REG - Advancedadvt Limited - Interim Results
14/03/2023 07:00
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RNS Number : 8169S Advancedadvt Limited 14 March 2023
AdvancedAdvT Limited
("AdvancedAdvT" or the "Company")
Unaudited Interim Results for the period ended 31 December 2022
The Company provides an update on the Company's cash and net asset position as
at 28 February 2023 and announces its unaudited interim results for the six
months ended 31 December 2022.
Overview and Chairperson's statement
Cash and Net Asset update as at 28 February 2023
• Unaudited Net Asset Value (NAV) of 95.6 pence per share 1 (91.4p at 31
December 2022 2 )
• Net assets of £127.3m(1) (£121.7m at 31 December 2022)
• Interest-bearing cash of £103.4m (£103m at 31 December 2022)
Highlights
• Strong position to execute on strategy given the opportunities in current
economic climate.
• Net assets of £121.7m as at 31 December 2022 (£121.7m at 30 June 2022)
• Cash of £103m at 31 December 2022 (£104.2m at 30 June 2022)
• Interest income from cash deposits largely offset operating losses, most of
which related to changes in fair value of financial assets during the period
Chairperson's statement
The Company has remained focused on its objective of completing a business
combination with one or more businesses, by seeking and actively evaluating
high-quality targets.
The global economy has faced significant challenges, with inflation, interest
rate increases and heightened geopolitical tensions creating headwinds in
various markets. However, we also recognise that such challenges also present
opportunities for businesses to adapt and become more resilient. By
identifying and capitalising on these opportunities, businesses can weather
the storm and come out stronger on the other side.
The Board believes the trend of increased data creation and digitalisation of
business processes and operations will continue to present investment
opportunities for high-quality businesses with the potential to generate
long-term value.
This continued acceleration of digital technologies has provided an
opportunity for businesses to deliver increased productivity, address labour
imbalances and gain a competitive advantage. Furthermore, the convergence of
technologies across fragmented markets has the potential to bring about
significant advancements for customers.
With a strong cash position which exceeds £100m, we have a clear advantage in
against a backdrop of market uncertainty. Whilst the cost of servicing debt
and its availability have become major challenges for other investment
vehicles, our cash reserves offer a unique, attractive alternative and
positions us well to execute on our strategy. This financial strength provides
flexibility and the resources to capitalise on opportunities, navigate the
challenges that may arise, as well as being an attractive proposition to
potential target businesses.
M&C Saatchi plc ("M&C")
We identified an opportunity to invest in an area of the market which had the
potential to deliver significant digital related growth and opportunity. An
initial investment, purchasing 9.82% of the issued share capital of M&C,
was followed up with an offer to acquire the remainder of M&C. Despite
some shareholder support, we did not receive sufficient acceptances and the
offer lapsed on 30 September 2022.
This was a disappointing outcome given the 42.5% support from M&C
shareholders in our announcement on 17 May 2022. We believed our offer was
beneficial to all the Company's and M&C stakeholders, introducing new cash
to fuel accelerated growth and investment.
As a significant shareholder in M&C, we will continue to assess all
potential value creation opportunities for M&C.
We would like to take this opportunity to thank our shareholders for their
continued support. We remain committed to acting with a disciplined approach
to deliver our objectives and create value for our shareholders.
We remain optimistic about the future, and we look forward to continuing to
work together to navigate the opportunities ahead.
Vin Murria OBE
Chairperson
13 March 2023
Enquiries:
Company Secretary 020 7004 2700
Antoinette Vanderpuije
Singer Capital Markets (Broker) 020 7496 3000
Phil Davies
George Tzimas
KK Advisory (Investor Relations) 07779 229508
Kam Bansil
Meare Consulting 07990 858548
Adrian Duffield
The Interim Report is also available on the 'Shareholder Documents' page of
the Company's website at www.advancedadvt.com and the National Storage
Mechanism at https://data.fca.org.uk/#/nsm/nationalstoragemechanism.
Management Report
I present to shareholders the unaudited interim condensed consolidated
financial statements of AdvancedAdvT Limited ("AdvancedAdvT" or the "Company")
for the six months ended 31 December 2022 (the "Consolidated Interim Financial
Statements"), consolidating the results of AdvancedAdvT and MAC I (BVI)
Limited (collectively, the "Group" or "MAC").
Activity, Strategy & Outlook
The Company was formed with the goal of identifying opportunities where a
merger of management expertise, improved operating performance, and a focused
investment and M&A strategy can unlock growth potential in core markets
and potentially expand into new territories and adjacent sectors. Our
objective is to generate attractive long-term returns for shareholders by
supporting sustainable growth, strategic acquisitions and performance
improvements within acquired companies.
