REG - Agronomics Limited - Unaudited Interim Results
08/02/2023 07:00
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RNS Number : 2158P Agronomics Limited 08 February 2023
8 February 2023
Agronomics Limited
("Agronomics" or the "Company")
Unaudited Interim Results for the six-month period ending 31 December 2022
Agronomics Limited (AIM:ANIC), the leading listed company focused on the field
of cellular agriculture, is pleased to announce its unaudited interim results
for the six-month period ending 31 December 2022. A copy of these Interim
Results is available on the Company's website www.agronomics.im
(http://www.agronomics.im) .
Financial highlights
● The Company's Net Asset Value per Share at 31 December 2022
was 16.38 pence (30 June 2022: 14.85 pence) - an increase of 10.3%. The
share price of 11.75 pence at the 31 December 2022 close represented a
discount of 28% to the 31 December 2022 NAV per share.
● Investment income, including loan interest and net unrealised
gains, increased to £19,870,529 (31 December 2021: £3,629,016) during the
six-month period.
● Operating expenses for the period were £800,227 (2021:
£769,363)
● A net profit of £18,582,602 (31 December 2021: profit of
£2,523,407) was recognised during the period.
● The carrying amount of invested assets at the half year was
£132,691,338 (30 June 2022: £94,813,088), and cash and cash equivalents and
cash deposits stood at £29,825,250 (30 June 2022: £51,482,501)
● Net assets increased to £162,507,068 at 31 December 2022 (30
June 2022: £143,912,903). The increase is largely due to unrealised gains on
investments of £19,374,741 recognised during the period.
Investment highlights
● 5 December 2022
(https://www.londonstockexchange.com/news-article/ANIC/investee-company-update-clean-food-group/15743943)
- Clean Food Group Limited ("Clean Food Group (https://cleanfood.group/) ")
received investment from Doehler Ventures (https://www.doehler-ventures.com/)
, the venture arm of Doehler Group (https://www.doehler.com/en/) GmbH
(https://www.doehler.com/en/) , a global producer, marketer and provider of
technology-based natural ingredients and ingredient systems for the food and
beverage industries.
● 16 November 2022 - UPSIDE Foods, Inc. (not an Agronomics
portfolio company) received a 'No Questions' letter from the US regulatory
body the US Food and Drug Administration, accepting their conclusion that
their cultivated chicken is safe to eat
● 26 October 2022
(https://www.londonstockexchange.com/news-article/ANIC/portfolio-company-solar-foods-update/15688552)
- Solar Foods Oy ("Solar Foods (https://solarfoods.com/) "), a Finnish food
technology portfolio company focused on commercialising its sustainable
protein, Solein, received its first regulatory approval in Singapore for its
novel protein by the Singapore Food Agency. On 23 December 2022
(https://www.londonstockexchange.com/news-article/ANIC/solar-foods-receives-euro34-million-in-grant/15770762)
, Solar Foods received a €34 million grant to support the build of its first
fermentation facility and start preparations for its full-scale facility
● 20 October 2022
(https://www.londonstockexchange.com/news-article/ANIC/investment-in-liberation-labs-us-20m-fundraise/15679719)
- Agronomics co-led the seed investment round of precision fermentation
contract manufacturer Liberation Labs Holdings Inc ("Liberation Labs
(https://liberationlabs.com/) "), subscribing for Seed Preferred Shares. The
final tranche of the committed US$ 7 million was completed on 5 December 2022
(https://www.londonstockexchange.com/news-article/ANIC/further-investment-in-liberation-labs-seed-round/15742973)
and, on 30 December 2022, the Company announced the close of Liberation Labs'
$20 million seed funding round.
● 6 August 2022
(https://polaris.brighterir.com/public/agronomics/news/rns/story/x4n3ppr) -
Agronomics led All G Food Holding Pty Ltd (https://allgfoods.com/) 's ("All G
Foods") Series A financing round with an AU $15 million (approximately £8.7
million) investment, subscribing for Series A Preferred Shares. Agronomics
will own 8.01% of All G Foods on a fully diluted basis following the close of
the round.
