REG - Braveheart Inv Group - Half-year Report
15/10/2024 07:00
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RNS Number : 1437I Braveheart Investment Group plc 15 October 2024
The information contained within this announcement is deemed by the Company to
constitute inside information pursuant to Article 7 of EU Regulation 596/2014
as it forms part of UK domestic law by virtue of the European Union
(Withdrawal) Act 2018 as amended.
15 October 2024
Braveheart Investment Group Plc
("Braveheart", the "Company" or the "Group")
Interim Results
Braveheart Investment Group plc (AIM: BRH), announces its interim results for
the six months ended 30 September 2024.
HIGHLIGHTS
· Profit of £43,000 in the six months ended 30 September 2024 (six
months ended 30 September 2023: loss of £732,000), profit per share of 0.07p.
· Net Asset Value ("NAV") of £3,458,298 at 30 September 2024 (30
September 2023: £9,826,816)
· NAV per share of 5.42p (30 September 2023: 15.42p).
For further information:
Braveheart Investment Group plc Tel: 01738 587555
Trevor Brown, Chief Executive Officer
Viv Hallam, Executive Director
Allenby Capital Limited (Nominated Adviser and Joint Broker) Tel: 020 3328 5656
James Reeve / George Payne
Peterhouse Capital Limited (Joint Broker) Tel: 020 7469 0936
Duncan Vasey / Lucy Williams
CHIEF EXECUTIVE OFFICER'S STATEMENT
We are pleased to report to shareholders the results for the six months ended
30 September 2024. Progress has continued in activities of the Group's
portfolio companies and summaries of their operations follow later in this
report.
Financial Review
The Directors have undertaken an unaudited interim review of the valuations of
the Group's investments and have concluded that, as at 30 September 2024, the
fair value of the Group's investments were as follows:
· Valuation of Portfolio Investments: £0,000 (31 March 2024:
£39,000)*
· Valuation of unconsolidated Strategic Investments: £2,349,000 (31
March 2024: £1,614,000)**
* these are the historic investments made by Braveheart up to 2015
** these are the new investments made by Braveheart since 2015
Therefore, the total unaudited value of our unconsolidated investment
portfolio as at 30 September 2024 is £2,349,000 (31 March 2024: £1,653,000).
As at 30 September 2023, the comparable total valuation of our investments was
£8,841,000. The increase in fair value of investments was the result of
making further investments and also a positive share price performance in the
listed investments.
Net asset value ("NAV") was £3.4 million as at 30 September 2024 (30
September 2023: £9.8 million, 31 March 2024: £3.3 million). This resulted in
an increase in net asset value per share from 5.33 pence as at 31 March 2024
to 5.42 pence as at 30 September 2024.
The Group reports a profit after tax for the period under review of £43,000
(September 2023: loss of £732,000). This equates to a profit per share of
0.07 pence (September 2023: loss per share of 1.15 pence).
The Directors believe that the Strategic Investments continue to be the most
likely drivers of growth in shareholder value over the remainder of the
current year and so have concentrated the remainder of this CEO Statement on
their operations and prospects.
Post Period Events
On 11th October 2024, the Company announced that it had acquired 65,415,862
ordinary shares in IQ-AI Limited ("IQ-AI"), representing 29.51% of IQ-AI's
issued share capital, for a total consideration of £719,574. IQ-AI is an
imaging software and healthcare diagnostics company, whose subsidiaries
include Imaging Biometrics, LLC ("IB") and Stone Checker Software Limited. IB
is a healthcare imaging software company that supplies medical technology
solutions, regulatory consulting services and has a neuroimaging product
portfolio. Stone Checker Software Limited is a supplier of technology
solutions in the field of kidney stone analysis and kidney stone prevention.
IQ-AI's ordinary shares are listed on the main market of the London Stock
Exchange. Trevor Brown is the CEO of IQ-AI.
Strategic Investments Overview
Listed Investments
At 30 September 2024, Braveheart held investments in the following AIM listed
companies:
· Aukett Swanke Group plc (Braveheart owned 6.97% of the company) a
professional services group that principally provides architectural, interior
design and smart building services in the primary international market sectors
of offices, residential, education, industrial, hospitality and mixed use or
'hybrid' developments. On 18 September 2024, Aukett Swanke announced the
acquisition of Vanti assets had added over £2m of new contract wins, its
£2.5m sale of its Old Torpedo Factory freehold, and the repayment of mortgage
and other debt reduction by an overall £1.75m. This, together with annualised
operating cost reduction of £2m, is expected to enhance profitability.