The management team has significant experience in the technology sector,
having invested in and/or operated a range of high-performing software and
digital services businesses. The management team has a track record of
successfully driving operational excellence within these businesses to deliver
organic growth and has a history of executing targeted and accretive M&A
in the software sector, having completed more than 85 acquisitions
collectively.
Over the last 25 years companies across all sectors have increasingly adopted
new digital technologies to optimise business processes and operations.
Implementing these new technologies has become central to driving cost
efficiencies and gaining a competitive advantage in a digital world, where
sectors and businesses with the highest level of digitalisation display the
largest productivity growth.
Despite the opportunities presented by digitalisation, pre-Covid-19 adoption
of new technologies by businesses and consumers was in part restricted by the
reticence of companies to invest in digital strategies and adopt new systems
and technologies. The global restrictions caused by Covid-19 have helped to
break down these barriers and forced businesses to become more agile which has
considerably accelerated digitalisation. The resulting increase in demand and
appetite to adopt new digital technologies, alongside the continued momentum
to move to the cloud, has given rise to a squeeze on the labour market and
digital skills.
We therefore believe there is significant opportunity to invest in companies
that are positioned to take advantage of the structural change arising from an
unprecedented acceleration of digitalisation brought about by the current
macroeconomic environment, affecting the way people live, work, and consume,
and the way businesses operate, engage, and sell to customers.
The Company may either consider acquiring total voting control of any target
company or business or acquiring a non-controlling interest constituting less
than total voting control or less than the entire equity interest of that
target company or business if such opportunity is considered attractive or
where the Company expects to acquire sufficient influence to implement its
strategy. In such circumstances, the remaining ownership interest will be held
by third parties and the Company's decision-making authority may be limited.
Any third party's interests may be contrary to the Company's interests.
Results
The Group's loss after taxation for the six months to 31 December 2022 was
£113,010 (31 December 2021: loss after taxation £218,548). The Group held
cash and cash equivalents at 31 December 2022 of £103,016,497 (31 December
2021: £104,169,997).
Dividend Policy
The Company has not yet acquired a trading operation and it is therefore
inappropriate to make a statement on the likelihood of any future dividends.
The Directors intend to determine the Company's dividend policy following
completion of a platform acquisition and, in any event, will only commence the
payment of dividends when it becomes commercially prudent to do so.
Corporate Governance
As a company with a Standard Listing, the Company is not required to comply
with the provisions of the UK Corporate Governance Code. Nevertheless, the
Board is committed to maintaining high standards of corporate governance and
will consider whether to voluntarily adopt and comply with the UK Corporate
Governance Code as part of any acquisition, taking into account the Company's
size and status at that time.
The Company currently complies with the following principles of the UK
Corporate Governance Code:
· The Company is led by an effective and entrepreneurial Board,
whose role is to promote the long-term sustainable success of the Company,
generating value for shareholders and contributing to wider society.
· The Board ensures that it has the policies, processes,
information, time and resources it needs in order to function effectively and
efficiently.
· The Board ensures that the necessary resources are in place for
the company to meet its objectives and measure performance against them.
Given the size and nature of the Company, the Board has not established any
committees and intends the Board as a whole would make decisions. If the need
should arise in the future, for example following any acquisition, the Board
may set up committees as appropriate.
Risks
The Directors have carried out a robust assessment of the principal risks
facing the Company including those that would threaten its business model,
future performance, solvency, or liquidity. The Company has published its
principal risks in the Company's prospectuses dated 4 December 2020, 18 March
2021 and 31 March 2022. The Directors are of the opinion that the risks
detailed in the Company's prospectus dated 31 March 2022 remain applicable for
the current financial year. The prospectus and detailed risks can also be
found on the Company's website www.advancedadvt.com
(http://www.advancedadvt.com) .
Responsibility Statement
Each of the Directors confirms that, to the best of their knowledge:
(a) these Consolidated Interim Financial Statements, which have been prepared
in accordance with IAS 34 "Interim Financial Reporting" as adopted by the
European Union, give a true and fair view of the assets, liabilities,
financial position and profit or loss of the Company; and
(b) these Consolidated Interim Financial Statements comply with the
requirements of DTR 4.2
Neither the Company nor the Directors accept any liability to any person in
relation to the interim financial report except to the extent that such
liability could arise under applicable law.
Details on the Company's Board of Directors can be found on the Company
website at www.advancedadvt.com.
