Final Results for the year ended 31 March 2017
21 June 2017
Braveheart Investment Group plc
('Braveheart', the 'Company' or the 'Group')
Final Results for the year ended 31 March 2017
Notice of AGM
Braveheart Investment Group plc today announces its audited annual results for the financial year ended 31 March 2017, highlights of which are set out below.
Highlights
· Profit of £780,000;
· Basic earnings per share of 2.88 pence;
· Revenue of £1,154,000;
· Cash at bank of £1,421,000 as at 31 March 2017;
· Continuation of investment strategy with further investment in Kirkstall Ltd and Paraytec Ltd and the purchase of a 40% holding in Gyrometric Systems Ltd
Further information:
Braveheart Investment Group plc
Trevor Brown, Chief Executive Tel: +44 1738 587555
Allenby Capital Limited (Nominated Adviser and Broker to Braveheart)
David Worlidge / James Thomas Tel: +44 20 3328 5656
CHIEF EXECUTIVE OFFICER'S REPORT
I am pleased to report to shareholders for the 12 months ended 31 March 2017.
Overview
In the interim report, the Company reported unaudited revenues of £562,000 in the six months ended 30 September 2016, generating an unaudited profit after tax of £475,000 and earnings per share of 1.67 pence. The Directors are pleased to report that Group performance continued strongly to the year end with revenues of £1,154,000 generating a profit after tax of £780,000 and earnings per share of 2.88 pence.
Throughout the course of the year the board has been firmly focussed on deploying shareholder funds where we believe the prospects for growth are outstanding. To this end we have continued to invest in Paraytec Limited and Kirkstall Limited where our overall holdings have increased. We have also made a new strategic investment in Gyrometric Limited. We will continue to work closely with the boards of our investee companies and anticipate updating shareholders over the current year on any significant operational developments as they arise.
Portfolio
In addition to our new strategic investments we also have investments in a further 12 companies that were made by Braveheart from 2002 until the summer of 2015 (the 'Portfolio'). We commented in our last Annual Report that we undertook a detailed review of the exit opportunities for each company in the Portfolio, with a view to ensuring that these investments were appropriately valued and to also ensure that wherever possible an exit from the investment would be sought. We were therefore pleased to announce on 16 September 2016, that the sale of our holdings in mLED Limited to a large US based technology company had completed. This sale generated £399,000 of consideration for the Group, with £73,000 held back in escrow, and resulted in a book profit to the Group of £303,000 of which £33,000 relates to a non-controlling interest.
As at 31 March 2017 the Group Portfolio has a valuation of £862,000 (2016: £468,000). We will continue to manage the Portfolio with a view to seeking exits wherever possible and appropriate.
Viking Fund Managers
The fund management business, Viking Fund Managers ('Viking') had another successful year, working throughout the Yorkshire and Humber region. It manages the Finance Yorkshire Equity Fund ('FYEF') which invests both debt and equity instruments in development capital situations and unit sizes range from £50,000 to £2 million.
During the year, the Viking team invested £3.1 million, bringing the total invested at 31 March 2017 to £49.4 million (2016: £46.3 million) into a total of 55 SMEs (2016: 53).
Thereafter, Viking is contracted to continue into the portfolio management phase until December 2019. Throughout last year the team were responsible for securing several exits for the fund. The portfolio continues to look promising as it moves into growth and realisation phase, with several investments having significant potential value to be returned.
Paraytec Limited operational update
Paraytec (www.paraytec.com) develops high performance specialist detectors for the analytical and life sciences instrumentation market. The company is based in York in the United Kingdom and has developed and patented its innovative ActiPix™ technology for optical imaging and absorbance measurements of fluid samples flowing in capillaries or fluid flow cuvettes. This technology enables researchers to measure the viscosity of drug formulations and the effective size of the active ingredients in these formulations. Paraytec's instruments can also be used to monitor how tablets, gels and creams, release their active ingredients into liquids, including biological media, as well as across membranes such as skin. The use of this technology allows the user to materially speed up drug development efforts by providing data in a real time that would otherwise be unavailable.
