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APQ Global Limited - Interim results for six months ending 30 June 2020

RNS Number : 0637Z
APQ Global Limited
15 September 2020
 

APQ Global Limited

("APQ Global" or the "Company")

Interim results for the period from 1 January 2020 to 30 June 2020

FINANCIAL HIGHLIGHTS

For the six months ended 30 June 2020

 

Financial highlights

 

Book Value at 30 June 2020 was $24.8m, a decrease of $48.1m from $72.9m since the start of the period. The term "book value" herein includes the assets of APQ Global Limited and its subsidiaries net of any liabilities. The results include the net assets of the Company and its subsidiaries, presented in US dollars.

 

Book Value per share in the period decreased by 61.49 from 93.19 to 31.70 cents.

 

Loss per share for the period were $0.59821 (for the six months ended 30 June 2019 - loss per share was $0.01348).

 

Dividends paid in GBP totalled 1.50 pence (1.97 cent) per share and were declared and paid during the period as follows:

 

·      1.50 pence (1.97 cent) per share       Ex Dividend 30 January 2020                          Paid 2 March 2020

 

 

There have been further AIM market trades since 30 June 2020, details of these can be found on the London Stock Exchange website by following the link below. Monthly book values are also made available as they fall due.

 

http://www.londonstockexchange.com/exchange/prices-and-markets/stocks/summary/company-summary/GG00BZ6VP173GGGBXASQ1.html

 

 

For further enquiries, please contact:

 

APQ Global Limited

Bart Turtelboom - Chief Executive Officer

 

020 3478 9708

 

N+1 Singer - Nominated Adviser and Broker

James Maxwell / Justin McKeegan

 

020 7496 3000

 

Carey Group - TISE sponsor

Claire Torode

 

01481 737 279

 

Buchanan Communication - Financial PR

Charles Ryland / Henry Wilson

 

020 7466 5000

 

Notes to Editors

 

APQ Global Limited

 

APQ Global (ticker: APQ LN) is a global emerging markets income company with interests across Asia, Latin America, Eastern Europe, the Middle East and Africa. The Company's objective is to steadily grow earnings to deliver attractive returns and capital growth to shareholders. This objective is achieved through a combination of revenue generating operating activities and investing in growing businesses across emerging markets. APQ Global run a well-diversified and liquid portfolio, take strategic stakes in selected businesses and plan to take operational control of companies through the acquisition of minority and majority stakes in companies with a focus on emerging markets.

 

For more information, please visit apqglobal.com.

 

Business highlights

 

On 29 January 2020, the Company entered into an agreement to purchase 100% of the Parish Group Limited ("Parish"), a company incorporated and domiciled in Guernsey. Parish Group Limited is a fiduciary and corporate services provider. In consideration to the sellers for the acquisition:

 

·      The Company paid a net amount of approximately $4,095,630 cash consideration to the Sellers;

·      APQ Capital Services Limited, a wholly owned subsidiary of the Company, issued 268,000 Convertible Preference Shares (convertible into ordinary shares in APQ Global) to the Sellers (the "Convertible Preference Shares") at price of $10 per share; and

·      The Company issued 1.0 million warrants in APQ Global ("Warrants"), with an exercise price equal to the most recently announced book value per share of 70.94 pence, to the Sellers.

 

The Convertible Preference Shares are convertible into a variable number of shares linked to the relative assets attributable to the convertible preference shares. On 30 June 2020, the conversion ratio on the Convertible Preference Shares issued by APQ Capital Services was amended to a fixed conversion ratio of 11.25 ordinary shares per convertible preference share. The investment in Parish was made through APQ Corporate Services Limited and is held for the purpose of investment income and capital appreciation. It will therefore be measured at fair value through profit and loss as part of the valuation of APQ Corporate Services Limited. On 10 June 2020, APQ Global appointed Parish Group as its company secretary and changed its registered office to the offices of Parish Group.

 

On 3 March 2020, the Company entered into an agreement to purchase 100% of the Delphos International, Ltd ("Delphos"), a US based Corporation. In consideration to the shareholders of Delphos for the acquisition, the Company paid an upfront amount of $1.5 million in cash (the "Upfront Payment"). The Company is also required to make an additional payment to clear the working capital of Delphos prior to the acquisition, this amounted to $112,265  In addition to the Upfront Payment, the Company shall potentially make up to three earn-out payments to the Sellers ("Earn-Out Payments"), depending on the levels of EBTDA generated by Delphos for the years ended 30 June 2020 and 30 June 2021, with each payment capped at $0.75 million and a further Earn-Out Payment capped at $0.5 million for the year ended 30 June 2022. In the event that the minimum contingencies applied to the Earn-Out payments are not met, the Company is not required to make any further payments in respect of that Earn-Out period.

 

On 1 May 2020, the Share purchase agreement for the acquisition of Palladium Trust Services Limited and the affiliated entities was amended so that the residual liability due at this date was derecognised through an immediate settlement of £80k.

 

On 10 June 2020, APQ Global appointed Parish Group as its company secretary and changed its registered office to the offices of Parish Group.

 

COVID-19

 

During the first quarter of 2020, the Company experienced difficult trading conditions in its liquid portfolio due to large market movements in emerging markets currencies, bonds and equities, caused by the COVID-19 pandemic.

 

During this time, the Company took decisive action to mitigate further risk to its balance sheet, de-risking its portfolio of liquid market securities, with the portfolio as of 31 March 2020 comprising:

 

•     $40.6 million of unencumbered cash;

•     $4.3 million of cash equities;

•     $1.3 million of cash bonds; and

•     $1.3 million of tangible book value in its private direct investments.

 

The Company has met all its payment obligations to various counterparties and is not in breach of any debt covenants.

 

Furthermore, with the ongoing uncertainty faced by emerging markets due to COVID-19, the Board has decided to implement the following further cash preservation measures, which are intended to facilitate a smooth recovery:

 

•     Suspension of dividends paid to ordinary shareholders until further notice;

•     The management bonus scheme to be cut from 20% of profits to 10%;

•     Significant cost reduction across all of the Company; and

•     Move to quarterly reporting of key metrics in the Company's income statement and balance sheet, an increase from semi-annually, starting for the reporting period Q2 2020.

 

 

 

STATEMENT OF DIRECTORS' RESPONSIBILITIES

 

 

We confirm that to the best of our knowledge:

 

• the condensed set of financial statements has been prepared in accordance with IAS 34 Interim Financial Reporting as adopted by the EU and gives a true and fair view of the assets, liabilities, financial position and profit of the group as required by DTR 4.2.4R;

 

• the half yearly report includes a fair review of the information required by:

 

 (a)  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

 

(b) 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 that period.

 

For and on behalf of the Board

 

 

 

Wayne Bulpitt
Chairman, APQ Global Limited

Date: 15 September 2020  

 

CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (UNAUDITED)

For the six months ended 30 June 2020

 

 

 

 

 

Note

For the six months ended

30 June 2020

 

For the six months ended

30 June 2019

 

 

$

 

$

 

 

 

 

 

Turnover

4

10,038,801

 

6,265,886

 

 

 

 

 

Net loss on financial assets at fair value through profit and loss

13

(58,711,659)

 

(4,532,368)

 

 

 

 

 

Administrative expenses

5

(2,061,620)

 

(1,706,616)

 

 

 

 

 

Operating loss for the period before tax

 

(50,734,478)

 

(26,902)

 

 

 

 

 

Interest receivable

8

2,515

 

350,046

 

 

 

 

 

Finance costs

9

(1,263,074)

 

(1,135,266)

 

 

 

 

 

Net gain on financial liabilities at fair value through profit and loss

 

570,507

 

-

 

 

 

 

 

Net foreign exchange gain / (loss)

 

4,601,598

 

(295,569)

 

 

 

 

 

Loss on ordinary activities before taxation

 

(46,822,932)

 

(1,053,887)

 

 

 

 

 

Tax on loss on ordinary activities

 

-

 

-

 

 

 

 

 

Loss on ordinary activities after taxation for the financial period

 

(46,822,932)

 

(1,053,887)

 

 

 

 

 

Basic and diluted earnings per share

10

(0.59821)

 

(0.01348)

 

 

 

 

 

The notes section below form an integral part of the Financial Statements.

