TIDMFOX
RNS Number : 0491O
Fox Marble Holdings PLC
30 September 2019
AIM: FOX 30 September 2019
Fox Marble Holdings plc
("Fox Marble" or the "Company")
Interim Results for the six months ended 30 June 2019
Fox Marble Holdings plc (AIM: FOX), the dimension stone company
focused on marble quarrying and finishing in Kosovo and the
Balkans, announces its interim results for the six months ended 30
June 2019.
Operational Highlights
-- Revenue from the sale of marble products for the six months
to 30 June 2019 increased 63 % to EUR1.0 million (H1 2018:
EUR615k), driven by an increase in sales of block material from the
Prilep quarry in Macedonia. Sales of Alexandrian White and
Alexandria Blue blocks increased to EUR0.6 million from EUR0.2
million in the same period in 2018, to a range of block wholesalers
across Europe and further afield.
-- Production in the six months to 30 June 2019 rose 74% to
9,529 tonnes from 5,473 tonnes in 2018. This significant increase
in the production over this period reflects capital investment made
in the quarries to date.
-- Capital investment of EUR550k made in the Prilep Alpha
quarry, to drive increased levels of production and to support the
delivery of material under the new sales contracts, has proved
successful. The production at the Prilep Alpha Quarry was 8,433
tonnes in the eight months to 31 August 2019 an increase of 225 %
on the prior year (31 August 2018: 2,592 tonnes).
-- The factory continues to operate successfully without
interruption producing slabs, tiles, steps and other bespoke
materials with increasing sales expected within the second half of
the year.
-- Appointment of two new members of the senior leadership team
- Don Nicolson, as Senior Advisor and Francisco Espinosa as Chief
Operating Officer. Both individuals bring a wealth of experience to
the Company, particularly in the marble sector, to help navigate
the next period of growth.
-- Launched EUR195 million arbitration claim against the
Republic of Kosovo pursuant to Article 16 of the Kosovo foreign
investment law.
Financial Highlights
-- Operating loss for the six months to 30 June 2019 of EUR0.7
million (six months to 30 June 2018: EUR1.0 million)
-- Loss for the six months to 30 June 2019 of EUR0.8 million
(six months to 30 June 2018: EUR0.8 million)
-- Cash balance as at 30 June 2019 of EUR0.7 million (31
December 2018: EUR0.4 million). Cash balance as at 26 September
2019 of EUR0.6 million.
Chris Gilbert, CEO, commented: "The first half year has seen a
significant increase in sales of our material from the first half
of 2018 with the emphasis on our white marble from the quarry in
Macedonia producing sustainable revenues as production
increases.
"The impact of the suspension of operations in the M3 quarry in
Kosovo is being mitigated by our increased focus on the sales of
processed material from our factory. We are seeing an encouraging
pipeline of sales from around the world and demand for our marble
in projects in places such as Cyprus, Dubai and domestically in the
Balkans. We expect to see an increase in sales of our processed
marble from our factory in the second half of this year."
"The appointment of Don Nicolson and Francisco Espinosa will
significantly add to the senior management team's capability and
Francisco's remit, which includes his role as Head of Sales, will
contribute directly to our bottom line. Their expertise and ability
is a welcome addition to the Fox team and will be reflected in the
Company's growth moving forwards."
Operational Update
Sales and Marketing
Sales for the six months to 30 June 2019 increased by 63% to
EUR1.0 million from EUR0.6 million in the same
period in 2018. The increase in sales has been driven by an increase in block marble sales.
In the first half of the year the Company saw the continuation
of large volume block sales to wholesalers primarily in China,
Turkey and Europe.
Sales of Alexandrian White and Alexandrian Blue block marble saw
a significant increase through the first half of the year to a
varied customer base across Europe and further overseas, with
revenues from this quarry increasing from EUR0.2 million in 2018 to
EUR0.6 million in 2019.
As previously announced, the Company secured its biggest single
order for its prized Alexandrian White marble. This order has been
placed by the Swaminarayan Hindu religious order who are building a
temple in Abu Dhabi on land donated by the Royal family of the
UAE.
Fox Marble is providing bespoke cut to size marble varying in
size from small blocks to large beams which will be shipped by the
temple to India to be hand carved and shipped to the temple site
and has received the schedule for the first shipment to be shaped
and sent to India.
Fox Marble has received a minimum firm commitment for this
material to be supplied during 2019 and 2020. The minimum value of
this order is expected to be $2.4 million and of which Fox has
recognized $0.1 million to date in revenues, with further shipments
expected over the remainder of the year.
Factory
A 5,400 square metre double skinned steel factory for the
cutting and processing of blocks into polished slabs and tiles has
been erected on a 10-hectare site that the Company acquired in
Lipjan in 2013, close to Pristina airport in Kosovo.
The Italian Gravellona Machine Marmo Computer Numerical Control
("CNC") machine installed in 2018 and continues to produce tiles,
steps and other bespoke cut to size products. Operating processes
have been consistently refined and the factory is now operating two
full shifts per day all year round.
