We could not find any results for:
Make sure your spelling is correct or try broadening your search.
Register for streaming realtime charts, analysis tools, and prices.
| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Csf Group | LSE:CSFG | London | Ordinary Share | JE00B61NN442 | ORD 10P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 0.70 | 0.00 | 00:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| 0 | 0 | N/A | 0 |
From Jan 2020 to Jan 2025
TIDMCSFG
RNS Number : 6126I
CSF Group PLC
27 November 2018
27 November 2018
CSF Group plc
("CSF" or "the Group")
HALF-YEAR RESULTS
For the six months ended 30 September 2018
CSF Group plc (AIM: CSFG), a provider of data centre facilities and services in South East Asia, today announces its unaudited half-year results for the six months ended 30 September 2018.
Financial highlights:
-- Group revenue of RM9.9m (GBP1.8m*) (H1 2018(#) : RM11.9m (GBP2.2m*)). -- Gross profit margin of 34.8% (H1 2018(#) : gross profit margin of 45.1%).
-- Loss before tax of RM1.2m (GBP0.2m*) (H1 2018(#) : profit before tax of RM2.0m (GBP0.4m*)).
-- Earnings per share: loss of 0.78 sen (0.15p*) per share (H1 2018(#) : earnings of 0.81 sen (0.15p*) per share).
-- Net cash generated from operating activities of RM3.0m (GBP0.6m*) (H1 2018(#) : net cash generated from operating activities of RM4.3m (GBP0.8m*)).
-- Closing unrestricted cash position as at 30 September 2018 of RM52.6m (GBP9.7m*) (31 March 2018: RM49.2m (GBP9.1m*)).
-- Net assets as at 30 September 2018 of RM56.8m (GBP10.5m*) (31 March 2018: RM58.1m (GBP10.7m*)).
Operational highlights:
-- Continuing to seek potential customers for the capacity at the Group's remaining data centres.
-- Exploring value-added services to increase the Group's revenue stream. -- Continuing to seek to improve operational efficiency.
* The figures in pounds Sterling are included solely for convenience. The figures in pounds Sterling are stated, as a matter of arithmetical computation only, on the basis of all current and prior year balances being translated from Malaysian Ringgits into pounds Sterling at the rate prevailing on 30 September 2018 of RM5.4070 : GBP1.00. This translation should not be construed as meaning that the Malaysian Ringgit amounts actually represent, have been, or could be converted into the stated number of pounds Sterling.
# The 6-month financial period from 1 April 2017 to 30 September 2017.
For further information:
CSF Group plc Phil Cartmell, Chairman +603 8311 9563 Allenby Capital Limited (Nominated Adviser & Broker) Nick Naylor / Alex Brearley +44 (0)20 3328 5656
CHAIRMAN'S STATEMENT
Overview of the six months ended 30 September 2018
The Group's monthly revenue is still insufficient to cover its monthly operating overheads, and this has been exacerbated by intense competition and pricing pressure experienced by the maintenance and the design and development segments of the Group's business. The Board also notes that significant capital expenditure will be required for the replacement of aging equipment at the CX1 data centre and will continue to work closely with management in the careful planning and implementation of the Group's capital expenditure budget.
The Board will continue to support the efforts of management in implementing its stated business strategies for growing the rental revenue of the CX1 data centre, albeit limited by space and power capacity, growing the design and development and maintenance business, and identifying further cost reduction measures, with the objective of preserving the Group's financial resources.
The Group incurred a loss for the financial period of RM1.3m (GBP0.2m*) (H1 2018: profit of RM1.3m (GBP0.2m*)). The loss was mainly attributable to a net provision of allowance for doubtful debts of RM0.7m (GBP0.1m*) and the absence of dividend income of RM0.7m (GBP0.1m*) received in June 2017, in conjunction with the disposal of the Group's 20% equity interest in an associate in Vietnam which was completed during the financial year ended 31 March 2017.
As at 30 September 2018, the Group had cash and cash equivalents of RM52.6m (GBP9.7m*) (31 March 2018: RM49.2m (GBP9.1m*)). This represents the cash that is available to the Group, and excludes restricted cash items, such as fixed deposits pledged for banking facilities and deposits held on behalf of the Company's Employee Benefit Trust.
Current trading
As highlighted in the Group's results for the year ended 31 March 2018, which were announced in July 2018, the Group continues to follow-up on a number of key strategic initiatives and is pursuing a pipeline of potential customers and business alliances and remains focused on these plans going forward.
The Board and management have also undertaken a number of strategic initiatives to seek to improve the Group's cash reserves, secure new customers, create additional revenue streams and strive to improve operational efficiency.