There is no other comprehensive income.

 

 

CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION (UNAUDITED)----

As at 30 June 2020

 

 

30 June

2020

 

31 December 2019

 

Note

$

 

$

Assets

 

 

 

 

Non-current assets

 

 

 

 

Property, plant and equipment

12

14,598

 

17,670

Leased assets

21

42,401

 

84,802

Investments

13

59,088,030

 

105,414,240

Total non-current assets

 

59,145,029

 

105,516,712

 

 

 

 

 

Current assets

 

 

 

 

Trade and other receivables

14

1,018,134  

 

871,691

Cash and cash equivalents

 

643,918

 

 1,505,234

Total current assets

 

1,662,052

 

2,376,925

 

 

 

 

 

Total assets

 

60,807,081

 

107,893,637

 

 

 

 

 

 

 

 

 

 

Current liabilities

 

 

 

 

Trade and other payables

15

(2,393,245)

 

(912,783)

Total current liabilities

 

(2,393,245)

 

(912,783)

 

 

 

 

 

Long term liabilities

 

 

 

 

3.5% Convertible Unsecured Loan Stock

16

(32,250,590)

 

(34,064,993)

6% Convertible preference shares

17

(1,347,099)

 

-

Total long-term liabilities

 

(33,597,689)

 

(34,064,993)

 

 

 

 

 

Net assets

 

24,816,147

 

72,915,861

 

 

 

 

 

Equity

 

 

 

 

Share capital

18

99,801,153

 

99,733,054

Equity component of 3.5% Convertible Unsecured Loan Stock

16

6,919,355

 

             6,919,355

Equity component of 6% Convertible preference shares

17

100,813

 

-

Share based payment reserve

19

287,650

 

300,798

Share warrants reserve

20

107,702

 

-

Retained earnings

 

(77,473,013)

 

(29,109,833)

Exchange reserve

 

(4,927,513)

 

(4,927,513)

 

 

 

 

 

Total equity

 

24,816,147

 

72,915,861

 

 

 

 

 

Net asset value per ordinary share

 

31.70c

 

93.19c

 

 

The Financial Statements were approved by the Board of Directors of APQ Global Limited and signed on 14 September 2020 on its behalf by:

 

 

                                                               

 ___________________                    ___________________                                                                   

Bart Turtelboom                                  Wesley Davis                       

Chief Executive Officer                     Director                 

                                                                               
The notes section below form an integral part of the Financial Statements.

 

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (UNAUDITED)

For the six months ended 30 June 2020

 

Share capital

 

$

 

CULS equity component

 

$

 

Convertible preference shares equity component

 

$

Share warrants

 

$

 

Other

capital reserves

 

$

Retained earnings

 

$

Exchange reserve

 

$

Total

 

$

 

 

 

 

 

 

 

 

 

 

At 1 January 2019

99,596,856

 

 

 

6,919,355

-

-

 

 

 

264,076

(25,409,610)

 

 

(4,927,513)

76,443,164

 

 

 

 

 

 

 

 

 

Comprehensive income

for the period

 

 

 

 

 

 

 

 

Loss for the period

-

-

-

-

-

(1,053,887)

-

(1,053,887)

 

 

 

 

 

 

 

 

 

Total comprehensive

income for the period

99,596,856

 

6,919,355

-

-

 

264,076

(26,463,497)

(4,927,513)

75,389,277

 

 

 

 

 

 

 

 

 

Contributions by and distributions to owners

 

 

 

 

 

 

 

 

Share based payments

-

-

-

-

105,846

-

-

105,846

Share based payments settled in cash

-

-

-

-

(6,736)

-

-

(6,736)

Issue of share awards

68,098

-

-

-

(68,098)

-

-

-

Dividends

-

-

-

-

-

(3,029,052)

-

(3,029,052)

 

 

 

 

 

 

 

 

 

As at 30 June 2019

99,664,954

6,919,355

-

-

295,088

(29,492,549)

(4,927,513)

72,459,335

 

 

 

 

 

 

 

 

 

 

 

 

Share capital

 

$

 

CULS equity component

 

$

 

Convertible preference shares equity component

 

$

Share warrants

 

$

 

Other

capital reserves

 

$

Retained earnings

 

$

Exchange reserve

 

$

Total

 

$

 

 

 

 

 

 

 

 

 

 

At 1 January 2020

99,733,054

 

 

 

6,919,355

-

-

 

 

300,798

(29,109,833)

 

 

(4,927,513)

72,915,861

 

 

 

 

 

 

 

 

 

Comprehensive income

for the period

 

 

 

 

 

 

 

 

Loss for the period

-

-

-

-

-

(46,822,932)

-

(46,822,932)

 

 

 

 

 

 

 

 

 

Total comprehensive

income for the period

99,733,054

 

6,919,355

-

-

300,798

(75,932,765)

(4,927,513)

26,092,929

 

 

 

 

 

 

 

 

 

Contributions by and distributions to owners

 

 

 

 

 

 

 

 

Issue of Share warrants

-

-

-

107,702

-

-

-

107,702

Adjustment to convertible preference share terms

-

-

100,813

-

-

-

-

100,813

Share based payments

-

-

-

-

61,688

-

-

61,688

Share based payments settled in cash

-

-

-

-

(6,737)

-

-

(6,737)

Issue of share awards

68,099

-

-

-

(68,099)

-

-

-

Dividends

-

-

-

-

-

(1,540,248)

-

(1,540,248)

 

 

 

 

 

 

 

 

 

As at 30 June 2020

99,801,153

6,919,355

100,813

107,702

287,650

(77,473,013)

(4,927,513)

24,816,147

 

 

 

 

 

 

 

 

 

 

The notes section below form an integral part of the Financial Statements.

 

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOW (UNAUDITED)

For the six months ended 30 June 2020

 

 

For the six months ended

30 June 2020

 

For the six months ended

30 June 2019

 

 

 

 

Restated

Cash flow from operating activities

Note

$

 

$

 

 

 

 

 

Cash generated from operations

 

 

 

 

Loss for the financial period

 

(46,822,932)

 

(1,053,887)

Adjustments for non-cash income and expenses

 

 

 

 

Equity settled share-based payments

19

61,688

 

105,846

Depreciation tangible fixed assets

12

6,858

 

6,885

Depreciation right of use assets

 

42,401

 

41,238

Net loss on financial assets at fair value through profit and loss

13

58,711,659

 

4,532,368

Net gain on financial liabilities at fair value through profit and loss

 

(570,507)

 

-

Net gain on amendment to 6% convertible preference share terms

 

(661,581)

 

-

Exchange rate fluctuations

 

(3,757,891)

 

(5,912)

Changes in operating assets and liabilities

 

 

 

 

Increase in trade and other receivables

14

(191,814)

 

(894,705)

Decrease in trade and other payables

15

(38,364)

 

(134,678)

Decrease in receivables from group undertakings

14

45,371

 

-

Decrease in payables from group undertakings

15

(31,361)

 

-

Cash generated from operations

 

6,793,527

 

2,597,155

 

 

 

 

 

Interest receivable

8

(2,515)

 

(350,046)

Finance costs

9

1,263,074

 

1,135,266

 

 

 

 

 

Net cash inflow from operating activities

 

8,054,086

 

3,382,375

 

 

 

 

 

Cash flow from investing activities

 

 

 

 

Payments to acquire investments

13

(8,009,911)

 

(237,396)

Payments to acquire property, plant and equipment

12

(3,786)

 

(3,135)

Interest received

8

2,515

 

350,046

Loan to APQ Cayman Limited

14

-

 

349,504

 

 

 

 

 

Net cash (outflow)/inflow from investing activities

 

(8,011,182)

 

459,019

 

 

 

 

 

Cash flow from financing activities

 

 

 

 

