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Interim Results

30th Sep 2024 07:00

RNS Number : 1252G
Jade Road Investments Limited
30 September 2024
 

JADE ROAD INVESTMENTS LIMITED

INTERIM CONSOLIDATED RESULTS FOR THE SIX MONTHS ENDED 30 JUNE 2024

Jade Road Investments Limited (AIM: JADE), the London quoted company focused on seeking the best risk-adjusted returns globally, is pleased to announce its interim results for the six months ended 30 June 2024.

Financial Highlights:

· Total interest income decreased to US$0.01 million (H1 2023: US$0.59 million).

· Net loss of $0.4 million (H1 2023: US$1.4 million loss).

· Consolidated basic / diluted loss per share of US$ 0.11 cents (H1 2023: loss per share US$ 0.75 cents).

· Consolidated NAV at 30 June 2024 decreased to a deficit of US$ (0.35) million/GBP (0.28) million (31 December 2023: US$0.05 million/GBP 0.04 million).

· NAV per share at 30 June 2024 (0.10) cents ((0.08) pence) (31 December 2023: 0.02 cents / 0.01 pence).

· Period end cash position of US$ 0.06 million (31 December 2023 : US$ 0.08 million).

· Post period issue of Convertible loan note raising £80,000

 

FOR FURTHER INFORMATION, PLEASE CONTACT:

Jade Road Investments Limited

+44 (0) 778 531 5588

John Croft

Zeus Capital Limited - Nominated Adviser

+44 (0) 203 829 5000

James Joyce

Andrew de Andrade

Hybridan LLP - Corporate Broker

+44 (0) 203 764 2341

Claire Noyce

Lionsgate Communications - Communications Adviser

+44 (0) 779 189 2509

Jonathan Charles

 

 

 

About Jade Road Investments

Jade Road Investments Limited is quoted on the AIM Market of the London Stock Exchange and is committed to providing shareholders with attractive uncorrelated, risk-adjusted long-term returns from a combination of realising sustainable capital growth and delivering dividend income.

 

 

Chairman's Statement

The Company's Results for the period to 30 June 2024 fully reflect the status of the Company following the disposal of its legacy assets described in our 2023 Annual Report. At this juncture the Company effectively became a shell company seeking an acquisition via a Reverse Take Over (RTO) and/or strategic partnerships to deliver future growth.

 

Since the end of this period the Company announced a strategic partnership with MBM Ltd. It is envisaged that the partnership will deliver investment opportunities for Jade in conjunction with its Investment Manager Heirloom Investment Management LLC. The partnership was announced on 16 August 2024 which can be viewed via the link below:

 

https://www.londonstockexchange.com/news-article/JADE/strategic-partnership-with-mbm-limited/16623422

 

As part of the agreement, MBM Ltd. will provide up to £300,000 in new capital to Jade via a Convertible Loan Note (CLN). The first tranche of £80,000 under the CLN has been received by the Company.

 

The Company's working capital remains constrained, however management is managing creditors and seeking further finance to deliver its strategy.

Whilst the relationship with MBM Ltd. is embryonic, I am encouraged by the cooperation and support experienced to date and expect to be able to announce more details in the coming months.

 

The principal assets as of 30 June 2024 are detailed below:

 

Principal assets

Valuation at 31 December 2023

US$ million

Transfer US$ million

Equity investment/ other movement US$ million

Valuation at 30 June 2024

US$ million

 

Heirloom Investment Fund and Heirloom Litigation Funding

0.5

-

(0.5)

-

 

Investments available for sale

4.3

(4.3)

-

-

 

Corporate debt

(3.8)

3.8

-

-

 

Other liabilities

(1.0)

0.5

0.1

(0.4)

 

Cash

0.1

-

-

0.1

 

 

Total Net Asset Value

0.1

-

(0.3)

(0.3)

 

 

 

John Croft

 

Chairman

CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

 

 

 

 

Six months ended

 

