Company Announcements

Half-year Report

Source: RNS
RNS Number : 2768Y
ARGO Group Limited
29 July 2024
 

 

 

 

Argo Group Limited

("Argo" or the "Company")

 

 

Interim Results for the six months ended 30 June 2024

 

Change of name of nominated adviser and broker

 

Argo today announces its interim results for the six months ended 30 June 2024.

 

Key highlights for the six months period ended 30 June 2024

 

This report sets out the results of Argo Group Limited (the "Company") and its subsidiaries (collectively "the Group" or "Argo") covering the six months ended 30 June 2024.

 

-     Revenues US$4.6 million (six months to 30 June 2023: US$1.5 million)

-     Operating profit US$2.4 million (six months to 30 June 2023: operating loss US$0.7 million)

-     Profit before tax US$2.5 million (six months to 30 June 2023: profit before tax US$0.1 million)

-     Net assets US$7.3 million (31 December 2023: US$5.1 million)

 

 

Commenting on the results and outlook, Kyriakos Rialas, Chief Executive of Argo said:

 

"We are pleased with the results of the Argo Group for the first six months of 2024 which were boosted by positive performance of The Argo Fund Limited as well as fee income from the management of a Romanian shopping mall that enabled Argo Property Management Srl to repay a previously fully provided loan to its parent.  The months of May and June 2024 were subdued with outperformers such as Argentina giving back some of the earlier months' profit.  The Argo Fund Limited is currently trading near its high watermark and as stated before, if this is maintained until year end some performance fees may also crystallise."

 

Change of Name of Nominated Adviser and Broker

The Company also announces that its Nominated Adviser and Broker has changed its name to Panmure Liberum Limited following completion of its own corporate merger.

 

 

 

 

 

Enquiries

 

Argo Group Limited

Andreas Rialas

020 7016 7660

 

Panmure Liberum Limited

Atholl Tweedie

020 7886 2500

 

This announcement contains inside information for the purposes of Article 7 of the Market Abuse Regulation (EU) No 596/2014 as it forms part of UK domestic law by virtue of the European Union (Withdrawal) Act 2018.

 

CHAIRMAN'S STATEMENT

 

Key highlights for the six months ended 30 June 2024

 

This report sets out the results of Argo Group Limited (the "Company") and its subsidiaries (collectively "the Group" or "Argo") covering the six months ended 30 June 2024.

 

-     Revenues US$4.6 million (six months to 30 June 2023: US$1.5 million)

-     Operating profit US$2.4 million (six months to 30 June 2023: operating loss US$0.7 million)

-     Profit before tax US$2.5 million (six months to 30 June 2023: profit before tax US$0.1 million)

-     Net assets US$7.3 million (31 December 2023: US$5.1 million)

 

The Group and its investment objective

 

Argo's investment objective is to provide investors with absolute returns in the funds that it manages by investing in multi strategy investments in emerging markets.

 

Argo was listed on the AIM market in November 2008 and has a performance track record dating back to 2000.

 

Business and operational review

 

For the six months ended 30 June 2024 the Group generated revenues of US$4.6 million (six months to 30 June 2023: US$1.5 million) with management fees accounting for US$1.0 million (six months to 30 June 2023: US$1.1 million). During the period the Group earned a one-off bonus fee of US$3.2 million upon the sale of an asset in Romania.

 

Total operating costs for the period, ignoring bad debt provisions, are US$2.0 million compared to US$1.8 million for the six months to 30 June 2023. The Group has provided against management fees of US$0.2 million due from the Designated share class in The Argo Fund ("TAF") (six months to 30 June 2023: US$0.4 million). In the Directors' view, these amounts are fully recoverable. However, the Directors have concluded that it would only be appropriate to recognise income without provision from these investment management services once a liquidity event occurs in this share class.

 

Overall, the financial statements show an operating profit for the period of US$2.4 million (six months to 30 June 2023: operating loss US$0.7 million) and a profit before tax of US$2.5 million (six months to 30 June 2023: profit before tax of US$0.1 million).  Net profit on investments was US$0.1 million (six months to 30 June 2023: net profit on investments US$0.3 million) and interest income was US$0.00 million (six months to 30 June 2023: US$0.5 million).

