TIDMOBOR
RNS Number : 2240N
Starcrest Education The Belt & Road
28 September 2021
28 September 2021
Starcrest Education The Belt & Road Limited
("Starcrest" or the "Company" or the "Group")
Interim Results for the six months to 30 June 2021
Starcrest Education The Belt & Road Limited (LSE: OBOR ),
the international developer and operator of education services in
Europe, is pleased to announce its unaudited results for the six
months to 30 June 2021.
Highlights
-- As of 30 June 2021, the Group had cash balances of GBP652,690 (2020: GBP1,920,399)
-- Post-period, on 06 August, the Company announced the signing
of non-legally binding heads of terms ("Heads of Terms") for the
acquisition of up to 80% of the issued share capital of National
Training Company Limited ("NTC" or the "Target") (the "Proposed
Transaction")
o Simultaneously, the Company announced that it is no longer
proceeding with the Company's previously stated intention to
acquire 60% of the issued share capital of The London School of
Science and Technology Limited ("LSST") as a result of
uncertainties due to the COVID-19 pandemic
-- Loss before tax for the period of GBP415,827 (2020:
GBP1,004,044), which principally covers costs relating to due
diligence for acquisition targets
-- Post-period, at its Extraordinary General Meeting, held on 28
September 2021, the Company announced that its shareholders had
approved its intention to change its name from "Starcrest Education
The Belt & Road Limited" to "Starcrest Education Limited"
John McLean OBE, Non-Executive Chairman, commented:
"We are pleased to announce Starcrest's interim results for the
six months to 30 June 2021.
"In response to the COVID-19 pandemic, the Company has refined
its strategic focus to providing premier education services and
products in the UK and Europe, having originally also included
opportunities in the Chinese education sector.
"Throughout the period, the Company remained proactively seeking
acquisition targets that fit with its search criteria and offer
attractive growth potential and returns. As a result of these
efforts, we are pleased to have signed Heads of Terms for the
acquisition of National Training Company Limited.
"We believe that the acquisition provides a valuable opportunity
for Starcrest and its shareholders. The Board is progressing
matters and we look forward to updating the market on our progress
in due course. However, we would reiterate to shareholders that
there can be no guarantee at this stage that the Proposed
Transaction will complete. "
- Ends -
Enquiries:
Starcrest Education
John McLean OBE, Non-Executive Chairman +44 (0) 7768 031454
Allenby Capital Limited (Financial
Adviser and Broker)
John Depasquale
Vivek Bhardwaj +44 (0) 20 3328 5657
Yellow Jersey PR (Financial PR)
Sarah Hollins
Henry Wilkinson +44 (0) 20 3004 9512
Notes to editors:
Starcrest is an international developer and operator of
education services in Europe. The Company was established to seek
acquisition opportunities in the international education sector and
to provide premier education services and products in the UK and to
countries in Europe.
Starcrest listed on the Main Market of the London Stock Exchange
on 31 January 2019 under the ticker symbol (LSE: OBOR). Further
information can be found on the Company's website at
https://www.starcresteducation.com .
Chairman's Statement
Introduction
I am very pleased to report the Company's interim results for
the period ended 30 June 2021.
Results
As of 30 June 2021, the Group had cash balances of GBP652,690
(30 June 2020: GBP1,920,399). Loss before tax for the period ended
30 June 2021 was GBP415,827 (2020: GBP1,004,044).
Starcrest made approximately GBP418,219 loss for the period
ended June 2021 (2020: GBP776,195). The majority of the losses
reported in this period, representing approximately GBP172,000, are
attributed to professional fees and associated costs relating to
the due diligence cost for acquisition targets. The remaining
expenditure related to Directors fees, administration and other
costs.
The majority of the losses reported in the comparative period to
30 June 2020, representing approximately GBP725,000, were
attributed to professional fees and associated costs relating to
the due diligence cost for acquisition targets. The remaining
expenditure related to Directors fees, administration and other
costs.