● 1 August 2022
(https://polaris.brighterir.com/public/agronomics/news/rns/story/w6zn0gr) -
Agronomics led Clean Food Group Limited's ("Clean Food Group") seed financing
with a £577,500 investment, subscribing for Ordinary Shares. Clean Food Group
is a UK-based cellular agriculture company focused on the commercialisation of
palm oil by fermentation.
Richard Reed, Chairman of Agronomics, commented: -
"Agronomics has continued to focus on selective opportunities within the field
of cellular agriculture to deploy capital during this half year, and now has
over 20 companies in its portfolio with broad diversification across major
protein categories and leading technologies across the cell culture and
precision fermentation categories.
This half year, Agronomics expanded its exposure to precision fermentation
dairy proteins through an investment in All G Foods, marking its first
investment in Australia. As well as making our first investment in a palm-oil
focused fermentation company through our investment in Clean Food Group.
In the past few months, we have witnessed several ground-breaking achievements
within the sector around regulatory clarity and scaling up, representing the
transition of the sector from R&D validation toward commercialisation. As
a result, we will continue to identify cellular agriculture as a sector with
enormous growth potential and believe Agronomics is well positioned to
capitalise on this positive trajectory. We expect the next 12 months to be
pivotal for the cellular agriculture sector, with the first regulatory
approvals for the sale of cultivated meat products coming in the US."
For further information please contact:
Agronomics Beaumont Canaccord Genuity Limited Cenkos Peterhouse Capital TB Cardew
Limited Cornish Limited Securities Plc Limited
The Company Nomad Joint Broker Joint Broker Joint Broker Public Relations
Richard Reed Roland Cornish Andrew Potts Giles Balleny Lucy Williams Ed Orlebar
Denham Eke James Biddle Harry Rees Michael Johnson Charles Goodfellow Alistair Walker
Alex Aylen (Head of Equities)
+44 (0) 1624 639396 +44 (0) 207 628 3396 +44 (0) 207 523 8000 +44 (0) 207 397 8900 +44 (0) 207 469 0936 +44 (0) 20 7930 0777
info@agronomics.im (mailto:info@agronomics.im) +44 (0) 7738 724 630
agronomics@tbcardew.com (mailto:agronomics@tbcardew.com)
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Chairman's statement
Introduction
I am pleased to present the Unaudited Interim Results for Agronomics Limited
(the "Company" or "Agronomics") for the six-month period ending 31 December
2022.
This half-year saw Agronomics continue to focus on select opportunities to
deploy capital within the field of cellular agriculture. During the period,
the Company led rounds that added two new names to the portfolio, increasing
the number of companies in its portfolio to 24, with broad diversification
across the world's largest protein categories and across differentiated
technologies in cell culture and precision fermentation. The investment in
Clean Food Group expanded the portfolio to encompass fermentation-derived palm
oil at a time when finding sustainable alternatives to palm oil is becoming
increasingly important, as shown by the EU's agreement in December 2022 to
implement new restrictions ensuring goods placed on the EU market are not
contributing to deforestation and forest degradation in the EU and elsewhere
in the world,
(https://ec.europa.eu/commission/presscorner/detail/en/ip_22_7444) including
palm oil. Agronomics also increased its exposure to precision fermentation
dairy proteins, through its investment in All G Foods, its first investment in
Australia. These investments represent the widening applications of
fermentation to produce necessary agricultural products.
We define cellular agriculture as the direct production of agricultural
commodities without animals, but from living cells or single-celled organisms
completely disconnected from conventional agriculture. This encompasses cell
culture, including cultivated meat and seafood, precision fermentation -
including biomass and precision fermentation, and enabling technologies, such
as novel bioreactor designs and low-cost growth factor methodologies to
support the first two categories. These technologies aim to provide more
sustainable methods for the development of such products, reducing greenhouse
gas emissions, antibiotic requirements, land use, water use, energy use,
improving animal welfare and mitigating climate change. Agronomics now has
exposure across cultivated meat - chicken, beef, pork, seafood, cultivated
leather, cultivated cocoa and cotton, precision fermentation-derived dairy and
egg proteins, palm oil and collagens.
