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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% 1.00 0.00 01:00:00
Industry Sector Turnover (m) Profit (m) EPS - Basic PE Ratio Market Cap (m)
Electronic & Electrical Equipment 5.8 0.6 0.1 16.7 6

Octagonal PLC Half-year Report

13/01/2021 7:00am

UK Regulatory (RNS & others)


Octagonal (LSE:OCT)
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From Jul 2020 to Jul 2021

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TIDMOCT

RNS Number : 4693L

Octagonal PLC

13 January 2021

13 January 2021

Octagonal plc

("Octagonal" or the "Company")

Interim Results

Octagonal (AIM: OCT), announces its unaudited half-year results for the six months to 30 September 2020. These include the trading results for the Company's principal trading subsidiary Global Investment Strategy UK Ltd (GIS) which are being announced along with the consolidated figures for Octagonal's group.

Summary of Octagonal PLC Financial highlights for the six months to 30 September 2020

-- Unaudited revenues for the six months to 30 September 2020 were GBP4.79 million ("m") (September 2019: GBP3.31m).

-- Unaudited operating profit for the group for six months to 30 September 2020 was GBP1.86m (September 2019: GBP1.12m)

   --    Net Assets as at 30 September 2020 were GBP10.14m (September 2019: GBP10.19m) 
   --    Group cash balance as at 30 September 2020 was GBP6.84m (September 2019: GBP6.08m) 

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 delivered strong earnings for the half year as markets remained active through the summer months against traditional trends, and our balanced business model continued to deliver consistent returns. GIS reported unaudited revenues of GBP4.79m and profit before taxation of GBP2.082m for the 6 months to 30 September 2020. This was an increase of 42.7% in revenue and 41.2% in profit compared with the corresponding period last year (revenue of GBP3.359m and profit before taxation of GBP1.475m for the 6 months to 30 September 2019).

Synergis Capital Plc (Synergis)

Discussions continue with the FCA as regards Synergis' activity and the business is undergoing an evaluation process with our regulator and we believe we have made good progress in demonstrating the business' robust processes and controls that are essential for its intended specialist lending activity.

Global Investment Strategy HK Limited (GIS HK)

Our Hong Kong subsidiary remains fully operational and continues to build on its network of Asia Pacific relationships to offer services to both its London based parent and regional clients. The HK office has contributed income to GIS, but we hope the year ahead will see it demonstrate its fiscal autonomy as a stand-alone entity, working in cooperation with its parent, but also servicing Asia based clients looking for a global service offering.

Outlook

Whilst trading continues in line with the board's expectations, the result for the year may be impacted by any effect of the recently announced SEC complaint against GIS in the US, the outcome of which cannot yet be determined with any certainty.

Dividend

On 17th December 2020, the Company declared a dividend of 0.1 pence per share which was paid on 12th January 2021.

John Gunn

Chairman

Unaudited Group Income Statement and statement of comprehensive income

For the 6 months ended 30 September 2020

 
                                                      Unaudited                Unaudited     Audited 
                                        -----------------------  -----------------------  ---------- 
                                                      30-Sep-20                30-Sep-19   31-Mar-20 
-------------------------------------- 
                                                        GBP'000                  GBP'000     GBP'000 
--------------------------------------  -----------------------  -----------------------  ---------- 
 
 Revenue                                                  4,796                    3,315       5,752 
 Cost of sales                                          (1,131)                    (710)     (1,447) 
 Gross profit                                             3,665                    2,605       4,305 
 
 Administrative expenses                                (1,809)                  (1,482)     (3,576) 
 Share based payment expense 
--------------------------------------  -----------------------  -----------------------  ---------- 
 Operating profit                                         1,856                    1,123         729 
 
 Other gains and losses                                       -                        -       (135) 
--------------------------------------  -----------------------  -----------------------  ---------- 
 Profit before tax                                        1,856                    1,123         594 
 
 Taxation                                                     -                       82       (302) 
--------------------------------------  -----------------------  -----------------------  ---------- 
 
 Profit for the year                                      1,856                    1,205         292 
--------------------------------------  -----------------------  -----------------------  ---------- 
 Attributable to: 
 Shareholders in the Parent Company                       1,862                    1,220         343 
 Non-controlling Interests                                  (6)                     (15)        (51) 
 
                                                          1,856                    1,205         292 
--------------------------------------  -----------------------  -----------------------  ---------- 
 
 Earnings per share attributable to 
  owners of the parent company 
 
 Basic and diluted (pence per share) 
 From continuing and total operations                     0.328                    0.215       0.060 
 Fully diluted                                            0.320                    0.210       0.060 
--------------------------------------  -----------------------  -----------------------  ---------- 
 