 

At the period end, the Group had net assets of US$7.3 million (31 December 2023: US$5.1 million) and net current assets of US$7.0 million (31 December 2023: US$4.8 million) including cash reserves of US$5.1 million (31 December 2023: US$1.3 million).

 

Net assets include investments in The Argo Fund ("TAF") at fair value of US$2.7 million (31 December 2023: US$3.7 million).

 

At the period end TAF owed the Group total fees of US$2.9 million (31 December 2023: US$2.8 million). At 30 June 2024, a provision for US$2.8 million was made against this amount as the timing of the receipt of the fees from the designated share class in TAF is unknown.

 

TAF ended the period with Assets under Management ("AUM") at US$100.1 million (31 December 2023: US$102.0 million). The current level of AUM remains below that required to ensure sustainable profits on a recurring management fee basis, in the absence of performance fees. This has necessitated an ongoing review of the Group's cost basis. Nevertheless, the Group has ensured that the operational framework remains intact and that it retains the capacity to manage additional fund inflows as and when they arise.

 

The average number of permanent employees of the Group for the six months to 30 June 2024 was 20 (30 June 2023: 20).

 

Fund performance

The Argo Funds

Fund

Launch

date

30 June

2024

6 months

30 June

2023

6 months

2023

year

total

Since inception

Annualised  performance

Sharpe

ratio

 

Down

months

 

 

%

%

%

%

CAGR %

 

 

The Argo Fund - A class

Oct-00

1.42

1.46

7.83

244.68

6.13

0.38

98 of 285

The Argo Fund - X2 class

Feb-21

9.08

-1.16

30.34

32.25

8.53

0.35

15 of 41

The Argo Fund - Designated Investment Class

Jan-20

 

-7.08

1.96

-35.84

12.77

N/A

N/A

N/A

 

The global outlook has improved in the first half of 2024 despite some disappointing news along the way. Real GDP growth expectations for the United States have increased and the jobs market has remained robust, but inflation has been stickier than previously expected as nominal wage growth remained brisk. China took additional, albeit still insufficient, steps to address the residential real estate crisis that has sapped consumer confidence. The Eurozone appears to have stabilised whilst Japan surprised on the upside, with higher-than-expected wage increases potentially signalling the beginning of a virtuous domestic wage-price feedback loop. This positive trend has been sustained despite ongoing crises in Ukraine and the Middle East and trade tensions between the West and China. There were also elections held in the first half of 2024 in a number of key emerging markets namely India, South Africa, Mexico and Indonesia and of course there is the US presidential vote to look forward to in November.

Equity markets delivered broad-based gains. The US advance has been narrowly led by a short list of AI and tech beneficiaries; the S&P 500 Index rose by 15% in the six months to end-June, but the median stock is up just 4%, and a single stock, Nvidia, accounted for about a third of the year-to-date S&P 500 Index rise. Other international stocks also performed well, with the MSCI World Index increasing by 10.8% and the MSCI Emerging Markets Index rising by 6.1%.

US Treasury 10-year yields started the period under review at 3.9%, peaked at 4.7%, but fell to 4.4% at end-June as weaker inflation numbers triggered hopes for earlier rate cuts, reflecting data variability and market dynamics. The rate cut cycle is seen as postponed rather than cancelled. Other major markets' 10-year yields were mostly unchanged, except Japan's, which rose to 1% for the first time in 11 years as the Bank of Japan (BOJ) gradually exits negative interest rates. The first week of June saw central bank divergence, with several banks beginning their easing cycles while the Fed is expected to remain on hold. The Bank of Canada, European Central Bank, and Swiss National Bank each cut rates by 25 bps, citing an improved inflation outlook.

The policy divergence has continued to support the U.S. dollar. The Japanese yen significantly underperformed, exceeding 161 against the dollar for the first time since 1986, driven by the BOJ's reluctance to tighten monetary policy. At the same time, a number of central banks in emerging market economies remain cautious in regard to cutting rates owing to external risks triggered by changes in interest rate differentials and associated depreciation of those economies' currencies against the dollar.