The factory continues to operate in good order, and the local
market for processed marble is developing. Over the last six
months, the factory has operated efficiently producing slabs,
tiles, steps and other bespoke materials with increasing sales
expected within the second half of the year.
Quarries
Quarry Operations at Prilep in Macedonia continue to develop
strongly with production in the six months to 30 June 2019 of 6,562
tonnes (2018: 1,928 tonnes). The Prilep quarry produces Alexandrian
White and Alexandrian Blue marble, both of which are proving
popular within the international block market. The quarry continues
to develop well with signs of increasing quality and whiteness as
the quarry depth increases, which will further improve margins.
Capital investment of EUR550k made in the Prilep Alpha quarry,
primarily in the form of new equipment, to drive increased levels
of production and to support the delivery of material under the new
sales contracts has been successful. Production continues strongly
in second half of the year with production of 8,433 tonnes in the
eight months to 31 August 2019 an increase of 225 % on the prior
year (31 August 2018: 2,592 tonnes).
The Cervenillë and Syriganë quarries are well developed quarries
where significant volumes of high quality material have been
extracted. The Cervenillë quarry is open across three separate
locations (Cervenillë A, B & C) from which red (Rosso Cait),
red tinged grey (Flora) light and darker grey (Grigio Argento)
marble is produced.
The quarry at Syriganë is open across four benches. The site
contains a variety of the multi-tonal breccia and Calacatta-type
marble and produces significant volumes of breccia marble in large
compact blocks. Output is marketed as Breccia Paradisea
(predominantly grey and pink) and Etrusco Dorato (predominantly
gold and grey).
These materials have all been used in high end developments. In
the UK these include, among others, St George's Homes and Capital
and Counties Plc's Lillie Square development. In Sydney, Australia
Rosso Cait and Breccia Paradisea marble have been used in what is
expected to be Australia's most expensive residential property.
These sales serve to demonstrate the desirability of these marble
products as the stone of choice in some of the most prestigious and
expensive residential developments around the world. The Company
will use existing quarried stock to develop the large volume block
market in these materials.
Production at the Maleshevë quarry was suspended in July 2019
due to the ongoing dispute with the former shareholders Green Power
Sh.p.k, and giving rise to the Arbitration claim discussed
above.
Financing
Fox Marble issued 13,263,161 new ordinary shares in the Company
at 9.5p per share on 7 February 2019. Gross proceeds of this issue
of equity amounts to GBP1,260,000. The New Ordinary Shares rank
pari passu with the existing ordinary shares.
Fox Marble issued a further GBP700,000 in Convertible Loan Notes
under the same terms as existing Loan Notes issued by the Company.
The Convertible Loan Notes will carry an interest rate of 8%, per
annum. The Convertible Loan Notes are due for conversion or
repayment on 4 February 2021 with a conversion price set at
10.5p.
New Appointments
Don Nicolson has been appointed to the role of Senior Advisor
with immediate effect. He will provide advice on strategy, business
planning and performance improvement. It is intended that Don will
join the board of Fox Marble Holdings Plc as Vice Chairman and
Non-Executive Director in due course providing increased capacity
and capability to the business.
Don Nicholson is a senior business leader with over 35 years'
experience in the extractive industries (oil, gas, mining and
natural stone). He has held multiple Board and senior executive
roles both in the UK and internationally. This included 26 years
with BP where he ran oil and gas businesses in the UK, United
States and Canada. Some of his key roles included being Director
North Sea, Chief of Staff to BP CEO (E&P) and VP BP Alaska. He
also has significant Board level experience in mining, both in the
UK and South Africa including CEO and Executive Vice Chairman
roles.
One of Don's most recent roles was that of Chairman, and interim
CEO of Levantina - The Natural Stone Company, headquartered in
Spain. Levantina is a world leader in the quarrying, processing and
marketing of natural stone. It is one of the largest companies in
the sector, operates several quarries including El Coto, believed
to be the largest Crema Marfil quarry in the world. The company
distributes and markets natural stone products to multiple
countries around the world.
As announced on the 27 September 2019, Francisco Espinosa has
been appointed to the role of Chief Operating Officer to the
Company in a non-Board capacity from the 1 October 2019. His role
will be the executive management of all the operations of Fox
Marble with specific emphasis on sales as Head of Sales worldwide,
as well as the operational efficiency of the quarries and the
factory.
Francisco has already visited the quarrying operations in Kosovo
and Macedonia and spent time in the factory identifying areas of
improvement. He is preparing a thorough strategic review in
conjunction with Fox Marble's recently appointed Senior Advisor Don
Nicolson and will remain focussed on marketing sales and
distribution.
Francisco has worked for Levantina Y Asociados de Minerales
S.A.U., for 12 years, rising to the level of Chief Operating
Officer. In this role Francisco was responsible for 600 employees
and accountable for seven factories, including marble, granite and
ceramic factories. He also holds an MBA from the European School of
Business in Madrid. He has in previous times worked for
Caterpillar, ITT Industries and ENEBE Sports Group.
