London
(or "the Company")
(BTC:L and VINZF:US)
Interim results for the six-months ended
London
Statement from
"The past six months have been operationally rewarding for
Your Board believes the foundations for growth are firmly in place, positioning us to strengthen the business significantly over the next half year and beyond.
We are fortunate to hold the ticker symbol "BTC" on the
Our Bitcoin mining fleet continues to expand across
We intend to keep building our mining capacity as new opportunities arise. Bitcoin mining lies at the core of our strategy. With Bitcoin prices around
On the treasury side, our Bitcoin holdings have grown to more than 85 BTC during the reporting period. Importantly, London BTC remains one of the few
Since our debut on the LSE, we have learned some valuable lessons. Future growth will focus on increasing our Bitcoin exposure via mining and treasury holdings, whilst avoiding the pattern of rapid, shareholder-diluting capital raisings common among other
Earlier this year, we announced our intent to seek a dual listing on Nasdaq. This remains a key strategic priority. With the publication of these interim accounts, our team will now work closely with our
We believe London BTC is built on a sustainable, scalable foundation within the Bitcoin ecosystem. Our team shares one vision and one mission: to grow stronger as Bitcoin continues to gain global recognition as both a store of value and a medium of exchange. We are confident the Company is well-positioned to capitalise on this accelerating momentum."
Statement from
"Over the past six months, we have strengthened every core aspect of our business from expanding our mining fleet in
We are building for longevity, a company that can compound Bitcoin per share over time, regardless of short-term market volatility. Our focus remains on strategic growth and operational excellence. We believe the months ahead will be pivotal as we continue executing towards our dual-listing ambitions and expanding our footprint in the US market.
Our mission is simple: to grow our existing operations and strengthen our Bitcoin treasury, while maintaining the highest levels of transparency, governance and alignment. London BTC is here to be the bridge between traditional markets and the Bitcoin standard."
The full interim financial statements are appended below and will also be available on the Company's website for viewing.
The directors of
For further information please refer to
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brian@first-sentinel.com |
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bobroberts@clear-cm.co.uk |
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London
Directors' report
Going Concern Statement
The Directors, having reviewed the budgeted cash flows and other available resources for the period to at least 12 months from the date of authorisation of these financial statements, have a reasonable expectation that the Company will have adequate resources to continue in operational existence for the foreseeable future. Accordingly, they continue to adopt the going concern basis in preparing the financial statements.
Change of accounting reference date
Last year, the Company changed its accounting reference date from 31 August to 28 February. The Company produced audited results for the 18-month period ended
Principal activity
London
As stated in the Company's approved
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The extensive use of multiple unrelated third-party hosting facilities for the Company's Bitcoin miners. |
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Acquiring Bitcoin mining machines: The Company has partnered with |
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Diversification: As with any investment (and cryptocurrency included), diversification reduces risk. In the long term, the Company intends to diversify its sources of revenue, other income and value creation by investing in and developing other commercial opportunities in the digital asset sector. |
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Focus on reliable, low-cost, renewable power as successfully doing so should enable it to reduce and maintain overall power costs. |
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Risk Management: Cryptocurrency investments carry a variety of risks, including volatility, security, liquidity, and regulatory risks. The Company keeps these risks under review and deploys mitigation strategies as and when required. |
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Sticking to objectives: Capital preservation and growth are priorities. |
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Growth: Both organic and expansionary growth is an ongoing objective.
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The Company continues to grow and advance its mining operations and will strengthen its Bitcoin treasury strategy however given the volatility of Bitcoin the board has been investigating potential hedging strategies. The board has identified that certain gold assets may act as a hedge against Bitcoin volatility, and therefore the board has determined that subject to any required regulatory approvals the company may make investments in certain gold assets from time to time.
Results and dividends
The Statement of Profit or Loss and Other Comprehensive Income is set out on page 10 and has been prepared in Pound Sterling, the functional and reporting currency of the Company.
