Eight Capital Ptnrs. - Final Results
30/06/2022 18:15
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RNS Number : 9162Q Eight Capital Partners PLC 30 June 2022
EIGHT CAPITAL PARTNERS PLC
("Eight Capital", "ECP" or "the Company")
Annual Report and Financial Statements
For the year ended 31 December 2021
Eight Capital (AQSE: ECP), the investing company whose investment strategy
focuses on technology, media, telecoms and financial services businesses,
including listed investing companies, is pleased to announce its final results
for the year ended 31 December 2021. The Company's audited report and
accounts can be found below. A copy of the final results will shortly be
available from the Company's website and will be sent to all shareholders.
A separate announcement providing details of the 2021 Annual General Meeting
will be made shortly.
The Directors of the Company accept responsibility for the content of this
announcement.
For further information, please visit www.eight.capital or contact:
Eight Capital Partners plc +44 20 3808 0029
Dominic White info@eight.capital
Cairn Financial Advisers LLP +44 20 7213 0880
AQSE Corporate Adviser
Jo Turner / James Lewis
Walbrook PR Limited +44 20 7933 8780
Paul Vann/Nick Rome Paul.vann@walbrookpr.com
About Eight Capital Partners:
Eight Capital Partners plc is an international financial services operating
company focused on owning and operating businesses engaged in "Fintech"
operations, from the digitisation of banking services, through to
blockchain-backed decentralised finance companies and "crypto banks."
ECP provides equity, debt, and equity-related investment capital to companies
seeking capital for growth and development, consolidation or acquisition, or
pre-IPO financing. The Company seeks to generate an attractive rate of return
for shareholders, predominantly through capital appreciation, by maximising
the revenues, profits and value of its operating subsidiaries, and taking
advantage of the increasing number of acquisition opportunities within the
continuously developing global technology, media, telecoms and financial
services sectors.
www.eight.capital (http://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 (http://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 is
currently working on transactions in the USA and Europe which are linked to
technological developments in the financial services industry, AI,
cybersecurity, e-commerce and cannabis. www.innovfinance.com
(http://www.innovfinance.com)
Chairman's Statement
Dear Shareholder,
I am pleased to report on the Company's financial results for the year ended
31 December 2021 and on a number of far-reaching corporate developments that
have occurred during the year, particularly during the second half and which
have continued into 2022.
Change of status to an Operating Group
The most important development during the period under review, and announced
in an extensive market update on 27 September 2021, was the change in status
from being an investing company to becoming an operating Group. This Report,
therefore, for the first time, presents Eight Capital Partners Plc's ("ECP" or
"Eight Capital") financial statements under IFRS reporting standards,
consolidating the results and balance sheets of its wholly owned subsidiaries,
Epsion Capital Limited ("Epsion"), and Innovative Finance Srl ("InnFin"), the
latter acquired in May 2021 (together "the operating subsidiaries").
ECP has therefore evolved into an international financial services operating
Group, whereby Epsion and InnFin source, advise on, finance, and deliver
transactions, primarily involving SME businesses within the technology, media,
telecoms and financial services sectors and in which ECP itself will
potentially invest.
Results
Through its two subsidiaries, the Group recorded revenues for the year under
review of £772,000 with a gross margin of over 70%. This income was further
supplemented by ECP itself providing management services to certain investees
and thereby recovering £128,000 of overhead costs. Interest income less
expense was a net surplus of £41,000 and the net movement in fair value of
both realised and unrealised gains and losses on investments at fair value
(explained further below) was a gain of £314,000. Overheads were relatively
high, at £1.1 million; partly a reflection of the substantial professional
support for the change in status outlined in the September update, and the
Group result for the year was a loss before tax of £98,000.
Subsidiary activities
Epsion, our wholly owned UK Corporate Finance subsidiary, advised on
approximately seven bonds from January through to July, generating
approximately £400,000 of revenue. During the rest of 2021, Epsion
concentrated on two related companies, providing advice ahead of potential
standard listings. If these companies are listed, there will be significant
fee earnings derived from these clients.
Innovative Finance S.r.l our wholly owned unregulated Italian Corporate
Finance subsidiary, acquired in May 2021, has concentrated in the second half
of the year on providing advice to investors and companies ahead of listing on
the Standard List of the LSE. Approximately €350,000 of the fees are from
advising investors and the remaining €50,000 are fees for companies
considering a listing. If these companies are listed InnFin will earn
significant future fees.