Equity dividends paid

11

(1,540,248)

 

(3,029,052)

Preference share dividends paid

9

(67,536)

 

-

Interest on CULS

16

(633,819)

 

(681,109)

Cash settled share-based payments

19

(6,737)

 

(6,736)

Payments for lease rental

21

(44,280)

 

(45,113)

 

 

 

 

 

Net cash outflow from financing activities

 

(2,292,620)

 

(3,762,010)

 

 

 

 

 

Net (decrease) / increase in cash and cash equivalents

 

(2,249,716)

 

79,384

 

 

 

 

 

Cash and cash equivalents at beginning of period

 

1,505,234

 

511,871

 

 

 

 

 

Exchange rate fluctuations on cash and cash equivalents

 

1,388,400

 

(21,123)

 

 

 

 

 

Cash and cash equivalents at end of period 

 

643,918

 

570,132

 

 

 

 

For the six months ended

30 June 2020

 

For the six months ended

30 June 2019

 

 

$

 

$

Reconciliation of cash flows to debt

 

 

 

 

Brought forward

 

34,132,003

 

31,834,626

Cash flows used in servicing interest payments of CULS

 

(633,819)

 

(681,109)

Cash flows used in principal payments of lease liabilities

 

(44,280)

 

(45,113)

Non cash flows - recognition of lease liability

 

-

 

143,850

Non-cash flows - net impact of recognition of convertible preference shares

 

1,347,099

 

-

Non cash flows - amortisation of discount on CULS issue

 

1,150,021

 

1,135,266

Non cash flows - amortisation of discount on lease liabilities

 

2,184

 

-

Exchange differences

 

(2,334,217)

 

(5,934)

Closing balance

 

33,618,991

 

32,381,586

 

 

 

 

 

Net debt comprises the following:

 

 

 

 

Convertible Unsecured Loan Stock 2024

 

32,250,590

 

32,257,873

6% convertible preference shares

 

1,347,099

 

-

Lease liabilities

 

21,302

 

123,713

 

 

33,618,991

 

32,381,586

 

*The cash flow for the six months ended 30 June 2019 has been restated due to an error in the classification of exchange rate differences on CULS, which had been treated as a movement in cash and cash equivalents rather than as a non-cash adjustment to cash generated from operating activities. In addition, the payments to acquire investments was stated gross of the deferred consideration. There has been no change to the Group's overall cash position for the six months ended 30 June 2019.

 

The notes section below form an integral part of the Financial Statements.

 

 

  

 

 

 

 

 

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

For the six months ended 30 June 2020

 

1. Corporate information

 

The interim consolidated financial statements of APQ Global Limited (the "Group") for the six months ended 30 June 2020 were authorised for issue in accordance with a resolution of the Board of Directors on 14 September 2020. The Company is incorporated as a limited company in Guernsey. The Company was incorporated on 10 May 2016 for an unlimited duration in accordance with the Companies (Guernsey) Law, 2008. The Company's registered office is at PO Box 142, The Beehive, Rohais, St Peter Port, Guernsey, GY1 3HT.

 

The objective of the Company is to steadily grow its earnings to seek to deliver attractive returns and capital growth through a combination of building growing businesses in emerging markets as well as earning revenue from income generating operating activities.

 

The Company and its subsidiaries have no investment restrictions and no maximum exposure limits will apply to any investments made by the Group, unless otherwise determined and set by the Board from time to time. No material change will be made to the Company's or subsidiaries objective or investing policy without the approval of Shareholders by ordinary resolution.

 

The Group's investment activities are managed by the Board. 

 

The shares are quoted on The International Stock Exchange for informational purposes. The ordinary shares are admitted to trading on AIM.

 

2. Significant accounting policies

 

2.1 Basis of preparation

 

These interim consolidated financial statements have been prepared in accordance with IAS 34 Interim Financial Reporting. They do not include all disclosures that would otherwise be required in a complete set of financial statements and should be read in conjunction with the 2019 Annual Report.

 

Taking account of the financial resources available to the Company, the directors believe that the Company is well placed to manage its business risks successfully despite the current uncertain economic outlook. After making enquiries the directors have a reasonable expectation that the Company has adequate resources for the foreseeable future, a period of not less than twelve months from the date of this report. Accordingly, they continue to adopt the going concern basis in preparing the condensed financial statements.

 

2.2 Basis of accounting

 

APQ Global Limited has applied the same accounting policies and methods of computation in its interim consolidated financial statements as in its 2019 annual financial statements.

 

2.3 Functional and presentational currency

 

The Company's presentational and functional currency is US Dollars.

 

2.4 Fair value measurement

 

The Company measures its investments in APQ Cayman Limited, APQ Corporate Services Limited, APQ Knowledge Limited and BARTR Holdings Limited at fair value at each reporting date.

 

For APQ Cayman Limited this is considered to be the carrying value of the net assets of APQ Cayman Limited. APQ Cayman Limited measures its underlying investments at fair value.

 

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value measurement is based on the presumption that the transaction to sell the asset or transfer the liability takes place either in the principal market for the asset or liability or, in the absence of a principal market, in the most advantageous market for the asset or liability. The principal or the most advantageous market must be accessible to the Company. The fair value of an asset or a liability is measured using the assumptions that market participants would use when pricing the asset or liability, assuming that market participants act in their economic best interest.

 

The fair value for financial instruments traded in active markets at the reporting date is based on their quoted price (bid price for long positions and ask price for short positions), without any deduction for transaction costs.

 

For all other financial assets, not traded in an active market, including APQ Corporate Services Limited, APQ Knowledge Limited and BARTR Holdings Limited, the fair value is determined by using valuation techniques deemed to be appropriate in the circumstances. These have been determined in accordance with the International Private Equity and Venture Capital Valuation (IPEV) Guidelines. These guidelines require the valuer to make judgements with regards to the most appropriate valuation method to be used and the results and inputs used to determine these valuations. Valuation methods that may be used include:

 

·      The income approach - valuation through discounted cash flow forecast of future cash flows or earnings, using appropriate discount rates.

·      The market approach - valuation by comparing the asset being valued to comparable assets for which price information is readily available. This price information can be in the form of transactions that have occurred or market information on companies operating in a similar industry.

·      The cost approach - valuation based on the cost of reproducing or replacing the asset being valued.

 

The use of these guidelines requires management to make judgements in relation to the inputs utilised in preparing these valuations. These include but are not limited to:

·      Determination of appropriate comparable assets and benchmarks;

·      Future cash flow expectations deriving from these assets;

·      Appropriate discount factors to be used in determining the discounted future cash flows; and

·      Adjustments required to existing market data to make it more comparable to the asset being valued.

 

For financial liabilities measured at fair value through profit and loss, including the derivative conversion option on convertible preference shares the Company uses valuation techniques deemed to be appropriate for the type of instrument being valued, incorporating a range of inputs such as conversion date, exercise price on conversion.

 

For assets and liabilities that are measured at fair value on a recurring basis, the Company identifies transfers between levels in the hierarchy by re-assessing the categorisation (based on the lowest level input that is significant to the fair value measurement as a whole), and deems transfers to have occurred at the beginning of each reporting period.

 

2.5 6% Convertible preference shares

 

APQ Capital Services Limited, a subsidiary of the Company, issued 6% convertible preference shares ("CPS"). The CPS contain a perpetual 6% dividend rate and a conversion option for ordinary shares of APQ Global Limited. On initial issue the CPS were recognised as a liability comprising a liability held at amortised cost and a derivative conversion option held at fair value through profit and loss.

 

At the date of issue, the fair value of the liability component held at amortised cost was estimated by assuming that an equivalent non-convertible obligation of the Company would have a coupon rate of 7.9%. The fair value of the derivative component, containing a variable conversion rate, is derived from the difference between the value of the consideration determined for the acquisition of Parish Group Limited and the fair value assigned to the liability held at amortised cost.

