DJ Alina Holdings PLC: Interim Report (30 June 2023)
Alina Holdings PLC (ALNA)
Alina Holdings PLC: Interim Report (30 June 2023)
29-Sep-2023 / 09:00 GMT/BST
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Alina Holdings PLC
Alina Holdings PLC
(Reuters: ALNA.L, Bloomberg: ALNA:LN)
("Alina" or the "Company")
Interim Results for the period ended 30 June 2023
The Company is pleased to announce its results for the six months ended 30 June 2023. The interim results have been
submitted to the FCA and will shortly be available on the Company's website: www.alina-holdings.com
Highlights for the 6 months ended 30 June 2023
GROUP RESULTS 1H 2023 versus 1H 2022
Group Net Profit / (Loss) for the period (GBP0.82m) vs. (GBP0.33m)
Group Earnings / (Loss) Per Share (both basic and diluted)*1 (3.62p) vs. (1.44p)
Reported Book value per share*2 GBP0.23 vs. GBP0.26
Net Cash GBP1.5m vs. GBP1.1m
Available for sale financial assets GBP1.9m vs. GBP2.7m
*1 based on weighted average number of shares in issue of 22,697,397 (1H22: 22,697,397)
*2 based on actual number of shares in issue as at 30 June 2023 of 22,697,397
-- Gross Rental Income declined by 16% due to the sale of Shaw in April 2023 and increased vacancy rates atHastings.
-- Hastings is currently being refurbished following the departure of Argos (now part of J Sainsbury PLC).The refurbishment process has been delayed due to the need for Asbestos Treatment. During remediation furtherincidence of Asbestos was identified, resulting in further delays as well as significantly more work and highercosts than originally foreseen. Notwithstanding these delays, the Board is confident that gross rental income ofthe property should be substantially increased once works are completed in H2 2023.
-- At Brislington, advanced stage architectural designs have been completed for the re-development of thesite into a mix of commercial units and residential apartments. The Board believes that the project has goodpotential for planning consent as it will assist the local council in achieving their need for a substantialincrease in Social Housing.
-- Shares in investment holding HEIQ Plc were down 63% over the H1 2023 period. Subsequently, the Companyfailed to post its accounts on a timely basis, which has resulted in the suspension of its shares.
-- During the period under review Book Value per share declined 14.5% from 26.9p as at 31 December 2022 toGBP23p per share.
Chairman's Statement
Trading update
First Half 2023 results were disappointing due to the negative impact of refurbishment delays at the Hastings property and the decline in HEIQ shares. I am confident that once the refurbishment in Hastings is completed that the Company will find a solid tenant for the vacant unit at market rates, above what the previous tenant was paying. Notwithstanding the cyclical nature of all chemical companies, HEIQ's performance has been more than disappointing, and the suspension of the Company's shares, due to delayed Audit, is clearly very concerning.
Macro Background/Outlook
Western economies are in the eye of the storm, with stock market bulls and bears reacting (read over reacting!) to every snippet of economic news and comment from the FED and the ECB. China's growth has stalled and the World waits to see what the impact will be on Western inflation and economic growth. Worryingly, inflation in Europe having shown signs of abating, now appears to be on the rise again.
Niall Fergusson, Bloomberg columnist and the Milbank Family Senior Fellow at the Hoover Institution at Stanford University recently wrote.As Humpty Dumpty says to Alice: "When I use a word, it means just what I choose it to mean - neither more nor less." Inflation has been above target for nearly two and a half years. Whenever it returns to 2%, we'll be told: "That's what we meant by transitory!"
The Company's Board is still in the "Markets are overvalued camp", and believe that Central Bank fiddling and tinkering will eventually result in the likelihood of stagflation in the UK and Europe and, if they get lucky, only recession in US.
Recessions have a habit of creeping up on one and then falling off a cliff. Past downturns have taken longer than expected to manifest themselves, but when they arrive they invariable bring pain and a dose of sanity back to markets as they adjust to the new "normal".
Given that the FED and ECB are still way behind the curve, their efforts to curb inflation are, in my opinion, ironically adding to inflation rather than killing it. The outcome will be a slow and painful death probably resulting in a longer recession, rather than the desired short sharp recessions which characterised the past couple of corrections. In our opinion, the current increase in interest rates will severely damage property prices in the US, UK and Europe (the greatest store of personal value for most families), which will ultimately result in a substantial stock market correction . that I and other (older!) participants have alluded to for some time.
