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Share Name Share Symbol Market Type Share ISIN Share Description
Octagonal Plc LSE:OCT London Ordinary Share GB00BWWCHQ23 ORD 0.05P
  Price Change % Change Share Price Bid Price Offer Price High Price Low Price Open Price Shares Traded Last Trade
  0.00 0.0% 1.50 1.30 1.70 1.50 1.50 1.50 17,283 08:00:00
Industry Sector Turnover (m) Profit (m) EPS - Basic PE Ratio Market Cap (m)
Electronic & Electrical Equipment 5.3 0.9 0.2 7.9 9

Octagonal PLC Half-year Report

13/11/2019 7:00am

UK Regulatory (RNS & others)


Octagonal (LSE:OCT)
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TIDMOCT

RNS Number : 1856T

Octagonal PLC

13 November 2019

13 November 2019

Octagonal plc

("Octagonal" or the "Company")

Interim Results

Octagonal (AIM: OCT), announces its unaudited half-year results for the six months to 30 September 2019. These include the trading results for the Company's principle trading subsidiary Global Investment Strategy UK Ltd (GIS) which are being announced along with the consolidated figures for the Group.

Summary of Octagonal PLC Financial highlights for the six months to 30 September 2019

-- Unaudited revenues for the six months to 30 September 2019 were GBP3.4 million ("m") (September 2018: GBP3.0m), the increase is partly due to providing further ancillary services to our clients around their existing activity

-- Unaudited operating profit for the group for six months to 30 September 2019 was GBP1.12m (September 2018: GBP0.97m)

-- Unaudited operating profit excluding costs associated with Synergis Capital PLC and GIS HK for the six months to 30 September 2019 was GBP1.4m (2018: GBP1.2m)

   --    Net Assets as at 30 September 2019 was GBP10.20m (September 2018: GBP9.20m) 
   --    Group cash balance as at 30 September 2019 was GBP6.08m (September 2018: GBP5.72m) 

This announcement contains inside information for the purposes of Article 7 of Regulation (EU) 596/2014.

For further information please visit www.octagonalplc.com or contact:

 
                                                +44 (0) 20 7048 
 Octagonal Plc                                   9400 
 John Gunn, Chairman 
 
 Beaumont Cornish Limited (Nominated Adviser 
  and Broker)                                   +44 (0) 20 7628 
  James Biddle / Roland Cornish                  3396 
 www.beaumontcornish.com 
 

Chairman Statement and update on group activities

Global Investment Strategy UK Ltd (GIS)

GIS, the Company's principle trading subsidiary, was pleased to report revenue of GBP3.36m and profits of GBP1.5m for the 6 months to 30th September 2019. This was an increase of 12% in revenue and 16.3% in profit compared with the corresponding period last year (revenue of GBP3m and profits of GBP1.29m for the 6 months to 30th September 2018).

These improvements have mainly come as a result of improvements in operating systems and processing efficiencies, giving us the ability to provide further ancillary services to our clients around their existing activity. These efficiencies will provide a long-term benefit for the business as we strive towards greater costs reductions and expansion of services to clients.

We have further established a new outsourced facility in Mumbai, which has given us access to system developers at a competitive cost, enabling us to build logically minded business tools which have improved our liquidity management and treasury functions.

GIS has also recently engaged with Euroclear/CREST to become a CREST participant and will shortly engage, under our existing permissions, in marketing to professional and regulated customers in the UK market, where we have traditionally not been very active. We wish to present ourselves as a global settlements and custody partner to small/medium sized stockbrokers, hedge funds, proprietary traders and family offices. The addition of our SFC regulated Hong Kong office has enabled us to expand these services to offering 24/5 trade execution, settlement and post trade operations to an international client base. As China starts to become a global player in equity and debt markets, coupled with the expansion of the Asia-Pacific (APAC) securities markets GIS and GISHK will be well placed to offer a service level seldom seen outside of the bulge bracket Tier 1 banks.

We hope that our shareholders will appreciate that management has placed considerable time and effort into the development of improving systems and processes, which has come at the expense of short-term growth, but this strategy paves a foundation for long term reward.

Global Investment Strategy Hong Kong

GIS HK is now operational and soft product marketing has commenced. We had some initial success in attracting both existing customers to the APAC securities markets and local business looking for a global reach. The immediate goal is to ensure that the respective offices support each other and develop with a common strategy. The HK office made a loss of GBP143,000 for the 6 months to September 2019 which was pre revenue, so we will be very focused on seeing an improvement as revenues start to materialise over the remainder of the year.

