Eight Capital Ptnrs. - 2023 Half-year Report
29/09/2023 12:43
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RNS Number : 2075O Eight Capital Partners PLC 29 September 2023
29 September 2023
EIGHT CAPITAL PARTNERS PLC
("Eight Capital" "ECP" or the "Company")
UNAUDITED HALF-YEARLY REPORT FOR THE SIX MONTHS ENDED 30 JUNE 2023
Eight Capital Partners plc (AQSE: ECP), announces its unaudited half-yearly
results for the half year ending 30 June 2023. Comparative figures are shown
for the comparable period in the previous financial year unless otherwise
stated:
Chairman's Interim Report
The Company has built on the results announced in the 2022 Annual Report and
Consolidated Financial Statements and is reporting a net profit of £1.2m in
the period (2022: £0.5m loss). Revenues, predominantly from project related
fees, were a satisfactory £0.6m (2022: £0.05m) and although administration
costs grew to £1.3m (2022: £0.4m), this was largely due to a £0.7m
unrealised foreign exchange loss, which was offset by a £1.7m fair value gain
on the Company's listed investments.
As noted in the 2022 Annual Report and Consolidated Financial Statements that
were announced on 12 September 2023, subsequent to the balance date of these
interim results, the Group has further strengthened its balance sheet. On 11
August 2023 the Company announced that a general meeting of the holders of the
Company's €10,000,000 4.8% Bonds had approved the conversion of those bonds,
together with the interest payment due on 3 September 2023, into new ordinary
shares in ECP. On 8 September 2023 the Company announced that, further to
the announcement on 11 August 2023, application had been made for
25,577,732,855 new ordinary shares at a price of 0.02525 pence per new
ordinary share in lieu of the conversion of the Notes and accrued interest.
In September 2021 Eight Capital first announced that it would be implementing
a plan to strengthen the balance sheet with the objective of moving the market
cap of the business towards £50m. The four step strategy including debt to
equity conversions outlined has been implemented and Eight Capital today has
a market cap of approximately £49 million, with minimal third party financial
debt and a recurring revenue stream of €1 million from interest payments.
The Company is now well placed to execute its fintech strategy:
- building fintech businesses through roll-up of other existing fintechs in
the same sector (such as Neobanking and SME digital lending); and
- acquisition of and digitisation of traditional wealth and asset management
businesses to create a scaled up fintech - digital asset manager.
This was confirmed in the circular dated 29 September 2022 and in the Annual
Report published in August 2023, where it announced that it intended to
establish a digital bank division through the acquisition of a NeoBank at
the core of its digital lending strategy. SMEs continue to be under‑served
by the traditional financial services sector and are sometimes overlooked by
larger funding institutions, or, when managed through a traditional banking
process, are perceived as difficult to underwrite and therefore expensive to
fund. There are significant benefits for SMEs using "fintech" systems and
innovatively structured capital solutions to better access capital, either for
direct investment or to assist with their working capital management. ECP's
intention is to create a pan-European SME digital lending platform that would
deliver faster, quicker and cheaper capital to SME clients. The team has
been working intensely towards delivering this strategy and has a number of
opportunities that have been developed, with strong potential for a near-term
announcement.
In addition, the Company also explained that it believes there is a
significant opportunity in wealth and asset management tech, through the
acquisition and integration of sub-scale traditional asset managers into a
larger, more efficient tech-enabled business. It now intends to establish a
second division focused on this roll-up and digitisation asset management
strategy, in order that it has resources to analyse two specific opportunities
in the sector, for delivery in 2024. It is seeing an increasing number of
wealth and asset management consolidation opportunities, that, subject to
pricing and building a strong digitisation team pre-acquisition, it intends to
progress in 2024.
Dominic White
Chairman
28 September 2023
This announcement contains inside information for the purposes of the UK
Market Abuse Regulation.
The Directors of the Company take responsibility for this announcement.
For further information, please contact:
Eight Capital Partners plc +44 20 3300 0715
Dominic White, Chairman info@eight.capital
Luciano Maranzana, Group CEO
Cairn Financial Advisers LLP +44 20 7213 0880
AQSE Corporate Adviser
Jo Turner / Liam Murray
Walbrook PR Limited +44 20 7933 8780
Paul Vann/Nick Rome eightcapital@walbrookpr.com
About Eight Capital Partners:
Eight Capital partners plc is a financial services operating company that aims
to grow revenue through businesses engaged in "Fintech" operations including
in the digital banking and lending sectors.
ECP seeks to grow its group revenue in these high growth fintech sub-sectors,
which it expects to also increase in value, such that they generate an
attractive rate of return for shareholders, predominantly through capital
appreciation.
www.eight.capital
Eight Capital Partners operates two subsidiary businesses:
Epsion Capital:
Epsion Capital is an independent corporate advisory firm based in London with
an extensive experience in UK and European capital markets. The team of senior
and experienced ECM and M&A professionals is specialised across multiple
markets, sectors and geographies and it prides itself on a commercial approach
that allows the clients to achieve their growth ambitions.
www.epsioncapital.com
Innovative Finance:
Innovative Finance is a corporate finance advisory business that develops
mergers and acquisitions and financing solutions across multiple sectors,
primarily in Europe, with access to international transactions. It focuses on
investments in Europe which are linked to technological developments in the
financial services industry. www.innovfinance.com
(http://www.innovfinance.com)
Forward Looking Statements
Certain statements in this announcement, are, or may be deemed to be, forward
looking statements. Forward looking statements are identified by their use of
terms and phrases such as "believe", "could", "should", "envisage'',
"estimate", "intend", "may", "plan", "potentially", "expect", "will" or the
negative of those, variations or comparable expressions, including references
to assumptions. These forward-looking statements are not based on historical
facts but rather on the Directors' current expectations and assumptions
regarding the Company's future growth, results of operations, performance,
future capital and other expenditures (including the amount, nature and
sources of funding thereof), competitive advantages, business prospects and
opportunities. Such forward looking statements reflect the Directors' current
beliefs and assumptions and are based on information currently available to
the Directors.