Emerging market fundamentals remain resilient against a backdrop of firm global growth, but uncertainty over the timing of easing cycles may limit the performance of EM assets. While Asian growth is projected to be healthy, growth is picking up from a low base in Latin America, and in Europe, the Middle East and Africa (EMEA).

The NAV of the Class A shares of the TAF increased by 1.42 % in the first half of 2024, broadly similar to the same period last year. The fund benefited from the renewed confidence in Argentina following the election of President Milei, though the sovereign bonds ended the period off their recent highs and have remained volatile. There were also positive contributions from long positions in other sovereign dollar bonds including Zambia, which has just completed a debt restructuring. The main detractors were the macro strategies and in particular the rates trades in Brazil and Mexico. Class A shares issued by TAF continue to be invested in diversified sovereign and corporate debt and macro positions which seek to capture alpha through long and short investment. In addition, there are other share classes within the TAF master/feeder structure which offer investors exposure to a distressed debt portfolio (Class X2, which gained 9% in the first half); macro strategies (Class X3) and also special situations where the timeline to investment realisation is likely to be longer.

Dividends and share purchase programme

The Group did not pay a dividend during the current or prior period. The Directors intend to restart dividend payments as soon as the Group's performance provides a consistent track record of profitability.

 

Outlook

The Board remains optimistic about the Group's prospects based on the transactions in the pipeline and the Group's initiatives to increase AUM. A significant increase in AUM is still required to ensure sustainable profits on a recurring management fee basis and the Group is well placed with capacity to absorb such an increase in AUM with negligible impact on operational costs.

 

Boosting AUM will be Argo's top priority in the next six months. The Group's marketing efforts continue to focus on TAF which has a 23-year track record as well as identifying acquisitions that are earnings enhancing.

 

Over the longer term, the Board believes there is significant opportunity for growth in assets and profits and remains committed to ensuring the Group's investment management capabilities and resources are appropriate to meet its key objective of achieving a consistent positive investment performance in the emerging markets sector.

 

 

CONDENSED CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER

COMPREHENSIVE INCOME

FOR THE SIX MONTHS ENDED 30 JUNE 2024

 

 


Six months

 

Six months

 

 


Ended


ended


 


30 June


30 June


 


2024


2023

 



Note

US$'000


US$'000








Management fees


990


1,111


Performance fees


-


-


Other income


3,646


400


Revenue


4,636


1,511




 


 


Legal and professional expenses


(115)


(119)


Management fees payable


(147)


(141)


Operational expenses


(417)


(402)


Employee costs


(1,271)


(1,108)


Bad debt provision

9, 10

(201)


(367)


Foreign exchange (loss)/profit


(11)


(9)


Depreciation

7

(50)


(48)


Operating profit/(loss)


2,424


(683)




 


 


Interest income


8


496


Realised and unrealised gain on investments


86


308


Profit on ordinary activities before taxation


2,518


121




 


 


Taxation

5

(350)


    -      


Profit/(loss) for the period after taxation attributable to members of the Company

6

2,168


121


Other comprehensive income


 


 


Items that may be reclassified subsequently to profit or loss:






Exchange differences on translation of foreign operations


(24)


6


Total comprehensive income for the period


2,144


127

 

 


 

 

 

 

 


Six months

 

Six months

 

 


Ended


Ended

 

 


30 June


30 June

 

 


2024


2023

 

 


US$


US$

 

Earnings per share (basic)

6

0.056


0.003


Earnings per share (diluted)

6

0.051


0.003











 

 

CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION

AS AT 30 JUNE 2024

 


30 June

 

31 December

 

 


2024

 

 

2023

 

 


Note

US$'000

 

US$'000

 

Assets



 


 

Non-current assets



 


 

Land, fixtures, fittings and equipment

7

468

 

526

 

Loans and advances receivable

10

89

 

98

 

Total non-current assets


557

 

624

 

 


 

 

 

 

Current assets


 

 

 

 

Financial assets at fair value through profit or loss

8

2,729

 

3,711


Loan and advances receivable

10

9

 

-


Trade and other receivables

9

289

 

400


Cash and cash equivalents


5,092

 

1,333


Total current assets


8,119

 

5,444


 


 

 

 

 

Total assets


8,676

 

6,068

 

