TIDMAAAP
29 July 2022
ANGLO AFRICAN AGRICULTURE PLC
DIRECTORS' REPORT AND CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE SIX MONTHSED 30 April 2022
Anglo African Agriculture plc ("AAA" or the "Company")
Half yearly report for the six months ended 30 April 2022
The Chairman's Report
I am pleased to report our results to the end of 30 April 2022. As disclosed in
the 2021 annual report the unexpected collapse of the Comarco transaction
adversely affected shareholders and we remain exceptionally disappointed by the
behaviour of the management at Comarco. The aborted transaction has resulted in
the board reviewing the ongoing purpose and importantly direction of the
company. The Board will inform shareholders in due course of the results of
this review and path forward.
The last six months of trading have been challenging globally. COVID-19
continues to disrupt global economies and business operations. The war in
Ukraine unexpectedly cast another layer of uncertainty and has weighed
adversely on global economic conditions. AAA has not been spared from these
global events, the Company and management have had to adapt to the challenging
environment. We believe the Company is strongly positioned to navigate this
uncertain period and importantly take advantage of opportunities caused by the
economic downturn.
Our South African operations brought in a new CEO Serge Pavlovic. Under a
difficult operating environment, the team in South Africa have done a
commendable job to steer the ship in the right direction. The Company had to
provide additional funding to stabilise Dynamic Intertrade during the period
under review and will continue to support its operations now consider what is
best for the future.
Dynamic Intertrade ("DI")
For the period under review DI had a tough period caused by a general economic
slowdown. For the 6-month period ending 30 April 2022, the group recorded a
decrease in revenue from R16.07 million to R14.04 million representing a 14,5%
decrease. This was the result of ongoing efforts to pass on various cost
increases to the Group's customers. DI imports the majority of its inventory
and this is reflected in the costs of revenue increasing due to the worsening
exchange rates, going from R11.8 million for the comparative period for 2021 to
R11.2 million for the current period. Operating expenses have been contained to
R4.4 million for the six months ended April 2021 from R4.5 million in 2021,
however finance charges have increased by 92.8% as DI made increasing use of
financing facilities.
DI has maintained its FSSC22000 certification which is important when dealing
with blue chip food manufacturing companies.
Dynamic Intertrade Agri ("DIA")
(46.8% owned by AAA)
As mentioned previously, DIA is in the process of being disposed of and as a
result no equity accounting of its results have been reported.
Group Results for the period
The loss for the period has decreased from £318,920 for April 2021 to £136,579
for the current year. This is as a result of DI having experienced a
disappointing first six months emanating from decreased demand from our
customers. coupled to the holding company reaching agreements with several of
it major suppliers following the abandonment of the Comarco transaction.
Outlook
The global financial recession will present some future headwinds in the short
to medium term. The Company and its advisors have been working tirelessly on
various initiatives aimed at creating shareholder value. As at the 25th of July
the Company had £350,000 in cash, and the board believes that the Company is
well positioned to take advantage of any opportunities that may arise due to
the current economic turmoil.
Responsibility Statement
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';
* the interim management report includes a fair review of the information
required by DTR 4.2.7R (indication of important events during the first six
months and description of principal risks and uncertainties for the
remaining six months of the year; and
* the interim management report includes a fair review of the information
required by DTR 4.2.8R (disclosure of related parties' transactions and
changes therein).
Andrew Monk
Non-Executive Chairman
27 July 2022
FOR FURTHER INFORMATION PLEASE CONTACT:
Anglo African Agriculture plc
Andrew Monk, Non-Executive
Chairman Tel +44 (0) 20 7440
0640
Rob Scott, Executive Director
Tel +27 (0)
84 600 6001
VSA Capital Limited (Financial Adviser and Broker)
Andrew Raca
Tel +44 (0) 20 3005 5000
Simba
Khatai
Tel +44 (0) 20 3005 5000
Forward looking statement
Certain statements in this announcement, are, or may be deemed to be, forward
looking statements. Forward looking statements are identi?ed by their use of
terms and phrases such as "believe", "could", "should" "envisage",
"estimate", "intend", "may", "plan", "will" or the negative of those,
variations or comparable expressions, including references to assumptions.
