REG - Acceler8 Ventures - Half-year Report
27 September 2021
ACCELER8 VENTURES PLC
Interim Report for the six months ended 30 June 2021
Acceler8 Ventures Plc (LSE: AC8, "AC8" or the "Company") announces its unaudited condensed interim results from incorporation on 25 March 2021 to 30 June 2021.
Strategy
AC8 was established in 2021 to undertake one or more investment and / or acquisition opportunities of businesses operating within the UK or internationally across certain sectors.
The Company retains a flexible investment and acquisition strategy which will, subject to appropriate levels of due diligence, enable it to deploy capital in target companies by way of minority or majority investments, or full acquisitions where it is in the interests of shareholders to do so. This includes transactions with target companies located across the UK and internationally, including but not limited to, Europe and the Asia Pacific region, with enterprise values up to £250 million.
The Company's strategic aim is to drive shareholder value through the acquisition of target companies in certain sectors where the Board believes there to be sustainable growth opportunities both organically, and through acquisition. Sectors of particular focus include gaming, media and entertainment, software and technology, industrials and business services.
Results and developments in the period from incorporation to 30 June 2021
The Company's loss after taxation was £157,000, reflecting operating expenses incurred during its admission to the Main Market of the London Stock Exchange.
The Company completed two pre-IPO placings with its Directors and founder shareholders, raising in aggregate £425,000 gross placing proceeds through the issuance of 425,000 ordinary shares.
In addition, the Company also commenced its IPO placing process under which it was proposing to raise £325,000 incremental gross placing proceeds through the issuance of a further 325,000 new ordinary shares.
As at the 30 June 2021, £92,000 had been received in advanced by AC8 pertaining to the IPO placing, which was held within the Company's bank account pending admission. This increased AC8's cash balance as at 30 June 2021 to £517,000.
Developments in the post period end and outlook
In July 2021, the Company completed its IPO placing, raising incremental gross placing proceeds of £325,000. Including the pre-IPO placing, this increased AC8's cash balance to £750,000 as at admission.
On 19 July 2021, the Company completed its IPO process and obtained a standard listing on the Official List of the Financial Conduct Authority, with its shares admitted to trading on the Main Market of the London Stock Exchange under the ticker AC8.
Since admission, AC8 has continued to pursue its investment and acquisition strategy and is currently assessing both domestic and international opportunities within its chosen sectors of interest.
Enquiries:
Tessera Investment Management Limited
Tony Morris
+44 (0) 7742 189145
Meare Consulting
Adrian Duffield
+44 (0) 7990 858548
INTERIM CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the period from incorporation on 25 March 2021 to 30 June 2021
Note
Unaudited
Period ended 30 June 2021
£
Revenue
-
Cost of sales
-
Gross profit
-
Operating expenses
(157,000)
Operating profit/(loss)
(157,000)
Net finance income
-
Loss before tax
(157,000)
Taxation
-
Loss for period
(157,000)
Loss attributable to the Company
(157,000)
Loss per share expressed in pounds per share
From continuing and total operations:
Basic & diluted loss per share, £
9
(0.9)
The Company has no items of other comprehensive income.
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
As at 30 June 2021
Note
Unaudited
As at 30 June 2021
£
Assets
Current assets
Receivables and prepayments
-
Cash
6
517,000
Total current assets
517,000
Current liabilities
Trade and other payables
7
(249,000)
Net current assets
268,000
Net assets
Share capital
8
4,252
Share premium
8
420,748
Retained earnings
(157,000)
Total equity attributable to
equity holders of the Company
268,000
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the period from incorporation on 25 March 2021 to 30 June 2021
Share
capital
£
Share premium
£
Retained earnings
£
Total
equity
£
Balance as at 25 March 2021
-
-
-
-
Loss for period
-
-
(157,000)
(157,000)
Total comprehensive loss
-
-
(157,000)
(157,000)
Shares issued
4,252
420,748
-
425,000
Balance as at 30 June 2021
4,252
420,748
(157,000)
268,000
CONSOLIDATED STATEMENT OF CASH FLOWS
For the period from incorporation on 25 March 2021 to 30 June 2021
Unaudited Period ended 30 June 2021
£
Cash flows from operating activities
Loss before income tax
(157,000)
Increase in trade and other payables
157,000
Net cash from operating activities
-
Cash flows from financing activities
Cash received from issue of Ordinary Shares
425,000
Cash received in respect of Ordinary Shares to be issued
92,000
Net cash inflow from financing activities
517,000
Net increase in cash and cash equivalents
517,000
Cash and cash equivalents at beginning of period
-
Cash and cash equivalents at end of period
517,000
NOTES TO THE GROUP FINANCIAL INFORMATION
1. General information
The Company was incorporated on 25 March 2021 as Acceler8 Ventures Limited, a private limited company under the laws of Jersey with registered number 134586. On 17 May 2021, the Company was re-registered as an unlisted public limited company and its name was changed to Acceler8 Ventures Plc. The Company is the parent company of Acceler8 Ventures Subco Limited (a private limited company under the laws of Jersey with registered number 134587).
