31 January 2018

GB00B0W5NJ22

Ecovista PLC

("Ecovista" or "the Company")

 

Audited Annual Results for the year ended 31 August 2017

 

Ecovista Plc, are delighted to report its audited annual results for the twelve months ended 31 August 2017.

 

CHAIRMAN'S STATEMENT

I am pleased to present to you my first chairman's statement since the departure of our previous chairman Mr Luca Tenuta for the period 1st September 2016 to 31st August 2017. Since my appointment I have made a thorough examination of company's investments.

Overview

The accounts for the period to 31 August 2017 showed a loss of £887,306, comparable to the loss for the 8 months ended 31 August 2016 of £216,537.

During the financial period, we have had several regulatory issues caused by one of the nominees of a number of our shareholders. These issues were beyond our control but have now all been resolved. The consequence of this resulted in a higher level of running costs due to various legal fees the Company was having to pay to protect the Company's position.

The continued decline in the Italian property market saw the value of our holding in Cignella SRL be devalued by £482,208, this being 54% of the losses incurred.  The current value of our holding in Cignella is £151,807.

During the financial period under review the Company raised £350,000 in new equity, and £470,000 in convertible loan notes (of which I personally invested £270,000) showing the strong commitment from new investors. This has strengthened our balance sheet and helped the completion of the property investments we targeted for this period, increasing the NAV of the group from £1,727,736 to £1,182,982 for the period to 31 August 2017.

The board remains committed to continue keeping a tight rein on costs and low levels of leveraging.

 

Current operations

100 Rye Street Ltd

The new 4,380sq ft. house that is being built is progressing well and is currently at first floor level with an expected completion date of 1st May with an anticipated gross value in the region of £1,350,000.

Start Hill Limited and Willside Limited

Start Hill Limited owns a 4-bedroom house on 0.3 of a hectare which is currently rented out on an Assured Shorthold Tenancy. Willside Limited has an option to purchase on the next-door property, also a 4-bedroom house within a slightly bigger plot of 0.43 hectares. The group is looking to gain planning permission to demolish the two houses and build a significant number of two-bedroom apartments on the combined plot. A pre-application has been obtained and the company hopes to submit a full planning application in early March.

Cignella S.r.l.

The Cignella Estate (Cignella -- http://www.cignella.com/en/) The resort is in southern Tuscany approximately 35 minutes south of Siena.   The resort comprises 18 houses and apartments, of which 13 are currently let via web based and local holiday companies to tourists mostly from the UK and Germany.  The remaining 5 properties are townhouses which are yet to be completed.  Holiday sale continue to improve year on year.

At present Ecovista owns 13% of the shares in Cignella SRL and has an option to buy the balance of the equity for EUR4m.

Recent Sale

Willow Cottages Ltd

After the planning appeal was turned down for the car park next to Stansted Airport, the group decided to sell the company Willow Cottage Limited for £400,000 (£100,000 for the shares, £300,000 for the debt). Although this created a loss of £169,941 on the transaction. The Board believes that the funds can be better used to generate value for Shareholders.

Outlook

The Group has continuous deal flow and is currently looking at a number of potential development sites in and around the London, Essex and Hertfordshire area.

The Directors believe there is sustainable growth in selective property transactions in these areas.

The Company intends to launch a EUR10,000,000 Eurobond listed on the GEM exchange in Dublin in the coming months in order to continue to fund further acquisitions in its target market and explore further opportunities in the UK property market.

The Board continues to view the year ahead with confidence.

 

Consolidated Income statement

For the year ended 31 August 2017

		Year to	Period to
		August 2017	August 2016
	Notes	£	£
TURNOVER	1	-	5,142
Cost of sales		-	-
Gross profit		-	5,142
Loss on sale of investment		(169,941)	-
Loss on revaluation of investments		(482,208)	-
Fair value adjustment on investment		2,153	-
Administrative expenses		(219,356)	(222,445)
Operating loss	2	(869,352)	(217,303)
Financial income		-	7,411
Financial expense		(17,954)	(6,645)
Loss before tax		(887,306)	(216,537)
Taxation	3	-	-
Loss for the period		(887,306)	(216,537)
Earnings per share attributable to owners of the parent company
Basic loss per share (pence)		(0.024p)	(0.006p)

There are no items of other comprehensive income.

 

 

Consolidated Statement of financial position

at 31 August 2017

		Group			Company
		2017	2016		2017	2016
	Notes	£	£		£	£
Fixed assets
Goodwill	4	-	1,745		-	-
Investment properties	5	1,347,090	1,165,000		-	-
Investments in subsidiaries	6	-	-		181	269,942
Investments	7	270,739	760,794		270,739	760,794
		1,617,829	1,927,539		270,920	1,030,736
Current assets
Debtors	8	75,092	72,124		1,482,086	931,308
Cash at bank and in hand		124,310	31,822		113,644	30,949
		199,402	103,946		1,595,730	962,257
Creditors: amounts falling due within one year	9	(80,071)	(119,104)		(52,299)	(51,787)
Net current assets		119,331	(15,158)		1,543,431	910,470
Total assets less current liabilities		1,737,160	1,912,381		1,814,351	1,941,206
Creditors: amounts falling due after more than one year		(554,178)	(184,645)		(554,178)	(184,645)
		1,182,982	1,727,736		1,260,173	1,756,561
Capital and reserves
Called up share capital	10	173,190	163,190		173,190	163,190
Share premium account		2,683,045	2,343,045		2,683,045	2,343,045
Equity reserve		14,552	22,000		14,552	22,000
Profit and loss account		(1,687,805)	(800,499)		(1,610,614)	(771,674)
Shareholders Funds		1,182,982	1,727,736		1,260,173	1,756,561

The financial statements were approved by the board of directors on 31 January 2017 and signed on its behalf.