Paraytec will focus resources on supporting its two license deals, which are progressing well: Malvern Instruments (part of Spectris plc) has incorporated ActiPix™ technology into its own branded instruments, which are now well established in the market place; and Sirius Analytical launched its own instrument in the US in late 2016. Both licensees now market instruments globally and sell them to analytical laboratories and life science researchers in universities and the major pharmaceutical and biopharmaceutical companies. In May 2017, Malvern and Paraytec commenced a grant funded programme to develop the next generation of products based on the ActiPix™ technology. Innovate UK will provide more than £1m of grant funding to support the cost of this work, which will last up to 3 years and include leading pharmaceutical companies.
Braveheart first invested in 2016 and has since made further investments during the year, including a convertible loan, which if converted is forecast to increase its total holdings to 46%.
Kirkstall Limited operational update
Kirkstall (www.kirkstall.com) has developed Quasi Vivo™, a system of interconnected chambers for cell and tissue culture in laboratories. Its patented technology is used by researchers in academia and drug development companies to maintain living cells in a nutrient flow. The technology, often referred to as 'organ on a chip', provides a way to model the behaviour of multiple human organs interconnected by a flow system that mimics the flow of blood in the body. Introducing flow into cell culture has the benefit that the cells are more active and respond to stimuli (such as dosing with a drug or chemical) in a way that is more predictive of what is likely to happen in a clinical environment.
Kirkstall's products are already being used by researchers in the development of drugs, nutraceuticals, cosmetics and personal care products. By enabling the testing of drugs on living tissue, there is the potential to greatly reduce the need for expensive animal testing and improve the chances of success in human clinical trials.
Braveheart first invested in Kirkstall in mid 2016, because it saw the Company had a world leading technology in a market that is forecast to grow at 38% CAGR. The group has continued to invest in Kirkstall post year end, and has now increased its percentage holding from 32% to 38%.
In December 2016, Lush Cosmetics announced that Kirkstall had a won top prize at its global awards ceremony for Innovation and Training in the use of Quasi Vivo™ as a leading alternative to animal testing for cosmetics and drug development. Kirkstall has started to use the prize money to deliver more training events for researchers in the EU and US who want to use Quasi Vivo.
In May 2017, Kirkstall organised its annual Quasi Vivo user conference in Manchester, UK. Over 3 days, 100 academic and industry researchers from all over the world presented the results of their work and shared experiences of using Quasi Vivo. There were many globally renowned speakers and it was a great showcase of Kirkstall's product capabilities. The event was sponsored by several key players in the market, including Lonza Group, one of the world's leading suppliers to the Pharma & Biotech and Specialty Ingredient markets and a key distributor of Kirkstall's products in the USA. Also in May 2017, a leading UK based CRO commenced Quasi Vivo validation trials with liver cells to validate Kirkstall's predictive assays, that it hopes will become the next industry standard tests used by all pharmaceutical companies.
Gyrometric Systems Limited operational update
In January 2017, we announced that Braveheart had acquired a 40% holding in Gyrometric Systems Limited, (www.gyrometric.systems). This company has developed a patent protected system of hardware and software to accurately monitor the vibrations in rotating shafts. Warnings generated by this system helps prevent expensive and untimely breakdowns in industry and transport. The company is a spin out from Nottingham Trent University and is based in Nottingham, UK. Its equipment is used to measure the performance of both high-speed and low-speed shafts in a wide variety of applications such as marine engines, wind turbines and industrial machine tools. The Gyrometric monitoring system can be used to protect drive-trains from overload damage, or predict when maintenance is required and hence allows customers to operate at maximum efficiency, saving energy, maintenance and capital costs. By detecting and monitoring minute irregularities in the motion of drive shafts the Gyrometric products predict failure of these shafts and the motors, bearings and couplings attached to them.
Braveheart invested because it sees strong and rapid growth potential for this company in a niche but global market. Gyrometric already has established sales partners in Germany and Asia and its technology has been operating successfully in the tug boat and cruise liner markets for several years. The company is now experiencing strong demand to roll this out to cruise liner operators across the world, where planned maintenance can save them many hundred thousand pounds a day verses a breakdown or delayed departure. Gyrometric's market leading marine OEM customer has recently forecast a significant order for the Gyrometric system this year.
Gyrometric reported a small profit for the year ended 31 December 2016 and, to support the planned growth, the Company has taken on additional staff and will move to larger premises in Nottingham. Braveheart is working closely with management to drive the business forward and considering increasing its investment.