The address of its registered office 28 Esplanade, St. Helier, Channel Islands, JE2 3QA, Jersey.
The Company has been incorporated for the purpose of identifying suitable acquisition opportunities in accordance with the Group's investment and acquisition strategy with a view to creating shareholder value. The Group will retain a flexible investment and acquisition strategy which will, subject to appropriate levels of due diligence, enable it to deploy capital in target companies by way of minority or majority investments, or full acquisitions where it is in the interests of shareholders to do so. This will include transactions with target companies located in the UK and internationally, including but not limited to, Europe, and the Asia Pacific region.
2. Basis of preparation
These interim condensed consolidated financial statements and accompanying notes have neither been audited nor reviewed by the Company's auditor.
The principal accounting policies applied in the preparation of the interim condensed consolidated financial statements are set out below. These policies have been consistently applied to the period presented, unless otherwise stated.
The interim condensed consolidated financial statements have been prepared in accordance with IFRS using the measurement bases specified by IFRS for each type of asset, liability, income and expense.
The interim condensed consolidated financial statements are presented in £ unless otherwise stated.
These interim condensed consolidated financial statements were approved by the Board of Directors on 24 September 2021.
Comparative figures
No comparative figures have been presented as the interim condensed consolidated financial statements cover the period from incorporation on 25 March 2021 to 30 June 2021.
Going concern
The interim condensed consolidated financial statements have been prepared on a going concern basis.
The basis for this conclusion is as a result of the projected monthly financial forecasts prepared and reviewed by the Directors contained in the working capital board memorandum approved by the Board of the Company as part of its admission process to the Main Market of the London Stock Exchange. The Directors have a reasonable expectation that the Group has adequate resources to continue in operational existence for the foreseeable future. Thus, they continue to adopt the going concern basis of accounting in preparing the interim condensed consolidated financial statements.
3. Significant accounting policies
The interim condensed consolidated financial statements is based on the following policies which have been consistently applied:
Basis of consolidation
The interim condensed consolidated financial statements incorporate the results of Acceler8 Ventures Plc and its subsidiary.
Control is achieved when the Group is exposed, or has rights, to variable returns from its involvement with the investee and has the ability to affect those returns through its power over the investee. Specifically, the Group controls an investee if, and only if, the Group has:
· Power over the investee (i.e., existing rights that give it the current ability to direct the relevant activities of the investee)
· Exposure, or rights, to variable returns from its involvement with the investee
· The ability to use its power over the investee to affect its returns
Generally, there is a presumption that a majority of voting rights results in control. To support this presumption and when the Group has less than a majority of the voting or similar rights of an investee, the Group considers all relevant facts and circumstances in assessing whether it has power over an investee, including:
· The contractual arrangement(s) with the other vote holders of the investee
· Rights arising from other contractual arrangements
· The Group's voting rights and potential voting rights
The Group re-assesses whether or not it controls an investee if facts and circumstances indicate that there are changes to one or more of the three elements of control. Consolidation of a subsidiary begins when the Group obtains control over the subsidiary and ceases when the Group loses control of the subsidiary. Assets, liabilities, income and expenses of a subsidiary acquired or disposed of during the year are included in the consolidated financial statements from the date the Group gains control until the date the Group ceases to control the subsidiary.
Profit or loss and each component of other comprehensive income (OCI) are attributed to the equity holders of the parent of the Group and to the non-controlling interests, even if this results in the non-controlling interests having a deficit balance.
When necessary, adjustments are made to the interim condensed consolidated financial statements of subsidiaries to bring their accounting policies into line with those used by other members of the Group.
All intra-group transactions, balances, income and expenses are eliminated in full on consolidation.