Transactions
As outlined in Starcrest's Final results, announced on 22 April
2021, no further progression was expected to take place until 30
June 2021 regarding the Company's previously stated intention to
acquire 60% of the issued share capital of The London School of
Science and Technology Limited ("LSST"), a private management
school that offers an open and inclusive education experience in
London and the midlands, as announced on 18 September 2019. During
the period, therefore, the Company remained proactively seeking
relevant acquisition opportunities that fit with the Company's
search criteria and that offer attractive growth potential.
Post-period, on 06 August 2021, with the uncertainties of the
COVID-19 pandemic a major contributory factor, the Company decided
to no longer proceed with acquiring LSST.
Simultaneously, we were pleased to announce that the Company had
signed non-legally binding heads of terms ("Heads of Terms") for
the acquisition of up to 80% of the issued share capital of
National Training Company Limited ("NTC" or the "Target") (the
"Proposed Transaction").
Under the Heads of Terms, the Company has agreed to put options
to require it to purchase the remaining 20% of the issued share
capital of the Target. The Proposed Transaction is subject to the
agreement and signature by the parties to a legally binding share
purchase agreement.
The Proposed Transaction is also subject to, amongst other
things, legal and financial due diligence, therefore the Company is
unable to provide further information at this stage about the terms
of the Proposed Transaction. If the Proposed Transaction is
successful, it will amount to a reverse takeover under the Listing
Rules.
The Board believes that the Target provides a valuable
opportunity for Starcrest and its shareholders. The Board is
therefore progressing matters and will update shareholders as soon
as they are able to. The Company is focused on completing the
transaction with NTC, however there is no certainty that the
transaction will complete which includes the raising of new monies
to fund the consideration. In the event the transaction does not
complete, the Company will continue to seek another potential
acquisition and to ensure that the Company has sufficient funding,
the Company has received a letter of support confirming that up to
a further GBP500,000 is available from its parent company,
Starcrest Education Management Company Ltd.
Change of Company Name and Strategy
At its Extraordinary General Meeting, held on 28 September 2021,
the Company announced that its shareholders had approved its
intention to change its name from "Starcrest Education The Belt
& Road Limited" to "Starcrest Education Limited".
The Company initially included a strategic focus on
opportunities in the Chinese education sector, as well as
opportunities in the UK and Europe. However, the Company's
international strategy has been constrained by the measures imposed
in response to the COVID-19 pandemic. Accordingly, the Company has
revised its strategy to provide premier education services and
products in the UK and Europe. The Board believes that the new name
better reflects the Company's current strategic focus.
Notwithstanding the change in strategy, the Company believes
that its principal risks and uncertainties remain unchanged from
those disclosed in the 2020 annual report.
Board
With the Company's intention to move from a shell to an
operating company, Starcrest hopes to strengthen its Board through
the appointment of a combined Chief Financial Officer and Chief
Operating Officer. More details will be provided on this in due
course.
Summary and Outlook
First and foremost, the Board's focus remains on progressing the
required steps to complete the acquisition of NTC. Alongside this,
however, in line with the Company's revised strategy and with its
extensive experience and contacts, the Board continues to seek
further acquisition targets across the education sector in the UK
and Europe, which the Board believes demonstrates potential for
long-term growth.
We look forward to providing further updates in due course.