These forward-looking statements are not based on historical facts but rather
on the Directors' current expectations and assumptions regarding the Company's
future growth, results of operations, performance, future capital and other
expenditures (including the amount, nature and sources of funding thereof),
competitive advantages, business prospects and opportunities. Such forward
looking statements re?ect the Directors' current beliefs and assumptions and
are based on information currently available to the Directors. A number of
factors could cause actual results to differ materially from the results
discussed in the forward-looking statements including risks associated with
vulnerability to general economic and business conditions, competition,
environmental and other regulatory changes, actions by governmental
authorities, the availability of capital markets, reliance on key personnel,
uninsured and underinsured losses and other factors, many of which are beyond
the control of the Company. Although any forward-looking statements contained
in this announcement are based upon what the Directors believe to be reasonable
assumptions, the Company cannot assure investors that actual results will be
consistent with such forward looking statements.
For further information please visit http://www.aaaplc.com.
Interim Condensed Consolidated Statement of Comprehensive Income
6 months Year ended 6 months
Ended Ended
30 April 31 October 30 April
Notes 2022 2021 2021
£ £ £
Turnover 681,761 1,404,234 788,096
Cost of Sales (545,163) (1,024,430) (579,056)
Gross Profit 136,598 379,804 209,040
Other Income 315,495 - -
Administrative expenses 4 (463,269) (895,464) (515,478)
Admission expenses 4 - - (8,350)
Impairments - - -
Operating loss (11,176) (515,660) (314,788)
Finance costs (125,403) (224,631) (76,152)
Finance income - 155,658 72,020
Loss before taxation (136,579) (584,633) (318,920)
Tax on loss on ordinary activities - - -
Loss after taxation (136,579) (584,633) (318,920)
Other Comprehensive Income impairment of - - -
investment in associate
Total comprehensive loss for the year from (136,579) (584,633) (318,920)
continuing operations
Loss attributable to ordinary shareholders (136,579) (584,633) (318,920)
Total comprehensive loss for the period (136,579) (584,633) (318,920)
Basic and diluted earnings per share 5 (0.62p) (2.66p) (1.45p)
Interim Condensed Consolidated Statement of Changes in Equity
Share Share Share Equity Retained Total
Capital Premium Based Portion of Earnings Equity
Payments Convertible
Reserve Loan Notes
£ £ £ £ £
Balance at 31 October 439,322 2,571,247 83,377 - (3,831,894) (737,948)
2020
Share Issue - - - - - -
Loss for the period - - - - (318,920) (318,920)
Balance at 30 April 439,322 2,571,247 83,377 - (4,150,814) (1,056,868)
2021
Equity portion of - - - 74,935 - 74,935
Convertible Loan Notes
issued during the year
Share Issue - - - - - -
Loss for the year - - - - (265,713) (265,713)
Balance at 31 October 439,322 2,571,247 83,377 74,935 (4,416,527) (1,247,646)
2021
Share Issue 76,247 76,248 - - - 152,495
Loss for the period - - - - (136,579) (136,579)
Balance at 30 April 515,569 2,647,495 83,377 74,935 (4,553,106) (1,231,730)
2022
Share capital is the amount subscribed for shares at nominal value.
Retained losses represent the cumulative loss of the Group attributable to
equity shareholders.
Share-based payments reserve relate to the charge for share-based payments in
accordance with IFRS 2.
Interim Condensed Consolidated Statement of the Financial Position
6 months Year ended 6 months
Ended Ended
30 April 31 October 30 April
Notes 2022 2021 2021
£ £ £
Assets
Non-Current Assets
Property, Plant and Equipment 6 11,266 13,769 19,041
Right of Use Asset 11 327,829 341,905 395,608
Loan receivable 7 - - 1,017,964
Total Non-Current Assets 339,095 355,674 1,432,613
Current assets
Investment in Associate - (held for 9 6,154 6,154 6,154
sale)
Inventories 34,847 42,683 74,585
Trade and Other Receivables 327,299 297,799 222,030
Cash and Cash Equivalents 503,399 1,109,774 111,332
Total Current Assets 871,699 1,456,410 414,101
Total Assets 1,210,794 1,812,084 1,846,714
Equity and Liabilities
Share Capital 10 515,569 439,322 439,322
Share Premium Account 10 2,647,495 2,571,247 2,571,247
Share-Based Payments Reserve 83,377 83,377 83,377
Equity portion of convertible loan 74,935 74,935 -
notes
Retained Earnings (4,553,107) (4,416,527) (4,150,814)
Total Equity (1,231,731) (1,247,646) (1,056,868)
Non-Current Liabilities
Non-Current Lease Liabilities 11 242,796 269,215 322,114
Borrowings 791,472 466,064 532,980
Convertible Loan Notes 778,065 778,065 853,000
Total Non-Current Liabilities 1,812,333 1,513,344 1,708,094
Current Liabilities
Current Lease Liabilities 11 87,866 77,887 75,206
Trade and Other Payables 542,326 1,468,499 1,120,282
Total Current Liabilities 630,192 1,546,386 1,195,488
Total Equity and Liabilities 1,210,794 1,812,084 1,846,714
Interim Condensed Consolidated Statement of Cash Flows
