DCI Advisors Ltd - Shareholder Update

DCI Advisors Ltd

(the "Company" or "DCI")

Shareholder Update

25th September 2025

Company  update

The Directors of your Company are proud to report significant progress in 2025 across the Company's complex portfolio. As a specialised Company holding a range of illiquid, largely undeveloped land assets in remote locations, the Company has faced a number of legacy challenges, which were inherited by the current Board. Over the past year, key asset sales have been completed with in some cases final steps pending, strategic restructuring is nearing finalisation, and the Company is now well-positioned for the future - bringing the return of capital to shareholders significantly closer.

Successful Asset Sales Mark Milestones in our Realisation Strategy

The total transaction value agreed this year is more than €45 million - the highest annual result DCI has achieved since implementing its realisation strategy in December 2016. The cash element for these transactions adds up to close to €33 million. The remainder relates to payment in kind as part of the Aristo Developers sale. Up until the end of August these transactions resulted in a cash inflow of close to €11m of which €3.2m was paid on an escrow account. More details on this are discussed later in this update. This figure of over €45 million represents nearly 40% of the total realised transaction value since its realisation strategy was implemented. Since their appointment to the Board just over four years ago, the two executive directors have, including the sale of One&Only at Kea Island (OOKI), overseen €63.6 million in transactions. The majority of the €17.9 million in OOKI proceeds were used to repay a loan facility and outstanding liabilities. The 2025 transactions position DCI to  make its first shareholder distribution since the Company's inception nearly 20 years ago - subject to the release of the final cash payments to the Company. Any such distribution will depend on the obligations regarding continued deleveraging, the settlement of outstanding tax liabilities, and the ongoing development at Kilada.

Aristo Developers Ltd

The Company announced in February 2025 the sale of its entire stake in Aristo Developers for €31.1 million, which also included selling DCI's remaining stake in the Venus Rock development land site.  This landmark transaction demonstrates the Company's ability to unlock value from its holdings.  The consideration for the sale was a combination of cash and residential land in Cyprus, strengthening DCI's liquidity and supporting the ongoing development of DCI's main asset in Greece, Kilada Country Club.

On 21 February 2025, DCI received the first cash tranche of €4.6 million from the sale and in a further milestone, the three residential development land plots in Paphos - valued at €12.8 million - were successfully transferred to DCI on 6 May 2025.  The acquired plots, all with division planning permissions, are being held as current assets and are being marketed for sale rather than being developed.

One plot, located in Peyia, includes 12 individual building sites with sweeping coastal views over Coral Bay.  The remaining two plots are seafront sites near Mandria village which are close to Paphos airport, covering 38,000 square meters in total.  The sale process for these plots is now actively underway, with marketing efforts already initiated. 

On 21 May 2025, a second payment of €4.1 million was received, with €908,830 received directly by DCI and €3.2 million placed in escrow to cover any unforeseen historical potential tax liabilities in Cyprus.  A final payment of €6.1 million is due following receipt of the requisite Cypriot tax clearances and efforts are well underway with the Company's tax advisors to obtain that clearance.  In return for the payments received to date, DCI's shareholding in DCI Holdings Two Limited (which owns Aristo Developers) has been reduced from 47.93% to 10.68%, with the final shares to be transferred upon receipt by DCI of the final payments.  The release of the €3.5 million payment related to the Venus Rock sale transaction is expected as soon as the relevant Cypriot tax clearance has been received.  Obtaining the tax clearance certificates has taken longer than expected but the Company has been advised that the first certificate is expected to be handed over in October.  A further announcement will be made at that time.

Apollo Heights

Following this success with Aristo Developers, DCI recently announced the sale of its land at Apollo Heights in Paramali, Cyprus, for €7.5 million - a price well above the carrying value in the most recent interim accounts.  DCI has received €2.5 million as a deposit on the signing of the Sale and Purchase Agreement with the remainder to be paid at the closing of the transaction which is expected to be once the tax position has been established. This agreement further exemplifies the Board's momentum in executing the Company's realisation strategy.

Livka Bay

Although the sale of Livka Bay did not proceed as planned in 2024 due to the prospective buyer's inability to secure financing, the Company remains confident in the asset's strong appeal to other potential buyers.  Colliers has been reappointed to market the project, and a renewed, active sales process is currently underway, positioning the asset for a successful transaction.

Kilada Country Club: Significant Development Progress and Global Marketing Launch

We would like to  emphasise that the collective effort of our dedicated local team, suppliers, and contractors - despite a highly challenging environment - has been truly invaluable. Their unwavering commitment made progress possible under circumstances that were, at times, extremely difficult, all driven by our shared belief in Kilada as a transformative and exceptional project.

As a Board, we are deeply grateful for their patience, dedication, and the sacrifices they have made to keep this vision on track. While their achievements may not be fully understood or recognised by many, they are fully acknowledged and deeply appreciated by the Board. They continued their efforts to deliver results despite ongoing attempts by certain parties to discredit their support, involvement, and accomplishments. Their resilience and professionalism have been critical to the project's progress. The Board looks forward to continuing our cooperation as we work together to realise the full potential of Kilada.

