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Alina

Holdings PLC

Interim report

Six months to 30 June 2021

Directors, Secretary and Advisers

Directors

C Duncan Soukup, Chairman

Gareth Maitland Edwards

Registered Office

Eastleigh Court,

Bishopstrow

Warminster

BA12 9HW

Company Secretary

William Heaney (resigned 30.07.21)

Broker

WH Ireland Limited

24 Martin Lane

London

EC4R 0DR

Solicitors to the Company Locke Lord (UK) LLP

201 Bishopsgate

London

EC2M 3AB

Eversheds Sutherland

One Wood Street

London

EC2V 7WS

DWF LLP

No. 2 Lochrin Square

96 Fountainbridge

Edinburgh

EH3 9QA

Auditors

Jeffreys Henry LLP

Finsgate 5-7 Cranwood Street

London EC1V 9EE

Registrars

Equiniti Limited

Aspect House

Spencer Street

Lancing

BN99 6QQ

Company website

www.alina-holdings.com

Page

Contents

Highlights for the 6 months ended 30 June 2021 ...........................................................................................................4

Chairman’s Statement .........................................................................................................................................................5

Interim Condensed Consolidated Statement of Income ................................................................................................8

Interim Condensed Consolidated Statement of Comprehensive Income ....................................................................9

Interim Condensed Consolidated Statement of Financial Position .............................................................................10

Interim Condensed Consolidated Statement of Cash Flows ........................................................................................11

Interim Condensed Consolidated Statement of Changes in Equity ............................................................................12

Notes to the Interim Condensed Consolidated Financial Information .......................................................................13

Notes to the Interim Condensed Consolidated Financial Information Continued .....................................................14

Notes to the Interim Condensed Consolidated Financial Information Continued .....................................................15

Notes to the Interim Condensed Consolidated Financial Information Continued .....................................................16

Highlights for the 6 months ended 30 June 2021

GROUP RESULTS 1H 2021 versus 1H 2020

Group Net Profit / (Loss) for the period

(£0.08)m vs. (£0.21)m

Group Earnings / (Loss) Per Share (both basic and diluted)* 1

(£0.36) vs. (£0.92)

Reported Book value per share* 2

£0.28 vs. £0.30

Net Cash

£2.9m vs. £4.1m

* 1 based on weighted average number of shares in issue of 22,697,000 (1H20: 22,697,000)

* 2 based on actual number of shares in issue as at 30 June 2021 of 22,697,000

Chairman’s Statement

I am happy to present the unaudited interim accounts for the six months to 30 June 2021. Following the Company’s

readmission to the market and change of objectives, the Board has focused its efforts on reviewing potential new

acquisitions whilst also managing the vestiges of the LSR property portfolio.

As shareholders may know, your board is not made up of what I would call, “property experts”, which we think is a

benefit, as we do not have any pre-, nor mis-conceptions of the value or opportunities of the Company’s property

assets. The current portfolio, which is not fully let is yielding in excess of 15%. Notwithstanding the yield and the

Company’s success in collecting in excess of 92% of rents during the duration of the Covid crisis, the Company’s

independent valuers, using the red-book method (akin to the car dealers’ blue book!), have reduced their estimation

of the value of the Company’s assets. In the real world a portfolio of assets yielding 15% wouldn’t be marked down

when yielding 15%, unless of course interest rates were going through the roof, which they aren’t…yet!

The Company’s property portfolio includes shopping arcades in Oldham (nr Manchester), Brislington (Bristol) and

Hastings (Sussex) where, as a reminder, England lost 1 – 0 to France in 1066.

Our 3 main properties are all leasehold for up to 186 years. Oldham has one vacant unit, where the tenant has vacated

but is still paying, which we are working with them on re-leasing; Brislington is more or less fully let, needs some repairs

but has some development potential, and Denmark Place in Hastings, where a major retailer, which has closed over

400 stores in the UK, has surrendered its lease, has ca. 9,000 sq. ft of available space. The good news is that the

retailer was paying well below current market rates, and we believe that once cleaned up and repaired that we will be

able to relet the property well above what we were previously receiving. Hastings may also have some expansion

possibilities, which we are also investigating.

Given the above, we are not a seller at these levels.

As previously announced, the Company has dipped its toe into the leisure market and acquired 2.7% of Dolphin Capital

Investors (DCI LON). DCI is a European Leisure business focused on developing high end hotels in the eastern

Mediterranean (Greece and the surrounding area). DCI has lost its shareholders even more money than the previous

board of Local Shopping REIT achieved…a record not to be proud of.