SynerGIS

Synergis reported a loss of GBP65,000, after a Research and Development tax refund of GBP82,000 in relation to the fintech development from inception of the division and was included in the 6 months to 30(th) September 2019.

We continue our dialogue with the regulator, and we will further update shareholders as soon as we have anything material to share.

The business remains operationally ready and ready to commence a product launch as soon as the regulatory process is complete. The board remain committed to this enterprise and feel that it sits well within our operational capabilities and will provide with long term benefits.

Recent high-profile failures of business offering consumer bonds have caused concerns for the FCA, so it is only natural that all new participants need to demonstrate strong competencies. The recent appointment of Chris Rollason, who was former head of capital and regulation for Jaywing PLC, to the board of GIS brings added skills to the Synergis team of market professionals. Chris is a chartered accountant, and has been a money market trader, before spending some 20 years in senior roles within strategy, risk and finance across a range of large banks and financial institutions. This unique skillset comes at a time when GIS are expanding their regulatory footprint both within the UK and in Hong Kong and compliments the existing Board configuration as the business continues to grow throughout this year and beyond.

Dividend

On 25th September 2019, the Company declared a dividend of 0.1 pence per share which was paid on 18th October 2019.

John Gunn

Chairman

Unaudited Group Income Statement and statement of comprehensive income

For the 6 months ended 30 September 2019

 
                                                      Unaudited                Unaudited     Audited 
                                        -----------------------  -----------------------  ---------- 
                                                      30-Sep-19                30-Sep-18   31-Mar-19 
-------------------------------------- 
                                                        GBP'000                  GBP'000     GBP'000 
--------------------------------------  -----------------------  -----------------------  ---------- 
 
 Revenue                                                  3,315                    3,006       5,311 
 Cost of sales                                            (710)                    (643)     (1,308) 
 Gross profit                                             2,605                    2,363       4,003 
 
 Administrative expenses                                (1,482)                  (1,391)     (2,998) 
 Share based payment expense                                                                    (63) 
--------------------------------------  -----------------------  -----------------------  ---------- 
 Operating profit                                         1,123                      972         942 
 
 Other gains and losses                                       -                        -        (16) 
 Finance income                                               -                        -           - 
--------------------------------------  -----------------------  -----------------------  ---------- 
 Profit before tax                                        1,123                      972         926 
 
 Taxation                                                    82                    (185)           1 
--------------------------------------  -----------------------  -----------------------  ---------- 
 
 Profit for the year                                      1,205                      787         927 
--------------------------------------  -----------------------  -----------------------  ---------- 
 Attributable to: 
 Shareholders in the Parent Company                       1,220                      869       1,061 
 Non-controlling Interests                                 (15)                     (82)       (134) 
 
                                                          1,205                      787         927 
--------------------------------------  -----------------------  -----------------------  ---------- 
 
 Earnings per share attributable 
  to owners of the parent company 
  (see Note 3. Below) 
 
 Basic and diluted (pence per share) 
 From continuing and total operations                     0.215                    0.154       0.187 
 Fully diluted                                            0.210                    0.150       0.182 
--------------------------------------  -----------------------  -----------------------  ---------- 
 

Unaudited Group Statement of Financial Position

As at 30 September 2019

 
                                         Unaudited   Unaudited     Audited 
                                        ----------  ----------  ---------- 
                                         30-Sep-19   30-Sep-18   31-Mar-19 
-------------------------------------- 
                                           GBP'000     GBP'000     GBP'000 
--------------------------------------  ----------  ----------  ---------- 
 
 Non-Current assets 
 Goodwill                                    2,869       2,869       2,869 
 Other Intangibles                             723         503         657 
 Property, plant and equipment                  44          68          40 
 Deferred Tax asset                              -          67           - 
                                             3,636       3,507       3,566 
--------------------------------------  ----------  ----------  ---------- 
 
 Current assets 
 Available for sale investments                266          31         266 
 Trade and other receivables                   853         796         708 
 Cash and cash equivalents                   6,076       5,717       5,466 
                                             7,195       6,544       6,440 
 TOTAL ASSETS                               10,831      10,051      10,006 
 