In the past few months, we have witnessed a number of pivotal moments that
represent a transition in the sector as companies move from R&D validation
toward commercialisation. November 2022 saw the US Food & Drug
Administration ("FDA") issue a 'no questions' letter to Upside Foods
(https://www.fda.gov/food/cfsan-constituent-updates/fda-completes-first-pre-market-consultation-human-food-made-using-animal-cell-culture-technology)
for their cultivated chicken product. We anticipate the US Department of
Agriculture will be working closely with the FDA to approve the cultivated
chicken in the coming year, which will allow this company to be the first to
achieve regulatory approval in a major jurisdiction. We also note that several
other cultivated meat companies are in discussions with the FDA for further
approvals. We expect further cultivated meat companies to achieve approvals in
the US in the near future, and there could be additional jurisdictions moving
forward by establishing their own regulatory pathways for the approval of
cultivated meat. Last week, our precision fermentation contract manufacturer,
Liberation Labs, announced it had purchased the site in the State of Indiana
for its first facility which has an initial capacity of 600k litres and
capable of expanding to 4 million litres in due course. This will be the first
purpose-built commercial precision fermentation plant in the United States.
Agronomics has a healthy balance sheet entering into 2023 and intends to
reserve the majority of its capital for follow-on investments into its
existing portfolio companies to assist with the achievement of major
milestones such as regulatory approvals, product launches, or building out
their commercial facilities. The Company continues to monitor and review new
and emerging technologies within the field of cellular agriculture, and will
also look to expand the portfolio for further diversification should the
opportunity arise.
Investment Review
During the period, the Company completed a number of investments and had
positive revaluations within the existing portfolio, as detailed below.
On 8 July 2022
(https://polaris.brighterir.com/public/agronomics/news/rns/story/ry5qdyw) ,
Portfolio company Tropic Biosciences UK Limited ("Tropic") raised US$ 35
million via a Convertible Loan Note led by Blue Horizon, including investment
from DisruptAD, Bloom8, Skyviews Life Science, Sucden Ventures and Tefken
Ventures.
On 1 August 2022
(https://polaris.brighterir.com/public/agronomics/news/rns/story/w6zn0gr) ,
Agronomics led Clean Food Group Limited's ("Clean Food Group
(https://cleanfood.group/) ") seed financing with a £577,500 investment,
subscribing for 5,775,000 Ordinary Shares. Clean Food Group is a UK-based
cellular agriculture company focused on the commercialisation of palm oil by
fermentation. AIM quoted SEED Innovations Limited (of which Jim Mellon,
executive director of Agronomics, has a 6.95% holding) also joined the round.
On 4 August 2022
(https://polaris.brighterir.com/public/agronomics/news/rns/story/x4n3ppr) ,
Agronomics led All G Food Holding Pty Ltd's ("All G Foods
(https://allgfoods.com/) ") Series A financing round with a AU $15 million
(approximately £8.7 million) investment, subscribing for 2,803,214 Series A
Preferred Shares. Agronomics will own 8.01% of All G Foods on a fully diluted
basis following close of the round.
On 8 September 2022
(https://polaris.brighterir.com/public/agronomics/news/rns/story/w31zd3x) ,
Portfolio company Bond Pet Foods, Inc ("Bond Pet Foods") completed its US$
17.5 million Series A financing, led by ADM Ventures and Cavallo Ventures,
with other prominent investors also participating. Agronomics first invested
£150,000 in Bond Pet Foods in September 2019, and now carries this position
at a book value of US$ 933,000, representing a multiple on invested capital
(MOIC) of 6.22x.
On 21 September 2022
(https://polaris.brighterir.com/public/agronomics/news/rns/story/w08m46r) ,
Portfolio company Onego Bio Ltd ("Onego Bio") entered into a partnership with
Perfect Day, Inc ("Perfect Day") through Perfect Day's latest enterprise
biology business nth Bio. Onego Bio utilises the same efficient microflora
platform as Perfect Day, but for production egg white proteins, beginning with
its first product Bioalbumen™. This partnership will allow Onego Bio to
access Perfect Day's expertise in strain engineering, bioprocess development,
regulatory support, and process services, accelerating the scale up and
commercialisation of their animal-free egg white proteins.
