TIDMRMA
RNS Number : 2604S
Rasmala PLC
29 September 2017
Rasmala plc
("Rasmala" or the "Company")
Condensed Consolidated Interim Financial Statements
For the six months ended 30 June 2017
Condensed Consolidated Interim Financial Statements
For the six months ended 30 June 2017
Highlights
-- Financial performance in our core businesses for the six
months to 30 June 2017 was stable and satisfactory
-- Operating income of GBP6.9m (first half 2016: GBP4.0m)
-- Operating loss of GBP1.3m (first half 2016: GBP1.3m loss)
-- Assets under management (AUM) at 30 June 2017 including
capital seeded by the Group increased 29% to US$1,235m (December
2016: US$956m)
-- Strong capital adequacy, regulatory and liquidity ratios maintained
Financial results
Rasmala delivered satisfactory performance in its core
businesses in the period up to 30 June 2017.
Total operating income for the six months to 30 June 2017 was
GBP6.9m (six months to 30 June 2016: GBP4m). Total expenses for the
six months were GBP8.1m (first half 2016: GBP5.2m). The resulting
Operating loss for the six months was GBP1.3m (first half 2016:
GBP1.3m).
These results consolidate Red Apartments Limited ("RAL"), a
serviced apartment provider we acquired in December 2016. Looking
at our results on a like for like basis (excluding RAL) total
operating income for the period was GBP4.8m (six months to 30 June
2016: GBP4m) and expenses for the period were GBP5.8m (six months
to 30 June 2016: GBP5.2m).
Our stable performance in the first six months reflects a more
diversified product offering and confidence from our clients in our
new initiatives. We expect this trend to continue in the second
half of the year.
The Group maintained its strong capital adequacy, regulatory and
liquidity ratios.
Commentary
Coming into 2017, markets were poised for reflation, higher
rates, steeper yield curves, stronger dollar, weaker emerging
markets, trade wars and higher volatility. Risks associated with
the election of Donald Trump, Brexit, a hawkish FOMC and China's
deleveraging were some of the catalysts that were expected to cause
higher volatility. In fact the outcome has been quite different
with periodic bouts of volatility and risk aversion quickly
evaporating.
The latest IMF forecasts project global growth of 3.5% in 2017
and 3.6% in 2018 with emerging markets once again driving broad
based global growth. The IMF expects economic growth of 4.5% in
emerging markets in 2017 versus 2% in developed markets. Emerging
markets are benefiting from positive global trade, a weakening
dollar, abundant global liquidity and improved fundamentals.
Uncertainty surrounding Brexit continues to restrain investment
and exert pressure on the British Pound which remains weak against
the Euro. The uncertainty regarding transitional trade arrangements
post Brexit is likely to continue with the divorce negotiations
struggling to gain meaningful traction.
In the GCC, Qatar's dispute with the Saudi-led alliance which
includes the UAE, Bahrain and Egypt, appears gridlocked and
unlikely to be resolved in the near term. Oil, a key driver of
economic activity in the GCC, has traded in a range
US$45-$57/barrel in 2017 with little progress in rebalancing market
supply and demand. OPEC/non-OPEC production cuts have largely been
negated by supply increases from the US, Libya and Nigeria. With
demand growth from China and India unlikely to increase in H2 2017
and European and Japanese growth unlikely to be accompanied by a
significant rise in oil use, oil price risk appears skewed towards
the lower end of the US$45-$60/barrel range for the remainder of
2017 and into 2018.
The reform programme in Saudi Arabia is gathering pace
demonstrated by the recent announcement allowing women to drive in
the Kingdom. Saudi Arabia reported a 20% reduction in its deficit
in H1 2017 compared to H1 2016 but also a 17% decline in non-oil
revenue in the same period. The expected inclusion of Saudi Arabia
into the MSCI Emerging Markets Index will increase the weight of
the GCC region to around 4%-6% of the total allowing the region to
finally claim a permanent allocation into any emerging markets
portfolio.
The Dubai economy continues to be resilient with the number of
passengers traveling through Dubai airports increasing 6% and
tourist arrivals 11% in H1 2017 resulting in a hotel occupancy rate
of 79%. DP World reported a 4.3% increase in throughput in Jebel
Ali in H1 2017 and the total value of real estate transactions
increased 17% in the same period compared to last year.
Global credit markets performed strongly on the back of the
relatively benign interest rate environment and robust fund flows.
Regionally, the heightened geopolitical risk associated with the
Qatari situation resulted in a spike in 5-year regional government
CDS levels although there has been a subsequent reversion to
pre-crisis levels (other than the Qatar 5-year CDS which currently
trades c. 50% higher than prior to the dispute).
In H1 2017, bond and sukuk witnessed a record US$45.2bn in new
issuance. This was split US$26.5bn and US$ 18.7bn between bonds and
sukuk respectively.