In May 2017, Gyrometric learned that its technology will be installed and tested in the 7MW wind turbine nacelle at Blyth, the UK's Centre of Excellence for Renewable Energy. It will be working with the Centre's partners who are the leading turbine manufacturers, operators and energy producers to demonstrate Gyrometric's ability to prevent drive-train failures, each costing up to £700,000 in downtime and repair.
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 is generated by both Strathtay Ventures Limited ('SVL') and Viking Fund Managers Limited ('VFM'). The principal revenue from the Group's operations principally comprises investment management fees, with total revenue during the year being £1,154,000 (2016: £1,133,000).
Finance income was £5,000 (2016: £7,000), this being interest on outstanding loan notes within the directly held portfolio.
As at 31 March 2017, the fair value of the Group's directly held portfolio of 20 companies was £862,000. During the year the Group made investments of £472,000 into three new portfolio companies. As previously noted, the investment in mLED Limited was realised generating consideration of £399,000.
Total income for the year ended 31 March 2017, including realised gains and unrealised revaluation gains and losses, was £1,608,000 (2016: £196,000).
The average number of employees decreased by 5 during the period under review. Employee benefits expense was £441,000 (2016: £1,001,000). Other operating and finance costs reduced to £388,000 (2016: £516,000).
The total profit after tax increased to £780,000 (2016: loss of £1,693,000), equivalent to a basic profit per share of 2.88 pence (2016: loss per share of 6.23 pence).
Financial Position
Net assets at 31 March 2017 were £2,486,000 (2016: £1,705,000), equivalent to 9.19 pence per share (2016: 6.30 pence) the increase reflecting trading results.
The Group's net assets include goodwill of £380,000 (2016: £380,000). The carrying value of goodwill was reviewed during the year and in light of current projections of future performance the Directors did not impair goodwill.
At the year end the Group had cash balances of £1,421,000 (2016: £1,263,000). There were no material borrowings.
A summary analysis of the Group's performance is as follows:
|
|
2017 |
2016 |
|
|
£'000 |
£'000 |
|
Investment management revenue |
1,154 |
1,133 |
|
Finance income |
5 |
7 |
|
Income before portfolio movements |
1,159 |
1,140 |
|
Change in fair value of investments, gain on disposal of investments and movement in contingent liability |
450 |
(944) |
|
Total income |
1,609 |
196 |
|
|
|
|
|
Employee benefits expense (including share based payments) |
(441) |
(1,001) |
|
Goodwill impairment |
- |
(372) |
|
Other operating and finance costs |
(388) |
(516) |
|
Total costs |
(829) |
(1,889) |
|
|
|
|
|
Profit/(Loss) before tax |
780 |
(1,693) |
|
|
|
|
|
Total profit/(loss) and total comprehensive income for the year |
780 |
(1,693) |
|
Opening cash balance |
1,263 |
503 |
|
Increase in portfolio investments |
(472) |
(17) |
|
Proceeds from sale of equity investments |
514 |
1,163 |
|
Other activities |
116 |
(382) |
|
Net cash acquired on acquisition |
- |
(4) |
|
Closing cash balance |
1,421 |
1,263 |
|
Net assets |
2,486 |
1,705 |
|
Net assets per share |
9.19 pence |
6.30 pence |
|
|
|
|
Outlook and Strategy
For the next year and beyond, our attention and resources will be focussed upon developing the three businesses where we now have significant commercial exposure. All enterprises are now entering exciting periods of expansion and we look forward to updating shareholders as events unfold. It is likely that headline revenue will decline in the first half of next year on a relative basis due to the exceptional nature of some of the revenue and realisation gains made this year, but we expect to report a continuing improvement in overall shareholder value.
Key Performance Indicators (KPIs)
The KPIs we use to monitor business performance, which given the nature of our business are primarily financial measures, are:
|
|
2017 |
2016 |
|
Net assets ('£000) |
2,486 |
1,705 |
|
Cash balance (£'000) |
1,421 |
1,263 |
|
Profit/(Loss) after tax attributable to equity holders (£'000) |
780 |
(1,685) |
|
Investments made by Group (£'000) |
472 |
61 |
|
Investments made by Group (number of companies) |
3 |
2 |
|
Realised gain on sale of Group investments (£'000) |
253 |
139 |
|
Net unrealised movement on revaluation of Group investments (£'000) |
183 |
(1,026) |
Principal Risks and Uncertainties
Through its operations the Group is exposed to a number of risks. The Group's risk management objectives and policies are described in the Corporate Governance Statement on page 10 of the financial statements.
