Final Results

RNS Number : 0671P

Braveheart Investment Group plc

16 June 2022

 

Prior to publication, the information contained within this announcement was deemed by the Company to constitute inside information as stipulated under the UK Market Abuse Regulation. With the publication of this announcement, this information is now considered to be in the public domain.

16 June 2022    

Braveheart Investment Group plc

("Braveheart", the "Company" or the "Group") 

Final Results for the year ended 31 March 2022 & Notice of AGM

Braveheart Investment Group plc (AIM: BRH) announces its audited annual results for the financial year ended 31 March 2022, highlights of which are set out below:

· Earnings per share of 3.10 pence per share (2021: 36.30 pence per share)

· Funds raised of £2.5 million before expenses during the year

· Additional investment into Phase Focus Limited

· Continued progress at Paraytec Limited

For further information:

Braveheart Investment Group plc Tel: [phone] Trevor Brown, Chief Executive Officer Allenby Capital Limited (Nominated Adviser and Joint Broker) Tel: [phone] David Worlidge / James Reeve / George Payne Peterhouse Capital Limited (Joint Broker) Tel: [phone] Heena Karani / Lucy Williams

Chief Executive Officer's Report

I am pleased to report to shareholders for the year ended 31 March 2022.

Overview

Group strategy continues to be application of the Board's expertise and financial resources to those existing and newly acquired businesses which the Board consider have the greatest potential for outperformance. Details of these investments together with operational updates about each of these companies follow below. 

Portfolio and Strategic Investments

As in previous years we have continued to divide our investments into two categories, namely our Strategic Investments and Portfolio Investments. Each of the Strategic Investments, of which there were five at the end of the year under review, is summarised below in this annual report.  The Portfolio Investments are direct investments into third party companies that were made by Braveheart from 2002 until the summer of 2015 (the 'Portfolio Investments').  There are investments into a total of 13 different companies within the Portfolio Investments as at 31 March 2022.  Sentinel Medical Limited is held in the accounts at £33, the original cost of Braveheart's shareholding holding.  This investment has been moved out of Strategic Investments and into Portfolio Investments, until the business reaches a point where it is determined to have significant value. Therefore, at the end of the period under review there were investments into a total of 18 companies.  We will continue to manage the Portfolio Investments with a view to seeking exits wherever possible.

Strategic Investments Overview

Paraytec Limited ( Braveheart owns 100% per cent of the company)

Paraytec Limited ("Paraytec") develops high performance specialist detectors for the analytical and life sciences instrumentation markets. In addition, the company has undertaken a programme with the University of Sheffield to develop a rapid test for identifying cancer and pathogens, including viruses.

As reported within our RNS on 15 November 2021, Paraytec has continued to refine the platform technology that underpins its proposed fast, sensitive COVID-19 test. The platform technology (product reference "CX300") comprises a low-cost instrument that utilises intense fluorescent light to detect small specific pathogens or cells in a biological sample.

Although the market for COVID-19 tests has dramatically changed in recent months, the Company believes there will continue to be a significant long-term global market for point-of-care COVID-19 testing. In addition, it is clear that Paraytec's technology platform has the potential for many other applications, and these are primarily the focus of interest in ongoing discussions with potential licensees and acquirers.

Paraytec has recently received ethical and HRA approval to proceed with a clinical study at the Sheffield Teaching Hospitals NHS Foundation Trust. This study will collect specimens from COVID-19 positive participants for up to ten days and monitor the ability of the Paraytec test to follow the course of infection by comparison with the culture of SARS-CoV-2 virus from the specimens. The test performance will also be compared with PCR (polymerase chain reaction) and lateral flow tests. If successful, the Directors believe these results will be a powerful demonstration of the accuracy and uniqueness of the Paraytec test.

Professor Carl Smythe's team has established a CAT 3 laboratory at the University of Sheffield to support the development of the CX300 technology platform. This will allow the research team to study a wide range of pathogens that cause infectious diseases, including COVID-19. Potential acquirers have focused their interest on a range of applications for the CX300, so the Paraytec team will now concentrate on developing multiple tests, including those previously commenced in bladder cancer and bacteraemia that causes sepsis.