International real estate markets remain very competitive, with
significant pools of capital looking for long term income assets.
International capital continues to view the UK as a secure
destination, with increased investment into the UK office and
logistics market, specifically from Asia Pacific and Chinese
investors. Record yields of sub 4% have been achieved in the City
of London on two acquisitions with transactions sizes of over
GBP1bn.
Logistics assets continue to remain an attractive asset class,
as investors shy away from retail and high street into warehousing
and distribution assets, as consumer shopping habits change, and
there is greater emphasis on e-commerce and online shopping. In
addition, the depreciation in the British Pound against the US
Dollar has created an opportunity for Middle Eastern and global
investors to increase their exposure to the UK.
US assets continue to attract Middle Eastern capital, as the
region doesn't suffer any US Dollar currency risk. Yields in the US
remain relatively stable, but with higher cost of funding, total
returns are lower, but this can be offset against the reduced risk
to currency volatility.
Investment Management
Our investment performance during the period was positive across
most Funds and client portfolios. We have seen significant interest
in our product offerings with strong net inflows of US$279m in AUMs
in the first half of 2017, a growth of 29%. This was very
encouraging with diversified flows continuing across our product
offering.
The Rasmala Trade Finance Fund received significant investor
interest on the back of strong performance. The fund specialises in
providing short-term structured and/or asset-backed liquidity to
companies trading real assets in the real economy and has delivered
34 consecutive months of positive returns generating an annualised
return of 4.5% for investors since inception. The fund has seen
interest from regional and international institutional investors as
well as family offices, corporates and high net worth
investors.
The team remains focused on tailoring products that offer
clients real alternatives, especially with more traditional global
assets looking so fully valued.
Investment Banking
In the first half of the year, the Investment Banking team
successfully originated, structured and acquired Amazon's largest
distribution warehouse in the UK for GBP61m (US$77m). The acquired
property is leased to Amazon with an unexpired term of 15 years.
The investment generates an annual cash dividend yield of 6.5% per
annum, with an expected internal rate of return of 7% upon exit.
The property extends over an area of more than one million square
feet.
Rasmala also originated, structured and acquired 48 warehouses
in Dubai covering over 500,000 sq. ft. (BUA) for approximately
US$63m (AED 234m) in partnership with Ajman Bank and other leading
Gulf investors.
The warehouses are located in Dubai Investments Park (DIP), a
mixed-use industrial, commercial and residential complex to the
east of Jebel Ali Free Zone (JAFZA), a major regional sea port and
business hub in Dubai. The acquisition is through a sale and
leaseback arrangement with a large UAE conglomerate by way of a
triple net lease for a term of 7 years. These properties are
sub-let to a diverse group of high quality tenants operating across
different sectors. The transaction was financed through a
combination of equity and Shari'a compliant financing facility,
with Ajman Bank participating as a strategic seed investor and sole
financier.
This transaction follows our previous acquisition of 72
warehouses so that we now own 120 warehouses in DIP covering 1.2
million square feet.
Our Investment Banking team will continue to focus on Real
Estate opportunities in the UK, Europe and UAE.
Treasury and Principal Investments
We continue to manage our balance sheet on a conservative basis
with significant focus on increasing liquidity in preparation for
the planned tender offer which we expect to launch in Q4 2017.
Corporate Developments
At the end of last year, the Board concluded that some immediate
steps needed to be taken to prepare the Group for the next phase of
its development.
It was decided to further simplify our business by relinquishing
our UK FCA permissions. Following a consultation process with all
relevant stakeholders the Board took necessary steps to implement
this decision in a careful and considered manner. The FCA has now
approved our application to relinquish our UK permissions and
although we are no longer an FCA regulated entity we continue to
operate regulated subsidiaries as before.
Earlier this year the Board announced it was planning to
distribute capital to shareholders. The Company is taking the
necessary steps to prepare and is planning to launch a tender offer
in Q4 2017.
A number of other steps have been taken to achieve our strategic
milestones, including increasing our shareholding in Rasmala
Holdings Limited to 100% and removing the restriction to conduct
all business in a Shari'a compliant manner.
Outlook
The outlook for the second half of the year is broadly stable as
we continue to identify investment opportunities at attractive
valuations and work closely with our clients to deliver on
these.