On 10 October 2022
(https://polaris.brighterir.com/public/agronomics/news/rns/story/w6z9kqr) ,
Portfolio company Meatable announced a partnership with the world's only
licensed large scale contract manufacturer for cultivated meat, Esco Aster,
based in Singapore. The partnership will facilitate the production of
Meatable's cultivated pork products, which are aiming to initially be launched
in selected restaurants in Singapore in 2024, subject to meeting Singaporean
regulatory requirements.
On 20 October 2022
(https://www.londonstockexchange.com/news-article/ANIC/investment-in-liberation-labs-us-20m-fundraise/15679719)
, Agronomics co-led the seed investment round of precision fermentation
contract manufacturer Liberation Labs Holdings Inc ("Liberation Labs
(https://liberationlabs.com/) "). The final tranche of the committed US$ 7
million was completed on 5 December 2022
(https://www.londonstockexchange.com/news-article/ANIC/further-investment-in-liberation-labs-seed-round/15742973)
and, on 30 December 2022
(https://polaris.brighterir.com/public/agronomics/news/rns/story/w03p4zw) ,
the Company announced the close of Liberation Labs' $20 million seed funding
round. Following completion of the financing, Agronomics holds an equity stake
of 38.5% on a fully diluted basis. The investment was co-led with Siddhi
Capital, a prominent and highly respected investor in innovative food products
and technologies. New Agrarian Company Limited, an affiliate of Agronomics,
also participated in Liberation Labs' funding round on identical terms and
tranching as Agronomics.
On 26 October 2022
(https://www.londonstockexchange.com/news-article/ANIC/portfolio-company-solar-foods-update/15688552)
, the Company announced that Solar Foods Oy ("Solar Foods
(https://solarfoods.com/) "), its Finnish food technology portfolio company
focused on commercialising its sustainable protein, Solein, received its first
regulatory approval in Singapore for its novel protein by the Singapore Food
Agency. On 23 December 2022
(https://www.londonstockexchange.com/news-article/ANIC/solar-foods-receives-euro34-million-in-grant/15770762)
, the Company also announced that Solar Foods had received a €34 million
grant to support the build of its first fermentation facility and start
preparations for its full-scale facility.
On 5 December 2022
(https://www.londonstockexchange.com/news-article/ANIC/investee-company-update-clean-food-group/15743943)
, Agronomics announced that portfolio company Clean Food Group Limited ("Clean
Food Group (https://cleanfood.group/) ") has received investment from Doehler
Ventures (https://www.doehler-ventures.com/) , the venture arm of Doehler
Group (https://www.doehler.com/en/) GmbH (https://www.doehler.com/en/) , a
global producer, marketer and provider of technology-based natural ingredients
and ingredient systems for the food and beverage industries.
The portfolio weightings by Net Asset Value at 31 December 2022 are set out
below:
Company Product Focus NAV Weighting
Liberation Labs Contract Manufacturer for Precision Fermentation 11.4%
SuperMeat Cultivated Poultry 9.7%
VitroLabs Cultivated Leather 6.9%
Formo Precision Fermentation - Dairy Proteins 5.7%
All G Foods Precision Fermentation - Dairy Proteins 5.2%
Geltor Precision Fermentation - Collagen 4.9%
BlueNalu Cultivated Bluefin Tuna 4.6%
Meatable Cultivated Pork and Beef 4.3%
The EVERY Company Precision Fermentation - Egg Proteins 4.3%
Onego Bio Precision Fermentation - Egg Proteins 3.7%
Solar Foods Novel Air Protein 3.2%
Good Dog Food Cultivated Pet Food 3.1%
The LIVEKINDLY Collective Plant-based Meat 3.0%
Clean Food Group Fermentation - Palm Oil 2.3%
GALY Cultivated Cotton 1.9%
Mosa Meat Cultivated Beef 1.9%
Tropic Gene-Edited Crops 1.6%
CellX Cultivated Chicken 1.4%
California Cultured Cultivated Coffee and Cocoa 1.1%
Ohayo Valley Cultivated Beef 0.8%
Bond Pet Foods Precision Fermentation - Pet Food 0.5%
Rebellyous Foods Plant-based Chicken and Equipment 0.2%
Legacy Investments N/A 0.2%
Under our valuation policy, it is not possible to reflect significant uplifts
between valuation events, and therefore the Board believes that the stated NAV
per share may not fully represent the current intrinsic value of the portfolio
companies given their continuing progress in this rapidly growing sector.