· Autins Group plc (Braveheart owned 26.95%) an industry-leading
designer, manufacturer, and supplier of acoustic and thermal insulation
solutions for the automotive industry and other sectors. On 26 September 2024,
we reported that Dr Qu Li, a non-executive director of Braveheart and leading
UK expert in automotive design and manufacturing had been appointed a
non-executive director of Autins. We believe her expertise will help develop
new opportunities for Autins.
· Image Scan Group plc (Braveheart owned 10.65% of the company) a
specialist supplier of real-time X-ray screening systems to the security and
industrial inspection markets. This company recently launched new AI software
to enhance threat recognition in its X-ray scanning product and a substantial
contract for its portable X-ray system for military and counter-terrorism
applications.
The portfolio value of the listed investments at 30 September 2024 was
£2,322,293.
Paraytec Limited (Braveheart owns 100% per cent of the company)
Paraytec develops high performance specialist detectors for the analytical and
life sciences instrumentation markets.
Paraytec continues to develop the CX300 instrument, focusing on its
application in rapid diagnosis and treatment of bacteraemia, commonly
associated with sepsis. The current CX300 instrument performs well in
detecting and counting particles labelled with a single-colour fluorescent
marker.
Development is progressing on the next-generation two-colour instrument, which
will enable real-time comparison of two populations of differently coloured
particles. This advancement opens access to a much larger market, with
feedback indicating potential use in a wide range of biomedical and research
applications. Paraytec has completed the prototype of this two-colour
instrument and is currently engaged in testing, miniaturization, and cost
reduction of the optical components. The instrument will shortly be tested by
collaborating universities before being marketed in 2025.
Work continues on the development of a point-of-care test for bacteraemia,
using CX300 technology to distinguish between gram-positive and gram-negative
bacteria. This test leverages a genetically engineered fluorescent protein
that binds specifically to peptidoglycan, aiding in the rapid identification
of bacterial infections.
A patent for the rapid Gram test has been filed. This test, which is crucial
for the early treatment of sepsis, is also applicable to many other sectors
such as food testing. The resulting assay will be compatible with the
two-colour instrument, as well as with more expensive equipment from other
manufacturers, expanding its versatility.
Discussions have commenced with potential distributors of the CX300 in other
territories and markets. In the period, a loan of £89,000 was made and the
value of the Company's equity investments and loan receivable in Paraytec
remains written down to zero.
Kirkstall Limited (Braveheart owns 86.11% of the company)
Kirkstall operates in the market known as "organ-on-a-chip," where it has
developed Quasi Vivo®, a system of chambers for cell and tissue culture in
laboratories. Its patented technology is used by researchers in the growing
New Approach Methodologies ("NAMs"), which enable human-relevant drug safety
decisions to be made without the need for animal testing.
Recently, the company has achieved cost reductions across the business,
improving operational efficiency.
Sales are being made to contract research organisations (CROs) involved in
drug development, a promising market for Kirkstall's technology. To support
this market, Kirkstall has developed a new product variant specifically
designed for CROs, which will also be suitable for general use.
Kirkstall has recently secured new distributors in China and South Korea.
Online seminars have resulted in significant engagement, and sales enquiries.
These distribution agreements are expected to significantly increase the
company's market reach. Distribution agreements in other territories are now
being sought.
Kirkstall's QV1200 product continues to be marketed by the company and is used
globally within university research teams, generating positive feedback. The
company is collaborating with these researchers to support the publication of
papers, which will further bolster sales and market presence. No change has
been made to the decision at 31 March 2024 to write down the value of the
Company's equity investments and loan receivable in Kirkstall to zero.
Gyrometric Systems Limited (Braveheart owns 21.43% of the company)
Gyrometric has developed a patent protected system of hardware and software to
monitor complex movements of rotating shafts at both high and low speeds and
detect minute irregularities in their motion. The system then analyses the
data to help predict mechanical failure in the shafts and motors, and the
bearings and couplings attached to them.
As reported on 1 August 2024, Gyrometric has been awarded a £300,000 grant by
the UK Government's Innovate programme ("IUK") and is leading a group of UK
specialists working to develop a monitoring system for large journal bearings
for wind turbines. The UK group includes Leonardo Testing Services Limited in
Sheffield and the UK's Offshore Renewable Energy Catapult in Blythe. In
parallel, the US Government has funded a USA-based team led by Tufts
University, which includes Kingsbury Inc., a specialist bearing manufacturer,
and a large US wind turbine manufacturer. These two teams will collaborate to
produce and test Gyrometric's monitoring technology for use in very large wind
turbine bearings.