Phasefocus Holdings Limited (Braveheart owns 42.67 per cent of the company)

Phasefocus Holdings Limited ("Phasefocus"), a spin-out from the University of Sheffield, has developed a series of patented computational imaging and analysis techniques that have a wide range of applications including live cell imaging, engineering metrology and electron microscopy. The company's novel method for high fidelity quantitative imaging and microscopy is known in the scientific literature as "ptychography".

Phasefocus's flagship product, Livecyte^TM, allows researchers and biotechnology companies to characterise the dynamic behaviour of live cells in ways previously not possible. Livecyte integrates Phasefocus's patented label-free Quantitative Phase Imaging technology with state-of-the-art automatic cell tracking algorithms. This enables users to automatically characterize growth, morphology and motility of large populations of cells in a 96-well plate assay format.

Since moving to a distribution sales model in 2019, partnerships with a wide range of distributors have resulted in a marked increase in awareness of the company's products in the marketplace. The reach of distributors, such as Cytena (part of the BICO group, formerly CELLINK Inc.) and SinsiTech in China, has helped Phasefocus enter new territories and has led to a rapid growth in revenues.

In the company's financial year ended 31 December 2021, revenue increased by more than 125% over the prior year. The company's head count also increased by more than 10% in 2021. To enable the company to keep up with production demand, in March 2022 Phasefocus opened an expanded production facility in Nottingham Science Park, Nottingham, UK. The new facility has more than four times the floor space of the previous production facility, with room to expand further as demand grows in future years.

Kirkstall Limited (Braveheart owns 80% of the company)

Kirkstall Limited ("Kirkstall") operates in the market known as 'organ-on-a-chip', where it has developed Quasi Vivo®, a system of chambers for cell and tissue culture in laboratories. Its patented technology is used by researchers in the growing 'organ-on-a-chip' market, where academia and drug development companies need to maintain living cells in a nutrient flow.

With most of Europe's university research laboratories operating fully again following relaxation of restrictions on non-COVID related research, Kirkstall has seen a steady upturn in sales enquiries and orders for its Quasi Vivo® products. The versatility and uniqueness of these products has been able to attract attention into wider application areas including inhalation toxicity, parasitic infections, nanotechnology, biosystem ecologies.

There has also been increased interest in its products from non-European countries including USA, China, India and Singapore in the field of non-animal micro-physiological in vitro models.

In the last year, the company identified three new peer reviewed publications from research teams utilising Kirkstall's Quasi Vivo ® system. Kirkstall is a strong supporter of such research, as publications like these are an excellent marketing tool.

The first study involved the evaluation of drug absorption via gastrointestinal tract tissue and was conducted at Sheffield Hallam University in collaboration with the Croda Group.  The research is the result of Kirkstall's partnership with Animal Free Research UK that started two years ago to support human-relevant science and the principle of the replacement of animals in research. https://doi.org/10.3390/pharmaceutics14020364

The second study was conducted by the research group of Berthold Huppertz at the Medical University of Graz, Austria. The study involved ex vivo human placental tissue and concluded that Kirkstall's Quasi Vivo ® system is the most native-like in vitro system that can be used to simulate blood flow from the mother to placenta and back, and thus can enable novel and more physiological study designs. https://doi.org/10.3390/ijms22147464

The third study was conducted by the group of Louise Carson, School of Mechanical and Aerospace Engineering, Queens University Belfast. The group utilised the Quasi Vivo ® system to develop an in vitro model to evaluate long term biocompatibility of bone substitute biopolymer constructs. 10.1016/j.actbio.2021.07.049

Since September 2021, Kirkstall's Quasi Vivo® system has been on public display at the Francis Crick Institute, London at their 'Outwitting Cancer' exhibition. www.crick.ac.uk/whats-on/exhibitions/outwitting-cancer/outwitting-cancer-exhibition

A new Quasi Vivo® platform with advanced fluid flow is in late stage development at Kirkstall. The system is a complete redesign, incorporating new features which the directors of Kirkstall believe are highly desired by both pharmaceutical and academic users. Prototypes are currently undergoing user testing by Kirkstall's partners in the CyGenTig European consortium, in which new techniques are under development for the production of engineered tissues by optogenetics, aiming to build replacement human organs by controlling individual cell growth using coloured laser light.