Investments will be written down in cases where we are not satisfied that
sufficient progress is occurring.
Financial Review
The Company recorded a net profit for the period of £18,582,602 (2021: profit
of £2,523,407). During the six months, our investment income, including loan
interest and net unrealised gains, increased to £19,870,529 (2021:
£3,629,016). No performance fees were payable or accrued for the current
period. The basic profit per share was 1.91 pence (2021: profit of 0.33
pence), and the diluted profit per share was 1.32 pence (2021: profit of 0.21
pence).
The carrying amount of invested assets is £132,691,338 (30 June 2022:
£94,813,088), and cash and cash equivalents and cash deposits stood
£29,825,250 (30 June 2022: £51,482,501). Our net assets increased to
£162,507,068 at 31 December 2021 (30 June 2022: £143,912,903). The increase
is largely due to unrealised gains on investments of £19,374,741 recognised
during the period. As a result, the net asset value per share at 31 December
2022 is 16.38 pence, which is an increase of 10.3% from 30 June 2022 (14.85
pence).
Financing activity
During the period, 38,897 new ordinary shares were issued following the
exercise of warrants. Gross proceeds of £11,563 were received by the Company.
Strategy and Outlook
Our current investment portfolio shows considerable promise for future growth,
given the scale of opportunity to invest in the nascent alternative foods
sector. We are expecting significant developments in a number of our
portfolio companies that should positively impact their valuation in the
coming months.
2022 saw a decline in venture funding across the board, and also within the
field of cellular agriculture. Whilst this may be seen as a concern, we are
optimistic that this reset has allowed for a readjustment of company
expectations, to allow for funding rounds to be completed in the coming months
at favourable and realistic valuations. Cellular agriculture remains a bright
spot of activity for capital deployment in companies that offer defensible IP,
and technologies that will allow for a revolution in the way we produce food
and other agricultural products.
The Board continues to seek new opportunities in line with its Investing
Policy. Further details of our Investing Policy can be found on the Company's
website at www.agronomics.im.
Richard Reed
Chairman
7 February 2022
Condensed statement of comprehensive income
For the period ended 31 December 2022
Period Period
ended ended
31/12/2022 31/12/2021
Notes (unaudited) (unaudited)
£ £
Income
Net income from financial instruments at fair value through profit and loss 2 19,374,741 3,492,270
──────── ────────
19,374,741 3,492,270
Operating expenses
Directors' fees (50,000) (36,667)
Other operating costs 4 (800,227) (769,363)
Unrealised foreign exchange losses (437,700) (299,579)
──────── ────────
Profit from operating activities 18,086,814 2,386,661
Interest received 2 495,788 136,746
──────── ────────
Profit before taxation 18,582,602 2,523,407
Taxation - -
──────── ────────
Profit for the period 18,582,602 2,523,407
Other comprehensive income - -
──────── ────────
Total comprehensive profit for the period 18,582,602 2,523,407
════════ ════════
Basic profit per share (pence) 5 1.91 0.33
Diluted profit per share (pence) 5 1.32 0.21
The Directors consider that the Company's activities are continuing.
The notes on pages 9 to 11 form part of these interim financial statements.