 


 

 

 

 

Equity and liabilities


 

 

 

 

 


 

 

 

 

Equity


 

 

 

 

Issued share capital

11

390

 

390

 

Share premium


25,353

 

25,353

 

Retained earnings


(15,239)

 

(17,407)                  

 

Foreign currency translation reserve


(3,242)

 

(3,218)

 

Total equity


7,262

 

5,118

 



 

 

 

 

Current liabilities


 

 

 

 

Trade and other payables

15

1,084

 

618

 

Total current liabilities


1,084

 

618

 

 

Non-current liabilities

 


 

 

 

 

Trade and other payables

15

330


332

 

Total non-current liabilities


330

 

332

 

 


 

 

 

 

Total equity and liabilities

 

8,676

 

6,068

 

 

 

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY

FOR THE SIX MONTHS ENDED 30 JUNE 2024


 

Issued share capital

 

 

Share premium

 

 

Retained earnings

 Foreign currency translation reserve

 

 

 

Total

 

2023

2023

2023

2023

2023

 

US$'000

US$'000

US$'000

US$'000

US$'000

 

 

 

 

 

 

As at 1 January 2023

390

25,353

(2,977)

(3,209)

19,557

 

 

 

 

 

 

Total comprehensive income

 

 

 

 

 

Profit for the period after taxation

-

-

121

               -

121

Other comprehensive income

-

-

-

6

6

As at 30 June 2023

390

25,353

(2,856)

(3,203)

19,684

 

 

 


 

Issued share capital

 

 

Share premium

 

 

Retained earnings

 Foreign currency translation reserve

 

 

 

Total

 

2024

2024

2024

2024

2024

 

US$'000

US$'000

US$'000

US$'000

US$'000

 

 

 

 

 

 

As at 1 January 2024

390

25,353

(17,407)

(3,218)

5,118

 

 

 

 

 

 

Total comprehensive income

 

 

 

 

 

Profit for the period after taxation

-

-

2,168

               -

2,168

Other comprehensive income

-

-

-

(24)

(24)

As at 30 June 2024

390

25,353

(15,239)

(3,242)

7,262

 

 

 

 

 

 

 

 

 

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

FOR THE SIX MONTHS ENDED 30 JUNE 2024

 

 

 


Six months ended

 

Six months ended

 


30 June

 

30 June

 


2024

 

2023

 

Note

US$'000

 

US$'000



 

 

 

Net cash inflow/(outflow) from operating activities

12

2,787


(387)



 

 

 

Cash flows used in investing activities


 

 

 

Interest received on cash and cash equivalent


8


-

Purchase of fixtures, fittings and equipment

7

-


(3)

Disposal of financial assets at fair value through profit or loss

8

1,068


-



 

 

 

Net cash generated/(used) from investing activities


1,076

 

(3)

 


 

 

 

Cash flows from financing activities





Payment of lease liabilities


(74)


-






Net cash used in financing activities


(74)

 

-

 


 

 

 

Net increase/(decrease) in cash and cash equivalents

 

3,789

 

(390)

 

 

 

 

 

Cash and cash equivalents at 1 January 2024 and

    1 January 2023

 

1,333


1,642


 




Foreign exchange loss on cash and cash equivalents

 

(30)


(11)


 

 

 

 

Cash and cash equivalents as at 30 June 2024 and 30 June 2023

 

5,092

 

1,241

 

 

 

NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

For the six months ended 30 June 2024

 

1.       CORPORATE INFORMATION

 

         The Company is domiciled in the Isle of Man under the Companies Act 2006.  Its registered office is at 33-37 Athol Street, Douglas, Isle of Man, IM1 1LB. The condensed consolidated interim financial statements of the Group as at and for the six months ended 30 June 2024 comprise the Company and its subsidiaries (together referred to as the "Group").

 

         The consolidated financial statements of the Group as at and for the year ended 31 December 2023 are available upon request from the Company's registered office or at www.argogrouplimited.com.

 

         The principal activity of the Company is that of a holding company and the principal activity of the wider Group is that of an investment management business. The functional currency of the Group undertakings are US dollars, Sterling and Romanian Lei. The presentational currency is US dollars.