On behalf of the Board
Trevor E Brown
Chief Executive Officer
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME for the year ended 31 March 2017
|
|
|
|
|
|
|
|
2017 |
2016 |
|
|
Notes |
£ |
£ |
|
|
|
|
|
|
Revenue |
2 |
1,153,645 |
1,132,739 |
|
Change in fair value of investments |
4 |
183,475 |
(1,025,718) |
|
Movement on contingent liability |
|
13,580 |
(57,362) |
|
Gain on disposal of investments |
|
252,747 |
138,561 |
|
Finance income |
|
5,182 |
7,393 |
|
Total income |
|
1,608,629 |
195,613 |
|
|
|
|
|
|
Employee benefits expense |
|
(440,594) |
(1,001,427) |
|
Impairment of intangible assets |
5 |
- |
(371,944) |
|
Other operating costs |
|
(384,143) |
(501,849) |
|
Total operating costs |
|
(824,737) |
(1,875,220) |
|
|
|
|
|
|
Finance costs |
|
(4,364) |
(13,799) |
|
|
|
|
|
|
Total costs |
|
(829,101) |
(1,889,019) |
|
|
|
|
|
|
Profit/(Loss) before tax |
|
779,528 |
(1,693,406) |
|
|
|
|
|
|
Tax |
|
- |
- |
|
|
|
|
|
|
Total Profit/(Loss) and total comprehensive income for the year |
|
779,528 |
(1,693,406) |
|
|
|
|
|
|
Profit/(Loss) attributable to: |
|
|
|
|
Equity holders of the parent |
|
767,900 |
(1,685,853) |
|
Non-controlling interest |
|
11,628 |
(7,553) |
|
|
|
779,528 |
(1,693,406) |
|
|
|
|
|
|
Earnings per share |
|
Pence |
Pence |
|
- basic |
3 |
2.88 |
(6.23) |
|
- diluted |
|
2.85 |
(6.23) |
|
|
|
|
|
CONSOLIDATED STATEMENT OF FINANCIAL POSITION as at 31 March 2017
|
|
|
|
2017 |
2016 |
|
|
|
Notes |
£ |
£ |
|
ASSETS |
|
|
|
|
|
Non-current assets |
|
|
|
|
|
Goodwill |
|
5 |
380,000 |
380,000 |
|
Investments at fair value through profit or loss |
|
4 |
862,129 |
467,609 |
|
Other receivables |
|
|
150,193 |
293,290 |
|
|
|
|
1,392,322 |
1,140,899 |
|
|
|
|
|
|
|
Current assets |
|
|
|
|
|
Trade and other receivables |
|
|
516,446 |
211,760 |
|
Cash and cash equivalents |
|
|
1,420,850 |
1,262,786 |
|
|
|
|
1,937,296 |
1,474,546 |
|
|
|
|
|
|
|
Total assets |
|
|
3,329,618 |
2,615,445 |
|
|
|
|
|
|
|
LIABILITIES |
|
|
|
|
|
Current liabilities |
|
|
|
|
|
Trade and other payables |
|
|
(768,528) |
(544,350) |
|
Contingent liability |
|
|
- |
(216,711) |
|
Deferred income |
|
|
(31,532) |
(47,090) |
|
|
|
|
(800,060) |
(808,151) |
|
Non-current liabilities |
|
|
|
|
|
Borrowings |
|
|
(43,392) |
(43,392) |
|
Other payables |
|
|
- |
(58,898) |
|
|
|
|
(43,392) |
(102,290) |
|
|
|
|
|
|
|
Total liabilities |
|
|
(843,452) |
(910,441) |
|
|
|
|
|
|
|
Net assets |
|
|
2,486,166 |
1,705,004 |
|
|
|
|
|
|
|
EQUITY |
|
|
|
|
|
Called up share capital |
|
|
541,109 |
541,109 |
|
Share premium reserve |
|
|
1,564,095 |
1,564,095 |
|
Merger reserve |
|
|
523,367 |
523,367 |
|
Retained earnings |
|
|
(118,018) |
(887,552) |
|
Equity attributable to owners of the Parent |
|
|
2,510,553 |
1,741,019 |
|
Non-controlling interest |
|
|
(24,387) |
(36,015) |
|
Total equity |
|
|
2,486,166 |
1,705,004 |
|
|
|
|
|
|
COMPANY STATEMENT OF FINANCIAL POSITION as at 31 March 2017
|
|
|
|
2017 |
2016 |
|
|
Notes |
|
£ |
£ |
|
ASSETS |
|
|
|
|
|
Non-current assets |
|
|
|
|
|
Investments at fair value through profit or loss |
4 |
|
830,674 |
230,543 |
|
Investment in subsidiaries |
|
|
939,761 |
938,127 |
|
Other receivables |
|
|
58,885 |
58,885 |
|
|
|
|
1,829,320 |
1,227,555 |
|
|
|
|
|
|
|
Current assets |
|
|
|
|
|
Trade and other receivables |
|
|
100,488 |
210,785 |
|
Cash and cash equivalents |
|
|
727,388 |
