REG - EMV Capital PLC - Interim Results
30/09/2024 07:00
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RNS Number : 1218G EMV Capital PLC 30 September 2024
EMV Capital PLC (formerly NetScientific PLC)
("EMV Capital" or "EMVC" or the "Company" or the "Group")
Interim Results for the six months ended 30 June 2024
EMV Capital plc (AIM: EMVC), the deeptech and life sciences VC investment
group, is pleased to announce its interim results for the six months ended 30
June 2024.
Investor Presentation
The Company will hold a live online presentation for investors on Tuesday 1
October 2024 at 11.00 a.m. on the Investor Meet Company platform. Investors
can join the live presentation via:
https://www.investormeetcompany.com/emv-capital-plc/register-investor
(https://www.investormeetcompany.com/emv-capital-plc/register-investor) .
Financial and Operational Highlights
Assets Under Management:
· Total AUM (both direct and indirect) increased by 44% to £106.7m
(2023: £74.0m, H1 2023: £61.6m). This comprises:
o Fair Value of direct holdings increased to £41.0m (2023: £35.6m),
including balance sheet investments of £16.8m, subsidiaries and associates at
directors' valuations of £24.2m, with the private unlisted portfolio valued
at £38.5m (2023: £31.1m).
o Fair Value of managed and third-party holdings rose by approximately 71%
to £65.7m (2023: £38.4m), including:
§ £24.1m from the newly added Martlet Capital portfolio, where EMV Capital
Partners Limited (formerly EMV Capital Limited) was appointed as investment
manager in May 2024.
§ A further net £3.2m increase from the managed portfolio.
Portfolio Size and Performance:
· The portfolio has expanded to over 70 companies, following the
mandate in May 2024 to manage the Martlet Capital portfolio.
· EMV Capital Partners syndicated investors contributed £6.4m
across 11 portfolio companies.
Group Performance:
· The Group's performance includes the operational core of EMV
Capital plc (formerly NetScientific plc) and EMV Capital Partners, alongside
portfolio companies where the Group holds over 50% shareholding.
· Total assets increased to £23.4m (2023: £22.5m), with net
assets growing to £18.5m (2023: £17.1m).
· Group Income increased marginally to £1.17m (H1 2023: £1.15m):
o EMV Capital Partners revenue grew strongly by 43% to £1.0m (H1 2023:
£0.7m), recording a profit of £0.1m (2022: £Nil).
o Additional subsidiary income of £0.1m (ProAxsis).
· Group loss for the half-year was £1.8m (H1 2023: £1.6m):
o Core Company and EMV Capital Partners losses amounted to £0.6m (H1 2023:
£0.4m), the difference mainly due to non-recurring gains on sale in the prior
year, the underlying cost base is unchanged from prior year.
o Losses at subsidiary portfolio companies, Glycotest and ProAxsis, have
reduced.
· There were no divestments during the period.
· Cash at 30 June 2024 stood at £0.3m (2023: £0.2m).
Fund Management:
· EMV Capital Partners took over the management of Martlet Capital,
a renowned Cambridge-based early-stage VC fund with a Fair Value of £24.1m
(30 June 2024), focusing on life sciences and deeptech.
o This appointment brings substantial recurring fund management fees and
exposure to carried interest.
o Additionally, the EMV Capital Evergreen EIS Fund was relaunched, with
expectations for further growth.
Value Creation Services:
· Retained contracts are in place to accelerate several portfolio
companies towards key value inflection points.
· These companies show strong prospects for significant fair value
increases over the next 12-18 months, with potential for future exits.
Outlook
Commenting on outlook Dr. Ilian Iliev, CEO, added:
"The first half of this year has seen us surpass the significant milestone of
£100m in AUM, alongside the launch of our Fund Management practice. Despite
challenging market conditions, we have protected shareholder value and
bolstered our portfolio through £6.4m in syndicated fundraisings, proactive
management, and our hands-on value creation services. The Martlet Capital
mandate is a landmark achievement, and we continue to focus on expanding our
Funds practice to deliver sustained growth."
"We also announced last week our rebrand and name change. Since acquiring EMV
Capital in 2020, we have consolidated our operations, significantly grown our
portfolio, and expanded our strategic focus. This new identity for our Group
reflects our business today-an agile, multi-sector venture capital firm
committed to delivering superior returns from innovative, high-growth
companies."
"The Group is now squarely focused on the next three years of its strategic
roadmap, positioning EMV Capital as a leading VC in the deeptech and life
sciences sectors. We aim to drive shareholder value by investing in companies
with transformative technologies both in the UK and internationally."
Summary
The rebranding to EMV Capital represents a defining moment in the evolution of
our business. Since 2020, when we managed £11.8m in AUM across eight
companies, we have expanded significantly. Today, with over £100m in AUM and
a portfolio of 70 companies, we are generating substantial recurring revenues
and are well-positioned for meaningful capital returns.
We are confident in the Group's future, underpinned by a strong and resilient
investment model. Despite challenging market conditions and limited capital
availability, we have continued to support our portfolio companies through
strategic capital deployment. Our focus on smaller, carefully targeted
investment rounds is expected to deliver long-term value as these companies
grow and the broader VC market stabilises.
The Group's strategy is to generate capital returns through profitable exits
of selected portfolio companies and carried interest from our expanding Funds
practice. Additionally, we aim to cover most or all core operational costs
through a combination of recurring fund management fees, value creation
services, corporate finance, and other income streams. As we scale our fund
management practice alongside ongoing investment syndication and selective
balance sheet investments, we expect a diversified mix of capital returns from
both direct investments and carried interest.
The person responsible for arranging the release of this announcement on
behalf of the Company is Ilian Iliev, Chief Executive Officer of the Company.
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES OF ARTICLE 7 OF
THE UK VERSION OF REGULATION (EU) NO 596/2014 WHICH IS PART OF UK LAW BY
VIRTUE OF THE EUROPEAN UNION (WITHDRAWAL) ACT 2018, AS AMENDED. UPON THE
PUBLICATION OF THIS ANNOUNCEMENT VIA A REGULATORY INFORMATION SERVICE, THIS
INSIDE INFORMATION IS NOW CONSIDERED TO BE IN THE PUBLIC DOMAIN.
