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Share Name Share Symbol Market Type Share ISIN Share Description
Vordere Plc LSE:VOR London Ordinary Share GB00B6QZLQ32 ORD GBP0.02
  Price Change % Change Share Price Bid Price Offer Price High Price Low Price Open Price Shares Traded Last Trade
  0.00 0.0% 10.00 8.50 11.00 0.00 0.00 0.00 0.00 01:00:00
Industry Sector Turnover (m) Profit (m) EPS - Basic PE Ratio Market Cap (m)
Real Estate Investment & Services 0.0 -4.1 -2.8 - 20

Vordere PLC Half-year Report

24/12/2019 9:28am

UK Regulatory (RNS & others)


Vordere (LSE:VOR)
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6 Months : From Oct 2019 to Apr 2020

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TIDMVOR

RNS Number : 9684X

Vordere PLC

24 December 2019

-COMPANY REGISTRATION NUMBER 07892904

VORDERE PLC

INTERIM REPORT FOR THE

SIX MONTHSED 30 SEPTEMBER 2019

(UNAUDITED)

Chairman's Statement

I have pleasure in presenting my first interim statement to shareholders for the period 1 April 2019 to 30 September 2019 and because of recent events, I decided that it was appropriate that you received a report from your Chairman despite my appointment post period end.

You will be aware that at the General Meeting on 24 October 2019, shareholders voted to remove three of the incumbent Directors, Nicholas Hofgren, Stuart Cheek and Graeme Johnson and appoint David Irving as Chief Executive. I was appointed the day after on the 25 October.

This was the culmination of a series of events resulting in considerable shareholder frustration with the then management with the recent history being as follows:

On 5 July 2019, the Company requested that the listing of its ordinary shares be suspended in order for the Company to assess accurately its financial position. The suspension of the listing of ordinary shares followed the allotment on 4 July 2019 of 277 million unlisted ordinary shares in exchange for the acquisition of six properties in Germany for a total price of EUR59.3m. That suspension is still continuing.

As a result of the suspension of the listing of the ordinary shares, poor communication, and increasing concerns about how the Company was being run, a number of shareholders attended the Company's Annual General Meeting held on 4 September 2019, at which time the Company's listing of ordinary shares remained suspended. At the Meeting shareholders sought, amongst other things, clarification from the Board of Directors on its plans to have the suspension lifted. Unfortunately, that clarification was not forthcoming.

On the 16 September 2019, following the Annual General Meeting, one of the Company's major shareholders, Mr John O'Donnell, requisitioned a General Meeting of the Company for shareholders to consider the removal of three of the incumbent Directors, Nicholas Hofgren, Stuart Cheek and Graeme Johnson, and the appointment of David Irving as a Director of the Company. Allegations of fraud were made and the Company is currently working through the fact finding stage of their investigation into these allegations and will update shareholders once finalised.

On 21 October 2019, and shortly before the requisitioned General Meeting was held, the then Board announced that it had allotted 129,277,975 ordinary shares in exchange for the acquisition of five properties in Brazil for a total purchase price of GBP25.9m.

Following the announcement of the acquisition of the Brazilian properties, Mr John O'Donnell applied to the High Court of Justice to obtain an interim injunction preventing those shares from voting at the General Meeting. The High Court of Justice duly granted the interim injunction. The interim injunction was extended by the Hight Court of Justice on 31 October 2019 to prevent the recipients of the ordinary shares from registering any transfer of such shares.

As previously mentioned, the General Meeting was held on 24 October 2019, at which all Resolutions were passed resulting in the removal of Nicholas Hofgren, Stuart Cheek and Graeme Johnson as Directors of the Company and the appointment of David Irving as a Director of the Company. The new Board of Directors following the General Meeting comprised Brent Fitzpatrick and David Irving. On 25 October 2019, the Board appointed myself, an experienced public company director, as non-executive Chairman of the Company. I believe that the Company is extremely fortunate to have secured the services of David Irving as the Chief Executive.

As announced on 18 December 2019, at hearings in the High Court in London on 13 and 16 December 2019, the Company consented to the continuation by the Court of an injunction, as explained further in the Chief Executive's Report.

In conclusion, there is still no certainty that the suspension of the Company's shares will be lifted. Your Board continues to consult with its advisers and the FCA, and will report to shareholders on this issue by the end of the first quarter of 2020.

In this past week there has been a delay in receiving funds relating to the sale of the Mohriner Allee property leading to an uncertainty relating to the Company's going concern position, which is outlined further within the Financial Review section of the Chief Executive's Report.

Your Board is currently undertaking a comprehensive review of both how the Company operates, its property operations, listing and future strategy and I hope to be in a position to report our findings to Shareholders by the end of the first quarter.

Peter L R Hewitt JP FCSI FRSA

Chairman

Chief Executive's Report

Since my appointment on 24 October 2019, the newly constituted Board of Directors has spent time reviewing the activities of the previous Board as well as planning and developing a new strategy in order to develop the Company's assets to deliver value for shareholders. I would like to take this opportunity to reassure shareholders that, despite the issues that have arisen over the past few months, your Board is working hard to protect and enhance shareholder value..

Business review

Turning now to the Company's trading activities, I would like to highlight the developments in the financial year to date and also my initial views on the portfolio.

During the six-month period to 30 September 2019, the previous Board continued with the strategy outlined in the Annual Report for the year ended 31 March 2019. Namely that your Company continued to identify itself as an investment and development company, although no meaningful development had been undertaken in the preceding year. The Company increased its property portfolio from four to ten properties, with new sites acquired in Germany. The Board is currently conducting an in-depth review of each property to determine the most appropriate business plan to maximise shareholder value, on a risk-adjusted basis.

Properties held at the start of the year

The Company owned four sites in Germany at the start of the year in: Bamberg; Berchtesgaden; Haag; and Hanau. The sites at Berchtesgaden and Hanau have generated some relatively insignificant rental income; these and the other two sites have remained undeveloped during the period.