948,562 |
|
|
|
|
827,876 |
1,159,347 |
|
|
|
|
|
|
|
Total assets |
|
|
2,657,196 |
2,386,902 |
|
|
|
|
|
|
|
LIABILITIES |
|
|
|
|
|
Current liabilities |
|
|
|
|
|
Trade and other payables |
|
|
(2,493,096) |
(2,295,601) |
|
Non-current liabilities |
|
|
|
|
|
Other payables |
|
|
- |
(58,898) |
|
|
|
|
|
|
|
Total liabilities |
|
|
(2,493,096) |
(2,354,499) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net assets |
|
|
164,100 |
32,403 |
|
|
|
|
|
|
|
EQUITY |
|
|
|
|
|
Called up share capital |
|
|
541,109 |
541,109 |
|
Share premium reserve |
|
|
1,564,095 |
1,564,095 |
|
Merger reserve |
|
|
523,367 |
523,367 |
|
Retained deficit |
|
|
(2,464,471) |
(2,596,168) |
|
Equity attributable to owners of the Parent |
|
|
164,100 |
32,403 |
|
|
|
|
|
|
CONSOLIDATED STATEMENT OF CASH FLOWS for the year ended 31 March 2017
|
|
|
|
|
|
|
|
|
|
2017 |
2016 |
|
|
|
|
£ |
£ |
|
Operating activities |
|
|
|
|
|
Profit/(Loss) before tax |
|
|
779,528 |
(1,693,406) |
|
Adjustments to reconcile profit/(loss) before tax to net cash flows from operating activities |
|
|
|
|
|
Share-based payments expense |
|
|
1,634 |
10,750 |
|
(Increase)/decrease in the fair value movements of investments |
|
|
(183,475) |
1,025,718 |
|
Gain on disposal of equity investments |
|
|
(252,747) |
(54,644) |
|
Gain on disposal of LLP |
|
|
- |
(83,917) |
|
Impairment losses |
|
|
- |
371,944 |
|
Interest income |
|
|
(5,182) |
(7,393) |
|
Increase in trade and other receivables |
|
|
(161,589) |
(106,433) |
|
(Decrease)/increase in trade and other payables |
|
|
(66,989) |
800 |
|
Cash flow from operating activities |
|
|
111,180 |
(536,581) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Investing activities |
|
|
|
|
|
Proceeds from sale of investments |
|
|
513,857 |
1,074,218 |
|
Proceeds from sale of LLP |
|
|
- |
88,917 |
|
Purchase of investments |
|
|
(472,155) |
(16,500) |
|
Repayment of loan notes |
|
|
- |
147,218 |
|
Acquisition of subsidiary, net of cash acquired |
|
|
- |
(4,509) |
|
Interest received |
|
|
5,182 |
7,393 |
|
Net cash flow from investing activities |
|
|
46,884 |
1,296,737 |
|
|
|
|
|
|
|
Net increase in cash and cash equivalents |
|
|
158,064 |
760,156 |
|
Cash and cash equivalents at the beginning of the year |
|
|
1,262,786 |
502,630 |
|
Cash and cash equivalents at the end of the year |
|
|
1,420,850 |
1,262,786 |
|
|
|
|
|
|
COMPANY STATEMENT OF CASH FLOWS for the year ended 31 March 2017
|
|
|
|
2017 |
2016 |
|
|
|
|
£ |
£ |
|
Operating activities |
|
|
|
|
|
Profit/(Loss) before tax |
|
|
130,063 |
(2,432,772) |
|
Adjustments to reconcile profit/(loss) before tax to net cash flows from operating activities |
|
|
|
|
|
(Increase)/decrease in the fair value movements of investments |
|
|
(152,213) |
948,436 |
|
(Gain)/loss on disposal of equity investments |
|
|
(76,582) |
73,819 |
|
Gain on disposal of LLP |
|
|
- |
(83,917) |
|
Impairment of subsidiaries |
|
|
- |
839,253 |
|
Interest income |
|
|
(4,985) |
(7,382) |
|
Decrease in trade and other receivables |
|
|
110,297 |
196,498 |
|
Increase in trade and other payables |
|
|
138,597 |
345,239 |
|
Net cash flow from operating activities |
|
|
145,177 |
(120,826) |
|
|
|
|
|
|
|
Investing activities |
|
|
|
|
|
Proceeds from sale of equity investment |
|
|
100,819 |
396,029 |
|
Purchase of investments |
|
|
(472,155) |
(16,500) |
|
Proceeds from sale of LLP |