6 months Year ended 6 months
Ended Ended
30 April 31 October 30 April
Notes 2022 2021 2021
£ £ £
Cash flows from operating activities
Operating loss (11,176) (515,660) (314,788)
Add: Depreciation 37,547 78,109 39,550
Add: unrealised foreign exchange (26,727) (65,301) (572,203)
(gain) / loss
Add: (Profit)/loss on disposal of 1,256 139 -
property, plant and equipment
Finance costs (185,777) (93,378) (76,152)
Interest received - 155,658 72,021
Changes in working capital
Decrease in inventories (5,720) 137,401 107,123
Decrease / (increase) in receivables 44,257 (8,363) 69,909
(Decrease) / increase in payables (715,968) 262,565 513,052
Net cash flow from operating (862,309) (48,830) (161,488)
activities
Investing Activities
Acquisition of property, plant and (257) (8,767) (8,657)
equipment
Disposal of property, plant and 1,303 - -
equipment
Foreign exchange movements (19,593) 433 -
Loan Receivable repaid - 944,004 -
Net cash flow from investing (18,547) 935,670 (8,657)
activities
Cash flows from financing activities:
Net proceeds from issue of shares 9 - - -
Convertible loan notes issued - 220,000 220,000
Increase in borrowings 348,503 32,973 104,261
Foreign exchange movements (23,095) (8,043) (38,608)
Capital repayments of lease liability (50,863) (67,071) (50,390)
Net cash flow from financing 274,545 177,859 235,263
activities
Net cash flow for the period (606,311) 1,064,699 65,118
Opening Cash and cash equivalents 1,109,774 45,251 45,251
Foreign exchange movements (64) (176) 963
Closing Cash and cash equivalents 503,399 1,109,774 111,332
Notes to the Interim Condensed Consolidated Financial Statements
1. General Information
Anglo African Agriculture plc is a company incorporated in the United Kingdom.
Details of the registered office, the officers and advisers to the Company are
presented on the Directors and Advisers page at the end of this report. The
Company has a standard listing on the London Stock Exchange main market. The
information within these Interim condensed consolidated financial statements
and accompanying notes must be read in conjunction with the Audited annual
financial statements that have been prepared for the year ended 31 October
2021.
2. Basis of Preparation
These unaudited condensed consolidated interim financial statements for the six
months ended 30 April 2022 have been prepared in accordance with International
Accounting Standard No34, Interim Financial Reporting, were approved by the
board and authorised for issue on 25 July 2022.
The basis of preparation and accounting policies set out in the Annual Report
and Accounts for the year ended 31 October 2021 have been applied in the
preparation of these condensed consolidated interim financial statements. These
interim financial statements have been prepared in accordance with the
recognition and measurement principles of the International Financial Reporting
Standards ("IFRS") as endorsed by the EU that are expected to be applicable to
the consolidated financial statements for the year ending 31 October 2022 and
on the basis of the accounting policies expected to be used in those financial
statements.
The figures for the six months ended 30 April 2022 and 30 April 2021 are
unaudited and do not constitute full accounts. The comparative figures for the
year ended 31 October 2021 are extracts from the 2021 audited accounts. The
independent auditor's report on the 2021 accounts was not qualified but
included a material uncertainty in respect of going concern.
3. Segmental Reporting
In the opinion of the Directors, the Group has one class of business, being the
trading of agricultural materials. The Group's primary reporting format is
determined by the geographical segment according to the location of its
establishments. There is currently only one geographic reporting segment, which
is South Africa. All revenues and costs are derived from the single segment.
Historically this segment has experienced a high demand for its products in the
months of July to December with a lower-than-average demand in the months of
January to March.
4. Company Result for the period
The Company has elected to take the exemption under section 408 of the
Companies Act 2006 not to present the parent Company income statement account.
The operating loss of the group for the six-month period ended 30 April 2022
was £11,176 (30 April 2021: £314,788, year ended 31 October 2021: loss of £
515,660). The operating loss incorporated the following main items:
6 months Year ended 6 months
Ended Ended
30 April 31 October 30 April
2022 2021 2021
£ £ £
Accounting and administration fees 24,413 20,153 14,786
Admission expenses - - 8,350
Brokership fees - 39,724 17,224
Legal and professional fees 32,164 36,089 -
Registrar fees 1,767 5,138 2,509
Personnel expenses 105,709 278,499 141,045
5. Earnings per Share
Earnings per share data is based on the Group result for the six months and the
weighted average number of shares in issue.