The shareholders of DCI voted some years ago to liquidate and return capital to shareholders. This process is still

ongoing and will certainly take a few more years, in our opinion. Shareholders recently removed the previous board

and are now working on accelerating the liquidation process. DCI’s September 2021 NAV was 16p per share, as a

going concern…which makes little sense to us when the company is in wind down mode. Nonetheless, we believe the

break-up value of the Company is North of the current market price of 4.1p/share but South of 16p. We would be very

happy to get out at 8p/share with a +100% gain on our cost or better. We do not, however, realistically believe that

DCI shares will fetch 16p in liquidation. Time will tell.

The remainder of the Company’s assets are in cash.

Conclusion

US markets are trading near their all-time highs, Chinese and Hong Kong markets are taking it on the chin. And interest

rates are bouncing along the bottom of a pit whilst Central Bankers now have to find a way to ween drug addicts off

free money…without causing a market collapse.

Dr Nouriel Roubini, (aka Dr Doom or Dr Realist, as he refers to himself) renowned for foreseeing the mortgage collapse

which brought on the 2008 market collapse said, on 21 September 2021, that the post-pandemic world is heading for

a repeat. His concern is that “We are in a debt trap” and in order to avoid a major market and economic collapse,

Central Banks will inflate their way out of the situation they have created with, over time and inevitably, higher rates

and slower growth, with the potential for Stagflation.

Unfortunately, I agree with Dr Doom/Realist, the elastic band is awfully stretched and risks snapping; what will the

ultimate catalyst be, remains to be seen but, in our opinion, snap it probably will.

From an investment point of view, therefore, given the above and the possibility of a fourth Covid wave…we are glad

to maintain our cash balance and wait for prices to adjust to reflect a slowing economy.

Portfolio Valuation

The fair value of the property portfolio of six assets held at 30 June 2021 was £2.795 million (30 June 2020: six assets,

£3.120 million, 31 December 2020: six assets, £2.795 million), based on the valuation provided by Allsop LLP, a firm

of independent chartered surveyors, as at 30 September 2020. The holding value of the property assets in the

Company’s accounts was £2.775 million (30 June 2020: £3.100 million, 31 December 2021: £2.775 million), which

took account of agreed pricing, where contracts for sale had been exchanged, and sales costs for all transactions in

progress. The directors considered that it was not appropriate to undertake a further valuation of the property assets

during the prevailing epidemic, bearing in mind the recent date of the previous valuation and the continuing unsettled

state of the market. For the 30 September 2020 independent valuation, two of the larger assets were subject to full

RICS valuations, with the remainder subject to desktop updates of their previous full valuations provided by Allsop LLP

in July 2019. The holding value of the property assets in the financial statements takes account of the agreed pricing

for disposal of the one remaining property considered to be held for sale and also incorporates the estimated

transaction costs for the sale. On 30 June 2021 the aggregate holding value of the property investment portfolio in the

Company’s accounts, incorporating the adjustment for the value of head leases under IFRS 16, was £3.116 million (30

June 2020: £3.816 million, 31 December 2021: £3.092 million). On a like-for-like basis (excluding the value of

properties disposed of during the year), the property valuation at 31 December 2020 showed a reduction on the 30

September 2019 valuation of 10.42%.

Dolphin Capital Investors (DCI LON)

Dolphin Capital Investors Ltd (www.dolphinci.com) has been a leading investor and developer in the luxury residential

resort sector. Dolphin aims to dispose all of the company’s assets by 31 December 2021.

https://www.dolphinci.com/wp-content/uploads/DCI-Fact-Sheet_September21.pdf

Responsibility Statement

We confirm that to the best of our knowledge:

(a) the condensed set of financial statements has been prepared in accordance with IAS 34 ‘Interim Financial

Reporting’ and gives a true and fair view of the assets, liabilities, financial position and profit or loss of the

Company and the undertakings included in the consolidation as a whole as required by DTR 4.2.4 R;

(b) the interim management report includes a fair review of the information required by DTR 4.2.7R (indication of

important events during the first six months and description of principal risks and uncertainties for the remaining

six months of the year); and

related parties’ transactions and changes therein).

Cautionary statement

This Interim Management Report (IMR) has been prepared solely to provide additional information to shareholders to

assess the Company’s strategies and the potential for those strategies to succeed. The IMR should not be relied on

by any other party or for any other purpose.