 

         Wholly owned subsidiaries                       Principal activity                  Country of incorporation

 

Argo Capital Management Limited              Investment management

United Kingdom

Argo Property Management Srl                    Property management

Romania



 

2.       ACCOUNTING POLICIES

 

(a)     Basis of preparation

 

         These condensed consolidated interim financial statements have been prepared in accordance with IAS 34 Interim Financial Reporting. They do not include all the information required for full annual financial statements and should be read in conjunction with the consolidated financial statements of the Group as at and for the year ended 31 December 2023.

 

         The accounting policies applied by the Group in these condensed consolidated interim financial statements are the same as those applied by the Group in its consolidated financial statements as at and for the year ended 31 December 2023.

 

         These condensed consolidated interim financial statements were approved by the Board of Directors on 29 July 2024.       

                 

b)      Financial instruments and fair value hierarchy

 

The following represents the fair value hierarchy of financial instruments measured at fair value in the Condensed Consolidated Statement of Financial Position. The hierarchy groups financial assets and liabilities into three levels based on the significance of inputs used in measuring the fair value of the financial assets and liabilities. The fair value hierarchy has the following levels:

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); and

 

Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs).

 

The level within which the financial asset or liability is classified is determined based on the lowest level of significant input to the fair value measurement.

 

 

3.      SEGMENTAL ANALYSIS

 

The Group operates as a single asset management business.

The operating results of the companies are regularly reviewed by the Directors of the Group for the purposes of making decisions about resources to be allocated to each company and to assess performance. The following summary analyses revenues, profit or loss, assets and liabilities:

 

 

Argo Group Ltd

 

Argo Capital Management Ltd

 

Argo Property Management

Srl

Six months ended

 30 June      

 

2024

2024

2024

2024

 

US$'000

US$'000

US$'000

US$'000






Total revenues for reportable segments customers

-

990

3,646

4,636

Intersegment revenues

-

-

 

-

-






Total profit/(loss) for reportable segments

(48)

(692)

2,908

2,168

Intersegment loss

-

-

-

-






Total assets for reportable segments assets

5,919

1,953

804

8,676

Total liabilities for reportable segments

5

481

928

1,414

 

Revenues, profit or loss, assets and liabilities may be reconciled as follows:

 

Six months

 

Ended

 

30 June 2024

 

US$'000

Revenues


Total revenues for reportable segments

4,636

Elimination of intersegment revenues

-

Group revenues

4,636



Profit or loss


Profit for reportable segments

5,085

Elimination of intersegment loss

(2,917)

Other unallocated amounts

-

Profit on ordinary activities before taxation

2,168



Assets


Total assets for reportable segments

8,676

Elimination of intersegment receivables

-

Group assets

8,676



Liabilities


Total liabilities for reportable segments

1,706

Elimination of intersegment payables

(292)

Group liabilities

1,414

 

 

 

 

Argo Group Ltd

 

Argo Capital Management Ltd

 

Argo Property Management

Srl

Six months ended

 30 June      

 

2023

2023

2023

2023

 

US$'000

US$'000

US$'000

US$'000






Total revenues for reportable segments customers

-

1,111

400

1,511

Intersegment revenues

-

-

 

-

-






Total profit/(loss) for reportable segments

687

(602)

36

121

Intersegment loss

-

-

-

-






Total assets for reportable segments assets

19,059

1,428

241

20,728

Total liabilities for reportable segments

6

675

363

1,044

 

Revenues, profit or loss, assets and liabilities may be reconciled as follows:

 

Six months

 

Ended

 

30 June 2023

 

US$'000

Revenues


Total revenues for reportable segments

1,511

Elimination of intersegment revenues

-

Group revenues

1,511



Profit or loss


Profit for reportable segments

121

Elimination of intersegment loss

-

Other unallocated amounts

-

Loss on ordinary activities before taxation

-



Assets


Total assets for reportable segments

20,728

Elimination of intersegment receivables

-

Group assets

20,728



Liabilities


Total liabilities for reportable segments

4,321

Elimination of intersegment payables

(3,277)

Group liabilities

1,044

 

 

4.   SHARE-BASED INCENTIVE PLANS

        

To incentivise personnel and to align their interests with those of the shareholders of Argo Group Limited, Argo Group Limited has granted share options to directors and employees under The Argo Group Limited Employee Stock Option Plan. The options are exercisable within 10 years of the grant date.