Basic loss per share is calculated by dividing the loss attributable to equity
shareholders by the weighted average number of ordinary shares in issue during
the period:
6 months Year ended 6 months
Ended Ended
30 April 31 October 30 April
2022 2021 2021
(Unaudited) (Audited) (Unaudited)
£ £ £
Loss after tax (136,579) (584,633) (318,920)
Weighted average number of ordinary shares in 21,966,077 21,966,087 21,966,077
issue
Basic and diluted loss per share (pence) (0.62p) (2.66p) (1.45p)
Basic and diluted earnings per share are the same, since where a loss is
incurred the effect of outstanding share options and warrants is considered
anti-dilutive and is ignored for the purpose of the loss per share calculation.
As at 30 April 2022 there were 26,148,289 (31 October 2021 - 26,148,289 and 30
April 2021 -
13,024,622) outstanding share warrants and 897,809 (31 October 2021 - 897,809
and 30 April 2021 -
1,047,809) outstanding options, both are potentially dilutive.
6. Property, Plant and Equipment
Depreciation on property, plant and equipment is calculated using the
straight-line method to write off their cost over their estimated useful lives
at the following annual rates:
Furniture and fixtures 17%
Leasehold improvements 33%
Plant and equipment 20% and 33%
Useful lives and depreciation method are reviewed and adjusted if appropriate,
at the end of each reporting period.
An item of property, plant and equipment is derecognised upon disposal or when
no future economic benefits are expected to arise from the continued use of the
asset. Any gain or loss arising on the disposal or retirement of an item of
property, plant and equipment is determined as the difference between the sales
proceeds and the carrying amount of the relevant asset and is recognised in
profit or loss in the year in which the asset is derecognised.
Group Leasehold Furniture Plant and Total
Property and equipment
fixtures
£ £ £ £
Cost
As at 31 October 2020 19,571 4,317 268,512 292,400
Exchange difference 961 212 13,176 14,349
Additions - - 8,657 8,657
Disposals - - - -
As at 30 April 2021 20,532 4,529 290,345 315,406
Exchange difference ( 786) (173) (10 775) (11 734)
Additions - - 110 110
Disposals - - ( 298) ( 298)
As at 31 October 2021 19,746 4,356 279,382 303,484
Exchange difference 979 216 13,844 15,039
Additions - - 257 257
Disposals - - (5 088) (5 088)
As at 30 April 2022 20,725 4,572 288,395 313,692
Accumulated depreciation
As at 31 October 2020 19,085 3,674 254,343 277,102
Charge for the year 353 196 5,092 5,641
Released on disposal - - - -
Exchange difference 943 183 12,496 13,622
As at 30 April 2021 20,381 4,053 271,931 296,365
Charge for the year 124 167 4,658 4,949
Released on disposal ( 159) ( 159)
Exchange difference ( 785) ( 160) (10 495) (11 440)
As at 31 October 2021 19,720 4,060 265,935 289,715
Charge for the year 25 98 3,196 3,319
Released on disposal - - (5 088) (5 088)
Exchange difference 977 205 13,298 14,480
As at 30 April 2022 20,722 4,363 277,341 302,426
Net Book Value
As at 30 April 2021 151 476 18,414 19,041
As at 31 October 2021 26 296 13,447 13,769
As at 30 April 2022 3 209 11,054 11,266
The holding company held no tangible fixed assets at 30 April 2022, 31 October
2021 and 30 April 2021.
7. Loan receivable
6 months Year ended 6 months
Ended Ended
30 April 31 October 30 April
2022 2021 2021
(Unaudited) (Audited) (Unaudited)
£ £ £
Loan to Touchwood Investments Ltd - - 1,017,964
Carrying value - - 1,017,964
The loan advanced to Touchwood Investments Ltd, a company that is part of the
Comarco Group, which operates a port in Mombasa was settled during the 2021
financial year.
8. Subsidiaries
AAA holds investments in the following subsidiary undertakings as at 30 April
2022, which principally affected the losses and net assets of the group.
Country of
incorporation Proportion Proportion
and place of (%) of (%) of
Name of companies Principal activities business equity equity
interest interest
2020 2019
Dynamic Value Added Agricultural South Africa 100% 100%
Intertrade (Pty) Products
Limited
Subsidiaries are all entities over which the group has the power to govern the
financial and operating policies generally accompanying a shareholding of more
than one half of the voting rights. Subsidiaries are consolidated, using the
acquisition method, from the date that control is gained and are stated at cost
less, where appropriate, provisions for impairment. Entities that do not comply
with this policy, but over which the group has a shareholding of between 20 and
50 percent of the voting rights are equity accounted from the date of
acquisition and are stated at cost and adjusted for the results of these
entities for the accounting period.