Duncan Soukup

Chairman

Thalassa Holdings Ltd

27 September 2021

Interim Condensed Consolidated Statement of Income

For the six months ended 30 June 2021

Six months

15 months

ended

30 Jun 21

30 Jun 20

31 Dec 20

Unaudited

Audited

Note

Gross rental income

218

214

598

Property operating expenses

(72)

(28)

(159)

Net rental income

146

186

439

Profit/Loss on disposal of investment properties

Profit/(loss) from change in fair value of investment properties

(325)

Profit/(loss) from change in fair value of afs investments

125

Administrative expenses including non-recurring

items

(245)

(277)

(489)

Operating loss before net financing costs

(86)

(374)

Depreciation

(2)

Financing income*

Financing expenses*

(160)

(123)

(94)

Loss before tax

(82)

(209)

(465)

Taxation

Profit/(loss) for the year from continuing

operations

(82)

(209)

(465)

Attributable to:

Equity shareholders of the parent

(82)

(209)

(465)

(82)

(209)

(465)

Earnings per share - GBP- pence (using

weighted average number of shares)

Basic and Diluted

(0.36)

(0.92)

(2.05)

The notes on pages 11 to 14 form an integral part of this consolidated interim financial information.

Interim Condensed Consolidated Statement of

Comprehensive Income

For the six months ended 30 June 2021

Six months

Six months 15 months

ended

30 Jun 21

30 Jun 20

31 Dec 20

Unaudited

Audited

Profit/(loss) for the financial year

(82)

(209)

(465)

Other comprehensive income:

Total comprehensive income

(82)

(209)

(465)

Attributable to:

Equity shareholders of the parent

(82)

(209)

(465)

Total Comprehensive income

(82)

(209)

(465)

The notes on pages 11 to 14 form an integral part of this consolidated interim financial information.

Interim Condensed Consolidated Statement of Financial

Position

As at 30 June 2021

As at

30 Jun 21

30 Jun 20

31 Dec 20

Note

Unaudited

Audited

Assets

Non-current assets

Investment properties

2,786

3,139

2,762

Available for sale financial assets

1,082

Total non-current assets

3,868

3,139

2,762

Current assets

Trade and other receivables

466

348

228

Investment properties held for sale

330

Cash and cash equivalents

2,920

4,050

4,073

Total current assets

3,716

4,728

4,631

Total assets

7,584

7,867

7,393

Non-current liabilities

Finance lease liabilities

(324)

(350)

(300)

Total non-current liabilities

(324)

(350)

(300)

Liabilities

Current liabilities

Trade and other payables

(815)

(694)

(566)

Total current liabilities

(815)

(694)

(566)

Total liabilities

(1,139)

(1,044)

(866)

Net assets

6,445

6,823

6,527

Shareholders’ Equity

Share capital

319

Capital redemption reserve

598

Retained earnings

5,528

5,906

5,610

Total shareholders' equity

6,445

6,823

6,527

Total equity

6,445

6,823

6,527

The notes on pages 11 to 14 form an integral part of this consolidated interim financial information.

These financial statements were approved by the board on 27 September 2021.

Signed on behalf of the board by:

Duncan Soukup

Interim Condensed Consolidated Statement of Cash Flows

For the six months ended 30 June 2021

As at

30 Jun 21

30 Jun 20

31 Dec 20

Unaudited

Audited

Cash flows from operating activities

Profit/Loss for the period before taxation

(82)

(209)

(465)

Loss from change in fair value of investment properties

325

Gain from change in fair value of afs

(125)

Loss from change in fair value of head leases

Net financing loss/(income)

117

123

(Profit)/Loss on disposal of investment properties

(1)

Decrease/ (Increase) in trade and other receivables

(83)

150

(Decrease)/ Increase in trade and other payables

204

146

Loss on foreign exchange

(95)

(123)

(57)

Lease liability interest

(11)

(26)

Depreciation

Interest paid

(6)

(7)

Interest received

Net cash flow from operating activities

(185)

207

Net proceeds from sale of investment properties

348

Net proceeds/(purchases) from available for sale investments

(957)

Net cash flow in investing activities

(957)

348

Cash flows from financing activities

Reduction in head lease liabilities

(11)

(48)

Net cash flow from financing activities - continuing

operations

(11)

(48)

Net increase in cash and cash equivalents

(1,153)

507

Cash and cash equivalents at the start of the year

4,073

3,985

3,566

Cash and cash equivalents at the end of the year

2,920

4,050

4,073

The notes on pages 11 to 14 form an integral part of this consolidated interim financial information.

Interim Condensed Consolidated Statement of Changes in

Equity

For the six months ended 30 June 2021

Attributable to owners of the Company

Capital

redemption

Retained

Capital

Reserves

reserve

Earnings

Total

£000

Balance as at 31 December 2019

319

598

6,115

7,032

Loss for Period

(209)

Balance as at 30 June 2020

319

598

5,906

6,823

Loss for Period

(296)

Balance as at

31 December 2020

319

598

5,610

6,527

Loss for Period

(82)

Balance as at 30 June 2021

319

598

5,528

6,445

The notes on pages 11 to 14 form an integral part of this consolidated interim financial information.