Year ended

 

 

 

 

Note

 

30 June

2024

Unaudited

US$000

30 June

2023

Unaudited

US$000

31 December

2023

Audited

US$000

 

 

 

 

Income from unquoted financial assets

 

 

 

-

588

1,090

Finance income from loans

 

 

 

7

-

545

Loss on disposal on disposal

 

 

 

-

-

(1)

 

 

 

 

 

Gross portfolio income

 

4

 

7

 

588

1,634

 

 

 

 

 

Fair value changes on financial assets at fair value through profit or (loss)

 

 

 

-

 

(101)

(17,295)

Foreign exchange on unquoted financial assets at fair value through profit or (loss)

 

 

 

(2)

 

-

-

Investment provisions

 

4

 

-

 

(588)

-

 

 

 

 

 

Net portfolio income/(loss)

 

4

 

5

 

(101)

(15,661)

 

 

 

 

 

Management fees

 

14

 

-

 

(376)

(350)

Incentive fees

 

 

 

-

 

-

43

Administrative expenses

 

5

 

(401)

 

(639)

(1,171)

 

 

 

 

 

 

Operating loss

 

 

 

(396)

 

(1,116)

(17,139)

 

 

 

 

 

Finance expense

 

 

 

(5)

 

(273)

(577)

 

 

 

 

 

Loss before taxation

 

 

 

(401)

 

(1,389)

(17,716)

 

 

 

 

 

 

Taxation

 

6

 

-

 

-

-

 

 

 

 

 

 

Loss and total comprehensive loss for the period

 

 

 

(401)

 

(1,389)

(17,716)

 

 

 

 

 

Loss per share

 

8

 

 

 

Basic

 

 

 

(0.11) cents

 

(0.75) cents

(5.94) cents

 

 

 

 

 

Diluted

 

 

 

(0.11) cents

 

(0.75) cents

(5.94) cents

 

 

 

 

 

 

 

 

 

 

The results above relate to continuing operations.

 

 

 

 

CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION

 

 

Note

 

30 June

2024

Unaudited

US$000

 

30 June

2023

Unaudited

US$000

 

31 December

2023

Audited

US$000

Assets

 

 

 

 

Unquoted financial assets at fair value through profit or loss

 

9

 

-

18,708

500

Loans and other receivables

 

10

 

26

1,721

19

Investments held for sale

 

 

 

-

-

4,290

Cash and cash equivalents

 

 

 

59

100

77

Total assets

 

 

 

85

20,529

4,886

 

 

 

 

 

Liabilities

 

 

 

 

Other payables and accruals

 

 

 

434

1,209

991

Current liabilities

 

 

 

434

1,209

991

 

 

 

 

 

Loans & borrowings

 

11

 

-

3,873

3,843

Total liabilities

 

 

 

434

5,082

4,834

 

 

 

 

 

 

 

 

Net assets

 

 

 

(349)

15,447

52

 

 

 

 

 

Equity and reserves

 

 

 

 

 

Share capital

 

12

 

151,686

150,615

151,686

Treasury share reserve

 

12

 

(754)

 

 

(615)

(754)

Share based payment reserve

 

 

 

2,936

2,936

2,936

Accumulated losses

 

 

 

(154,217)

(137,489)

(153,816)

Total equity and reserves attributable to owners of the parent

 

 

 

(349)

15,447

52

 

 

 

 

 

 

 

 

 

 

 

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

 

 

 

Share

capital

US$000

 

Treasury share reserve

US$'000

Share

based

payment

reserve

US$000

 

Accumulated losses

US$000

 

Total

US$000

 

Group balance at 1 January 2023

148,903

(615)

2,936

(136,100)

15,124

Loss for the period

-

-

-

(1,389)

(1,389)

Other comprehensive income

-

-

-

-

-

Total comprehensive loss for the period

-

-

-

(1,389)

(1,389)