Condensed statement of financial position
As at 31 December 2022
31/12/2022 30/06/2022
Notes (unaudited) (audited)
£ £
Current assets
Financial assets at fair value through profit or loss 6 132,691,338 94,813,088
Cash deposits 8,109,785 20,024,175
Trade and other receivables 106,733 102,659
Cash and cash equivalents 21,715,465 31,458,326
──────── ────────
Total assets 162,623,321 146,398,248
════════ ════════
Equity
Share capital 991 968
Share premium 134,208,846 129,855,667
Share reserve - 4,341,639
Accumulated earnings 28,297,231 9,714,629
──────── ────────
Total equity 162,507,068 143,912,903
Current liabilities
Trade and other payables 7 116,253 2,485,345
──────── ────────
Total liabilities 116,253 2,485,345
──────── ────────
Total equity and liabilities 162,623,321 146,398,248
════════ ════════
The notes on pages 9 to 11 form part of these interim financial statements.
These interim financial statements were approved by the Board of Directors on
7 February 2022 and were signed on their behalf by:
Denham Eke
Director
Condensed statement of changes in equity
For the period ended 31 December 2022
Share Share Share reserve Retained earnings
capital premium £ £ Total
£ £ £
Balance at 01 July 2021
(audited) 799 91,278,407 7,394,360 1,356,250 100,029,816
Total comprehensive profit for the period - - - 2,523,407 2,523,407
Issue of shares 138 31,830,969 - - 31,831,107
Share issue costs capitalised - (43,600) - - (43,600)
────── ──────── ─────── ──────── ────────
Balance at 31 December 2021 (unaudited) 937 123,065,776 7,394,360 3,879,657 134,340,730
══════ ════════ ═══════ ════════ ════════
Share Share Share reserve Retained earnings
capital premium £ £ Total
£ £ £
Balance at 01 July 2022 968 129,855,667 4,341,639 9,714,629 143,912,903
(audited)
Total comprehensive profit for the period - - - 18,582,602 18,582,602
Issue of shares 23 4,353,179 (4,341,639) - 11,563
────── ──────── ─────── ──────── ────────
Balance at 31 December 2022 (unaudited) 991 134,208,846 - 28,297,231 162,507,068
══════ ════════ ═══════ ════════ ════════
The notes on pages 9 to 11 form part of these interim financial statements.
Condensed statement of cash flows
For the period ended 31 December 2022
Period Period
ended ended
Notes 31/12/2022 31/12/2021
(unaudited) (unaudited)
£ £
Cash flows from operating activities
Profit for the period 18,582,602 2,523,407
Purchase of investments (18,213,217) (19,423,481)
Proceeds from sale of investments - 696,456
Interest received - non-cash (495,788) (134,052)
Unrealised gains on investments 2 (19,374,741) (3,492,270)
Unrealised foreign exchange losses on investments (71,775) 245,537
─────── ───────
Operating loss before changes in working capital (19,572,919) (19,584,403)
Change in trade and other receivables (4,076) 378,324
Change in trade and other payables (2,369,092) 87,813
─────── ───────
Net cash flows from operating activities (21,946,087) (19,118,266)
═══════ ═══════
Cash flows from financing activities
Proceeds from issue of shares 11,563 2,006,423
Share issue commissions paid - (43,600)
Cash interest received 277,273 -
─────── ───────
Net cash flows from financing activities 288,836 1,962,823
═══════ ═══════
Cash flows from investing activities
Bank deposits not considered cash and cash equivalents (net movement) 11,914,390 -
─────── ───────
Net cash from investing activities 11,914,390 -
═══════ ═══════
Decrease in cash and cash equivalents (9,742,861) (17,155,443)
Cash and cash equivalents at beginning of period 31,458,326 62,436,497
─────── ───────
Cash and cash equivalents at the end of period 21,715,465 45,281,054
═══════ ═══════
The notes on pages 9 to 11 form part of these interim financial statements.
1 Significant accounting policies
Agronomics Limited (the "Company") is a company domiciled in the Isle of Man.
The address of the Company's registered office is 18 Athol Street, Douglas,
Isle of Man, IM1 1JA.