Vin Murria OBE
Chairperson
13 March 2023
Condensed Consolidated Statement of Comprehensive Income
Six months Six months
ended
ended
31 December 31 December
2022 2021
Note Unaudited Unaudited
£ £
Administrative expenses 2 (167,005) (237,894)
Fair Value on Financial Assets 5 (1,080,000) -
Operating loss (1,247,005) (237,894)
Finance Income 1,133,995 19,346
Loss before taxation (113,010) (218,548)
Taxation 3 - -
Loss for the period (113,010) (218,548)
Total comprehensive loss for the period attributable to owners of the parent
(113,010) (218,548)
Loss per ordinary share (£)
Basic 4 (0.00) (0.00)
Diluted 4 (0.00) (0.00)
The Group's activities derive from continuing operations.
Condensed Consolidated Statement of Financial Position
As at As at
31 December 30 June
2022 2022
Note Unaudited Audited
£ £
Non-current assets
Financial asset at fair value through profit or loss 5 18,120,000 19,200,000
18,120,000 19,200,000
Current assets
Trade and other receivables 6 662,568 101,485
Cash and cash equivalents 7 103,016,497 104,169,997
Total current assets 103,679,065 104,271,482
Total assets 121,799,065 123,471,482
Equity and liabilities
Equity
Sponsor share 2 2
Ordinary shares 131,166,131 131,166,131
Warrant reserve 98,000 98,000
Warrant cancellation reserve 350,000 350,000
Share-based payment reserve 353,135 305,104
Accumulated losses (10,374,418) (10,261,408)
Total equity 121,592,850 121,657,829
Current liabilities
Trade and other payables 8 206,215 1,813,653
Total liabilities 206,215 1,813,653
Total equity and liabilities 121,799,065 123,471,482
Consolidated Statement of Changes in Equity
Notes Sponsor share Ordinary shares Class A shares Warrant reserves Warrant Cancellation Reserve Share based payment reserve Accumulated losses Total equity
£ £ £ £ £ £ £ £
Balance as at 31 July 2020 - - - - - - - -
Issuance of 1 ordinary share - 1 - - - - - 1
Redesignation of 1 ordinary share 1 (1) - - - - - -
Issuance of 700,000 ordinary shares and warrants - 602,000 - 98,000 - - - 700,000
Share issue costs - (275,300) - - - - - (275,300)
Issuance of 2,500,000 Class A shares and warrants - - 2,150,000 350,000 - - - 2,500,000
Conversion of 2,500,000 Class A shares - 2,150,000 (2,150,000) (350,000) 350,000 - - -
Issuance of 130,000,000 ordinary shares - 130,000,000 - - - - - 130,000,000
Share issue costs - (1,310,569) - - - - - (1,310,569)
Issuance of 1 sponsor share 1 - - - - - - 1
Total comprehensive loss for the period - - - - - - (2,546,025) (2,546,025)
Share-based payment expense - - - - - 209,250 - 209,250
Balance as at 30 June 2021 (Audited) 2 131,166,131 - 98,000 350,000 209,250 (2,546,025) 129,277,358
Total comprehensive loss for the period - - - - - - (218,548) (218,548)
Share-based payment expense - - - - - 48,031 - 48,031
Balance as at 31 December 2021 (Unaudited) 2 131,166,131 - 98,000 350,000 257,281 (2,764,573) 129,106,841
Total comprehensive loss for the period - - - - - - (7,496,835) (7,496,835)
Share-based payment expense - - - - - 47,823 - 47,823
Balance as at 30 June 2022 (Audited) 2 131,166,131 - 98,000 350,000 305,104 (10,261,408) 121,657,829
Total comprehensive loss for the period - - - - - - (113,010) (113,010)
Share-based payment expense - - - - - 48,031 - 48,031
Balance as at 31 December 2022 (Unaudited) 2 131,166,131 - 98,000 350,000 353,135 (10,374,418) 121,592,850
Consolidated Statement of Cash Flows
Six months Six months
ended ended
31 December 31 December
2022 2021
Note Unaudited Unaudited
£ £
Operating activities
Loss for the period (113,010) (218,548)
Adjustments to reconcile total operating loss to net cash flows:
Interest income (1,133,995) (19,346)
Fair Value adjustment on Investment 5 1,080,000 -
Add back share-based payment expense 2 48,031 48,031
Working capital adjustments:
(Increase)/decrease in trade and other receivables and (288,426) 210,188
Prepayments
Decrease in trade and other payables (1,607,438) (32,728)
Net cash flows used in operating activities (2,014,838) (12,403)
Financing activities
Interest income 861,339 19,346
Net cash flows from financing activities 861,339 19,346
Net (decrease)/increase in cash and cash equivalents (1,153,499) 6,943
Cash and cash equivalents at the beginning of the period 104,169,996 129,224,447
Cash and cash equivalents at the end of the period 7 103,016,497 129,231,390
Notes to the Condensed Consolidated Financial Statements
1. SEGMENT INFORMATION
The Board of Directors is the Group's chief operating decision-maker. As the
Group has not yet acquired a trading business, the Board of Directors
considers the Group as a whole for the purposes of assessing performance and
allocating resources, and therefore the Group has one reportable operating
segment.