Enquiries:
Rasmala plc Tel: +44 (0)20 7847 9900
----------------------- -------------------------
Zak Hydari, CEO
----------------------- -------------------------
Stockdale Securities Tel: +44 (0)20 7601 6100
----------------------- -------------------------
Antonio Bossi, Elhanan
Lee
----------------------- -------------------------
Rasmala plc
Condensed consolidated statement of income
For the six months ended 30 June 2017 (unaudited)
Year to
6 months to 30-Jun-17 6 months to 30-Jun-16 31-Dec-16
GBP'000 GBP'000 GBP'000
--------------------------------------------------------- ---------------------- ---------------------- -----------
Income
Income from financing and investing activities 559 650 1,550
Returns to financial institutions and customers (178) (83) (160)
--------------------------------------------------------- ---------------------- ---------------------- -----------
Net margin 381 567 1,390
--------------------------------------------------------- ---------------------- ---------------------- -----------
Net fees and commission income 4,189 2,826 7,063
Net (loss)/gain from financial assets measured at fair
value through profit or loss 380 286 542
Gain on private equity investments designated at fair
value through profit or loss (59) 351 (5,715)
Fair value gain on investment property - (100) (98)
Other operating income 1,984 45 395
--------------------------------------------------------- ---------------------- ---------------------- -----------
Total operating income 6,875 3,975 3,577
--------------------------------------------------------- ---------------------- ---------------------- -----------
Expenses
--------------------------------------------------------- ---------------------- ---------------------- -----------
Staff costs (3,488) (3,298) (6,957)
Depreciation and amortisation (59) (44) (85)
Other operating expenses (4,557) (1,903) (4,617)
--------------------------------------------------------- ---------------------- ---------------------- -----------
Total expenses (8,104) (5,245) (11,659)
--------------------------------------------------------- ---------------------- ---------------------- -----------
Operating profit before tax (1,229) (1,270) (8,082)
Income tax (51) 8 (178)
Deferred tax (2) - (135)
--------------------------------------------------------- ---------------------- ---------------------- -----------
Loss from continuing operations (1,282) (1,262) (8,395)
--------------------------------------------------------- ---------------------- ---------------------- -----------
Loss after tax from discontinuing operations (31) - (82)
Loss for the year (1,313) (1,262) (8,477)
--------------------------------------------------------- ---------------------- ---------------------- -----------
Loss attributable to:
Owner of the Company (1,133) (941) (7,968)
Non-controlling interest (180) (321) (509)
--------------------------------------------------------- ---------------------- ---------------------- -----------
(1,313) (1,262) (8,477)
--------------------------------------------------------- ---------------------- ---------------------- -----------
Earnings per share from continuing operations
- Basic (3.63p) (3.09p) (25.97p)
- Diluted (3.63p) (3.09p) (25.97p)
Earnings per share from discontinuing operations
- Basic (0.08p) 0.00p (0.21p)
- Diluted (0.08p) 0.00p (0.21p)
Earnings per share from total profit or loss attributable to the owners of the parent
- Basic (3.72p) (3.09p) (26.17p)
- Diluted (3.72p) (3.09p) (26.17p)
Rasmala plc
Condensed consolidated statement of comprehensive income
For the six months ended 30 June 2017 (unaudited)
Year to
6 months to 30-Jun-17 6 months to 30-Jun-16 31-Dec-16
GBP'000 GBP'000 GBP'000
Loss for the year (1,313) (1,262) (8,477)
Items that may be reclassified
subsequently to profit or loss:
Gain on fair value of
available-for-sale securities (31) 317 181
Loss on fair value of
available-for-sale securities 252 (96) (251)
Exchange loss on net investment in
foreign operations (606) (793) (2,843)
Total comprehensive (loss) for the
year (1,698) (1,834) (11,390)
------------------------------------- ------------------ ---------------------- ----------------------
Total comprehensive (loss)
attributable to:
Owners of parent (1,953) (1,820) (10,940)
Non-controlling interest 255 (14) (450)
------------------------------------- -------- -------- -----------------------------------
(1,698) (1,834) (11,390)
------------------------------------- -------- -------- -----------------------------------
Rasmala plc
Condensed consolidated statement of financial position
As at 30 June 2017 (unaudited)
6 months to 30-Jun-17 6 months to 30-Jun-16 Year to
31-Dec-16
GBP'000 GBP'000 GBP'000
---------------------------------------------------- ---------------------- ---------------------- -----------
Assets
Cash and cash equivalents 3,555 4,622 14,319
Financial assets measured at fair value through
profit or loss 68,305 46,133 27,679
Available-for-sale securities - 23,689 24,959
Financial assets measured at amortised cost 1,621 18,523 4,931
Other assets 8,117 10,393 12,790
Investment property 5,375 - 5,375
Property and equipment 248 334 309
Intangible assets 9 - 13
Goodwill 15,440 12,651 16,091
----------------------------------------------------- ---------------------- ---------------------- -----------
102,670 116,345 106,466
Assets classified as held for sale 48 107 45
Total assets 102,718 116,452 106,511
----------------------------------------------------- ---------------------- ---------------------- -----------
Liabilities
Financial liabilities measured at fair value through
profit or loss - 5,931 1,447