-ends-
For more information, please contact:
EMV Capital plc via Rosewood
Ilian Iliev, CEO
Panmure Liberum (UK) Limited (NOMAD and Broker) +44 (0)20 7886 2500
Emma Earl / Will Goode / Freddy Crossley / Mark Rogers (Corporate Finance)
Rupert Dearden (Corporate Broking)
Rosewood (Financial PR) +44 (0)20 7653 8702
John West / Llewellyn Angus / Lily Pearce
CHIEF EXECUTIVE OFFICER'S STATEMENT
Overview
I am delighted to present an update on EMV Capital's (formerly
NetScientific's) progress during the first half of 2024. Our commitment to
becoming a prominent deeptech venture capital investor in the life sciences,
sustainability, and industrials sectors, both in the UK and internationally,
continues to drive strong results across our business and portfolio companies.
Operational Highlights
We have made significant progress within our business, achieving a number of
key milestones:
· Rebrand and Name Change: Last week, we announced our rebrand and
name change to EMV Capital Plc. Since acquiring EMV Capital in 2020, we have
consolidated our operations, significantly grown our portfolio, and expanded
our strategic focus. This new identity reflects our evolution into an agile,
multi-sector venture capital firm, committed to delivering superior returns
from innovative, high-growth companies.
· Sustainable Investment Strategy: We have successfully executed
our 'evergreen' sustainable investment strategy. This approach covers a
substantial part of our core operating costs through a combination of
recurring fund management and monitoring fees, as well as fees from corporate
finance and value creation services.
· Revenue Growth: The Group's core operations have shown a c.43%
increase in revenues, reaching £1.0m. While there has been a modest increase
in losses reflecting PLC operations, EMV Capital Partners Limited (formerly
EMV Capital Limited) itself has remained profitable.
· Expansion of Funds Practice: We achieved substantial operational
progress in our Funds practice by securing the fund management mandate for
Cambridge-based Martlet Capital. This non-dilutive transaction represents a
key milestone for the Group, integrating a respected brand from the
world-class Cambridge high-tech investment cluster. It also boosts fee income
and critical mass for our Funds practice, while creating opportunities for the
launch of two additional funds under the Martlet brand, backed by its
supportive investor base.
· EMVC Evergreen EIS Fund Relaunch: We have relaunched the EMVC
Evergreen EIS Fund, now directly managed by EMV Capital Partners, further
strengthening our venture capital capabilities.
Portfolio Highlights
· Syndicated Investments: Syndicated investments have played a
pivotal role in supporting our portfolio companies. EMV Capital Partners
syndicated investors contributed £6.4m in third-party syndicated investments
across 11 portfolio companies, of which £3.2m was added to our Assets Under
Management (AUM) post-acquisition of our direct stake in Wanda Health.
· Fundraising Support: EMV Capital Partners' ongoing fundraising
efforts have secured crucial funding for our portfolio companies, enabling
them to execute their growth strategies and prepare for upcoming scale-up
investment rounds. These efforts have also enhanced the fair value of the
Group's direct holdings.
· Key Portfolio Transactions Supported by EMV Capital Partners:
o EMV Capital Partners led a £3.2m fundraising into Sofant Technologies.
o EMV Capital Partners led a £2.1m fundraising into Deeptech Recycling.
o Further syndicated investments facilitated by EMV Capital Partners were
made into Ventive and DName-iT.
o EMV Capital Partners led and advised on the restructuring of Wanda,
resulting in a 30% direct holding by the Group and subsequent advanced
subscriptions by syndicated investors.
o EMV Capital Partners advised on investments of £1.4m in ProAxsis.
o Further investment was made into Glycotest by Fosun Pharma and EMV Capital
Partners syndicated investors.
o Post-balance sheet date, EMV Capital Partners led a £1.5m investment in
Q-Bot.
· Valuation Gains: We have seen strong valuation gains in several
portfolio companies where we have been actively engaged, including Deeptech
Recycling, Ventive, DName-iT, and ProAxsis.
· PDS Biotech: The company has made further progress towards a
planned Phase 3 study for one of its drug programmes, advancing its strategic
development.
· ProAxsis: The company has streamlined its operations, reducing
operating costs by over 30%, while achieving a modest increase in sales and
strengthening its pipeline. In April 2024, ProAxsis completed a fundraising
round that crystallised an uplift of £4.5m to the fair value of our direct
interest, which is £8.0m.
· Glycotest: Glycotest has advanced its commercialisation strategy
for its liver cancer diagnostic test, with a post-balance sheet date
partnership with the University of Georgia Complex Carbohydrate Research
Center to develop novel glycomic assays.
· Value Creation Programmes: We continue to implement value
creation programmes aimed at accelerating the progress of a cohort of our
portfolio companies towards key value inflection points. These efforts are
expected to drive further fair value increases in the next 12-18 months and
enhance the prospects for profitable exits.
Financial Highlights
Reflecting our venture capital model, we report on both the 'core' operations
of our Group (comprising EMV Capital plc and EMV Capital Partners Limited) and
our 'portfolio subsidiaries' (Glycotest and ProAxsis). The subsidiaries are
treated as separately managed portfolio companies, each supported by external
investors.
· Assets Under Management (AUM): Total AUM (both direct and
indirect) increased by 44% to £106.7m (2023: £74.0m, H1 2023: £61.6m). This
comprises:
o Fair Value of direct holdings increased to £41.0m (2023: £35.6m),
including balance sheet investments of £16.8m, subsidiaries and associates at
directors' valuations of £24.2m, with the private unlisted portfolio valued
at £38.5m (2023: £31.1m).
o The fair value of our holding in NASDAQ-listed PDS Biotechnology declined
by £1.8m to £2.5m.
o This decline was offset by the following significant changes in AUM:
§ Martlet Capital portfolio fair value increased by approximately £0.9m
compared to the previous period.
§ ProAxsis increased from £3.5m to £8.0m, a 129% rise.
§ DeepTech Recycling increased from nil to £1.8m.
§ DName-iT Holdings increased from £1.2m to £1.6m, a 33% increase.
o Fair Value of managed and third-party holdings rose by approximately 71%
to £65.7m (2023: £38.4m), including:
§ £24.1m from the newly added Martlet Capital portfolio, where EMV Capital
Partners Limited (formerly EMV Capital Limited) was appointed as investment
manager in May 2024.
§ A further net £3.2m increase from the managed portfolio.
· Portfolio Size and Performance:
o The portfolio has expanded to over 70 companies, following the mandate in
May 2024 to manage the Martlet Capital portfolio.
o EMV Capital Partners syndicated investors contributed £6.4m across 11
portfolio companies.
