GlobalCapital plc - Interim Results

Thursday, September 1st, 2016

On 31 August 2016, GlobalCapital plc published its interim financial statements covering the six months ended 30 June 2016.

Performance Overview

During the period under review, the GlobalCapital Group reported a pre-tax profit of €1.88 million compared to €1.18 million in the first six months of 2015. The improvement in profitability is largely attributable to the 28.8% increase in the profit of the ‘Agency and brokerage services’ segment to €0.61 million (which mainly comprises the Health Insurance Agency) as the segment’s income improved whilst its cost base was reduced. To a lesser extent, the results were also boosted by a lower loss in the ‘Property services’ segment of €0.08 compared to a loss of €0.11 million in the six months ended 30 June 2015. The Group’s profitability was also boosted by a 24.6% reduction in other corporate expenses to €0.36 million.

On the other hand, the Group’s ‘Business of Insurance’ including the Group’s life insurance arm registered a 13.4% drop in the segment’s profitability to €0.32 million. The announcement further explained that the Group’s life assurance subsidiary incurred a net unrealised fair value loss of €0.08 million compared to a net gain of €1.13 million in the first half of 2015 whilst investment income was stable across both periods. The performance of the ‘Investment & Advisory Services’ also deteriorated with the segment’s profitability sliding by 94.8% to just €7,169 on the back of a slowdown in new business and the adverse volatility in international markets which were only partially offset by the cost containment efforts.

After accounting for a tax expense of €1 million (H1 2015: €0.7 million), the Group reported a net profit of €0.87 million compared to €0.48 million in the first six months of 2015. This translates into an earnings per share of €0.037 (H1 2015: €0.029).

The Statement of Financial Position as at 30 June 2016 shows a 4.3% increase in total assets to €105.37 million compared to the corresponding figures as at 31 December 2015. On the other hand, total liabilities contracted by 1.5% to €92.25 million. Overall, the Group’s equity base expanded by 78.2% to €13.1 million largely reflecting the €4.7 million proceeds from the rights issue (net of expenses) undertaken earlier this year. This translates into a net asset value of €0.4373 (Dec 2015: €0.56).

Capital Raising Events

The Directors also noted that the Group had successfully raised €10 million in a new 5% unsecured bond maturing in 2021 to meet the repayment of the previously matured bond.

Furthermore, the Directors noted that the shareholders approved an increase in the authorised share capital to 85 million ordinary shares during an Extraordinary General Meeting held on 22 July 2016. The Directors intend to increase the issued share capital of the Company, subject to regulatory approval, in order to raise additional equity to meet general financing requirements and to repay the Company’s new unsecured bonds in 2021.

On the basis of the above, the Directors stated that there are no longer any material uncertainties that may cast significant doubt about the Company’s ability to continue as a going concern.

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GlobalCapital plc – Interim Financial Report covering the six months ended 30 June 2016.

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