|
|
- |
88,917 |
|
Repayment of loan notes |
|
|
- |
147,218 |
|
Interest received |
|
|
4,985 |
7,382 |
|
Net cash flow from investing activities |
|
|
(366,351) |
623,046 |
|
|
|
|
|
|
|
Net movement in cash and cash equivalents |
|
|
(221,174) |
502,220 |
|
Cash and cash equivalents at the beginning of the year |
|
|
948,562 |
446,342 |
|
Cash and cash equivalents at the end of the year |
|
|
727,388 |
948,562 |
|
|
|
|
|
|
Consolidated and company Statement of ChAnges in Equity for the year ended 31 March 2017
|
|
|
|
|||||||||||||
|
|
Share Capital |
Share Premium |
Merger Reserve |
Retained Earnings |
Total |
Non-controlling interest |
Total Equity |
||||||||
|
|
£ |
£ |
£ |
£ |
£ |
£ |
£ |
||||||||
|
GROUP |
|
|
|
|
|
|
|
||||||||
|
At 1 April 2015 |
541,109 |
1,564,095 |
523,367 |
787,551 |
3,416,122 |
(28,462) |
3,387,660 |
||||||||
|
Share-based payments |
- |
- |
- |
10,750 |
10,750 |
- |
10,750 |
||||||||
|
Transactions with owners |
- |
- |
- |
10,750 |
10,750 |
- |
10,750 |
||||||||
|
Loss and total comprehensive income for the year |
- |
- |
- |
(1,685,853) |
(1,685,853) |
(7,553) |
(1,693,406) |
||||||||
|
At 1 April 2016 |
541,109 |
1,564,095 |
523,367 |
(887,552) |
1,741,019 |
(36,015) |
1,705,004 |
||||||||
|
Share-based payments |
- |
- |
- |
1,634 |
1,634 |
- |
1,634 |
||||||||
|
Transactions with owners |
- |
- |
- |
1,634 |
1,634 |
- |
1,634 |
||||||||
|
Profit and total comprehensive income for the year |
- |
- |
- |
767,900 |
767,900 |
11,628 |
779,528 |
||||||||
|
At 31 March 2017 |
541,109 |
1,564,095 |
523,367 |
(118,018) |
2,510,553 |
(24,387) |
2,486,166 |
||||||||
|
|
|
|
|
|
|
|
|
||||||||
|
|
Share Capital |
Share Premium |
Merger Reserve |
Retained Earnings |
Total |
|
|
||||||||
|
|
£ |
£ |
£ |
£ |
£ |
|
|
||||||||
|
COMPANY |
|
|
|
|
|
|
|
||||||||
|
At 1 April 2015 |
541,109 |
1,564,095 |
523,367 |
(174,146) |
2,454,425 |
|
|
||||||||
|
Share-based payments |
- |
- |
- |
10,750 |
10,750 |
|
|
||||||||
|
Transactions with owners |
- |
- |
- |
10,750 |
10,750 |
|
|
||||||||
|
Loss and total comprehensive income for the year |
- |
- |
- |
(2,432,772) |
(2,432,772) |
|
|
||||||||
|
At 1 April 2016 |
541,109 |
1,564,095 |
523,367 |
(2,596,168) |
32,403 |
|
|
||||||||
|
Share-based payments |
- |
- |
- |
1,634 |
1,634 |
|
|
||||||||
|
Transactions with owners |
- |
- |
- |
1,634 |
1,634 |
|
|
||||||||
|
Profit and total comprehensive income for the year |
- |
- |
- |
130,063 |
130,063 |
|
|||||||||
|
At 31 March 2017 |
541,109 |
1,564,095 |
523,367 |
(2,464,471) |
164,100 |
|
|||||||||
NOTES TO THE FINANCIAL STATEMENTS for the year ended 31 March 2017
1 Accounting policies
Basis of preparation
The consolidated financial information contained within this announcement has been prepared in accordance with International Financial Reporting Standards (IFRS) as adopted by the European Union (EU) and the Companies Act 2006 applicable to companies reporting under IFRS. The consolidated financial information in this report has been prepared under the historical cost convention as modified by the revaluation of certain financial assets and liabilities at fair value through profit and loss. The financial information included in this announcement does not include all the disclosures required by IFRS or the Companies Act 2006 and accordingly does not itself comply with IFRS or The Companies Act 2006.