· Total Income: £1.17m, representing a slight increase of 2% (H1
2023: £1.15m).
o Income from the 'core' operations increased by approximately 43% to £1m
(H1 2023: £0.7m), driven primarily by a near doubling of revenues from EMV
Capital Partners.
o No divestments occurred during the period.
· Group Losses: Losses from operations increased slightly to £1.8m
(H1 2023: £1.6m).
o Core operations losses rose to £0.6m (H1 2023: £0.4m), although EMV
Capital Partners achieved a modest profit uplift compared to H1 2023.
o Losses at both Glycotest and ProAxsis decreased, reflecting cost
reductions and cash savings. While these losses are consolidated at Group
level, the companies are funded by third-party sources and thus do not require
further financial support from the Group's core operations.
· Working Capital: Working capital management remains prudent. The
Group ended the period with a cash balance of £0.3m and an existing £0.2m
bank overdraft facility. In addition, the Group holds approximately £2.7m in
readily realisable quoted securities as of 31 August 2024.
Operating Model
Our strategic focus includes the advancement of our sustainable business model
and boosting the Net Asset Value and Fair Value of our portfolio companies.
This creates the potential for substantial investment returns from our
maturing portfolio through targeted growth and profitable exits. In
particular, our objectives include:
· Capital Efficient Investment Strategy: Using a combination of
funding sources to gain (and increase) direct and indirect stakes in our
portfolio companies, including syndicated investments, selective balance sheet
investments to gain deeper stakes, as well as deploying funds from our Funds
practice.
· Funds Practice: Having launched our fund practice with the Martlet
Capital fund and EMV Capital Evergreen EIS Fund mandates, we are exploring
further fund opportunities that would add to our AUM, recurring fund
management fees and carried interest exposure.
· External Funding of Portfolio: We are facilitating and syndicating
external funding for our portfolio companies, to accelerate growth and
development.
· Proactive Portfolio Management: We believe proactive management is
key to obtaining superior returns and protecting the value of our holdings.
Our approach involves taking Board positions, working closely with management
and maintaining strong relationships with co-investors to coordinate
strategies and objectives. We are an active, engaged investor deploying our
expertise.
· Value Creation: We concentrate on a select cohort of companies at a
time, driving growth and investment realisations through fundraising support
and value creation services. Our in-house operational team, venture partners,
and panel of expert service providers offer support across functions including
investment readiness, exit readiness, IP strategy, corporate collaborations,
financial functions, and senior executive placements.
· Operational Income Generation: Our objective is to eventually
cover all operational costs through operational income fees. Starting from nil
in 2020, the Group now has multiple sources for ongoing income including fees
in connection with corporate finance and advisory, board seats, annual
management, Value Creation Services (VCS), and (most recently) recurring Fund
management fees through EMV Capital Partners.
· Capital realisation channels / 'routes to exit': We target the
realisation of venture-type/outsized investment returns through strategic
partial or full exits from our directly owned positions (direct cash) and
carried interest from Fund management exits. These exits can be realised
through M&A, IPOs, or sales to PE and other financial investors.
· Deepening direct stakes: Our proactive investment approach enables
us to selectively build stakes in portfolio companies through a mixture of
modest balance sheet investments, accepting fees as equity (e.g. Ventive),
co-founding businesses (e.g. Deeptech Recycling), and making selective paper
acquisitions (e.g. Cetromed).
Portfolio Highlights
Summary
Since its holding of a portfolio of eight companies in 2020, the Company has
significantly expanded its reach, now managing a portfolio of approximately 70
companies. This includes a mix of direct (on balance sheet) holdings and
third-party stakes, for which we have established carried interest fee
arrangements. Collectively, we refer to these holdings as Assets Under
Management (AUM).
This diverse portfolio offers a broad spectrum of potential returns and
presents opportunities to take larger stakes in select companies while
generating additional advisory revenue.
Measuring Assets Under Management (AUM): AUM is a commonly used measure in the
VC and PE industry to denote the Fair Value of stakes owned in public and
private companies, on balance sheet (i.e. owned by the company), and as part
of third-party funds under management with carried interest.
As outlined in our 2023 annual accounts, historically we have reported the
value of directly owned (on balance sheet) stakes based on directors' fair
value, whilst indirect advised stakes were recorded at cost. To enhance
comparability and transparency, beginning with our 2023 accounts, both direct
(on balance sheet) and indirect (third-party managed) stakes will now be
measured at directors' fair value. Collectively, these holdings will be
referred to as Assets Under Management (AUM).
It is important to note that investments in early-stage private companies are
inherently challenging to value. To ensure consistency and rigor in our
valuation process, we have applied the British Venture Capital Association
(BVCA) valuation principles when determining fair value.
Total assets under management (both direct and indirect) is £106.7m (2023:
£74.0m), an increase of £32.7m
as described above.
More details on the individual companies' developments are provided in the
Portfolio Update section below.
1 Table 1: Fair Value of Directly Held Portfolio Holdings
Fair Value of Direct stakes
Portfolio Company Country Sector Stage Group Stake (%) Fair Value (m)
H1 2024 YE 2023 H1 2023
Q-Bot UK Robotics Sales 15.6% £4.0 £3.8 £4.1
Vortex Biotech Holdings Ltd UK/US Liquid biopsy oncology Sales 22.1% £3.5 £3.5 £2.8
PDS Biotechnology -Nasdaq Listed US Immuno-oncology Phase II clinical 3.0% £2.5 £4.3 £5.3
Deeptech Recycling Limited UK Recycling Industrial 21.2% £1.8 £0.0 £0.0
EpiBone US Regenerative medicine Early clinical 1.3% £1.1 £1.1 £1.1
SageTech Medical Equipment UK Waste anaesthetic Commercial 5.1% £0.9 £0.9 £0.9
Ventive UK Heat pumps and passive ventilation Sales 11.1% £0.9 £0.9 £0.1
Sofant Technologies UK Semiconductors satellite coms Early sales 1.3% £0.5 £0.5 £0.5
FOx Biosystems BEL Research equipment Sales 3.9% £0.5 £0.4 £0.4
G - Tech Medical US Wearable gut monitor Early clinical 3.8% £0.3 £0.3 £0.3
CytoVale US Medical biomarker Late clinical 1.0% £0.3 £0.3 £0.3
Martlet Capital UK Venture capital Sales 1.4% £0.2 £0.2 £0.2
PointGrab IL Smart building automation Sales 0.5% £0.1 £0.1 £0.1
Wanda Health UK/US Digital health monitoring Sales 30.0% £0.1 £0.0 £0.0
QuantalX Neuroscience IL Medical diagnostics Late clinical 0.4% £0.1 £0.1 £0.1
TOTAL £16.8 £16.4 £16.2
2 Table 2: Directors' Valuations of Subsidiaries & Associates
Directors' Valuations of Subsidiaries & Associates
Portfolio Company Country Sector Stage Group Stake (%) Fair Value (m)
H1 2024 YE 2023 H1 2023
EMV Capital UK Venture capital Sales 100% £3.6 £3.5 £3.5
Glycotest US Liver cancer diagnostics Late clinical 52.7% £11.0 £11.0 £11.0
ProAxsis UK Respiratory diagnostics Sales 88.5% £8.0 £3.5 £3.5
DName-iT UK/BEL Lab technology Presales 31.4% £1.6 £1.2 £1.0
TOTAL £24.2 £19.2 £19.0
Third-Party Stakes: Funds and Syndicated Investment to which the Group has
carried interest exposure
Carried interest or profit share agreements typically range from 15% to 20% of
profits earned for investors above a minimum return hurdle rate of c.10%.
