M&L PROPERTY & ASSETS PLC
M&L Property & Assets Plc
Interim Report
For the six months ended 30th June 2015 (Unaudited)
Key Highlights for the Period
Chairman's Statement
Following the approval at the 2015 Annual General Meeting, the Company has now
changed its name from Pactolus Hungarian Property plc to M&L Property & Assets
plc.
During the period to 30th June 2015, the Group has managed to reduce its
administrative expenses by 2 per cent to €94,527 compared to €96,119 reported
in last year's interim report.
Hungary's residential property market has marginally recovered since 2014
however the outlook remains unclear to us.
The Group has seen an increase in rental income of 0.4 per cent relative to the
same six monthly period in 2014, benefitting from an improved rent book in the
second quarter of 2015.
As mentioned in previous reports, reduced revenue income as the Group sells
further properties, coupled with relatively fixed direct costs makes it
difficult for the group to make a positive contribution.
We have diversified from our main Hungarian property agent and are working with
a further two agents, thus aiming to maximise the returns from our portfolio.
Working alongside more agents, we successfully completed the sale of seven
properties in the 6 months to 30th June 2015.
Reported net assets as at 30th June 2015 were €5.1m, which equates to 35 pence
per share. This figure has been depreciated predominantly by the strengthening
of Sterling.
Our strategy for the remainder of the year is to continue to work on reducing
the Group's costs and to sell further properties from the portfolio, using the
sales proceeds to reduce debt.
B. Miller
Non-Executive Chairman
16th September 2015.
Condensed Consolidated Income Statement
6 months to 6 months to Year ended
30th June 30th June 31st December
2015 2014 2014
€ € €
Unaudited Unaudited Audited
Continuing operations
Rental income and related fees 248,361 247,406 493,473
Direct operating expenses (105,949) (88,756) (236,090)
Gross profit 142,412 158,650 257,383
Administrative expenses (94,527) (96,119) (177,140)
Operating profit 47,885 62,531 80,243
Finance income 125 237 412
Finance costs (37,369) (60,804) (115,896)
Profit on disposal of investment 1,886 - -
properties
Profit on disposal of listed 12 967 967
investment
Gain on revaluation of investment 963 - 26,458
properties
Unrealised profit on listed 152 - (99)
investment
Profit/(loss) from continuing operations 13,654 2,931 (7,915)
Exceptional items - - -
Profit/(loss) before taxation 13,654 2,931 (7,915)
Tax expense - - (802)
Net profit/(loss) attributable to 13,654 2,931 (8,717)
equity shareholders
Other comprehensive loss
Exchange differences on translating foreign (6,200) (35,578) (62,316)
operations
Total comprehensive profit/ 7,454 (32,647) (71,033)
(loss) for the period
Profit/(loss) attributable to equity 13,654 2,931 (8,717)
shareholders
Total comprehensive profit/(loss) 7,454 (32,647) (71,033)
attributable to equity shareholders
Profit/(loss) per ordinary Share 0.13 cent 0.03 cent (0.08) cent
Weighted average number of shares 10,316,624 10,316,624 10,316,624
Condensed Consolidated Statement of Financial Position
As at As at As at
30th June 30th June 31st December
2015 2014 2014
€ € €
Notes Unaudited Unaudited Audited
Non-current assets
Investment properties 4,858,111 6,773,004 5,355,611
Property under development 317,804 317,804 317,804
Property, plant & equipment 20,300 28,420 24,360
Listed investment 906 - 904
5,197,121 7,119,228 5,698,679
Current assets
Investment properties 615,625 171,315 1,615,166
Trade and other receivables 146,613 108,929 61,775
Cash and cash equivalents 742,831 183,403 233,906
1,505,069 463,647 1,910,847
Total assets 6,702,190 7,582,875 7,609,526
Current liabilities
Trade and other payables 352,938 229,083 257,187
Secured loan - 1,150,000 -
Other loans 5 1,274,360 1,097,968 2,284,901
1,627,298 2,477,051 2,542,088
Net assets 5,074,892 5,105,824 5,067,438
Equity
Share capital 6 150,226 150,226 150,226
Capital redemption reserve 222,715 222,715 222,715
Share premium 1,046,894 1,046,894 1,046,894
Merger reserve (109,193) (109,193) (109,193)
Translation reserve (1,584,718) (1,551,780) (1,578,518)
Retained earnings 5,348,968 5,346,962 5,335,314