Eight Capital: update on prior year's investments
ECP's investment portfolio now and as at 31 December 2021 is comprised
exclusively of quoted companies. The private investments included in last
year's report have either been sold (FPG - see below) or integrated into the
Group (Epsion and InnFin).
Finance Partners Group ("FPG"): Financial Services
This investment was disposed of during the year, originally consisting of a
receivable of €2 million with an ability to convert into equity acquired for
€1.9 million. The ability to convert was exercised and the resultant
holding in FPG of 28.7% was sold for €2.15 million (equivalent to £1.83
million), of which €1.57 million (£1.34 million) was paid on closing and
the balance of €580,000 (£487,000) payable in 2022. The gain on disposal
figure included in these accounts is £130,000
Retained investments: combined loss in value recorded in these accounts:
£116,000.
Supply@ME Capital Plc ("SYME): Inventory securitisation
SYME is an inventory monetisation business based on a novel asset
securitisation concept, enabled by an innovative software platform. SYME is
listed on the Standard List of the London Stock Exchange. SYME's share price
has not performed well and ECP's £250,000 investment, acquired at a share
price of £0.11 has seen a drop to £0.0017 at the year-end, with a total fall
in value of over £200,000 since purchase. The movement during the year under
review, included in the income statement, is a loss of £90,000. Although the
share price reduction has been a source of concern, the Board recognises that
the concept and possibilities for SYME were, and still are, interesting once a
critical mass of investment capital to support securitisations can be
delivered by SYME's management.
Evrima Plc ("EVA"): Mining and exploration investment
Evrima was formerly Sports Capital Group ("SCG") and ECP invested in a
football related project from which SCG withdrew. They reverted to their
previous sector of investment: mining and associated exploration and changed
their name. The Company's investment was approximately £140,000 and is
currently £131,000, based on its quote on AQSE Growth Market. We will dispose
of this investment in due course.
Greencare Capital Plc ("GRE"): Investment in Cannabis health products and
general wellness.
The Company invested both prior to and at IPO when GRE listed on the AQSE
Growth Market in December 2019. The total investment was £280,000 and the
average price paid per share was 10.9p. The shares at the year-end - and
currently - were quoted at 30.5p, having fallen slightly since the end of
2020. It was recently announced that Dominic White, Chairman of ECP, has
become chairman of GRE. We await positive developments.
Fair value adjustment on contingent liability
The terms of the acquisition of InnFin included an earn-out formula contingent
upon the attainment of certain levels of profitability in future years,
creating a contingent liability towards the vendor at the date of acquisition
in May 2021. The fair-valuing of this liability at 31 December 2021 has
resulted in a positive adjustment in the income statement of £300,000.
Refined Growth Strategy
As part of its transformation into an operating group, ECP has recently
refined its growth strategy to focus increasingly on those businesses engaged
in "Fintech" operations, including the digitisation of banking services and
blockchain-backed decentralised finance and other disruptive financial
services technologies, all of which seek to improve and automate the delivery
and use of financial services. Your Board also considers there to be many
value creation opportunities for shareholders from the further aligning and
expansion of the activities of Epsion and InnFin.
By combining their advisory and transactional expertise with the strategic
utilisation of ECP's growing in-house capital resources, ECP is able to
provide significant support to the transactions managed by the operating
subsidiaries through the provision of early-stage and growth co-investment
capital to growing companies seeking finance for expansion, development,
consolidation or acquisition, or as pre-IPO/RTO funding.
The competitive advantage of ECP's new operating structure is its flexibility
in terms of where it invests in the "capital stack" pyramid, being equally
comfortable with private or public debt and/or equity positions, convertibles
and structured equity or debt facilities. Much of the financial services
advisory market only delivers third party capital and advice, without direct
access to supportive in-house capital, or having access to in-house capital
lines with a less flexible mandate.
Corporate Transactions during the year
Eight Capital successfully completed a number of corporate transactions during
the year, each one forming part of its strategic objective to grow the market
capitalisation of the Company towards and beyond £50 million, and
establishing a strong balance sheet base from which to significantly expand
its operations and its own equity valuation.
To this end, in May 2021, the Company acquired InnFin, based in Milan, which
develops mergers and acquisitions and financing solutions across multiple
sectors, primarily in Europe.