Eight Capital Partners plc
Consolidated Statement of Comprehensive Income
for the six months ended 30 June 2023
Note Six months ended Six months ended Year ended
30 June 2023 30 June 2022 31 December
Unaudited Unaudited 2022
£'000 £'000 Audited
£'000
Revenue 572 58 895
Cost of sales (4) (9) (8)
Gross profit 568 49 887
Other operating income 51 10 84
Administrative expenses (1,321) (440) (1,111)
Net change in unrealised/realised gains and losses on investments at fair 1,724
value through profit or loss
(46) 1,488
Net gains on fair value through profit or loss - - 1,311
Operating profit /(loss) 1,022 (427) 2,659
Finance income 437 486 876
Finance expense including debt modification gain or loss (221) (565) 1,103
Profit / (loss) before tax 1,238 (506) 4,638
Taxation - - -
Profit / (loss) for the period 1,238 (506) 4,638
Other comprehensive income - (2) -
Total comprehensive profit/ (loss) 1,238 (508) 4,638
Basic and diluted earnings /(loss) per share (pence): 2 0.0008 (0.03) 0.02
Eight Capital Partners plc
Consolidated Statement of Financial Position at 30 June 2023
Note As at As at As at
30 30 31 December
June June 2022
2023 Unaudited 2022 Unaudited Audited
£'000 £'000 £'000
Non-current assets
Goodwill 2,717 3,867 2,717
Intangible assets 7 11 11
Property, plant and equipment 18 17 22
Trade and other receivables - - 311
Total non-current assets 2,742 3,895 3,061
Current assets
Investments 3 30,457 35,362 28,785
Trade and other receivables 1,138 1,349 1,062
Cash and cash equivalents 40 29 22
Total current assets 31,635 36,740 29,869
Current liabilities
Trade and other payables 818 723 468
Loans and borrowings 1,016 17,593 970
Total current liabilities 1,834 18,316 1,438
Non-current liabilities
Long term bond 5,948 21,340 5,807
Liability for contingent consideration - 1,305 -
Loans and borrowings - - 402
Total non-current liabilities 5,948 22,645 6,209
Net assets 26,595 (326) 25,283
Capital and reserves
Share Capital 4 17,484 1,453 17,484
Share premium account 18,099 2,068 18,099
Convertible loan notes 84 84 84
Currency translation reserve (7) (16) -
Retained earnings (9,065) (3,915) (10,384)
Total equity 26,595 (326) 25,283
Eight Capital Partners plc
Notes to the Half-Year Financial Statements
For the six months ended 30 June 2023
1. Accounting policies
Basis of preparation
These interim financial statements have been prepared in accordance with
UK-adopted international accounting standards.
The interim financial statements do not include all disclosures that would
otherwise be required in a complete set of financial statements and should be
read in conjunction with the 2022 audited annual report. The statutory
financial statements for the year ended 31 December 2022 were prepared in
accordance with UK-adopted international accounting standards. The auditors
reported on those financial statements and their Audit Report was unqualified.
The interim financial information is unaudited, has not been reviewed by the
Company's auditors and does not constitute statutory accounts as defined in
the Companies Act 2006.
The interim financial information was approved and authorised for issue by the
Board of Directors on
28 September 2023
Going concern
As at the date of this report, the Group had cash or cash equivalents of circa
£545,000, which include cash of £160,000 and listed shares of £345,000, as
well as receivables contractually agreed over the next 12 months of circa £1
million.
At the end of June 2024, the Company is due to be repaid more than £30
million pounds, when the 1AF2 Bond matures, of which £29.6 million was
covered by a security package at year end. The Group's funding requirements
(costs plus current creditors, offset by fees to be earned) excluding net
interest income are not expected to exceed £1 million in the next 12 months.
Any material capex during the next 12 months will be funded by fresh capital
and the Company has always had good support from its main shareholder.
The Directors are therefore of the opinion that the Group has adequate
financial resources to enable it to continue in operation for the foreseeable
future. For this reason, it continues to adopt the going concern basis in
preparing the financial statements.
2. Profit or loss per share
Six months ended 30 June 2023 Six months ended 30 June 2022 Year ended
£'000 £'000 31 December 2022
£'000
Basic and diluted
Profit / (loss) for the period attributable to owners of the Company 1,238 4,638
(506)
Weighted average number of shares: 161,873,969,648 1,564,315,462 19,290,867,985
Basic earnings / (loss) per share (pence): 0.0008 (0.03) 0.02
The basic and diluted earnings per share were determined by dividing the
profit or loss attributable to the equity holders of the Company by the
weighted average number of shares outstanding during the periods.
3. Investments
Listed investments Total
£'000 £'000
Fair value at 1 January 2022: 24,734 24,734
Fair value adjustment 2,672 2,672
Foreign exchange adjustments 1,379 1,379
Fair value at 31 December 2022: 28,785 28,785
Transfer from trade and other receivables 809 809
Fair value loss on listed investments 1,718 1,718
Foreign exchange adjustments (855) (855)
Fair value at 30 June 2023: 30,457 30,457
4. Share capital
Ordinary share capital is summarised below:
Number of Ordinary Shares of 0.01p Nominal value
£'000
As at 31 December 2022 and 30 June 2023 161,873,969,648 17,484
Deferred share capital is summarised below:
Number of Deferred Shares of 0.24p Nominal value
£'000
As at 31 December 2022 and 30 June 2023 540,166,760 1,296
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