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Share Name Share Symbol Market Type Share ISIN Share Description
Summerway Capital Plc LSE:SWC London Ordinary Share GB00BDQYGP38 ORD 1P
  Price Change % Change Share Price Bid Price Offer Price High Price Low Price Open Price Shares Traded Last Trade
  0.00 0.0% 85.00 84.00 86.00 85.00 85.00 85.00 0.00 08:00:00
Industry Sector Turnover (m) Profit (m) EPS - Basic PE Ratio Market Cap (m)
Equity Investment Instruments 0.0 -0.2 -3.6 - 5

Summerway Capital PLC Interim Report

19/05/2020 7:00am

UK Regulatory (RNS & others)


Summerway Capital (LSE:SWC)
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RNS Number : 2590N

Summerway Capital PLC

19 May 2020

19 May 2020

Summerway Capital Plc

("Summerway" or the "Company")

Interim Report for the six months ended 29 February 2020

London, 19 May 2020 - Summerway Capital plc announces its unaudited condensed interim results for the six months ended 29 February 2020.

Over the period, Summerway incurred a loss after taxation of GBP86.7k (2019: GBP114.8k), reflecting operating expenses of GBP97.9k and finance income of GBP11.2k. As at 29 February 2020, Summerway held GBP5.547 million cash (31 August 2019 GBP5.648 million).

Alexander Anton, Summerway's Chairman, commented:

"As countries across the World struggle to come to terms with the impact of COVID-19, we remain committed to identifying and evaluating potential investment opportunities in the evolving New World economy. I hope to report positive progress in the next few months."

The Interim Report is also available on the Company's website at www.summerwaycapital.co.uk

Enquiries:

 
 Summerway Capital 
 Mark Farmiloe                                020 7440 7520 
 
 N+1 Singer (Nominated Adviser and Broker) 
 Sandy Fraser                                 020 7496 3000 
 

LEI Code: 213800YXCATORT475807

CHAIRMAN'S STATEMENT

I am pleased to present to shareholders the Interim Condensed Consolidated Financial Statements of Summerway Capital plc (the "Company") for the six months ended 29 February 2020.

Strategy

The Company's investment strategy remains the same as outlined in its Admission Document dated 16 October 2018.

Results and Developments in the Period

The Group's loss after taxation for the six months to 29 February 2020 was GBP86,730 (2019: GBP114,766), which comprised GBP97,904 of administrative expenses and interest received of GBP11,175. At the period end, the Company held a cash balance of GBP5,547,414.

On listing in October 2018, Summerway successfully raised GBP5.8million (after expenses).

Outlook

We continue to pursue our investment strategy since admission to trading on AIM on 19 October 2018. We receive a regular flow of potential acquisition opportunities and, whilst the COVID-19 pandemic has introduced a new and unforeseen element of uncertainty for business and financial markets thereby bringing fresh complexity to the acquisition process, we hope to report positive progress towards completion of our first transaction in the months ahead. We look forward to updating shareholders further in due course.

Alexander Anton

Chairman

SUMMERWAY CAPITAL PLC

Consolidated Statement of Comprehensive Income

For the six months ended 29 February 2020

 
                                            Six months   Six months        Year 
                                                 ended        ended       ended 
                                           29 February  28 February   31 August 
                                                  2020         2019        2019 
                                     Note 
----------------------------------  -----  -----------  -----------  ---------- 
                                                   GBP          GBP         GBP 
 
 
 Administrative expenses              4       (97,904)    (118,046)   (205,882) 
                                           -----------  -----------  ---------- 
 Operating loss                               (97,904)    (118,046)   (205,882) 
 
 Finance income                                 11,175        3,280      14,562 
                                           -----------  -----------  ---------- 
 Finance income                                 11,175        3,280      14,562 
 
 Loss before income tax                       (86,730)    (114,766)   (191,320) 
                                           -----------  -----------  ---------- 
 