The Company also has several portfolio investments that are smaller scale
legacy investments for which we continue to seek exits where appropriate.
Outlook
We have implemented efficiencies and continued to cut costs, including Board
fees resulting in annual fixed costs being reduced by around 20%. Work will
continue to improve the value of our investments and to seek opportunities for
enhancing shareholder value.
Trevor Brown
Chief Executive Officer
15(th) October 2024
Condensed consolidated statement of COMPREHENSIVE INCOME
for the six months ended 30 September 2024
Six months ended Six months ended
Year ended
30 September 30 September 31 March
2024 2023 2024
(unaudited) (unaudited) (audited)
Continuing operations Note £ £ £
Revenue 10,990 46,494 60,896
Change in fair value of investments 3 430,575 (651,444) (2,257,293)
Impairment of investments 3 - - (4,847,349)
(Loss)/ Profit on disposal of investments (10,088) 79,761 1,304,035
Total income 431,477 (525,189) (5,739,711)
Employee benefits expense (202,107) (271,363) (594,234)
Other operating costs (127,850) (143,995) (278,852)
Total operating costs (329,957) (415,358) (873,086)
Impairment of loans in investment companies (89,000) - (1,594,620)
Finance income 32,564 9,628 16,896
Finance costs (1,478) (1,322) (2,795)
Total costs (387,871) (407,052) (2,453,605)
Profit/ (Loss) before tax 43,606 (932,241) (8,193,316)
Tax - 200,049 944,050
Profit/ (Loss) after tax for the period and total comprehensive income for the 43,606 (732,192) (7,249,266)
period
Profit/ (Loss) attributable to:
Equity holders of the parent 43,606 (732,192) (7,249,266)
43,606 (732,192) (7,249,266)
Basic earnings/ (loss) per share Pence Pence Pence
- Basic 2 0.07 (1.15) (11.38)
- Diluted 2 0.07 (1.15) (11.38)
The above condensed consolidated Statement of Comprehensive Income should be
read in conjunction with the accompanying notes.
Condensed consolidated statement of FINANCIAL POSITION
for the six months ended 30 September 2024
30 September 30 September 31 March
2024 2023 2024
(unaudited) (unaudited) (audited)
Note £ £ £
ASSETS
Non-current assets
Property, plant and equipment - 229 108
Investments at fair value through profit or loss 3 2,349,611 8,841,515 1,653,341
Debtors due in over one year - 1,340,952 -
2,349,611 10,182,696 1,653,449
Current assets
Trade and other receivables 57,646 89,256 105,707
Cash and cash equivalents 1,094,640 399,034 1,742,315
1,152,286 488,290 1,848,022
Total assets 3,501,897 10,670,986 3,501,471
LIABILITIES
Current liabilities
Trade and other payables (43,599) (100,169) (104,145)
(43,599) (100,169) (104,145)
Non-current liabilities
Deferred taxation - (744,001) -
- (744,001) -
Total liabilities (43,599) (844,170) (104,145)
Net assets 3,458,298 9,826,816 3,397,326
EQUITY
Called up share capital 4 1,274,469 1,274,469 1,274,469
Share premium 5,370,711 5,370,711 5,370,711
Share based payment reserve 615,554 510,604 598,188
Retained earnings (3,802,436) 2,671,032 (3,846,042)
Equity attributable to owners of the parent 3,458,298 9,826,816 3,397,326
Total equity 3,458,298 9,826,816 3,397,326
The above condensed consolidated statement of financial position should be
read in conjunction with the accompanying notes.