The Company did not declare a dividend during this period.
Review of the business and future developments
A review of the Company's performance, financial position and future prospects is given within this report and the Chairman's and Chief Executive Officer's statement earlier.
Financing and Markets
Highlights
· During the period under review the Company raised a gross amount of
· With the new equity capital, the Company bought
· The Company increased its Bitcoin mining fleet by 385 taking its fleet over 1,000 miners, with the fleet now standing at over 1,100 miners.
· The Company is debt free.
· The Company has total assets exceeding
Substantial shareholdings
Other than as summarised below, the Directors have been advised of any individual interest, or group or interests held by persons acting together, which on
|
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No. shares |
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% of share capital |
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50,740,204 |
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14.61 |
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50,330,067 |
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14.49 |
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49,850,067 |
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14.35 |
(Note: Directors
Board Changes
The Board appointed
Employees
The Company had one directly employed person in the period.
Creditor Payment Policy
The policy of the Company is to:
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(a) |
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Agree the terms of payment with suppliers when settling the terms of each transaction; |
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(b) |
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Ensure the suppliers are made aware of the terms of payment by inclusion of all the relevant terms in contracts; and |
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(c) |
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Pay in accordance with its contractual and other legal obligations provided suppliers comply with the terms and conditions of supply. |
Directors' Liability
As permitted by the BVI Business Companies Act, 2004 (as amended), the Company is entitled to purchase insurance cover for the Directors against liabilities in relation to the Company. The Company has Directors and Officers insurance in place.
Financial Reporting
The Board has ultimate responsibility for the preparation of the half-year accounts. A detailed review of the performance of the Company is contained in this report and the Chairman's Statement. Presenting the Director's Report, the Board seeks to present a balanced and understandable assessment of the Company's position, performance and prospects.
Internal control
A key objective of the Directors' is to safeguard the value of the business and assets of the Company. This requires the development of relevant policies and appropriate internal controls to ensure proper management of the Company's resources and the identification and mitigation of risks which might serve to undermine them. The Directors are responsible for the Company's system of internal control and for reviewing its effectiveness. It should, however, be recognised that such a system can provide only reasonable and not absolute assurance against material misstatement or loss.
Risk management
The directors have in place a process of regularly reviewing risks to the business and monitoring associated controls, actions and contingency plans.
The Company's principal risks and uncertainties, including financial risk management policies, as seen by the board at this current time are set out below.
Principal risk
The Company aims to provide a listed
The Company's strategy is to follow an appropriate risk policy, which effectively manages exposures related to the achievement of business objectives. The Board is responsible for approving the Company's strategy and determining the appropriate level of risk. The key risks which the Company faces are detailed as follows:
Business and investment performance risk
Business performance risk is the risk that the Company may not perform as expected either due to internal factors or due to external competitive pressures in the markets in which they operate. The Company may seek investments in companies with growth potential. The Directors may identify suitable investment opportunities in accordance with its investment strategy. Bitcoin valuation is volatile, and this affects the mining operations as well as treasury valuations. The risk is that the Company's investments may encounter circumstances that result in a loss of value which could in turn damage the Company's share value.
Valuation risk
Valuation risk is the risk that the value of an investment when made was overstated. The Board seeks to mitigate this risk by conducting due diligence on its investment targets and sourcing independent valuations and opinions.
Market conditions
Market conditions, especially in the context of Bitcoin valuations, may have a negative impact on the Company's ability to make investments which generate acceptable returns, or to disinvest in a timely manner such that acceptable returns can be realised.
There is increased market risk as the Company is now involved in the cryptocurrency market. The Bitcoin price is volatile, but the Board sees this as a great opportunity to grow a substantial business. The Board also sees leverage to the Bitcoin price over the coming years as tremendous and believes the continual addition of miners to the mining fleet can ultimately be beneficial to the Company.