Issue of shares net of issue costs

1,712

-

-

1,712

Group balance at 30 June 2023

 

150,615

 

(615)

2,936

 

(137,489)

 

15,447

 

Loss for the period

-

-

-

(16,327)

(16,327)

Other comprehensive income

-

-

-

-

-

Total comprehensive loss for the period

-

-

-

(16,327)

(16,327)

Issue of shares net of issue costs

1,071

-

-

-

1,071

Repurchase of shares

-

(139)

-

-

(139)

Group balance at 31 December 2023 and 1 January 2024

151,686

(754)

2,936

(153,816)

52

Loss for the period

-

-

-

(401)

(401)

Total comprehensive loss for the period

-

-

-

(401)

(401)

Group balance at 30 June 2024

 

151,686

 

(754)

2,936

 

(154,217)

 

(349)

 

 

 

 

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

 

 

Six months ended

 

Year ended

 

 

30-Jun

2024

Unaudited

US$'000

30-Jun

2023

Unaudited

US$'000

31 December

2023

Audited

US$'000

Cash flow from operating activities

 

 

 

 

 

 

 

(Loss) / Profit before taxation

 

(401)

 

(1,389)

(17,716)

Adjustments for:

 

 

 

Finance income

 

(7)

 

-

(545)

Finance expense

 

7

 

273

577

Exchange loss

 

-

 

84

47

Fair value changes on unquoted financial assets at fair value through profit or loss

 

-

 

19

13,938

Fair value changes on loans and receivables at fair value through profit or loss

 

-

 

-

2,236

Realised (gain) on disposal of investments

 

-

 

-

-

Increase/(Decrease) in other receivables

 

(7)

 

(35)

13

Increase/(Decrease) in other payables and accruals

 

(110)

 

(127)

 

(323)

 

 

 

Net cash used in operating activities

 

(518)

 

(1,175)

(1,773)

 

 

 

 

Cash flow from investing activities

 

 

 

Sale proceeds of unquoted financial assets at fair value through profit or loss

 

500

 

-

250

Purchase of unquoted financial assets at fair value through profit and loss

 

-

 

(500)

(750)

 

 

 

Net cash generated from investing activities

 

500

 

(500)

(500)

 

 

 

 

Issue of Shares

 

-

 

1,712

2,763

Purchase of treasury shares

 

-

 

(259)

(139)

Payment of interest on loans and borrowings

 

-

 

(594)

Net cash generated used in financing activities

 

-

 

1,453

2,030

Net outflow in cash & cash equivalents during the period

 

(18)

 

(222)

(243)

Cash and cash equivalents and net debt at the beginning of the period

 

77

 

321

321

Foreign exchange on cash balances

 

-

 

1

(1)

Cash & cash equivalents and net debt at the end of the period

 

59

 

100

77

 

 

 

 

 

NOTES TO THE FINANCIAL INFORMATION

 

1. CORPORATE INFORMATION

 

The Company is a limited company incorporated in the British Virgin Islands ("BVI") under the BVI Business Companies Act 2004 on 18 January 2008. The address of the registered office is Commerce House, Wickhams Cay 1, P.O. Box 3140, Road Town, Tortola, British Virgin Islands VG 1110 and its principal place of business is 19/F., CMA Building, 64 Connaught Road Central, Central, Hong Kong.

 

The Company is quoted on the AIM Market of the London Stock Exchange (code: JADE) and the Quotation Board of the Open Market of the Frankfurt Stock Exchange (code: 1CP1).

 

The principal activity of the Company is investment holding. The Company is principally engaged in investing primarily in unlisted assets in the areas of mining, power generation, health technology, telecommunications, media and technology ("TMT"), and financial services or listed assets driven by corporate events such as mergers and acquisitions, pre-IPO, or re-structuring of state-owned assets.

 

The condensed consolidated interim financial information was approved for issue on 29 September 2023.