Unfortunately, progress has been slow in resolving a pre-emption claim from the local municipality associated with the pre-existing Hanau site. The previous assessment that it is probable that the future economic benefits associated with the property will flow to the Company is still considered appropriate, but there is a risk that the Court will find in favour of the municipality and this ongoing litigation restricts the Company's plans for the site. The Board may need to incur additional costs in order to settle the dispute with the municipality, so that progress can be made in developing the Hanau site.

Properties acquired during the period

The Company acquired six new sites in Germany during the period, as disclosed in the 31 March 2019 Annual Report, in Jüterbog; Mohriner Allee; Pegau; Schkeuditz; Sehnde and Usedom: All of the sites, with the exception of Mohriner Allee, are classified as investment properties with the intention being to hold the sites to earn rentals or for capital appreciation or both.

Following my appointment, I am pleased to report that I have now visited all of your Company's properties in order to fully appreciate and understand each property's location and characteristics. This will assist me in recommending to the Board, the most appropriate development strategy going forward. This work is nearing completion and the Board will provide shareholders with an update in the first quarter of 2020.

The table below outlines the near-term asset management priorities for each property. These have been developed in conjunction with Fortis Home (the Company's German property managers) and following an intensive property tour, visiting each asset, over a 3-week period.

 
 Bamberg         Due to listed building requirements, the refurbishment 
                  of the existing accommodation is extremely complex 
                  and cost intensive. We plan to have further discussion 
                  with the municipality and the owner of the adjacent 
                  property in Q1 2020 in order to develop and evaluate 
                  a full suite of options. 
 Berchtesgaden   The hotel element of this property has been re-let 
                  successfully for 5 years. 
                  A unit in the property, formerly leased to a dentist 
                  is now vacant and this will be developed/refurbished 
                  for apartment letting. Due to lack of refurbishment 
                  over the last number of years the property requires 
                  significant ongoing maintenance expenditure, relative 
                  to the income derived from the asset. 
                  Our current view is to continue to increase the 
                  rental income from this property to a level where 
                  it becomes attractive to potential buyers. 
                ---------------------------------------------------------- 
 Haag            The redevelopment of this property into a restaurant 
                  / hotel does not appear to be economically viable. 
                  Following a meeting with local development partners, 
                  we are evaluating the redevelopment of the property 
                  into social/senior living. We will have feedback 
                  on interested long-term operating partners by 
                  Q2 2020. 
                ---------------------------------------------------------- 
 Hanau           This property is currently subject to a preemption 
                  right by the City of Hanau and Vordere is in litigation 
                  with the City due to disagreement on the value 
                  of the property that they City has placed on the 
                  property. We are evaluating a proposal to commence 
                  with the building-out/refurbishment two buildings 
                  in order to demonstrate to the City that Vordere 
                  is serious about redevelopment of this site and 
                  in the process for the City to waive its preemption 
                  right. 
                ---------------------------------------------------------- 
 Juterbog        This is the largest asset in the portfolio and 
                  will result in a development comprising of commercial 
                  and residential buildings. We have received positive 
                  feedback from the municipality who are keen for 
                  Vordere to commence with planning with the aim 
                  of starting the refurbishment of one to two buildings 
                  by the end of 2020. We are currently working on 
                  clean-up activities in preparation for the development. 
                ---------------------------------------------------------- 
 Mohriner        This project has been sold. The sale process is 
  Allee           being finalised with receipt of the proceeds expected 
                  in January 2020. 
                ---------------------------------------------------------- 
 Pegau           Given the increased cost that Vordere has had 
                  to assume in order to acquire this property, we 
                  will have to re-evaluate and will most likely 
                  revise the concept for this site to ensure that 
                  it is economically viable. 
                ---------------------------------------------------------- 
 Schkeuditz      The municipality supports the development of the 
                  intended residential units and commercial space. 
                  An adjacent site has been developed with residential 
                  units and terraced houses which have been sold 
                  and are mostly occupied. We are working with PDE/PORR 
                  to prepare a development plan comprising of multi-family 
                  houses and some commercial space. 
                ---------------------------------------------------------- 
 Sehnde          The municipality fully supports the development 
                  of the intended residential units and has plans 
                  to develop the area around our property. We have 
                  undertaken extensive clean-up works to ensure 
                  the property is ready for the next stage of development. 
                  We are currently putting the bank guarantee in 
                  place and will have further meetings with the 
                  municipality in Q1 2020. 
                ---------------------------------------------------------- 
 Usedom          We are evaluating a change in the development 
                  concept from permanent residential living residential 
                  to micro-living apartments for salaried employees 
                  of the local hospitality businesses. Initial research 
                  indicates that there is a demand for this accommodation. 
                ---------------------------------------------------------- 
 

Financial review

Since 31 March 2019, the Company has increased its total assets from GBP24.2m to GBP73.6m as a result of the acquisition of six new properties via the issue of consideration shares, as outlined in the Company's announcement on 4 July 2019.

The properties purchased in the period were bought for EUR59,290,000, with consideration being the issue of new shares at GBP0.20 per share. Introducer fees of EUR2,668,050 and broker fees of EUR1,482,250, being 4.5% and 2.5% of the purchase price respectively, were also settled through the issue of new shares at GBP0.20 per share, resulting in at total of 277,931,954 new shares being issued to purchase the properties. In addition, EUR3,092,000 of RETT was accrued at the date of the transaction and other professional fees associated with the transactions of EUR351,988 were incurred, both of which were capitalised as part of the properties' transaction costs. The total of the purchase price and all transaction costs in GBP was GBP58,604,013 (being GBP56,639,212 of investment property and GBP1,964,801 of development property (inventory).