Operations
Real Estate
Hastings: the detection of asbestos in Hastings has delayed the letting of the largest area of the property (nearly 50%). Remediation is, however, now nearing completion and the unit will shortly be available to rent, which should have the dual positive impact of reducing costs (the Company is currently paying rates) whilst also substantially increasing revenues. With regard to the upper floors, planning permission has been applied for, and we are currently awaiting consent from the local council for conversion to mixed residential and commercial use.
Bristol: the local council is currently carrying out recladding to the residential tower, which abuts our retail units. Unfortunately, refurbishment of the adjoining property has been substantially delayed due to the scarcity of replacement cladding.
Staffordshire: the refurbishment of the last unlet unit at Company's small residential property in Staffordshire is now nearing completion and the property will be put into auction in Q4 2023.
Holdings 1. DCI Advisors Ltd (DCI LN)
https://www.dciadvisorsltd.com/index.html
As at June 30 2023, ALNA owned 3.2% of DCI Advisors Ltd., which is focused on the development of luxury leisure properties in the Eastern Mediterranean Greece, Cyprus and Croatia).
The company has had a torrid life and has unsuccessfully been trying to wind down its property portfolio and return capital to shareholders for a number of years.
DCI shares are up +15% YTD, in anticipation of the potential sale of Company assets, whilst the share price movement is welcome we are disappointed with the Board's decision to use debt to fund working capital, which it can neither service nor repay unless the sale of property assets is successfully concluded.in an environment of increasing interest rates. 2. HEIQ plc (HEIQ LN)
https://www.heiq.com/investors/
We are decidedly annoyed with the situation at HEIQ. The company's shares have been suspended since 2 May 2023 due to the company's inability to file audited accounts for 2022, "as a result of the acquisition and implementation of new systems as well as changes to processes within the organisation. This has impacted the timing of the audit work, in this first year for the company's new auditor, Deloitte".
In both HEIQ's RNSs of 27 April 2023 and 2 May 2023 the company stated, "The Directors anticipate that the Company will be in a position to publish the audited report and accounts in the coming weeks." In its RNS of 2 May 2023, the company stated that "The company will provide further market updates around the expected timing of the annual results publication once its financial reporting and the audit work is sufficiently progressed". The coming weeks have come and gone, and it is now more than 4 months since HEIQ's shares were suspended and no further announcements have, to the best of our knowledge, been made which, given the number of acquisitions that the Company has made in the past 18 months, gives us substantial cause for concern.
Conclusion
The most recent inflation data might seem to suggest that warnings of a reprise of the 1970s were wrong. The optimists have been in the ascendancy since last spring's mini-banking crisis. Now, the consensus, with the exception of a few older, maybe wiser heads(?), suggest that the economy can return to the Fed's target of 2% rate of inflation without a recession. Lest we forget, pain-free disinflation was a recurring delusion of the 1970s which suffered painful (Central Bank induced) recessions in 1970, 1974-75 and 1980.
As a reminder for those too young to know, or too old to remember, monetary policy acts with long and variable time-lags. The time it takes from the moment the yield curve inverts (as happened in July 2022) to the start of a recession has historically ranged between 4 and 16 months. Higher interest rates impact an economy in multiple complex ways, but ultimately they are bad news for all indebted companies or individuals who need to refinance their liabilities in an environment of rising interest rates.
The idea that the West can recover from the fiscal and monetary excesses of the past twenty years without economic pain seems like wishful thinking.unless, that is, you believe in miracles or fairy tales.which brings us back to Humpty Dumpty and Alice in Wonderland. Duncan Soukup Chairman Thalassa Holdings Ltd 28 September 2028
Responsibility Statement
We confirm that to the best of our knowledge: a. the condensed set of financial statements has been prepared in accordance with IAS 34 'Interim FinancialReporting' and gives a true and fair view of the assets, liabilities, financial position and profit or loss of theCompany and the undertakings included in the consolidation as a whole as required by DTR 4.2.4 R; b. 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 uncertaintiesfor the remaining six months of the year); and c. 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).
Cautionary statement
This Interim Management Report (IMR) has been prepared solely to provide additional information to shareholders to assess the Company's strategies and the potential for those strategies to succeed. The IMR should not be relied on by any other party or for any other purpose.