Third party Assets Under Management are expected to grow through further
syndicated investments in existing and new portfolio companies and the
expansion of our Funds practice. The Consolidated Statement of Financial
Position reflects the owned portfolio as equity investments classified as fair
value through other comprehensive income (FVTOCI) and financial assets
classified as fair value through profit and loss (FVTPL), adhering to the
British Venture Capital Association guidelines widely accepted in the VC
community. The fair value of the below third-party stakes is not included
within the group's audited financial statements.
Table 3: Fair Value of Third-Party Portfolio Holdings and Managed Funds
(estimates)
Portfolio Company Country Sector Stage AUM (%) AUM Fair Value (m)
H1 2024 YE 2023 H1 2023
Martlet Capital Portfolio UK Life Sciences/ Sales - £24.1 £0.0 £0.0
DeepTech
Q-Bot UK Robotics Sales 31.5% £9.4 £8.6 £4.5
Sofant Technologies UK Semiconductors satellite coms Early sales 25.4% £8.8 £8.5 £5.3
SageTech Medical Equipment UK Waste anaesthetic Commercial 24.8% £4.4 £4.4 £3.9
PointGrab IL Smart building automation Sales 20.8% £4.2 £3.5 £4.1
Ventive UK Heat pumps and passive ventilation Sales 30.2% £2.7 £2.2 £0.1
Deeptech Recycling Limited UK Recycling Industrial 29.3% £2.5 £1.3 £0.0
Vortex Biotech Holdings Ltd UK/US Liquid biopsy oncology Sales 15.4% £2.2 £2.2 £1.6
Martlet Capital UK Venture capital Sales 5.9% £1.6 £1.5 £1.3
Glycotest US Liver cancer diagnostics Late clinical 5.8% £1.5 £0.6 £0.3
EMV Capital Evergreen EIS Fund UK Life Sciences/ Sales - £1.1 £0.0 £0.0
DeepTech
DName-iT UK/BEL Lab technology Presales 17.5% £0.9 £0.5 £0.4
ProAxsis UK Respiratory diagnostics Sales 9.0% £0.8 £0.4 £0.0
Nanotech Industrial Solutions US Material science Sales - £0.8 £0.8 £0.8
Wanda Health UK/US Digital health monitoring Sales - £0.4 £3.6 £3.6
EpiBone US Regenerative medicine Early clinical 0.3% £0.3 £0.3 £0.2
TOTAL £65.7 £38.4 £26.1
Selected portfolio company highlights
Glycotest, Inc. ("Glycotest") - Subsidiary
· Location: Merion, PA, US
· Website: https://www.glycotest.com/ (https://www.glycotest.com/)
· Direct Equity Holding 52.7%, other assets under management 5.8%
Overview:
Glycotest Inc. is a liver disease diagnostics company commercialising new and
unique blood tests for liver cancers and fibrosis-cirrhosis. The Company is a
spin-out from the Baruch S. Blumberg Institute and Drexel University College
of Medicine, backed by EMV Capital Partners and Fosun Pharma.
Glycotest's lead product is its hepatocellular carcinoma (HCC) panel, a
biomarker panel, driven by a proprietary algorithm, for curable early-stage
HCC, the most common form of primary liver cancer. This has outperformed
current standard tests in preliminary clinical studies. Glycotest has also
developed tests for the second most prevalent form of liver cancer.
Glycotest believes the liver cancer early detection market presents a
>$800m opportunity in the US alone, and $4bn globally.
Crucially, the Company has successfully completed patient enrolment and sample
collection for its HCC Panel clinical validation study, carried out across 20
major medical centres under the leadership of key opinion leaders. This effort
has resulted in the creation of a world-leading biobank, now one of the
largest collections of blood samples globally for HCC test validation.
Key developments:
To advance commercialisation of the HCC Panel program, the Company has: (1)
completed enrolment and is advancing toward database lock for the HCC Panel
clinical validation study; and (2) executed an agreement with the University
of Georgia Complex Carbohydrate Research Center (CCRC) for the development of
new glycomic assays to revise and strengthen the performance of the HCC Panel
test.
Following a careful assessment of multiple technology and partnership options,
Glycotest has entered into a partnership with the CCRC with the objective of
developing superior glycomic assays for deployment in the HCC Panel test. The
CCRC is a long-standing center of excellence in glycosciences and a world
renowned innovator in testing methodology relevant to the HCC Panel. With
expertise and resources in a rich array of sophisticated instrumental
techniques, the CCRC is uniquely positioned to collaborate with Glycotest on
this important project focusing on the development of high-performance mass
spectroscopy-based assays.
As announced on 23 January 2024, Glycotest received an additional $1m of
investment from Fosun Pharma, and converted into equity syndicated convertible
loan agreement investments of $848,474 (including accrued interest) from EMV
Capital Partners.
Q-Bot Limited ("Q-Bot'')
· Location: London
· Website: https://q-bot.co/ (https://q-bot.co/)
· Direct Equity Holding 15.6%, other assets under management 31.5%
Overview:
Q-Bot is an award-winning robotics developer for construction retrofit. Its
AI-powered robotic tools are used to inspect, monitor, and retrofit insulation
for residential buildings. Q-Bot's robots have been used for 5,000+ installs
in the UK and internationally, primarily for retrofit underfloor insulation
applications. The company is now seeking to extend the application of its
technology to the US, Australia and EU, and to explore other uses of the
technology such as in crawlspace, wall and attic insulation (with over 800,000
homes manually spray foam insulated every year in the US alone).