Condensed consolidated statement of CASH FLOWS
for the six months ended 30 September 2024
Six months ended Six months ended
30 September 30 September 31 March
2024 2023 2024
(unaudited) (unaudited) (audited)
£ £ £
Operating activities
Profit/ (Loss) before tax 43,606 (932,241) (8,193,316)
Adjustments to reconcile profit before tax to net cash flows from operating
activities
Decrease/ (Increase) in the fair value movements of investments (430,575) 651,444 2,257,293
Impairment of investments - - 4,847,349
Share based payment 17,366 39,401 126,985
Impairment of loans in investment companies 89,000 - 1,594,620
Loss/ (Profit) on disposal of equity investments 10,088 (79,761) (1,304,035)
Movement in liabilities due to Viking fund - 127 -
Depreciation and amortisation 108 189 310
Interest income (32,564) (9,628) (16,896)
Decrease/ (Increase) in trade and other receivables 48,061 (210,498) (44,015)
Decrease in trade and other payables (60,535) (49,487) (21,309)
Net cash flow used in operating activities (315,445) (590,454) (753,014)
Investing activities
Proceeds from sale of investments 73,912 228,515 2,512,690
Acquisition of investments (349,706) (183,516) (532,516)
Loans to investments (89,000) - (436,602)
Interest received 32,564 9,628 16,896
Net cash flow used in investing activities (332,230) 54,627 1,560,468
Financing activities
Funds raised, net of share issue costs - - -
Net cash flow from financing activities - - -
Net (decrease) / increase in cash and cash equivalents (647,675) (535,827) 807,454
Cash and cash equivalents at the start of the period 1,742,315 934,861 934,861
Cash and cash equivalents at the end of the period 1,094,640 399,034 1,742,315
Condensed consolidated statement of CHANGES IN EQUITY
for the six months ended 30 September 2024
Attributable to owners of the Parent
Share Capital Share Premium Share based payment Reserve Retained Earnings Total Total Equity
£ £ £ £ £ £
At 31 March 2023 (audited) 1,274,469 5,370,711 471,203 3,403,224 10,519,607 10,519,607
Total comprehensive income for the period - - - (732,192) (732,192) (732,192)
Transactions with owners recorded directly in equity:
Share based payments - - 39,401 - 39,401 39,401
At 30 September 2023 (unaudited) 1,274,469 5,370,711 510,604 2,671,032 9,826,816 9,826,816
Total comprehensive income for the period - - - (6,517,074) (6,517,074) (6,517,074)
Transactions with owners recorded directly in equity:
Share based payments - - 87,584 - 87,584 87,584
At 31 March 2024 (audited) 1,274,469 5,370,711 598,188 (3,846,042) 3,397,326 3,397,326
Total comprehensive income for the period - - - 43,606 43,606 43,606
Transactions with owners recorded directly in equity:
Share based payments - - 17,366 - 17,366 17,366
At 30 September 2024 (unaudited) 1,274,469 5,370,711 615,554 (3,802,436) 3,458,298 3,458,298
NOTES TO THE INTERIM FINANCIAL STATEMENTS
1 Basis of preparation
The financial information presented in this half-yearly report constitutes the
condensed consolidated financial statements (the interim financial statements)
of Braveheart Investment Group plc ("Braveheart" or "the Company"), a company
incorporated in the United Kingdom and registered in Scotland, and its
subsidiaries (together, "the Group") for the six months ended 30 September
2024. The interim financial statements should be read in conjunction with the
Annual Report and Accounts for the year ended 31 March 2024 and have been
prepared in accordance with UK-adopted international accounting standards in
accordance with the requirements of the Companies Act 2006. The financial
information in this half-yearly report, which was approved by the Board and
authorised for issue on 15 October 2024 is unaudited.
The interim financial statements do not constitute statutory accounts for the
purpose of sections 434 and 435 of the Companies Act 2006. The comparative
financial information presented herein for the year ended 31 March 2024 has
been extracted from the Group's Annual Report and Accounts for the year ended
31 March 2024 which have been delivered to the Registrar of Companies. The
Group's independent auditor's report on those accounts was unqualified, did
not include references to any matters to which the auditors drew attention by
way of emphasis without qualifying their report and did not contain a
statement under section 498(2) or 498(3) of the Companies Act 2006.
The preparation of the half-yearly report requires management to make
judgements, estimates and assumptions that affect the policies and the
reported amounts of assets and liabilities, income and expenses. The
estimates and associated assumptions are based on historical experience and
other factors that are believed to be reasonable under the circumstances, the
results of which form the basis of making judgements about carrying values of
assets and liabilities that are not readily apparent from other sources.
Actual results may differ from these estimates. In preparing this half-yearly
report, the significant judgements made by management in applying the Group's
accounting policies and the key sources of estimation uncertainty were the
same as those applied to the audited consolidated financial statements for the
year ended 31 March 2024.
The interim financial statements have been prepared using the same accounting
policies as those applied by the Group in its audited consolidated financial
statements for the year ended 31 March 2024 and which will form the basis of
the 2025 Annual Report and Accounts. The interim financial statements have
been prepared on the same basis as the financial statements for year ended 31
March 2024 which is on the assumption that the Company is a going concern.