Dispute and Arbitration Claim
On 4 September Fox Marble launched United National Commission on
International Trade Law (UNCITRAL) arbitration proceedings, against
the Republic of Kosovo for damages in excess of EUR195 million, as
a result of the failure of the State to protect Fox Marble's rights
over the Maleshevë quarry.
The Company believes the Kosovan Government to be in clear
breach of its responsibilities towards the Company as a foreign
investor in Kosovo and that this action is in the best interests of
its shareholders and employees. The Company anticipates a fair and
satisfactory resolution.
All the Company's other operations, including the quarries and
processing factory in Kosovo and the Prilep quarry in Northern
Macedonia, are unaffected.
The background to the claim is the dispute arising with the
former shareholders of Green Power Sh.p.k and Scope Sh.p.k, which
has resulted in Fox Marble being prevented from operating the
Maleshevë quarry. Since the dispute arose Fox Marble has been
working to resolve the matter with the appropriate Kosovan
Government agencies, namely the Kosovo mining regulator, the
Independent Commission of Mines and Mineral ("ICMM") and the
Agjencia e Regjistrimit të Bizneseve ("ARBK"), the Kosovo business
registration agency. However, in what is a clear breach of Kosovo
Law 04/L-220 "On Foreign Investment" (2014), Fox Marble has been
prevented from asserting its rights in these matters.
Despite the cumulative weight of evidence, Fox Marble was denied
the right to appeal any decision relating to the Maleshevë quarry
in direct contravention of the provisions of the Kosovo foreign
investment law, Law 04 /L-220.
As a direct consequence of the ARBK and ICMM decisions, the
Company has brought arbitration proceedings against the Republic of
Kosovo pursuant to Article 16 of the Kosovo foreign investment law
(as above). The basis of the claim for damages is the investment
made to date in the Maleshevë quarry, loss of future revenues
associated with the site and future investment plans in Kosovo.
Significant future investment plans are the subject of the MOU
signed in October 2016 by the Government of Kosovo and Stone
Alliance LLC which is majority owned by Fox Marble.
The Company is represented by its legal advisers, Stephenson
Harwood LLP, as well as its Kosovan lawyers.
This announcement contains inside information for the purposes
of Article 7 of EU regulation 596/2014.
For more information on Fox Marble please visit
www.foxmarble.net or contact:
Fox Marble Holdings plc
Chris Gilbert, Chief Executive Officer Tel: +44 (0) 20 7380
0999
Fiona Hadfield, Finance Director Tel: +44 (0) 20 7380
0999
Brandon Hill Capital (Joint Broker)
Oliver Stansfield Tel: +44 (0) 20 3463
Optiva Securities (Joint Broker) 5000
Christian Dennis Tel: +44 (0) 20 3981
Jeremy King 4173
Cairn Financial Advisers LLP (Nomad)
Liam Murray / Sandy Jamieson Tel: +44 (0) 20 7213
0880
Notes to Editors:
Fox Marble (AIM: FOX), is a marble production, processing and
distribution company in Kosovo and the Balkans region.
Its marble products, including Alexandrian White, Alexandrian
Blue, produced from the Company's Prilep quarry in Macedonia, and
Breccia Paridisea and Rosso Cait and Grigio Argento, produced from
its quarries in Kosovo, are gaining traction globally both to
international wholesale companies as well as being supplied
directly into luxury residential properties.
In the UK these include among others St George's Homes and
Capital and Counties Plc's Lillie Square development. In Sydney,
Australia Rosso Cait, Alexandrian White and Breccia Paradisea
marble have been used in what is expected to be Australia's most
expensive residential property. These sales serve to demonstrate
the desirability of Fox's premium marble products as the stone of
choice in some of the most prestigious and expensive residential
developments around the world.
Marble demand continues to grow with stable pricing and Fox is
capitalising on this growth internationally.