 Income tax                                          -            -           - 
                                           -----------  -----------  ---------- 
 Net loss for the period                      (86,730)    (114,766)   (191,320) 
 Total other comprehensive income                    -            -           - 
                                           -----------  -----------  ---------- 
 Total comprehensive loss                     (86,730)    (114,766)   (191,320) 
                                           -----------  -----------  ---------- 
 
 Attributable to: 
 Owners of the Company                        (86,730)    (114,766)   (191,320) 
 
 Loss per ordinary share 
 Basic and diluted loss per share 
  attributable to ordinary equity 
  holders of the Company              5        (1.41)p      (2.55)p     (3.60)p 
 

The Company's activities derive from continuing operations.

SUMMERWAY CAPITAL PLC

Consolidated Statement of Financial Position

As at 29 February 2020

 
                                                As at        As at      As at 
                                          29 February  28 February  31 August 
                                                 2020         2019       2019 
                                    Note 
----------------------------------  ----  -----------  -----------  --------- 
                                                  GBP          GBP        GBP 
Assets 
Current assets 
Cash and cash equivalents                   5,547,414    5,687,979  5,647,837 
Other receivables                    7         24,112       71,178     15,670 
                                          -----------  -----------  --------- 
Total current assets                        5,571,526    5,759,157  5,663,507 
                                          -----------  -----------  --------- 
 
Total assets                                5,571,526    5,759,157  5,663,507 
                                          -----------  -----------  --------- 
 
Current liabilities 
Trade and other payables             9         15,690       40,037     20,941 
                                          -----------  -----------  --------- 
                                               15,690       40,037     20,941 
                                          -----------  -----------  --------- 
Non-current liabilities 
Incentive shares                     10        12,000       12,000     12,000 
                                          -----------  -----------  --------- 
                                               12,000       12,000     12,000 
                                          -----------  -----------  --------- 
Total liabilities                              27,690       52,037     32,941 
                                          -----------  -----------  --------- 
Net Assets                                  5,543,836    5,707,120  5,630,566 
                                          -----------  -----------  --------- 
 
Capital and reserves attributable 
 to equity holders of the parent 
Share capital                        8         61,300       61,300     61,300 
Share premium reserve                       5,711,086    5,711,086  5,711,086 
Capital redemption reserve                     49,500       49,500     49,500 
Accumulated losses                          (278,050)    (114,766)  (191,320) 
                                          -----------  -----------  --------- 
Total Equity                                5,543,836    5,707,120  5,630,566 
                                          -----------  -----------  --------- 
 
 

SUMMERWAY CAPITAL PLC

Consolidated Statement of Changes in Equity

For the six months ended 29 February 2020

 
                         Notes      Share   Deferred       Share       Capital   Accumulated       Total 
                                  capital     shares     Premium    Redemption        losses      equity 
                                                         reserve       reserve 
                                ---------  ---------  ----------  ------------  ------------  ---------- 
                                      GBP        GBP         GBP           GBP           GBP         GBP 
 Balance as at                          -          -           -             -             -           - 
  31 August 2018 
 Issue of initial 
  shares                           50,000          -           -             -             -      50,000 
 Shares split                    (49,500)     49,500           -             -             -           - 
 Cancellation 
  of deferred shares                    -   (49,500)           -        49,500             -           - 
 Issue of shares                   60,800          -   6,019,200             -             -   6,080,000 
 Share issue costs                      -          -   (308,114)             -             -   (308,114) 
 Loss for the 
  period                                -          -           -             -     (114,766)   (114,766) 
                                ---------  ---------  ----------  ------------  ------------  ---------- 
 Balance as at 
  28 February 2019                 61,300          -   5,711,806        49,500     (114,766)   5,707,120 
                                ---------  ---------  ----------  ------------  ------------  ---------- 
 Loss for the 
  period                                -          -           -             -      (76,554)    (76,554) 
                                ---------  ---------  ----------  ------------  ------------  ---------- 
 Balance as at 
  31 August 2019                   61,300          -   5,711,806        49,500     (191,320)   5,630,566 
                                ---------  ---------  ----------  ------------  ------------  ---------- 
 Loss for the 
  period                                -          -           -             -      (86,730)    (86,730) 
                                ---------  ---------  ----------  ------------  ------------  ---------- 
 Balance as at 
  29 February 2020                 61,300          -   5,711,806        49,500     (191,320)   5,543,836 
                                ---------  ---------  ----------  ------------  ------------  ---------- 
 