The Board and management will continue to implement measures to reduce the burn rate of the Group's cash reserves. The Board will continue to ensure that there is no significant cash outlay other than the sums required to cover the committed lease rentals and other necessary operating overheads, subject to any further capital expenditure to replace ageing equipment or expenditure required to generate new revenue streams.
Outlook
The Board and management team remain focused in implementing the Group's key strategies, as outlined above, and on pursuing the pipeline of potential customers and business alliances.
Dividends
The Board does not propose any payment of dividends in respect of the six month period ended 30 September 2018.
Trading in the Company's shares on AIM
On 12 November 2018 the Company announced that, following its extraordinary general meeting held on 24 September 2018 and the resignation of Mr Phil Cartmell as the Company's Chairman and as a director with effect from the close of business on 31 December 2018, its nominated adviser, Allenby Capital Limited ("Allenby Capital"), gave the Company three months' notice of its resignation, pursuant to the nominated adviser agreement between the Company and Allenby Capital. As a consequence, Allenby Capital will cease to act as the Company's nominated adviser at the close of business on 31 December 2018. The Company also announced that it had recently met with a number of potential replacement nominated advisers, but was turned down by them for various reasons.
The board of CSF has been unable to make further progress on this matter since 12 November 2018 and, as a consequence, it now believes that it will not be possible for the Company to appoint a replacement nominated adviser before 31 December 2018. If the Company fails to appoint a replacement nominated adviser before the close of business on 31 December 2018, the Company's shares will be suspended from trading on AIM there afterwards. If, following such suspension, the Company fails to appoint a replacement nominated adviser within one month of the date that its shares are suspended from trading on AIM, the admission of the Company's shares to trading on AIM will be cancelled.
Phil Cartmell
Chairman
CSF Group plc
* The figures in pounds Sterling are included solely for convenience. The figures in pounds Sterling are stated, as a matter of arithmetical computation only, on the basis of all current and prior year balances being translated from Malaysian Ringgits into pounds Sterling at the rate prevailing on 30 September 2018 of RM5.4070 : GBP1.00. This translation should not be construed as meaning that the Malaysian Ringgit amounts actually represent, have been, or could be converted into the stated number of pounds Sterling.
CHIEF FINANCIAL OFFICER'S REVIEW
Introduction
The Group recorded a basic loss per share ("LPS") of 0.78 sen (0.15p*) (H1 2018: earnings of 0.81 sen (0.15p*)).
Financial results
Hot Features
Premium
Proforma
6 months 6 months 6 months 6 months
ended ended ended ended
30 September 30 September 30 September 30 September
2018 2017 2018 2017
RM'000 RM'000 GBP'000 GBP'000
(unaudited) (unaudited) (unaudited) (unaudited)
-------------- -------------- -------------- --------------
Group revenue from continuing
operations 9,878 11,858 1,827 2,193
-------------- -------------- -------------- --------------
Revenue from discontinued
operations - 27,684 - 5,120
-------------- -------------- -------------- --------------
Total Group revenue 9,878 39,542 1,827 7,313
-------------- -------------- -------------- --------------
Continuing Operations:
-------------- -------------- -------------- --------------
Gross profit 3,441 5,352 636 990
-------------- -------------- -------------- --------------
Other operating income 60 734 11 136
-------------- -------------- -------------- --------------
Administrative expenses (4,978) (4,878) (920) (902)
-------------- -------------- -------------- --------------
Net allowance for doubtful
debts (668) 257 (123) 48
-------------- -------------- -------------- --------------
Operating (loss) / profit
from continuing operations (2,145) 1,465 (396) 271
-------------- -------------- -------------- --------------
Net finance income 801 673 148 124
-------------- -------------- -------------- --------------
Foreign exchange gain /
(loss) 185 (126) 34 (23)
-------------- -------------- -------------- --------------
Profit before tax of continuing
operations (1,159) 2,012 (214) 372
-------------- -------------- -------------- --------------
Tax (97) (712) (18) (132)
-------------- -------------- -------------- --------------
(Loss) / Profit from continuing
operations (1,255) 1,300 (232) 240
-------------- -------------- -------------- --------------
Discontinued Operations: -
-------------- -------------- -------------- --------------
Gross loss - (9,664) - (1,787)
-------------- -------------- -------------- --------------
Other operating income - 36 - 7
-------------- -------------- -------------- --------------
Administrative expenses - (2,837) - (525)
-------------- -------------- -------------- --------------
Allowance for doubtful
debts - (546) - (101)
-------------- -------------- -------------- --------------
Provision for onerous leases - 3,140 - 581
-------------- -------------- -------------- --------------