John McLean OBE
Non-Executive Chairman
28 September 2021
UNAUDITED CONDENSED CONSOLIDATED INTERIM FINANCIAL
STATEMENTS
FOR THE PERIODED 30 JUNE 2021
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
6 months 6 months
ended ended
Note 30/06/2021 30/06/2020
Unaudited Unaudited
GBP GBP
Administrative expenses (415,827) (1,004,044)
------------- ---------------------
Operating loss 10 (415,827) (1,004,044)
------------- ---------------------
Finance costs - -
------------- ---------------------
Loss before taxation (415,827) (1,004,044)
Income tax - -
------------- ---------------------
Loss for the period (415,827) (1,004,044)
------------- ---------------------
Other Comprehensive (loss)/gain
Exchange gain arising on translation
to presentation currency (2,391) 227,849
------------- ---------------------
Total comprehensive loss attributable
to equity holders of the Company
for the period (418,219) (776,195)
------------- ---------------------
Loss per share - basic and
diluted (pence per share) 13 (1.93) (4.66)
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
Note As at As at
30/06/2021 31/12/2020
Unaudited Audited
GBP GBP
Current assets
Cash and cash equivalents 14 652,690 1,454,672
Trade and other receivables 15 35,271 16,681
Total current assets 687,961 1,471,353
------------ --------------------------
Total assets 687,961 1,471,353
============ ==========================
Equity and liabilities
Capital and reserves
attributable to owners
of the company
Ordinary shares 17 215,600 215,600
Share premium 3,454,364 3,454,364
Retained earnings (3,359,606) (2,943,779)
Foreign exchange reserves 93,761 96,153
------------ --- --------------------------
Total equity 404,119 822,338
------------ --- --------------------------
Current liabilities
Trade and other payables 16 283,842 649,015
Lease liabilities -
Total current liabilities 283,842 649,015
Total equity and liabilities 687,961 1,471,353
============ ==========================
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE PERIODED 30 JUNE 2021 Share Share Other Retained Foreign Total
capital premium reserves earnings exchange equity
GBP GBP GBP GBP GBP GBP
Balance at 1
January
2021 215,600 3,454,364 - (2,943,779) 96,153 822,338
Loss for the
period - - - (415,827) - (415,827)
Other
comprehensive
loss for the
financial
period - - - - (2,391) (2,391)
-------- ---------- --------- ------------ --------- ----------
Balance at 30
June 2021
(Unaudited) 215,600 3,454,364 - (3,359,606) 93,761 404,119
-------- ---------- --------- ------------ --------- ----------
FOR THE PERIODED 30 JUNE 2020 Share Share Other Retained Foreign Total
capital premium reserves earnings exchange equity
GBP GBP GBP GBP GBP GBP
Balance at 1
January 2020 215,600 3,454,364 - (1,406,444) (113,428) 2,150,092
Loss for the
period - - - (1,004,044) - (1,004,044)
Other
comprehensive
gain for the
financial
period - - - - 227,849 227,849
Balance at 30
June
2020
(Unaudited) 215,600 3,454,364 - (2,410,488) 114,421 1,373,897
-------- ---------- --------- ------------ ---------- ------------
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEARED 31 DECEMBER 2020 Share Share Other Retained Foreign Total
capital premium reserves earnings exchange equity
GBP GBP GBP GBP GBP GBP
Balance at 1
January 2020 215,600 3,454,364 - (1,406,444) (113,428) 2,150,092
Loss for the
year - - - (1,537,335) (1,537,335)
Other
comprehensive
gain for the
year - - - - 209,581 209,581
-------- ---------- --------- ------------ ---------- ------------
Balance at 31
December
2020 (Audited) 215,600 3,454,364 - (2,943,779) 96,153 822,338
-------- ---------- --------- ------------ ---------- ------------
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
PERIODED 30 JUNE 2021
30/06/2021 30/06/2020
Unaudited Unaudited
GBP GBP
Cash flows from operating activities
Operating loss (415,827 ) (1,004,044)
Depreciation - -
Finance cost - -
(Increase) in receivables 15 (18,590) (66,447)
(Decrease) in payables 16 (365,595) (95,119)
------------- -------------
Net cash generated from operating
activities (800,012) (1,165,610)
------------- -------------
Cash flows from financing activities
Transaction costs deducted from - -
equity
Principal paid on lease liabilities - -
Interest paid on lease liabilities - -
------------- -------------
Net cash used in financing activities - -
------------- -------------
Net decrease in cash, cash equivalents (800,012) (1,165,610)
Cash, cash equivalents at beginning
of the period 1,454,672 2,787,046
Exchange gains on cash and cash
equivalents (1,970) 298,963
------------- -------------
Cash, cash equivalents at end
of the period 14 652,690 1,920,399
============= =============
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED INTERIM FINANCIAL
STATEMENTS
1. GENERAL INFORMATION
Starcrest Education The Belt & Road Limited ("the Company")
was incorporated and registered in the Cayman Islands as a private
company limited by shares on 23 May 2018 under the Companies Law
(as revised) of The Cayman Islands, with the name Starcrest
Education The Belt & Road Limited, and registered number
337619.