SUMMERWAY CAPITAL PLC

Consolidated Statement of Cash Flows

For the six months ended 29 February 2020

 
                                                            Six months   Six months        Year 
                                                                 ended        ended       ended 
                                                           29 February  28 February   31 August 
                                                                  2020         2019        2019 
                                               Note 
-------------------------------------------  -------  ----------------  -----------  ---------- 
                                                                   GBP          GBP         GBP 
 
 Cash flows from operating activities 
 Operating loss                                               (97,904)    (118,046)   (205,882) 
 
 Adjustments to reconcile loss before 
  income tax to operating cash flows: 
 Increase in other receivables                  7              (8,442)     (71,178)    (15,670) 
 (Decrease)/increase in trade and other 
  payables                                     9,10            (5,251)       52,037      32,941 
 Bank interest received                                         11,175        3,280      14,562 
                                                      ----------------  -----------  ---------- 
 Net cash used in operating activities                       (100,423)    (133,907)   (174,049) 
                                                      ----------------  -----------  ---------- 
 
 Cash flows from financing activities 
 Proceeds from issue of share capital              8                 -    6,130,000   6,130,000 
 Share issue costs                                                   -    (308,114)   (308,114) 
                                                      ----------------  -----------  ---------- 
 Net cash generated from financing 
  activities                                                         -    5,821,886   5,821,886 
                                                      ----------------  -----------  ---------- 
 
 
 Net increase in cash and cash equivalents                   (100,423)    5,687,979   5,647,837 
 Cash and cash equivalents at beginning 
  of the period                                              5,647,837            -           - 
                                                      ----------------  -----------  ---------- 
 Cash and cash equivalents at the end 
  of the period                                              5,547,414    5,687,979   5,647,837 
                                                      ----------------  -----------  ---------- 
 
 

SUMMERWAY CAPITAL PLC

Notes to the Financial Statements

For the six months ended 29 February 2020

   1.   GENERAL INFORMATION 

Summerway Capital plc is an investing company (for the purposes of the AIM Rules for Companies) and is incorporated in England and Wales and domiciled in the United Kingdom (company number: 11545912). It is a public limited company and the address of the registered office is Fleetworks, 26 Farringdon Street, London EC4A 4AB. The Company is the parent company of Summerway Subco Limited (company number: 11565845). The activity of the Company is the acquisition and subsequent development of businesses which are either headquartered in the UK, or that have substantial operations in the UK. The Company is principally focused on opportunities in the wider household and consumer goods sector, including retail and consumer brands, particularly where there is an opportunity to introduce operational and performance improvements, including new technologies and associated operating and value leverage.

   2.   BASIS OF PREPARATION 

These Interim Condensed Consolidated Financial Statements for the six months ended 29 February 2020 have been prepared in accordance with the Disclosure Guidance and Transparency Rules of the Financial Conduct Authority and with the recognition and measurement principles of International Financial Reporting Standards ("IFRS") as adopted by the EU that are expected to be applicable to the financial statements for the year ended 31 August 2020 and on the basis of the accounting policies to be used in those financial statements. The Interim Condensed Consolidated Financial Statements do not include all the information required for full annual financial statements and accordingly, whilst the Interim Condensed Consolidated Financial Statements have been prepared in accordance with the recognition and measurement principles of IFRS, it cannot be construed as being in full compliance with IFRS.

These Interim Condensed Consolidated Financial Statements do not comprise statutory accounts within the meaning of section 434 of the Companies Act 2006.