Unaudited Group Statement of Financial Position

As at 30 September 2020

 
                                     Unaudited   Unaudited     Audited 
                                    ----------  ----------  ---------- 
                                     30-Sep-20   30-Sep-19   31-Mar-20 
---------------------------------- 
                                       GBP'000     GBP'000     GBP'000 
----------------------------------  ----------  ----------  ---------- 
 
 Non-Current assets 
 Goodwill                                2,869       2,869       2,869 
 Other Intangibles                         856         723         805 
 Property, plant and equipment              43          44          39 
 Deferred Tax asset                                                  - 
                                         3,768       3,636       3,713 
----------------------------------  ----------  ----------  ---------- 
 
 Current assets 
 Available for sale investments            225         266         225 
 Trade and other receivables             1,067         853         489 
 Cash and cash equivalents               6,838       6,076       5,463 
                                         8,130       7,195       6,177 
 TOTAL ASSETS                           11,898      10,831       9,890 
 
 Current liabilities 
 Trade and other payables                1,123         457         942 
 Current tax liabilities                   632         182         632 
 Borrowings                                  -           -           - 
                                         1,755         639       1,574 
----------------------------------  ----------  ----------  ---------- 
 
 NET ASSETS/(LIABILITIES)               10,143      10,193       8,316 
----------------------------------  ----------  ----------  ---------- 
 
 Equity 
 Share capital                             285         285         285 
 Share premium account                     171         171         171 
 Reverse acquisition reserve               679         679         679 
 Foreign currency reserve                   16           -          45 
 Share option and warrant reserve          162         162         162 
 Retained earnings                       8,841       8,814       6,979 
----------------------------------  ----------  ----------  ---------- 
 Equity attributable to owners of 
  the company                           10,154      10,111       8,321 
 Non- Controlling interests               (11)          81         (5) 
----------------------------------  ----------  ----------  ---------- 
 
 Total Equity                           10,143      10,193       8,316 
----------------------------------  ----------  ----------  ---------- 
 

Unaudited Group Statement of Changes in Equity

For the 6 months ended 30 September 2020

 
                      Share     Share       Reverse     Share    Foreign   Retained         Equity   Non-controlling     Total 
                    capital   Premium   acquisition    option   Currency   earnings   attributable         interests    equity 
                                            reserve   reserve    Reserve                 to owners 
                                                                                            of the 
                                                                                           Company 
                    GBP'000   GBP'000       GBP'000   GBP'000    GBP'000    GBP'000        GBP'000           GBP'000   GBP'000 
-----------------  --------  --------  ------------  --------  ---------  ---------  -------------  ----------------  -------- 
 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 
 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 
                          -         -             -         -          -      (191)          (191)                 -     (191) 
                          -         -             -         -          -      (162)          (162)              (12)     (174) 
-----------------  --------  --------  ------------  --------  ---------  ---------  -------------  ----------------  -------- 
 Balance at 1 
  April 
  2019 restated *       285       171           679       162   -             7,205          8,502                46     8,548 
 
 Profit for the 
  year                    -         -             -         -          -        343            343              (51)       292 
 Exchange 
  differences 
  on translation 
  of foreign 
  operations              -         -             -         -         45          -             45                 -        45 
 Dividend paid            -         -             -         -                 (569)          (569)                 -     (569) 
-----------------  --------  --------  ------------  --------  ---------  ---------  -------------  ----------------  -------- 
 Balance at 31 
  March 
  2020                  285       171           679       162         45      6,979          8,321               (5)     8,316 
 
 Profit for the 
  year                    -         -             -         -                 1,862          1,862               (6)     1,856 
 Exchange 
  differences 
  on translation 
  of foreign 
  operations              -         -             -         -       (29)          -           (29)                 -      (29) 
-----------------  --------  --------  ------------  --------  ---------  ---------  -------------  ----------------  -------- 
                        285       171           679       162         16      8,841         10,154              (11)    10,143 
-----------------  --------  --------  ------------  --------  ---------  ---------  -------------  ----------------  -------- 
 

*Please refer to Note 4 of the Company's audited financial statements for the period ended 31 March 2020