Key developments 2024:
To maximise value, Q-Bot's board adopted a revised business plan which
includes rationalising its business into two separate divisions, an
installations business and a technology focused business. The planned
restructuring allows the installations business to attract investment to reach
break-even and accelerate growth, and the technologies business to operate on
a standalone basis and exploit multiple existing and new US and EU growth
opportunities to create further value.
To enable this strategy (post-balance sheet date, in July), EMV Capital
Partners led and syndicated a fundraising of £1.5m (as announced on 30 July
2024). Reflecting the challenging market conditions, this investment was at a
discount of the previous valuation.
In the UK, Q-Bot is focused on consolidating growth through a focus on
retrofit robot-based installations of underfloor insulation in both private
homeowner and social housing markets. In the UK alone, Q-Bot believes there
are 6m+ homes where its application is relevant, and the company continues
exploring opportunities both in the EU and the US. In the UK, Q-Bot launched
an underfloor insulation grant programme in partnership with E-On, focused on
the privately owned market.
Internationally, Q-Bot is exploring other uses of its technology through JVs
and JDAs, including a major opportunity identified in the loft insulation
market in the USA.
EMVC Interest:
Direct equity holding of 14.3% (2022: 17.6%), and assets under management from
syndicated investors representing 32.4% (2022: 30.9%). Post-balance sheet date
direct equity holding of 17.0%, and other assets under management of 37.4%.
ProAxsis Ltd ("ProAxsis") - Subsidiary
· Location: Belfast
· Website: https://proaxsis.com/ (https://proaxsis.com/)
· Direct Equity Holding 88.6%, other assets under management 9.0%
Overview:
ProAxsis Limited is a respiratory diagnostics company and a spin-out from
Queens University Belfast. The company has commercialised activity-based
immunoassays targeting Neutrophil Elastase (NE) and Proteinase 3, as
biomarkers of lung infection and inflammation in chronic respiratory diseases
such as COPD, cystic fibrosis and bronchiectasis.
This technology has been translated into a point-of-care test (NEATstik®), to
enable ongoing monitoring of active NE levels. The company has a revenue
generating clinical services business line, providing Pharma and CROs with
NEATstik for clinical trials. In addition, the company is exploring a Point of
Care offering, including through a second generation NEATstik.
Key developments 2024:
The company implemented a restructuring programme, whereby operational and
staff costs were reduced by 34% and 40% respectively, leading to a reduced
cashburn. Clinical services sales have increased, with a stronger pipeline for
2024/25 and a potential route to breakeven.
In April 2024 the company closed a c.£1.8m investment led by EMV Capital
Partners, including conversions into equity of £777k of Group intercompany
balances at a valuation of £8m. This round represented a 100% increase in
fair value for the Group. The company also won an InnovateUK SMART R&D
grant to be executed jointly with the Center for Process Innovation.
In Q1 2024, the Board initiated the launched of a project with an M&A
consultancy to explore the potential for M&A and strategic investments.
The search indicated that in the current market environment, a substantive
M&A is unlikely, but several parties showed interest in the Company and
provided valuable feedback on the COPD technology currently under development.
The search also identified potential partners and has resulted in an MoU with
a Southern African-based assay kit manufacturer.
The company is now focused on achieving breakeven in its core commercial
offering, while exploring options for its Point of Care programme.
EMVC Interest:
Direct equity holding of 88.6%, other assets under management of 9.0%. The
fair value of the Company's stake in ProAxsis is estimated to be £8.0m (2023:
£3.5m). Other assets under management fair value of £0.8m (2023: £0.4m).
Sofant Technologies Limited ("Sofant")
· Location: Edinburgh
· Website: http://www.sofant.com/ (http://www.sofant.com/)
· Direct Equity Holding 1.3%, other assets under management 25.4%
Overview:
Sofant has developed a highly energy efficient, modular phased array antenna
platform for satellite and terrestrial communications. Its platform is highly
scalable and Sofant believes that the satellite communications (SatCom)
terminal it is launching next year leads the industry in terms of Size,
Weight, Power consumption, and Cost (SWaP-C). Their SatCom terminals enable
mobile connectivity across a wide range of airborne, land, and sea
applications. Including in-flight connectivity (IFC), maritime communications,
and communications on the move (COTM) for military and commercial
applications. Its low-power passively cooled terminal delivers unparalleled
performance supporting multi-orbit connectivity across LEO, MEO, and GEO
satellite networks.
Key developments 2024:
After signing a development and advanced order contract with Viasat in 2023,
Sofant has seen significant growth in customer interest from other industry
players. Sofant's internal testing indicates that all system level components
are working as anticipated and is now in advanced testing and validation of
the SatCom terminal with an expected commercial launch in 2025. The company is
now set to execute its go-to-market strategy to deliver satellite terminals to
SatCom operators and their clients in aerospace, defence and commercial
applications. Sofant is finalising the development of its first commercial
product, and is now engaged with a wide range of potential customers. The
strong level of interest they are experiencing reflects the broader market's
transition to Low and Mid earth orbit satellite communications.
In May 2024, EMV Capital Partners led a c.£3m investment round, with the
participation of Scottish Enterprise and Kelvin Capital.
EMVC Interest:
Direct equity holding of 1.3% and other assets under management of 25.4%,
direct fair value of £0.5m (2023: £0.5m). Other assets under management fair
value of £8.8m (2023: £8.5m). The Company, through its direct and indirect
holdings is the largest shareholder of Sofant.
Martlet Capital Limited ("Martlet")
· Location: Cambridge
· Website: http://martletcap.com (https://martletcap.com/) /
· Direct Equity Holding 1.4%, other assets under management 5.9%
Overview:
Martlet Capital is an early-stage VC Fund in Cambridge, providing patient
capital to IP-rich, deep tech and life sciences B2B startups with high growth
potential.
Martlet Capital (and its predecessor entity that was part of Marshall Group)
has invested in more than 65 startups since its launch in 2011. In 2021,
Martlet successfully raised additional capital to scale its investment
activity.