The subsidiaries included in these condensed consolidated
financial statements were incorporated in November 2019.
The Company's registered office is located at Cricket Square,
Hutchins Drive PO Box 2681, Grand Cayman KY1-1111, Cayman
Islands.
2. PRINCIPAL ACTIVITIES
The principal activity of the Group is to seek education related
acquisition opportunities in Europe.
3. RECENT ACCOUNTING PRONOUNCEMENT
a) New interpretations and revised standards effective for the
period ended 30 June 2021
The International Accounting Standards Board (Board) has issued
an amendment to IFRS 16 Leases to make it easier for lessees to
account for COVID-19-related rent concessions such as rent holidays
and temporary rent reductions
The Group has had no lease contract since August 2020 and
therefore the Group have not recognised an asset or liability
during the interim period. No lease related payments have been
included in profit or loss.
b) Standards and interpretations in issue but not yet
effective
There are a number of standards and interpretations which have
been issued by the International Accounting Standards Board that
are effective for periods beginning subsequent to 1 January 2021
(the date on which the Company's next annual financial statements
will be prepared from) that the Company has decided not to adopt
early. The Directors do not believe these standards and
interpretations will have a material impact on the financial
statements once adopted.
4. BASIS OF PREPARATION
These condensed consolidated interim financial statements have
been prepared in accordance with IAS 34 Interim Financial Reporting
as adopted by the European Union and prepared under the historic
cost convention. The comparative figures as at 31 December 2020
have been extracted from the Group's Financial Statements for that
financial year, but do not constitute these accounts.
The Company's functional currency is USD. The Company listed its
shares on the main market of the London Stock Exchange on 31
January 2019. The directors have decided to present the
consolidated interim financial information in Pounds Sterling
(GBP), which is the Group's presentation currency, as the Company
is listed in the UK.
The Directors have prepared cash flow forecasts for the business
on the expectation that the proposed transaction completes. These
forecasts show that the Company and the enlarged Group will be able
to continue in operational existence for at least 12 months from
the date of signing these accounts. The Directors have also
considered the scenario under which the proposed transaction does
not complete. This shows that the Group would require additional
funding to be able to meet its obligations as they fall due. The
Directors have received an undertaking from the Company's parent
company, Starcrest Education Management Company Ltd to provide
financial support in the event that the Company and Group require
such support in order to be able to meet its obligations as they
fall due for a period of at least one year from the date of these
condensed consolidated financial statements. Having considered this
undertaking, and all relevant facts and circumstances, the
Directors consider it appropriate to prepare the financial
statements on the going concern basis.
5. SIGNIFICANT ACCOUNTING POLICIES
5.1 Foreign currency translation
Transactions in currencies other than the Company's functional
currency (foreign currencies) are recognised at the rates of
exchange prevailing on the dates of the transactions. At each
reporting date, monetary assets and liabilities that are
denominated in foreign currencies are retranslated at the rates
prevailing at that date. Non-monetary items carried at fair value
that are denominated in foreign currencies are translated at the
rates prevailing at the date when the fair value was determined.
Non-monetary items that are measured in terms of historical cost in
a foreign currency are not retranslated.
Exchange differences are recognised in profit or loss in the
period in which they arise.
Results at 30 June 2021 are translated into the presentation
currency. Assets and liabilities are translated at the closing rate
while income and expenses are translated at exchange rates at the
dates of the transactions. Differences arising are recognised in
Other Comprehensive Income in the period in which they arise
(foreign currency translation reserve).
5.2 Financial instruments
A financial asset or a financial liability is recognised only
when the Group becomes a party to the contractual provisions of the
instrument.