Notes to the Interim Condensed Consolidated Financial

Information

1. General information

Alina Holdings PLC (“Alina” or the “Company”) is a company registered on the Main Market of the London Stock

Exchange.

In December 2020 the Company changed its accounting reference date to 31 December in each year, following which

it published an interim report for the six months to its previous accounting reference date of 30 September 2020. The

comparative period reported on in this document is therefore the six months from the 1 January 2020 and 30 June

2020, thereby ensuring continuity in the Company’s financial reporting.

2. Significant Accounting policies

The Group prepares its accounts in accordance with applicable International Financial Reporting Standards (“IFRS”)

as adopted by the UK.

The accounting policies applied by the Company in this unaudited consolidated interim financial information are the

same as those applied by the Company in its consolidated financial statements as at and for the period ended 31

December 2020 except as detailed below.

The financial information has been prepared under the historical cost convention, as modified by the accounting

standard for financial instruments at fair value.

Estimates

There are no changes to the estimates since last reporting period.

Segmental reporting

IFRS 8 requires operating segments to be identified on the basis of internal reports that are regularly reported to the

chief operating decision maker to allocate resources to the segments and to assess their performance. Since the

strategy review in July 2013 the Group has identified one operation and one reporting segment, being rental income

in the UK, which is reported to the Board of directors on a quarterly basis. The Board of directors is considered to be

the chief operating decision maker.

2.1. Basis of preparation

The condensed consolidated interim financial information for the six months ended 30 June 2021 has been prepared

in accordance with International Accounting Standard No. 34, ‘Interim Financial Reporting’. They do not include all of

the information required for full annual financial statements and should be read in conjunction with the consolidated

financial statements of the Company as at and for the year ended 31 December 2020.

These condensed interim financial statements for the six months ended 30 June 2021 and 30 June 2020 are unaudited

and do not constitute full accounts. The comparative figures for the period ended 31 December 2020 are extracted

from the 2020 audited financial statements. The independent auditor’s report on the 2020 financial statements was not

qualified.

All intra-group transactions, balances, income and expenses are eliminated in full on consolidation.

2.2. Going concern

The financial information has been prepared on the going concern basis as management consider that the Group has

sufficient cash to fund its current commitments for the foreseeable future.

3. Earnings per share

Six months

15 months

ended

30 Jun 21

30 Jun 20

31 Dec 20

Unaudited

Audited

The calculation of earnings per share is based on

the following loss and number of shares:

Profit/(loss) for the period (£'000)

(82)

(209)

(465)

Weighted average number of shares of the Company ('000)

22,697

Earnings per share:

Basic and Diluted (GBP - pence)

(0.36)

(0.92)

(2.05)

Notes to the Interim Condensed Consolidated Financial

Information Continued

4. Investment Properties

Freehold

Leasehold

Investment

Properties

Total

£000

At 31 December 2019

3,099

3,139

Fair value adjustments

At 30 June 2020

3,099

3,139

Fair value adjustment - head leases

(48)

Depreciation - head leases

(4)

Fair value adjustments - property

(325)

At 31 December 2020

2,722

2,762

Fair value adjustment - head leases

Depreciation - head leases

(2)

At 30 June 2021

2,746

2,786

Allsop LLP, a firm of independent chartered surveyors valued the Group’s property portfolio at 30 September 2017, 31 March 2018, 30 September

2018 and 31 March 2019. On each of these dates Allsop LLP performed a full valuation of 25% of the Group’s properties (including site

inspections) and a desktop valuation of the remainder, such that all properties owned by the Group have been inspected and valued over the two-

year period. The valuations, using assumptions regarding yield rates, void levels and comparable market transactions, were undertaken in

accordance with the Royal Institute of Chartered Surveyors Appraisal and Valuation Standards on the basis of market value. Market value is

defined as the estimated amount for which a property should exchange on the date of valuation between a willing buyer and a willing seller in an

arm’s length transaction, after proper marketing wherein the parties had each acted knowledgeably, prudently and without compulsion

In July 2019 Allsop LLP carried out a full valuation (including site visits) on all the properties held at that date. In the light of that recent full

valuation, for the 30 September 2019 financial statements the Company had desktop valuations prepared by Allsops for all the properties in the

portfolio at that date, except for three properties which were considered to be held for sale and were therefore valued at their expected sale price

less sales costs.