 Current liabilities 
 Trade and other payables                      457         225         532 
 Current tax liabilities                       182         626         561 
 Borrowings                                      -           -           - 
                                               639         851       1,093 
--------------------------------------  ----------  ----------  ---------- 
 Non-Current liabilities 
 
 NET ASSETS/(LIABILITIES)                   10,192       9,200       8,913 
--------------------------------------  ----------  ----------  ---------- 
 
 Equity 
 Share capital                                 285         284         285 
 Share premium account                         171         171         171 
 Reverse acquisition reserve                   679         679         679 
 Share option and warrant reserve              162          99         162 
 Retained earnings                           8,814       7,841       7,558 
--------------------------------------  ----------  ----------  ---------- 
 Equity attributable to owners of the 
  company                                   10,111       9,074       8,855 
 Non- Controlling interests                     81         126          58 
--------------------------------------  ----------  ----------  ---------- 
 
 Total Equity                               10,192       9,200       8,913 
--------------------------------------  ----------  ----------  ---------- 
 

Unaudited Group Statement of Changes in Equity

For the 6 months ended 30 September 2019

 
                       Share      Share       Reverse      Share   Retained         Equity   Non-controlling     Total 
                     capital    Premium   acquisition     option   earnings   attributable         interests    equity 
                                              reserve    reserve                 to owners 
                                                                                    of the 
                                                                                   Company 
                     GBP'000    GBP'000       GBP'000    GBP'000    GBP'000        GBP'000           GBP'000   GBP'000 
-----------------  ---------  ---------  ------------  ---------  ---------  -------------  ----------------  -------- 
 Balance at 
  31 March 2017        1,104      3,669           679          -      1,148          6,600                37     6,637 
 Total 
  comprehensive 
  income for 
  the year                 -          -             -          -      1,276          1,276             (251)     1,025 
 Capital 
  reduction            (824)    (3,669)             -          -      4,493              -                 -         - 
 Dividend Paid             -          -             -          -      (568)          (568)                 -     (568) 
 Shares issued             4        171                                                175                 -       175 
 Share based 
  payment expense          -          -             -         99          -             99                 -        99 
 Adjustment 
  arising from 
  change in 
  non-controlling 
  interest                 -          -             -          -        623            623               422     1,045 
-----------------  ---------  ---------  ------------  ---------  ---------  -------------  ----------------  -------- 
 Balance at 
  31 March 2018          284        171           679         99      6,972          8,205               208     8,413 
 Total 
  comprehensive 
  income for 
  the year                 -          -             -          -      1,060          1,060             (134)       926 
 Capital                                            -          -                         -                 - 
 reduction 
 Dividend paid             -          -             -          -      (568)          (568)                 -     (568) 
 Share issues              1                        -          -          -              1                 -         1 
 Share based 
  payment expense          -          -             -         63          -             63                 -        63 
 Adjustment 
  arising from 
  change in 
  non-controlling 
  interest                 -          -             -          -         94             94              (16)        78 
-----------------  ---------  ---------  ------------  ---------  ---------  -------------  ----------------  -------- 
 Balance at 
  31 March 2019          285        171           679        162      7,558          8,855                58     8,913 
 Total 
  comprehensive 
  income for 
  the year                 -          -             -          -      1,220          1,220              (15)     1,205 
 Adjustment 
  arising from 
  change in 
  non-controlling 
  interest                 -          -             -          -         36             36                38        74 
 
 Balance at 
  30 September 
  2019                   285        171           679        162      8,814         10,111                81    10,192 
-----------------  ---------  ---------  ------------  ---------  ---------  -------------  ----------------  -------- 
 