Political risk
All countries carry political risk that can lead to interruption of activity. Politically stable countries can have enhanced environmental and social risks, risks of strikes and changes to taxation, whereas less developed countries can have, in addition, risks associated with changes to the legal framework, civil unrest and government expropriation of assets. The Directors will have working knowledge of the countries in which the Company will invest in to help reduce possible political risk.
Review of business and financial performance
The Company had a pleasing operational period. Revenue which is linked to petahash sold to Luxor Technologies increased from
The Company aims to maintain a very lean operation, with no fixed office and very few fixed costs. Total head count is 5. The expenses for the period increased to
Included in the income is a profit on sales of shares of
The balance sheet has improved greatly. The Company raised a
In addition, the Company raised further equity capital during the period of
Cash position
Having sufficient cash for business operations is vital for the Company and must be managed accordingly. The Directors review and manages the Company's cash flow monthly. The financial strategy is to ensure that, wherever possible, there are sufficient funds to cover corporate overheads and business expenditure for as long a period as possible. Management has confidence that financing of the Company can continue as and when required albeit the board is keen to avoid excessive dilution and will manage the financing process with that objective in mind.
Furthermore, the Company has ensured that where possible it has built operational flexibility in its corporate and expenditure to be paused should the financing environment prove difficult and cash preservation prove essential.
Corporate Governance
The Directors have adopted the Quoted Companies Alliance Corporate Governance Code.
Due to the size and nature of the Company, audit and risk management issues will be addressed by the Directors as a whole, rather than by separate committees. As the Company develops, the Board will consider establishing separate audit and risk management committees and will consider developing further policies and procedures, which reflect the principles of good governance.
Directors' Responsibility Statement
The Directors confirm that to the best of their knowledge:
(a) the condensed set of financial statements has been prepared in accordance with IAS 34 'Interim Financial Reporting' as contained in
(b) the interim management report includes a fair review of the information required by DTR 4.2.7R of the Disclosure and Transparency Rules (indication of important events during the first six months and description of principal risks and uncertainties for the remaining six months of the year; and
(c) the interim management report includes a fair review of the information required by DTR 4.2.8R of the Disclosure and Transparency Rules (disclosure of related parties' transactions and changes therein).
Website publication
The Directors are responsible for the maintenance and integrity of the corporate and financial information included on the Company's website. Legislation in the
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Unaudited |
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Consolidated |
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Note |
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6 months ended |
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6 months ended |
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From continuing activities |
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£ |
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£ |
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Revenue |
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582,211 |
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280,513 |
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Cost of sales |
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(490,232) |
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(181,140) |
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Depreciation and Amortisation Expense |
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(78,410) |
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(45,974) |
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13,569 |
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53,399 |
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Other income |
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228,067 |
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- |
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Gross profit |
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241,636 |