Operating (loss) / profit
from discontinued operations - (9,871) - (1,826)
-------------- -------------- -------------- --------------
Net finance cost - (5,439) - (1,006)
-------------- -------------- -------------- --------------
Loss from discontinued
operations - (15,310) - (2,832)
-------------- -------------- -------------- --------------
Loss for the financial
period (1,255) (14,010) (232) (2,591)
-------------- -------------- -------------- --------------
Foreign currency translation (60) 102 (11) 19
-------------- -------------- -------------- --------------
Total comprehensive loss
for the period (1,315) (13,908) (243) (2,572)
-------------- -------------- -------------- --------------
Basic EPS for continuing
operations (0.78) 0.81 (0.15)p 0.15p
-------------- -------------- -------------- --------------
Basic LPS for discontinued
operations - (9.56) - (1.77)p
-------------- -------------- -------------- --------------
Basic LPS for the Group (0.78) (8.75) (0.15)p (1.62)p
-------------- -------------- -------------- --------------
Revenue
Proforma
6 months 6 months 6 months 6 months
ended ended ended ended
30 September 30 September 30 September 30 September
2018 2017 2018 2017
RM'000 RM'000 GBP'000 GBP'000
(unaudited) (unaudited) (unaudited) (unaudited)
-------------- -------------- -------------- --------------
Data centre rental
income
* Continuing operations 5,907 6,063 1,093 1,121
- 27,684 - 5,120
* Discontinued operations
-------------- -------------- -------------- --------------
Total data centre
rental income 5,907 33,747 1,093 6,241
-------------- -------------- -------------- --------------
Maintenance income 1,294 2,989 239 553
-------------- -------------- -------------- --------------
Sub-total 7,201 36,736 1,332 6,794
-------------- -------------- -------------- --------------
Design and fit-out
of data centre facilities 2,602 2,531 481 468
-------------- -------------- -------------- --------------
Consultancy 75 275 14 51
-------------- -------------- -------------- --------------
Total Group revenue 9,878 39,542 1,827 7,313
-------------- -------------- -------------- --------------
Data centre rental revenue (from continuing operations) decreased by 2.6% from RM6.1m (GBP1.1m*) in H1 2018 to RM5.9m (GBP1.1m*) in the six months under review, mainly due to the reduction of the rental rate on the renewal of a tenancy contract with effect from 1 July 2018.
The decrease in maintenance revenue by RM1.7m (GBP0.3m*) was mainly attributable to the non-renewal of maintenance contracts by certain customers.
Gross profit / (loss) margin
In respect of continuing operations, the Group recorded a lower gross profit margin of 34.8% as compared to 45.1% in H1 2017, mainly due to lower data centre rental income from the CX1 data centre, and lower maintenance revenue as explained in "Revenue" above.
(Loss) / Profit from operations
The Group incurred an operating loss of RM2.1m (GBP0.4m*) compared to an operating profit of RM1.5m (GBP0.3m*) in the corresponding period, mainly due to the following factors:
(i) decrease in maintenance income by RM1.7m (GBP0.3m*);
(ii) net increase in allowance for doubtful debts of RM0.67m (GBP0.12m*) as compared to a net decrease in allowance for doubtful debts of RM0.26m (GBP0.05m*), representing an adverse variance of RM0.93m (GBP0.17m*); and
(iii) dividend income of RM0.7m (GBP0.1m*) recorded in H1 2018, in conjunction with the disposal of the Group's 20% equity interest in an associate in Vietnam which was completed during the financial year ended 31 March 2017, which did not recur in the current period;
Cash and working capital
As at 30 September 2018 the Group had cash and cash equivalents (excluding fixed deposits pledged for banking facilities and deposits held on behalf of the Employee Benefit Trust) of RM52.6m (GBP9.7m*). The Group recorded net cash generated from operating activities of RM3.0m (GBP0.6m*) (H1 2018: RM4.2m (GBP0.8m*)), mainly due to the return of rental deposits in connection with the CX2 and CX5 data centres, amounting to RM9.07 (GBP1.7m*) million in May 2018, which was partly offset by the making of bonus payments to certain of the Company's executive directors, management and employees amounting to RM5.4 (GBP1.0m*) million in June 2018 (as announced on 24 July 2018).
Critical accounting judgment and key sources of estimation uncertainty
The areas of critical accounting judgment and key sources of estimation uncertainty as disclosed on pages 47 to 48 of the Group's Annual Report for the year ended 31 March 2018 remain valid for the six months ended 30 September 2018.
Going concern
These financial statements have been prepared on a going concern basis. The directors' consideration of going concern and the associated uncertainties are provided in Note 1.
Lee King Loon
Chief Financial Officer
CSF Group plc
* The figures in pounds Sterling are included solely for convenience. The figures in pounds Sterling are stated, as a matter of arithmetical computation only, on the basis of all current and prior year balances being translated from Malaysian Ringgits into pounds Sterling at the rate prevailing on 30 September 2018 of RM5.4070 : GBP1.00. This translation should not be construed as meaning that the Malaysian Ringgit amounts actually represent, have been, or could be converted into the stated number of pounds Sterling.