At the heart of DCI's plans is the completion of Phase One of the Kilada Country Club project in Greece.  Since 2023, the Company has invested approximately €11 million, of which €1.2 million was invested in 2025, into this high-potential development.  DCI also injected further cash amounting to €1.9 million in order to repay an outstanding loan to the Company's JV-partner.

Since 2023, significant progress has been made on the Kilada project.  The archaeological team has released 95% of the golf course land, minimizing concerns about archaeological findings.  Supported by our Greek team in December 2023, the Company was able to get the Greek government to approve the release of a €1.5 million grant payment for the project, with an additional €4.5 million grant payment expected over the next year.  The progress made in 2023 was not only confirmed by the release of the government grant but was also confirmed by a strong uplift in the valuation for the project.  By the end of 2024, nine holes were grassed, and had been played by wealthy individuals residing in the area.  Since then, additional holes have been shaped and are ready for grassing, which is imminent.  Excavations for the golf clubhouse and country club are finished, and foundation reinforcements and columns are in place.

Preliminary discussions are underway to agree terms with a 5-star hotel operator in order to secure hotel development financing.  Acceleration of the development is expected as DCI has budgeted more cash for the development over the coming months from the net sales proceeds from the Aristo Developers and Apollo Heights disposals which will confirm the Project's advancing maturity.

Investor interest in Kilada continues to grow, with ongoing discussions for potential full or partial sales of the Project.  To maximise the asset's market potential, DCI is working with Savills Greece, a leading international real estate agency, to lead and support the sales and exit process.  This strategic partnership is expected to enhance marketing reach and attract high-quality buyers both from within Greece and internationally, positioning Kilada for a successful sale once development milestones are fully achieved.

Other Greek Developments

Constructive discussions continue to be ongoing with the Greek Church to restructure the original purchase terms for Lavender Bay as a result of the ownership dispute with the Greek State, with the goal of reaching a mutually beneficial agreement that reflects current market conditions.  Importantly, there is a potential buyer for the asset, and DCI is working to align all parties to facilitate a successful transaction.

While no exit discussions are currently underway for the other two Greek assets at Plaka Bay and Scorpio Bay, Savills will support DCI in progressing those opportunities towards a sale.

Operational Efficiency and Cost Management

Despite a challenging and at times hostile environment, the Equity attributable to owners of the Company remained resilient, holding relatively stable at €108 million at the end of 2024, compared to €112 million at the end of 2022. These figures include the Aristo Transaction but exclude the Apollo Transaction, which is at a premium of €1.9 million above carrying value, as well as the impact from the announcement as set out in the RNS dated 12 September 2025.

Cost discipline has been applied to capture most of the savings associated with no longer having an external investment manager. Professional Fees have seen a steady decline from €6 million in 2021 to €3.8 million in 2024, a reduction of over 37%. This includes a notable decrease in Investment Manager remuneration, contributing significantly to overall savings. Total Professional Fees, including Administrative and other expenses, followed the same trend, falling from €7.3 million in 2021 to €5.4 million in 2024, a 27% overall reduction. This result was maintained despite several one-off legacy-related expenses. Legal costs, in particular, rose temporarily to €1.7 million in 2023 due to exceptional items, including the re-domiciliation of the Company to Guernsey and the resolution of inherited legal matters. These costs were managed down to €1 million in 2024. Total legal fees during 2023-2024 were approximately €1.7 million above the historical average, which typically ranges between €400,000 and €600,000 annually. Going forward, legal costs are expected to return to these levels or lower, relating mainly to operational matters and asset disposals. With many of the legacy issues now resolved, a number of one-off expenses are not expected to recur, supporting a further reduction in costs going forward. In addition, continued operating efficiencies and the ongoing reduction of the DCI portfolio through asset sales are expected to contribute to a lower overall cost base with the ultimate intention to liquidate the Company at the appropriate time.

The successful re-domiciliation of DCI to Guernsey strengthened its corporate governance and has positioned the Company for improved capital management, including the return of surplus capital to shareholders once the proceeds of further asset sales are received.

Financial Position

Since the Company became self-managed in March 2023, the Company's operating expenses have been funded by its shareholders. The Board extends its sincere gratitude to all shareholders who were willing and able to provide financial support for the execution of the Company's investment strategy. We also wish to thank all service providers - including our legal advisors - for their patience, flexibility, and continued support during a period of financial constraint. The Board deeply appreciates their trust and belief in our ability to execute the strategy and manage the Company through this transitional phase. The total shareholder loans received during this period amounted to approximately €7.2 million, a portion of which were used to refinance maturing shareholder loans.  As of the end of 2024, outstanding shareholder loans stood at €4.9 million.

Of the €7.75 million cash proceeds (€11 million minus €3.2 million) received in the six months to 30 June 2025, a net €1 million of shareholder loan repayments plus interest were made.  Since then, an additional €1.7 million is in the process of being repaid leaving a remaining balance of €2.2 million, which is contractually scheduled for repayment in 2026.