FOX MARBLE HOLDINGS PLC
Condensed unaudited consolidated income statement and statement
of comprehensive income
Six months Six months For the
ended 30 ended 30 year ended
Note June June 2018
2019 2018 Audited
Unaudited Unaudited
EUR'000s
EUR'000s EUR'000s
------------------------------------ ------- ----------- ----------- ------------
Revenue 1,002 615 1,410
Cost of Sales (542) (421) (887)
----------- ----------- ------------
Gross Profit 460 194 522
=========== =========== ============
Administrative and other operating
expenses (1,155) (1,195) (2,981)
Operating loss (695) (1,001) (2,458)
=========== =========== ============
Finance costs 4 (182) (82) (120)
Finance income 5 43 267 282
----------- ----------- ------------
Loss before taxation (834) (816) (2,296)
=========== =========== ============
Taxation - - -
Loss for the period (834) (816) (2,296)
=========== =========== ============
Other comprehensive income - - -
Total comprehensive loss for
the period attributable to
owners of the parent company (834) (816) (2,296)
=========== =========== ============
Loss per share
Basic loss per share 6 (0.003) (0.01) (0.01)
Diluted loss per share 6 (0.003) (0.01) (0.01)
FOX MARBLE HOLDINGS PLC
Condensed unaudited consolidated statement of financial
position
Notes As at 30 As at 31 As at 30
June 2019 December June 2018
Unaudited 2018 Unaudited
Audited
EUR'000s EUR'000s
EUR'000s
---------------------------------- ------ ----------- ---------- -----------
Assets
Non-current assets
Intangible assets 2,635 2,673 1,145
Property, plant and equipment 7 5,041 4,845 4,857
Receivables - 111
----------- ---------- -----------
Total non-current assets 7,676 7,518 6,113
=========== ========== ===========
Current assets
Trade and other receivables 8 948 889 1,016
Inventories 4,180 3,807 3,713
Cash and cash equivalents 679 438 154
----------- ---------- -----------
Total current assets 5,807 5,134 4,883
----------- ---------- -----------
Total assets 13,483 12,652 10,996
=========== ========== ===========
Current liabilities
Trade and other payables 1,091 1,185 1,037
Borrowings 9 87 89 -
----------- ---------- -----------
Total current liabilities 1,178 1,274 1,037
=========== ========== ===========
Non-current liabilities
Deferred tax liability 85 85
Borrowings 9 3,986 3,683 861
Total non-current liabilities 4,071 3,768 861
----------- ---------- -----------
Total liabilities 5,249 5,042 1,898
=========== ========== ===========
Net assets 8,234 7,610 9,098
Equity
Share capital 10 2,851 2,701 2,669
Share premium 31,250 29,942 29,947
Retained loss (25,988) (25,154) (23,639)
Share based payment reserve 85 85 85
Other reserves 36 36 36
----------- ---------- -----------
Total equity attributable
to owners of the parent company 8,234 7,610 9,098
=========== ========== ===========
FOX MARBLE HOLDINGS PLC
Condensed consolidated statement of cash flows
Six months Six months Year
ended ended ended 31
30 June 30 June December
2019 2018 2018
Notes Unaudited Unaudited Audited
EUR'000s EUR'000s EUR'000s
-------------------------------------- -------- ----------- ----------- ----------
Cash flows from operating activities
Loss before taxation (834) (816) (2,296)
Adjustment for:
Finance costs 4 182 82 120
Finance income 4 (43) (267) (282)
Operating loss for the period (695) (1,001) (2,458)
=========== =========== ==========
Adjustment for:
Amortisation 38 17 43
Depreciation 6 379 261 90
Foreign exchange losses /
(gains) on operating
Activities 23 2 6
Equity settled transactions - 1 1
Provision for bad debts 42 37 124
Provision for inventory - - 251
Changes in working capital:
Increase in receivables 7 (101) (122) (6)
Increase in inventories (373) (394) (207)
Increase/(decrease) in accruals 238 (81) (31)
Decrease in trade and other payables (330) (255) (157)
-----------
Net cash used in operating activities (779) (1,535) (2,342)
=========== =========== ==========
Cash flow from investing activities
Expenditure on property, plant
and equipment 6 (576) (364) (500)
Interests on bank deposits - 1 1
-----------
Net cash outflow from investing
activities (576) (363) (499)
=========== =========== ==========
Cash flows from financing activities
Proceeds from issue of shares
(net of issue costs) 1,458 3,908 3,137
Proceeds on issue of debt (net
of issue costs) 222 84 1,314
Repayment of debt - (2,403) (1,604)
Interest paid (59) (78) (103)
Net cash inflow from financing
activities 1,621 1,511 2,744
=========== =========== ==========
Net increase/(decrease) in cash
and cash equivalents 266 (387) (97)
Cash and cash equivalents
at beginning of
Period 438 542 542
Exchange gains losses on cash
and cash equivalents (25) (1) (7)
Cash and cash equivalents at
end of period 679 154 438
FOX MARBLE HOLDINGS PLC
Condensed consolidated statement of changes in equity
Share Share Share Other Profit Total
capital premium based reserve and loss
payment reserve
reserve (1)
EUR'000s EUR'000s EUR'000s EUR'000s EUR'000s
EUR'000s
------------------------ ---------- ---------- ---------- ---------- ---------- ----------
As at 31 December
2017 and 1 January
2018 2,284 26,424 84 36 (22,823) 6,005
Adjustment on adoption
of IFRS 9 - - - - (34) (34)
---------- ---------- ---------- ---------- ---------- ----------
Adjusted at 1 January
2018 2,284 26,424 84 36 (22,857) 5,971
---------- ---------- ---------- ---------- ---------- ----------
Total comprehensive
loss for the period - - - - (816) (816)
Transactions with
owners
Share options charge - - 1 - - 1
Share capital issued 385 3,523 - - - 3,908
As at 30 June 2018 2,669 29,947 85 36 (23,673) 9,064
------------------------ ---------- ---------- ---------- ---------- ---------- ----------
Total comprehensive
loss for the period (1,481) (1,481)
Transactions with
owners
Share capital issued 32 (5) - - - 27
As at 31 December
2018 2,701 29,942 85 36 (25,154) 7,610
------------------------ ---------- ---------- ---------- ---------- ---------- ----------
Total comprehensive
loss for the period (834) (834)
Transactions with
owners
Share capital issued 150 1,308 1,458
As at 30 June 2019 2,851 31,250 85 36 (25,988) 8,234
======================== ========== ========== ========== ========== ========== ==========
(1) Brought forward losses at 31 December 2017 includes a charge
incurred following the admission of the Company to AIM on the 31
August 2012 when loan notes with a carrying value of EUR1,508,807
(GBP1,195,000) were converted into 29,875,000 shares at an issue
price of 20 pence per share, with a total value of EUR7,544,035
(GBP5,975,000) resulting in a non-cash accounting charge of
EUR6,035,228, reflecting the fair value loss being recognised, in
the statement of comprehensive income in the period ended 31
December 2012.