Unaudited Group Statement of Cash flows

For the 6 months ended 30 September 2020

 
                                  Unaudited   Unaudited     Audited 
                                 ----------  ----------  ---------- 
                                  30-Sep-20   30-Sep-19   31-Mar-20 
                                    GBP'000     GBP'000           . 
-------------------------------  ----------  ----------  ---------- 
 OPERATING ACTIVITIES 
 Profit/(loss) for the year 
  before taxation                     1,856       1,123         594 
 Adjusted for: 
 Share based payment                      -           -           - 
 Depreciation                             7           7          14 
 Amortisation of intangibles                                     27 
 Investment impairment                    -           -         135 
 Operating cash flows before 
  movements in working capital        1,863       1,130         770 
 (Increase)/Decrease in 
  trade and other receivables         (578)       (145)          44 
 Increase/(Decrease) in 
  trade and other payables              181        (76)         407 
 Other movement                                                  21 
-------------------------------  ----------  ----------  ---------- 
 Net cash from / (used in) 
  operating activities                1,466         909       1,242 
 Tax paid                              (28)       (262)       (191) 
 Net cash used in operating 
  activities                          1,438         647       1,051 
-------------------------------  ----------  ----------  ---------- 
 INVESTING ACTIVITIES 
 Purchase of property, plant 
  and equipment                        (12)         (4)        (13) 
 Development costs                     (51)        (66)       (174) 
 Purchase of investments                  -           -       (302) 
 Related party repayment 
  of loan                                                       (9) 
-------------------------------  ----------  ----------  ---------- 
 Net cash from/(used in) 
  investing activities                 (63)        (70)       (498) 
-------------------------------  ----------  ----------  ---------- 
 FINANCING ACTIVITIES 
 Non-controlling interest 
  investment                              -          33          14 
 Dividend paid                            -           -       (569) 
-------------------------------  ----------  ----------  ---------- 
 Net cash from/ (used in) 
  financing activities                    -          33       (555) 
-------------------------------  ----------  ----------  ---------- 
 Net (decrease)/increase 
  in cash and cash equivalents        1,375         610         (3) 
 Cash and cash equivalents 
  at beginning of the period          5,463       5,466       5,466 
 Cash and cash equivalents 
  at end of the period                6,838       6,076       5,463 
-------------------------------  ----------  ----------  ---------- 
 

Notes to the interim statement

For the 6 months ended 30 September 2020

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 2020 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 2020, 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 2020 were approved by the Board on 11 January 2020.

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 2020 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-20     30-Sep-19     31-Mar-20 
------------------------------ 
                                         GBP           GBP           GBP 
------------------------------  ------------  ------------  ------------ 
 Profit attributable to 
  owners of the Group              1,862,332     1,220,000       343,000 
------------------------------  ------------  ------------  ------------ 
 Weighted average number 
  of ordinary shares in issue 
  for basic                      568,576,886   568,576,886   568,576,886 
------------------------------  ------------  ------------  ------------ 
 Weighted average number 
  of ordinary shares in issue 
  for fully diluted earnings     581,880,940   582,326,886   581,880,940 
------------------------------  ------------  ------------  ------------ 
 Earnings per share (pence 
  per share) 
 Basic                                 0.328         0.215          0.06 
 Fully diluted                         0.320         0.210          0.06 
------------------------------  ------------  ------------  ------------ 
 

4. Dividend and post balance sheet events

Post year-end GIS, has seen increased market volatility and uncertainty as a result of the impact of Covid-19. This has been the greatest challenge to the financial service industry since the financial crisis of 2008. During these periods of increased volatility, the board of GIS took steps to limit client exposure to riskier assets and strengthen our liquidity resources. The strategy in which we chose to navigate the period, given the conditions, is a testament to the strength of our business model. Our investments in technology has enabled us to continue to serve our clients around the World, with all employees working from home, offering clients a seamless 24-hour 5 day a week service from London, Mumbai and Hong Kong. The Board is proud of the hard work and conscientiousness of the team, with many facing personal challenges given the impact of the Covid-19 lockdown. Whilst largely relating to the pre-crisis period, the 2020 results demonstrate the stability of our business model and protection of our stakeholders' interests. Our balance sheet, capital and liquidity position remain strong and we remain well positioned to facilitate client activity during these uncertain times. For now, our focus remains on the welfare of our employees and the financial soundness of the business.

In December 2020, GIS declared and paid a dividend of GBP1,200,000 to its parent Company Octagonal plc. This dividend received by Octagonal plc created sufficient distributable reserves for Octagonal Plc to pay the interim dividend to its members on 12 January 2021.

The Board concluded that there is no need to continue with the cost, management time and the legal and regulatory obligations associated with maintaining the Company's listing as long as Shareholders interests are protected and that there is no risk of Shareholders losing any tax advantages. The Company has not raised any funds since the listing in 2015. Should the Company need to raise funds in the future, the Board believe that the Private Equity market would value the Company based on enterprise value.

The Company published an announcement on 17(th) December 2020 stating that it will distribute to shareholders a circular containing details of the proposed cancellation and to seek the approval of shareholders to the proposed cancellation of the admission of its ordinary shares to trading on AIM at a General Meeting.

5. Distribution

The half yearly report for the six-month period ended 30 September 2020 will shortly be available on the Company's website ( www.octagonalplc.com ) or directly from the Company at its registered address.

-ends-

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