Cash and cash equivalents
Cash and cash equivalents comprise cash at bank and in hand and on demand deposits due within three months with banks and other financial institutions, that are readily convertible into known amounts of cash and which are subject to an insignificant risk of changes in value.
Equity
Ordinary Shares are classified as equity.
Taxation
Income tax for the period is based on the taxable income for the year. Taxable income differs from profit as reported in the statement of comprehensive income for the period as there are some items which may never be taxable or deductible for tax and other items which may be deductible or taxable in other periods. Income tax for the period is calculated on the basis of the tax laws enacted or substantively enacted at the end of the reporting period. Current and deferred tax is recognised in profit or loss, except to the extent that it relates to items recognised in other comprehensive income or directly in equity. In this case, the tax is also recognised in other comprehensive income or directly in equity, respectively.
Deferred income tax is recognised, using the liability method, on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the interim condensed consolidated financial statements. Deferred income tax is determined using tax rates (and laws) that have been enacted, or substantially enacted, by the end of the reporting period and are expected to apply when the related deferred income tax asset is realised, or the deferred income tax liability is settled.
Deferred income tax assets are recognised only to the extent that it is probable that future taxable profit will be available against which the temporary differences can be utilised.
4. Critical accounting estimates and judgments
In preparing the interim condensed consolidated financial statements, the Directors have to make judgments on how to apply the Group's accounting policies and make estimates about the future. The Directors do not consider there to be any critical judgments that have been made in arriving at the amounts recognised in the interim condensed consolidated financial statements.
5. Investments
Principal subsidiary undertakings of the Group
The Company directly owns the ordinary share capital of its subsidiary undertakings as set out below:
Subsidiary
Nature of business
Country of incorporation
Proportion of A ordinary shares held by Company
Proportion of B ordinary shares held by Company
Acceler8 Ventures Subco Limited
Intermediate holding company
Jersey, Channel Islands
100 per cent.
0 per cent.
The address of the registered office of Acceler8 Ventures Subco Limited (the "Subco") is 28 Esplanade, St. Helier, Channel Islands, JE2 3QA, Jersey. The Subco was incorporated on 25 March 2021 and prepares its own financial statements for the period ended 31 March each year.
The A ordinary shares have full voting rights, full rights to participate in a dividend and full rights to participate in a distribution of capital. The B ordinary shares have been issued pursuant to the Company's Subco Incentive Scheme as set out in Note 13.
6. Cash and cash equivalents
As at
30 June 2021
£
Cash at bank and in hand
517,000
7. Trade and other payables
Amounts falling due within one year:
As at
30 June 2021
£
Provisions
140,000
Accruals
17,000
Calls in advance
92,000
Total
249,000
Calls in advance relate to certain IPO related placing proceeds received in advance by the Company from proposed IPO placees, which were subject to the Company's admission in July 2021.
The Company has also recognised a contingent liability of £115,125, which relates to transaction support, admission fees and printing expenses. These expenses are contingent on the Company being admitted to the Main Market of the London Stock Exchange, and as at 30 June 2021, the Directors of the Company were uncertain as to whether this event would take place. The Directors have recognised this amount as a contingent liability.
8. Share capital and share premium
Number of ordinary shares
Share capital
£
Share premium
£
Total £
As of 30 June 2021
425,000
4,252
420,748
425,000
9. Earnings per share
30 June 2021
Loss attributable to the equity holders of the Company
(157,000)
Weighted number of shares in issue
174,486
(Loss) / earnings per share (£)
(0.9)
Capital reorganisation
On 18 May 2021, the Company resolved to subdivide its ordinary share capital by 100:1 in order to reduce the nominal value of the Ordinary Shares from £1 each to £0.01 each. This resulted in a post subdivision share capital of 200 Ordinary Shares, which were then redesignated into 2 Ordinary Shares of £0.01 par value each and 198 Deferred Shares of £0.01 par value each. On 21 May 2021, in accordance with article 5B of the Company's articles of association adopted by way of written resolution by all the members of the Company passed on 18 May 2021, the Company redeemed for nil consideration the Deferred Shares.