Notes to the condensed consolidated financial statements for the
period ended 30 June 2017
1) General information
The principal activity of Fox Marble Holdings plc and its
subsidiary and associate companies Fox Marble Limited, H&P
Sh.P.K, Granit Shala Sh.P.K, Rex Marble Sh.P.K, Fox Marble Asia
Limited, Fox Marble FZC, Gulf Marble Investments Limited, Stone
Alliance LLC and Fox Marble Kosova Sh.P.K (collectively "Fox Marble
Group" or "Group") is the exploitation of quarry reserves in the
Republic of Kosovo and the Republic of North Macedonia
Fox Marble Holdings plc is the Group's ultimate Parent Company
("the Parent Company"). It is incorporated in England and Wales and
its registered office is 15 Kings Terrace, London, NW1 0JP.
Fox Marble Holdings plc shares are admitted to trading on the
London Stock Exchange's AIM market.
2) Basis of preparation
The results presented in this report are unaudited and they have
been prepared in accordance with the principles of International
Financial Reporting Standards ("IFRS") as adopted by the European
Union that are expected to be applicable to the financial
statements for the year ending 31 December 2019.
The accounting policies applied in these results are consistent
with those applied in the Group's Annual Report and Accounts for
the year ending 31 December 2018 and those expected to be
applicable to the financial statements for the year ending 31
December 2019.
This half yearly report does not constitute statutory accounts
within the meaning of Section 434 of the Companies Act 2006.
Statutory accounts for Fox Marble Holdings plc for the year ended
31 December 2018 were approved by the Board on 4 June 2019 and have
been filed with the Registrar of Companies. The report of the
auditors on those accounts was unqualified and did not contain a
statement under Section 498 (2) or (3) of the Companies Act 2006.
These condensed interim financial statements for the six months
ended 30 June 2018 have been prepared in accordance IAS 34,
'Interim financial reporting', as adopted by the European Union.
The condensed interim financial statements should be read in
conjunction with the annual financial statements for the year ended
31 December 2018, which have been prepared in accordance with IFRS
as adopted by the European Union. The Annual Report and Accounts
2018 for the Group are available at www.foxmarble.net.
3) Going concern
The Directors have reviewed projected cash flow forecasts and
are of the opinion that it is appropriate to prepare this report on
a going concern basis.
In making this assessment management has considered:
a) the current working capital position and operational requirements;
b) the timing of expected sales receipts and completion of existing orders;
c) the sensitivities of forecast sales figures over the next eighteen months;
d) the timing and magnitude of planned capital expenditure;
e) the level of indebtedness and timing of when such liabilities
may fall due and the ability of the Company to secure additional
financing; and
f) the working capital position over the next 18 months
The Directors have considered the impact of the dispute at the
Maleshevë and the Arbitration claim launched by the Company, which
has resulted in a stoppage of quarrying operations at its
Malaesheve quarry since July 2019, with a resulting impact on the
Company's ability to generate revenue from that quarry. The
Directors have made no assumption regarding satisfactory resolution
of dispute or Arbitration claim within the forecast, or resumption
of production at the Malaesheve quarry, in order to consider the
most prudent position within the forecast. The dispute has not had
a material effect on the Company's operations in Macedonia, its
processing operations at the Company's factory, or operations in
its other quarries in Kosovo. The Company has however reviewed the
level of country risk with regard to operations in Kosovo and
considered the impact of this increased risk on its forecast.
The forecasts make a number of operating assumptions around
which there are risks and uncertainties. These include expected
levels of production at the Prilep, Syriganë and Cervenillë
quarries, satisfactory operation of the processing factory, sales
forecasts and pipelines over the next 18 months and the ability to
drawdown on existing debt facilities.
There are a number of key risks and uncertainties that could
impact the Company operations and therefore the ability of the
Company to operate as a going concern. These include:
a) levels of production at the group's quarries can be impacted
by unforeseen delays due to inclement weather, regulatory disputes,
geological features or equipment failure;
b) levels of production at processing factory;
c) satisfactory operation of the Company's key operating agreements and licences;
d) realisation of the forecast sales growth which could be
impacted by issues with production or delays in fulfilment; and
e) ability to draw down on existing debt facilities.