Autins Group plc (Braveheart owns 8.7% of the company)

During the period, Braveheart invested in Autins Group plc ("Autins") (AIM: AUTG) through market purchases of shares. Autins specialises in solving acoustic and thermal problems in the automotive industry and other specialist applications. In particular, the company's leading product Neptune, a non-woven microfibre web, is produced by a mixture of engineered polyester fibre and melt-blown polypropylene. This material outperforms traditional automotive insulation and is gaining traction in office and flooring acoustics applications.

The Board considers that this investment fits well in its portfolio of advanced technology businesses and seeks to identify opportunities with Autins that will benefit both companies.

Velocity Composites plc (Braveheart owns 4.13% of the company)

In September 2021, Braveheart acquired 4.13% of Velocity Composites plc ("Velocity") (AIM: VEL) through the purchase of shares. Velocity is a leading supplier of advanced composite material kits to the Aerospace sector. Velocity Composites' clients include multi-national manufacturers of composite parts and assemblies, who in turn deliver to the world's leading civil and military aircraft manufacturers. The Airbus A320, A330, A350, A380, Eurofighter Typhoon, F35 Joint Strike Fighter, Boeing 737, Boeing 787 and V22 Osprey are all constructed using parts manufactured from Velocity's kits.

The Board considers that this investment fits well in its portfolio of advanced technology businesses.

Outlook

We have entered our new financial year acutely aware of the geo-political and macro-economic challenges the world is facing. However, we are hopeful that this turbulence will also present interesting new investment opportunities and we will be positioned to respond as events unfold.

Financial Review

During the year we continued the comprehensive review of our cost base and continued to reduce the central costs.

Income Statement

Fee-based revenue was generated by Braveheart Investment Group Plc. The principal revenue from the Group's operations comprises investment management fees, with total revenue during the year being £43,000 (2021: £60,000). Revenue derived from strategic subsidiary undertakings has decreased by £64,000 from £205,000 in 2021 to £141,000 in 2022. Finance income was £Nil (2021: £Nil), this being interest on outstanding loan notes within the directly held portfolio.

As at 31 March 2022, the total number of directly held investments in the portfolio of Strategic Investments and the Portfolio Investments was 18 companies (2021: 19), of which two have been consolidated into Braveheart's accounts.  The fair value of the directly held portfolio, excluding the two companies now consolidated into the Company's accounts, was £4,716,080 (2021: £613,847). During the year the group made investments of £1,467,000 into three portfolio companies, Autins Group Plc, Velocity Composites Plc and Phase Focus Holdings Limited. This excludes investments made into investments that are controlled by the Group. Two investments (being Kirkstall and Paraytec) that are considered as Strategic Investments by the Board are now deemed to be 'controlled' by the Company and as a result of this, those companies have been consolidated into Braveheart's accounts (but remain categorised by management as Strategic Investments). At the year end, the value of these two investments was £220,622 (2021: £220,622), although the value in the consolidation in terms of goodwill stands at £205,775 (2021: £205,775, two companies). Therefore, the fair value of the directly held portfolio (Strategic Investments and Portfolio Investments and including the two investments that have now been consolidated into the Company's accounts) was £4,921,855 (2021: £819,622). 

Total income for the year ended 31 March 2022, including realised gains and unrealised revaluation gains and losses, was £2,937,000 (2021: £16,562,000).

The average number of employees remained at 7 during the period under review. The number of employees working within the Group, excluding employees of Kirkstall and Paraytec, was 4 during the year under review (2021: 3). Employee benefits expense was £636,000 (2021: £1,341,000). Other operating and finance costs decreased to £753,000 (2021: £954,000). 

The total profit after tax decreased to £1,442,000 (2021: £13,907,000), equivalent to a basic profit per share of 3.10 pence (2021: 36.30 pence).

Financial Position

The Group's net assets of £6,607,000 (2021: £2,564,000), include goodwill of £206,000 (2021: £206,000).

The carrying value of goodwill was reviewed during the year. The income method was not deemed appropriate for the companies under review due to the difficulty of projecting the future income of these companies, so market value approach was considered more appropriate.

At the year end the Group had cash balances of £1,894,000 (2021: £2,143,000 (including discontinued operations)). There were no material borrowings.