 

2. BASIS OF PREPARATION

 

The condensed consolidated interim financial information has been prepared in accordance with International Accounting Standard ("IAS") 34 "Interim Financial Reporting" and is presented in US Dollars.

 

3. PRINCIPAL ACCOUNTING POLICIES

 

The condensed consolidated interim financial information has been prepared on the historical cost convention, as modified by the revaluation of certain financial assets and financial liabilities at fair value through the statement of comprehensive income.

 

The accounting policies and methods of computation used in the condensed consolidated financial information for the six months ended 30 June 2024 are the same as those followed in the preparation of the Group's annual financial statements for the year ended 31 December 2023 and are those the Group expects to apply into financial statements for the year ending 31 December 2024. There was no impact on the Company's accounting policies as a result of any new or amended standards which became applicable for the current accounting period.

 

The seasonality or cyclicality of operations does not impact the interim financial information.

 

4. SEGMENT INFORMATION

 

The operating segment has been determined and reviewed by the Board to be used to make strategic decisions. The Board considers there to be a single business segment, being that of investing activity.

 

The reportable operating segment derives its revenue primarily from debt investment in several companies and unquoted investments.

 

The Board assesses the performance of the operating segments based on a measure of adjusted Earnings Before Interest, Taxes, Depreciation and Amortisation ("EBITDA"). This measurement basis excludes the effects of non-recurring expenditure from the operating segments such as restructuring costs. The measure also excludes the effects of equity-settled share-based payments and unrealised gains/losses on financial instruments.

 

 

The segment information provided to the Board for the reportable segment for the periods are as follows:

Six months ended

Year ended

30 June

2024

30 June

2023

31 December 2023

US$000

US$000

US$000

 

Income on unquoted financial assets

-

588

1,090

Financial income on loans & receivables

7

-

545

Gain on disposal

-

-

(1)

Gross portfolio income

7

588

1,634

 

Expected credit loss provision

-

(588)

-

Foreign exchange

(2)

(101)

(43)

Equity fair value adjustments

-

-

(15,029)

 

Portfolio income through profit or loss

5

(101)

(13,438)

 

Net assets:

 

 

FMHL

-

5,252

-

Meize

-

8,800

-

DocDoc

-

2,806

-

ICG

-

1,335

-

Infinity TNP

-

-

-

Heirloom Investment Fund

-

500

500

Other

-

15

-

Unquoted assets at fair value through profit or loss

-

18,708

500

Loans and other receivables at fair value through the profit or loss (third party)

26

1,721

19

Investments held for sale

-

-

4,290

Cash

59

100

77

Liabilities

(434)

(5,082)

(4,834)

 

Net assets

(349)

15,447

52

 

 

On 1 May 2024 the transfer of the 'Legacy Assets' consisting of the holdings in DocDoc Pte Limited, Future Metal Holdings Limited, Meize Energy Industrial Holdings Limited, Infinity Capital Group Infinity TNP, Project Nicklaus and Fook Lam Moon Holdings was approved by the shareholders at the annual general meeting. The corporate bond issued by the Group was also transferred. All assets and liabilities have been transferred to an independent third-party company which is not owned or controlled by the Group. The Group received no consideration in return for the transfer. These assets had been included as held for sale in the financial statements dated 31 December 2023.

 

 

The impact of fair value changes on the investments in the portfolio are as follows:

 

Six months ended

Year ended

30 June

2024

30 June

2023

31 December 2023

US$000

US$000

US$000

 

Income on unquoted financial assets through profit or loss

-

588

1,090

 

Equity fair value adjustments:

 

- FMHL

-

-

(1,538)

- Meize

-

-

(8,801)

- DocDoc

-

-

(3,016)

- Infinity Capital Group

-

-

(1,659)

- Other

-

-

(15)

-

-

(15,029)

 

Expected credit loss provision:

 

- ICG

-

(112)

-

- FMHL

-

(300)

-

- DocDoc

-

(176)