 

The fair value of the options granted during the period was measured at the grant date using a Black-Scholes model that takes into account the effect of certain financial assumptions, including the option exercise price, current share price and volatility, dividend yield and the risk-free interest rate. The fair value of the options granted is spread over the vesting period of the scheme and the value is adjusted to reflect the actual number of shares that are expected to vest.

 

The principal assumptions for valuing the options are:

 

Exercise price (pence)

21.0/24.0

Weighted average share price at grant date (pence)

19.0

Average option life at date of grant (years)

10.0

Expected volatility (% p.a.)

15.0

Dividend yield (% p.a.)

10.0

Risk-free interest rate (% p.a.)

2

 

The fair value of options granted is recognised as an employee expense with a corresponding increase in equity. The total charge to employee costs in respect of this incentive plan is £nil (2023: £nil).

                    

The number and weighted average exercise price of the share options during the period is as follows:

 


Weighted average exercise price

No. of share options

Outstanding at beginning of period

21.2p

3,895,998

Granted during the period

-

-

Forfeited during the period

-

-

Outstanding at end of period

21.2p

3,895,998

Exercisable at end of period

21.2p

3,895,998

 

Outstanding share options are contingent upon the option holder remaining an employee of the Group.

The weighted average fair value of the options issued during the period was £Nil (2023: £Nil).

 

 

No share options were issued during the period.

 

 

5.      TAXATION

 

         Taxation rates applicable to the parent company and the UK and Romanian subsidiaries range from 0% to 25% (2023: 0% to 25%).

        

Consolidated statement of profit or loss

Six months

 

Six months


ended

 

Ended


30 June

 

30 June


2024

 

2023


US$'000

 

US$'000


 

 

 

Taxation charge for the period on Group companies

350

 

-

 

The charge for the period can be reconciled to the profit shown on the Condensed Consolidated Statement of profit or loss as follows:

 


 

Argo

Argo

Argo

 

 


 

Group

Capital

Property

 

Six


 

Limited

Management

Management

 

 Months


 

 

Limited

Srl

 

Ended


 

30 June

30 June

30 June

 

30 June


 

2024

2024

2024

 

2024


 

US$'000

US$'000

US$'000

 

US$'000

Profit/(loss) before tax

 

(48)

(692)

3,258

 

2,518

Applicable tax rate


0%

25%

16%



Tax at applicable rate


-

(173)

521


348

Current period tax losses


-

173

-


173

Losses from prior periods


-

-

(171)


(171)

Tax charge

 

          -

-

350

 

350


 

Argo

Argo

Argo

 

 


 

Group

Capital

Property

 

Six


 

Limited

Management

Management

 

Months


 

 

Limited

Srl

 

Ended


 

30 June

30 June

30 June

 

30 June


 

2023

2023

2023

 

2023


 

US$'000

US$'000

US$'000

 

US$'000

Profit/(loss) before tax

 

687

(602)

36

 

121

Applicable tax rate


0%

25%

16%



Tax at applicable rate


-

(151)

6


(145)

Current period tax losses


-

151

-


151

Losses from prior periods


-

-

(6)


(6)

Tax charge

 

          -

-

-

 

-

 

Consolidated statement of financial position

 

 

 


30 June

 

31 December


2024

 

2023


US$'000

 

US$'000


 

 

 

Corporation tax payable

-

 

-

 

 

6.      EARNINGS PER SHARE

 

         Earnings per share is calculated by dividing the net profit for the period by the weighted average number of shares outstanding during the period.


