) (44)
========================================= ===== =========== ===========
Net decrease in cash and cash
equivalents 581 732
Cash and cash equivalents at 1
January 2021 and
1 January 2020 675 863
Foreign exchange loss on cash
and cash equivalents (20) 6
Cash and cash equivalents as at
30 June 2021 and 30 June 2020 1,236 1,601
========================================= ===== =========== ===========
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
For the six months ended 30 June 2021
1. CORPORATE INFORMATION
The Company is domiciled in the Isle of Man under the Companies Act 2006. Its registered office is at 33-37 Athol Street, Douglas, Isle of Man, IM1 1LB. The condensed consolidated interim financial statements of the Group as at and for the six months ended 30 June 2021 comprise the Company and its subsidiaries (together referred to as the "Group").
The consolidated financial statements of the Group as at and for the year ended 31 December 2020 are available upon request from the Company's registered office or at www.argogrouplimited.com.
The principal activity of the Company is that of a holding company and the principal activity of the wider Group is that of an investment management business. The functional currency of the Group undertakings are US dollars, Sterling and Romanian Lei. The presentational currency is US dollars.
Wholly owned subsidiaries Country of incorporation
Argo Capital Management Limited United Kingdom Argo Property Management Srl Romania 2. ACCOUNTING POLICIES (a) Basis of preparation
These condensed consolidated interim financial statements have been prepared in accordance with IAS 34 Interim Financial Reporting. They do not include all 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 31 December 2020.
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 as at and for the year ended 31 December 2020.
These condensed consolidated interim financial statements were approved by the Board of Directors on 29 July 2021.
b) Financial instruments and fair value hierarchy
The following represents the fair value hierarchy of financial instruments measured at fair value in the Condensed Consolidated Statement of Financial Position. The hierarchy groups financial assets and liabilities into three levels based on the significance of inputs used in measuring the fair value of the financial assets and liabilities. The fair value hierarchy has the following levels:
Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities;
Level 2: inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices); and
Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs).
The level within which the financial asset or liability is classified is determined based on the lowest level of significant input to the fair value measurement
3. SEGMENTAL ANALYSIS
The Group operates as a single asset management business.
The operating results of the companies are regularly reviewed by the Directors of the Group for the purposes of making decisions about resources to be allocated to each company and to assess performance. The following summary analyses revenues, profit or loss, assets and liabilities:
Argo Capital Argo Property Six months
Argo Group Management Management ended
Ltd Ltd Srl 30 June
2021 2021 2021 2021
US$'000 US$'000 US$'000 US$'000
Total revenues for
reportable segments
customers - 1,533 131 1,664
Intersegment revenues - - -
-
Total profit/(loss)
for reportable segments 86 (316) (193) (423)
Intersegment profit/(loss) (222) - - (222)
Total assets for
reportable segments
assets 21,561 1,066 305 22,932
Total liabilities
for reportable segments 7 275 51 333
============================ ============= =============== ================ ===========
Revenues, profit or loss, assets and liabilities Six months
may be reconciled as follows:
Ended
30 June
2021
US$'000
Revenues
Total revenues for reportable segments 1,664
Elimination of intersegment revenues -
================================================== ===========
Group revenues 1,664
================================================== ===========
Profit or loss
Loss for reportable segments (423)
Elimination of intersegment loss 222
Other unallocated amounts -
================================================== ===========
Loss on ordinary activities before taxation (201)
================================================== ===========
Assets
Total assets for reportable segments 22,936
Elimination of intersegment receivables (4)
Group assets 22,932
================================================== ===========
Liabilities
Total liabilities for reportable segments 3,716
Elimination of intersegment payables (3,383)
================================================== ===========
Group liabilities 333
================================================== ===========
Argo Capital Argo Capital
Management Argo Capital Management Six months
Argo Group (Cyprus) Management Property ended
Ltd Ltd Ltd Ltd 30 June
2020 2020 2020 2020 2020
US$'000 US$'000 US$'000 US$'000 US$'000
Total revenues