CONDENSED CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
For the 6 months ended 30 September 2018
Proforma Proforma
6 months 6 months 6 months 6 months
to 30 September to 30 September to 30 September to 30 September
2018 2017 2018 2017
Note RM'000 RM'000 GBP'000 GBP'000
(unaudited) (unaudited) (unaudited) (unaudited)
Continuing operations:
Revenue 9,878 11,858 1,827 2,193
Cost of sales (6,437) (6,506) (1,191) (1,203)
Gross profit 3,441 5,352 636 990
Other operating income 60 734 11 136
Administrative expenses (4,978) (4,878) (921) (902)
Net allowance for doubtful
debts (668) 257 (123) 48
Total operating expenses (5,646) (4,621) (1,044) (855)
Operating (loss) / profit (2,145) 1,465 (397) 271
Finance income 806 680 149 126
Finance costs (5) (7) (1) (1)
Foreign exchange gain
/ (loss) 185 (126) 34 (23)
(Loss) / Profit before
tax (1,159) 2,012 (214) 372
Tax (97) (712) (18) (132)
(Loss) / Profit from
continuing operations (1,255) 1,300 (232) 240
Loss from discontinued
operations 6 - (15,310) - (2,832)
Loss for the financial
period (1,255) (14,010) (232) (2,591)
Other comprehensive income
/ (loss)
Foreign currency translation (60) 102 (11) 19
Total comprehensive loss
for the period (1,315) (13,908) (243) (2,572)
Earnings per share for
continuing operations
* Basic (sen) 7 (0.78) 0.81 (0.15)p 0.15p
* Diluted (sen) 7 (0.78) 0.81 (0.15)p 0.15p
Loss per share for discontinued
operations
* Basic (sen) 7 - (9.56) - (1.77)p
* Diluted (sen) 7 - (9.56) - (1.77)p
----------------- -----------------
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
As at 30 September 2018
Note Proforma Proforma
As at As at As at As at
30 September 31 March 30 September 31 March
2018 2018 2018 2018
RM'000 RM'000 GBP'000 GBP'000
(unaudited) (audited) (unaudited) (unaudited)
Non-current assets
Property, plant and equipment 4,440 3,991 821 738
Other investments 9 9 2 2
Trade and other receivables 40 40 7 7
Deferred tax asset 161 161 30 30
4,649 4,201 860 777
Current assets
Inventories 199 277 37 51
Trade and other receivables 7,041 17,698 1,302 3,273
Current tax assets 1,787 1,341 330 248
Restricted cash 2,130 2,130 394 394
Cash and cash equivalents 9 52,595 49,184 9,727 9,096
63,752 70,630 11,791 13,063
Total assets 68,401 74,831 12,650 13,840
Current liabilities
Trade and other payables 8,719 14,403 1,612 2,664
Bank borrowings 723 339 133 63
9,442 14,742 1,745 2,726
Non-current liabilities
Trade and other payables 2,153 1,968 398 364
Onerous lease provision 5 - - - -
2,153 1,968 398 364
-------------- ----------- -------------- ------------
Total liabilities 11,595 16,710 2,145 3,090
============== =========== ============== ============
Net assets 56,806 58,121 10,507 10,749
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION (Cont'd)
As at 30 September 2018
Note Proforma Proforma
As at As at As at As at
30 September 31 March 30 September 31 March
2018 2018 2018 2018
RM'000 RM'000 GBP'000 GBP'000
(unaudited) (audited) (unaudited) (unaudited)
Equity
Share capital 78,936 78,936 14,599 14,599
Share premium 104,499 104,499 19,327 19,327
Shares held under Employee
Benefit Trust (2,300) (2,300) (425) (425)
Other reserve (72,219) (66,153) (13,357) (12,235)
Translation reserve (924) (864) (171) (160)
Accumulated loss (51,186) (55,997) (9,466) (10,356)
Total equity 56,806 58,121 10,507 10,749
CONDENSED CONSOLIDATED CASH FLOW STATEMENT
For the 6 months ended 30 September 2018
6 months Proforma Proforma
ended 6 months 6 months ended
6 months ended 30 September ended 30 September
30 September 2017 30 September 2017
2018 RM'000 2018 GBP'000
RM'000 GBP'000
(unaudited) (unaudited) (unaudited) (unaudited)
Net cash generated from
operating activities (Note
9) 3,026 4,298 560 795
Investing activities
Interest received 806 838 149 155
Capital expenditure (806) (2,541) (149) (470)
Net cash used in investing
activities - (1,703) - (315) Financing activities Borrowing from revolving line of credit 385 60 71 11 Repayment of obligations under finance leases - (25) - (5) Decrease / (increase) in restricted cash - 1,098 - 203 Repayment of borrowings - (334) - (62) Net cash generated from financing activities 385 799 71 148 Net increase / (decrease) in cash and cash equivalents 3,411 3,394 631 628 Cash and cash equivalents classified under assets held for sale (Note 8) - (554) - (102) Cash and cash equivalents at beginning of financial period (Note 10) 49,157 57,998 9,091 10,726 Cash and cash equivalents at end of financial period (Note 10) 52,568 60,838 9,722 11,252