The unaudited condensed financial statements of the Company (the "Financial
Information") are prepared in accordance with Isle of Man law and
International Financial Reporting Standards ("IFRS") and their interpretations
issued by the International Accounting Standards Board ("IASB") and adopted by
the European Union ("EU"). The financial information in this report has been
prepared in accordance with the Company's accounting policies. Full details of
the accounting policies adopted by the Company are contained in the financial
statements included in the Company's annual report for the year ended 30 June
2022 which is available on the Group's website: www.agronomics.im
(http://www.agronomics.im)
The accounting policies and methods of computation and presentation adopted in
the preparation of the Financial Information are consistent with those
described and applied in the financial statements for the year ended 30 June
2022. There are no new IFRSs or interpretations effective from 1 July 2022
which have had a material effect on the financial information included in this
report.
The unaudited condensed financial statements do not constitute statutory
financial statements. The statutory financial statements for the year ended 30
June 2022, extracts of which are included in these unaudited condensed
financial statements, were prepared under IFRS as adopted by the EU. The
auditors' report on those financial statements was unmodified.
The preparation of the Financial Information requires management to make
judgements, estimates and assumptions that affect the application of policies
and reported amounts of assets and liabilities, income and expenses. Actual
results could differ materially from these estimates. In preparing the
Financial Information, the critical judgements made by management in applying
the Company's accounting policies and the key sources of estimation
uncertainty were the same as those that applied to the financial statements as
at and for the year ended 30 June 2022 as set out in those financial
statements.
The Financial Information is presented in Great British Pounds, rounded to the
nearest pound, which is the functional currency and also the presentation
currency of the Company.
2 Net income from financial instruments at fair value
through profit and loss
31/12/2022 31/12/2021 31/12/2020 31/12/2019
(unaudited) (unaudited) (unaudited) (unaudited)
£ £ £ £
Net unrealised gains on investments 19,374,741 3,492,270 479,010 84,262
Other income 495,788 136,746 31,625 -
─────── ─────── ─────── ───────
Total investment income 19,870,529 3,629,016 510,635 84,262
═══════ ═══════ ═══════ ═══════
3 Performance fee
31/12/2022 31/12/2021
(unaudited) (unaudited)
£ £
Performance fee - -
═══════ ═══════
Shellbay Investments Limited ("Shellbay") receives performance fees for the
provision of Mr James Mellon as Director of the Company. Shellbay shall be
entitled to an annual fee equal to the value of 15% of any increase between
the Company's net asset value ("NAV") on a per issued share basis at the start
of a reporting period and 30 June ("Closing NAV Date") each year during the
term of the New Shellbay Agreement, with the first reporting period being from
1 July 2020 to 30 June 2021, and annually thereafter. The opening and closing
NAV for each period will be based on the audited financial statements of the
Company for the relevant financial year, with the opening NAV for each
reporting period being the higher of (i) 5.86 pence per share (the highest
annual audited NAV per share since the Company adopted its current investment
policy and reported NAV per share in September 2019)), and (ii) the highest
NAV per share reported at a Closing Date for the previous reporting periods
during the term of the agreement (establishing a rolling high-watermark for
Shellbay to qualify for such fee). Any increase in NAV per share will then be
applied to the total issued share capital at the end of the relevant period
for the purposes of determining the 15% fee. Any change in NAV per share that
arises from funds raised at a premium or discount to the existing NAV per
share will therefore be considered for the purposes of calculating Shellbay's
fee by reference to the annual audited accounts (for clarity being an increase
in respect of a premium and a decrease in respect of a discount).
At the election of the Company, the Shellbay fee shall be payable either in
whole or in part by the issue of new shares at a price equal to the mid-price
on the last day of the relevant Qualifying Period (being the Company's
accounting year from 1 July to 30 June) or grant of nil price warrants over
shares; or in cash; or (with the agreement of Shellbay), in cash-equivalents
(such as shares), and other assets held by the Company. No fees were payable
or accrued for the current period (31 December 2021: £nil). See note 8 for
further details.
4 Other operating costs
31/12/2022 31/12/2021 31/12/2019
(unaudited) (unaudited) (unaudited)
£ £ £
Auditors' remuneration 30,000 51,149 9,500
Insurance 19,741 9,031 3,544
Professional fees 292,586 577,849 518,388
Sundry expenses 457,900 131,334 31,350
─────── ─────── ───────
Total other costs 800,227 769,363 577,782
═══════ ═══════ ═══════
The Company has no employee's other than the
Directors.