for reportable
segments customers - 120 1,227 144 1,491
Intersegment
revenues - 120 - - 120
Total profit/(loss)
for reportable
segments 818 - (423) (201) 194
Intersegment
profit/(loss) - 120 (120) - -
Total assets
for reportable
segments assets 20,370 341 1,460 303 22,474
Total liabilities
for reportable
segments 6 90 857 78 1,031
===================== ============= ============= =============== =============== ===========
Revenues, profit or loss, assets and liabilities Six months
may be reconciled as follows:
Ended
30 June
2020
US$'000
Revenues
Total revenues for reportable segments 1,491
Elimination of intersegment revenues (120)
================================================== ===========
Group revenues 1,371
================================================== ===========
Profit or loss
Total profit for reportable segments 194
Elimination of intersegment loss -
Other unallocated amounts -
================================================== ===========
Profit on ordinary activities before taxation 194
================================================== ===========
Assets
Total assets for reportable segments 25,358
Elimination of intersegment receivables (2,884)
Group assets 22,474
================================================== ===========
Liabilities
Total liabilities for reportable segments 3,915
Elimination of intersegment payables (2,884)
================================================== ===========
Group liabilities 1,031
================================================== ===========
4. SHARE-BASED INCENTIVE PLANS
On 14 March 2011 the Group granted options over 5,900,000 shares to directors and employees under The Argo Group Limited Employee Stock Option Plan. All options are exercisable at 24p per share within 10 years of the grant date.
The fair value of the options granted was measured at the grant date using a Black-Scholes model that takes into account the effect of certain financial assumptions, including the option exercise price, current share price and volatility, dividend yield and the risk-free interest rate. The fair value of the options granted is spread over the vesting period of the scheme and the value is adjusted to reflect the actual number of shares that are expected to vest.
The principal assumptions for valuing the options are:
Exercise price (pence) 24.0 Weighted average share price at grant date (pence) 17.0 Weighted average option life (years) 10.0 Expected volatility (% p.a.) 15.0 Dividend yield (% p.a.) 10.0 Risk-free interest rate (% p.a.) 0.907
The fair value of options granted is recognised as an employee expense with a corresponding increase in equity. The total charge to employee costs in respect of this incentive plan is GBPnil (30 June 2020: GBPnil)
The number and weighted average exercise price of the share options during the period is as follows:
Weighted average No. of share
exercise price options
Outstanding at beginning of period 24.0p 4,115,000
Granted during the period - -
Forfeited during the period 24.0p (3,865,000)
==================================== ================= =============
Outstanding at end of period 24.0p 250,000
==================================== ================= =============
Exercisable at end of period 24.0p 250,000
==================================== ================= =============
The options outstanding at 30 June 2021 have an exercise price of 24p and a weighted average contractual life of 5.6 years. Outstanding share options are contingent upon the option holder remaining an employee of the Group.
No share options were issued during the period.
5. TAXATION
Taxation rates applicable to the parent company and the UK and Romanian subsidiaries range from 0% to 19% (2020: 0% to 19%).
Consolidated statement of profit or
loss Six months Six months
ended Ended
30 June 30 June
2021 2020
US$'000 US$'000
Taxation charge for the period on Group - -
companies
======================================== =========== ===========
The charge for the period can be reconciled to the profit shown on the Condensed Consolidated Statement of profit or loss as follows:
Six months Six months
Ended Ended
30 June 30 June
2021 2020
US$'000 US$'000
(Loss)/profit before tax (201) 194
================================================ ============= ===========
Applicable Isle of Man tax rate for - -
Argo Group Limited of 0%
Timing differences - -
Non-deductible expenses - -
Other adjustments - -
Tax effect of different tax rates of - -
subsidiaries operating in other jurisdictions
================================================ ============= ===========
Tax charge - -
================================================ ============= ===========
Consolidated statement of financial
position
30 June 31 December
2021 2020
US$'000 US$'000
Corporation tax payable - -
==================================== ======== ============
6. EARNINGS PER SHARE
Earnings per share is calculated by dividing the net profit for the period by the weighted average number of shares outstanding during the period.