   3.   CHANGES TO THE GROUP'S ACCOUNTING POLICIES 

NEW STANDARDS, AMMENTS AND INTERPRETATIONS

The Group applied standards, amendments and interpretations which are effective for annual periods commencing on or after 1 September 2018. There are a number of standards, amendments to standards, and interpretations which have been issued by the IASB that are effective in future accounting periods that the group has decided not to adopt early. The most significant of these are:

IFRS 16 - Leases (effective for periods commencing on or after 1 January 2019);

IFRIC 23 - Uncertainty over Income Tax Positions (effective for periods commencing on or after 1 January 2019);

Annual improvements to IFRSs 2015 - 2017 Cycle (IFRS 3 - Business Combinations, IFRS 11 - Joint Arrangements, IAS 12 - Income Taxes and IAS 23 - Borrowing Costs) (effective for periods commencing on or after 1 January 2019).

The Group does not currently expect any material impact of the above standards or any other standards issued by the IASB, but not yet effective.

   4.   ADMINISTRATION EXPENSES 
 
                                   Period     Period   Year ended 
                                 ended 29   ended 28    31 August 
                                 February   February         2019 
                                     2020       2019 
                               ----------  ---------  ----------- 
                                      GBP        GBP          GBP 
 Group expenses by nature 
 One-off costs related 
  to the listing                        -     39,340       39,340 
 Staff related costs               27,000     22,500       51,978 
 Office costs                      19,498     17,604       35,660 
 NOMAD, registrar and 
  Stock Exchange costs             22,309     17,552       38,834 
 Audit, accountancy and 
  professional costs               21,659     14,770       31,993 
 Other expenses                     7,438      6,280        8,077 
                               ----------  ---------  ----------- 
                                   97,904    118,046      205,882 
                               ----------  ---------  ----------- 
 
 
 
   5.   LOSS PER SHARE 

Basic loss per ordinary share is calculated by dividing the loss attributable to equity holders of the Company by the weighted average number of ordinary shares in issue during the period.

 
                                           Period   Period ended      Year ended 
                                         ended 29    28 February       31 August 
                                         February           2019            2019 
                                             2020 
                                    -------------  -------------  -------------- 
 
 
 Loss attributable to the owners 
  of the Company                     GBP (86,730)  GBP (114,766)   GBP (191,320) 
 Weighted average number of 
  ordinary shares in issue              6,130,000      4,508,667       5,313,781 
 Basic and diluted loss per                (1.41) 
  share                                         p       (2.55) p        (3.60) p 
 
 
 
   6.   INVESTMENTS 

Principal subsidiary undertakings of the Group

The Company directly owns the ordinary share capital of its subsidiary undertakings as set out below:

The issued share capital of the subsidiary comprises 1 A ordinary share of GBP0.01 and 999,999 B ordinary shares of GBP0.012.

 
 Subsidiary                                                  Proportion         Proportion 
                                                          of A ordinary      of B ordinary 
                       Nature of               Country      shares held             shares 
                        business      of incorporation       by Company            held by 
                                                                                   Company 
 
 Summerway Subco     Incentive                 England 
  Limited              vehicle               and Wales             100%               0% 
 
 

The address of the registered office of Summerway Subco Limited (the "Subsidiary") is Fleetworks, 26 Farringdon Street, London EC4A 4AB. The subsidiary was incorporated on 12 September 2018 and prepares its own financial statements for the period ended 30 September each year.

The A ordinary shares have full voting rights, full rights to participate in a dividend and full rights to participate in a distribution of capital.

The B ordinary shares do not have voting rights. No dividends shall be declared in relation to any of the B ordinary shares without the consent of the Parent company. The B ordinary shares are not to be redeemed and are not liable to be redeemed.

The B ordinary shares have been issued to the Directors to facilitate the Subsidiary Incentive Scheme. Further details of the Subsidiary Incentive Scheme can be found on pages 42 and 43 of the Company's Placing and Admission document published on 16 October 2018.