A summary analysis of the Group's performance is as follows:

			2022	2021
			£'000	£'000
Investment management revenue and sales			186	269
Finance income			-	-
Income before portfolio movements			186	269
Profit on disposal of investments			60	7,690
Profit on sale of subsidiary			-	8,931
Change in fair value of investments, gain on disposal of investments and movement in contingent liability			2,691	(329)
Total income of continuing activities			2,937	16,561
Employee benefits expense (including share- based payments)			(636)	(1,341)
Impairment of goodwill			-	(63)
Other operating and finance costs			(755)	(955)
Total costs on continuing activities			(1,391)	(2,359)
Profit before tax - continuing			1,546	14,202
Loss on discontinued operations			-	(69)
Tax			(104)	(226)
Total profit and total comprehensive profit for the year			1,442	13,907
Opening cash balance	2,143			685
Investment in portfolio companies	(1,467)			(250)
Proceeds from sale of equity investments	246			17,346
Amount paid to BBB	(171)			-
Dividends paid	-			(15,859)
Warrants and share options exercised	7			867
Funds raised - net of share issue costs	2,416			641
Other activities	(1,280)			(1,287)
Closing cash balance	1,894			2,143
Net assets	6,607			2,564

 

 

Key Performance Indicators (KPIs)

The KPIs we use to monitor business performance have been changed in order to better reflect the emphasis that the Board has placed upon the development of the Strategic Investments as the best way to increase shareholder value over the short and medium term. Given the nature of our business these KPI's remain as, primarily, financial measures.  They are:

	2022	2021
Cash ('£000)	1,894	2,143
Share price (pence)	17.75	70.50
Income ('£000)	186	269
Value of investments	4,716	614

 

On behalf of the Board

Trevor E Brown

Chief Executive Officer

15 June 2022

Consolidated Statement of comprehensive INCOME for the year ended 31 March 2022

		2022	2021
	Notes	£	£
Revenue from contracts with customers	2	185,814	268,725
Change in fair value of investments		2,690,598	(329,083)
Profit on disposal of investments	4	60,414	7,690,287
Profit on sale of subsidiary	4	-	8,931,434
Total income		2,936,826	16,561,363
Employee benefits expense		(636,141)	(1,340,954)
Impairment of goodwill	7	-	(62,543)
Other operating costs		(752,449)	(953,791)
Total operating costs		(1,388,590)	(2,357,288)
Finance costs		(2,349)	(1,745)
Finance income		138	150
Total costs		(1,390,801)	(2,358,883)
Profit before tax		1,546,025	14,202,480
Tax		(104,048)	(226,367)
Profit from continuing operations		1,441,977	13,976,113
Loss from discontinued operations, net of tax		-	(69,350)
Total profit and total comprehensive loss for the year		1,441,977	13,906,763
Profit attributable to :
Equity holders of the parent		1,453,804	13,936,436
Non-controlling interest		(11,827)	(29,673)
		1,441,977	13,906,763
Earnings per share		Pence	Pence
- basic	5	3.10	36.30
- diluted	5	2.82	35.25

consolidated statement of financial position as at 31 March 2022

 

			2022	2021
		Notes	£	£
ASSETS
Non-current assets
Property, plant and equipment			1,776	2,166
Intangible assets			26,103	28,152
Goodwill			205,775	205,775
Investments at fair value through profit or loss			4,716,080	613,847
			4,949,734	849,940
Current assets
Inventory			90,113	98,441
Trade and other receivables			123,412	105,772
Cash and cash equivalents		8	1,893,931	2,142,866
			2,107,456	2,347,079
Total assets			7,057,190	3,197,019
LIABILITIES
Current liabilities
Trade and other payables			(272,432)	(591,079)
Deferred income			(7,025)	(41,843)
			(279,457)	(632,922)
Non-current liabilities
Deferred taxation			(170,398)	-
Total liabilities			(449,855)	(632,922)
Net assets			6,607,335	2,564,097
EQUITY
Called up share capital			1,044,807	766,148
Share premium reserve			4,371,343	2,226,671
Share based payment reserve			309,835	137,200
Retained earnings			899,202	(559,897)
Equity attributable to owners of the Parent			6,625,187	2,570,122
Non-controlling interest			(17,852)	(6,025)
Total equity			6,607,335	2,564,097