5 Basic and diluted profit per share
The calculation of the basic earnings per share is based on the earnings
attributable to ordinary shareholders divided by the weighted average number
of shares in issue during the period.
The calculation of diluted earnings per share is based on the basic earnings
per share, adjusted to allow for the issue of shares, on the assumed
conversion of all dilutive share options.
31/12/2022 31/12/2021
£ £
Profit for the period 18,582,602 2,523,407
No. No.
Weighted average number of ordinary shares in issue 973,278,666 763,671,848
Dilutive effect of shares to be issued 435,440,939 435,479,836
Diluted number of ordinary shares 1,408,719,605 1,199,151,684
Basic earnings per share (pence) 1.91 0.33
Diluted earnings per share (pence) 1.32 0.21
6 Financial assets at fair value through profit or loss
A wholly owned subsidiary entity of the Company, Agronomics Investment
Holdings Limited ("the Subsidiary" or "AIHL"), holds the majority of the
portfolio of unquoted investments. Unquoted investments were transferred by
the Company into AIHL at their respective carrying amounts. The investment in
subsidiary is stated at fair value through profit or loss in accordance with
the IFRS 10 Investment Entity Consolidation Exception. The fair value of the
investment in Subsidiary is based on the period-end net asset value of the
Subsidiary. Additions and disposals regarding the investment in subsidiary are
recognised on trade date.
31/12/2022 30/06/2022
(unaudited) (audited)
£ £
Quoted 200,350 250,691
Unquoted 9,026,792 6,795,650
Investment in subsidiary 123,464,196 87,766,747
─────── ───────
132,691,338 94,813,088
═══════ ═══════
The composition of the investments held, both directly and indirectly through
the Subsidiary in the underlying portfolio, is as follows:
31/12/2022 30/06/2022
(unaudited) (audited)
£ £
Equities 120,165,572 84,942,939
Convertible loan notes and SAFEs* 12,525,766 9,870,149
─────── ───────
132,691,338 94,813,088
═══════ ═══════
* A SAFE is a Simple Agreement for Future Equity. SAFE Agreements have similar
characteristics to Convertible Loans and are designed to provide an early
investor with an "edge" ahead of a larger planned funding. The edge is
typically conversion of funds advanced for new equity at a discount to the
subsequent raise.
7 Trade and other payables
31/12/2022 30/06/2022
(unaudited) (audited)
£ £
Provision for audit fee 25,490 55,000
Trade creditors 90,763 149,071
Provision for Shellbay fee - 2,281,274
────── ──────
116,253 2,485,345
══════ ══════
During the period, the fee due to Shellbay was settled in full. See note 8.
8 Related party transactions
Under an agreement dated 1 December 2011, Burnbrae Limited, a company related
to both Jim Mellon and Denham Eke, provide certain services, principally
accounting and administration, to the Company. This agreement may be
terminated by either party on three months' notice. The Company incurred a
total cost of £15,000 (period ended 31 December 2021: £18,000) during the
period under this agreement of which £3,000 was outstanding as at the period
end (30 June 2022: £3,000).
Under an updated agreement dated May 2021, Shellbay Investments Limited, a
Company related to both Jim Mellon and Denham Eke, provide the services of Jim
Mellon as Director of the Company.
No fees were payable or accrued for the current period (31 December 2021:
£nil). See note 3 for further details.
During the period, the Shellbay fee due at 30 June 2022 was settled in full,
with the issuance of 14,257,963 new ordinary shares, and a cash payment of
£2,281,274.
In accordance with the Company's published investment strategy, Mr Mellon may
co-invest alongside the Company in certain investments and, accordingly, he
has direct and indirect interests in other investments held by the Company.
9 Commitments and contingent liabilities
There are no known commitments or contingent liabilities as at the period end.
10 Events after the reporting date
To the knowledge of the Directors, there have been no material events since
the end of the reporting period that require disclosure in the condensed
interim financial statements.
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