 

The terms of the CPS were amended on the 30 June 2020, to amend the conversion option to a fixed ratio of CPS to ordinary shares. Subsequent to this amendment to the CPS are regarded as a compound instrument, comprising of a liability component and an equity component.  Due to the significant change in the terms of the CPS the initial instrument was derecognised and then recognised at the new fair value. Any gain/loss on the derecognition of the liability is recognised in the statement od comprehensive income.

 

On amendment, the fair value of the liability component was estimated by assuming that an equivalent non-convertible obligation of the Company would have a coupon rate of 11.9%. The fair value of the equity component was determined in based on the present value of the average gain on conversion based on a range of simulated share prices. 

 

The dividends on the convertible preference shares are taken to the statement of comprehensive income as finance costs.

 

2.6 Share warrants

 

Share warrants issued are measured at fair value at the date of issue using the Black-Scholes pricing model, which incorporates certain input assumptions including the warrant price, risk-free interest rate, expected warrant life and expected share price volatility. The fair value is included as a component of equity and is transferred from the share warrant equity reserve to share capital on exercise. If the warrants expire then the fair value is transferred from the share warrant equity reserve to retained earnings.

 

3. Segment Information                                                                                                  

 

For management purposes, the Group is organised into one main operating segment, which invests in equities and credit, government and local currency bonds. All of the Group's activities are interrelated, and each activity is dependent on the others. Accordingly, all significant operating decisions are based upon analysis of the Group as one segment. The financial results from this segment are equivalent to the financial statements of the Group as a whole.                                                                                                             

                                                                                                               

The following table analyses the Group's assets by geographical location. The basis for attributing the assets are the place of listing for the securities or for non-listed securities, country of domicile.

 

 

30 June

 2020

 

31 December

2019

 Group

 

$

 

$

 

 

 

 

 

Cayman

 

44,559,266

 

102,885,960

United Kingdom

 

371,772

 

425,085

Guernsey

 

15,876,043

 

4,582,592

 

 

 

 

 

 

 

60,807,081

 

107,893,637

 

4. Analysis of turnover

 

 

For the six months ended

30 June 2020

 

For the six months ended

30 June 2019

 

 

$

 

$

 

 

 

 

 

Dividends received from APQ Cayman Limited

 

7,635,275

 

5,963,216

Dividends received from APQ Corporate

 

989,193

 

-

Rental income

 

-

 

(674)

Telecommunications minutes income

 

674,821

 

303,344

Other income from early settlement of deferred compensation

 

77,931

 

-

Other income from amendment to 6% convertible preference share terms

 

661,581

 

-

 

 

 

 

 

 

 

10,038,801

 

6,265,886

 

                                                                                                                                                                                                                               

5. Analysis of administrative expenses

 

 

 

For the six months ended

30 June 2020

 

For the six months ended

30 June 2019

 

 

$

 

$

 

 

 

 

 

Personnel expenses

 

302,790

 

237,051

Depreciation of tangible fixed assets expenses

 

6,858

 

6,885

Depreciation of right of use assets

 

42,401

 

45,168

Audit fees

 

87,372

 

48,350

Audit related services - review of interim financial statements

 

-

 

8,273

Auditors remuneration - non audit fees

 

6,996

 

-

Nominated advisor fees

 

31,753

 

32,424

Cost of purchasing telecommunications minutes

 

665,948

 

409,168

Expenses incurred in relation to investment in BARTR Holdings Limited

 

2,463

 

189,929

Administration fees and expenses

 

97,086

 

94,035

Director's remuneration

 

100,948

 

114,960

Other expenses

 

158,762

 

191,058

Professional fees

 

722,266

 

389,720

Share based payment expenses

 

61,688

 

105,846

Insurance

 

5,686

 

5,500

Recharge of expenses to APQ Cayman Limited

 

(231,397)

 

(171,751)

 

 

 

 

 

 

 

2,061,620

 

1,706,616

           

 

6. Director's remuneration

 

 

 

For the six months ended

30 June 2020

 

For the six months ended

30 June 2019

 

 

$

 

$

 

 

 

 

 

Director's remuneration

 

98,940

 

112,390

Share based payment expenses

 

49,350

 

84,677

Social security costs on director's remuneration

 

2,008

 

2,570

 

 

 

 

 

 

 

150,298

 

199,637

 

 

 

 

 

The highest paid director was Bart Turtelboom (2018 - Bart Turtelboom)

 

79,777

 

123,604

 

 

 

 

 

Average number of directors in the year

 

4

 

4

 

 

 

 

 

 

               

7. Personnel expenses

 

 

 

For the six months ended

30 June 2020

 

For the six months ended

30 June 2019

 

 

$

 

$

 

 

 

 

 

Short term benefits - wage and salaries

 

110,933

 

111,281

Short term benefits - social security costs

 

13,883

 

8,773

Short term benefits - other benefits

 

173,219

 

113,242

Short term benefits - Share based payment expenses

 

12,338

 

21,169

Post-employment benefits

 

4,755

 

3,755

 

 

 

 

 

 

 

315,128

 

258,220

 

 

 

 

 

Personnel expenses include expenses per note 5 and the portion of share based payments relating to individuals who are not directors of the Company.

 

 

 

 

 

Key management personnel expenses, excluding director's remuneration detailed in note 6, is as follows:

 

 

 

 

 

Short term benefits - other benefits

 

169,808

 

110,068

Short term benefits - Share based payment expenses

 

12,338

 

21,169

 

 

182,146

 

131,237

 

8. Interest receivable

 

 

 

For the six months ended

30 June 2020

 

For the six months ended

30 June 2019

 

 

$

 

$

 

 

 

 

 

Loan interest receivable from APQ Cayman Limited

 

-

 

350,046

Loan interest receivable from Palladium Trust Services Limited

 

1,884

 

-

Loan interest receivable from New Markets Media & Intelligence Ltd

 

631

 

-

 

 

 

 

 

 

 

2,515

 

350,046

 

 

 

 

9. Finance costs

 

 

 

For the six months ended

30 June 2020

 

For the six months ended

30 June 2019

 

 

$

 

$

 

 

 

 

 

Interest on 3.5% Convertible Unsecured Loan Stock 2024 

 

1,150,021

 

1,135,266

Discount on unwinding of deferred consideration

 

43,333

 

-

Discount on unwinding of lease liability

 

2,184

 

-

Dividends paid on 6% convertible preference shares

 

67,536

 

-

 

 

 

 

 

 

 

1,263,074

 

1,135,266

 

10. Earnings Per Share

 

The basic and diluted earnings per shares are calculated by dividing the profit or loss by the average number of ordinary shares outstanding during the period.

 

 

 

For the six months ended

30 June 2020

 

For the six months ended

30 June 2019

 

 

$

 

$

 

 

 

 

 

Total comprehensive income for the period

 

(46,822,952)

 

(1,053,887)

Average number of shares in issue

 

78,271,130

 

78,170,417

 

 

 

 

 

Earnings per share

 

(0.59821)

 

(0.01348)

 

For the current period and prior period, the effect of potentially dilutive instruments in issue are not dilutive as the effect of this dilution would be to decrease the loss per share.

 

 

 

 

Potentially dilutive instruments in issue

 

The Group had share awards vested but not yet issued. They would increase the weighted average number of shares by 321,278 (30 June 2019 - 438,106).

 

The Group has 6,000 (2018 - 6,000) units of Convertible Loan Stock which are potentially dilutive if converted into ordinary shares. This would increase the weighted average number of shares by 6,000 (30 June 2019 - 6,000).

 

On the 29 January 2020, APQ Global issued 1,000,000 share warrants with an exercise price of 70.94p. The possible impact of this dilution would be to increase the weighted average number of shares by 1,000,000 (30 June 2019 - nil).

 

On the 29 January 2020, APQ Global issued 268,000 convertible preference shares which were convertible into a variable number of shares linked to the relative assets attributable to the convertible preference shares. On 30 June 2020, the terms of the Convertible preference shares were changed so that they are now convertible into 11.25 ordinary shares per convertible preference share. The possible impact of this dilution would be to increase the weighted average number of shares by 3,015,000 (30 June 2019 - nil).