Financial instruments are initially recognised at the
transaction price as this represents fair value, unless the
arrangement constitutes a financing transaction, where it is
recognised at the present value of the future payments discounted
at a market rate of interest for a similar instrument.
Financial assets
All financial assets are initially recognised at fair value,
less transaction costs. Subsequent to initial recognition, they are
recorded at amortised cost.
Financial liabilities
Financial liabilities are initially recognised at fair value.
Subsequent to initial recognition, they are recorded at amortised
cost.
5.3 Share Capital
Ordinary shares are classified as equity. Incremental costs
directly attributable to the issue of ordinary shares or options in
relation to ordinary shares are shown in equity as a deduction, net
of taxation, from the proceeds.
5.4 Cash and cash equivalents
Cash and cash equivalents include cash in hand, deposits held on
call with banks and other short term highly liquid investments that
are readily convertible into known amounts of cash and which are
subject to an insignificant risk of changes in value.
5.5 Earnings per share
Basic earnings per share is computed using the weighted average
number of shares outstanding during the period. Diluted earnings
per share is computed using the weighted average number of shares
during the period plus the dilutive effect of dilutive potential
ordinary shares outstanding during the year.
5.6 Leases
Where the Group enters into leases that are longer than 12
months, the Group recognises right-of-use assets measured at an
amount equal to the lease liability. The lease liability is
measured at the present value of the remaining lease payments,
discounted using the Group's incremental borrowing rate at date of
lease commencement. Lease modifications are accounted for at the
effective date of the lease modification.
6. ACCOUNTING ESTIMATES AND JUDGEMENTS
Preparation of financial information in conformity with IFRS
requires management to make judgements, estimates and assumptions
that affect the application of accounting policies and the reported
amounts of assets, liabilities, income and expenses.
There are no significant accounting estimates or judgements that
affect reported amounts of assets, liabilities, income and expenses
in this period.
7. FINANCIAL RISK MANAGEMENT
The Group has exposure to the liquidity risk, foreign currency
risk and capital risks from its use of financial instruments.
Credit, interest rate and market risks are not considered to be
material to the Group. The Group is not subject to any externally
imposed capital requirements.
The Group's financial instruments consist mainly of cash and
accounts receivable and payable.
a. Liquidity risk
Liquidity risk is the risk that the Group will encounter
difficulty in meeting the obligations associated with its financial
liabilities. The Group's approach to managing liquidity is to
ensure, as far as possible, that it will always have sufficient
liquidity to meet its liabilities when due, under both normal and
stressed conditions, without incurring unacceptable losses or
risking damage to the Group's reputation.
The Group's financial liabilities comprise trade payables,
amounts due to the parent company and accruals.
The Group's financial assets comprise cash and cash equivalents,
trade and other receivables.
The Group has sufficient cash to meet their liabilities as they
fall due.
b. Foreign currency risk
In 2020, the board decided to convert 80% of the U.S. Dollars in
Singapore's OCBC Bank to British pounds and transfer them to HSBC
bank account in the UK. There was no foreign currency payment
during the period. Financial risks of variations in foreign
currency exchange rates have been significantly reduced as a
result.
c. Credit risk
Credit risk refers to the risk that counterparty will default on
its contractual obligations resulting in financial loss to the
Group. Credit allowances are made for estimated losses that are
anticipated to be incurred by the reporting date.
8. CAPITAL MANAGEMENT
The Group actively manages the capital available to fund the
Group, comprising equity and reserves. The Group's objectives when
maintaining capital is to safeguard the entity's ability to
continue as a going concern, so that it can continue to provide
returns for shareholders.
9. SEGMENT REPORTING
IFRS 8 defines operating segments as those activities of an
entity about which separate financial information is available and
which are evaluated by the Board of Directors to assess performance
and determine the allocation of resources. The Board of Directors
are of the opinion that under IFRS 8 the Group has only one
operating segment. The Board of Directors assess the performance of
the operating segment using financial information which is measured
and presented in a manner consistent with that in the Financial
Statements. Segmental reporting will be reviewed and considered in
light of the development of the Group's business over the next
reporting period.