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53,399 |
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Expenses |
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Administration expenses |
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(1,485,889) |
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(551,036) |
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Warrants, options & share based payments |
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- |
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(260,000) |
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Operating loss |
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(1,244,253) |
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(757,637) |
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Realised Gain on disposal of Bitcoin |
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50,024 |
|
88,231 |
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Non-operational impairment |
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|
(1,977) |
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- |
|||
|
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|
|
|
|
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|
|||
|
Loss before income tax expense |
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|
|
(1,196,206) |
|
(669,406) |
|||
|
|
|
|
|
|
|
|
|||
|
Income tax expense |
|
|
|
- |
|
- |
|||
|
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|
|
|
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|
|||
|
Loss after income tax expense for the half-year attributable to the owners of |
|
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(1,196,206) |
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(669,406) |
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Other comprehensive income |
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|||
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|||
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Items that will not be reclassified subsequently to profit or loss |
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|||
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Gain on the revaluation of intangible assets at fair value through other comprehensive income, net of tax |
|
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|
16,345 |
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- |
|||
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|||
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Other comprehensive income for the half-year, net of tax |
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|
16,345 |
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- |
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|||
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Total comprehensive income for the half-year attributable to the owners of |
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|
(1,179,861) |
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(669,406) |
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|||||
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Consolidated |
|||||
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Unaudited |
|
Audited |
|||
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|
|
|||
|
|
|
Note |
|
£ |
|
£ |
|||
|
Assets |
|
|
|
|
|
|
|||
|
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|
|
|
|
|
|
|||
|
Current assets |
|
|
|
|
|
|
|||
|
Trade and other receivables |
|
|
|
41,920 |
|
68,031 |
|||
|
Cash and cash equivalents |
|
|
|
225,452 |
|
855,484 |
|||
|
Total current assets |
|
|
|
267,372 |
|
923,515 |
|||
|
|
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|
|
|
|
|||
|
Non-current assets |
|
|
|
|
|
|
|||
|
Investments |
|
|
|
31,199 |
|
- |
|||
|
Property, plant and equipment |
|
|
667,755 |
|
624,349 |
||||
|
Intangibles |
|
|
6,893,332 |
|
398,954 |
||||
|
Deferred tax |
|
|
|
3,125 |
|
3,125 |
|||
|
Security Deposit |
|
|
|
148,685 |
|
96,022 |
|||
|
Total non-current assets |
|
|
|
7,744,096 |
|
1,122,450 |
|||
|
|
|
|
|
|
|
|
|||
|
Total assets |
|
|
|
8,011,468 |
|
2,045,965 |
|||
|
|
|
|
|
|
|
|
|||
|
Liabilities |
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
|
|||
|
Current liabilities |
|
|
|
|
|
|
|||
|
Trade and other payables |
|
|
|
295,105 |
|
237,564 |
|||
|
Amount owing to director |
|
|
|
1,508,160 |
|
2,728 |
|||
|
Total current liabilities |
|
|
|
1,803,265 |
|
240,292 |
|||
|
|
|
|
|
|
|
|
|||
|
Total liabilities |
|
|
|
1,803,265 |
|
240,292 |
|||
|
|
|
|
|
|
|
|
|||
|
Net assets |
|
|
|
6,208,203 |
|
1,805,673 |
|||
|
|
|
|
|
|
|
|
|||
|
Equity |
|
|
|
|
|
|
|||
|
Issued capital |
|
|
25,284,027 |
|
19,701,636 |
||||
|
Revaluation surplus reserve |
|
|
193,129 |
|
176,784 |
||||
|
Retained earnings |