In the event that the risks identified are realised the Company
has available to it a number of other contingent actions, which it
can take to mitigate the impact of potential downside scenarios.
These include seeking additional financing, leveraging existing
sale agreements, reducing overheads, and renegotiation of the terms
of its existing debt obligations.
In conclusion, having regard to the existing and future working
capital position and projected sales, the Directors are of the
opinion that the Group has adequate resources to enable it to
undertake its planned activities for the next twelve months.
4) Net finance costs
Six months Six months Year
ended ended ended
30 June 30 June 31 December
2019 2018 2018
EUR'000s EUR'000s EUR'000
-------------------------------- ----------- ----------- -------------
Finance Costs
Interest expense on borrowings (165) (59) (120)
Net foreign exchange loss on
loan note instrument (17) (23) -
----------- ----------- -------------
(182) (82) (120)
=========== =========== =============
5) Net finance income
Six months Six months Year
ended ended ended
30 June 30 June 31 December
2019 2018 2018
EUR'000s EUR'000s EUR'000
-------------------------------------- ----------- ----------- -------------
Finance Income
Movement in fair value of derivative 43 267 278
Net foreign exchange gain on
loan note instrument - - 2
Interest income on bank deposits - - 1
43 267 282
=========== =========== =============
6) Loss per share
Six months Six months
ended ended Year ended
30 June 30 June 31 December
2019 2018 2018
EUR'000s EUR'000s EUR'000
---------------------------------- ------------ ------------ -------------
Loss for the year used for
the calculation of basic
LPS 834 862 2,296
Number of shares
Weighted average number of
ordinary shares for the purpose
of basic LPS 229,909,530 210,773,990 214,022,550
Effect of potentially dilutive
ordinary shares - -
Weighted average number of
ordinary shares for the purpose
of diluted LPS 229,909,530 210,773,990 214,022,550
Loss per share:
Basic (0.003) (0.004) (0.01)
Diluted (0.003) (0.004) (0.01)
7) Property, plant and equipment
Land Factory Quarry Office equipment Total
Plant Plant and leasehold
and machinery and machinery improvements
EUR'000s
EUR'000s EUR'000s EUR'000s EUR'000s
------------------------ ---------- --------------- --------------- ----------------- ----------
Cost
As at 31 December 2017 160 3,041 2,989 30 6,220
Additions - 218 146 - 364
As at 30 June 2018 160 3,259 3,135 30 6,584
Additions - 172 176 - 348
As at 31 December 2018 160 3,431 3,311 30 6,933
Additions - 4 573 - 576
As at 30 June 2019 160 3,435 3,884 30 7,509
Depreciation
As at 31 December 2017 - 45 1,394 27 1,466
Charge for the period - 39 220 2 261
As at 30 June 2018 - 84 1,614 29 1,727
Charge for the period - 54 306 1 361
As at 31 December 2018 - 138 1,920 30 2,089
Charge for the period - 52 328 - 379
As at 30 June 2019 - 190 2,248 30 2,468
Net book value
---------- --------------- --------------- ----------------- ----------
As at 30 June 2019 160 3,245 1,636 - 5,041
========== =============== =============== ================= ==========
As at 31 December 2018 160 3,293 1,391 1 4,845
As at 30 June 2018 160 3,175 1,521 1 4,857
8) Trade and other receivables
30 June 31 December 30 June
2019 2018 2018
EUR'000s EUR'000s EUR'000s
------------------------------- ---------- ------------ ----------
Non-current assets
Other receivables - - 111
---------- ------------ ----------
- - 111
---------- ------------ ----------
Current assets
Trade receivables (net) 440 364 438
Deposits on capital equipment 149 149 269
Other deposits 55 55 55
Other receivables 150 166 31
Prepayments 77 89 124
VAT recoverable 77 66 99
---------- ------------ ----------
948 889 1,016
========== ============ ==========
9) Borrowings
30 June 31 December 30 June
2019 2018 2018
EUR'000s EUR'000s EUR'000s
------------------------------------ ---------- ------------ ----------
Current liabilities
Convertible loan note 86 85 -
Derivative over own equity
at fair value 1 4 -
---------- ------------ ----------
87 89 -
========== ============ ==========
Non-Current liabilities
Convertible loan note 3,782 2,871 754
Other borrowings held at amortised - 554 -
cost
Derivative over own equity
at fair value 217 259 107
3,986 3,684 861
========== ============ ==========
a. Series 3 Loan Note
On 28 June 2017, the Company issued a convertible loan note with
a value of GBP440,000 ("Series 3 Loan Note") to a non related
party. This new Series 3 Loan Note has an interest rate of 8% per
annum, in line with the Series 1 Loan Note issued to Amati Global
Investors Limited. The Loan Note is due for conversion or repayment
on 31 August 2020 with a conversion price set at 10p.