In August, ECP disposed of its investment in Finance Partners Group SPA
("FPG"), an Italian-based financial services business, realising
€2.15million. The profitable sale of this minority stake has provided ECP
with a better strategic alignment between the Company's two remaining wholly
owned subsidiaries and its other activities with a primary focus on
technological developments within the financial services industry, such as
fintech SME funding solutions and digitisation of banking including
decentralised finance technology, to be key growth areas.
As announced on 4 August 2021 the purchaser agreed to pay ECP a total of
€2.15 million for the acquisition of FPG. The cash element of €1.57
million was paid immediately. Discussions are ongoing relating to the final
part of the settlement €0.58 million, which remains due, and against which
an extra amount of Euros 10,000 has been paid to ECP plus further asset
security backing provided to support the receivable, to the benefit of the
Company. The agreed latest date of payment is now 1 September 2022.
In addition to these corporate transactions, and as part of the Board's key
strategic objective to build scale to the business by further strengthening
the Balance Sheet, in August the Company purchased €40m 2.5% Fixed Rate
Secured Bonds at Par from IWEP Limited, a company controlled by Dominic White,
ECP's chairman and ECP's major shareholder, which significantly increased
ECP's gross assets. Consideration for the acquisition of the Bonds was settled
by a one-year vendor loan which was subsequently restructured into a €15
million 4.8% Bond described below and a €25 million interest-free vendor
loan ("Vendor Loan").
In September, the Company launched a €25 million 4.8% Fixed Rate five-year
Bond Programme, with an initial tranche, placed at launch and listed on The
Vienna Stock Exchange. This Bond programme also provided a logical next step
towards the continuing expansion of the Balance Sheet, whilst also providing
better medium-term visibility for the refinancing of ECP's existing 7% listed
bonds which mature in July of this year.
Corporate Transactions after the year end
On 23 May, the Company announced that it had issued a further €5 million
tranche of its 7% Bond to a third party that had acquired €5 million of the
Vendor Loan from IWEP. In that announcement, ECP also reinforced its
commitment to a transformational strengthening of the Company's balance sheet
through IWEP seeking to convert, subject to regulatory and shareholder
consent, as much as possible of its debt with the Company into equity.
On 24 June, the company announced that at a Bondholder meeting held on the 23
June, an Extraordinary Resolution approved a proposal to modify the terms and
conditions of the 7% Bond such that the terms align with the more recently
issued €25m 4.8% Bond repayable on 3 September 2026.
These current and proposed balance sheet transactions are intended to
consolidate and expand the Company's service offering as well as helping it to
develop a platform from which it can develop as a multi-faceted financial
services company, whilst also providing a stronger base from which it can
raise third party capital.
Planned Placing and Open Offer
As announced in the Corporate Update in September 2021, it is the Company's
intention to raise new equity capital via a placing once the restructuring of
debt is completed. Your Board recognises that those who have already invested
in the Company may wish to increase their investment and it is therefore
anticipated that current shareholders will be invited to participate in the
fundraise on the same terms as the debt conversions and equity placing.
Further information will be given in due course.
The Company also intends to provide an opportunity for all debt investors to
convert debt to equity on the same terms.
Strengthening of the Management Team
Integral to the success of the Company's transition to an operating business
has been the strengthening of its senior management team, with the appointment
to the Board in June 2021 of former Bank of England Chief Accountant, David
Bull, who joined initially as a Non-Executive Director and then, following the
Company's successful transition to operating group status, was appointed
full-time Chief Executive Officer.
David has responsibility for leading the further development of ECP's
financial services business, both organically and through acquisition, all
within the context of fintech services. His knowledge and experience of
technology and the way it relates to asset and commercial finance,
international banking and the digitisation of banking services, combined with
his strong risk management skills and proven business leadership qualities are
already proving invaluable as we move towards more advanced technologies in
the financial services sector. He will also be strengthening the operational
management team with further additions in financial management and compliance,
which will be at the heart of the Company's operating activities.