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the 6 months ended 30 September 2018
Shares held under Employee Benefit Trust Accumulated loss Translation
Share capital Share premium RM'000 Other reserve RM'000 reserve Total
RM'000 RM'000 (unaudited) RM'000 (unaudited) RM'000 RM'000
(unaudited) (unaudited) (unaudited) (unaudited) (unaudited)
At 1 April 2017 78,936 104,499 (2,300) (66,153) (168,964) (1,246) (55,228)
Loss for the
period - - - - (14,010) 102 (13,908)
At 30 September
2017 78,936 104,499 (2,300) (66,153) (182,974) (1,144) (69,136)
At 1 April 2018 78,936 104,499 (2,300) (66,153) (55,997) (864) 58,121
Realisation of other reserve
arising from the disposal
of a subsidiary - - - (6,066) 6,066 - -
Loss for the period - - - - (1,255) (60) (1,315)
At 30 September 2018 78,936 104,499 (2,300) (72,219) (51,186) (924) 56,806
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the 6 months ended 30 September 2018
Shares held under Employee Benefit Trust Translation
Share capital Share premium GBP'000 Other reserve Accumulated loss reserve Total
GBP'000 GBP'000 (unaudited) GBP'000 GBP'000 GBP'000 GBP'000
(unaudited) (unaudited) (unaudited) (unaudited) (unaudited) (unaudited)
Proforma
At 1 April 2017 14,599 19,327 (425) (12,235) (31,249) (230) (10,214)
Loss for the
period - - - - (2,591) 19 (2,572)
At 30 September
2017 14,599 19,327 (425) (12,235) (33,840) (212) (12,786)
At 1 April 2018 14,599 19,327 (425) (12,235) (10,356) (160) 10,749
Realisation of
other reserve
arising from the
disposal of a
subsidiary - - - (1,122) 1,122 - -
Loss for the
period - - - - (232) (11) (243)
At 30 September
2018 14,599 19,327 (425) (13,357) (9,466) (171) 10,507
Notes 1 to 12 form an integral part of the condensed consolidated interim financial results.
1. General information
This announcement of condensed consolidated interim financial results was approved for issue by the Board of Directors on 27 November 2018 and is unaudited.
While the financial information included in this preliminary announcement has been prepared in accordance with the recognition and measurement criteria of International Financial Reporting Standards (IFRSs), this announcement does not itself contain sufficient information to comply with IFRSs. In July 2018, the Group published full financial statements for the year ended 31 March 2018 that comply with IFRSs, which were delivered to the Jersey Registrar of Companies in August 2018.
(i) Basis of preparation
The annual financial statements of the Group are prepared in accordance with IFRSs as adopted by the European Union. The condensed consolidated interim financial results have been prepared in accordance with the accounting policies the Group intends to use in preparing its next annual financial statements. The condensed consolidated interim financial results should be read in conjunction with the annual financial statements for the year ended 31 March 2018, which have been prepared in accordance with IFRSs as adopted by the European Union.
(ii) Sterling figures
The figures in pounds Sterling are included solely for convenience. The figures in pounds Sterling are stated, as a matter of arithmetical computation only, on the basis of all current and prior year balances being translated from Malaysian Ringgits into pounds Sterling at the rate prevailing on 30 September 2018 of RM5.4070 : GBP1.00 This translation should not be construed as meaning that the Malaysian Ringgit amounts actually represent, have been or could be converted into the stated number of pounds Sterling.
(iii) Basis of accounting
The accounting policies adopted are consistent with those of the annual financial statements for the year ended 31 March 2018, as described in those financial statements.
Taxes on income in interim periods are accrued using the tax rate that would be applicable to expected total annual earnings.
1. General information (Cont'd) (iv) Forward-looking statements
Certain statements in these condensed consolidated interim financial results are forward-looking. Although the Group believes that the expectations reflected in these forward-looking statements are reasonable, we can give no assurance that these expectations will prove to have been correct. Because these statements involve risks and uncertainties, actual results may differ materially from those expressed or implied by these forward-looking statements.