                                                                                               

11. Dividends

 

Dividends were declared in the period ended 30 June 2020 as follows:

 

 

Ex-dividend date

 

 

Payment date

Dividend (£)

 

 

Dividend ($)

Dividend per share (£)

Dividend per share ($)

 

 

 

 

 

 

 

Dividend

30 January 2020

2 March 2020

1,174,014

1,540,248

0.015

0.020

 

 

 

 

 

 

 

 

 

 

1,174,014

1,540,248

0.015

0.020

 

The stated dividend policy of the Company is to target an annualised dividend yield of 6% based on the Placing Issue Price.  Due to the impact of COVID-19 the Company has ceased all dividends until further notice.

                                                                               

There is no guarantee that any dividends will be paid in respect of any financial period. The ability to pay dividends is dependent on a number of factors including the level of income returns from the Group's investments. There can be no guarantee that the Group will achieve the target rates of return referred to in this document or that it will not sustain any capital losses through its activities.

 

 

12. Property, plant and equipment

 

 

Office

 equipment

 

 

Leasehold

improvements

 

 

Total

 

$

 

 

$

 

$

Cost

 

 

 

 

 

 

At 1 January 2020

63,511

 

 

34,588

 

117,451

Additions during the period

3,786

 

 

-

 

3,786

At 30 June 2020

67,297

 

19,352

 

34,588

 

121,237

 

 

 

 

 

 

 

 

Accumulated depreciation

 

 

 

 

 

 

At 1 January 2020

49,474

 

 

34,588

 

99,781

Charge for the period

5,987

 

 

-

 

6,858

At 30 June 2020

55,461

 

16,590

 

34,588

 

106,639

 

 

 

 

 

 

 

 

Net book value

 

 

 

 

 

 

At 30 June 2020

11,836

 

2,762

 

-

 

14,598

 

 

 

 

 

 

 

 

At 31 December 2019

14,037

 

3,633

 

-

 

17,670

 

 

13. Investments

 

 

 

Unlisted investments

 

 

 

 

 

APQ

Cayman Limited

 

APQ Corporate Services Limited

 

 

APQ Knowledge Limited

 

 

BARTR Holdings Limited

 

 

 

Listed Investments

 

 

 

 

Total

 

$

 

$

 

$

 

$

 

 

 

$

At 1 January 2020

         102,885,960

 

         852,869

 

         884,668

 

         790,743

 

         -

 

         105,414,240

Additions 

-

 

10,336,558

 

 

 

 

 

2,048,891

 

12,385,449

Fair value movement

(58,326,693)

 

(550,000)

 

-

 

-

 

         165,034

 

(58,711,659)

 

 

 

 

 

 

 

 

 

 

 

 

 

44,559,267

 

10,639,427

 

884,668

 

790,743

 

2,213,925

 

59,088,030

 

Consolidated investments

 

APQ Global Limited is the managing partner of APQ Partners LLP whose registered office is at 22-23 Old Burlington Street, London, W1S 2JJ. APQ Partners LLP supports the investment activities of APQ Global Limited and therefore does not meet the requirements of being an investment entity. This subsidiary is consolidated into the group financial statements.

 

On 31 July 2019, APQ Global Limited incorporated a wholly owned subsidiary, APQ Capital Services Limited, a Company incorporated in Guernsey. The registered address of APQ Capital Services Limited is PO Box 142, The Beehive, Rohais, St Peter Port, Guernsey, GY1 3HT. APQ Capital Services supports the investment activities of APQ Global Limited and therefore does not meet the requirements of being an investment entity. This subsidiary is consolidated into the group financial statements.

 

 

Unlisted investments held at fair value through profit and loss

 

APQ Global Limited wholly owns APQ Cayman Limited whose registered office is at the offices of Mourant Ozannes Corporate Services (Cayman) Limited, 94 Solaris Avenue, Camana Bay, PO Box 1348, Grand Cayman KY1-1108, Cayman Islands. The Company meets the definition of an investment entity. Therefore, APQ Cayman Limited is not consolidated and is recognised as an investment at fair value through profit or loss.

 

On the 19 November 2018, APQ Global Limited acquired a capital interest represents a 40% shareholding and equivalent voting rights BARTR Holdings Limited, a company incorporated in England and Wales, whose registered office is Tobias House St. Marks Court, Thornaby, Stockton-On-Tees, United Kingdom, TS17 6QW. BARTR Holdings Limited wholly owns two subsidiaries, BARTR Connect Limited, whose registered office is Tobias House St. Marks Court, Thornaby, Stockton-On-Tees United Kingdom, TS17 6QW, and BARTR Technologies Limited, whose registered office is 156 Great Charles Street Queensway, Birmingham, England, B3 3HN. On 19 May 2020, the capital interest was converted from ordinary shares to preference shares which have no voting rights, but preferential dividends and preferential rights on assets on wind up of BARTR Holdings Limited. BARTR Holdings Limited is not consolidated and is recognised as an investment at fair value through profit or loss.

 

On 10 January 2019, the Company incorporated a wholly owned subsidiary APQ Corporate Services Limited, for the purpose of acting as a holding company for new investments. The registered address of APQ Corporate Services Limited is PO Box 142, The Beehive, Rohais, St Peter Port, Guernsey, GY1 3HT. APQ Corporate Services Limited meets the definition of an investment entity. Therefore, APQ Corporate Services Limited is not consolidated and is recognised as an investment at fair value through profit or loss.              

 

On 21 December 2018, the Group entered into an agreement to purchase 100% of the following 5 entities; Palladium Trust Services Limited, a Company incorporated in England and Wales, Palladium Trust Company (NZ) Limited, a company incorporated and domiciled in New Zealand, Palladium Corporate Service (Singapore) Pte Limited, a company incorporated and domiciled in Singapore, Palladium Finance Group Limited (Seychelles), a company incorporated and domiciled in the Seychelles and Palladium Trust Company (BVI) Limited, a company incorporated and domiciled in the British Virgin Islands. The completion of this purchase was finalised on 22 February 2019. The total consideration of the purchase agreement was $290,518 (£222,500). As at 30 June 2020, $nil is still due with respect to this purchase agreement and is included within deferred consideration in Note 15. All 5 of the entities are 100% owned by APQ Corporate Services Limited. The intention is to hold these investments for the purpose of obtaining investment income and capital appreciation. As their parent company, APQ Corporate Services Limited meets the definition of an investment entity, these entities are not consolidated and are recognised as an investment at fair value through profit or loss as part of the valuation of APQ Corporate Services Limited.

 

On 1 March 2019, the Company incorporated a wholly owned subsidiary APQ Knowledge Limited also for the purpose of acting as a holding company for new investments. The registered address of APQ Knowledge Limited is PO Box 142, The Beehive, Rohais, St Peter Port, Guernsey, GY1 3HT. APQ Knowledge Limited meets the definition of an investment entity. Therefore, APQ Knowledge Limited is not consolidated and is recognised as an investment at fair value through profit or loss.

 

On 26 February 2019, the Group entered into an agreement to purchase 100% of Frontier Consultancy Limited, a Company incorporated in England and Wales. Frontier Consultancy Limited changed its name to New Markets Media & Intelligence Ltd on 13 March 2019. The total consideration of the purchase agreement was $613,947 (£463,742). As at 30 June 2020, $249,373 (£201,823) is still due with respect to this purchase agreement and is included within deferred consideration in Note 15. The entity is 100% owned by APQ Knowledge Limited. The intention is to hold this investment for the purpose of obtaining investment income and capital appreciation. As its parent company, APQ Knowledge Limited meets the definition of an investment entity, New Markets Media & Intelligence Ltd is not consolidated and is recognised as an investment at fair value through profit or loss as part of the valuation of APQ Corporate Services Limited.

 

On 12 April 2019, APQ Corporate Services Limited incorporated a wholly owned subsidiary, GEO Strategic Partners Limited, a Company incorporated in the Isle of Man. The intention is to hold this investment for the purpose of obtaining investment income and capital appreciation. As its parent company, APQ Corporate Services Limited meets the definition of an investment entity, GEO Strategic Partners Limited is not consolidated and is recognised as an investment at fair value through profit or loss as part of the valuation of APQ Corporate Services Limited.