-

Foreign exchange on unquoted financial assets at fair value through profit or loss

-

(19)

2

 

Total fair value changes on financial assets at fair value through profit or loss

-

(19)

(13,937)

 

5. ADMINISTRATIVE EXPENSES

Six months ended

Year ended

30 June

2024

30 June

2023

31 December 2023

US$000

US$000

US$000

 

Staff costs

183

183

321

Professional fees

171

417

752

Travel expenses

7

14

19

Insurance

11

11

22

Loss on redemption of assets

26

-

15

Foreign exchange

-

6

8

IT costs

-

1

1

Marketing

-

-

3

Bank charges

3

6

11

Other costs

-

3

20

401

639

1,171

 

6. TAXATION

 

The Company is incorporated in the BVI and Hong Kong. The Company is not subject to any income tax in the BVI. The Company does not engage in any business activities or generate income in Hong Kong; therefore it is not subject to taxation in Hong Kong.

 

7. DIVIDEND

 

The Board does not recommend the payment of an interim dividend in respect of the six months ended 30 June 2024 (30 June 2023: Nil).

 

 

8. LOSS PER SHARE

 

The calculation of the basic and diluted earnings per share attributable to owners of the Group is based on the following:

Six months ended

Year ended

30 June

2024

US$000

30 June

2023

US$000

31 December

2023

US$000

Numerator

Basic/Diluted:

Net loss

(401)

(1,389)

(17,716)

Number of shares

'000

'000

'000

Denominator

Basic:

Number of / Weighted average shares

350,713

185,008

298,477

Dilutive effect of warrants

-

-

-

Diluted:

Adjusted weighted average shares

350,713

185,008

298,477

 

 

Loss per share

 

Basic (cents)

(0.11)

(0.75)

(5.94)

Diluted (cents)

(0.11)

(0.75)

(5.94)

 

 

Warrants issued to the Investment Manager were anti-dilutive and therefore there is no impact on the weighted average shares in issue. No warrants were issued during the current period ending 30 June 2024 (2023: 1,002,333).

 

9. UNQUOTED FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS

 

30 June

2024

US$000

30 June

2023

US$000

31 December

2023

US$000

 

At the beginning of the period

500

18,227

18,227

Fair value changes through profit and loss

-

569

(13,937)

Transferred to held for sale

-

-

(4,290)

Expected credit loss provision through profit and loss

-

(588)

-

Realised gain

-

-

-

Disposals

(500)

-

(250)

Additional investment

-

500

750

 

At the end of the period

-

18,708

500

 

 

 

10. LOANS AND OTHER RECEIVABLES AT FAIR VALUE THROUGH PROFIT OR LOSS

 

 

30 June

2024

US$000

30 June

2023

US$000

31 December

2023

US$000

 

 

At the beginning of the period

 

19

1,769

-

Other receivables

 

7

-

19

Fair value changes through profit and loss

-

(48)

-

 

 

At the end of the period

 

26

1,721

19

 

Note

30 June

2024

US$000

30 June

2023

US$000

31 December

2023

US$000

 

 

 

Other receivables

26

1,721

19

 

Total loans and borrowings

26

1,721

19

 

 

 

The breakdown of Loans is as follows:

30 June

2024

US$000

30 June

2023

US$000

31 December

2023

US$000

 

Loan principal

-

26,500

-

Accrued PIK interest

-

2,248

532

Accrued interest payable in cash

-

3,070

-

Fair Value Adjustments - Principal

-

(26,500)

-

Fair Value Adjustments - Accrued Interest

-

(5,318)

(532)

Net loans receivable

-

-

-

 

 

 

 

11. LOANS AND BORROWINGS

 

30 June

2024

US$000

30 June

2023

US$000

31 December

2023

US$000

Corporate debt

-

3,873

3,843

 

Total loans and borrowings

-

3,873

3,843

 

The movement in loans and borrowings is as follows:

30 June

2024

US$000

30 June

2023

US$000

31 December

2023

US$000

Opening balance

3,843

3,859

3,859

Borrowing costs amortised

-

-

-

Interest expense accrued

-

273

577

Payment of interest liability

-

(259)

(594)

Transferred out

(3,843)

-

-

 

Closing balance

-

3,873

3,843

 

12. SHARE CAPITAL

 

Number of

Shares

Amount

US$000

Issued share capital excluding treasure shares at 31 December 2023

350,713,130

150,932

Shares issues in the period

-

-

Issued share capital excluding treasure shares at 30 June 2024

350,713,130

150,932

Consisting of:

Authorised, called-up and fully paid ordinary shares of no-par value each at 30 June 2024

358,193,134

151,686

Authorised, called-up and fully paid ordinary shares of no-par value held as treasury shares by the Company at 30 June 2024

(7,480,004)

(754)

 

(i) Under the BVI corporate laws and regulations, there is no concept of "share premium," and all proceeds from the sale of no-par value equity shares are deemed to be share capital of the Company.

 

13. FINANCIAL INSTRUMENTS

 

Financial assets

As at

30 June

2024

 

 

As at

30 June

2023

 

 

As at

31 December

2023

 

 

US$'000

 

US$'000

 

US$'000

 

 

 

 

 

 

 

Unquoted financial assets at fair value

 

-

 

18,708

500

 

Other receivables at fair value

-

 

1,659

-

 

Cash and cash equivalents at amortised cost

 

59

 

100

77

 

 

 

 

 

Financial assets

 

59

 

20,467

577

 

 

 

Financial liabilities

As at

30 June

2024

 

 

As at

30 June

2023

 

As at

31 December

2023

US$'000

 

US$'000

 

US$'000

 

Other payables and accruals at amortised cost

434

1,209

991

Corporate debt at amortised cost

-

3,873

3,843

 

Financial liabilities

434

5,082

4,834

 

Financial assets at fair value through profit or loss

 

The following table provides an analysis of financial instruments that are measured subsequent to initial recognition at fair value, grouped into Level 1, 2 or 3 based on the degree to which the fair value is observable:

 

Note

As at

30 June 2024

US$000

As at

30 June

2023

US$000

As at

31 December

2023

US$000

 

 

Level 3

 

 

Unquoted financial assets at fair value

9

-

18,708

500

Other receivables at fair value

10

26

1,721

-

 

 

 

26

20,429

500

 

 

 

There is no transfer between levels in the current period. Carrying values of all financial assets and liabilities are approximate to fair values. The value of level 3 investments has been determined using the yield capitalisation (discounted cash flow) method.

 

 

14. RELATED PARTY TRANSACTIONS

 

During the period under review, the Group entered into the following transactions with related parties and connected parties:

 

Notes

30 June

 2024

US$000

30 June

 2023

US$000

31 December

 2023

US$000

 

 

Remuneration payable to Directors

 

183

183

321

Re-imbursement of expenses to directors

 

-

-

26

 

 

Heirloom Investment Management LLC

 

 

Administration Fee

 

-

-

47

 

 

Harmony Capital

 

 

Management fee

 

-

376

350

Incentive fee

 

-

-

(43)

 

 

Amount due to

Harmony Capital at period end

 

745

910

745

Heirloom Investment Management LLC

 

-

-

16

Directors

 

68

-

75

 

 

 

15. EVENTS AFTER THE REPORTING PERIOD

 

On 11 July 2024 Dr Lee George Lam resigned from his role as non-executive director.

 

On 16 August 2024 Jade announced a strategic partnership with MBM Limited. MBM Limited will provide new capital in the form of convertible loan notes (CLN) of up to £300,000 and will introduce potential new investments to Jade. The first tranche of the CLN, amounting to £80,000 has been received .

 

 

16. COPIES OF THE INTERIM REPORT

 

The interim report is available for download from www.jaderoadinvestments.com.

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