The six property assets held at 30 September 2020 were valued at that date by Allsop LLP. In line with the Company’s established valuation

policy, two of the larger assets were subject to full RICS valuations, including site inspections, with the remainder subject to desktop updates of

their previous carrying values. In view of the market uncertainty and the operational restrictions arising from the COVID-19 outbreak, the directors

did not consider it appropriate to carry out a fresh valuation of the property portfolio at the half-year. The six properties contained in the portfolio

therefore continue to be recognised in the financial statements at their holding value in the Company’s accounts at 30 September 2020. One

property is considered to be held for sale and its holding value in the Company’s accounts therefore takes account of agreed pricing and sales

costs. There were no sales during the period.

Material valuation uncertainty

The outbreak of the Coronavirus (COVID-19), declared by the World Health Organization as a “Global Pandemic” on 11 March 2020, has

impacted global financial markets and global economy. Despite the easing of restrictions, the future impact that COVID-19 might have on the real

estate market gives that less certainty should be attached to the valuation than would normally be the case. A reconciliation of the portfolio

valuation at 30 June 2021 to the total value for investment properties given in the Consolidated Balance Sheet is as follows:

As at

30 Jun 21

30 Jun 20

31 Dec 20

Unaudited

Audited

£000

Portfolio valuation

2,775

3,100

2,775

Investment Properties held for sale

(330)

Head leases treated as investment properties per IFRS

341

369

317

Total per Balance Sheet

2,786

3,139

2,762

Notes to the Interim Condensed Consolidated Financial

Information Continued

5. Available for sale investments

The Group classifies the following financial assets at fair value through profit or loss (FVPL):-

Equity investments that are held for trading

As at

30 Jun 21

30 Jun 20

31 Dec 20

Unaudited

Audited

£000

Available for sale investments

At the beginning of the period

Additions

957

Unrealised gain/(losses)

125

Disposals

At period close

1,082

AFS investments have been valued incorporating Level 1 inputs in accordance with IFRS7 . They are a combination of cash and securities held

with the listed broker.

Financial instruments require classification of fair value as determined by reference to the source of inputs used to derive the fair value. This

classification uses the following three-level hierarchy:

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);

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

6. Lease liabilities

Finance lease liabilities on head rents are

Minimum

payable as follows:

Lease

Payment

Interest

Principal

£000

At 30 September 2019

3,074

(2,705)

369

Movement in value

(340)

292

(48)

At 30 December 2020

2,734

(2,413)

321

Head lease payment increase following rent review

317

(292)

Movement in value

(11)

At 30 June 2021

3,040

(2,694)

346

Short term liabilities

Long term liabilities

3,055

(2,705)

350

At 30 June 2020

3,074

(2,705)

369

Short term liabilities

Long term liabilities

2,713

(2,413)

300

At 31 December 2020

2,734

(2,413)

321

Short term liabilities

Long term liabilities

3,018

(2,694)

324

At 30 June 2021

3,040

(2,694)

346

In the above table, interest represents the difference between the carrying amount and the contractual liability/cash

flow. All leases expire in more than five years.

Notes to the Interim Condensed Consolidated Financial

Information Continued

7. Related party balances and transactions

As at the period end the Group owed £139,599 (December 2020: £99,700, June 2020: £18,400) to Thalassa

Holdings Limited (“Thalassa”), a company under common directorship. The bulk of this sum related to legal fees

settled by Thalassa but payable by the Group. The remained related to accounting and registered office services

supplied to the Group by Thalassa at cost. The total amount is treated as an unsecured, interest free loan made

repayable on demand. The full amount was settled August 2021.

During the period the Group accrued £77,598 (December 2020: nil, June 2020: nil) for consultancy and administrative

services provided to the Group by a company in which the Chairman has a beneficial interest.

8. Share capital

As at

30 Jun 21

30 Jun 20

31 Dec 20

Unaudited

Audited

Allotted, issued and fully paid:

22,697,000 ordinary shares of £0.01 each

226,970

9,164,017 treasury shares of £0.01 each

91,640

Total Share Capital

318,610

During the year to 30 September 2019, the Company underwent a Court approved restructure of capital and buy back of shares. Under this action

the issued 20p shares were converted to 1p; capital reserves were transferred to distributable reserves; 59,808,456 shares were repurchased, and

a new Capital Redemption Reserve of £0.598m was established.

Investment in Own Shares

At the year-end, 9,164,017 shares were held in treasury (September 2019: 9,164,017, June 2020: 9,164,017), and at the date of this report 9,164,017

were held in treasury.

9. Subsequent events

There were no subsequent events.

10. Copies of the Interim Report

The interim report is available on the Company’s website: www.alina-holdings.com.