Six months

 

Six months

 


ended

 

Ended

 


30 June

 

30 June

 


2024

 

2023

 


US$'000

 

US$'000

 


 

 

 

 

Net profit for the period after taxation attributable to members

2,168

 

121



 

 

 

 


No. of shares

 

No. of shares

 


 

 

 

 

Weighted average number of ordinary shares for basic earnings per share

38,959,986


38,959,986

 

Effect of dilution (Note 4)

3,895,998


3,895,998

 

Weighted average number of ordinary shares for diluted earnings per share

42,855,984

 

42,855,984

 

 


Six months

 

Six months


Ended

 

ended


30 June

 

30 June


2024

 

2023


US$

 

US$


 

 

 

Earnings per share (basic)

0.056


0.003

Earnings per share (diluted)

0.051


0.003

 

 

 

7.      LAND, FIXTURES, FITTINGS AND EQUIPMENT

 

 

Right

of use

assets

Fixtures, fittings and equipment

 

 

 

Land

 

 

Total

 

USD'000000

US$'000

US$'000

US$'000

Cost





At 1 January 2023

455

188

172

815

Additions

-

6

-

6

Disposals

-

(20)

-

(20)

Foreign exchange movement

24

(5)

(6)

(13)

At 31 December 2023

479

169

166

814

Additions

-

-

-

-

Disposals

-

-

-

-

Foreign exchange movement

(4)

(2)

(5)

(11)

At 30 June 2024

475

167

161

803

 





Accumulated Depreciation





At 1 January 2023

 

30

 

177

 

-

                  207

Depreciation charge for period

93

4

-

97

Disposals

-

(20)

-

(20)

Foreign exchange movement

5

(1)

-

4

At 31 December 2023

128

160

-

288

Depreciation charge for period

47

3

-

50

Disposals

-

-

-

-

Foreign exchange movement

(1)

(2)

-

(3)

At 30 June 2024

174

161

-

335

 





Net book value

 

 

 

 

At 31 December 2023

351

9

 

166

526

At 30 June 2024

301

6

161

468

 

 

 

8.       FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS

 



 

 

 



30 June 2024

 

30 June 2024

Holding

Investment in management shares

Total cost

 

Fair value


 

US$'000

 

US$'000


 

 

 

 

10

The Argo Fund Ltd

-


-



-

 

-

 

Holding

Investment in ordinary shares

Total cost

 

Fair value


 

US$'000

 

US$'000


 

 

 

 

7,920

The Argo Fund Ltd*

2,176


2,729



2,176

 

2,732

 



31 December

 

31 December



2023

 

2023

Holding

Investment in management shares

Total cost

 

Fair value


 

US$'000

 

US$'000


 

 

 

 

10

The Argo Fund Ltd

-


-



-

 

-

 

Holding

Total cost

 

Fair value


US$'000

 

US$'000


 

 

 

 

10,920

The Argo Fund Ltd*

3,000


3,711



3,000

 

3,711

 

*Classified as current in the consolidated statement of Financial Position

 

 

9.   TRADE AND OTHER RECEIVABLES

 


At 30 June 2024

 

At 31 December 2023


US$ '000

 

US$ '000





Trade receivables - Gross

3,009


2,947

Less: provision for impairment of trade receivables

(2,875)


(2,676)

Trade receivables - Net

134


271

Other receivables

33


44

Prepayments and accrued income

122


84


289


399

The Directors consider that the carrying amount of trade and other receivables approximates their fair value. All trade receivable balances are recoverable within one year from the reporting date except as disclosed below.

 

         The movement in the Group's provision for impairment of trade and loan receivables is as follow:

 


At 30 June 2024

 

At 31 December 2023


US$ '000

 

US$ '000





As at 1 January

2,676


1,980

Bad debt recovered

-


-

Charged during the period

201


686

Foreign exchange movement

 

 

(2)


10

Closing balance

2,875


2,676

     

 

10. LOANS AND ADVANCES RECEIVABLE

 


 At 30 June

2024

 

At 31 December

2023

 


US$'000

 

US$'000

 





 

Deposits on leased premises - current

9


-

 

Deposits on leased premises - non-current (see below)

89


                       98

9

 

Other loans and advances receivable - non-current (note 14)

 

-


-



98


98








 

The deposits on leased premises relate to the Group's offices in London and Romania.

 

The movement in the Group's expected credit loss on loan receivables is as follows:

 


At 30 June

 

At 31 December


2024

 

2023


US$ '000

 

US$ '000





As at 1 January

26,224


12,570

Expected credit loss recognized during the year

-


13,320

Foreign exchange movement

(320)


334

Closing balance

25,904


26,224

 

 

11.     SHARE CAPITAL

 

   The Company's authorised share capital is unlimited with a nominal value of US$0.01.