The Group is also delighted to have announced on 13 May 2022, the appointment
of Richard Day to the Board of Epsion as its Non-Executive Chairman. Richard
was co-founder of institutional stockbroker Arden Partners plc, where, from
2002 to when he left in 2015, he was head of corporate finance for much of
that time, whilst playing an important role in building its sectoral and
geographical presence. He currently holds chairmanships of two quoted
companies: Pelatro plc, a "Big Data" analytics company on AIM and The British
Honey Company plc, the premium British honey and craft spirits producer. He
also chairs Eden Geothermal Limited, a private company drilling its first of
two geothermal wells, adjacent to the Eden Project in Cornwall in the
south-west of England. Richard's broad experience of public markets, corporate
finance and corporate governance across diverse business sectors is already
having a significant influence and will without doubt be a huge asset not only
to Epsion, but to the Group as a whole.
Outlook
2021 was a watershed year for Eight Capital. It successfully transitioned into
a financial service operating group, completing a number of complementary
corporate and financial transactions, strengthening both the Company's
operational capabilities and putting in place actions to radically strengthen
its Balance Sheet. It has a clear strategy in place for the transformation of
the business in terms of its size, market value and influence within the
fintech sector of financial services and through our wholly-owned
subsidiaries, Epsion and InnFin.
The Board's strategy is to grow the business both organically through the
development of new financial, "fintech-led" services and by selective
acquisitions to boost revenue and market presence, thereby significantly
increasing shareholder returns.
The Group has made a good start to the current financial year. We are
nurturing earnings potential and structuring the business and the Balance
Sheet for future sustained growth, while building value for shareholders. We
have a growing pipeline of opportunities that we intend to deliver through our
business model and the management team in place to deliver growth over the
next two years. The Board views the future with increasing confidence.
Dominic White
Chairman
Consolidated Statement of Comprehensive Income
For the year ended 31 December 2021
2021
£'000
GROUP
Revenue 772
Cost of Sales (252)
Gross Profit 520
Administrative expenses (1,101)
Net change in unrealised/realised gains and losses on investments at fair 314
value through profit or loss
Other income 128
Operating loss (139)
Interest income 418
Finance expense (377)
Loss before tax (98)
Taxation -
Loss for the financial year (98)
Other comprehensive income:
Items that may be subsequently reclassified to profit or loss:
Currency translation differences (1)
Other comprehensive income/ (loss) for the year, net of tax (1)
Total comprehensive income attributable to the owners of the Parent (99)
Earnings per share (pence) from continuing operations attributable to owners (0.01)
of the
Company - Basic & Diluted
Consolidated Statement of Financial Position
At 31 December 2021
GROUP Note 2021
£'000
Non-current assets
Goodwill 15 3,867
Intangible Assets 17 13
Property, plant & equipment 16 23
Total non-current assets 3,903
Current assets
Investments 18 34,569
Trade and other receivables 19 1,270
Cash and cash equivalents 202
Total current assets 36,041
Current liabilities
Trade and other payables 20 428
Borrowings 22 21,380
Total current liabilities 21,808
Non-current liabilities
Long term bond 21 16,431
Liability for contingent consideration 1,311
Borrowings 22 203
Total non-current liabilities 17,945
Net assets 191
Capital and reserves
Share capital 24 1,453
Share premium 2,068
Share option & warrant reserve 26 15
Convertible loan note 27 84
Currency translation reserve (5)
Retained earnings (3,424)
Total equity 191
Consolidated Statement of Changes in Equity
For the year ended 31 December 2021
Share capital Share premium Share option Convertible loan note Currency translation reserve Retained earnings Total
& warrant reserve reserve
£'000 £'000 £'000 £'000 £'000 £'000 £'000
As at 30 December 2020 1,431 2,001 11 84 - (3,326) 201
Loss for the year - - - - (98) (98)
Other comprehensive income for the year - - - - (1) - (1)
Total Comprehensive Income - - - - (1) (98) (99)
Movement in reserves - - - - (4) - (4)
Share based payment - - 4 - - - 4
Issue of shares 22 67 - - - - 89
Total Transactions with Owners 22 67 4 - - - 93
As at 31 December 2021 1,453 2,068 15 84 (5) (3,424) 191
Consolidated Statement of Cash Flows
For the year ended 31 December 2021
2021
£'000
Cash from operating activities
Loss before tax (98)
Adjustments for:
Net interest expense /(income) 41
Net change in unrealised gains on investments at fair value through profit and (314)
loss
Share based payment expense 4
Provisions -
Foreign exchange (205)
Increase in trade and other receivables (1,117)
Increase/(decrease) in trade and other payables 308
Net cash used in operating activities (1,381)
Cash flow from investing activities
Purchase of investments (33,620)
Proceeds on disposal of investments 1,830
Acquisition of subsidiary, net of cash acquired (InnFin) (902)
Acquisition of subsidiary, net of cash acquired (Epsion) (120)
Purchase of property, plant and equipment (3)
Interest income 418
Net cash used in investing activities (32,397)
Cash flows from financing activities
Proceeds from issue of shares (net of issue costs) -
Loans received/(cancelled) 20,969
(Repayment)/Proceeds from bond issue 13,185
Finance charges (377)
Net cash from financing activities 33,777
Net cash flow for the year (1)
Cash and cash equivalents at beginning of year 203
Cash and cash equivalents at end of year 202
Net change in cash and cash equivalents (1)