Duncan Soukup
Chairman
Thalassa Holdings Ltd
28 September 2023
Interim Condensed Consolidated Statement of Income
For the six months ended 30 June 2023
Six months Six months Year
ended ended ended
30 Jun 23 30 Jun 22 31 Dec 22
Unaudited Unaudited Audited
Note GBP'000 GBP'000 GBP'000
Gross rental income 165 196 351
Property operating expenses (142) (158) (300)
Net rental income 23 38 51
Profit/Loss on disposal of investment properties - - 4
Profit/(loss) from change in fair value of investment holdings (331) (441) 563
Administrative expenses including non-recurring items (373) (297) (604)
Operating loss before net financing costs (681) (700) 14
Depreciation (2) (2) (3)
Financing income* 44 405 318
Financing expenses* (182) (30) (470)
Share of profits of associated entities - - 5
Loss before tax (821) (327) (136)
Taxation - - -
Profit/(loss) for the year from continuing operations (821) (327) (136)
Attributable to:
Equity shareholders of the parent (821) (327) (136)
(821) (327) (136)
Earnings per share - GBP- pence (using weighted average number of shares)
Basic and Diluted 3 (3.62) (1.44) (0.60)
The notes on pages 13 to 16 form an integral part of this consolidated interim financial information. Interim Condensed Consolidated Statement of Comprehensive Income
For the six months ended 30 June 2023
Six months Six months Year
ended ended ended
30 Jun 23 30 Jun 22 31 Dec 22
Unaudited Unaudited Audited
GBP'000 GBP'000 GBP'000
Profit/(loss) for the financial year (821) (327) (136)
Total comprehensive income (821) (327) (136)
Attributable to:
Equity shareholders of the parent (821) (327) (136)
Total Comprehensive income (821) (327) (136)
The notes on pages 13 to 16 form an integral part of this consolidated interim financial information. Interim Condensed Consolidated Statement of Financial Position
As at 30 June 2023
As at As at As at
30 Jun 23 30 Jun 22 31 Dec 22
Note Unaudited Unaudited Audited
Assets GBP'000 GBP'000 GBP'000
Non-current assets
Investment properties 4 2,502 2,782 2,504
Investments in associated entities 5 - 5
Total non-current assets 2,507 2,782 2,509
Current assets
Trade and other receivables 356 495 233
Available for sale financial assets 5 1,907 2,680 2,597
Investment properties held for sale - - 800
Cash and cash equivalents 1,503 1,129 873
Total current assets 3,766 4,304 4,503
Total assets 6,273 7,086 7,012
Liabilities
Current liabilities
Trade and other payables 673 856 591
Total current liabilities 673 856 591
Finance lease liabilities 6 324 324 324
Total non-current liabilities 324 324 324
Total liabilities 997 1,180 915
Net assets 5,276 5,906 6,097
Shareholders' Equity
Share capital 8 319 319 319
Capital redemption reserve 598 598 598
Retained earnings 4,359 4,989 5,180
Total shareholders' equity 5,276 5,906 6,097
Total equity 5,276 5,906 6,097
The notes on pages 13 to 16 form an integral part of this consolidated interim financial information.
These financial statements were approved by the board on 28 September 2023.
Signed on behalf of the board by:
Duncan Soukup
Interim Condensed Consolidated Statement of Cash Flows
For the six months ended 30 June 2023
As at As at As at
30 Jun 23 30 Jun 22 31 Dec 22
Unaudited Unaudited Audited
GBP'000 GBP'000 GBP'000
Cash flows from operating activities
Profit/(Loss) for the year before taxation (683) (702) 14
Gain from change in fair value of investment properties - - (563)
(Profit)/Loss from change in fair value of head leases - - (3)
(Profit)/Loss on disposal of investment properties - - (4)
Decrease/(Increase) in trade and other receivables (123) 90 22
(Decrease)/Increase in trade and other payables 82 458 164
Gain/(loss) on foreign exchange (3) 144 126
Lease liability interest (11) (11) (23)
Depreciation 801 2 -
Interest received 9 - 1
Interest paid (3) (17) (19)
Profit from change in fair value of investments held for sale (3) (17) 191
Cash generated by operations 66 (53) (94)
Taxation - - -
Net cash flow from operating activities 66 (53) (94)
Purchase of investments held for sale (341) (3,592) (1,206)
Sale of investments held for sale 574 2,566 -
Unrealised Gain or (Loss) on Investment 331 441 -
Net Proceeds from sale of investment properties - - 403
Net cash flow in investing activities 564 (585) (803)
Cash flows from financing activities
(Increase)/reduction on head lease liabilities - - 3
Net cash flow from financing activities - - 3
Net increase in cash and cash equivalents 630 (638) (894)
Cash and cash equivalents at the start of the year 873 1,767 1,767
Cash and cash equivalents at the end of the year 1,503 1,129 873
The notes on pages 13 to 16 form an integral part of this consolidated interim financial information.