Over the past decade, Martlet has achieved several significant exits from its
portfolio through trade sales to global technology companies and IPOs;
including the 'unicorn' Abcam (IPO), Audio Analytic, Cambridge CMOS Sensors
(acquired by AMS), Arachnys (acquired by AML RightSource).
Key developments 2024:
In May 2024, EMV Capital Partners was appointed as investment manager to
Martlet Capital Limited to manage, on a discretionary basis, portfolio of
investments. In addition, the Group acquired the operational venture capital
business of Martlet Capital.
Following the transaction, Martlet reported an increase in Fair Value to
£24.1m (30 June 2024).
Fund management arrangements
The management agreement between Martlet Capital and EMV Capital Partners
provides EMV Capital Partners with recurring investment management fees (in
the mid-high six figures per annum) for a minimum period of four years, and
carried interest fees based on the increase in fair value of each company
within the Martlet Capital portfolio between the fair value on appointment of
EMV Capital Partners and the values received on each exit.
Group Interest:
At the time of spin-out of Martlet Capital from Marshall Group, the Company
invested in the initial fundraising rounds of Martlet Capital in 2021. Fair
value of direct investment: £275,000 (2023: £275,000). Total syndicated
amount as assets under management by EMV Capital Partners: £1.48m. Total
direct and syndicated amount represents 9.6% of issued share capital.
Convertible Loan Notes: £0.52m (£0.075m direct holding and £0.445m
advised).
Wanda Health ("Wanda")
· Location: US and UK
· Website: https://www.wandahealth.com/
(https://www.wandahealth.com/)
· Direct Equity Holding 30.0%, £0.4m advance assurance agreement,
indirect (advised)
Overview:
Wanda Health has commercialised an intelligent platform for remote patient
monitoring and virtual care. The platform empowers healthcare providers and
payers with early detection of exacerbations in patients with acute, chronic,
and specialty diseases, helping them speed interventions, prevent adverse
events, and improve patient adherence. Wanda's platform enables the control
and reduction of hospitalisation and readmission rates through a Remote
Patient Monitoring System that collects data from patients' homes or community
settings, and provides it to clinicians, highlighting high risks cohorts.
Key developments 2024:
In May 2024 a balance sheet restructuring resulted in the Company's direct
holding increasing from nil to 30%.
Wanda has achieved ISO 13485 and ISO 27001 certification. Wanda is now working
towards securing regulatory position as an FDA-approved device, as well as
achieving UKCA and CE Marks which allow for the platform to be sold in the UK
and the EU respectively. It has seen significant growth in sales with several
Primary Care Providers in the US.
Wanda is also exploring partnerships with various organisations in the COPD
and heart health areas, to support further product development, and entry into
the US.
EMVC Interest:
30.0% direct equity holding, £0.4m advance assurance agreement, indirect
(advised), direct fair value of £0.1m (2023: £Nil).
Ventive Limited ("Ventive")
1. Location: London
2. Website: https://ventive.co.uk/ (https://ventive.co.uk/)
3. Direct Equity Holding 11.1%, other assets under management 30.2%
Overview:
Ventive designs and manufactures intelligent heating and ventilation solutions
to make buildings healthy, comfortable, efficient and affordable. Its early
innovation (Windhive®) has already secured a position in the commercial HVAC
market delivering passive ventilation with heat recovery to school buildings,
with near zero running costs. Its all-in-one HOME heat pump for domestic
dwellings provides ventilation, heating and hot water via an intelligent
exhaust-air heat pump with whole-house air handling system. The heat pump is
designed to address the challenges of the Energy Transition, reducing
installation complexity and moving people to clean-running, super-efficient
heating and cooling solutions.
The company has two product lines - passive ventilation with heat recovery (in
sales) and a novel all-in-one heatpump system. Its ventilation systems have
now been delivered to over 30 schools and 5 leisure centres with excellent air
quality results being achieved. With a recent sales hire, the pipeline is
increasing and this side of the company is targeting breakeven next year.
Key developments 2024:
In May 2024, closed a c.£400,000 investment, led by EMV Capital Partners, to
support the completion of the design and test phase and factory build for
Ventive's modular heat pumps and further enhancements to its passive air
ventilation product range. The equity round enabled further access
non-dilutive funding from the £1.5m DESNZ grant and a £100,000 UK Government
grant focused on 'net zero HVAC' systems.
Ventive has delivered early heat pump prototypes for testing in the UK and EU.
Early indications show excellent performance from the system with CE marking
targeted for H1 2025, and market launch in H2 2025.
EMVC Interest:
11.1% direct equity holding, other assets under management 30.2%, direct fair
value of £0.9m (2023: £0.9m). Other assets under management fair value of
£2.7m (2023: £2.2m).
Deeptech Recycling Technologies Limited ("DeepTech Recycling")
· Location: Oxfordshire
· Website: https://www.deeptech-recycling.co.uk
(https://www.deeptech-recycling.co.uk)
· Direct Equity Holding 21.2%, other assets under management 29.3%
Overview:
DeepTech Recycling is a plastic waste chemical recycling company, operating in
the growing global multi-billion market for plastic waste management. Its
mission is to make the use of plastic sustainable and support the critical
global drive towards a circular economy for plastics. The technology converts
currently unrecyclable plastic waste, that would normally be landfilled or
incinerated, into oil that can be used by the petrochemical industry as the
feedstock for producing virgin quality plastic.
Key developments 2024:
Deeptech Recycling has consolidated all assets and relaunched a streamlined
business focused on target plastic waste streams and capital efficient
strategy. After securing the initial investment in Q4 2023, DeepTech Recycling
successfully launched a streamlined business, focused on target plastic waste
streams and with a capital efficient strategy. The company has made good
commercial progress in 2024, transitioning into new technology development
premises in Oxfordshire and making key strategic hires. DeepTech has secured
its first commercial project, with an MoU signed and Purchase Order received
from a major packaging producer in the UK and EU markets for the development
of a recycling facility. The first stage of the first commercial project has
been successfully completed. DeepTech has signed Heads of Terms with an EU
based strategic partner for development and construction of a second
commercial project in Norway, with feasibility studies underway. The company
is also progressing discussions with a customer for a third commercial project
in one of its target plastic waste markets, and re-establishing relationships
with several multinationals.