Consolidated Statement of CAsh flows for the year ended 31 March 2022

			2022	2021
			£	£
Operating activities
Profit for the year			1,441,977	13,906,763
Adjustments to reconcile profit before tax to net cash flows from operating activities
Share based payment			177,930	400,148
(Increase) / Decrease in the fair value movements of investments			(2,690,598)	329,083
Profit on disposal of subsidiary			-	(8,931,434)
Profit on disposal of equity investments			(60,414)	(7,690,287)
Fees taken from investment proceeds			-	78,419
Bonus in lieu of cash			-	300,000
Non-controlling interest on disposal			-	(92,673)
Investment movement owed to BBB			41,265	(15,528)
Depreciation and amortisation			12,919	11,755
Impairment of goodwill			-	62,543
Interest income			(138)	(150)
Taxation			170,398	(4,136)
Decrease in inventory			8,328	39,253
Increase in trade and other receivables			(17,640)	(8,400)
(Decrease) / Increase in trade and other payables			(353,465)	330,225
Cash flow from operating activities			(1,269,438)	(1,284,419)
Investing activities
Proceeds from sale of investments			245,871	17,346,338
Amount paid to BBB			(170,887)	-
Purchase of investments			(1,467,469)	(250,000)
Purchase of intangibles			(9,834)	(5,549)
Purchase of tangibles			(646)	(1,124)
Interest received			138	150
Net cash flow from investing activities			(1,402,827)	17,093,951
Financing activities
Dividends paid			-	(15,859,160)
Warrants and share options exercised			7,480	866,980
Funds raised, net of share issue costs			2,415,850	640,623
Net cash flow from financing activities			2,423,330	(14,351,557)
Net (decrease) / increase in cash and cash equivalents			(248,935)	1,457,975
Cash and cash equivalents at the beginning of the year			2,142,866	684,891
Cash and cash equivalents at the end of the year			1,893,931	2,142,866

Consolidated Statement of ChAnges in Equity for the year ended 31 March 2022

	Called up Share Capital	Share Premium Reserve	Share based payment Reserve	Retained Earnings/ (Deficit)	Total	Non-controlling interest	Total Equity
	£	£	£	£	£	£	£
At 1 April 2020	561,555	91,657	-	1,043,955	1,697,167	79,572	1,776,739
Profit and total comprehensive profit for the year Allotment of shares	- 204,593	- 2,135,014	- -	13,936,436 -	13,936,436 2,339,607	(29,673) -	13,906,763 2,339,607
Dividend paid	-	-	-	(15,859,160)	(15,859,160)	-	(15,859,160)
Non-controlling interest on disposal	-	-	-	55,924	55,924	(55,924)	-
Share based payments	-	-	400,148	-	400,148	-	400,148
Transfer to retained earnings	-	-	(262,948)	262,948	-	-	-
Transactions with owners, recognised directly in equity	204,593	2,135,014	137,200	(1,603,852)	872,955	(85,597)	787,358
At 1 April 2021	766,148	2,226,671	137,200	(559,897)	2,570,122	(6,025)	2,564,097
Profit and total comprehensive profit for the year Allotment of shares	- 278,659	- 2,228,822	- -	1,453,804 -	1,453,804 2,507,481	(11,827) -	1,441,977 2,507,481
Cost of shares issued	-	(84,150)	-	-	(84,150)	-	(84,150)
Share based payments	-	-	177,930	-	177,930	-	177,930
Transfer to retained earnings	-	-	(5,295)	5,295	-	-	-
Transactions with owners, recognised directly in equity	278,659	2,144,672	172,635	1,459,099	4,055,065	(11,827)	4,043,238
At 31 March 2022	1,044,807	4,371,343	309,835	899,202	6,625,187	(17,852)	6,607,335

Notes to the financial statements for the year ended 31 March 2022

1 Corporate information

The Group and Company financial statements of Braveheart Investment Group plc (the Company) for the year ended 31 March 2022 were authorised for issue by the Board of Directors on 15 June 2022 and the statements of financial position were signed on the Board's behalf by Trevor Brown.

Braveheart Investment Group plc is a public company incorporated in the United Kingdom under the Companies Act 2006 limited by shares.  The address of the registered office is detailed at the back of this report.  The nature of the Group's operations and its principal activities are set out in the Strategic Report and Directors' Report.  The Company is registered in Scotland.  The Company's ordinary shares are traded on the AIM market of the London Stock Exchange.