EIGHT CAPITAL PARTNERS PLC
Notes to the consolidated financial statements
For the year ended 31 December 2021
1. General information
Eight Capital Partners Plc ("the Company") is a public limited company limited
by shares and incorporated in England. Its registered office is Kemp House,
160 City Road, London, EC1V 2NX.
The Company's shares are traded on the Aquis Stock Exchange Growth Market
under ticker ECP and ISIN number GB00BYT56612.
The consolidated financial statements of the Company consist of the following
companies (together "the Group"):
Eight Capital Partners plc UK registered company
Epsion Capital Limited UK registered company
Innovative Finance srl ("InnFin") Italian registered company
The Group's objective is to generate an attractive rate of return for
shareholders, predominantly through capital appreciation, by taking advantage
of opportunities to invest in the financial services and technology, media,
and telecoms (TMT) sectors.
The information contained in this announcement has been extracted from the
full report and accounts and, as such, references, notes and page numbers may
be incorrect. Shareholders should read the full report and accounts, a copy
of which is available on the Company's website.
2. Accounting policies
The principal accounting policies applied in the preparation of these
consolidated financial statements are set out below.
Basis of preparation
These consolidated financial statements have been prepared and approved by the Directors in accordance with the UK-adopted international accounting standards. These are the Group's first financial statements prepared in accordance with the UK-adopted international accounting standards. (see note 4).
The Company was classified as an investment vehicle in the prior years ending
31 December 2021. On 1 July 2021 Eight Capital Plc changed its status from an
investment vehicle to an operating company. As a result, and in accordance
with IFRS 10, some of the Company's investments have been consolidated from
this date. No consolidated comparative information has been disclosed as the
Company was an investment vehicle and none of its investments met the
requirements of IFRS 10 for an investment company.
These consolidated financial statements are prepared on a going concern basis, under the historical cost convention, as modified by the recognition of listed investments at fair value.
These consolidated financial statements are presented in Pounds Sterling,
rounded to the nearest thousand (£'000), which is the Company's presentation
and functional currency.
The presentational currency for Epsion Limited is Pounds Sterling and for
InnFin is Euro as the subsidiary is registered in Italy.
The preparation of financial statements in conformity with IFRS requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the Group's accounting policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the consolidated financial statements are disclosed in note 3.
Basis of consolidation
The Group financial statements consolidate the financial statements of the
Company and all its subsidiaries ("the Group").
Subsidiaries include all entities over which the Group is exposed, or has
rights, to variable returns from its involvement with the investee and has the
ability to affect those returns through its power over the investee. The
existence and effect of potential voting rights that are currently exercisable
or convertible are considered when assessing whether the Group controls
another entity. Subsidiaries are consolidated from the date on which control
commences until the date that control ceases. Intra-group balances and any
unrealised gains and losses on income or expenses arising from intra-group
transactions, are eliminated in preparing the consolidated financial
statements.
The acquisition method of accounting is used to account for business
combinations. The cost of an acquisition is measured as the fair value of the
assets given, equity instruments issued, and liabilities incurred or assumed
at the date of exchange, and the equity interests issued. Identifiable assets
acquired, and liabilities and contingent liabilities assumed in a business
combination are measured initially at their fair value at the acquisition
date. Acquisition related costs are expensed as incurred. Where necessary,
amounts reported by subsidiaries have been adjusted to conform with the
Group's accounting policies.
Going concern
As at 31 December 2021, the Group had cash of £202,000 and current
investments of £34,569,000.