 

On 31 July 2019, APQ Global Limited incorporated a wholly owned subsidiary, APQ Connect Limited, a Company incorporated in Guernsey. The registered address of APQ Connect Limited is PO Box 142, The Beehive, Rohais, St Peter Port, Guernsey, GY1 3HT.

 

 

On 29 January 2020, the Company entered into an agreement to purchase 100% of the Parish Group Limited ("Parish"), a company incorporated and domiciled in Guernsey. Parish Group Limited is a fiduciary and corporate services provider. In consideration to the sellers for the acquisition

·      The Company paid a net amount $4,095,630 cash consideration to the Sellers;

·      APQ Capital Services Limited, a wholly owned subsidiary of the Company, issued 268,000 Convertible Preference Shares (convertible into ordinary shares in APQ Global) to the Sellers (the "Convertible Preference Shares") at price of $10 per share; and

·      The Company issued 1.0 million warrants in APQ Global ("Warrants"), with an exercise price equal to the most recently announced book value per share of 70.94 pence, to the Sellers.

 

Total consideration is valued at $6,883,332.

 

The registered address of Parish is PO Box 142, The Beehive, Rohais, St Peter Port, Guernsey, GY1 3HT.The investment in Parish was made through APQ Corporate Services Limited and is held for the purpose of investment income and capital appreciation. It will therefore be measured at fair value through profit and loss as part of the valuation of APQ Corporate Services Limited.

 

On 3 March 2020, the Company entered into an agreement to purchase 100% of the Delphos International, Ltd ("Delphos"), a US based Corporation. In consideration to the shareholders of Delphos for the acquisition, the Company paid an upfront amount of $1.5 million in cash (the "Upfront Payment"). The Company is also required to make an additional payment to clear the working capital of Delphos prior to the acquisition, this amounted to $112,265  In addition to the Upfront Payment, the Company shall potentially make up to three earn-out payments to the Sellers ("Earn-Out Payments"), depending on the levels of EBTDA generated by Delphos for the years ended 30 June 2020 and 30 June 2021, with each payment capped at $0.75 million and a further Earn-Out Payment capped at $0.5 million for the year ended 30 June 2022. In the event that the minimum contingencies applied to the Earn-Out payments are not met, the Company is not required to make any further payments in respect of that Earn-Out period. The Earn-Out payment with respect to the year ended 30 June 2020 has been paid after the reporting period. Total consideration for the acquisition of Delphos is valued at $3,453,226. Total value of undiscounted future deferred contingent cashflows as at the 30 June 2020 is $2,028,628.

 

The registered address of Delphos is 2121 K St, NW, Suite 1020, Washington, DC 20037. The investment in Delphos was made through APQ Corporate Services Limited and is held for the purpose of investment income and capital appreciation. It will therefore be measured at fair value through profit and loss as part of the valuation of APQ Corporate Services Limited.

 

Listed investments held at fair value through profit and loss

 

The Company has made direct investments in equities that are freely traded on international stock exchanges. These investments are highly liquid.

 

Valuation techniques        

                                                                                               

APQ Cayman Limited has a portfolio of tradable assets and liabilities which it values at fair value using the same policies as the Company. The Company is able to redeem its holding of APQ Cayman Limited at its net asset value.  Fair value of the investment in APQ Cayman Limited is therefore measured at its Net Asset Value.

 

The investment in BARTR Holdings Limited was completed on 19 November 2018. Fair value has been determined in relation to the most recent round of fund raising by BARTR Holdings Limited. This is due to BARTR Holdings Limited being a pre-revenue technology start-up company for which other valuation techniques are not appropriate.

 

The investment in APQ Corporate Services Limited was completed on 10 January 2019. Fair value has been determined through the income approach, incorporating comparison with external sources and the expected cash flows of the investment.

 

The investment in APQ Knowledge Limited was completed on 1 March 2019. Fair value has been determined through the income approach, incorporating comparison with external sources and the expected cash flows of the investment.

 

Listed investments are measured at fair value using the current market price for the underlying equity as quoted on the applicable stock exchange the security is traded on.

 

 

 

Fair value hierarchy

               

The Company classifies its investments into the three levels of the fair value hierarchy based on:                                                                                                                                                  

Level 1: Quoted prices in active markets for identical assets or liabilities;                                                                             

Level 2: Those involving inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly (as prices) or indirectly (derived from prices); and                                                             

Level 3: Those with inputs for the asset or liability that are not based on observable market data (unobservable inputs).                                                                                                         

The Company has classified its investments in APQ Cayman Limited, BARTR Holdings Limited, APQ Corporate Services Limited and APQ Knowledge Limited as level 3 as the inputs utilised in valuing the investments are deemed to be unobservable. The most significant unobservable input used in the fair value of the investment in APQ Cayman is the NAV. The most significant unobservable input used in the fair value of the investments in BARTR Holdings Limited is the most recent funding raised by BARTR Holdings Limited. The most significant unobservable input used in the fair value of the investments in APQ Corporate Services Limited and APQ Knowledge Limited are the future expected cash flows of the investments, used in deriving a valuation using discounted cash flows. The movement in the investments in the year are shown above.

 

The listed investments are designated as Level 1 instruments in the fair value hierarchy as fair value can be determined by the quoted market price for these assets.

 

The movement of investments classified by level is as per the below. There have been no transfers between levels.

               

                                                                               

 

 

Level 1

 

Level 2

 

Level 3

 

Total

 

 

$

 

$

 

 

 

$

At 1 January 2020

 

-

 

         -

 

105,414,240

 

         105,414,240

Additions 

 

2,048,891

 

-

 

10,336,558

 

12,385,449

Fair value movement

 

         165,034

 

-

 

(58,876,693)

 

(58,711,659)

 

 

 

 

 

 

 

 

 

 

 

2,213,925

 

-

 

56,874,105

 

59,088,030

 

 

14. Trade and other receivables

 

 

 

 

30 June

2020

 

31 December 2019

 

 

 

 

$

 

$

 

 

 

 

 

 

 

Trade debtors

 

 

 

76,423

 

68,581

Amounts due from group undertakings 

 

 

 

236,118

 

281,489

Prepayments and accrued income

 

 

 

668,224

 

466,914

Other debtors

 

 

 

37,369

 

54,707

 

 

 

 

 

 

 

 

 

 

 

1,018,134

 

871,691

 

 

 

 

 

 

 

 

 

 

15. Trade and other payables

 

 

 

 

30 June

2020

 

31 December 2019

 

 

 

 

$

 

$

 

 

 

 

 

 

 

Trade creditors

 

 

 

78,847

 

75,260

Other creditors 

 

 

 

20,341

 

1,960

Amounts due to group undertakings

 

 

 

30,048

 

61,409

Accruals

 

 

 

80,413

 

140,745

Lease liability

 

 

 

21,302

 

67,010

Deferred consideration

 

 

 

2,162,294

 

566,399

 

 

 

 

 

 

 

 

 

 

 

2,393,245

 

912,783

                 

16. 3.5% Convertible Unsecured Loan Stock 2024

 

 

Nominal number

 of CULS

 

Liability

component

 

Equity

component

 

$

 

$

 

$

 

 

 

 

 

 

As at 1 January 2020

41,446,167

 

34,064,993

 

6,919,355

Amortisation of discount on issue and issue expenses

-

 

1,150,021

 

-

Interest paid during the period

-

 

(633,819)

 

-

Exchange differences

-

 

(2,330,605)

 

-

 

 

 

 

 

 

As at 30 June 2020

41,446,167

 

32,250,590

 

6,919,355

 

At an Extraordinary General Meeting held on 4 September 2017, Resolutions were passed approving the issue of 4,018 3.5 per cent. convertible unsecured loan stock 2024 ("CULS") to raise £20,090,000 before expenses. The CULS were admitted to trading on the International Securities Market, the London Stock Exchange's market for fixed income securities and dealings commenced at 8.00 a.m. on 5 September 2017.