Your new Board has revisited the requirement to hold the investment property portfolio at fair value at the period end and, given the lack of progress made in developing the properties, do not consider there to have been any increase in the fair value of the properties since acquisition and this has resulted in a significant loss on revaluation. This loss represents the significant transaction costs that were occurred in relation to introducer fees, broker fees, RETT and other professional fees (equivalent of GBP6,503,622), GBP944,119 of increased cost that Vordere has had to assume in order to acquire the Pegau property, plus GBP501,257 of property related professional fees that had been capitalised in relation to spend with advisers in trying to establish a development strategy for the new and existing properties, which is not considered to have led to an increase in fair value to the investment properties at the period end and is considered to have limited use to the development strategy going forward. The total loss from the fair value adjustment of investment properties is GBP7,951,024.

Within the administrative expense of GBP2,513,478 there are exceptional costs that have been incurred in relation to Prospectus costs of GBP506,248 for a prospectus which was not approved by the FCA. The Current Board are putting in a great deal of effort in understanding the reasons behind this. Additional fees paid to the Directors in September 2019 were GBP132,178. The Prospectus costs relate to professional fees incurred by previous management going back around nine months, GBP237,118 of the costs had been carried within prepayments as at 31 March 2019, with additional costs of GBP269,130 originally capitalised within the period to 30 September 2019. Given the length of time taken, the change in management and changes to advisors, these costs are no longer considered to have any value and have been written-off in the period. In addition, the Mohriner Allee property that is held as inventory was written down by GBP323,694 from its cost to its net realisable value, based on its disposal after the period, as outlined below.

At 30 September 2019, the Company had GBP4.3 million in cash, no debt and continued to keep a number of its operational business functions outsourced which the historic board saw as best practice. Your Board is currently reviewing this operational strategy with a view to significantly reducing the administrative expenses. Since the period end the Company has incurred net cash outflows of cGBP3.4 million through to the end of November 2019, with the largest outlays being on Real Estate Transfer Tax of c.GBP1.1 million, putting in place a development bond for the Sehnde property of c.GBP0.75 million and normal cash outflows for overheads of GBP0.2 million per month. In addition, there were c.GBP1.1 million of payments made by the previous Board, elements of which are currently under investigation as referred to in the Chairman's Statement.

In September 2019, the Company has also received an additional GBP1.1 million of cash from the early repayment of one of its Norwegian loans. The Company is currently negotiating the full payment of unpaid interest from the previously repaid loan and the current loan.

Completion of Mohriner Allee and going concern

Your Board has prepared cash flow forecasts for a period of at least 12 months from the date of this announcement, and have a reasonable expectation that the funds from the Mohriner Allee sale will be received early in January 2020 and as a result continue to prepare these condensed financial statements on a going concern basis.

As mentioned, cash from the sale of the Mohriner Allee property is due to be received in early January 2020 and this is anticipated to result in net proceeds of EUR1,879,000 to the Group (being the equivalent of GBP1,673,584 at the projected period end foreign exchange rate). Costs of sale of GBP14,251 were accrued for and off-set within the valuation of the Mohriner Allee property as at 30 September 2019.

The proceeds were originally expected to be received prior to announcing these interim results, but delays in the legal process have resulted in the Board concluding that a material uncertainty exists in relation to this matter and its potential impact on the Company's cash flows. The delays that have already taken place in finalising the sale have left the Board unable to conclude with sufficient certainty that the funds will be received without further delay.

Separately, your Board are seeking to raise short to mid-term debt finance, secured against the property portfolio, in order to accelerate the development of the properties and to generate rental income.

Further details of this matter are provided within Note 3 to the financial statements.

Key Performance Indicators

The net asset value per share has increased by 30% since 31 March 2019, from 11.67p per share to 14.66p per share as at 30 September 2019.

For the period ended 30 September 2019 no updated formal property valuations have been obtained and the directors are relying on the previous formal valuations as at the year end 31 March 2019 or 4 July 2019 for those purchased in the period. The directors do not believe that there are any material factors that would impact these valuations, but would note that they are based on the assumptions and development strategies put forward by the previous Board.

Principal Risks and uncertainties

The principal risks and uncertainties remain unchanged from those outlined within the 31 March 2019 Annual Report, with the exception of the updates below.

Your Board understands that the original seller of the properties is currently undergoing a form of re-structuring and although there is technically no legal risk surrounding your Company's ownership of the properties, there is a possibility that these properties might be caught up in any restructuring or administration proceedings. Accordingly, it is a current priority of your Board to ensure that ownership is fully transferred to the Company as soon as possible.

The preservation of cash remains a core driver for your Board and we remain determined to keep operational costs to a minimum whilst reviewing the efficiency of the company to ensure that maximum funds remain available to invest in value enhancing projects. As outlined in the financial review section, your Board is currently discussing the possibility of arranging short or mid-term debt finance to be secured against the property portfolio, in order to make progress in developing the properties.

Your Board recognises and is conscious of the political and economic uncertainty that surrounds the UK's decision to leave the European Union and the political uncertainty that has existed prior to the recent General Election. However, we do not believe that the risks facing the business have changed significantly since the year end.

Other matters

Brazil

In October 2019, the Company signed binding agreements to acquire five properties in Brazil for a total purchase price of GBP25,855,595, payable in the Company's shares. The five properties were valued by ReMax, with BDO LLP providing Companies Act Section 593 approval. In consideration for the acquisition, the Company allotted 129,277,975 new ordinary shares at a price of GBP0.20 per share in the capital of the Company by way of the issuance of certificated shares.

Following the Company's announcement on 21 October 2019 in respect of the acquisition of the Brazil properties, one of the Company's major shareholders, Mr John O'Donnell, applied to the High Court of Justice to obtain an interim junction preventing the Company from registering the 129,277,975 ordinary shares in the register of members.

The High Court of Justice duly granted the interim injunction and this was extended by the High Court of Justice on 31 October 2019 to prevent the recipients of the ordinary shares from registering any transfer of such shares.

At hearings in the High Court in London on 13 and 16 December 2019, the Company consented to the continuation by the Court of an injunction made against the Company, Ritz Property Investimentos Imobiliarios EIRELI ("Ritz"), Aurora Capital Ltd ("Aurora") and GFG UK Ltd ("GFG UK"), which prevents the registration of any transfer of the shares in the Company held by Ritz, Aurora and GFG UK, pending the resolution of the claim made by Mr John O'Donnell for orders setting aside a transaction made between the Company and Ritz in October 2019.

