Argo today announces its interim results for the six months ended 30 June 2021.
The Company will today make available its interim report for the six months period ended 30 June 2021 on the Company’s website www.argogrouplimited.com.
Key highlights for the six months period ended 30 June 2021
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 2021.
– Revenues US$1.6 million (six months to 30 June 2020: US$1.4 million)
– Operating loss US$0.7 million (six months to 30 June 2020: US$0.4 million)
– Loss before tax US$0.2 million (six months to 30 June 2020: profit before tax US$0.2 million)
– Net assets US$22.6 million (31 December 2020: US$22.8 million)
Commenting on the results and outlook, Kyriakos Rialas, Chief Executive Officer of Argo said:
” Argo Group is pleased to present its six months results for the period ending 30 June 2021. Income derived from management fees remains stable reflecting assets under management but excludes any potential performance fees that would crystallise at year end provided the NAV of The Argo Fund does not fall below the highwater mark. Costs have gone up slightly due to some exceptional non-repetitive expenses but additional AUM are needed to comfortably cover running expenses.
Argo is currently focusing on its single Emerging Markets Fund with different share classes to reflect its strategies. A new share class was launched earlier this year to attract investors looking for distressed situations in Emerging market bonds.”
Enquiries
Argo Group Limited
Andreas Rialas
020 7016 7660
Panmure Gordon
Dominic Morley
020 7886 2500
This announcement contains inside information for the purposes of Article 7 of the Market Abuse Regulation (EU) No 596/2014 (as amended) as it forms part of the domestic law of the United Kingdom by virtue of the European Union (Withdrawal) Act 2018 (as amended) (“MAR”).
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 2021 the Group generated revenues of US$1.6 million (six months to 30 June 2020: US$1.4 million) with management fees accounting for US$1.2 million (six months to 30 June 2020: US$1.2 million). The Group does not accrue for performance fees until they are crystalized at the year end. Unrecognised performance fees at 30 June 2021 amounted to US$0.9 million (2020: US$ nil).
Total operating costs for the period, ignoring bad debt provisions, are US$2.0 million compared to US$1.6 million for the six months to 30 June 2020 . The Group has provided against management fees of US$0.4 million due from the Designated share class in The Argo Fund (“TAF”) (six months to 30 June 2020: US$0.2 million). In the Directors’ view these amounts are fully recoverable however they 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 loss for the period of US$0.7 million (six months to 30 June 2020: US$0.4 million) and a loss before tax of US$0.2 million (six months to 30 June 2020: profit before tax of US$0.2 million). Net loss on investments of US$0.04 million (six months to 30 June 2020: net profit on investments US$0.2 million) and interest income of US$0.5 million (six months to 30 June 2020: US$0.4 million).
At the period end, the Group had net assets of US$22.6 million (31 December 2020: US$22.8 million) and net current assets of US$8.4 million (31 December 2020: US$8.8 million) including cash reserves of US$1.2 million (31 December 2020: US$0.7 million).
Net assets include investments in The Argo Fund (“TAF”) at fair values of US$7.1 million (31 December 2020: US$6.8 million)
At the period end TAF owed the Group total fees of US$1.1 million ( 31 December 2020 : US$1.0 million). At 30 June 2021, a provision for US$0.9 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$126.7 million (2020: US$130.4 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 2021 was 19 ( 30 June 2020 : 20).