In May 2025, the Company also repaid €1.9 million, funded by sales proceeds and a shareholder loan, to its joint venture partner at Kilada Country Club.  In addition, other outstanding payables and accrued expenses were reduced by €1.5 million during the year.

Altogether, the Company's total deleveraging so far in 2025 amounted to €4.4 million including loan repayments and reduction in outstanding payables. This is excluding the €1.7 million in expected shareholder loans repayments which are currently in process of being repaid.

Legal Update

Since 2023, the Company has achieved multiple legal successes as part of its various legal disputes - successes that have directly protected and advanced shareholder interests. The latest legal update was set out in the RNS dated 12 September 2025.

Some shareholders and a former director previously expressed strong opposition to the Board's legal strategy and questioned the ability of the Board to bring these matters to a successful resolution. The Board believes that the outcome of these proceedings clearly demonstrates the merit of its approach and its determination to protect shareholder value. Despite the doubts and attempts to discredit its efforts, the Board remained focused and has now delivered results that speak for themselves. The Board is confident  that shareholders recognise that and that the legal strategy the Board followed was the correct path designed to protect and enhance shareholder value and interests.

Legal costs have been carefully managed, resulting in a nearly 40% reduction in legal fees in 2024 - reflecting a deliberate balance between maintaining a robust legal position and disciplined cost control. While the Board acknowledges that legal expenses have been elevated since 2023, we firmly believe these were necessary to protect the Company and prevent future disruption. Legal costs are expected to return to more normalised levels going forward.

Corporate Governance Enhancement

Since 2021, the Company has made steady and meaningful progress in strengthening its corporate governance framework, reflecting our ongoing commitment to transparency, accountability, and alignment with shareholder interests.  We recognise that good governance is not a one-time achievement but a continuous process, and we remain open to making further improvements.

As part of this commitment, the Board has consistently maintained an open stance toward strengthening its composition, including the addition of new non-executive directors.  To support this objective, the Board engaged Nurole, a leading board-level recruitment platform, in April 2024 to identify and recommend suitably qualified candidates.  However, this process was paused following concerns raised by a major shareholder regarding the associated costs of adding new directors to the DCI Board.  The Board respected these concerns, underscoring its responsiveness to shareholder feedback.  However, at the request of that same shareholder, Gerasimos Efthimiatos was appointed as a non-executive non-independent Director in November 2024.  The same shareholder then proposed a second non-executive Director soon afterwards, but the Board and a number of shareholders were and remain uncomfortable at this level of influence being exercised by one shareholder.  However, this shareholder then issued a requisition seeking to appoint Martin Adams as a Director and this EGM is due to be held on 10 October.  The independent Directors will be writing to shareholders shortly about this. 

More recently, the Company initiated a dialogue with one of its other principal shareholders, with the shared goal of making the Board's composition more balanced and representative of the Company's future direction.  Following  the conclusion of these discussions, DCI expects to appoint Mr Nikiforos Charagionis to the DCI Board with effect from the conclusion of the EGM being held on 10 October.  Mr Charagionis is a resident of Greece and a senior member of the Greek real estate team of Grifon Capital which is an associate of Fortress Investment Group.  Fortress  owns approximately 10% of DCI's issued share capital. A further announcement about this appointment will be made shortly.

There has been some criticism suggesting that certain directors were not involved in all board meetings. We would like to clarify that up to now, there have been a total of 11 board meetings held in 2025, of which 10 were attended by all directors, either physically or virtually. One meeting was held in person in Guernsey and was a procedural meeting; it was pre-agreed that two directors would attend in person to satisfy local requirements. This arrangement was communicated in advance and did not imply the exclusion of any director. Any suggestion that a director was excluded from board meetings is factually incorrect. All directors were involved in the decision-making process throughout. Mr. Gerasimos Efthimiatos, a non-independent director of DCI appointed at the request of Almitas, however was recused - by decision of the Board - from all discussions concerning the appointment of Martin Adams as a director of DCI.

Looking ahead, the Company remains committed to enhancing its governance standards in a cost-effective and collaborative manner and will continue to explore opportunities to engage constructively with all shareholders.

Outlook: Building on Momentum Towards Shareholder Value

DCI is focused on advancing the shareholder strategy approved in December 2021 of bringing key assets to market for sale, completing sales, and it will then seek to return surplus capital to shareholders.  With the Aristo Developers and Apollo Heights sales agreed and completion just awaiting receipt of tax clearances in Cyprus, and Kilada's formal sales process about to commence, the Company is well positioned to start making distributions to shareholders.  As a result, the Company is currently planning its first distribution which it expects to make when the cash from the Aristo Developers and Apollo Heights transactions has been received.

Discussions around selling Lavender Bay further enhance the pipeline of potential exits.  DCI remains committed to maximising the value of its development portfolio while maintaining disciplined cost control and strong governance.

The Board looks forward to sharing further updates with shareholders as these initiatives develop and milestones are achieved and is confident that the substantial progress achieved to date is laying the foundation for rewarding shareholder returns.

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