(v) Going concern
The Group's business activities, together with the factors likely to affect the future development, performance and position are set out in the Chairman's Statement. The financial position of the Group, its cash flows and liquidity positions are described in the Chief Financial Officer's Review in the 2018 Annual Report. In addition, the notes to the annual financial statements for the year ended 31 March 2018 include statements regarding foreign currency risk management, interest rate risk management, credit risk management and liquidity risk management.
As at 30 September 2018, the Group's cash and cash equivalents excluding deposits held on behalf of the Employee Benefit Trust stand at RM52.6 million.
The Directors have prepared financial projections, including cash flows, for a period up to 30 September 2019. The projections include sensitivity testing to consider a reasonable worst case scenario. Based on these projections and taking into consideration the current financial position of the Group and future capital and lease commitments, the Directors have a reasonable expectation that the Group has adequate resources to continue in operational existence for the foreseeable future. Thus they continue to adopt the going concern basis of accounting in preparing the annual financial statements. In reaching this conclusion the directors have paid particular attention to the following factors:
-- The disposal of Bridge Data Centres Malaysia Sdn Bhd (formerly known as CSF CX Sdn Bhd) ("BDCM") has improved the Group's financial position due to the elimination of the net liabilities of BDCM and the elimination of the Group's obligations on the lease payable in respect of the CX2 and CX5 data centres;
-- The return of rental deposits in connection with the CX2 and CX5 data centres, amounting to RM9.07 million on 31 May 2018;
-- The existing cash reserves of the business, and the fact that the Group has low levels of bank borrowings with low financial covenants;
-- The Group's business model is to lease its data centres as opposed to outright ownership. As a result, the Group is committed to regular lease rental payments, which constitute a significant proportion of the Group's cost base. The Group therefore needs to achieve a certain level of tenant occupancy to cover the minimum lease and other costs of ownership of a given data centre;
(v) Going concern (Cont'd)
-- Due to changes in the data centre rental market, current market rentals have declined. In this regard the Group are monitoring closely its costs and examining ways to improve the Group's operations and its procurement process, including working closely with its suppliers to reduce its overall costs;
-- The Group has completed the restructuring with the freeholder on the lease rental payments on CX1, with revised lease rental rates having commenced on 1 January 2016, whereby the lease rental payments shall be lower in the earlier years and progressively increasing thereafter; and
-- The capital expenditure requirements to replace ageing equipment and/or for generating new revenue streams.
Given prevailing market conditions, the Group is forecast to continue to make operating losses and have operating cash outflows. The Board is continuing to review the Group's business model with the aim of establishing sustainable profitable trading.
Notwithstanding the above and taking into consideration the current financial position, future capital and lease commitments of the Group, the directors have a reasonable expectation that the Group has adequate resources to continue in operational existence for the foreseeable future. Thus they continue to adopt the going concern basis of accounting in preparing the consolidated financial statements for the period ended 30 September 2018.
2. Basis of consolidation
The condensed consolidated financial statements incorporate the financial statements of the Company and entities controlled by the Company (its subsidiaries) made up to 30 September 2018. Control is achieved where the Company has the power to govern the financial and operating policies of an investee entity so as to obtain benefits from its activities.
The results of subsidiaries acquired or disposed of during the year are included in the consolidated statement of comprehensive income from the effective date of acquisition or up to the effective date of disposal, as appropriate. Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used into line with those used by the Group. All intra-group transactions, balances, income and expenses are eliminated on consolidation.
Any contingent consideration to be transferred by the group is recognised at fair value at the acquisition date. Subsequent changes in fair value of the contingent consideration that is deemed to be an asset or liability is recognised in accordance with IAS 39 either in profit or loss or as a change to other comprehensive income. Contingent consideration that is classified as equity is not re-measured, and its subsequent settlement is accounted for within equity.
Goodwill is initially measured as the excess of the aggregate of the consideration transferred and the fair value on non-controlling interest over the net identifiable assets acquired and liabilities assumed.
3. Revenue recognition and contract accounting
Revenue represents amounts receivable for work carried out in the rental of data centre space (including reimbursement for electricity consumed by customers), design and development of data centre facilities, the maintenance of data centres and imputed interest on loans to data centre developers.
Revenue from contract works is recognised in the Consolidated Statement of Comprehensive Income based on the stage of completion which is determined based on the contract costs incurred for work performed to date in proportion to the estimated total contract costs.
Revenue on design and development activity is recognised over the period of the activity and in accordance with the underlying contract. Revenue is measured by reference to the fair value of consideration received or receivable from customers. Cost overspends on design and development are recognised as they arise and cost under-spends recognised when it is known with reasonable certainty, the final position of the relevant contract. Where design and development projects are in progress and where sales invoiced exceed the cost of work completed, the excess is shown as deferred income, within other financial assets. When it is probable that total fit-out costs will exceed contract revenue, the expected loss is recognised as an expense immediately.