The Court also made orders for service of the Court documents on Ritz in Brazil and Aurora in Cayman, which will be completed in the coming weeks. The Company, Ritz, Aurora and GFG UK will then be required to take a formal position in relation to Mr O'Donnell's claim and the case will proceed to be resolved by the Court.

The Brazilian acquisition contains a number of conditions subsequent which may prevent the transaction from legally closing. The Board is of the opinion that the Brazilian property acquisition is not in the best interests of shareholders and will continue to seek to have the transaction set aside or unwound.

Your Board is committed to increasing transparency and communication with shareholders as well as being fully focused on developing a strategy that maximises shareholder capital and risk-adjusted returns.

I would like to take the opportunity to thank the Company's shareholders for their continued support and patience in what has been a difficult past few months.

David Irving

Chief Executive Officer

The Directors of Vordere PLC and their bios are listed on the Company's website at www.vordere.com.

Condensed consolidated income statement and condensed consolidated statement of comprehensive income for the six months ended 30 September 2019

 
                                      Note    Unaudited        Unaudited       Audited 
                                              Six months      Six months    Year ended 
                                                 ended             ended        31 Mar 
                                                30 Sep       30 Sep 2018          2019 
                                                 2019 
                                                                     GBP 
                                                  GBP                              GBP 
 Revenue                                          115,587         80,670       174,268 
 Net loss from fair value                     (7,951,024)              -             - 
  adjustment on property 
 Repair and maintenance costs                    (74,053)       (30,132)      (38,877) 
 Other direct property operating 
  expenses                                       (16,063)       (39,563)     (100,128) 
 Other expenses                               (2,513,478)    (1,361,997)   (2,735,446) 
 Operating Loss                              (10,439,031)    (1,351,022)   (2,700,183) 
 Finance income                                    65,465         60,230       114,913 
 Loss before taxation                        (10,373,566)    (1,290,792)   (2,585,270) 
 Taxation                                               -          (593)       (1,621) 
-----------------------------------  -----  -------------  -------------  ------------ 
 Loss for the period attributable 
  to equity owners of the 
  company                                    (10,373,566)    (1,291,385)   (2,586,891) 
-----------------------------------  -----  -------------  -------------  ------------ 
 
 Statement of comprehensive 
  income 
-----------------------------------  -----  -------------  -------------  ------------ 
 Exchange gain/(loss) arising 
  on translation of foreign 
  operations                                    1,517,435         39,803     (362,899) 
-----------------------------------  -----  -------------  -------------  ------------ 
 Total comprehensive loss 
  for the period/year attributable 
  to the owners of the company                (8,856,131)    (1,251,582)   (2,949,790) 
-----------------------------------  -----  -------------  -------------  ------------ 
 Loss per share 
-----------------------------------  -----  -------------  -------------  ------------ 
 Basic                                 4          (0.028)        (0.006)       (1.295) 
 Diluted                               4          (0.028)        (0.006)       (1.295) 
-----------------------------------  -----  -------------  -------------  ------------ 
 

Condensed consolidated statement of financial position as at 30 September 2019

 
                                      Note      Unaudited         Unaudited     Audited 
                                               Six months        Six months    Year ended 
                                                    ended             ended      31 Mar 
                                              30 Sep 2019       30 Sep 2018       2019 
 
                                                      GBP               GBP       GBP 
-----------------------------------  -----  -------------  ----------------  ------------ 
 NON-CURRENT ASSETS 
 Investment property                   5       66,239,734                 -    15,586,442 
 Property, plant and equipment                      6,917             7,579         7,248 
 Financial assets at amortised 
  cost                                 6          941,712         2,075,278     2,011,122 
 Total non-current assets                      67,188,363         2,082,857    17,604,812 
 CURRENT ASSETS 
 Development property                  7        1,673,584        16,120,568             - 
 Trade and other receivables                      401,301           293,341       900,782 
 Cash and cash equivalents                      4,332,986         7,175,135     5,645,997 
-----------------------------------  -----  -------------  ----------------  ------------ 
 Total current assets                           6,407,871        23,589,044     6,546,779 
-----------------------------------  -----  -------------  ----------------  ------------ 
 Total assets                                  73,596,234        25,671,901    24,151,591 
-----------------------------------  -----  -------------  ----------------  ------------ 
 LIABILITIES 
-----------------------------------  -----  -------------  ----------------  ------------ 
 Total current liabilities             8      (3,562,261)         (669,980)     (847,878) 
-----------------------------------  -----  -------------  ----------------  ------------ 
 NET ASSETS                                    70,033,973        25,001,921    23,303,713 
-----------------------------------  -----  -------------  ----------------  ------------ 
 
 EQUITY 
 Capital and reserves attributable 
  to owners of the company 
 Share capital                         9        9,553,647         3,995,008     3,995,008 
 Share premium                                 74,533,183        24,505,431    24,505,431 
 Retained earnings                           (14,854,854)       (3,185,782)   (4,481,288) 
 Foreign exchange reserves                        801,997         (312,736)     (715,438) 
-----------------------------------  -----  -------------  ----------------  ------------ 
 TOTAL EQUITY                                  70,033,973        25,001,921    23,303,713 
-----------------------------------  -----  -------------  ----------------  ------------ 
 

Condensed consolidated statement of changes in equity for the six months ended 30 September 2019