While the financial information included in this announcement has been prepared in accordance with International Financial Reporting Standards (IFRSs), this announcement does not itself contain sufficient information to comply with IFRSs. The Group has also published full financial statements that comply with IFRSs available on its website and to be circulated shortly.

The financial information set out in the announcement does not constitute the company's statutory accounts for the years ended 31 March 2022 or 2021. The financial information for the year ended 31 March 2021 is derived from the statutory accounts for that year, which were prepared under IFRSs, on which the auditors gave a qualified report, and which have been delivered to the Registrar of Companies.

The financial information for the year ended 31 March 2022 is derived from the statutory accounts for that year, which were prepared under IFRSs, on which the auditors have given an unqualified report that did not contain a statement under section 498(2) or 498(3) of the Companies Act 2006, and which will be delivered to the Registrar of Companies.

2 Accounting policies

Basis of preparation

The Group and Company financial statements have been prepared in accordance with UK-adopted international accounting standards in accordance with the requirements of the Companies Act 2006 and in accordance with the requirements of the AIM rules. The principal accounting policies adopted by the Group and by the Company are set out in the following notes.

The consolidated financial statements have been prepared on a historical cost basis, except where otherwise indicated. The financial statements are presented in sterling and all values are rounded to the nearest pound (£) except where otherwise indicated.

3 Revenue from contracts with customers

Revenue is attributable to the principal activities of the Group. In 2022 and 2021, all revenue arose within the United Kingdom.

				2022	2021
				£	£
Investment management				1,500	3,600
Consultancy				43,090	59,634
Sale of goods				33,537	54,333
Grant income				74,984	111,181
Royalties				32,703	39,977
				185,814	268,725

Of the revenue stated above, £43,090 (2021: £59,634) related to The Lachesis Seed Fund Limited Partnership.

The group derives revenue from the transfer of goods and services over time and at a point in time in the following major product lines:

	Investment management		Consultancy	Sale of goods		Grant  income	Royalties	Total
2022
Timing of revenue recognition
At a point in time	1,500		-	33,537		74,984	-	110,021
Over time	-		43,090	-		-	32,703	75,793
	1,500		43,090	33,537		74,984	32,703	185,814
2021
Timing of revenue recognition
At a point in time	3,600		-	54,333		111,181	-	169,114
Over time	-		59,634	-		-	39,977	99,611
	3,600		59,634	54,333		111,181	39,977	268,725

4 Profit on sale of investment and subsidiary

During the previous year, the company disposed of its shareholding in Pharm 2 Farm Limited in exchange for 310,354,815 shares in Remote Monitored Systems Plc. The sale was completed on 5 November 2020, and the group made a profit of £8,931,434 on the initial investment of £225,000.

The group also sold 519,992,405 shares in Remote Monitored Systems Plc for £17,424,757. The shares were acquired during the previous year through a share for share exchange, cash investment and the sale of Pharm 2 Farm Limited. The consideration of these various transactions was £9,734,470, resulting in a profit on disposal of £7,690,287.

 

5 Earnings per share

Basic earnings per share has been calculated by dividing the profit attributable to equity holders of the parent by the weighted average number of ordinary shares in issue during the year.

The calculations of profit per share are based on the following profit and numbers of shares in issue:

	2022	2021
	£	£
Profit for the year	1,441,977	13,906,763
Weighted average number of ordinary shares in issue:	No.	No.
For basic profit per ordinary share	46,870,999	38,307,451
Potentially dilutive ordinary shares	4,596,000	1,140,000
For diluted earnings per ordinary share	51,466,999	39,447,451

Dilutive earnings per share adjusts for share options granted where the exercise price is less than the average price of the ordinary shares during the period.  At the current year end there were 4,596,000 (2021: 1,140,000) potentially dilutive ordinary shares.

The diluted loss per Ordinary Share is calculated by adjusting the weighted average number of Ordinary shares outstanding to consider the impact of options, warrants and other dilutive securities.