Income from support and maintenance agreements and the rental of data centre space is recognised on a straight line basis over the period of the related activity. Data centre space is rented out under operating leases.
4. Segment reporting
The Group's management regularly reviews segment information based on the key products and services provided to its customers; rental of data centre space, maintenance (including support of data centres), the design and development of data centre facilities, and consultancy services.
6 months ended Data centre Design and development of
30 September rental data centres Consultancy Consolidated
2018 RM'000 Maintenance RM'000 RM'000 RM'000 RM'000
(unaudited) (unaudited) (unaudited) (unaudited) (unaudited)
Revenue 5,907 1,294 2,602 75 9,878
Cost of Sales (5,214) (702) (7) (514) (6,437)
Gross profit / (loss) 693 592 2,595 (439) 3,441
Other operating income 30 30 - - 60
Provision for onerous - - - - -
leases
Administrative cost (1,827) (266) (170) (53) (2,316)
Allowance for doubtful
debts (611) - (57) - (668)
Write back of doubtful - - - -
debts -
Staff costs (837) (175) (77) (12) (1,101)
Segment depreciation - (26) - - (26)
Segment result (3,245) (436) (303) (65) (609)
Corporate costs (1,536)
Gain on foreign exchange 185
Finance income 806
Finance cost (5)
Loss before
tax (1,159)
Tax (97)
Loss for the financial
period (1,255)
Other comprehensive loss
Loss on foreign currency
translation (60)
-------------
Total comprehensive loss
for the financial period (1,315)
=============
4. Segment reporting (Cont'd)
Design and
Data centre development of
6 months ended rental Maintenance data centres Consultancy Consolidated
30 September 2017 RM'000 RM'000 RM'000 RM'000 RM'000
(unaudited) (unaudited) (unaudited) (unaudited) (unaudited)
Revenue 8,390 2,989 204 275 11,858
Cost of Sales (4,612) (1,239) (63) (592) (6,506)
Gross profit / (loss) 3,778 1,750 141 (317) 5,352
Other operating income 10 - 724 - 734
Administrative cost (1,145) (4) 5 - (1,144)
Allowance for doubtful debts 7 - - 7
Write back of doubtful debts - - 250 - 250
Staff costs (915) (235) (103) - (1,253)
Segment depreciation (7) (5) (21) - (33)
Segment result 1,728 1,506 996 (317) 3,913
Corporate costs (2,448)
Gain on foreign exchange (126)
Finance income 680
Finance cost (7)
____________
Profit before tax 2,012
(712)
Tax
____________
Profit from continuing operations 1,300
Loss from discontinued operations (15,310)
-------------
Loss for the financial period (14,010)
Other comprehensive income
Gain on foreign currency
translation 102
-------------
Total comprehensive loss for the
financial period (13,908)
=============
5. Onerous lease provision
As at As at
30 September 31 March
2018 2018
Movement in provision for onerous leases RM'000 RM'000
(unaudited) (audited)
At start of financial period / year - 73,300
-------------- ---------
Additional provision - 5,590
Utilisation of provision - (8,730)
-------------- ---------
Net (utilisation) / additional provision - 3,140
Unwinding of discount - 4,220
Disposal of subsidiary - (74,380)
At end of financial period / year - -
The Group's business model is to lease data centres and commit to lease rentals and certain other costs of ownership. As such, the Group needs to achieve a certain level of rental income from tenants over the life of the data centre lease such that revenue received will exceed costs.
The onerous leases provision solely related to Bridge Data Centres Malaysia Sdn Bhd (formerly known as CSF CX Sdn Bhd) ("BDCM"), and was subsequently derecognised as a result of the disposal of BDCM.
6. Discontinued operations
6 months 6 months
ended 30 ended 30
September September
2018 2017
RM'000 RM'000
Note (unaudited) (unaudited)
Revenue - 27,684
Cost of sales - (37,348)
Gross loss - (9,664)
Other operating income - 36
------------ ------------
Administrative expenses - (2,837)
Net allowance for doubtful
debts - (546)
Provision for onerous leases 5 - 3,140
------------ ------------
Total operating expenses - (243)
Operating loss - (9,871)
Finance income - 158
------------ ------------
Interest payable on bank
loans, overdraft and finance
leases - (1,377)
Unwinding of discounts
on provisions - (4,220)
------------ ------------
Finance cost - (5,597)
Loss for the period from
discontinued operations - (15,310)
Net cash used in operating activities - (6,333)
Net cash used in investing activities - (717)
Net cash generated from financing
activities - 725
Decrease in cash and cash equivalents - (6,325)
The results of the discontinued operations are in respect of Bridge Data Centres Malaysia Sdn Bhd (formerly known as CSF CX Sdn Bhd) ("BDCM"), which was previously a wholly-owned subsidiary of the Group. The Group completed the transfer of board and management control of BDCM during financial year ended 31 March 2018.