The financial information set out in the announcement does not constitute the group's statutory accounts for the years ended 31 March 2017 or 2016 within the meaning of section 434 of the Companies Act 2006. The financial information for the year ended 31 March 2016 is derived from the statutory accounts for that year which has been delivered to the Registrar of Companies. The auditors reported on those accounts; their report was unqualified and did not contain a statement under Section 498 (2) or (3) of the Companies Act 2006.
The statutory financial statements for the year ended 31 March 2017 will be delivered to the Registrar of Companies following the Company's Annual General Meeting. The auditors reported on those accounts; their report was unqualified and did not contain a statement under Section 498 (2) or (3) of the Companies Act 2006. The Group's business activities (together with the factors likely to affect its future development, performance and position) and its financial position is set out in the Chief Executive Officer's Report. The Group's risk management objectives and policies are described in the Corporate Governance Statement of the financial statements.
The directors have reviewed the Group's and the Company's budgets and plans, taking account of reasonably possible changes in trading performance and have a reasonable expectation that the Group and the Company have adequate resources to continue in operational existence for the foreseeable future and that it is therefore appropriate to continue to adopt the going concern basis in preparing the financial statements.
2 Revenue
Revenue is attributable to the principal activities of the Group. In 2017 and 2016, all revenue arose within the United Kingdom.
|
|
|
|
|
Group 2017 |
Group 2016 |
|
|
|
|
|
£ |
£ |
|
Investment management |
|
|
956,625 |
1,078,851 |
|
|
Consultancy |
|
|
197,020 |
53,888 |
|
|
|
|
|
|
1,153,645 |
1,132,739 |
The business is regarded as one segment due to the nature of services provided and the methods used to provide these services. The business is managed and financial performance is reported to the Board on this basis.
3 Profit/(Loss) per share
Basic profit/(loss) per share has been calculated by dividing the profit/(loss) attributable to equity holders of the parent by the weighted average number of ordinary shares in issue during the year.
The calculations of profit/(loss) per share are based on the following profit/(loss) and numbers of shares in issue:
|
|
2017 |
2016 |
|
|
£ |
£ |
|
Profit/(Loss) for the year |
779,528 |
(1,685,853) |
|
|
|
|
|
Weighted average number of ordinary shares in issue: |
No. |
No. |
|
For basic profit/(loss) per ordinary share |
27,055,491 |
27,055,491 |
|
Potentially dilutive ordinary shares |
270,270 |
- |
|
For diluted profit/(loss) per ordinary share |
27,325,761 |
27,055,491 |
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 270,270 potentially dilutive ordinary shares.
