| Fri 19 Dec 2008, 11:00 | | HAL - Halogen Holdings Societe Anonyme - Second Interim Report 2008 |
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HAL - Halogen Holdings Societe Anonyme - Second Interim Report 2008
Halogen Holdings Societe Anonyme
(Incorporated in Luxembourg. RC Number B39773)
Share code: HAL - ISIN LU0216267913
Registered Office:
58 rue Charles Martel,
L-2134, Luxembourg
19 December 2008
Dear Shareholder,
SECOND INTERIM REPORT 2008
At the Annual General Meeting held on 28 March 2008 members approved the
change to the company`s year end from 30 September to 31 March. An interim
report for the six months to 31 March 2008 was sent to shareholders in June
2008. This second interim report details the results for the twelve months
ended 30th September 2008 and full audited accounts will be prepared for the
18 months ended 31st March 2009 and the next Annual General Meeting will be
held on Friday 26 September 2009
508,110 of the 621,586 May 2008 Warrants to subscribe for shares in Halogen
have been exercised raising approximately GBP502,000 for the Group. The
remainder of the warrants lapsed unexercised. In accordance with the
authority granted at the EGM on 28 September 2007, 1,016,220 additional
warrants have been issued to those subscribers on the basis of 2 new warrants
for every warrant exercised, with an exercise price of Euro1.25 and an
exercise date of 31 May 2011.
We had the option to subscribe up to GBP1 million in Heartstone Inns Limited
("Heartstone") at GBP1 per share, which were exercisable on 9th August 2008.
We subscribed GBP500,000 (excluding costs) and Heartstone agreed to extend
the option over the remaining GBP500,000 for an additional year with an
increase in the exercise price to GBP1.15 per share.
Now that we have no staff operating in Zimbabwe, cancellation of the
company`s listing in Harare has been delayed by problems in obtaining
responses from the relevant organisations in Zimbabwe. A letter has recently
been sent to shareholders on the Zimbabwe section of the register of
shareholders advising them that the Zimbabwe Exchange has been requested to
cease trading Halogen shares on 31st December 2008, and that the Zimbabwe
share register at that date will be merged with the European register.
We have taken advice on how to move the Group out of Luxembourg since
operating from Luxembourg is comparatively expensive for a Group of our size.
It is not practical to migrate to another country, as this would require
approval by all shareholders, including those who are deceased or have moved
with no forwarding address. We will therefore need to arrange for an offer
to be made for the Company, or for the liquidation of the Company and its
replacement by a new holding company in another country. We expect to inform
shareholders of our proposals early in the new year.
A trading update from our associated company, Heartstone, is included below.
Prospects
Heartstone did not see any suitable pub acquisition opportunities between
March and September, but recently there have been a few quality pubs coming
onto the market at more realistic valuations. This delay in the acquisition
program will defer the date when Heartstone will be able to pay the dividends
that we need to finance operating cost.
David Marshall
Chairman
Heartstone Inns Limited - Trading Update - 6 months ended 30 September 2008
Overview
Since January 2008 the company has owned the freehold of, and operated, four
high quality food led rural pubs. The most recent acquisition, the Hare &
Hounds in Devon was acquired on 10 January 2008.
Trading during the current calendar year has been challenging as the economy
has suffered its first major downturn in decades. The economic decline has
seen the valuations of listed pub companies and regional brewers plummet and
several restructure or refinance to ensure survival.
Managed businesses, such as Heartstone are weathering the storm better than
the tenanted or leased pub estates but whereas a few months ago several of
the large operators were reporting low like-for-like growth they are now
reporting declines. From our own experience we know that trading from June
onwards has been particularly difficult but this has not yet come through in
the quoted company`s results. Insofar as it is possible to gauge the
performance of businesses comparable to Heartstone, we would estimate like-
for-like sales in food led rural pubs and dining pubs to be between 5% and
20% down on last year.
Across the estate Heartstone is experiencing like-for-like sales declines
this year of below 8% so against the market we believe the company is
performing broadly in line with, or slightly ahead of comparable operators.
Consumers are spending but they are going for value, our strongest performer
is the Hare & Hounds, which is a high quality carvery business offering a
great product at reasonable prices. We have ensured that accessibly priced
dishes are available at each of the pubs to offer customers the option of
dining at modest cost.
Pressure in input costs continue; we are taking whatever action we can to
mitigate the impact, for example taking out one or two year supply deals on
utilities to get the best prices. However, on a more positive note we have
recently started to see food prices level off.
A key element to success is having the right people in place and, after a few
teething problems, we now have a stable management team in each pub and they
are working well to enhance the local reputation and grow the core customer
base.
Trading outlook
The harsh current trading environment is likely to persist for some time yet.