Interim Condensed Consolidated Statement of Changes in Equity
For the six months ended 30 June 2023
Capital
Share redemption Retained
Capital reserve Earnings Total
GBP'000 GBP'000 GBP'000 GBP'000
Balance as at 31 December 2021 319 598 5,316 6,233
Loss for Period - - (327) (327)
Balance as at 30 June 2022 319 598 4,989 5,906
Total comprehensive income for the year - - 191 191
Balance as at 31 December 2022 319 598 5,180 6,097
Loss for Period - - (821) (821)
Balance as at 30 June 2023 319 598 4,359 5,276
The notes on pages 13 to 16 form an integral part of this consolidated interim financial information. Notes to the Interim Condensed Consolidated Financial Information
1. General information
Alina Holdings PLC ("Alina" or the "Company") is a company registered on the Main Market of the London Stock Exchange.
2. Significant Accounting policies
The Group prepares its accounts in accordance with applicable UK Adopted International Accounting Standards (IFRSs).
The accounting policies applied by the Company in this unaudited consolidated interim financial information are the same as those applied by the Company in its consolidated financial statements as at and for the period ended 31 December 2022 except as detailed below.
The financial information has been prepared under the historical cost convention, as modified by the accounting standard for financial instruments at fair value.
Estimates
There are no changes to the estimates since last reporting period.
Segmental reporting
IFRS 8 requires operating segments to be identified on the basis of internal reports that are regularly reported to the chief operating decision maker to allocate resources to the segments and to assess their performance. Since the strategy review in July 2013 the Group has identified one operation and one reporting segment, being rental income in the UK, which is reported to the Board of directors on a quarterly basis. The Board of directors is considered to be the chief operating decision maker.
2.1. Basis of preparation
The condensed consolidated interim financial information for the six months ended 30 June 2023 has been prepared in accordance with International Accounting Standard No. 34, 'Interim Financial Reporting'. They do not include all of the information required for full annual financial statements and should be read in conjunction with the consolidated financial statements of the Company as at and for the year ended 31 December 2022.
These condensed interim financial statements for the six months ended 30 June 2023 and 30 June 2022 are unaudited and do not constitute full accounts. The comparative figures for the period ended 31 December 2022 are extracted from the 2022 audited financial statements. The independent auditor's report on the 2022 financial statements was not qualified.
All intra-group transactions, balances, income and expenses are eliminated in full on consolidation.
2.2. Going concern
The financial information has been prepared on the going concern basis as management consider that the Group has sufficient cash to fund its current commitments for the foreseeable future.
3. Earnings per share
Six months Six months Year
ended ended ended
30 Jun 23 30 Jun 22 31 Dec 22
Unaudited Unaudited Audited
The calculation of earnings per share is based on the following loss and number of
shares:
Profit/(loss) for the period (GBP'000) (821) (327) (136)
Weighted average number of shares of the Company ('000) 22,697 22,697 22,697
Earnings per share:
Basic and Diluted (GBP - pence) (3.62) (1.44) (0.60)
Number of shares outstanding at the period end: 22,697,397 22,697,397 22,697,397
Notes to the Interim Condensed Consolidated Financial Information Continued
4. Investment Properties
Freehold Leasehold Investment
Investment Investment Properties
Properties Properties Held for sale Total
GBP000 GBP000 GBP000 GBP000
At 31 December 2021 40 2,744 330 3,114
Fair value adjustment - head leases - - - -
Depreciation - head leases - (2) - (2)
At 30 June 2022 40 2,742 330 3,112
Depreciation - head leases - (1) - (1)
Fair value adjustment - property - 563 563
Reclassification of property for sale - (800) 800 -
Sale of property (40) - (330) (370)
At 31 December 2022 - 2,504 800 3,304
Fair value adjustment - head leases - - - -
Depreciation - head leases - (2) - (2)
Sale of property - - (800) (800)
At 30 June 2023 - 2,502 - 2,502
The Directors are pleased to announce the completion of sale on 26th April 2023 of the Oldham, Manchester property held for sale as at 31 December 2022.
As at As at As at
30 Jun 23 30 Jun 22 31 Dec 22
Unaudited Unaudited Audited
GBP000 GBP000 GBP000
Portfolio valuation 2,168 2,445 2,968
Investment Properties held for sale - - (800)
Head leases treated as investment properties per IFRS 16 334 337 336
Total per Balance Sheet 2,502 2,782 2,504
Notes to the Interim Condensed Consolidated Financial Information Continued
5. Investment Holdings
The Group classifies the following financial assets at fair value through profit or loss (FVPL):-
Equity investments that are held for trading
As at As at As at
30 Jun 23 30 Jun 22 31 Dec 22
Unaudited Unaudited Audited
GBP000 GBP000 GBP000
Securities investments
At the beginning of the period 1,749 1,783 1,783
Additions 1,117 2,844 5,532
Unrealised gain/(losses) (385) (169) (211)
Disposals (574) (2,566) (5,355)
1,907 1,892 1,749
Investment Holdings
Securities held 1,907 1,892 1,749
Portfolio Holdings - 788 848
1,907 2,680 2,597
Investments have been valued incorporating Level 1 inputs in accordance with IFRS7. They are a combination of cash and securities held with the listed broker.