Going Concern
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.
a) New and amended standards adopted by the Group
A number of new or amended standards became applicable for the current
reporting period. These new/amended standards do not have a material impact on
the Group, and the Group did not have to change its accounting policies or
make retrospective adjustments as a result of adopting these standards.
b) New accounting policies adopted by the Group
There were no new accounting policies adopted by the Group during the period,
nor any amendments to existing accounting policies.
2 (Loss)/Earnings per share
The basic (loss)/earnings per share has been calculated by dividing the
(loss)/ profit for the period attributable to equity holders of the parent by
the weighted average number of ordinary shares in issue during the period.
The calculation of (loss)/ earnings per share is based on the following profit
and number of shares in issue:
Six months ended Six months ended Year ended
30 Sept 2024 30 Sept 2023 31 Mar 2024
(unaudited) (unaudited) (audited)
£ £ £
Profit/ (Loss) for the period attributable to equity holders of the parent 43,606 (732,192) (7,249,266)
Weighted average number of ordinary shares in issue:
- For basic earnings per ordinary share 63,723,489 63,723,489 63,723,489
- Potentially dilutive ordinary shares - - -
- For diluted earnings per ordinary share 63,723,489 63,723,489 63,723,489
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 end of the current period there were no potentially
dilutive ordinary shares.
3 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
£ £ £ £ £ £
At 31 March 2023 (audited) 2,011,877 - - 7,446,447 - 9,458,324
Additions at cost 33,516 - - 150,000 - 183,516
Disposals (148,754) - - - - (148,754)
Amount owed to creditors - - - (127) (127)
Change in Fair Value (44,758) - - (606,686) - (651,444)
At 30 September 2023
(unaudited) 1,851,881 - - 6,989,634 - 8,841,515
Additions at cost 349,000 - - - - 349,000
Disposals (147,630) - - (912,272) - (1,059,902)
Amount owed to creditors - - - (24,074) - (24,074)
Change in Fair Value (439,156) - - (1,166,693) - (1,605,849)
Impairment - - - (4,847,349) (4,847,349)
At 31 March 2024 (audited) 1,614,095 - - 39,246 - 1,653,341
Additions at cost 327,206 - - 22,500 - 349,706
Disposals (84,000) - - - - (84,000)
Amount owed to creditors - - - (11) - (11)
Change in Fair Value 464,992 - - (34,417) - 430,575
At 30 September 2024
(unaudited) 2,322,293 - - 27,318 - 2,349,611
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'. When using
the DCF valuation method, reasonably possible alternative assumptions could
have a material effect on the fair valuation of investments. The impact on
the fair value of investments if the discount rate and provision shift by 1%
is £23,496 (2023: £88,415).
4 Share capital
30 Sept 2024 30 Sept 2023 31 Mar 2024
(unaudited) (unaudited) (audited)
Authorised £ £ £
83,723,489 ordinary shares of 2 pence each 1,674,470 1,674,470 1,674,470
(30 September 2023: 83,723,489,
31 March 2024: 83,723,489)
Allotted, called up and fully paid
63,723,489 ordinary shares of 2 pence each 1,274,469 1,274,469 1,274,469
(30 September 2023: 63,723,489,
31 March 2024: 63,723,489)
The Company has one class of ordinary shares. All shares carry equal voting
rights, equal rights to income and distribution of assets on liquidation or
otherwise, and no right to fixed income.
5 Subsequent Events
On 11(th) October 2024, the company announced that it had acquired 65,415,862
ordinary shares in IQ-AI Limited, representing 29.51% of the issued share
capital, for a total consideration of £719,574. 45,761,083 shares in IQ-AI
were purchased from Trevor Brown, CEO of Braveheart, at a price of 1.1 pence
per share, for a consideration of £503,371.91. A further 19,654,779 shares in
IQ-AI Shares were purchased from Free Association Books Limited ("FAB"), a
company owned by the children of Trevor Brown, also at a price of 1.1p per
IQ-AI share for a consideration of £216,202.57.
6 Availability of Interim Results
Shareholder communications
A copy of this report is available on request from the Company's registered
office: 1 George Square, Glasgow, G2 1AL. A copy has also been posted on the
Company's website: www.braveheartinvestmentgroup.co.uk
(http://www.braveheartinvestmentgroup.co.uk) .
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