6 Investments at fair value through profit or loss

	Level 1	Level 2		Level 3
	Equity investments in quoted companies	Equity investments in unquoted companies	Debt investments in unquoted companies	Equity investments in unquoted companies	Debt investments in unquoted companies	Total
	£	£	£	£	£	£
At 1 April 2020	-	-	-	724,402	-	724,402
Additions at Cost	9,734,470	-	-	203,000	-	9,937,470
Disposals	(9,734,470)	-	-	-	-	(9,734,470)
Amount owed to creditors	-	-	-	15,528	-	15,528
Change in Fair Value	-	-	-	(329,083)	-	(329,083)
At 1 April 2021	-	-	-	613,847	-	613,847
Additions at Cost	1,420,534	-	-	46,935	-	1,467,469
Disposals	-	-	-	(48,274)	-	(48,274)
Amount owed to creditors	-	-	-	(7,560)	-	(7,560)
Change in Fair Value	(286,680)	-	-	2,977,278	-	2,690,598
At 31 March 2022	1,133,854	-	-	3,582,226	-	4,716,080

Included in the balance above are investments that would be owed to the British Business Bank through the Revenue Share Agreement. At the year end, an amount of £31,043 would be due to the British Business Bank on disposal. This liability is shown in the accounts within other creditors.

As at 31 March 2022, the group total value of investments in companies was £4,716,080 (2021: £613,847). The group total change in fair value during the year was a profit of £2,690,598 (2021: loss £329,083).

Investments, which is made up of equity investments, are designated on initial recognition as financial assets at fair value through profit or loss. This measurement basis is consistent with the fact that the Group's performance in respect of its portfolio investments is evaluated on a fair value basis in accordance with an established investment strategy. When investments are recognised initially, they are measured at fair value.

After initial recognition the fair value of listed investments is determined by reference to bid prices at the close of business on the reporting date. Unlisted equity investments are measured at fair value by the directors in compliance with the principles of the International Private Equity and Venture Capital Guidelines, updated and effective December 2015, as recommended by the European Venture Capital Association. The fair value of unlisted equity investments is determined using the most appropriate of the valuation methodologies set out in the guidelines. These include using recent arm's length market transactions; reference to the current market value of another instrument, which is substantially the same; earnings or profit multiples; indicative offers; discounted cash flow analysis and pricing models.

The Group classifies its investments using a fair value hierarchy. Classification within the hierarchy has been determined on the basis of the lowest level input that is significant to the fair value measurement of the relevant investment as follows:

· Level 1 - valued using quoted prices in active markets for identical assets;

· Level 2 - valued by reference to valuation techniques using observable inputs other than quoted prices included within Level 1; and

· Level 3 - valued by reference to valuation techniques using inputs that are not based on observable market data.

The fair values of quoted investments are based on bid prices in an active market at the reporting date. All unquoted investments have been classified as Level 3 within the fair value hierarchy, their respective valuations having been calculated using a number of valuation techniques and assumptions, notwithstanding that the basis of the valuation methodology preferred by the Group is 'price of most recent investment'.   To reflect the potential impact of alternative assumptions and a lack of liquidity in these holdings, a discount of 15% has been applied to all Level 3 valuations. When using the DCF valuation method, reasonably possible alternative assumptions could have a material effect on the fair valuation of investments.

The methodologies used in the year are broken down as follows:

Methodology	Description	Inputs	Adjustments			% of portfolio valued on this basis
Fund Raising	Used for unquoted investments where there has been a funding round, generally within the last twelve months	The price of the most recent investment	A liquidity discount is applied, typically 15%. Where last funding round is greater than twelve months then further discounts ranging between 0% and 100% are applied.			26%
Earnings	Used for investments which we can determine a set of listed companies with similar characteristics	Earnings multiples are applied to the earnings of the company to determine the enterprise value	A liquidity discount is applied, typically 15%			0%
Debt/Loan notes	Loan investments	The fair value of debt investment is deemed to be cost less any impairment provision	Impairment provision if deemed necessary			0%
Indicative offers	Used where an investment is in a sales process, a price has been agreed but the transaction has not yet settled	Contracted proceeds or best estimate of expected proceeds	A discount between 5% - 10% is applied to reflect any uncertain adjustments to expected proceeds			74%
Discounted cash flow	Used for companies with long-term cash flows	Long term cash flows are discounted at a rate considered appropriate for the business, typically 9% - 12.5%	A liquidity discount is applied, typically 15%			0%
Change in fair value in the year:					Group 2022	Group 2021
					£	£
Fair value gains					2,982,077	11,895
Fair value losses					(291,479)	(340,978)
					2,690,598	(329,083)

The gain in the year came from the uplift of the valuation in Phase Focus.