As an operating business, the Group has fee income from its corporate finance
activities and the performance and income from its investments, supported by
aggregate bond facilities of up to €35 million (of which €24 million has
been utilised to date). Annualised normal running costs of the Company are
circa £1.5 million including debt service, reduced by rebilling of shared
services of approximately £120,000 and interest income of £860,000. As at
the date of this report, the Company had approximately £100,000 cash at bank
and anticipated near-term divesting revenues of up to £650,000, of which
£500,000 is contractual for delivery in September 2022, and with a further
£750,000 of investment assets at current market value earmarked for
disinvestment in the second half of 2022. At Group level additional fee income
of circa £1.2 million is expected.
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.
New standards, amendments and interpretations adopted by the Group and Company
The following IFRS or IFRIC interpretations were effective for the first time
for the financial year beginning 1 January 2021.:
Standards /interpretations Application
IAS 1 & IAS 8 amendments Definition of Material
IFRS 3 amendments Business Combinations
IFRS 16 Amendments to provide lessees with an exemption from assessing whether a
COVID-19 related rent concession is a lease modification
New standards, amendments and interpretations not yet adopted
Standards /interpretations Application
IAS 1 amendments Presentation of Financial Statements: Classification of Liabilities as Current
or Non-Current.
Effective: Annual periods beginning on or after 1 January 2023
IFRS 3 amendments Business Combinations - Reference to the Conceptual Framework.
Effective: Annual periods beginning on or after 1 January 2022
IFRS 7, IFRS 9, IFRS 16 Amendments regarding replacement issues in the contract of IBOR reform.
Effective: Annual periods beginning on or after 1 January 2021
IFRS 16 Amended by Covid-19 Related Rent Concessions beyond 30 June 2021 (amendment to
IFRS 16)
Effective: Annual periods beginning on or after 1 April 2021
IAS 1 amendments Presentation of Financial Statements: Classification of Liabilities as Current
or Non-Current.
Effective: Annual periods beginning on or after 1 January 2023
There are no IFRS's or IFRIC interpretations that are not yet effective that
would be expected to have a material impact on the Company or Group.
3. First-time adoption of IFRS
These financial statements, for the year ended 31 December 2021, are the first
the Group has prepared in accordance with IFRS. For periods up to and
including the year ended 31 December 2020, the Parent Company prepared its
financial statements in accordance with United Kingdom Accounting Standards,
including Financial Reporting Standard 102, "The Financial Reporting Standard
applicable in the United Kingdom and the Republic of Ireland" ("FRS 102").
Accordingly, the Group has prepared financial statements that comply with
UK-adopted international accounting standards as at 31 December 2021, as
described in the summary of significant accounting policies. In preparing the
financial statements, the Group's opening statement of financial position was
prepared as at 1 January 2020, the Group's date of transition to IFRS.
There were no material adjustments applied to the Group financial statements
during the transition to IFRS.
4. Earnings per share
2021 2020 2019
Earnings (£)
Loss used in calculating basic and diluted earnings:
Loss for the year (£98,000) (£432,000) (£432,000)
Number of shares
Weighted average number of shares for the purposes of basic and diluted 1,479,362,244 1,069,696,174 618,720,310
earnings per share
Loss per share (pence) (0.01) (0.04) (0.07)
The calculation of basic earnings per share of (0.01) pence is based on the
loss attributable to equity owners of the Company of £98,000 and on the
weighted average number of ordinary shares of 1,479,362,244 in issue during
the period. Dilutive instruments are ignored when the overall result is a
loss.
5. Investments in subsidiaries
Company Shares in group undertakings
£'000
Cost
At 1 January 2021 -
Acquisition of Epsion Capital Limited (Note 11.1) 100
Acquisition of Innovative Finance S.r.l (Note 11.2) 3,710
At 31 December 2021 3,810
At 31 December 2021, the Group consisted of a parent company, Eight Capital
Partners plc, registered in England and Wales and its two wholly owned
subsidiaries.
Subsidiaries:
Epsion Capital Limited
Registered Office: 8-10 Hill Street, London, United Kingdom, W1J 5NG
Nature of business: Financial intermediation.