9. Investment in Associate
6 months Ended Year ended 6 months Ended
30 April 31 October 30 April
2022 2021 2021
(Unaudited) (Audited) (Unaudited)
£ £ £
Investment in Dynamic Intertrade Agri (Pty)
Ltd 6,154 6,154 6,154
Equity accounted profit/ (loss) for the - - -
period
Impairment of investment - - -
Carrying value
6,154 6,154 6,154
10. Share Capital
Ordinary shares are classified as equity. Proceeds from issuance of ordinary
shares are classified as equity. Incremental costs directly attributable to the
issuance of new ordinary shares are deducted against share capital.
Allotted, called up and fully paid Number of
ordinary shares
of 2.0p (April 2019 - 0.1p) each shares Share Capital Share Premium
£ £
Balance at 31 October 2020 21,966,077 439,322 2,571,247
Share issue
- - -
Balance at 30 April 2021 21,966,077 439,322 2,571,247
Share issue
- - -
Balance at 31 October 2021 21,966,077 439,322 2,571,247
Share issue 3,823,627 76,247 76,248
Balance at 30 April 2022 25,789,704 515,569 2,647,495
11 Leases
Right of Use Asset and Liability
On adoption of IFRS 16, the Group recognised lease liabilities in relation to
leases which had previously been classified as 'operating leases' under the
principles of IAS 17 Leases. These liabilities were measured at the present
value of the remaining lease payments, discounted using the lessee's
incremental borrowing rate for comparable assets as of 1 November 2019. The
weighted average lessee's incremental borrowing rate for comparable mortgage
bonds applied to the lease liabilities on 1 November 2019 was 8.5%, being the
discount rate on the Group's borrowings. In the Directors opinion this is the
discount rate that the Group would obtain should it be purchasing land and
buildings. Without further security available the Group would be unlikely to
secure funding from other sources and therefore the Directors believe the 8.5%
rate applied is the most appropriate basis on which to base the IFRS 16
calculations.
For leases previously classified as finance leases the entity recognised the
carrying amount of the lease asset and lease liability immediately before
transition as the carrying amount of the right of use asset and the lease
liability at the date of initial application. The measurement principles of
IFRS 16 are only applied after that date.
6 months Year ended 6 months
Ended Ended
30 April 31 October 30 April
2022 2021 2021
£ £ £
Lease liability recognised in the
statement of financial position at 31 347,102 410,502 410,502
October 2021
Foreign exchange movements 17,200 3,672 20,146
Discounted using the incremental
borrowing rate at date of initial 17,223 - 17,062
application
Additions to leases during the - - -
year
Lease payments (50,863) (67,072) (50,390)
Lease liability recognised in the
statement of financial position 330,662 347,102 397,320
Of which:
Current lease liabilities 87,866 77,887 75,206
Non-current lease liabilities 242,796 269,215 322,114
330,662 347,102 397,320
Right-of use assets were measured at the amount equal to the lease liability,
adjusted by the amount of any prepaid or accrued lease payments relating to
that lease recognised in the statement of financial position as at 31 October
2021. There were no onerous lease contracts that would have required an
adjustment to the right-of-use assets at the date of initial application. The
recognised right of-use assets relate to the following types of assets:
6 months Year ended 6 months
Ended Ended
30 April 31 October 30 April
2022 2021 2021
£ £ £
Properties 327,829 341,905 395,608
12 Events Subsequent to 30 April 2022
There were no material events subsequent to April 2022 other than what has been
disclosed.
Directors and Advisers
Directors: Robert Scott
Andrew Monk
Matthew Bonner
Company Number: 07913053
Registered Address: Park House
16-18 Finsbury Circus
London
EC2M 7EB
Head Office: Park House
16-18 Finsbury Circus
London
EC2M 7EB
Financial Adviser & Broker: VSA Capital
Limited
Park House
16-18 Finsbury Circus
London
EC2M 7EB
Auditors: Jeffreys Henry LLP
Finsgate
5-7 Cranwood Street
London
EC1V 9EE
Solicitors to the Company: Keystone Law
48 Chancery Lane
London
WC2A 1JF
Registrars: Neville Registrars Limited
Neville House
18 Laurel Lane
Halesowen
West Midlands
B63 3DA
END
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