 

Following Admission there were 4,018 CULS in issue. Holders of the CULS are entitled to convert their CULS into Ordinary Shares on a quarterly basis throughout the life of the CULS, commencing 31 December 2017, and all outstanding CULS will be repayable at par (plus any accrued interest) on 30 September 2024. The initial conversion price is 105.358 pence, being a 10 per cent. premium to the unaudited Book Value per Ordinary Share on 31 July 2017. Following conversion of 80 per cent. or more of the nominal amount of the CULS originally issued, the Company will be entitled to require remaining CULS Holders to convert their outstanding CULS into Ordinary Shares after they have been given an opportunity to have their CULS redeemed.

 

On 22 January 2018, the Company raised a further £10,207,300 ($14,492,418) before expenses through the issue of 1,982 units of 3.5 per cent. convertible unsecured loan stock 2024 in denominations of £5,000 ($7,099) nominal each, at an issue price of £5,150 ($7,312) per unit.

 

 

 

 

 

17. 6% convertible preference shares

 

 

Nominal number

 of preference shares

 

 

Liability

held at amortised cost

 

 

Liability

held at fair value through profit and loss

 

 

Equity

component

 

$

 

$

 

$

 

$

 

 

 

 

 

 

 

 

As at 1 January 2020

-

 

-

 

-

 

-

Preference shares issued during the acquisition of Parish

268,000

 

2,026,016

 

653,984

 

-

Fair value movement on derivative component

-

 

-

 

(570,507)

 

-

Derecognition on amendment to conversion terms

-

 

(2,026,016)

 

(83,477)

 

-

Recognition following the amendment to conversion terms

-

 

1,347,099

 

-

 

100,813

 

 

 

 

 

 

 

 

As at 30 June 2020

268,000

 

1,347,099

 

-

 

100,813

 

On the 29 January 2020, APQ Capital Services Limited, a subsidiary of APQ Global, issued 268,000 convertible preference shares at a value of $10 per share, which were convertible into a variable number of shares linked to the relative assets attributable to the convertible preference shares. These convertible preference shares were admitted to trading on The International Stock Exchange on 30th January 2020

 

The conversion option into a variable number of shares was identified as a derivative option which was designated at fair value through profit and loss. This instrument was designated as a Level 3 in accordance with the fair value hierarchy as per Note 13. Fair value has been determined in conjunction with a third party valuation firm, using forecasting of the share price at the date the conversion option is exercised. The following assumptions were used in the calculation of the value of the derivative option:

 

 

 

Assumptions

 

 

 

Implicit interest rate

 

7.9%

Duration

 

7 years

 

 

On 30 June 2020, the terms of the Convertible preference shares were changed so that they are now convertible into 11.25 ordinary shares per convertible preference share. The fair value of the convertible preference shares was remeasured at this date and the previously recognised carrying values of these convertible preference shares were derecognised. Fair value was remeasured using the following assumptions:

 

 

 

Assumptions

 

 

 

Implicit interest rate

 

11.9%

Duration

 

6.6 years

 

 

18. Share Capital              

                                                                               

The issued share capital of the Company is 78,294,203 ordinary shares of no par value listed on The International Stock Exchange and AIM.                                                                                     

                                                                                               

Quantitative information about the Company's capital is provided in the statement of changes in equity and in the tables below.

                                                                                               

The shares are entitled to dividends when declared and to payment of a proportionate share of the Companies net asset value on any approved redemption date or upon winding up of the Company.

                                                                                               

The Company's objectives for managing capital are:                                                                                

                                                                                               

•    To invest the capital in investments meeting the description, risk exposure and expected return indicated in its listing documents.                                                                  

•              To maintain sufficient liquidity to meet the expenses of the Company, pay dividends and to meet redemption requests as they arise.

•              To maintain sufficient size to make the operation of the Company cost-efficient.                                                     

•              The Board has authority to purchase up to 14.99 per cent. of the issued Ordinary Share capital of the Company. The Board intends to seek a renewal of this authority at each annual general meeting of the Company. No buy backs occurred during the period under review.

 

 

Ordinary

shares

 

 

 

 

 

No

 

£

 

$

 

 

 

 

 

 

As at 1 January 2020

78,241,047

 

76,797,815

 

99,733,054

 

 

 

 

 

 

Shares issued from share awards during the period

53,156

 

50,340

 

68,099

 

 

 

 

 

 

At 30 June 2020

78,294,203

 

76,848,155

 

99,801,153

 

 

During the period ended 30 June 2020, 53,156 (period ended 30 June 2019 - 53,156) shares were issued as part of the share award scheme as detailed in note 19.

 

19. Share awards

 

On 19 April 2017 (and amended 17 July 2018), the Company established a share award scheme for the employees of the Company. The scheme grants the Board the authority to allot share awards or share options with service conditions attached. Share awards or options can only be awarded for performance periods whereby the book value per share (excluding dividend transactions) exceeds the book value per share for all previous performance period ends. The maximum amount of share awards or options is determined by reference to 20% of the increased performance of the current book value per share against all previous performance periods. The Board retains the right to settle these awards in either shares or cash.

 

The first share awards were granted in 2018 with respect to the performance period ended 31 December 2017.

 

Grant date

 

Type of award

 

No. of instruments

 

Fair value of instrument granted pence

 

Vesting conditions

 

Final vesting date

 

 

 

 

 

 

 

 

 

 

 

1 January 2018

 

Shares

 

584,141

 

 

 

 

128.11

 

Awards vest quarterly over 5 years provided the employee is still in service of the Group.

 

31 December 2022

 

 

 

 

2020

 

2019

 

 

Number of awards

 

Weighted average of fair value of instrument

 

Number of awards

 

Weighted average of fair value of instrument

 

 

 

 

cents

 

 

 

cents

 

 

 

 

 

 

 

 

 

Outstanding at 1 January

 

379,692

 

128.11

 

496,520

 

-

Settled in equity

 

(53,156)

 

128.11

 

(53,156)

 

128.11

Settled in cash

 

(5,258)

 

128.11

 

(5,258)

 

128.11

Outstanding at 30 June

 

321,278

 

128.11

 

438,106

 

128.11

 

 

 

 

 

 

Charge for awards to be settled in Equity

 

Charge for awards settled in Cash

 

Total charge for share based awards

 

 

 

 

$

 

$

 

$

 

 

 

 

 

 

 

 

 

Period ended 30 June 2019

 

 

 

                      99,110

 

6,736

 

105,846

 

 

 

 

 

 

 

 

 

Period ended 30 June 2020

 

 

 

54,951

 

6,737

 

61,688

 

 

The unvested portion of the share awards currently granted is $123,937 (At 30 June 2019 - $266,169). Of the awards outstanding the number vested that are available for settlement amount to 29,207 (At 30 June 2019 - 29,207)

 

20. Share warrants

 

On 29 January, the Company issued 1,000,000 warrants as part of the acquisition of Parish Group Limited. The fair value of the warrants issued as part of the consideration for this investment was determined using the Black Scholes option pricing model. The assumptions used in the valuation are as follows:

 

 

 

Assumptions

 

 

 

Share price on issue (cents)

 

68.50

Exercise price of share warrants (cents)

 

70.94

Volatility

 

10.45%

Duration

 

6.6 years

Risk free rate

 

1.00%

Dividend yield

 

0.00%

 

 

 

Issue date

 

Warrants outstanding at 1 January 2020

Warrants issued in the period

Warrants exercised in the period

Warrants lapsed in the period

Warrants outstanding at 30 June 2020

Exercise price

cents

Expiry Date

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

29 January 2020

 

-

1,000,000

-

-

1,000,000

70.94

30 August 2026

 

 

 

 

 

 

 

 

 

 

 

-

1,000,000

-

-

1,000,000

 

 

 

The weighted average remaining life of the warrants outstanding is 6.2 years

 

21. Leases

 

Finance lease commitments

 