As at 30 June 2019, the Series 3 Loan Note held at amortised
cost had a balance of EUR502,568 (31 December 2018 - EUR489,235).
The Stockholders' option to convert the loan has been treated as an
embedded derivative and measured at fair value. As at 30 June 2019
the derivative had a value of EUR21,944 (31 December 2017 -
EUR16,818). The fair value has been assessed using a Black Scholes
methodology. The derivative is classified as a level 3 derivative
on the basis that the valuation includes one or more significant
inputs not based on observable market data.
b. Series 4 Loan Note
On 28 December 2017, the Company issued a convertible loan note
with a value of GBP160,000 ("Series 4 Loan Note") to a non related
party. This new Series 4 Loan Note has an interest rate of 8% per
annum, in line with the Series 1 Loan Note issued to Amati Global
Investors Limited. The Loan Note is due for conversion or repayment
on 31 August 2020 with a conversion price set at 10.5p.
As at 30 June 2019, the Series 4 Loan Note held at amortised
cost had a balance of EUR177,537 (31 December 2018 - EUR174,202).
The Stockholders' option to convert the loan has been treated as an
embedded derivative and measured at fair value. As at 30 June 2019
the derivative had a value of EUR8,008 (31 December 2018 -
EUR7,918). The fair value has been assessed using a Black Scholes
methodology. The derivative is classified as a level 3 derivative
on the basis that the valuation includes one or more significant
inputs not based on observable market data.
c. Series 5 Loan Note
On 3 January 2018, the Company issued a convertible loan note
with a value of GBP75,000 ("Series 5 Loan Note") to a non related
party. This new Series 5 Loan Note has an interest rate of 8% per
annum. The Loan Note is due for conversion or repayment on 31
December 2019 with a conversion price set at 10.5p.
As at 30 June 2019, the Series 5 Loan Note held at amortised
cost had a balance of EUR85,857 (31 December 2018 - EUR85,258). The
Stockholders' option to convert the loan has been treated as an
embedded derivative and measured at fair value. As at 30 June 2019,
the derivative had a value of EUR829 (31 December 2018 - EUR3,711).
The fair value has been assessed using a Black Scholes methodology.
The derivative is classified as a level 3 derivative on the basis
that the valuation includes one or more significant inputs not
based on observable market data.
d. Series 6 Loan Note
On 30 July 2018, the Company issued a convertible loan note with
a value of GBP300,000 ("Series 6 Loan Note") to a non related
party. This new Series 6 Loan Note has an interest rate of 8% per
annum. The Loan Note is due for conversion or repayment on 30 July
2020 with a conversion price set at 10.5p.
As at 30 June 2019, the Series 6 Loan Note held at amortised
cost had a balance of EUR334,602 (31 December 2018 - EUR331,310).
The Stockholders' option to convert the loan has been treated as an
embedded derivative and measured at fair value. As at 30 June 2019,
the derivative had a value of EUR15,014 (31 December 2018 -
EUR24,121). The fair value has been assessed using a Black Scholes
methodology. The derivative is classified as a level 3 derivative
on the basis that the valuation includes one or more significant
inputs not based on observable market data.
e. Series 7 Loan Note
On 30 September 2018, the Company issued a convertible loan note
with a value of GBP300,000 ("Series 7 Loan Note") to a non related
party. This new Series 7 Loan Note has an interest rate of 8% per
annum. The Loan Note is due for conversion or repayment on 30
September 2020 with a conversion price set at 10.5p.
As at 30 June 2019, the Series 7 Loan Note held at amortised
cost had a balance of EUR337,510 (31 December 2018 - EUR335,044).
The Stockholders' option to convert the loan has been treated as an
embedded derivative and measured at fair value. As at 30 June 2019,
the derivative had a value of EUR16,449 (31 December 2018 -
EUR27,223). The fair value has been assessed using a Black Scholes
methodology.
f. Convertible Loan Notes 2020
As consideration for the acquisition of Gulf Marble Investments
Limited Fox Marble has issued an Unsecured Convertible Loan Note
("Gulf Loan Note") in the amount of EUR1,785,000. Under the terms
of the Loan Note, the holder may elect to convert at a conversion
price of 130% of the 3 month volume weighted average share price.
The Loan Note is repayable from 1 October 2020. The Loan Note
carries an interest rate of Libor plus 1.5% payable annually in
arrears.
As at 30 June 2019, the Gulf Loan Note held at amortised cost
had a balance of EUR1,618,026 (31 December 2018 - EUR1,541,502).
The Stockholders' option to convert the loan has been treated as an
embedded derivative and measured at fair value. As at 30 June 2019,
the derivative had a value of EUR113,504 (31 December 2018 -
EUR182,669). The fair value has been assessed using a Black Scholes
methodology. The derivative is classified as a level 3 derivative
on the basis that the valuation includes one or more significant
inputs not based on observable market data.
g. Series 8-10 Loan Notes 2021
On 4 February 2019, the Company issued a convertible loan notes
with a value of GBP700,000 ("Series 8-10 Loan Note") to non related
parties. This new Loan Note has an interest rate of 8% per annum.