7. Loss per share
The calculation for loss per share, based on the weighted average number of shares, is shown in the table below:
6 months 6 months
ended ended
30 September 30 September
2018 2017
(unaudited) (unaudited)
Net (loss) / profit from continuing
operations (RM'000) (1,255) 1,300
Net loss from discontinued operations
(RM'000) - (15,310)
Net loss for the financial period
after taxation attributable to members
(RM'000) (1,255) (14,010)
Weighted average number of ordinary
shares for basic earnings per share
('000) 160,029 160,029
Weighted average number of ordinary
shares for diluted earnings per share
('000) 160,029 160,029
The number of ordinary shares for diluted earnings per share is the weighted average number of ordinary shares of CSF Group plc in issue.
8. Assets and liabilities classified as held for sale
As at 30 As at
September 30 September
2018 2017
RM'000 RM'000
(unaudited) (unaudited)
Assets classified as held for sale
Property, plant and equipment - 24,502
Trade and other receivables - 30,423
Restricted cash - 9,178
Cash and cash equivalents - 554
-------------- ---------------
Total assets of subsidiary held for
sale - 64,657
============== ===============
Liabilities directly associated with
assets classified as held for sale
Trade and other payables - 112,794
Provision for onerous leases - 74,380
-------------- ---------------
Total liabilities of subsidiary held
for sale - 187,174
============== ===============
The assets and liabilities classified as held for sale as at 30 September 2017 were in respect of Bridge Data Centres Malaysia Sdn Bhd (formerly known as CSF CX Sdn Bhd) ("BDCM"), which was previously a wholly-owned subsidiary of the Group. The Group has completed the disposal of BDCM pursuant to the Share Purchase Agreement (the "Share SPA") entered into between CSF International Limited ("CSFI"), a wholly-owned subsidiary of CSF Group Plc and BDC AssetCo Pte Ltd ("BAC", or the "Purchaser"), an investee company of Bain Capital Partners Asia Fund III and Bridge Data Centres (International) Pte Ltd, on 28 September 2017.
9. Note to the Cash Flow Statement
6 months 6 months
ended 30 ended 30
September September
2018 2017
RM'000 RM'000
(unaudited) (unaudited)
Loss for the financial period (1,255) (14,010)
Adjustments for:
Allowance for doubtful debts 668 539
Allowance for doubtful debts written back - (250)
Depreciation of property, plant and equipment 385 2,737
Foreign currency translation (60) 102
Interest expense 5 5,604
Interest income (806) (838)
Gain on disposal of property, plant and (31) -
equipment
Provision for onerous leases - (3,140)
Tax 97 712
Operating cash outflow before movements
in working capital (995) (8,544)
Decrease / (Increase) in inventories 78 (52)
Decrease in receivables 9,990 3,500
(Decrease) / Increase in payables (5,499) 10,260
Cash generated from operations 3,574 5,164
Interest paid (5) (111)
Income taxes paid (543) (755)
Net cash generated from operating activities 3,026 4,298
10. Cash and cash equivalents
As at As at
31 March 31 March
2018 2017
RM'000 RM'000
(unaudited) (audited)
Cash and cash equivalents- statement of
financial position 49,184 60,313
Deposit held on behalf of employee benefit
trust (27) (2,315)
__________ __________
Cash and cash equivalents at beginning
of the financial period - cash flow 49,157 57,998
As at As at
30 September 30 September
2018 2017
RM'000 RM'000
(unaudited) (unaudited)
Cash and cash equivalents- statement of
financial position 52,595 62,997
Deposit held on behalf of employee benefit
trust (27) (2,159)
__________ _________
Cash and cash equivalents at the end of
the financial period - cash flow 52,568 60,838
11. Dividend
The Board does not propose any payment of dividends in respect of the six month period to 30 September 2018 (H1 2018: Nil).
12. Contingencies
The Group holds a number of guarantees with various banks in respect of banking facilities as follows:
As at As at
30 September 31 March
2018 2018
RM'000 RM'000
(unaudited) (audited)
Banking guarantees 2,000 2,000
-ends-
This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.
END
IR UBOKRWUAAURA
(END) Dow Jones Newswires
November 27, 2018 04:58 ET (09:58 GMT)
1 Year Csf Group Chart |
1 Month Csf Group Chart |
Support: +44 (0) 203 8794 460 | support@advfn.com
By accessing the services available at ADVFN you are agreeing to be bound by ADVFN's Terms & Conditions
