Vela Technologies - Quarterly Investment Update
30/08/2024 07:00
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RNS Number : 2243C Vela Technologies PLC 30 August 2024
30 August 2024
Vela Technologies plc
("Vela" or "the Company")
Quarterly Investment Update
The Board of Vela (AIM:VELA), an AIM-quoted investing company focused on
early-stage and pre-IPO disruptive technology investments, is pleased to
report an update for the quarter ended 30 June 2024.
Key numbers as at 30 June 2024*
· The value of Vela's total assets (including cash) decreased
during the quarter by £2,737,000 to £2,804,000 (quarter to 31 March 2024 - a
decrease of £640,000 to £5,541,000).
· This decrease is entirely attributable to the collapse in the
value of Conduit Pharmaceuticals Inc. ("Conduit") (an unrealised loss of
£2,800,000).
· Of the remainder of the listed portfolio, a profit of £8,000
was realised on investments valued at £78,000 at 31 March 2024 and there was
an unrealised gain of £137,000 on the remaining £1,658,000 of listed
investments (excluding Conduit) brought forward at 31 March 2024.
· No acquisitions were made during the quarter.
· The fair value of the investment portfolio (excluding cash)
at 30 June 2024 was £2,747,000 (31 March 2024 - £5,487,000).
· Vela's cash balance stood at £57,000 (31 March 2024 -
£53,000).
*The figures contained within this quarterly investment update are taken from
unaudited management information.
Investments traded on a recognised stock market are valued using the
accounting policies outlined in the notes to the annual financial statements.
Unlisted investments and other financial assets are stated at the values
attributed to them in the audited balance sheet as at 31 March 2023, unless
there has been a transaction since that date which suggests a materially
different valuation.
Changes in the investment portfolio during the quarter
The following table sets out the changes in the investment portfolio during
the quarter ended 30 June 2024:
Holdings at Quarter to Holdings at 30 June 2024
31 March 2024
30 June 2024
No. of shares Fair value (£) Realised profit Unrealised profit (loss) No. of % of equity Fair value (£)
shares
Listed in the UK
On the main market
R8 Capital Investments plc (formerly Mode 620,581 14,000 - - 620,581 < 1 14,000
Global Holdings plc)
On AIM
Northcoders Group plc 347,499 547,000 - 193,000 347,499 4.3 740,000
EnSilica plc 776,707 447,000 4,000 (93,000) 666,707 < 1 290,000
Skillcast Group plc 675,676 199,000 4,000 59,000 625,676 < 1 244,000
Finseta plc (formerly 400,000 120,000 - 30,000 400,000 < 1 150,000
Cornerstone FS plc)
Tribe Technology plc 3,125,000 180,000 - (52,000) 3,125,000 1.3 128,000
MTI Wireless Edge Ltd 200,000 92,000 - (18,000) 200,000 < 1 74,000
On AQSE
TruSpine Technologies plc 6,000,000 57,000 - 15,000 6,000,000 3.9 72,000
Igraine PLC 23,928,080 72,000 - (6,000) 23,928,080 27.7 66,000
Global Connectivity plc 1,200,000 5,000 - 10,000 1,200,000 < 1 15,000
(formerly Rural
Broadband Solutions
PLC)
Ethernity Networks Ltd 350,000 3,000 - (1,000) 350,000 < 1 2,000
1,736,000 8,000 137,000 1,795,000
Listed overseas
NASDAQ
Conduit Pharmaceuticals Inc 1,005,760 2,924,000 - (2,800,000) 1,005,760 1.0 124,000
(formerly St George
Street Capital Limited)
Unlisted
Community Social 71,429 427,000 - - 71,429 < 1 427,000
Investment Limited
(formerly WeShop
Limited)
Aeristech Limited 145,833 401,000 - - 145,833 1.0 401,000
828,000 - - 828,000
Total investments 5,488,000 2,747,000
Cash 53,000 57,000
Total assets 5,541,000 2,804,000
Key developments in principal investee companies since the last quarter
Conduit Pharmaceuticals Inc. ("Conduit")
At 31 March 2024 Conduit's share price was $3.67. At 30 June 2024 this had
fallen to $1.06 and has since sunk to $0.14 as at 28 August 2024. On 16
August 2024 Conduit announced that it had become aware that one of its
directors had previously entered into certain collateral pledge agreements
that resulted in the disposition of a substantial amount of shares in Conduit
and that it had appointed an independent committee of the Board to establish
the facts. Another independent committee of the Conduit board has been formed
to investigate and review the trading patterns of certain of Conduit
shareholders and determine if any action should be taken. It seems that the
irregularities were instrumental in the collapse of the share price. The
signing of a licensing agreement with AstraZeneca AB in August suggests that
the commercial prospects for Conduit's clinical assets remains encouraging.