2. ADMINISTRATIVE EXPENSES BY NATURE
Six months Six months
ended 31
ended 31
December December
2022 2021
Unaudited Unaudited
£ £
Group administrative expenses by nature
Directors' fees 112,021 111,340
Professional fees 74,056 32,396
Non-recurring project costs (103,982) (3,039)
Listing fees 24,140 44,288
Share based payment expense 48,031 48,031
Branding and website cost 11,262 3,637
Travel and entertainment 690 611
Bank charges 787 630
167,005 237,894
3. TAXATION
Six months ended 31 December 2022 Six months ended 31 December 2021
Unaudited Unaudited
£ £
Analysis of tax in period
Current tax for the period - -
Total current tax - -
The central management and control of the Group is exercised in the UK and
accordingly the Group is treated as tax resident in the UK.
Reconciliation of effective rate and tax charge:
Six months ended 31 Six months ended 31
December December
2022 2021
Unaudited Unaudited
£ £
Loss on ordinary activities before tax (113,010) (218,548)
Expenses not deductible for tax purposes 1,128,102 48,031
Profit/(Loss) on ordinary activities subject to corporation tax 1,015,092 (170,517)
Profit/(Loss) on ordinary activities multiplied by the rate of corporation tax 192,867 (32,398)
in the UK of 19%
Tax Losses utilised (192,867) -
Effects of:
Losses carried forward for which no deferred tax recognised - 32,398
Total taxation charge - -
At 31 December 2022, cumulative tax losses available to carry forward against
future trading profits were £3,902,418 subject to agreement with HM Revenue
& Customs. Prior to an acquisition, there is no certainty as to future
profits and no deferred tax asset is recognised in relation to these carried
forward losses.
4. LOSS PER ORDINARY SHARE
Basic EPS is calculated by dividing the profit/(loss) attributable to equity
holders of a company by the weighted average number of ordinary shares in
issue during the year. Diluted EPS is calculated by adjusting the weighted
average number of ordinary shares outstanding to assume conversion of all
dilutive potential ordinary shares.
The Company has issued 700,000 warrants, each of which is convertible into one
ordinary share. The Group made a loss in the current period, which would
result in the warrants being anti-dilutive. Therefore, the warrants have not
been included in the calculation of diluted earnings per share.
The Company has issued two sponsor shares, the sponsor shares have no right to
receive distributions and so have been ignored for the purposes of IAS 33.
Six months Six months
ended 31 ended 31
December December
2022 2021
Unaudited Unaudited
Loss attributable to owners of the parent (113,010) (218,548)
Weighted average number of ordinary shares in issue 133,200,000 133,200,000
Weighted average number of ordinary shares for diluted EPS 133,200,000 133,200,000
Basic and diluted loss per ordinary share (£'s) 0.00 0.00
5. INVESTMENTS
Principal subsidiary undertakings of the Group
The Company owns directly the whole of the issued ordinary share capital of
its subsidiary undertaking. Details of the Company's subsidiary are presented
below:
Nature of business Country of incorporation Proportion of ordinary shares held by parent Proportion of ordinary shares held by the Group
Subsidiary
MAC I (BVI) Limited Incentive vehicle BVI 100% 100%
The registered office of MAC I (BVI) Limited Commerce House, Wickhams Cay 1,
P.O. Box 3140, Road Town, Tortola, British Virgin Islands VG1110.
Financial assets of the Company
The Company directly owns equity investments for which the Company has not
elected to recognise fair value gains and losses through Other Comprehensive
Income.
As at 31 December 2022 As at 30 June 2022
Unaudited Audited
£ £
Level 1 Financial assets at fair value through profit or loss (FVTPL) 18,120,000 19,200,000
18,120,000 19,200,000
There were no transfers between levels for fair value measurements during the
year. The Company's policy is to recognise transfers into and out of fair
value hierarchy levels as at the end of the reporting period.
a) Level 1: The fair value of financial instruments traded in active
markets (such as publicly traded derivatives, and equity securities) is based
on quoted market prices at the end of the reporting period. The quoted market
price used for financial assets held by the Company is the current bid price.