 

 

30 June

30 June

31 December

31 December

 

2024

2024

2023

2023

 

No.

US$'000

No.

US$'000

Issued and fully paid

 

 

 

 

Ordinary shares of US$0.01 each

38,959,986

390

38,959,986

390


38,959,986

390

38,959,986

390

The Directors did not recommend the payment of a final dividend for the year ended 31 December 2023 and do not recommend an interim dividend in respect of the current period.

 

12.     RECONCILIATION OF NET CASH INFLOW/(OUTFLOW) FROM OPERATING ACTIVITIES TO PROFIT/(LOSS) ON ORDINARY ACTIVITIES BEFORE TAXATION

 


Six months ended

30 June 2024

 

Six months ended

30 June 2023


US$'000

 

US$'000

 

 

 

 

Profit on ordinary activities before taxation

2,518


121





Interest income

(8)


(496)

Depreciation on fixtures, fittings and equipment

3


2

Depreciation on right of use asset

47


46

Realised and unrealised profit on investments

(86)


(308)

Net foreign exchange loss

11


9

Increase in payables

205

 


136

Decrease in receivables, loans and advances

111


103

Corporation tax paid

(14)

 


-

Net cash inflow/(outflow) from operating activities

2,787

 

(387)

 

13.     FAIR VALUE HIERARCY

 

The table below analyses financial instruments measured at fair value at the end of the reporting period by the level of the fair value hierarchy (note 2b).

 

                                                               At 30 June 2024


Level 1

Level 2

Level 3

Total


US$ '000

US$ '000

US$ '000

US$ '000

Financial assets at fair value through profit or loss

 

 

-

2,729

-

2,729

 

                                                               At 31 December 2023


Level 1

Level 2

Level 3

Total


US$ '000

US$ '000

US$ '000

US$ '000

Financial assets at fair value through profit or loss

 

 

-

 

3,711

 

-

 

3,711

 

 

 

 

 

NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

For the six months ended 30 June 2024 (continued)

 

14.   RELATED PARTY TRANSACTIONS

 

All of the Group revenues derive from The Argo Fund in which two of the Company's directors, Kyriakos Rialas and Kenneth Watterson, have influence through directorships and the provision of investment management services.

 

At the reporting date the Company holds investments in The Argo Fund Limited. These investments are reflected in the accounts at fair value of US$2.7 million (31 December 2023: $3.7 million).

 

In February 2020, the Group granted a loan to Argo Real Estate Limited Partnership "ARE LP", an entity that is 100% owned by Andreas Rialas of US$11.0 million (€10.2 million).  In March 2023, ARE LP assigned its loan receivable from Novi Biznes Poglyady LLC to Argo Group Limited in exchange for the cancellation of its loan payable to Argo Group Limited. Interest of 9.25% per annum is receivable on this loan. As this loan is exposed to the performance of an investment property in Ukraine, further to an independent valuation of the property and taking into consideration the seniority of the loan, an expected credit loss allowance to the full loan balance was recognised during 2023. No further interest is currently recorded until the situation in Ukraine improves and the recoverability of the loan becomes more certain. 

 

The Group also has a balance receivable for US$12.0 million (€11.2 million) from ARE LP that was assigned from Argo Real Estate Opportunities Fund Limited during 2021. The carrying value of this balance is $nil.

 

 

15.  TRADE AND OTHER PAYABLES


At 30 June

 

At 31 December


2024

 

2023


US$ '000

 

US$ '000





Trade creditors

67


16

Other creditors and accruals

1,017

              


602

Total current trade and other payables

1,084


618

 

      Trade creditors are normally settled on 30-day terms.

 

 


At 30 June

 

At 31 December


2024

 

2023


US$ '000

 

US$ '000





Other creditors and accruals

330


332

Total non-current trade and other payables

330


332

Total trade and other payables

1,414

 

950

 

16.  EVENTS AFTER THE REPORTING PERIOD

 

There were no material events after the reporting period, which have a bearing on the understanding of the consolidated financial statements.

 

 

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