4 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 |
|
GROUP |
£ |
£ |
£ |
£ |
£ |
£ |
|
At 1 April 2015 |
- |
- |
- |
2,317,580 |
160,485 |
2,478,065 |
|
Additions at Cost |
- |
- |
- |
- |
16,500 |
16,500 |
|
Acquired |
165,554 |
- |
- |
- |
- |
165,554 |
|
Repayments/Disposals |
- |
- |
- |
(1,014,807) |
(151,985) |
(1,166,792) |
|
Change in Fair Value |
- |
- |
- |
(1,000,718) |
(25,000) |
(1,025,718) |
|
At 1 April 2016 |
165,554 |
- |
- |
302,055 |
- |
467,609 |
|
Additions at Cost |
- |
- |
- |
373,000 |
99,155 |
472,155 |
|
Repayments/Disposals |
(165,554) |
- |
- |
(95,556) |
- |
(261,110) |
|
Change in Fair Value |
- |
- |
- |
183,475 |
- |
183,475 |
|
At 31 March 2017 |
- |
- |
- |
762,974 |
99,155 |
862,129 |
|
|
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 |
|
COMPANY |
£ |
£ |
£ |
£ |
£ |
£ |
|
At 1 April 2015 |
- |
- |
- |
1,619,060 |
160,485 |
1,779,545 |
|
Additions at Cost |
- |
- |
- |
- |
16,500 |
16,500 |
|
Repayments/Disposals |
- |
- |
- |
(465,081) |
(151,985) |
(617,066) |
|
Change in Fair Value |
- |
- |
- |
(923,436) |
(25,000) |
(948,436) |
|
At 1 April 2016 |
- |
- |
- |
230,543 |
- |
230,543 |
|
Additions at Cost |
- |
- |
- |
373,000 |
99,155 |
472,155 |
|
Repayments/Disposals |
- |
- |
- |
(24,237) |
- |
(24,237) |
|
Change in Fair Value |
- |
- |
- |
152,213 |
- |
152,213 |
|
At 31 March 2017 |
- |
- |
- |
731,519 |
99,155 |
830,674 |
As at 31 March 2017, the group total value of investments in companies was £862,129 (2016: £467,609). The group total change in fair value during the year was a gain of £183,475 (2016: loss £1,025,718).
Investments, which include equity and debt 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 used most commonly by the Group is 'price of most recent investment'. The use of reasonably possible alternative assumptions has no material effect on the fair valuation of the related investments. The effect on the consolidated statement of comprehensive income for the period is also not expected to be material. There are no identified unobservable inputs to which the Level 3 fair values would be materially sensitive. The impact on the fair value of investments if the discount rate and provision shift by 1% is £3,595 (2016: £3,269).
5 Goodwill
|
|
|
Viking |
Neon |
Total |
|
|
|
£ |
£ |
£ |
|
Cost - At 1 April 2015, 31 March 2016 and 31 March 2017 |
|
371,944 |
380,000 |
751,944 |
|
Impairment |
|
|
|
|
|
At 1 April 2015 |
|
- |
- |
- |
|
Impairment charge |
|
(371,944) |
- |
(371,944) |
|
At 31 March 2016 and 31 March 2017 |
|
(371,944) |
- |
(371,944) |
|
Net Book Value - At 1 April 2016 and 31 March 2017 |
|
- |
380,000 |
380,000 |
At the year ended March 2016, the recoverable amount of Viking was assessed and due to the acquisition of Ridings Holdings Limited (RHL) and The Ridings Early Growth Investment Company Limited (Regic) during the year, management fees previously paid from RHL and Regic to Viking have now ceased leaving the only revenue stream as being Lachesis fund management fees. The future level of fee income generated by Lachesis was deemed insufficient to meet the recoverable amount of goodwill and has therefore resulted in a full impairment of Viking goodwill.
At the end of the current year, the Group assessed the recoverable amount of the above goodwill associated with Neon's cash-generating unit and determined that goodwill was not impaired. The recoverable amount of Neon was assessed by reference to the cash-generating unit's value in use based on internally prepared and approved 3 year cash flow projections assuming the following growth rates and applying the following discount factors:
Cashflow projections are mainly based on contracted revenues and associated costs, which can therefore be predicted with reasonable certainty and the directors do not consider there to be significant assumptions included within these cash flows.
|
Cash-generating unit |
Neon |
|
|
|
2017 |
2016 |
|
Growth rate (average p.a.) |
2.5% |
2.5% |
|
Discount factor (p.a.) |
12.5% |
12.5% |
These factors are based on past experience and future expectations which the directors consider to be appropriate. Value in use estimates arising from reasonably possible changes to these factors do not indicate further impairment.
6 Posting of audited results for the year ended 31 March 2017 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 2017 to shareholders shortly. It is also posting notice of its annual general meeting ("Notice of AGM"), to be held at Mazars' office at Tower Bridge House, St Katharine's Way, London E1W 1DD on 20 July 2017 at 11.00 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/.
This information is provided by RNS
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