Unaudited Group Statement of Cash flows

For the 6 months ended 30 September 2019

 
                                           Unaudited   Unaudited     Audited 
                                          ----------  ----------  ---------- 
                                           30-Sep-19   30-Sep-18   31-Mar-19 
                                             GBP'000     GBP'000           . 
----------------------------------------  ----------  ----------  ---------- 
 OPERATING ACTIVITIES 
 Profit/(loss) for the year before 
  taxation                                     1,123         972         925 
 Adjusted for: 
 Share based payment                               -           -          63 
 Depreciation                                      7           7          31 
 Investment impairment                             -           -          15 
 Gain on disposal of investment                    -           - 
----------------------------------------  ----------  ----------  ---------- 
 Operating cash flows before movements 
  in working capital                           1,130         979       1,034 
 (Increase)/Decrease in trade and 
  other receivables                            (145)       (275)       (209) 
 Increase/(Decrease) in trade and 
  other payables                                (76)        (60)         246 
----------------------------------------  ----------  ----------  ---------- 
 Net cash from / (used in) operating 
  activities                                     909         644       1,071 
 Tax paid                                      (262)           -           - 
 Net cash used in operating activities           647         644       1,071 
----------------------------------------  ----------  ----------  ---------- 
 INVESTING ACTIVITIES 
 Purchase of property, plant and 
  equipment                                      (4)         (8)           - 
 Development costs                              (66)        (94)       (248) 
 Purchase of investments                           -           -       (250) 
 Related party repayment of loan                               -        (14) 
----------------------------------------  ----------  ----------  ---------- 
 Net cash from/ (used in) investing 
  activities                                    (70)       (102)       (512) 
----------------------------------------  ----------  ----------  ---------- 
 FINANCING ACTIVITIES 
 Non-controlling interest investment              33       (149)         150 
 Dividend paid                                     -           -       (568) 
----------------------------------------  ----------  ----------  ---------- 
 Net cash from/ (used in) financing 
  activities                                      33       (149)       (418) 
----------------------------------------  ----------  ----------  ---------- 
 Net (decrease)/increase in cash 
  and cash equivalents                           610         393         142 
 Cash and cash equivalents at beginning 
  of the period                                5,466       5,324       5,324 
 Cash and cash equivalents at end 
  of the period                                6,076       5,717       5,466 
----------------------------------------  ----------  ----------  ---------- 
 

Notes to the interim statement

For the 6 months ended 30 September 2019

1. General information

Octagonal plc is a company incorporated in the England and Wales with number 6214926, and whose registered office is: 2(nd) Floor, 2 London Wall Buildings, London EC2M 5PP, under the Companies Act 2006. The Company's main activity is that of a financial services business offering a wide range of services to institutional, family office and high net worth clients.

The Company's functional currency is Sterling. The Company's financial statements are presented in Sterling, which is the Company's presentational currency.

2. Basis of preparation

The financial information set out in this interim report for the six months ended 30 September 2019 is unaudited and does not constitute statutory accounts as defined in Section 434 of Companies Act (2006).

The Company's statutory financial statements for the period ended 31 March 2019, prepared under IFRS, have been filed with the Registrar of Companies. The auditor's report on those financial statements was unqualified and did not contain a statement under section 498 (2) or (3) of the Companies Act 2006.

These financial statements have been prepared on a going concern basis under the historical cost convention. The Directors believe that the going concern basis is appropriate for the preparation of these interim financial statements as the Company is in a position to meet all its liabilities as they fall due. These interim financial statements for the six months to 30 September 2019 were approved by the Board on 12 November 2019.

3. Earnings per share

The basic earnings per share is based on the profit for the year divided by the weighted average number of shares in issue during the year. The weighted average number of ordinary shares for the period ended year ended 30 September 2019 assumes that all shares have been included in the computation based on the weighted average number of days since issue.

 
                                          Unaudited     Unaudited       Audited 
                                       ------------  ------------  ------------ 
                                          30-Sep-19     30-Sep-18     31-Mar-19 
------------------------------------- 
                                            GBP'000       GBP'000       GBP'000 
-------------------------------------  ------------  ------------  ------------ 
 Profit attributable to owners 
  of the Group                            1,220,000       869,000     1,060,000 
-------------------------------------  ------------  ------------  ------------ 
 Weighted average number of ordinary 
  shares in issue for basic             568,576,886   564,706,598   567,866,749 
-------------------------------------  ------------  ------------  ------------ 
 Weighted average number of ordinary 
  shares in issue for fully diluted 
  earnings                              582,326,886   578,453,598   581,616,749 
-------------------------------------  ------------  ------------  ------------ 
 Earnings per share (pence per 
  share) 
 Basic                                        0.215         0.154         0.187 
 Fully diluted                                0.210         0.150         0.182 
-------------------------------------  ------------  ------------  ------------ 
 

4. Dividend and post balance sheet events

On 25(th) September 2019, the Company declared a dividend of 0.1 pence per share which was paid on 18(th) October 2019.

5. Distribution

The half yearly report for the six-month period ended 30 September 2019 will shortly be available on the Company's website (www.octagonalplc.com) or directly from the Company at its registered address.

-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

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