|
|
|
(19,268,953) |
|
(18,072,747) |
|||
|
|
|
|
|
|
|
|
|||
|
Total equity |
|
|
|
6,208,203 |
|
1,805,673 |
|||
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
|
|
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|
|
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|||
|
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|||
|
|
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Share |
|
Option |
|
Warrant |
|
Retained |
|
Total equity |
|||
|
|
|
capital |
|
Reserve |
|
Reserve |
|
Earnings |
|
||||
|
Consolidated |
|
£ |
|
£ |
|
£ |
|
£ |
|
£ |
|||
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
Balance at |
|
1,934,630 |
|
646,390 |
|
1,292,780 |
|
(2,371,202) |
|
1,502,598 |
|||
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
Loss after income tax expense for the half-year |
|
- |
|
- |
|
- |
|
(669,406) |
|
(669,406) |
|||
|
Other comprehensive income for the half-year, net of tax |
|
- |
|
- |
|
- |
|
- |
|
- |
|||
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
Total comprehensive income for the half-year |
|
- |
|
- |
|
- |
|
(669,406) |
|
(669,406) |
|||
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
Transactions with owners in their capacity as owners: |
|
|
|
|
|
|
|
|
|
|
|||
|
Contributions of equity, net of transaction costs |
|
637,020 |
|
- |
|
- |
|
- |
|
637,020 |
|||
|
Forfeited Options and Warrants |
|
- |
|
(67,774) |
|
- |
|
67,774 |
|
- |
|||
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
Balance at |
|
2,571,650 |
|
578,616 |
|
1,292,780 |
|
(2,972,834) |
|
1,470,212 |
|
|
|
Share |
|
Revaluation |
|
Retained |
|
Total equity |
|
|
|
capital |
|
Reserves |
|
Earnings |
|
|
|
Consolidated |
|
£ |
|
£ |
|
£ |
|
£ |
|
|
|
|
|
|
|
|
|
|
|
Balance at |
|
19,701,636 |
|
176,784 |
|
(18,072,747) |
|
1,805,673 |
|
|
|
|
|
|
|
|
|
|
|
Loss after income tax expense for the half-year |
|
- |
|
- |
|
(1,196,206) |
|
(1,196,206) |
|
Other comprehensive income for the half-year, net of tax |
|
- |
|
16,345 |
|
- |
|
16,345 |
|
|
|
|
|
|
|
|
|
|
|
Total comprehensive income for the half-year |
|
- |
|
16,345 |
|
(1,196,206) |
|
(1,179,861) |
|
|
|
|
|
|
|
|
|
|
|
Transactions with owners in their capacity as owners: |
|
|
|
|
|
|
|
|
|
Contributions of equity, net of transaction costs (note 5) |
|
5,582,391 |
|
- |
|
- |
|
5,582,391 |
|
|
|
|
|
|
|
|
|
|
|
Balance at |
|
25,284,027 |
|
193,129 |
|
(19,268,953) |
|
6,208,203 |
|
|
|
|
|
|
|
|||
|
|
|
|
|
Unaudited |
|
Consolidated |
|||
|
|
|
Note |
|
6 months ended |
|
6 months ended |
|||
|
|
|
|
|
£ |
|
£ |
|||
|
Cash generated from operations |
|
|
|
|
|
|
|||
|
Payments to suppliers and employees |
|
|
|
(1,742,898) |
|
(607,909) |
|||
|
|
|
|
|
|
|
|
|||
|
Net cash flow from operating activities |
|
|
|
(1,742,898) |
|
(607,909) |
|||
|
|
|
|
|
|
|
|
|||
|
Cash flows from investing activities |
|
|
|
|
|
|
|||
|
Payments to acquire property, plant & equipment |
|
|
|
(121,257) |
|
(163,099) |
|||
|
Payments for intangibles |
|
|
(6,277,500) |
|
- |
||||
|
Proceeds from disposal of intangibles |
|
|
|
- |
|
390,003 |
|||
|
|
|
|
|
|
|
|
|||
|
Net cashflow (used in)/generated from investing activities |
|
|
|
(6,398,757) |
|
226,904 |
|||
|
|
|
|
|
|
|
|
|||
|
Cash flows from financing activities |
|
|
|
|
|
|
|||
|
Proceeds from issue of shares |
|
|
6,078,915 |
|
419,020 |
||||
|
Proceeds from borrowings |
|
|
|
1,432,708 |
|
(99) |
|||
|
|
|
|
|
|
|
|
|||
|
Net cash from financing activities |
|
|
|
7,511,623 |
|
418,921 |
|||
|
|
|
|
|
|
|
|
|||
|
Net increase/(decrease) in cash and cash equivalents |
|
|
|
(630,032) |
|
37,916 |
|||
|
Cash and cash equivalents at the beginning of the financial half-year |
|
|
|
855,484 |
|
87,326 |
|||
|
|
|
|
|
- |
|
- |
|||
|
|
|
|
|
|
|
|
|||
|
Cash and cash equivalents at the end of the financial half-year |
|
|
|
225,452 |
|
125,242 |
|
Cash and cash equivalents consists of: |
|
|
|
Cash at bank and in hand |
|
225,452 |
|
Cash and cash equivalents at |
|
225,452 |
London
Notes to the financial statements
Note 1. General Information
London
In the opinion of the Directors the financial statements present fairly the financial position, and results from operations and cashflows for the period in conformity with the IFRS as adopted by the
Note 2. Accounting Policies
These general-purpose financial statements for the interim half-year reporting period ended
These general-purpose financial statements do not include all the notes of the type normally included in annual financial statements. Accordingly, these financial statements are to be read in conjunction with the annual report for the year ended
The accounting policies adopted are consistent with those of the previous financial year and corresponding interim reporting period, except for the policies stated below.