   7.   OTHER RECEIVABLES 

All receivables are current. There is no material difference between the book value and the fair value of receivables.

 
                                 As at         As at        As at 
                           29 February   28 February    31 August 
                                  2020          2019         2019 
                          ------------  ------------  ----------- 
                                   GBP           GBP          GBP 
 Amounts falling due 
  within one year 
 Prepayments                    18,550        14,848       10,027 
 Other receivables               5,562        56,330        5,643 
                          ------------  ------------  ----------- 
                                24,112        71,178       15,670 
                          ------------  ------------  ----------- 
 
   8.   CALLED UP SHARE CAPITAL 
 
                                         As at          As at        As at 
                                   29 February    28 February    31 August 
                                          2020           2019         2019 
                                 -------------  -------------  ----------- 
                                           GBP            GBP          GBP 
 Issued 
 6,130,000 ordinary shares of 
  1p each                               61,300         61,300       61,300 
                                 -------------  -------------  ----------- 
 
 
 
 

On incorporation on 31 August 2018 the issued share capital of the Company consisted of 50,000 ordinary shares of GBP1 each.

On 12 October 2018 each ordinary share of GBP1.00 each in the capital of the Company was sub-divided into 1 ordinary share of GBP0.01 each and 1 deferred share of GBP0.99 each.

On 19 October 2018 Alexander Anton and Benjamin Shaw each gifted 16,667 deferred shares of GBP0.99 each and Mark Farmiloe gifted 16,666 deferred shares of GBP0.99 each arising on the sub-division of the ordinary shares of GBP1.00 each referred to above held by them to the Company for cancellation and the Board resolved to cancel all such gifted deferred shares.

On 19 October 6,080,000 ordinary of GBP0.01 each were issued pursuant to a placing at a price of GBP1 per share and, together with the existing ordinary shares, 6,130,000 ordinary shares were admitted to trading on AIM.

   9.   TRADE AND OTHER PAYABLES 

There is no material difference between the book value and the fair value of the trade and other payables.

 
                                          As at          As at       As at 
                                    29 February    28 February   31 August 
                                           2020           2019        2019 
                                   ------------  -------------  ---------- 
                                            GBP            GBP         GBP 
 Trade payables                             180         15,711         941 
 Accruals                                14,791         21,490      19,200 
 Other tax and social security 
  payables                                  719          2,836         800 
                                         15,690         40.037      20,941 
                                   ------------  -------------  ---------- 
 

10. NON-CURRENT LIABILITIES

 
                            As at         As at        As at 
                      29 February   28 February    31 August 
                             2020          2019         2019 
                     ------------  ------------  ----------- 
                              GBP           GBP          GBP 
 Incentive shares          12,000        12,000       12,000 
 
                           12,000        12,000       12,000 
                     ------------  ------------  ----------- 
 

The incentive shares liability is estimated at fair value through profit and loss using level 3 fair value measurement techniques.

Fair values are categorised into different levels in a fair value hierarchy based on the degree to which the inputs to the measurement are observable and the significance of the inputs to the fair value measurement in its entirety:

-- Level 1 fair value measurements are those derived from quoted prices (unadjusted) in active markets for identical assets or liabilities.

-- Level 2 fair value measurements are those derived from 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).

-- Level 3 fair value measurements are those derived from valuation techniques that include inputs for the asset or liability that are not based on observable market data (unobservable inputs).

The B shares issued by the subsidiary under the incentive scheme were deemed to have an implied aggregate subscription price of GBP12,000, based on the nominal value per B share plus a premium. The initial subscription price of the incentive shares remains the best estimate of the fair value of the liability associated with the incentive shares as none of the criteria for potential value creation have yet been met. The fair value of the liability is assessed at each reporting date with any changes accounted for as a fair value gain or loss and recognised directly in the statement of comprehensive income.

11. RELATED PARTY DISCLOSURES

Parties are considered to be related if one party has the ability to control the other party or exercise significant influence over the other party, or the parties are under common control or influence, in making financial or operational decisions.