 
                               Share     Share premium     Retained         Foreign       Total equity 
                              capital                      earnings         exchange 
                                                                            reserve 
                                GBP           GBP            GBP              GBP             GBP 
 Balance at 1 April 
  2018 (audited)             3,995,008      24,505,431    (1,894,397)         (352,539)     26,253,503 
 Comprehensive Loss 
 Loss for the period 
  and total comprehensive 
  income                             -               -    (1,291,385)                 -    (1,291,385) 
 Other comprehensive 
  income                             -               -              -            39,803         39,803 
 Total owners equity 
  at 30 September 
  2018 (unaudited)           3,995,008      24,505,431    (3,185,782)         (312,736)     25,001,921 
--------------------------  ----------  --------------  -------------  ----------------  ------------- 
 Comprehensive loss 
 Loss for the period                 -               -    (1,295,506)                 -    (1,295,506) 
 Other comprehensive 
  income                             -               -              -         (402,702)      (402,702) 
--------------------------  ----------  --------------  -------------  ----------------  ------------- 
 Total owners equity 
  at 31 March 2019 
  (audited)                  3,995,008      24,505,431    (4,481,288)         (715,438)     23,303,713 
--------------------------  ----------  --------------  -------------  ----------------  ------------- 
 Comprehensive Loss 
 Loss for the period                 -               -   (10,373,566)                 -   (10,373,566) 
 Other comprehensive 
  income                             -               -              -         1,517,435      1,517,435 
 Transactions with 
  owners 
 Issue of share capital      5,558,639      50,027,752              -                 -     55,586,391 
 Total owners equity 
  at 30 September 
  2019 (unaudited)           9,553,647      74,533,183   (14,854,854)           801,997     70,033,973 
--------------------------  ----------  --------------  -------------  ----------------  ------------- 
 

Condensed consolidated cash flow statement for the six months ended 30 September 2019

 
                                                 Unaudited     Unaudited       Audited 
                                                Six months    Six months    Year ended 
                                                  ended 30      ended 30        31 Mar 
                                                  Sep 2019      Sep 2018          2019 
 
                                                       GBP           GBP           GBP 
-------------------------------------------  -------------  ------------  ------------ 
 Cash flows from operating activities 
 Loss for the year                            (10,373,566)   (1,291,385)   (2,586,891) 
 Adjustments for: 
 Tax expense                                             -           593         1,621 
 Depreciation and impairment                           331           331           662 
 Net loss from fair value adjustment             7,951,024             -             - 
  on investment property 
 Write-down of development property                323,694             -             - 
  to net realisable value 
 Finance income                                   (65,465)      (60,230)     (114,913) 
 Finance costs                                           -             -             - 
                                               (2,163,982)   (1,350,691)   (2,699,521) 
 Movements in working capital 
 Decrease/(increase) in receivables                164,662       459,217     (128,087) 
 Increase in payables                              367,407       167,639       547,595 
 Increase in development properties              (136,609)       (1,789)       (1,976) 
 Tax paid                                                -         (593)       (1,621) 
-------------------------------------------  -------------  ------------  ------------ 
                                                   395,460       624,474       415,911 
 Net cash used in operating activities         (1,768,522)     (726,217)   (2,283,610) 
-------------------------------------------  -------------  ------------  ------------ 
 
 Cash flows from investing activities 
 Increase in investment property                 (696,619)             -             - 
 Interest received                                  65,465        60,230       114,913 
 Loan repayment received                         1,069,410             -             - 
 Net cash from investing activities                438,256        60,230        91,636 
 Net decrease in cash and cash equivalents     (1,330,266)     (665,987)   (2,191,974) 
 Cash and cash equivalents at start 
  of the period                                  5,645,997     7,840,423     7,840,423 
 Effect of foreign exchange rate 
  changes                                           17,255           699       (2,452) 
-------------------------------------------  -------------  ------------  ------------ 
 Cash and cash equivalents at period 
  end                                            4,332,986     7,175,135     5,645,997 
-------------------------------------------  -------------  ------------  ------------ 
 

Notes to the interim accounts

For the six months ended 30 September 2019

1. General information

The Company is incorporated in England and Wales and is domiciled in the UK. Its registered office is at 3(rd) Floor, 11-12 St. James's Square, London, United Kingdom, SW1Y 4LB.

These unaudited condensed interim financial statements for the six months ended 30 September 2019 have been prepared in accordance with International Financial Reporting Standards (IFRS) and IAS 34 "Interim Financial Reporting" as adopted by the European Union and do not constitute statutory accounts as defined in Section 434 of the Companies Act 2006. This condensed set of financial statements has been prepared on a consistent basis with the Company's published financial statements for the year ended 31 March 2019, after the adoption of new accounting standards disclosed in note 2, and is presented in pounds sterling.

The comparative figures for the financial year ended 31 March 2019 have been extracted from the Company's statutory accounts which have been reported on by the Company's auditor and delivered to the Registrar of Companies. The report of the auditors was unqualified and did not contain a statement under the Companies Act 2006 regarding matters which are required to be noted by exception. The interim results have been reviewed by Grant Thornton UK LLP but have not been audited.

2. Changes in accounting policies

During the period the Group has adopted IFRS 16 "Leases", the adoption of IFRS 16 has not led to a change in accounting or the need restate the prior period figures.

In applying IFRS 16 for the first time, the Group has used the practical expedient permitted by the standard, which allows the accounting for operating leases, with a remaining lease term of less than 12 months as at 1 April 2019, as short-term leases. Payments associated with short-term leases, and leases of low-value assets are recognised on a straight-line basis as an expense in profit or loss. Short-term leases are leases with a lease term of 12 months or less. Low-value assets comprise IT equipment and small items of office furniture. The adoption of IFRS 16 has had no impact to the consolidated financial statements based on management's assessments.

All other accounting policies remain unchanged since the year ended 31 March 2019.

3. Going concern

The Directors have prepared cash flow forecasts for a period of at least 12 months from the date of this announcement and have a reasonable expectation that the funds from the Mohriner Allee sale will be received early in January 2020, allowing the Group to meet its liabilities as they fall due. As a result, the Directors continue to prepare these condensed financial statements on a going concern basis.

The proceeds from the sale of the Mohriner Allee property are due to be received in early January 2020 and this is anticipated to result in net proceeds of EUR1,879,000 to the Group (being the equivalent of GBP1,673,584 at the projected period end foreign exchange rate). Costs of sale of GBP14,251 were accrued for and off-set within the valuation of the Mohriner Allee property as at 30 September 2019.