Basis of Preparation
The interim report has been prepared in accordance with International Financial Reporting Standards as adopted by the
The interim report does not include all the notes of the type normally included in an annual financial report. Accordingly, this report is to be read in conjunction with the annual report for the year ended
Note 3. Non-current assets - property, plant and equipment
|
|
|
Unaudited Consolidated |
||
|
|
|
|
|
|
|
|
|
£ |
|
£ |
|
|
|
|
|
|
|
Bitcoin Mining Machine - at cost |
|
906,489 |
|
784,674 |
|
Less: Accumulated depreciation |
|
(238,734) |
|
(160,325) |
|
|
|
|
|
|
|
|
|
667,755 |
|
624,349 |
Note 4. Non-current assets - Intangibles
|
|
|
Unaudited Consolidated |
||
|
|
|
|
|
|
|
|
|
£ |
|
£ |
|
|
|
|
|
|
|
Bitcoin Wallet |
|
6,893,332 |
|
396,977 |
|
|
|
|
|
|
|
Tokenomic |
|
- |
|
1,977 |
|
|
|
|
|
|
|
|
|
6,893,332 |
|
398,954 |
Reconciliations
Reconciliations of the written down values at the beginning and end of the current financial half-year are set out below:
|
|
|
Consolidated |
|
Consolidated |
|
|
|
|
|
Bitcoin Wallet |
|
Tokenomic |
|
Total |
|
Consolidated |
|
£ |
|
£ |
|
£ |
|
|
|
|
|
|
|
|
|
Balance at |
|
396,977 |
|
1,977 |
|
398,954 |
|
Additions |
|
6,474,350 |
|
- |
|
6,474,350 |
|
Mined Bitcoin (including internal transfers) |
|
597,048 |
|
- |
|
597,048 |
|
Bitcoin disposed (including internal transfers) |
|
(591,388) |
|
- |
|
(591,388) |
|
Revaluation increments |
|
16,345 |
|
- |
|
16,345 |
|
Impairment of assets |
|
- |
|
(1,977) |
|
(1,977) |
|
|
|
|
|
|
|
|
|
Balance at |
|
6,893,332 |
|
- |
|
6,893,332 |
Note 5. Equity - issued capital
|
|
|
Unaudited Consolidated |
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares |
|
Shares |
|
£ |
|
£ |
|
|
|
|
|
|
|
|
|
|
|
Ordinary shares - fully paid |
|
347,413,516 |
|
253,701,022 |
|
26,068,097 |
|
19,989,182 |
|
Cost of capital |
|
N/A |
|
N/A |
|
(784,070) |
|
(287,546) |
|
|
|
|
|
|
|
|
|
|
|
|
|
347,413,516 |
|
253,701,022 |
|
25,284,027 |
|
19,701,636 |
Movements in ordinary share capital
|
Details |
|
Date |
|
Shares |
|
Issue price |
|
£ |
|
|
|
|
|
|
|
|
|
|
|
Balance |
|
|
|
253,701,022 |
|
|
|
19,989,182 |
|
Issue of fully paid ordinary shares as part of the |
|
|
|
50,740,204 |
|
|
|
- |
|
Issue of fully paid ordinary shares |
|
|
|
22,028,473 |
|
|
|
3,028,915 |
|
Issue of fully paid ordinary shares |
|
|
|
4,000,000 |
|
|
|
550,000 |
|
Issued ordinary shares as part of placement |
|
|
|
3,783,733 |
|
|
|
700,000 |
|
Issued ordinary shares as part of placement |
|
|
|
1,621,621 |
|
|
|
300,000 |
|
Issue of fully paid ordinary shares |
|
|
|
11,538,462 |
|
|
|
1,500,000 |
|
|
|
|
|
|
|
|
|
|
|
Balance |
|
|
|
347,413,515 |
|
|
|
26,068,097 |
|
● |
|
On |
|
● |
|
On |
|
● |
|
On |
|
● |
|
On |
|
● |
|
On |
|
● |
|
On |
Note 6. Equity - revaluation reserve
|
|
|
Unaudited Consolidated |
||
|
|
|
|
|
|
|
|
|
£ |
|
£ |
|
|
|
|
|
|
|
Revaluation surplus reserve |
|
193,129 |
|
176,784 |
Note 7. Earnings per share
|
|
|
Unaudited Consolidated |
||
|
|
|
6 months ended |
|
6 months ended |
|
|
|
£ |
|
£ |
|
|
|
|
|
|
|
Earnings per share for loss from continuing operations |