The Company's subsidiary, APQ Partners LLP, leases rental space and information with regards to this lease is outlined below:

 

 

 

 

 

 

 Rental lease asset

 

 

 

$

 

 

 

 

 

Leased asset on 1 January 2020

 

 

 

84,802

Depreciation for the period

 

 

 

(42,401)

 

 

 

 

 

At 30 June 2020

 

 

 

42,401

 

 Rental lease liability

 

 

 

30 June

2020

 

 

 

 

$

 

 

 

 

 

Lease asset on 1 January 2020

 

 

 

67,010

Unwinding discount on lease liability

 

 

 

2,184

Payments for lease

 

 

 

(44,280)

Exchange differences

 

 

 

(3,612)

 

 

 

 

 

At 30 June 2020

 

 

 

21,302

 

 

 

22. Capital Management                                                                                 

 

The Group can raise new capital which may be implemented through the issue of a convertible debt instrument or such other form of equity or debt as may be appropriate.  It also has a buy-back authority subject to a maximum buy-back of 14.99 per cent of the issued Ordinary Shares.                                                                                 

                                                                                               

The Group's objectives for managing capital are:       

                                                                               

•              To invest the capital into investments through its subsidiary, APQ Cayman Limited.                                                 

•              To maintain sufficient liquidity to meet the expenses of the Group and pay dividends.                                             

•              To maintain sufficient size to make the operation of the Group cost-effective.                                                                                                                                                                   

The Group may utilise borrowings in connection with its business activities. Although there is no prescribed limit in the Articles or elsewhere on the amount of borrowings that the Group may incur, the Directors will adopt a prudent borrowing policy and oversee the level and term of any borrowings of the Group and will review the position on a regular basis.

The Group's capital comprises:

 

 

30 June

2020

 

31 December

2019

 

 

$

 

$

 

 

 

 

 

Share capital

 

99,801,153

 

99,733,054

Preference shares

 

100,813

 

-

Equity component of 3.5% Convertible Unsecured Loan Stock 2024

 

6,919,355

 

6,919,355

Other capital reserves

 

395,352

 

300,798

Retained earnings

 

(77,473,013)

 

(29,109,833)

Exchange reserve

 

(4,927,513)

 

(4,927,513)

 

 

 

 

 

Total shareholders' funds

 

24,816,147

 

72,915,861

 

23. Related party transactions                       

                                                                                                               

Wayne Bulpitt founded the Active Group; he is also a shareholder of the Company.                                                                                                                                                                                         

Bart Turtelboom founded APQ Partners LLP and is also a director of APQ Cayman Limited as well as the largest shareholder of the Company.                                                                                            

                                                                                               

The Directors are remunerated from the Company in the form of fees, payable monthly in arrears. Bart Turtelboom was entitled to an annual salary of £120,000 as Chief Executive Officer of the Company. From 1 April 2018 this was split between the Company and APQ Cayman Limited.

 

 

 

 

 

APQ Global Limited - Remuneration

 

APQ Global Limited - Share based remuneration

 

APQ Cayman Limited - Remuneration

 

Total

 

 

$

 

$

 

$

 

$

 

 

For the six months ended 30 June 2020

 

For the six months ended 30 June 2019

 

For the six months ended

30 June 2020

 

For the six months ended

30 June 2019

 

For the six months ended

30 June 2020

 

For the six months ended 30 June 2019

 

For the six months ended 30 June 2020

 

For the six months ended 30 June 2019

Bart Turtelboom

Chief Executive Officer

30,427

 

38,927

 

49,350

 

84,677

 

45,256

 

38,927

 

125,033

 

162,531

Wayne Bulpitt 

Non-Executive Chairman

25,226

 

26,130

 

-

 

-

 

-

 

-

 

25,226

 

26,130

Wesley Davis

Executive Director

32,250

 

36,000

 

-

 

-

 

32,250

 

36,000

 

64,500

 

72,000

Philip Soulsby

Non-Executive Director

11,037

 

11,333

 

-

 

-

 

-

 

-

 

11,037

 

11,333

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

98,940

 

112,390

 

49,350

 

84,677

 

77,506

 

74,927

 

225,796

 

271,994

 

APQ Global Limited has incurred $31,898 (six months ended 30 June 2019 - $47,397) of fees and expenses to Active Services (Guernsey) Limited as administrator of the Company. As at 30 June 2020, APQ Global Limited owed $24,177 to Active Services (Guernsey) Limited (31 December 2019 - $21,677).

 

On 10 June 2020, the Company changed its administrator from Active Services (Guernsey) to Parish Group Limited, a wholly owned subsidiary of APQ Global Limited. APQ Global Limited has incurred $9,082 (six months ended 30 June 2019 - $nil) of fees and expenses to Parish Group Limited as administrator of the Company. As at 30 June 2020 the balance owed to Parish Group Limited was $nil (31 December 2019 - $nil).

 

As described in the Listing Document, and under the terms of the Services Agreement, APQ Partners LLP assist the Board and the Group's management based in Guernsey with the implementation of its business strategy, provide research on business opportunities in emerging markets and provide support for cash management and risk management purposes. APQ Partners LLP are entitled to the reimbursement of expenses properly incurred on behalf of APQ Global Limited in connection with the provision of its services pursuant to the agreement. APQ Partners LLP has recharged expenses of $213,638 (six months ended 30 June 2019 - $208,835) to APQ Global Limited during the period. As at 30 June 2020, APQ Global Limited was owed $152,650 from APQ Partners LLP (31 December 2019 - $142,010). In both the current and prior period amounts have been eliminated on consolidation.

 

During the period, the Group recharged expenses to APQ Cayman Limited of $250,318 (six months ended 30 June 2019 - $191,215) and was recharged expenses of $18,921 (six months ended 30 June 2019 - $19,463) from APQ Cayman Limited. During the six months ended 30 June 2019, the Company converted the $33,372,357 loan it had outstanding with APQ Cayman Limited, for which it had charged interest of $350,046 in that period. As at 30 June 2020, $38,761 (31 December 2019 - $29,418) was due from APQ Cayman Limited.

 

During the period, APQ Global Limited provided $nil (six months ended 30 June 2019 - $210,000) to BARTR Connect Limited in the context of an investment in BARTR Holdings Limited, an entity over which the Company has significant influence. At 30 June 2020, $nil (31 December 2019 - $nil) was due to BARTR Connect Limited.

 

During the period, APQ Global Limited provided funding of $nil (six months ended 30 June 2019 - $144,464) to APQ Corporate Services Limited during the period. As at 30 June 2020, $500,000 (31 December 2019 - $144,464) was due from APQ Corporate Services Limited.

 

During the period, APQ Global Limited paid expenses on behalf of APQ Connect Limited amounting to $101,933 (six months ended 30 June 2019 - $nil). As at 30 June 2020, $198,128 (31 December 2019 - $96,195) was due from APQ Connect Limited.

 

During the period, APQ Global Limited paid $67,536 (six months ended 30 June 2019 - $nil) as dividends to the holders of the convertible preference shares on behalf of APQ Capital Services Limited.

 

In 2019, APQ Global provided a loan to Palladium Trust Services Limited, a group undertaking, of $37,431. In addition, the loan attracts interest at a rate of 10%. During the period, APQ Global charged interest of $1,884 (six months ended 30 June 2019 - $nil). As at 30 June 2020, APQ Global Limited was owed $37,990 (31 December 2019 - $40,831) from Palladium Trust Services Limited.

 

In 2019, APQ Global Limited provided a loan to New Markets Media & Intelligence Ltd, of $24,299. In addition, the loan attracts interest at a rate of 10%. During the period, APQ Global Limited charges interest of $631 (six months ended 30 June 2019 - $nil). The loan has been fully repaid in the period.  As at 30 June 2020 APQ Global Limited owed $30,048 (31 December 2019 - $1,960) to New Markets Media & Intelligence Ltd.

 

 

 

 

 

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 [email protected] or visit www.rns.com.

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APQ Global hails its 2Q results as 'stellar'

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