These instruments are included in level 1.
b) Level 2: The fair value of financial instruments that are not traded
in an active market (e.g. over-the counter derivatives) is determined using
valuation techniques that maximise the use of observable market data and rely
as little as possible on entity-specific estimates. If all significant inputs
required to fair value an instrument are observable, the instrument is
included in level 2.
c) Level 3: If one or more of the significant inputs is not based on
observable market data, the instrument is included in level 3. This is the
case for unlisted equity securities. During the year, the following
gains/(losses) were recognised in profit or loss:
Six months Six months
ended 31 ended 31
December December
2022 2021
Unaudited Unaudited
£ £
Fair value (losses) on equity investments at FVTPL recognised in the profit or (1,080,000) -
loss
(1,080,000) -
6. TRADE AND OTHER RECEIVABLES
As at 31 December 2022 As at 30 June 2022
Unaudited Audited
£ £
Amounts receivable in one year:
Prepayments 20,553 11,271
Other receivables 272,660 65,488
VAT receivable 369,355 24,726
662,568 101,485
There is no material difference between the book value and the fair value of
the receivables. Receivables are considered to be past due once they have
passed their contracted due date.
7. CASH AND CASH EQUIVALENTS
As at 31 December 2022 As at 30
June
Unaudited
2022
Audited
£ £
Cash and cash equivalents
Cash at bank 20,114,984 64,169,997
Deposits on call 82,901,513 40,000,000
103,016,497 104,169,997
Credit risk is managed on a Group basis. Credit risk arises from cash and cash
equivalents and deposits with banks and financial institutions. For banks and
financial institutions, only independently rated parties with a minimum
short-term credit rating of P-1, as issued by Moody's, are accepted.
8. TRADE AND OTHER PAYABLES
As at 31 December 2022 As at 30
June
Unaudited
2022
Audited
£ £
Amounts falling due within one year:
Trade payables 1,725 125,768
Accruals 88,646 1,572,041
A ordinary share liability 115,844 115,844
206,215 1,813,653
There is no material difference between the book value and the fair value of
the trade and other payables.
9. FINANCIAL INSTRUMENTS AND ASSOCIATED RISKS
The Group has the following categories of financial instruments at the period
end:
As at 31 December 2022 As at 30
June
Unaudited
2022
Audited
£ £
Financial assets measured at amortised cost
Cash and cash equivalents 103,016,497 104,169,997
Other receivables 272,660 65,488
Financial assets at fair value through profit or loss (FVTPL) 18,120,000 19,200,000
121,409,157 123,435,485
Financial liabilities measured at amortised cost
Trade and other payables 206,215 1,813,653
206,215 1,813,653
The fair value and book value of the financial assets and liabilities are
materially equivalent.
As the Group's assets are predominantly cash and cash equivalents, market risk
and liquidity risk are not currently considered to be material risks to the
Group. There have been no changes to the Group's risk management policies or
treasury management since 30 June 2022
10. RELATED PARTY TRANSACTIONS
Antoinette Vanderpuije, the Company Secretary is a partner of Marwyn
Investment Management LLP ("MIMLLP"). MIMLLP manages MVI II Holdings I LP
which is beneficially owned by Marwyn Value Investors II LP. MVI II Holdings
I LP holds 15.41 per cent of the Company's ordinary shares and 1 Sponsor
Share.
Antoinette Vanderpuije has a beneficial interest in the Incentive Shares her
indirect interest in MLTI which owns 2,000 A2 ordinary shares in the capital
of MAC I (BVI) Limited.
Antoinette Vanderpuije is also a partner of Marwyn Capital LLP ("MCLLP").
MCLLP provides corporate finance, company secretarial and managed service
support to the Company. The Company has incurred fees of £8,788 in respect
of company secretarial and managed service support and £125,000 for services
to the Company in regard to Project Maltesers. MCLLP incurred costs of
£5,648, which it recharged the Company during the period.
11. COMMITMENTS AND CONTINGENT LIABILITIES
There were no commitments or contingent liabilities outstanding at 31 December
2022 that requires disclosure or adjustment in these financial statements.
12. POST BALANCE SHEET EVENTS
No other matter or circumstance has arisen since 31 December 2022 that has
significantly affected, or may significantly affect the consolidated entity's
operations, the results of those operations, or the consolidated entity's
state of affairs in future financial years.
1 NAV per share estimated using 10 day VWAP price of 194p for the M&C
Saatchi shares held as a Financial asset at fair value through profit or loss
2 NAV per share estimated using 10 day VWAP price of 152p for the M&C
Saatchi shares held as a Financial asset at fair value through profit or loss
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