Under the terms of their respective service agreements, the Executive Directors are each paid a salary of GBP1,000 per calendar month, in each case payable monthly in arrears. The Non-Executive Director is paid a monthly fee of GBP1,500 per calendar month.

The Directors and their connected persons hold a total of 1,650,000 ordinary shares in the Company, representing 26.9 per cent of the enlarged share capital following admission.

On 17 September 2018 the Executive Directors subscribed for, in aggregate, 999,999 B Shares in the subsidiary, Summerway Subco Limited pursuant to the Subsidiary Incentive Scheme.

Alexander Anton and Mark Farmiloe are members of VirginiaCo LLP.

Benjamin Shaw is a member of Romana Capital LLP and Sealark LLP.

VirginiaCo LLP and Romana Capital LLP are members of AFS Advisors LLP ("AFS").

The Company is party to a corporate advisory agreement dated 12 October 2018 with AFS.

Pursuant to that agreement, AFS has agreed to provide strategic and general business advice to the Company, including identifying potential investment opportunities and acquisition targets and making recommendations to the Board in respect of the acquisition and disposition of the same.

AFS will receive a transaction fee equal to 1 per cent. of the gross transaction value of any acquisition or investment undertaken by the Company during the term of the agreement or after termination of the agreement to the extent the Company completes a transaction in relation to which AFS had provided any services prior to the date notice to terminate was deemed to have been received by AFS. In addition, from legal completion of the first acquisition or investment undertaken by the Company, the Company will pay AFS a monthly retainer of GBP15,000. As at 29 February 2020 no charges have been incurred under the agreement as the legal of completion of the first acquisition has not happened.

Under the corporate advisory agreement, AFS agrees that it shall not (and shall procure that each associate of AFS shall not) introduce to any person other than the Company any acquisition of or investment in any company or business that would fall within the scope of the Investment Policy without offering the Company a right of first refusal in respect of the same (if applicable) or obtaining the prior written consent of the Company.

The appointment is for an initial term of eighteen months or such longer period as the Company is an investing company for the purposes of the AIM Rules for Companies. Thereafter the agreement shall be renewed automatically for successive periods of 12 months unless a party gives notice to the other party in writing that it wishes to terminate the agreement at least three months before the relevant renewal date.

Either party may terminate the agreement (without prejudice to any right of action accruing or already accrued to it) without penalty by notice in writing, inter alia, if the other party commits: (i) an act of fraud or negligence; (ii) or a material breach of the terms of the agreement, which has not been rectified within 60 business days of being requested in writing to do so (if such breach is capable of rectification).

The Company may also terminate the agreement if there is a change of control of AFS without the prior written consent of the Company.

The agreement shall terminate automatically if either party to the agreement: (i) enters into liquidation (except on terms previously approved in writing by the other party) or has a receiver appointed over that party or its assets; (ii) if an effective resolution is passed for the winding up of any party (other than for the purposes of a solvent reconstruction or amalgamation previously approved in writing by the other party); or (iii) if any party becomes insolvent or stops or threatens to stop carrying on business or payment of its material proven debts or make any arrangement with creditors generally.

The Company has given an indemnity in favour of AFS in respect of AFS' potential losses in carrying on its responsibilities under the agreement. The Agreement is governed by and construed in accordance with the laws of England.

The Company had desk rental agreements with Romana Capital LLP and Sealark LLP under which the Company paid GBP18,150 during the period.

The Company engaged Fraser Real Estate, a company in which Alexander Anton is an indirect shareholder to provide administrative and accounting services throughout the period. The Company paid Fraser Real Estate GBP3,870 during the period for the provision of these services.

The Company's Admission Document dated 19 October 2018 sets out in detail the other related parties transactions. There have been no material changes to these arrangements and transactions since the Admission Document was published.

12. COMMITMENTS AND CONTINGENT LIABILITIES

There were no commitments or contingent liabilities outstanding at 31 August 2019 that require disclosure or adjustment in these financial statements.

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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