The proceeds were originally expected to be received prior to announcing these interim results, but delays in the legal process have resulted in those proceeds now being expected in early January 2020. The receipt of these proceeds are included within the Group's cash flow forecasts and allow the Group to meet its current and forecast liabilities as they fall due. The delays that have already taken place in finalising the sale have left the Board unable to conclude with sufficient certainty that the funds will be received without further delay which would cast significant doubt on the ability of the Group to continue as a going concern. As those funds have yet to be received, the Board have concluded that a material uncertainty exists in relation to this matter and its potential impact on the Company's cash flows.

Separately, your Board are seeking to raise short to mid-term debt finance, secured against the property portfolio, in order to accelerate the development of the properties and to generate rental income. However, these arrangements have yet to be finalised.

Nevertheless, having considered the uncertainties described above and after making appropriate enquiries, the Directors have a reasonable expectation that the Group has adequate resources to continue in operational existence for the foreseeable future and accordingly continue to adopt the going concern basis in preparing these condensed financial statements.

4. Loss per share

The calculation of the basic and fully diluted loss per share is based on the loss for the period after tax of GBP10,373,566 (30 Sep 2018: GBP1,291,385; 31 Mar 2019: GBP2,586,891) divided by the weighted average issued ordinary shares of 367,731,269 (30 Sep 2018: 199,750,418; 31 Mar 2019: 199,750,418). Where a loss has been recorded for the year the diluted loss per share does not differ from basic loss per share as the exercise of any options or warrants would have the effect of reducing loss per share and is therefore not dilutive under the terms of IAS 33.

5. Investment property

Management determined in the year to 31 March 2019 that the properties held by the Group should be reclassified as investment properties on the basis that they will be retained for rental income and/or long-term capital appreciation. During the period to 30 September 2019 the Group acquired six new properties, five of which were classified as Investment Properties, as the initial assessment was that they would be retained for rental income and/or long-term capital appreciation. The other property, Mohriner Allee, was classified as development property as the expectation was to always to sell the site, the site is in the process of being sold as outlined in note 7. In the prior interim period to 30 September 2018 the properties were classified as development properties within stock and held at the lower of cost and net realisable value, see note 7.

Rental income of GBP115,587 (30 Sep 2018: GBP80,670; 31 Mar 2019: GBP174,268) was recognised in respect of investment properties (30 Sep 2018: development properties).

The fair value of the investment properties was established using the residual value method and carried out by Jones Lang LaSalle, external independent qualified valuers with recent experience valuing investment properties in the location held by the Group. For all investment properties, their current use equates to the highest and best use.

All fair value estimates for investment properties are included in level 3 under the fair value hierarchy for determining the fair value of non-financial assets. The valuation of each of the properties was determined using the residual value method, as the properties are intended for development, with the sales comparison approach the key initial input. Properties valued using the sales comparison approach take into account comparable properties in close proximity. These values are adjusted for differences in key attributes such as location, size and quality of interior fittings.

During the six month period to 30 September 2019 five new investment properties were purchased with shares issued for consideration. The valuations were performed by Jones Lang LaSalle prior to purchase on the same basis as the previous valuations prepared for the existing four properties. Transaction costs incurred on the purchases have been capitalised on initial recognition, at the foreign exchange rate agreed in the contract, and comprised: Introducer and Broker fees, that were also settled through the issue of shares, totalling GBP3,516,892, Real Estate Transfer Tax accruing on the transactions of GBP2,606,695 and Other professional fees of GBP274,317.

At 30 September 2019, in line with the fair value accounting policy adopted under IAS 40, the Group is required to hold each Investment Property at its fair value. As the new Board are having to revisit the strategy associated with each of the ten properties held by the Group the transaction costs incurred by the previous management were not considered to have added value at the period end and therefore these are all to be written off as part of the loss incurred in writing the initial costs down to their period end fair value being the amounts included within the JLL valuations. In addition the previous management incurred professional fees of GBP501,257 across the property portfolio relating to their previous strategy, which again was not considered to have added to the fair value of the properties as at 30 September 2019.

 
                                                         GBP 
 Fair value at 1 April 2018 (audited) and 30               - 
  September 2018 (unaudited) 
 Transfer from development properties             15,586,442 
                                                ------------ 
 Fair value at 31 March 2019 (audited)            15,586,442 
                                                ------------ 
 Additions: 
 
        *    Direct acquisitions                  56,639,212 
 
        *    Subsequent expenditures                 501,257 
 Net loss from fair value adjustments            (7,951,024) 
 Currency translation difference in OCI            1,463,847 
                                                ------------ 
 Fair Value at 30 September 2019 (unaudited)      66,239,734 
                                                ============ 
 

6. Financial assets at amortised cost

Non-current financial assets at amortised cost of GBP941,712 (30 Sep 2018: GBP2,075,278; 31 Mar 2019: GBP2,011,122) relate to 3rd party loans from Vordere Capital S.a.r.l. to JV11 Eiendom AS and MV13 Eiendom AS, with the loan to MV13 fully repaid during the period to 30 September 2019.

On the 2nd August 2017, Vordere Capital S.a.r.l. agreed to provide MV13 Eiendom AS with a secured term loan facility of NOK 13,000,000 with interest of aggregate of 6 per cent per annum and 1 percent per annum. On the 15th November 2017, Vordere Capital S.a.r.l. agreed to provide JV Eiendom AS with a secured term loan facility of NOK 9,500,000 with interest of aggregate of 6 per cent per annum and 1 percent per annum.

The loans were repayable 5 years from the Drawndown Dates of the loans, as described above. Interest receivable for the period amounts to GBP65,465 (30 Sep 2018: GBP60,230; 31 Mar 2019: GBP114,913). Vordere Capital S.a.r.l. has a security over the properties bought with the proceeds of the above loan.