Northcoders Group plc ("Northcoders")
In May Northcoders published its 2023 annual report and in July gave a trading
update for the first half of 2024. 2023 showed a 27% increase in revenue
over 2022 and the trading update reported a further 26% increase in revenue
for the first half of 2024 versus the first half of 2023. The company had a
cash balance of £1.3 million at 30 June 2024 and has reported continued
strong growth in contracted business.
EnSilica plc ("EnSilica")
In May EnSilica announced that it expected to report record revenues of
approximately £25 million for the year to 31 May 2024 (2023: £20.5 million)
and profit after tax of approximately £1.9 million (2023: £1.8 million).
During the quarter the company raised additional capital of £5.2 million at
45p per share to finance its growing business momentum and the development
of its intellectual property. In July 2024 the company announced that it had
won a contract that was expected to enhance revenue by $5 million in its
current financial year with further supply revenue of $50 million over the
5-year life of the contract.
Skillcast Group plc ("Skillcast")
In April Skillcast reported its 2023 results which showed revenue growth of
15%, including a 37% increase in annualised recurring revenue, and a strong
balance sheet with a £7.2 million cash balance. In July the company published
a trading update which reported an expected 23% increase in revenue for the
first half of 2024, including a 35% increase in recurring subscription revenue
compared to the same period last year and an expectation of a small EBITDA
profit for the full year.
Finseta plc (formerly Cornerstone FS plc) ("Finseta")
In May Finseta (whose name change was registered at Companies House that
month) also reported its 2023 results. These showed a doubling of revenue
and a maiden year of profitability and positive cash flow. In July Finseta
published a trading update, reporting for the first half of 2024 a 42%
increase in revenue, a quadrupling of adjusted EBITDA and a strong balance
sheet with cash of £2.8 million (an increase in the half year of £0.5
million); and an expectation of continued strong growth for the remainder of
2024.
Tribe Technology plc ("TribeTech")
In June TribeTech announced that it had raised equity and loan capital of
£1.4 million in order to provide additional working capital. In July the
company reported that it had achieved a major milestone by shipping its first
drill rig to Major Drilling Group International Inc for use on an iron ore
deposit in Australia.
Aeristech Limited ("Aeristech")
Aeristech reported to its shareholders in June that it was generating material
revenue from its first major customer, Cummins, the international engine
manufacturer; and that this would be augmented by revenue from a number of
other major customers during the remainder of 2024 and 2025. It also
announced that it was in talks with significant providers of equity and loan
funds. We understand that these negotiations continue.
Other activities
· Since the publication of the last quarterly update in June 2024, the
Board of Vela has spoken or met with representatives of the following investee
companies:
o Conduit Pharmaceuticals Inc.
o TruSpine Technologies plc
o Tribe Technology plc
o Aeristech Limited
o Igraine PLC
o Skillcast Group plc
· Vela's management team has had, and continues to have, discussions
with a number of prospective investee companies. Protracted negotiations
with Hamak Gold Limited resulted in investment at the beginning of July
(announced on 17 July). The Board continues frequently to receive and
appraise opportunities to invest.
James Normand, Executive Director of Vela, commented: "It is frustrating that
events at Conduit Pharmaceuticals Inc. have overshadowed a steady performance
from Vela's UK portfolio. Vela's principal other investments are trading
well; and it is the Board's view that such results will in due course be
reflected in their value on the listed markets."
For further information, please contact:
Vela Technologies plc Tel: +44 (0) 7950 389469
Brent Fitzpatrick, Non-Executive Chairman
James Normand, Executive Director
Allenby Capital Limited (Nominated Adviser) Tel: +44 (0) 20 3328 5656
Nick Athanas / Piers Shimwell
Peterhouse Capital Limited (Broker) Tel: +44 (0) 20 7469 0930
Novus Communications (PR and IR Adviser) Tel: +44 (0) 20 7448 9839
Alan Green / Jacqueline Briscoe
About Vela Technologies
Vela Technologies plc (AIM: VELA) is an investing company focused on early
stage and pre-IPO long term disruptive technology investments. Vela's
investee companies have either developed ways of utilising technology or are
developing technology with a view to disrupting the businesses or sector in
which they operate. Vela will also invest in already-listed companies where
valuations offer additional opportunities.
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