The company believes it has a strong position in a massive market, amidst a
growing recognition that chemical recycling is going to be an essential route
for dealing with the environmental challenges of plastic waste and ensuring
sustainable and circular polymer production. In May 2024, the company secured
a further £0.8m to expand the team to execute on current customer-driven
opportunities and projects. The company is working towards re-establishing a
demonstration scale plant in a commercial environment in the UK by 2025 and on
developing construction ready, financially attractive commercial projects.
EMVC Interest:
21.2% direct ownership stake, other assets under management of 17.5%, direct
fair value of £1.8m (2023: £Nil). Other assets under management fair value
of £2.5m (2023: £1.3m).
DName-iT Ltd ("DName-iT")
· Location: UK and Belgium
· Website: https://www.dnameit.com/ (https://www.dnameit.com/)
· Direct Equity Holding 31.4%, other assets under management 17.5%
Overview:
DName-iT is a spin-out from the world-renowned Katholieke Universiteit Leuven
and is developing a platform to improve the identification and elimination of
handling and process errors in genetic testing in high-priority areas such as
cancer diagnostics, precision medicine and non-invasive prenatal testing
(NIPT). To spot specimen handling errors and to identify specimen
contamination in Next Generation Sequencing tests, DName-iT has created a
proprietary molecular barcoding system, called DName® - that allows the
detection of swaps and contamination of blood, saliva and extracted DNA
specimens, as well as reagent contamination, from sample capture to completed
NGS reporting.
Key developments 2024:
DName-iT has identified priority market segments for service launch - NIPT, an
important use of genomics in women's reproductive health; and the fast-growing
market for cancer diagnostics using NGS. The company is exploring various
near-term revenue opportunities in the UK and the EU, including potential
go-to-market partnerships, license opportunities and further clinical
validation pilots.
The company's product platform development work has Progressed its regulatory
pathway in the UK and EU; successfully completed a proof-of-concept pilot
study with an independent European testing laboratory; in collaboration with
ProAxsis has planned and prepared DNames® for a 24-month shelf-life testing
programme; and completed market research to identify a priority market segment
for DNames® - Non-invasive Prenatal Testing (NIPT), an important use of
genomics in women's reproductive health.
In addition the company is exploring a patent licensing programme in the
genomic sequencing industry space.
EMVC Interest:
31.4% direct ownership effective stake, other assets under management of
17.5%, direct fair value of £1.6m (2023: £1.2m). Other assets under
management fair value of £0.9m (2023: £0.5m).
PDS Biotechnology Corporation ("PDS")
· Location: Princeton, NJ, US
· Website: PDS Biotech (https://www.pdsbiotech.com/)
· Stock symbol: PDSB (NASDAQ)
· Direct Equity Holding 3.0%
Overview:
PDS Biotechnology is a Phase 2/Phase 3 stage immunotherapy company focused on
transforming how the immune system targets and kills cancers and the
development of infectious disease vaccines. Its key focus is on advanced head
and neck squamous cell cancers (HNSCC). PDS Biotech's lead program is a
proprietary dual-acting combination of IL-12 fused antibody drug conjugate
(ADC) PDS01ADC and T-cell activator Versamune® HPV in regimen with a
standard-of-care immune checkpoint inhibitor.
The Company backed PDS as its first institutional investor in 2014, and has
continued its support over the years, including by anchoring a NASDAQ
placement in 2020, and supporting a subsequent placement in 2021.
Key developments:
PDS has announced an updated clinical strategy with a two-part registrational
trial focused on the triple combination of Versamune® HPV; PDS01ADC; and
pembrolizumab as a first line treatment in HPV16-positive recurrent/metastatic
HNSCC.
EMVC interest:
EMV Capital currently owns 3.0% of the undiluted share capital (2023: 3.5%).
The current value of the Company's stake as of 31 August 2024 at a share price
of $3.20 per share is worth £2.7m, with a company market capitalisation of
$118m.
Strategic Focus
Our strategic focus includes the advancement of our sustainable business model
and boosting the Net Asset Value and Fair Value of our portfolio companies.
This creates the potential for substantial investment returns from our
maturing portfolio through targeted growth and profitable exits. In
particular, our objectives include:
· Value Creation: We are actively progressing a cohort of our
portfolio companies through value creation stages, ensuring they achieve their
full potential.
· External Funding of Portfolio: We are facilitating and syndicating
external funding for our portfolio companies, to accelerate growth and
development. This also generates advisory, commission and performance fee
opportunities.
· Proactive Portfolio Management: We maintain a proactive approach to
portfolio management, protecting our positions while supporting management in
their business plan execution.
· Increased Fee Generation: We are actively working to enhance our
fee generation capabilities, ensuring a sustainable revenue stream to support
our growth objectives.
· Selective Group Divestments: We are strategically evaluating our
portfolio to identify opportunities for selective divestments, allowing us to
optimise our holdings and obtain investment returns.
· Funds Practice: We will continue to grow our Fund practice and are
exploring new fund opportunities in line with our growth strategy.
Summary and Outlook
The first half of this year has seen us surpass the significant milestone of
£100m in AUM, alongside the launch of our Fund Management practice. Despite
challenging market conditions, we have protected shareholder value and
bolstered our portfolio through £6.4m in syndicated fundraisings, proactive
management, and our hands-on value creation services. The Martlet Capital
mandate is a landmark achievement, and we continue to focus on expanding our
Funds practice to deliver sustained growth.
The Group is now squarely focused on the next three years of its strategic
roadmap, positioning EMV Capital as a leading VC in the deeptech and life
sciences sectors. We aim to drive shareholder value by investing in companies
with transformative technologies both in the UK and internationally.
The rebranding to EMV Capital represents a defining moment in the evolution of
our business. Since 2020, when we managed £12.2m in AUM across eight
companies, we have expanded significantly. Today, with over £100m in AUM and
a portfolio of 70 companies, we are generating substantial recurring revenues
and are well-positioned for meaningful capital returns.
We are confident in the Group's future, underpinned by a strong and resilient
investment model. Despite challenging market conditions and limited capital
availability, we have continued to support our portfolio companies through
strategic capital deployment. Our focus on smaller, carefully targeted
investment rounds is expected to deliver long-term value as these companies
grow and the broader VC market stabilises.
The Group's strategy is to generate capital returns through profitable exits
of selected portfolio companies and carried interest from our expanding Funds
practice. Additionally, we aim to cover most or all core operational costs
through a combination of recurring fund management fees, value creation
services, corporate finance, and other income streams. As we scale our fund
management practice alongside ongoing investment syndication and selective
balance sheet investments, we expect a diversified mix of capital returns from
both direct investments and carried interest.