Details of investments where the nominal value of the holding in the undertaking is 20% or more of any class of share are as follows:

Caledonia Portfolio Realisations Limited ('CPR') holds a 20% aggregate shareholding in Verbalis Limited ('Verbalis'), a design and production of automated language translation systems company . Neither CPR nor the Company is represented on the Board or within management of Verbalis and in the opinion of the directors, this shareholding does not entitle the Company to exert a significant or dominant influence over Verbalis. The carrying value of Verbalis is £nil (2021: £nil).

The Company holds a 6.43% aggregate holding on Gyrometric Systems Limited, this company has developed a patent protected system of hardware and software to accurately monitor the vibrations in rotating shafts. During the year Braveheart announced that it and Remote Monitored Systems plc ("RMS") had entered into a share purchase agreement with the founders of Gyrometric Systems Limited to return of control of Gyrometric to the founders of the company, David Orton, Dr Paul Orton and Dr Janet Poliakoff. Under the terms of the reorganisation, Braveheart's 19.5% interest in Gyrometric was reduced to 6.43% and Braveheart wrote off a loan of £39,200. The carrying value of Gyrometric is £1 (2021: £1).

The Company holds a 42% aggregate holding on Phase Focus Holdings Limited, has developed a series of patented computational imaging techniques that have a wide range of applications including live cell imaging, engineering metrology and electron microscopy. The Company is represented on the Board and in the opinion of the directors, this shareholding nor the representative entitles the Company to exert a significant or dominant influence over Phase Focus. The carrying value of Phase Focus is £3,418,573 (2021: £389,913).

The Company holds a 38% aggregate holding on Sentinel Medical Limited, this company is developing a point of care diagnostic device for bladder cancer detection and monitoring . The Company is represented on the Board and in the opinion of the directors, this shareholding nor the representative entitles the Company to exert a significant or dominant influence over Sentinel. The carrying value of Sentinel is £33 (2021: £33).

The registered addresses for these entities are as follows:

Verbalis Limited  Frostineb Cottage, Fala, Pathhead, Midlothian, EH37 5TB

Gyrometric Systems Limited   Dockholme Lock Cottage, 380 Bennett Street, Long Eaton, Nottingham, NG10 4JF

Phase Focus Holdings Limited   125 Wood Street, London, United Kingdom, EC2V 7AW

Sentinel Medical Limited    York House, Outgang Lane, Osbaldwick, York, England, YO19 5UP

7 Goodwill

	Paraytec	Kirkstall	Pharm 2 Farm	Total
	£	£	£	£
Cost - At 31 March 2020	571,137	944,409	131,359	1,646,905
Disposals	-	-	(131,359)	(131,359)
Cost - At 31 March 2021	571,137	944,409	-	1,515,546
Disposals	-	-
Cost - At 31 March 2022	571,137	944,409	-	1,515,546
Impairment - At 31 March 2020	(365,362)	(881,866)	-	(1,247,228)
Impairment		(62,543)-	-	(62,543)
Impairment - 31 March 2021	(365,362)	(944,409)	-	(1,309,771)
Impairment	-	-	-	-
Impairment - 31 March 2022	(365,362)	(944,409)	-	(1,309,771)
Net Book Value - At 1 April 2022	205,775	-	-	205,775
Net Book Value - At 1 April 2021	205,775	-	-	205,775

The income approach was not deemed a reliable method for valuing the goodwill of Paraytec and Kirkstall. Therefore, the market value method was used in order to ascertain the value of goodwill at the year end.

8 Cash and cash equivalents

	2022	2021
	£	£
Cash at bank and on hand	1,893,931	2,142,866

Cash balances are held with HSBC Bank plc and Bank of Scotland plc and earn interest at floating rates based on daily bank deposit rates.

 

 

9 Posting of audited results for the year ended 31 March 2022 and Notice of AGM

 

The Company is pleased to announce that it expects to post its audited report and accounts for the year ended 31 March 2022 to shareholders shortly. It is also posting notice of its annual general meeting ("Notice of AGM"), to be held on 13 July 2022 at 10.30 am. Copies of the final report and accounts and the Notice of AGM will also be available to view on the Company's website shortly, at http://www.braveheartgroup.co.uk/.

 

END

 

 

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