Total equity 5,074,892 5,105,824 5,067,438
Net asset value per share 49.2 cents 49.5 cents 49.1 cents
Number of ordinary shares 10,316,624 10,316,624 10,316,624
Condensed Consolidated Statement of Changes in Equity
Unaudited
Six months ended 30th June 2015
Share Capital Share Merger Translation Retained
Capital Redemption Premium Reserve Reserve Earnings Total
€ € € € € € €
Balance as at 1st 150,226 222,715 1,046,894 (109,193) (1,578,518) 5,335,314 5,067,438
January 2015
Changes in equity for
2015
Profit for the period - - - - - 13,654 13,654
Exchange difference - - - - (6,200) - (6,200)
on translating
foreign operations
150,226 222,715 1,046,894 (109,193) (1,584,718) 5,348,968 5,074,892
Unaudited
Six months ended 30th June 2014
Share Capital Share Merger Translation Retained
Capital Redemption Premium Reserve Reserve Earnings Total
€ € € € € € €
Balance as at 1st 150,226 222,715 1,046,894 (109,193) (1,516,202) 5,344,031 5,138,471
January 2014
Changes in equity for
2014
Profit for the period - - - - - 2,931 2,931
Exchange difference - - - - (35,578) - (35,578)
on translating
foreign operations
150,226 222,715 1,046,894 (109,193) (1,551,780) 5,346,962 5,105,824
Audited
Year ended 31st December 2014
Share Capital Share Merger Translation Retained
Capital Redemption Premium Reserve Reserve Earnings Total
€ € € € € € €
Balance as at 1st 150,226 222,715 1,046,894 (109,193) (1,516,202) 5,344,031 5,138,471
January 2014
Changes in equity for
2014
Loss for the year - - - - - (8,717) (8,717)
Exchange difference on - - - - (62,316) - (62,316)
translating foreign
operations
150,226 222,715 1,046,894 (109,193) (1,578,518) 5,335,314 5,067,438
Condensed Consolidated Cash Flow Statement
6 months to 6 months to Year ended
to
30th June 30th June 31st December
2015 2014 2014
€ € €
Unaudited Unaudited Audited
Cash flows from operating
activities
Net profit/(loss) 13,654 2,931 (8,717)
Adjusted for:
Profit on sale of investment (1,886) - -
properties
Unrealised gain on investment (963) - (26,458)
property
Profit on sale of listed (12) (967) (967)
investment
Unrealised gain on listed (152) - 99
investment
Depreciation and impairment 4,060 4,060 8,120
Interest income (125) (237) (412)
Bank loan interest expense - 29,666 56,180
Other loans interest expense 37,369 31,138 59,716
Foreign exchange (losses)/gains (2,376) 2,189 (28,825)
Income tax expense - - 802
(Increase)/decrease in receivables (84,837) (10,341) 36,813
Increase/(decrease) in payables 52,570 14,171 58,116
Cash generated from operating 17,302 72,610 154,467
activities
Interest paid - (29,742) (57,950)
Income taxes refunded/(paid) 5,812 1,619 (2,142)
Net cash generated from operating activities 23,114 44,487 94,375
Cash flows from investing
activities
Net receipts from sales of investment 1,499,890 - -
properties
Purchase of listed investments - (8,155) (9,513)
Receipt from sale of listed investments 161 9,122 9,477
Bank interest received 125 237 412
Net cash generated from investing activities 1,500,176 1,204 376
Cash flows from financing
activities
Bank loan repayment - - (1,150,000)
Other loans (repaid)/received (1,010,541) - 1,147,167
Net cash used in financing activities (1,010,541) - (2,833)
Net increase in cash and cash equivalents 512,749 45,691 91,918
Exchange movement on foreign (3,824) (37,767) (33,491)
subsidiaries translation
Cash and cash equivalents as at 1st January 233,906 175,479 175,479
Cash and cash equivalents as at period end 742,831 183,403 233,906
Notes to the Interim Report
For the six months ended 30th June 2015
1. Basis of preparation
These interim condensed consolidated financial statements for the six months to
30th June 2015 have not been audited or reviewed and do not constitute
statutory accounts within the meaning of section 435 of the Companies Act
2006. They have been prepared in accordance with the Group's accounting
policies as set out in the Group's latest annual financial statements for the
year ended 31st December 2014 and are in compliance with IAS 34 "Interim
Financial Reporting". These accounting policies are drawn up in accordance
with International Financial Reporting Standards (IFRS) as adopted by the
European Union and the Isle of Man Companies Acts 1931 to 2004.