Six months Six months
ended Ended
30 June 30 June
2021 2020
US$'000 US$'000
Net (loss)/profit for the period after
taxation attributable to members (201) 194
======================================== ============= =============
No. of No. of
shares shares
Weighted average number of ordinary
shares for basic earnings per share 38,959,986 38,959,986
Effect of dilution (Note 4) 250,000 4,115,000
======================================== ============= =============
Weighted average number of ordinary
shares for diluted earnings per share 39,209,986 43,074,986
======================================== ============= =============
Six months Six months
Ended ended
30 June 30 June
2021 2020
US$ US$
Earnings per share (basic) (0.005) 0.005
Earnings per share (diluted) (0.005) 0.004
============================== =========== ===========
7. LAND, FIXTURES, FITTINGS AND EQUIPMENT
Fixtures,
Right fittings
of use and equipment Total
assets Land
USD'000000 US$'000 US$'000 US$'000
Cost
At 1 January 2020 808 260 179 1,247
Additions - - - -
Disposals - - - -
Foreign exchange movement 25 6 17 48
=========================== ============= =============== ======== =======================
At 31 December 2020 833 266 196 1,295
Additions - 2 - 2
Disposals - (62) - (62)
Foreign exchange movement 9 - (5) 4
=========================== ============= =============== ======== =======================
At 30 June 2021 842 206 191 1,239
=========================== ============= =============== ======== =======================
Accumulated Depreciation
At 1 January 2020 344 242 - 586
Depreciation charge for
period 188 10 - 198
Disposals - - -
Foreign exchange movement 23 4 - 27
=========================== ============= =============== ======== =======================
At 31 December 2020 555 256 - 811
Depreciation charge for
period 99 4 - 103
Disposals - (62) (62)
Foreign exchange movement 6 (5) - 1
=========================== ============= =============== ======== =======================
At 30 June 2021 660 193 - 853
=========================== ============= =============== ======== =======================
Net book value
At 31 December 2020 278 10 196 484
28
=========================== ============= =============== ======== =======================
At 30 June 2021 342 18 181 541
=========================== ============= =============== ======== =======================
8. FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS
30 June 2021 30 June 2021
Holding Investment in management Total cost Fair value
shares
US$'000 US$'000
10 The Argo Fund Ltd - -
- -
======== ========================= =============== ===============
Holding Investment in ordinary Total cost Fair value
shares
US$'000 US$'000
19,920 The Argo Fund Ltd* 5,511 7,110
5,511 7,110
======== ======================= ============= =============
31 December 31 December
2020 2020
Holding Investment in management Total cost Fair value
shares
US$'000 US$'000
10 The Argo Fund Ltd - -
100 Argo Distressed Credit - -
Fund Ltd
1 Argo Special Situations - -
Fund LP
- -
======== ========================= ============== ==============
Holding Investment in ordinary Total cost Fair value
shares
US$'000 US$'000
20,061 The Argo Fund Ltd* 5,511 6,818
5,511 6,818
======== ======================= ============= =============
*Classified as current in the consolidated statement of Financial Position
Note that some of the Argo Funds listed above may have investments in each other.
9. TRADE AND OTHER RECEIVABLES
At 30 June At 31 December
2021 2020
US$ '000 US$ '000
Trade receivables - Gross 1,306 1,292
Less: provision for impairment
of trade receivables (1,139) (780)
-------------------------------- ------------- -----------------
Trade receivables - Net 167 512
Other receivables 47 1,062
Prepayments and accrued income 137 95
================================ ============= =================
351 1,669
================================ ============= =================
The Directors consider that the carrying amount of trade and other receivables approximates their fair value. All trade receivable balances are recoverable within one year from the reporting date except as disclosed below.
The movement in the Group's provision for impairment of trade and loan receivables is as follow:
At 30 June At 31 December
2021 2020
US$ '000 US$ '000
Opening balance 14,101 12,405
Bad debt recovered - -
Charged during the period 365 484
Foreign exchange movement (417) 1,212
=========================== ============= =================
Closing balance 14,049 14,101
=========================== ============= =================
10. LOANS AND ADVANCES RECEIVABLE
At 30 June At 31 December
2021 2020
US$'000 US$'000
Deposits on leased premises - current 12 13
Deposits on leased premises - non-current
(see below) 113 111
9
Other loans and advances receivable
- non-current (note 14) 13,724 13,534
=============================================== ========= ===========================
13,849 13,658
=============================================== ========= ===========================
The deposits on leased premises relate to the Group's offices in London and Romania.