The Loan Note is due for conversion or repayment on 4 February 2021
with a conversion price set at 10.5p.
As at 30 June 2019, the Loan Notes held at amortised cost had a
balance of EUR798,183. The Stockholders' option to convert the loan
has been treated as an embedded derivative and measured at fair
value. As at 30 June 2019, the derivative had a value of EUR42,757.
The fair value has been assessed using a Black Scholes
methodology.
The Directors consider that the carrying amount of borrowings
approximates their fair value at 30 June 2019
10) Share capital
Group and Company: 30 June 31 December Share Share Share premium Share
2019 2018 capital capital 30 June premium
Number Number 30 June 31 December 2019 31 December
2019 2018 2018
EUR'000 EUR'000 EUR'000
EUR'000
-------------------- ------------ ------------ --------- ------------- -------------- -------------
Issued, called up and fully paid
Ordinary shares of GBP0.01 each
At start of
the period 217,885,322 181,344,851 2,701 2,284 29,942 26,424
Issued in the
year 13,263,121 36,540,471 150 416 1,302 3,518
At end of the
period 231,148,443 217,885,322 2,851 2,701 31,250 29,942
The Company has one class of ordinary share capital.
a. On a resolution at a general meeting, every member (whether
present in person, by proxy or authorised representative) has one
vote in respect of each ordinary share held by him.
b. All ordinary shares rank equally in the right to participate
in any approved dividend distribution applicable to this class of
share.
c. Except as otherwise provided below, all dividends must be
i. Declared and paid according to the amounts paid up on the
shares on which the dividend is paid; and
ii. Apportioned and paid proportionately to the amounts paid up
on the shares during any portion of the period in respect of which
the dividend is paid.
d. If any share is issued in terms of providing that it ranks
for dividend as from a particular date that share ranks for
dividend accordingly.
e. In the event of any winding up all shares will rank equally
in relation to distribution of capital.
f. All shares are non-redeemable.
On 19 January 2018, following the passing of all authorities at
a General Meeting held on that day, the Company issued 14,692,852
ordinary shares at 10.5p per share. On 29 January 2018, the Company
issued 19,047,619 ordinary shares to Kesari Tours PVT Limited at a
price of 10.5p per share.
On 14 August 2018, the Company issued 2,800,000 ordinary shares
to consultants and employees in reflection of the work performed at
the Company.
Fox Marble issued 13,263,161 new ordinary shares in the Company
at 9.5p per share on 7 February 2019. Gross proceeds of this issue
of equity amounts to GBP1,260,000. The New Ordinary Shares rank
pari passu with the existing ordinary shares.
11) Acquisition
On 4 April 2019 Fox Marble, announced that it had conditionally
agreed to acquire Green Power Sh.p.k ("Green Power") the licence
holder of the Maleshevë quarry and Scope Sh.p.k. ("Scope"), a
company through which Fox Marble has entered into two hire purchase
agreements (the "Acquisitions" or "Transactions").
The acquisitions give Fox Marble the direct rights to the
Maleshevë quarry in their entirety, eliminate the annual royalty
which would have been due under the operating agreement, and reduce
monthly outgoings for equipment and maintenance at the factory.
Fox Marble has conditionally acquired the entire share capital
of Green Power, for a consideration of GBP1,000,000 to be satisfied
by the issue of 13,000,000 new ordinary shares in the Company at a
price that equates to 7.69 pence per share.
In the period since entering into the initial agreement with
Green Power for nil consideration no royalty payment has been paid,
due to the costs associated with development of the quarry. However
with increasing production and expected sales of the materials it
is anticipated that royalty payments over the remaining period of
the agreement are expected to be paid and as such the Board
believes that it is in the best interest of the Company to control
the asset.
In 2018, Fox Marble entered into certain hire purchase
arrangements with Scope, a company incorporated in Kosovo, to
acquire and install in its factory certain equipment including a
new CNC machine which was announced on 16 April 2018. The
consideration paid for Scope is less than the value of the future
payments due under the hire purchase agreements being acquired as
part of its acquisition.
The Company has conditionally agreed to acquire the entire
issued share capital of Scope for a consideration of GBP300,000 to
be satisfied by the issue of 3,000,000 new ordinary shares in the
Company at a price that equates to 10 pence per share.
On 26 June 2019 the Company announced that it had received
notification from the legal representatives of Green Power and
Scope, challenging the enforceability of the acquisition agreements
relating to the proposed Acquisitions. The Company is seeking
advice from its legal advisers in respect of these claims, which
they believe to be wholly unfounded.
12) Events after the reporting period
On 4 September 2019 Fox Marble launched United National
Commission on International Trade Law international (UNCITRAL)
arbitration proceedings, against the Republic of Kosovo for damages
in excess of EUR195 million, as a result of the failure of the
State to protect Fox Marble's rights over the Maleshevë quarry.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
IR BKLLLKKFBBBQ
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September 30, 2019 02:02 ET (06:02 GMT)
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