Class of share % Holding
Ordinary shares 100
Innovative Finance S.r.l
Registered Office: Via Turati 26 20121 Milano Italy
Nature of business: Financial Advisory
Class of share % Holding
Ordinary shares 100
6. Investments
The table below sets out the fair value measurements. Categorisation has been
determined on the basis of listed or unlisted investments as follows:
Group Unlisted Listed Total
Investments Investments
£'000 £'000 £'000
Fair value at 1 January 2020 2,817 973 3,790
Investment disposals (854) - (854)
Fair value gain on investment - 202 202
Effects of foreign exchange 41 - 41
Fair value at 31 December 2020 2,004 1,175 3,179
Investment disposals (1,701) (1,701)
Investment in subsidiaries (413) (413)
Investment additions: 1AF2 bond - 33,620 33,620
Fair value (loss) on listed investments - (116) (116)
Foreign exchange adjustment 110 (110) -
Fair value at 31 December 2021 - 34,569 34.569
Gains on investments held at fair value through
profit or loss
Fair value (loss) on listed investments (116) (116)
Fair value gain on contingent liability of InnFin acquisition 300 - 300
Realised gain on disposal of investments 130 - 130
Net gain on investments held at fair value 430 (116) 314
through profit or loss
Further Information on each investment can be found in the Chairman's
Statement on page 2.
There was no impact to the fair value of the investments held by the Group due
to the transition from FRS 102 to IFRS.
7. Long-term bonds
Group 2021 2020 2020
£'000 £'000 £'000
IFRS Restated FRS 102
IFRS
Opening balance at 1 January 2,945 3,005 3,005
Bonds issued 13,675 176 176
Bonds returned - (403) (403)
Foreign exchange adjustment (189) 167 167
Closing balance at 31 December 16,431 2,945 2,945
The Company launched 5,000 bonds of €1,000 each (the "7% Bonds") to raise up
to €5 million on the Vienna Stock Exchange's multilateral trading facility
("MTF") on 26 July 2019. The principal terms of the Bonds are as follows: -
Issue price and redemption at par; - Interest of 7% per annum paid
semi-annually in arrears; - Issue date of 26 July 2019 with a redemption date
of 26 July 2022.
Bonds that are not issued to third parties remain as issued to the Company for
future trading and only those that are issued to third parties are recognised
as liabilities. At 31 December 2021 a total of 3,990 (2020: 3,290) bonds
representing a liability of €3,990,000 (2020: €3,290,000) had been issued
to third parties and 1,010 (2020: 1,710) Bonds with a par value of
€1,010,000 (2019: €1,710,000) were issued to the Company and available to
be traded.
In September 2021, the Company launched a €25million 4.8% Fixed Rate five
year Bond Programme, with two initial tranches, totalling €15,050,000
(equivalent to £13,675,000) placed at and shortly after launch and listed on
The Vienna Stock Exchange.
On 19 May 2022, the Company issued a further 5,000 7% Bonds of €1,000 (New
7% Bonds) each to various Bondholders, within the same issuing structure and
on the same terms as the original 7% Bonds
8. Related party transactions
Administrative services
During the year, the Company was invoiced £15,500 (2020: £31,400) for
administrative services provided by Marker Management Services Ltd, a company
controlled by Martin Groak, a director of Eight Capital.
Acquisition of a €2 million receivable from Finance Partners Group and
conversion to equity
On 7 August 2019 the Company announced the acquisition from IWEP Ltd. ("IWEP")
of a €2 million convertible receivable (the "Receivable") from Finance
Partners Group SpA ("FPG"), an Italian financial services company that invests
in private companies seeking future listings on public markets and whose
principal investment was in The AvantGarde Group.
On 14 May 2021, the Company converted £27,000 of the loan with IWEP Ltd into
67,699,173 new ordinary shares at a price of £0.00039 per share.
IWEP is a company connected to Eight Capital Partners' Chairman Dominic White.
In August 2019 Dominic White agreed to become a non-executive board member of
The Avantgarde Group to monitor the Company's and IWEP's interests.
9. Post balance sheet events
On 23 May 2022, the Company announced that it had issued a further €5
million tranche of its 7% Bond to a third party that had acquired €5 million
of the Vendor Loan from IWEP. In that announcement, ECP also reinforced its
commitment to a transformational strengthening of the Company's balance sheet
through IWEP seeking to convert, subject to regulatory and shareholder
consent, as much as possible of its debt with the Company into equity.
On 24 June 2022, the company announced that at a Bondholder meeting held on 23
June, an Extraordinary Resolution approved a proposal to modify the terms and
conditions of the 7% Bond such that the terms align with the more recently
issued €25m 4.8% Bond repayable on 3 September 2026.
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