On 24 September 2019 repayment of NOK 12,541,832 (cGBP1.2m) was sent to the Group representing the full final repayment of the outstanding principal and interest in relation to the MV13 Eiendom AS loan. The remaining loss allowance recognised under IFRS 9 in relation to this loan was released on repayment, which totalled GBP22,443.

7. Development property

 
                                    Six months  Six months       Year 
                                      ended 30    ended 30   ended 31 
                                      Sep 2019    Sep 2018   Mar 2019 
                                           GBP         GBP        GBP 
Assets held for development and 
 resale in the ordinary course of 
 business                            1,673,584  16,120,568          - 
                                     1,673,584  16,120,568          - 
                                    ----------  ----------  --------- 
 

The property acquired at Mohriner Allee has been classified as development property (inventory) as the expectation was always to sell the site. The sale is due to concluded in early January 2020 and is expected to result in net proceeds of EUR1,879,000 to the Group (being the equivalent of GBP1,673,584 at the period end foreign exchange rate).

In the prior interim period to 30 September 2018 the first four German properties were classified as development properties within stock and held at the lower of cost and net realisable value, these were reclassified as investment properties during the second half of the year ended 31 March 2019, see note 5.

8. Total current liabilities

 
                 Six months  Six months       Year 
                   ended 30    ended 30   ended 31 
                   Sep 2019    Sep 2018   Mar 2019 
                        GBP         GBP        GBP 
Trade payables    1,324,743     432,050    305,505 
Other payables       70,929      12,255    196,043 
Accruals          2,166,589     225,675    346,330 
                  3,562,261     669,980    847,878 
                 ----------  ----------  --------- 
 

The increase in current liabilities during the period ended 30 September 2019 is due mainly to Real Estate Transfer Tax and partly due to the increase in the number of properties. As at 30 September 2019 Real Estate Transfer Tax had been paid for two of the six new sites, invoiced and included in trade payables for one site and accrued for the final three sites.

9. Issued share capital

Authorised, allotted and called up share capital:

 
                                  Six months  Six months       Year 
                                    ended 30    ended 30   ended 31 
                                    Sep 2019    Sep 2018   Mar 2019 
                                         GBP         GBP        GBP 
Ordinary shares of GBP0.02 each 
 at the beginning of the period    3,995,008   3,995,008  3,995,008 
Shares issued during the period    5,558,639           -          - 
                                   9,553,647   3,995,008  3,995,008 
                                  ----------  ----------  --------- 
 
 
                                   Six months   Six months         Year 
                                     ended 30     ended 30     ended 31 
                                     Sep 2019     Sep 2018     Mar 2019 
                                       Number       Number       Number 
Ordinary shares of GBP0.02 each 
 at the beginning of the period   199,750,418  199,750,418  199,750,418 
Shares issued during the period   277,931,954            -            - 
                                  477,682,372  199,750,418  199,750,418 
                                  -----------  -----------  ----------- 
 

Share issue and investment property purchase

On 12 June 2019, the Company announced that it had signed binding agreements to acquire six properties in Germany, for a total purchase price of EUR59,290,000 (the "Acquisition Agreements"), in accordance with its published investment strategy. The consideration for the properties under the Acquisition Agreements, along with fees to the Introducer (EUR2,668,050) and GFG Limited (EUR1,482,250), were to be satisfied by the issue of new ordinary shares in the Company at a value of GBP0.20 per share.

On 4 July 2019, the Company announced that it had allotted 277,931,954 new ordinary shares (the "Consideration Shares"), as outlined in the Acquisition Agreements, of nominal value GBP0.02 in the capital of the Company (the "Share Allotment") by way of the issuance of certificated shares which are not open to trading on any clearing system. Accordingly, at the Company's request the listing of its ordinary shares has been suspended pursuant to Chapter 5 of the Listing Rules. As noted in the Chairman's Statement, the shares in the Company remain suspended and are likely to be so in the near future.

The Company's total issued share capital prior to 4 July 2019 was 199,750,418 shares of nominal value GBP0.02. Following the Share Allotment, the issued share capital is 477,682,372 shares. There are 10,426,780 Ordinary Shares which shall be held in Treasury pending completion of conditions in respect of one acquisition agreement, as set out in the Prospectus. The total voting rights are therefore 467,255,592 shares as at 4 July 2019.

10. Related parties

Mr Nicholas Hofgren, a former Director of Vordere PLC is also a director of GFG Limited. On 30 September 2016, the Company signed a 2--year Corporate advisory agreement with GFG Limited, under the agreement the Company has agreed to pay GFG a fee of GBP7,500 per month until such time that the Company asset value exceeds GBP10,000,000 whereupon the fee will be calculated at the rate of 1.5% of the gross asset value or GBP15,000, whichever is greater, per month. During the six month period ended 30 September 2019, the Company paid GBP351,651 (2018: GBP212,235) for monthly advisory services to GFG and GBP50,000 (2018: GBP50,000) for monthly Board services. As at 30 September 2019 the outstanding balance was GBP91,723 (2018: GBP43,706). GFG were paid GBP1,298,747 of fees in relation to the acquisition of the six new properties in the period, which were settled by the issue of new shares at 20p per share (2018: GBPnil).

On the 2 June 2018 the Company signed a revised agreement for 3-years for a Corporate advisory agreement with GFG, with no other changes.

Mr Nicholas Hofgren, a former Director of Vordere PLC received GBP18,000 (2018: GBP18,000) in directors' remuneration during the six months ended 30 September 2019. As at 30 September 2019 the outstanding balance with Nicholas Hofgren was GBPnil (2018: GBPnil).

Mr G Johnson, a former Director of Vordere PLC is also a Director of Granite and Pine Investments International Ltd. During the six months period ended 30 September 2019 Directors' fees of GBP90,340 (2018: GBP12,500) were recognised from Granite and Pine Investments International Ltd on behalf of Mr G Johnson. As at 30 September 2019 the outstanding balance due to Granite and Pine Investments International Ltd was GBP80,037 (2018: GBPnil).