|
|
|
|
|
Loss after income tax attributable to the owners of |
|
(1,196,206) |
|
(669,406) |
|
|
|
Unaudited Consolidated |
||
|
|
|
6 months ended |
|
6 months ended |
|
|
|
£ |
|
£ |
|
|
|
|
|
|
|
Loss after income tax attributable to the owners of |
|
(1,196,206) |
|
(669,406) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average number of ordinary shares used in calculating basic earnings per share |
|
311,564,234 |
|
133,876,095 |
|
|
|
|
|
|
|
Weighted average number of ordinary shares used in calculating diluted earnings per share |
|
311,564,234 |
|
133,876,095 |
|
|
|
Pence |
|
Pence |
|
|
|
|
|
|
|
Basic earnings per share |
|
(0.38) |
|
(0.50) |
|
Diluted earnings per share |
|
(0.38) |
|
(0.50) |
Note 8. Financial instruments
Financial risk management objectives
The consolidated entity's activities expose it to a variety of financial risks: market risk (including foreign currency risk), and liquidity risk. The consolidated entity's overall risk management program focuses on the unpredictability of financial markets and seeks to minimise potential adverse effects on the financial performance of the consolidated entity.
Risk management is carried out by finance director ('finance') under policies approved by the Board of Directors ('the Board'). These policies include identification and analysis of the risk exposure of the consolidated entity and appropriate procedures, controls and risk limits. Finance identifies, evaluates financial risks within the consolidated entity's operating units. Finance reports to the Board on a monthly basis.
Market risk
Foreign currency risk
The consolidated entity undertakes certain transactions denominated in foreign currency and is exposed to foreign currency risk through foreign exchange rate fluctuations.
Foreign exchange risk arises from future commercial transactions and recognised financial assets and financial liabilities denominated in a currency that is not the entity's functional currency. The risk is measured using sensitivity analysis and cash flow forecasting.
The average exchange rates and reporting date exchange rates applied were as follows:
|
|
|
Average exchange rates |
Reporting date exchange rates |
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pound sterling |
|
|
|
|
|
|
|
|
|
Australian dollar |
|
2.0460 |
|
1.8734 |
|
2.0647 |
|
2.0261 |
|
Canadian dollar |
|
1.8380 |
|
1.6790 |
|
1.8574 |
|
1.8186 |
|
Euro |
|
1.1839 |
|
1.1495 |
|
1.1562 |
|
1.2115 |
|
|
|
1.3316 |
|
1.2440 |
|
1.3507 |
|
1.2575 |
Price risk
The consolidated entity is not exposed to any significant price risk.
Liquidity risk
The consolidated entity manages liquidity risk by maintaining adequate cash reserves by continuously monitoring actual and forecast cash flows and matching the maturity profiles of financial assets and liabilities.
Fair value of financial instruments
Unless otherwise stated, the carrying amounts of financial instruments reflect their fair value.
Note 9. Events after the reporting period
In
No matter or circumstance, other than above, has arisen since
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