Financial liabilities measured at amortised cost 10,705 3,677 5,400
Income tax payable 49 39 110
Deferred tax payable 317 - 319
Other liabilities 4,764 4,256 5,385
----------------------------------------------------- ---------------------- ---------------------- -----------
15,835 13,903 12,661
Liabilities associated with asset held for sale 12 128 12
Total liabilities 15,847 14,031 12,673
----------------------------------------------------- ---------------------- ---------------------- -----------
Net assets 86,871 102,421 93,838
----------------------------------------------------- ---------------------- ---------------------- -----------
Capital and reserves
Share capital 15,721 15,721 15,721
Other reserves 100,483 103,386 103,386
Fair value reserve on available-for-sale securities - 70 (221)
Foreign exchange reserve (5,236) (2,393) (4,195)
Accumulated losses (25,797) (17,548) (24,574)
----------------------------------------------------- ---------------------- ---------------------- -----------
Equity attributable to owners of parent 85,171 99,236 90,117
----------------------------------------------------- ---------------------- ---------------------- -----------
Non-controlling interest 1,700 3,184 3,721
----------------------------------------------------- ---------------------- ---------------------- -----------
Total equity 86,871 102,421 93,838
----------------------------------------------------- ---------------------- ---------------------- -----------
Rasmala plc
Condensed consolidated Cash flow statement
For the six months ended 30 June 2017 (unaudited)
6 months to 30-Jun-17 6 months to 30-Jun-16 Year to
31-Dec-16
GBP'000 GBP'000 GBP'000
--------------------------------------------------------- ---------------------- ---------------------- -----------
Cash flows from operating activities
Operating (loss)/profit for the period (1,229) (1,270) (8,082)
Operating loss on discontinued operations (31) - (82)
Adjusted for:
Unrealised loss from financial assets measured at fair
value through profit or loss (134) 4 (462)
Unrealised gain on private equity investments designated
at fair value through profit or loss 41 (316) 5,765
Depreciation and amortisation 58 44 85
Financial assets measured at fair value through profit
or loss (40,901) 2,856 15,399
Available-for-sale securities 25,180 (1,732) (3,294)
Financial assets measured at amortised cost 3,387 2,357 14,094
Other assets 4,097 (5,103) (7,232)
Investment property - 1,091 1,194
Financial liabilities measured at fair value through
profit or loss (1,447) 4,450 (34)
Financial liabilities measured at amortised cost 6,093 (503) (3,022)
Other liabilities (574) (2,475) (2,718)
Assets classified as held for sale (4) (11) 64
Liabilities associated with asset held for sale 31 13 (33)
Distribution made by a subsidiary (82) - -
--------------------------------------------------------- ---------------------- ---------------------- -----------
Cash used in operating activities (5,515) (595) 11,642
Tax paid (109) (155) (360)
--------------------------------------------------------- ---------------------- ---------------------- -----------
Net cash generated by/ (used in) operating activities (5,624) (750) 11,282
--------------------------------------------------------- ---------------------- ---------------------- -----------
Cash flow from investing activities
Payment on acquisition of a subsidiary net of cash
acquired - - (1,318)
Acquisition of non-controlling interests (4,994) - -
Purchase of property and equipment (18) (34) (2)
--------------------------------------------------------- ---------------------- ---------------------- -----------
Net cash (used in)/ generated from investing activities (5,012) (34) (1,320)
--------------------------------------------------------- ---------------------- ---------------------- -----------
Net (decrease)/increase in cash and cash equivalents (10,636) (784) 9,962
Cash and cash equivalents at the beginning of year 14,319 5,406 5,406
Exchange differences on cash and cash equivalents (128) - (1,049)
--------------------------------------------------------- ---------------------- ---------------------- -----------
Cash and cash equivalents at the end of the year 3,555 4,622 14,319
--------------------------------------------------------- ---------------------- ---------------------- -----------
Notes to the condensed consolidated interim financial statements
(unaudited)
At 30 June 2017
1. Principal activities and authorisation of the financial
statements
Rasmala plc ('Company') is an investment holding company
incorporated in England on 11 January 2005.
The interim condensed consolidated financial statements of the
Company and its subsidiaries (the 'Group') for the six months ended
30 June 2017 were authorised by the Board of Directors for issue on
29 September 2017.
The condensed consolidated financial statements of the Group as
at and for the period ended 30 June 2017 are available at
www.rasmala.com
2. Accounting policies
The accounting policies applied by the Group in these condensed
consolidated interim financial statements are the same as those
applied by the Group in its consolidated financial statements as at
and for the year ended 31 December 2016.
3. Subsequent events
Rasmala increased its shareholding from 76% to 100% in Rasmala
Holdings Limited. The Company also received approval from the FCA
to relinquish its regulatory permissions and is no longer a UK
regulated entity.
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR FMGZLGLDGNZM
(END) Dow Jones Newswires
September 29, 2017 06:37 ET (10:37 GMT)
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