Mr B Fitzpatrick, a Director of Vordere PLC is also a Director of Ocean Park Developments Ltd. During the six months period ended 30 September 2019 Directors' fees of GBP23,750 (2018: GBP12,500) were recognised from Ocean Park Developments Ltd on behalf of Mr B Fitzpatrick. As at 30 September 2019 the outstanding balance due to Ocean Park Developments Ltd was GBP11,250 (2018: GBP6,250). The outstanding amount is repayable on demand.

Mr S Cheek, a former Director of Vordere PLC is also a Director of Randall Duke Limited. During the six months period ended 30 September 2019 Directors' fees of GBP57,500 (2018: GBP10,417) were recognised from Randall Duke Limited on behalf of Mr S Cheek. As at 30 September 2019 the outstanding balance was GBP45,000 (2018: GBP2,083).

A General Meeting was held on 24 October 2019, at which all Resolutions were passed resulting in the removal of Nicholas Hofgren, Stuart Cheek and Graeme Johnson as Directors of the Company.

11. Principal risks and uncertainties

The principal risks and uncertainties for the six months of ending 30 September 2019 are laid out on page 7 of this interim report.

12. Events occurring after the reporting period

On 21 October 2019, and shortly before the General Meeting was held, the then Board announced that it had allotted 129,277,975 ordinary shares in consideration for the acquisition of five properties in Brazil for a total purchase price of GBP25.9m.

The Mohriner Allee property disposal was agreed, as disclosed in note 7.

13. Board Approval

These interim results were approved by the Board of Vordere Plc on 23 December 2019.

DIRECTORS RESPONSIBILITY STATEMENT AND REPORT ON PRINCIPAL RISKS AND UNCERTANTIES

Responsibility statement

We confirm to the best of our knowledge:

(a) The condensed set of financial statements have been prepared in accordance with IAS 34 Interim Financial Reporting as adopted by the EU;

(b) The interim management report includes a fair review of the information required by:

(1) DTR 4.2.7R of the Disclosure and Transparency Rules, being an indication of important events that have occurred during the first six months of the financial year and their impact on the condensed set of financial statements; and a description of the principal risks and uncertainties for the remaining six months of the year; and

(2) DTR 4.2.8R of the Disclosure and Transparency Rules, being related party transactions that have taken place in the first six months of the current financial year and that have materially affected the financial position or performance of the entity during the period; and any changes in the related party described in the last annual report that could do so.

Strategic Decisions

The Board will provide leadership within a framework of appropriate and effective controls. The Board will set up, operate and monitor the corporate governance values of the Company, and will have overall responsibility for setting the Company's strategic aims, defining the business objective, managing the financial and operational resources of the Company and reviewing the performance of the officers and management of the Company's business both prior to and following an acquisition.

Financial Risk Management

The Company has a simple capital structure and its principal financial asset is cash. At 30 September 2019 the Company had currency risk relating to financial assets and liabilities denominated in Euros, as well as having currency risk on its property assets that are also valued in Euros. The Company has no material exposure to market risk, and the Directors manage its exposure to liquidity risk by maintaining adequate cash reserves and the close monitoring of cash requirements going forward.

23 December 2019

Independent review report to the members of Vordere Plc

Introduction

We have been engaged by the company to review the condensed set of financial statements in the half-yearly financial report of Vordere Plc for the six months ended 30 September 2019 which comprises the Condensed Consolidated Income Statement, the Condensed Consolidated Statement of Comprehensive Income, the Condensed Consolidated Statement of Financial Position, the Condensed Consolidated Statement of Changes in Equity, the Condensed Cash Flow Statement and the related notes. We have read the other information contained in the half-yearly financial report which only comprises the Chairman's Report and Chief Executive's Report set out on pages 2 to 8.

Directors' responsibilities

The half-yearly financial report is the responsibility of, and has been approved by, the directors. The directors are responsible for preparing the half-yearly financial report in accordance with the Disclosure and Transparency Rules of the United Kingdom's Financial Conduct Authority.

As disclosed in note 1, the annual financial statements of the group are prepared in accordance with International Financial Reporting Standards as adopted by the European Union. The condensed set of financial statements included in this half-yearly financial report has been prepared in accordance with International Accounting Standard 34, 'Interim Financial Reporting', as adopted by the European Union.

Our responsibility

Our responsibility is to express a conclusion on the condensed set of financial statements in the half-yearly financial report based on our review.

Scope of review

We conducted our review in accordance with International Standard on Review Engagements (UK and Ireland) 2410, 'Review of Interim Financial Information Performed by the Independent Auditor of the Entity' issued by the Auditing Practices Board for use in the United Kingdom. A review of interim financial information consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK) and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Conclusion

Based on our review, nothing has come to our attention that causes us to believe that the condensed set of financial statements in the half-yearly financial report for the six months ended 30 September 2019 is not prepared, in all material respects, in accordance with International Accounting Standard 34, 'Interim Financial Reporting', as adopted by the European Union and the Disclosure and Transparency Rules of the United Kingdom's Financial Conduct Authority.

Emphasis of matter - Material uncertainty related to going concern

We draw attention to Note 3 to within these interim financial statements, which indicates the delays that have taken place in finalising the sale of the Mohriner Allee property. The delays that have already taken place in finalising the sale have left the Board unable to conclude with sufficient certainty that the funds will be received without further delay which would cast significant doubt on the ability of the Group to continue as a going concern. As those funds have yet to be received, the Directors have concluded that a material uncertainty exists in relation to this matter and its potential impact on the Company's cash flows. Our conclusion is not modified in respect of this matter.

Use of our report

This report is made solely to the company, in accordance with International Standard on Review Engagements (UK and Ireland) 2410, 'Review of Interim Financial Information performed by the Independent Auditor of the Entity' issued by the Auditing Practices Board. Our review work has been undertaken so that we might state to the company those matters we are required to state to it in an independent review report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company for our review work, for this report, or for the conclusion we have formed.

Grant Thornton UK LLP

Statutory Auditor, Chartered Accountants

Crawley

23 December 2019

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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