Trading Statement

RNS Number : 7739E

Braveheart Investment Group plc

01 October 2008

 



1 October 2008 

Braveheart Investment Group plc

('Braveheart' or the 'Group')

TRADING UPDATE

Braveheart (AIM: BRH), the technology commercialisation and investment management company, today provides an update on trading for the first half of its financial year to 30 September 2008.

The Group has maintained its investment programme throughout the first half despite increasingly difficult market conditions. The main focus has been on supporting the existing portfolio by way of both equity and debt. In the current market conditions, in which investors are increasingly risk averse, the Group is reducing its risk profile by providing a higher proportion of fixed income instruments with associated equity rights than has hitherto been the case.

During the period a first closing of the Strathclyde Innovation Fund ('SIF') has been achieved with initial commitments totaling £4.5 million from investors comprising Braveheart, the University of Strathclyde and Strathclyde alumni. This also includes Scottish Enterprise's Scottish Co-investment Fund, which has agreed to co-invest alongside SIF by committing an allocation specifically for use by SIF. The commitments made at the first close are over a five year period and provision has been made for additional closings to bring in other potential partners over the next two years. As has been previously noted, the SIF will have the exclusive right of first refusal to fund all commercial investment opportunities that arise in respect of intellectual property emanating from the university.

However, the second proposed fund, being that with the University of Edinburgh, will not now be marketed. Braveheart advised the University of Edinbugh that it was not confident of achieving a satisfactory closing of this fund in the current market conditions and the University decided to undertake a review of its IP commercialisation strategy rather than waiting for markets to improve. In the meantime, Braveheart will continue to fund selected spin-outs from the University of Edinburgh by way of its Alpha EIS Fund.

The Group is maintaining its strategy to expand its presence across the UK from its Scottish base. The Group is currently recruiting and expects to make a number of appointments shortly. These new appointments will reflect Braveheart's desire to build a stronger client base in England and will lead to the opening of a London office. This initiative will ensure that Braveheart is well positioned when the markets recover and the appetite for early stage technology investing strengthens.

The Group has witnessed a challenging first half with difficult trading conditions in the capital markets. This has led to reduced levels of activity and will result in a reduction in turnover at the interim stage. In the absence of any realisations due to the prevailing market conditions, the effect of this reduced activity will be a net loss for the period. Notwithstanding, the Group ended the period with a strong balance sheet with some £4 million of cash and as such is, in the opinion of the directors, well positioned to take advantage of opportunities created from the downturn in markets and the economy more generally.

The Group expects to announce interim results for the half year to 30 September 2008 in early December.

Commenting, Geoffrey Thomson, Chief Executive of Braveheart said, 'This has been a difficult summer for everyone in the financial services industry and Braveheart is no exception. We have witnessed widespread disruption in the capital markets and consequent retrenchment and caution on the part of investors. However, we are working through the current turmoil and continuing with our stated strategy. This will ensure that we are well placed for accelerated growth as markets improve.'

He added: 'We have strong cash reserves and will be progressing our expansion as planned in what has become a buyers' market. We continue to make select investments and support our portfolio and we are pleased to have achieved a first close of the Strathclyde Innovation Fund in the most difficult market conditions that most us can remember. I look forward to updating investors with further news of our progress at the time of our interim results.'

For further information please visit www.braveheart-ventures.co.uk or contact:

Braveheart Investment Group	Tavistock Communications (for Braveheart)
Geoffrey Thomson, Chief Executive	Simon Hudson / Clemmie Carr
Tel: [phone]	Tel: [phone]
[e-mail]	[e-mail]

Notes to Editors

Braveheart Investment Group is a technology commercialisation and investment management company based in Perth, Scotland. Since its formation in 1997 it has made the transition from start-up angel syndicate to fully listed company. Braveheart's shares listed on AIM in March 2007.

Investments are made in young, emerging, unlisted companies where there is potential for significant growth through successful commercialisation of IP and Braveheart enjoys close relationships with several universities to identify emerging technologies. Investments are predominantly technology-focused, however the Group also maintains limited exposure to more traditional businesses.  

Braveheart's diverse portfolio currently comprises over 30 companies and it has completed over 70 deals in its ten year history, including 6 IPOs, 3 trade sales and 8 write-offs and has an exit IRR of 33%.

At the 2008 Ernst & Young Entrepreneur of The Year Awards (Scotland) Braveheart CEO Geoffrey Thomson was given a special award recognising his contribution and support of emerging technology businesses in Scotland over the past decade. 

 

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