Placing and issue of equity
On 21 May 2021 and following the Company's capital reorganisation, the Company raised £399,998 through the issuance of 399,998 new ordinary shares of £0.01 each. 274,999 ordinary shares were subscribed for by David Williams, Director and shareholder of the Company, 100,000 ordinary shares were subscribed for by Giles Willits, Director of the Company, and 24,999 ordinary shares were subscribed for by Tessera Investment Management Limited, also a shareholder in the Company. Following completion of the placing and the issuance of 399,998 new ordinary shares on 21 May and a further 25,000 new ordinary shares for £1 on 24 May 2021, the Company's total issued share capital is 425,000 Ordinary Shares of £0.01 par value each.
10. Financial instruments
As at
30 June 2021 £
Financial assets
Cash and cash equivalents
517,000
Financial risk management objectives and policies
The Group's major financial instrument comprises its bank balance. The risks associated with this financial instrument, and the policies on how to mitigate this risk are set out below. The Directors manage and monitor these exposures to ensure appropriate measures are implemented in a timely and effective manner.
Credit risk
The Group's credit risk is wholly attributable to its cash balance. The credit risk from its cash and cash equivalents is deemed to be low due to the nature and size of the balances held as of 30 June 2021.
Interest rate risk
As of 30 June 2021, the Group had no exposure to interest rate risk.
Currency risk
All monetary assets and liabilities and all transactions of the Group are denominated in its functional currency. As such, the Group is exposed to no foreign currency risk.
Fair value of financial assets and liabilities
There is no material difference between the fair value of the Group's financial asset and its carrying value in the interim condensed consolidated financial statements.
11. Related party transactions
On incorporation, the Company issued 1 Ordinary Share of £1 par value at £1 per Ordinary Share for cash consideration of £1 to David Williams, a Director.
On 14 May 2021, the Company entered into a strategic advisory agreement with Tessera pursuant to which Tessera has agreed to provide strategic and general corporate advice, and acquisition and capital raising transaction support services to the Company. Tessera was entitled to an initial transaction fee of £100,000 (plus VAT) payable on admission for transaction management services provided to the Company in connection with admission and the placings. Following admission, Tessera will provide strategic advisory services and will be paid a success fee on completion on the first acquisition, at an amount to be agreed between Tessera and the Company. Following completion of the first acquisition, Tessera will provide services as requested by the Company and will charge a fixed daily rate or monthly retainer fee depending on the volume of such services.
On 21 May 2021, the Company issued 274,999 Ordinary Shares of £0.01 par value at £1 per Ordinary Share for cash consideration of £274,999 to David Williams, a Director, and a further 100,000 Ordinary Shares of £0.01 par value at £1 per Ordinary Share for cash consideration of £100,000 to Giles Willits, also a Director of the Company who was appointed on 5 May 2021. In addition, the Company issued a further 24,999 Ordinary Shares of £0.01 par value at £1 per Ordinary Share for cash consideration of £24,999 to Tessera.
12. Ultimate controlling party
As of 30 June 2021, the ultimate controlling party of the Group is David Williams by virtue of his majority shareholding in the Group.
13. Post balance sheet events
Director service agreements
On 14 July 2021, each of the Non-executive Directors entered into a letter of appointment with the Company. With effect from admission, each of the Directors have been entitled to receive a gross annual fee of £20,000, payable monthly in arrears, plus reimbursement of all reasonable and properly documented expenses incurred in performing their duties as directors of the Company.
Subco Incentive Scheme
On 14 July 2021, David Williams and Giles Willits, Directors of the Company, and Anthony Morris and Kathleen Long, Directors of Tessera Investment Management Limited, became the first participants in the Subco Incentive Scheme ("Founder Participants"), and as such, the proportion of shareholder value attaching to the Subco Incentive Scheme is 2.9 per cent. of a total cap of 15 per cent. Under the terms of the Subco Incentive Scheme, the Founder Participants each subscribed for B Shares in Subco at their unrestricted market value equating to 2 pence per B Share. The Founder Participants and their respective holdings are outlined below.
Name
Subco B shares held
Giles Willits
24,000
Kathleen Long
1,667
David Williams
1,667
Anthony Morris
1,666
Total
29,000
Placing and issue of equity and admission
On 19 July 2021, the Company completed its IPO placing raising £325,000 through the issuance of 325,000 new ordinary shares.
The Company also completed its IPO process and obtained a standard listing on the Official List of the Financial Conduct Authority, with its shares admitted to trading on the Main Market of the London Stock Exchange under the ticker AC8.
Following admission, the Company's total issued share capital increased to 750,000 Ordinary Shares of £0.01 par value each.
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