The comparative figures for the financial year ended 31st December 2014 are not
the statutory accounts for that financial year but are a condensed version of
those accounts prepared under IFRS which have been reported on by the Group's
auditors.
This interim report was approved for issue by the Board of Directors on 16th
September 2015.
2. Going concern
The directors are satisfied that the Group has adequate resources in place to
manage its risks after having reviewed its financial position and cash flow
forecast. The impact of any potential tenancy failures and the continued
volatility in the economy has been taken into account. The directors are
satisfied that the Group will continue in operational existence for the
foreseeable future and therefore continue to adopt the going concern basis in
preparing this interim report.
3. Operating segments
The Group operates in a single reporting segment under the classification of
properties held for investment. The entire Group's revenue and property assets
are derived from and located in a single geographical location, Hungary.
The profit to 30th June 2015 of €13,654 (2014: profit €2,931) is materially all
derived from the operations of managing the Group's investment properties. It
is principally involved in acquiring, developing, selling and letting
investment property under short to medium term contracts.
4. Material agreements
Midas Investment Management Ltd ("MIM") was appointed the Group's Asset Manager
on 17 March 2006. The Asset Manager's charges are summarised as follows:
* A flat annual fee of €55,000 per annum plus VAT;
* A quarterly fee on all property rented out of 12 per cent of the net rental
income plus VAT; and
* A commission on sales of up to 4 per cent plus VAT of sales proceeds. For
the avoidance of doubt, MIM will only charge a fee on sales if it is
involved in procuring the buyer and only if the commission charged by
others when aggregated with MIM's commission does not exceed 5 per cent
plus VAT.
5. Other Loans
The Group's loan facility with M&M Investment Company plc (its parent company)
has reduced from €2,284,901 to €1,274,360. The loan will be fully repaid once
further properties are sold in line with the Group's strategy.
6. Share capital
Ordinary Shares of 1p each issued and fully paid
Number 2015 Number 2014
of shares € of shares €
Balance as at 1st January & 10,316,624 150,226 10,316,624 150,226
30th June
The share buy back facility was renewed at the Company's annual general meeting
on 25th June 2015 giving the directors a new authority to acquire up to a
further 2,950,774 shares (29 per cent) of the Company's then issued share
capital. There have been no further acquisitions since the AGM date.
7. Events after the balance sheet date
There has been no significant events since the reporting period date.
Interim report
This Interim Report and Accounts will be available from the Company's
registered address at Jubilee Buildings, Victoria Street, Douglas, Isle of Man,
IM1 2SH and on the Company's website www.mandlpaplc.com.
For further information, please contact:
Asset Manager:
Midas Investment Management Limited
Tel: +44 (0) 161 228 1709
Nominated Adviser:
Liam Murray/Jo Turner
Cairn Financial Advisers LLP
Tel: +44 (0) 20 7148 7900
M&L PROPERTY & ASSETS : Half-yearly Report
September 16, 2015 at 03:43 pm IST
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