Other loans and advances receivable relates to a loan for $12.1 million (EUR10.2 million) principal made by Argo Group Limited to Argo Real Estate Limited Partnership in February 2020, an entity that is 100% owned by Andreas Rialas. The loan accrues interest at 9%.
The Group also has a balance receivable for $12.9 million (EUR10.9 million) from Argo Real Estate Limited Partnership that was assigned from Argo Real Estate Opportunities Fund Limited during the period. The carrying value of this balance is $nil.
11. SHARE CAPITAL
The Company's authorised share capital is unlimited with a nominal value of US$0.01.
30 June 30 June 31 December 31 December
2021 2021 2020 2020
No. US$'000 No. US$'000
Issued and fully paid
Ordinary shares of
US$0.01 each 38,959,986 390 38,959,986 390
======================= ============= ========== ============= ============
38,959,986 390 38,959,986 390
======================= ============= ========== ============= ============
The Directors did not recommend the payment of a final dividend for the year ended 31 December 2020 and do not recommend an interim dividend in respect of the current period.
12. RECONCILIATION OF NET CASH INFLOW/(OUTFLOW) FROM OPERATING ACTIVITIES TO PROFIT/(LOSS) ON ORDINARY ACTIVITIES BEFORE TAXATION
Six months Six months
ended ended
30 June 2021 30 June
2020
US$'000 US$'000
(Loss)/profit on ordinary activities
before taxation (201) 194
Interest income (519) (409)
Depreciation on fixtures, fittings
and equipment 4 6
Depreciation on right of use asset 99 91
Realised and unrealised loss/(gain) 38 (205)
Net foreign exchange loss/(profit) 4 (313)
(Decrease)/increase in payables (42) 97
Decrease in receivables, loans and
advances 317 754
Corporation tax paid - (20)
Net cash (outflow)/inflow from operating
activities (300) 195
========================================== ================ =============
13. FAIR VALUE HIERARCY
The table below analyses financial instruments measured at fair value at the end of the reporting period by the level of the fair value hierarchy (note 2b).
At 30 June 2021
Level 1 Level 2 Level 3 Total
US$ '000 US$ '000 US$ '000 US$ '000
Financial assets
at fair value through
profit or loss - 7,110 - 7,110
======================== ========== ========= ========= =========
At 31 December 2020
Level 1 Level 2 Level 3 Total
US$ '000 US$ '000 US$ '000 US$ '000
Financial assets
at fair value through
profit or loss - 6,818 - 6,818
======================== ========== ========= ========= =========
14. RELATED PARTY TRANSACTIONS
Most Group revenues derive from The Argo Fund in which two of the Company's directors, Kyriakos Rialas and Kenneth Watterson, have influence through directorships and the provision of investment management services.
At the reporting date the Company holds investments in The Argo Fund Limited. These investments are reflected in the accounts at fair value of US$7.1 million (31 December 2020: $6.8 million).
At the period end, the Group was owed $13.7 million (note 10) by Argo Real Estate Limited Partnership, an entity that is 100% owned by Andreas Rialas. The loan carries an interest rate of 9% per annum.
During the period, a balance owed by Argo Real Estate Opportunities Fund Limited for US$12.9 million (EUR10.9 million) (31 December 2020: US$13.3 million (EUR10.9 million)) was assigned to Argo Real Estate Limited Partnership. These balances are carried at US$ nil (31 December 2020: US$ nil) in the financial statements.
15. TRADE AND OTHER PAYABLES
At 30 June At 31 December
2021 2020
US$ '000 US$ '000
Trade creditors 99 118
Other creditors and accruals 234 297
=============================== =========== ===============
Total current trade and other
payables 333 415
=============================== =========== ===============
Trade creditors are normally settled on 30-day terms.
At 30 June At 31 December
2021 2020
US$ '000 US$ '000
Other creditors and accruals - 79
=================================== ============= ===============
Total non-current trade and other
payables - 79
=================================== ============= ===============
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END
IR DZGZNVLNGMZM
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