10. OPERATING LOSS
The operating loss is stated after charging:
6 months ended 6 months ended 30
30 June 2021 June 2020
Lease expense - 47,206
11. STAFF COSTS AND KEY MANAGEMENT EMOLUMENTS
Period ended Period ended
30 June 2021 30 June
2020
Key management
emoluments
Remuneration 177,500 136,288
Executive Directors
Xingchen Zhu - 10,000
Xiaojun Zhang 55,000 15,000
Peng Luo - 5,000
Non-executive
Directors
John McLean OBE 17,500 17,500
Norman Cumming 15,000 15,000
Nicholas Petford
DSc 15,000 15,000
------------------------- ------------------------
102,500 77,500
Employees
Staff costs 75,000 58,788
75,000 58,788
12. TAXATION
The Company is incorporated in the Cayman Islands, and its
activities are subject to taxation at a rate of 0%.
The Company's wholly owned subsidiaries, Starcest Education PLC
and Starcest Education Management (UK) Ltd are incorporated in
England and Wales, and its activities are subject to taxation at a
rate of 19%. For the period to 30 June 2021 the entities have made
a taxable loss. No deferred tax asset has been recognised.
13. EARNINGS PER SHARE
The Company presents basic and diluted earnings per ordinary
share information for its ordinary shares. Basic earnings per share
is calculated by dividing the loss attributable to ordinary
shareholders of the Company by the weighted average number of
ordinary shares in issue during the reporting period.
There is no difference between the basic and diluted loss per
share.
6 months ended 6 months ended
30/06/2021 30/06/2020
Loss attributable to ordinary shareholders (415,827) (1,004,044)
Weighted average number of shares 21,560,000 21,560,000
Losses per share (expressed as pence
per share) (1.93) (4.66)
14. CASH AND CASH EQUIVALENTS
Unaudited Audited
30/06/2021 31/12/2020
GBP GBP
Cash and cash equivalents 652,690 1,454,672
------------ ------------
Cash at bank earns interest at floating rates based on daily
bank deposit rates.
15. TRADE AND OTHER RECEIVABLES
Unaudited Audited
30/06/2021 31/12/2020
GBP GBP
Trade receivables 34,860 -
VAT and other
receivables 411 16,681
------------ ------------
35,271 16,681
16. TRADE AND OTHER PAYABLES
Unaudited Audited
30/06/2021 31/12/2020
GBP GBP
Trade payables 13,267 46,262
Amounts due to the parent
company 209,538 209,455
Other creditors - 5,817
Accruals 61,037 387,481
------------ ------------
283,842 649,015
All payables are financial liabilities measured at amortised
cost.
Amounts due to the parent company are unsecured, interest free
and repayable on demand.
17. SHARE CAPITAL
Number of shares Nominal value
GBP GBP
Authorised
Ordinary shares of GBP GBP0.01
each 1,000,000,000 10,000,000
Issues and fully paid
Issue of ordinary shares of
GBP0.01 each 21,560,000 215,600
----------------- --------------
18. ULTIMATE CONTROLLING PARTY
The Company's immediate parent company is Starcrest Education
Management Company Ltd. The Company's ultimate parent company is
Fubao Group Holdings Ltd. The ultimate controlling party is Mr Peng
Luo, who is also a director of the Company.
19. RESERVES
The following describes the nature and purpose of each reserve
within equity:
Reserve Description and purpose
Share premium Amount subscribed for share
capital in excess of nominal
value.
Other reserve Consideration received for shares
which are not yet issued.
Retained earnings All other net gains and losses
and transactions not recognised
elsewhere.
Foreign exchange Gains/losses arising on retranslation
reserve of net assets from functional
to presentation currency.
20. RELATED PARTY TRANSACTIONS
As at 30 June 2021, an amount of GBP209,538 (unaudited) (31
December 2020 (audited): GBP209,455) was owed to Starcrest
Education Management Company Ltd. This amount mainly arose from
business expenses paid on behalf of the Group by the parent
company.
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IR EANNPALNFEEA
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