Financial instruments require classification of fair value as determined by reference to the source of inputs used to derive the fair value. This classification uses the following three-level hierarchy:
Level 1 - quoted prices (unadjusted) in active markets for identical assets or liabilities;
Level 2 - inputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly (i.e., as prices) or indirectly (i.e., derived from prices);
Level 3 - inputs for the asset or liability that are not based on observable market data (unobservable inputs).
For period ending 30 Jun 23, portfolio holdings cash balances have been reclassified to cash and cash equivalents.
6. Lease liabilities
Minimum
Finance lease liabilities on head rents are payable as follows: Lease
Payment Interest Principal
GBP000 GBP000 GBP000
At 30 June 2022 3,018 (2,672) 346
Movement in value (12) 12 -
At 31 December 2022 3,006 (2,660) 346
Movement in value (11) 11 -
At 30 June 2023 2,995 (2,649) 346
Short term liabilities 22 - 22
Long term liabilities 2,996 (2,672) 324
At 30 June 2022 3,018 (2,672) 346
Short term liabilities 22 - 22
Long term liabilities 2,984 (2,660) 324
At 31 December 2022 3,006 (2,660) 346
Short term liabilities 22 - 22
Long term liabilities 2,973 (2,649) 324
At 30 June 2023 2,995 (2,649) 346
In the above table, interest represents the difference between the carrying amount and the contractual liability/ cash flow. All leases expire in more than five years.
Notes to the Interim Condensed Consolidated Financial Information Continued
7. Related party balances and transactions
As at the period end the Group owed GBP49,886.70 (December 2022: GBP17,073, June 2022: GBP49,303) to Thalassa Holdings Limited ("Thalassa"), a company under common directorship. The balance relates to accounting and registered office services supplied to the Group by Thalassa at cost. The total amount is treated as an unsecured, interest free loan made repayable on demand.
During the period the Group accrued GBP75,755 (December 2022: GBP155,000, June 2022: GBP88,887) for consultancy and administrative services provided to the Group by a company in which the Chairman has a beneficial interest. The balance owed by the Group at the period end date was (GBP33,245) (December 2022: GBP717, June 2022: GBP88,887).
Athenium Consultancy Ltd, a company in which the Group owns shares invoiced the group for financial and corporate administration services totalling GBP90,750 for the period (Jun 2022: GBP82,500).
8. Share capital
As at As at As at
30 Jun 23 30 Jun 22 31 Dec 22
Unaudited Unaudited Audited
GBP GBP GBP
Allotted, issued and fully paid:
22,697,397 ordinary shares of GBP0.01 each 226,970 226,970 226,970
9,164,017 treasury shares of GBP0.01 each 91,640 91,640 91,640
Total Share Capital 318,610 318,610 318,610
During the year to 30 September 2019, the Company underwent a Court approved restructure of capital and buy back of shares. Under this action the issued 20p shares were converted to 1p; capital reserves were transferred to distributable reserves; 59,808,456 shares were repurchased, and a new Capital Redemption Reserve of GBP0.598m was established.
Investment in Own Shares
At the year-end, 9,164,017 shares were held in treasury (June 2022: 9,164,017), and at the date of this report 9,164,017 were held in treasury.
9. Subsequent events
There were no subsequent events.
10. Copies of the Interim Report
The interim report is available on the Company's website: www.alina-holdings.com.
----------------------------------------------------------------------------------------------------------------------- Dissemination of a Regulatory Announcement that contains inside information in accordance with the Market Abuse Regulation (MAR), transmitted by EQS Group. The issuer is solely responsible for the content of this announcement.
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ISIN: GB00B1VS7G47 Category Code: IR TIDM: ALNA LEI Code: 213800SOAIB9JVCV4D57 OAM Categories: 1.2. Half yearly financial reports and audit reports/limited reviews Sequence No.: 274694 EQS News ID: 1737213 End of Announcement EQS News Service =------------------------------------------------------------------------------------
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(END) Dow Jones Newswires
September 29, 2023 04:00 ET (08:00 GMT)