 

L Stokely (Director)

Company No. 05660908 (England and Wales)

 

 

Group statement of changes in equity

For the year ended 31 August 2017

 

	Share capital	Share premium	Equity reserve	Retained earnings	Total
	£	£	£	£	£
1 September 2016	151,730	1,572,105	22,000	(583,963)	1,161,872
Total comprehensive income for the year	-	-	-	(216,536)	(216,536)
Issue of share capital	11,460	770,940	-	-	782,400
31 August 2016	163,190	2,343,045	22,000	(800,499)	1,727,736
Total comprehensive income for the period	-	-	-	(887,306)	(887,306)
Issue of share capital	10,000	340,000	-	-	350,000
Movement in convertible loan notes	-	-	(7,448)	-	(7,448)
31 August 2017	173,190	2,683,045	14,552	(1,687,805)	1,182,982

 

 

1.              Turnover

	2017	2016
	£	£
Rental income from properties in the UK	-	5,142
	-	5,142

 

2.              Operating loss

Operating loss is stated after charging:

	2017	2016
	£	£
Auditors' remuneration - audit fees	10,000	8,500
Directors' emoluments	34,000	120,000

 

3.              Taxation

	2017	2016
	£	£
Loss on ordinary activities before taxation	887,306	216,536
Current tax on profits of the year at standard rate of UK corporation tax of 19.58% (2016 - 20%)	173,735	43,307
Losses carried forward	(173,735)	(43,307)
Tax charge in the income statement	-	-

The group has estimated excess management expenses of £908,534 (2016: £734,799) available for carry forward against future trading profits.

Deferred tax assets arising from these losses at 20% of £887,306 (2016: £216,536) have not been provided in the accounts as recovery is not probable in the foreseeable future.

 

Earnings per share

	2017	2016
Losses, £	887,306	216,536
Weighted average number of shares	3,672,733,282	3,391,061,602
Basic loss per share, pence	0.024	0.006

 

 

 

4.              Goodwill

		2017	2016
		£	£
At the beginning of the period		1,745	1,745
Disposals		(1,745)	-
At the end of the period		-	1,745

Goodwill relates to the acquisition of Willow Cottages Limited.

 

5.              Investment properties

		2017	2016
		£	£
At the beginning of the period		1,165,000	500,000
Additions on acquisition of subsidiaries		682,090	665,000
Disposals of subsidiary - Willow Cottage		(500,000)	-
At the end of the period		1,347,090	1,165,000

 

During the period, Ecovista plc acquired 80% in Start Hill Limited.

 

 

 

6.              Investments in subsidiaries

		2017	2016
		£	£
At the beginning of the period		269,942	269,941
Additions		180	1
Disposals		(269,941)	-
At the end of the period		181	269,942

 

At 31 August 2017 the Company had interests in the following subsidiaries:

		Domicile	% owned	Nature of business
Start Hill Limited		England	80	Property owner
Willside Limited		England	100	Business services
100 Rye Street Limited		England	100	Land owner

 

7.              Investments

		2017	2016
		£	£
Loan issued		118,932	116,779
Equity investments		151,807	644,015
		270,739	760,794

 

a)      Loan issued is an interest free loan to Cignella Srl with an option to acquire all of Cignella's share capital by 31 December 2019, the loan is repayable on 31 December 2019. The loan is carried at amortised cost:

		2017	2016
		£	£
At the beginning of the period		116,779	741,230
Nominal value of the loan issued		-	-
Fair value adjustment		2,153	-
Converted into shares		-	(634,015)
Exchange difference		-	2,153
Finance income		-	7,411
At the end of the period		118,932	116,779

b)     Equity investments represent a 13% stake in Cignella Srl received as a partial loan repayment. The investments are unquoted and stated at cost less impairment.

 

8.              Debtors

	Group			Company
	2017	2016		2017	2016
	£	£		£	£
Due from subsidiaries	-	-		1,416,336	865,558
Loans issued	60,000	60,000		60,000	60,000
Prepayments	5,750	5,750		5,750	5,750
Other debtors	9,342	6,374		-	-
	75,092	72,124		1,482,086	931,308

Loans issued represent loans to Cignella Wellness Limited; the loans are unsecured, interest free and repayable in December 2019.

 

9.              Creditors: amounts falling due within one year

	Group			Company
	2017	2016		2017	2016
	£	£		£	£
Trade payables	33,005	43,832		33,005	31,305
Loans payable	464	53,200		-	-
Other creditors	46,602	22,072		19,294	20,482
	80,071	119,104		52,299	51,787

10.          Share capital

	2017		2016
	Number	£	Number	£
Ordinary shares of £0.00001 each, issued and fully paid	4,590,315,699	45,903	3,590,315,700	35,903
Deferred shares of £0.00099 each	128,572,167	127,287	128,572,167	127,287
		173,190		163,190

On 01 August 2017, 571,428,571 new ordinary shares were subscribed for at £0.00035 and a further 428,571,428 new ordinary shares were subscribed for at £0.00035, both to fund future property acquisitions.

 

11.          Transactions with related parties

There were no related party transactions during the year apart from the directors' remuneration disclosed in note 2.

12.          Ultimate Controlling Party

In the opinion of the Directors there is no controlling party at the period end.

13.          Post balance sheet events

There have been no material events after the reporting date.