In an attempt to drive sales we are offering discounts during November and
the first quarter of 2009 by way of money off meal vouchers. Also, in order
to drive Christmas sales we carried out a direct mailing campaign targeting
local businesses, which has already resulted in several bookings and many
enquiries.
Further Information
Further information on Heartstone and its pubs can be found on its web site:
www.heartstoneinns.co.uk
Heartstone has a 31 December year end and copies of its accounts to 31
December 2007 are available on application by e-mail to halogen@city-
group.com
Unaudited consolidated group profit and loss account
Half years ended Years ended
30 September 30 September
2008 2007 2008 2007
GBP000 GBP000 GBP000 GBP000
Operating costs (92) (102) (195) (187)
Operating loss before (92) (102) (195) (187)
interest and taxation
Interest 7 62 14 108
Exchange losses (14) (9) (25) (4)
Share of results of (29) (10) (191) (10)
associate
Loss before exceptional (128) (59) (397) (93)
item and taxation
Exceptional item - - (355) - 1,317
(loss)/profit on sale of
subsidiary
(Loss)/Profit before (128) (414) (397) 1,224
taxation
Taxation (5) (1) (6) (3)
(Loss)/Profit after (133) (415) (403) 1,221
taxation and retained
for the period
Reconciliation of
headline loss per share
(Loss)/Earnings per (6) (23) (18) 65
share (pence)
Less exceptional item, - 20 - (70)
net of tax and minority
interests (pence)
Headline loss per share (6) (3) (18) (5)
(pence)
Consolidated Statement of recognised gains and losses and changes in equity
Net (loss)/profit for (133) (415) (403) 1,221
the period
Shares issued 502 136 502 136
Exchange differences - 8 - 2
369 (271) 99 1,359
Shareholders` funds at 3,054 3,595 3,324 1,965
start of the period
Shareholders` funds at 3,423 3,324 3,423 3,324
end of the period
Unaudited consolidated group balance sheet
30 30 September
September
2008 2007
GBP000 GBP000
Non current assets
Investment in associate 3,317 3.000
Current assets
Investment - 178
Trade and other receivables 20 376
Cash and bank balances 187 26
207 580
Current liabilities
Accounts payable (101) (256)
Net current assets 106 324
Total assets, less current liabilities 3,423 3,324
Capital and Reserves
Called up share capital 1,710 1,226
Legal reserve 123 109
Exchange reserve 267 267
Revenue reserve 1,323 1,722
Shareholders` funds 3,423 3,324
Net assets per share GBP1.36 GBP1.65
Unaudited consolidated group cash flow statement
Half years ended Year ended
30 September 30 September
2008 2007 2008 2007
GBP000 GBP000 GBP000 GBP000
Operating activities
Cash (absorbed)/generated by (102) (268) 158 (342)
normal trading activities
Interest received and other 7 63 14 108
investment income
Taxation (5) (1) (6) (3)
(100) (206) 166 (237)
Investment activities
Acquisition of interest in (507) (3,010) (507) (3,010)
associate
Net proceeds on disposal of - 117 - 2,213
subsidiary
Less shares in Central - - - (868)
African Gold plc as part of
proceeds
Net cash inflow from (507) (2,893) (507) (1,665)
investment activities
Financing activities
Shares issued 502 - 502 -
Net (decrease)/increase in (105) (3,099) 161 (1,902)
funds
Net funds at start of period 292 3,115 26 1,924
Effect of foreign exchange - 10 - 4
rate changes
Net funds at end of period 187 26 187 26
Notes
1 Accounting Policy
The results and the cash flow statement for the half year ended 30
September 2008 comply with IAS 34 - Interim Financial Reporting. They
have been prepared on the basis of accounting policies adopted in the
accounts for the year ended 30 September 2007 which comply with
International Financial Reporting Standards in all respects and
Luxembourg law. The results for the year to 30 September 2007 are an
abridged version of the Group`s full accounts for that year, which have
been filed with the relevant authorities.
2 (Loss)/ Earnings per share
(Loss)/Earnings per share are based on the result and the weighted
average number of shares in issue of 2,185,426 (2007 1,864,206).
Headline earnings are basic earnings adjusted for exceptional items.
3 Capital Expenditure
There was no capital expenditure during the period (2007 - nil) and
there were no capital expenditure commitments at 31st March 2008 (2007 -
nil).
4 Segmental analysis
A segmental analysis is not presented, there being no operating
subsidiaries. The only segment not arising directly from central
operations is the share of the results of the associated company.
Luxembourg
19 December 2008
Sponsor
Sasfin Capital (A division of Sasfin Bank Limited)
Date: 19/12/2008 11:00:20 Produced by the JSE SENS Department.
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