Dr. Ilian Iliev
Chief Executive Officer
30 September 2024
CONSOLIDATED INCOME STATEMENT
FOR THE SIX MONTHS ENDED 30 JUNE 2024
EMV Capital plc (formerly NetScientific plc)
Unaudited Unaudited
Six months Six months
ended 30 June ended 30 June
2024 2023
Continuing Operations Notes £000s £000s
Total Income 1,171 1,154
Revenue 4 1,134 770
Cost of sales (208) (53)
Gross profit 926 717
Other operating income 5 37 384
Research and development costs (920) (808)
Selling, general and administrative costs (1,656) (1,840)
Other costs (53) (67)
Loss from operations (1,666) (1,614)
Share of loss of equity accounted associate (71) -
Finance income 23 22
Finance expense (97) (45)
Loss before taxation (1,811) (1,637)
Income Tax - 17
Total loss for the period from continuing operations (1,811) (1,620)
Loss attributable to:
Owners of the parent 6 (1,692) (1,364)
Non-controlling interests (119) (256)
(1,811) (1,620)
Basic and diluted loss per share attributable to owners of the parent during
the period:
6
Total loss for the period from continuing operations (7.1p) (5.8p)
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE SIX MONTHS ENDED 30 JUNE 2024
Unaudited Unaudited
Six months Six months
ended 30 June ended 30 June
2024 2023
Notes £000s £000s
Loss for the period (1,811) (1,620)
Items that may be subsequently reclassified to profit or loss in subsequent
periods:
Exchange differences on translation of foreign operations 26 (272)
Change in fair value of investments classified as fair value through other
comprehensive income
874 (5,698)
Total comprehensive loss for the period (911) (7,590)
Attributable to:
Owners of the parent (782) (7,376)
Non-controlling interests (129) (214)
(911) (7,590)
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2024
Unaudited Audited
30 June 31 December
2024 2023
Notes £000s £000s
Assets
Non-current assets
Property, plant and equipment 156 139
Right-of-use assets 173 255
Intangible assets 2,756 2,757
Investments in equity-accounted associates 2,012 1,283
Equity investments classified as FVTOCI* 16,781 16,441
Financial assets classified as FVTPL** 234 232
Total non-current assets 22,112 21,107
Current assets
Inventories 28 52
Trade and other receivables 960 934
Cash and cash equivalents 325 365
Total current assets 1,313 1,351
Total assets 23,425 22,458
Liabilities
Current liabilities
Bank overdraft - (165)
Trade and other payables (3,612) (2,814)
Lease liabilities (93) (141)
Loans and borrowings (459) (464)
Total current liabilities (4,164) (3,584)
Non-current liabilities
Lease liabilities (89) (127)
Loans and borrowings (662) (1,635)
Total non-current liabilities (751) (1,762)
Total liabilities (4,915) (5,346)
Net assets 18,510 17,112
Issued capital and reserves
Attributable to the parent
Called up share capital 7 1,197 1,179
Warrants 42 42
Share premium account 74,354 74,217
Capital reserve account 237 237
Equity investment reserve 8,382 7,508
Foreign exchange and capital reserve 1,381 1,351
Retained earnings (66,666) (66,702)
Equity attributable to the owners of the parent 18,927 17,832
Non-controlling interests (417) (720)
Total equity 18,510 17,112
* Fair value through other comprehensive income
** Fair value through profit and loss
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE SIX MONTHS ENDED 30 JUNE 2024
Shareholders' equity
Share capital Warrants Share premium Capital reserve Equity investment reserve Retained earnings Foreign exchange and capital reserve Total Non-controlling interests Total equity
£000s £000s £000s £000s £000s £000s £000s £000s £000s £000s
1 January 2023 1,174 42 74,175 237 13,277 (64,486) 1,421 25,840 (598) 25,242
Loss for the period - - - - - (1,364) - (1,364) (256) (1,620)
Other comprehensive income -
Foreign exchange differences
- - - - - - (314) (314) 42 (272)
Change in fair value during the period
- - - - (5,698) - - (5,698) - (5,698)
Total comprehensive income - - - - (5,698) (1,364) (314) (7,376) (214) (7,590)
Change in proportion of equity by non-controlling interest - - - - - 26 - 26 380 406
Share-based payments - - - - - 37 - 37 - 37
30 June 2023 1,174 42 74,175 237 7,579 (65,787) 1,107 18,527 (432) 18,095
Loss for the period - - - - - (1,279) - (1,279) (2) (1,281)
Other comprehensive income -
Foreign exchange differences - - - - - - 244 244 6 250
Change in fair value during the period - - - - (71) - - (71) - (71)
Total comprehensive income - - - - (71) (1,279) 244 (1,106) 4 (1,102)
Issue of share capital 5 - 42 - - - - 47 - 47
Change in proportion of equity by non-controlling interest - - - - - 327 - 327 (292) 35
Share-based payments - - - - - 37 - 37 - 37
31 December 2023 1,179 42 74,217 237 7,508 (66,702) 1,351 17,832 (720) 17,112
Loss for the period - - - - - (1,692) - (1,692) (119) (1,811)
Other comprehensive income -
Foreign exchange differences
- - - - - - 30 30 (10) 20
Change in fair value during the period
- - - - 874 - - 874 - 874
Total comprehensive income - - - - 874 (1,692) 30 (788) (129) (917)
Issue of share capital
18 - 137 - - - - 155 - 155
Change in proportion of equity by non-controlling interest - - - - - 1,696 - 1,696 432 2,128
Share-based payments - - - - - 32 - 32 - 32
30 June 2024 1,197 42 74,354 237 8,382 (66,666) 1,381 18,927 (417) 18,510
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE SIX MONTHS ENDED 30 JUNE 2024
Notes Unaudited Unaudited
Six months Six months
ended 30 June ended 30 June
2024 2023
£000s £000s
Cash flows from operating activities
Loss after income tax (1,811) (1,620)
Adjustments for:
Depreciation of property, plant and equipment 25 25
Depreciation of right to use assets 82 82
Amortisation of intangibles 114 124
Estimated credit losses on trade receivables 22 18
Change in fair value of financial assets classified as FVTPL - (342)
Share-based payments 32 37
R&D tax credit (23) (17)
Foreign exchange loss/(gain) 23 (205)
Share of associate loss 71 8
Finance income (23) (22)
Finance costs 97 38
(1,391) (1,874)
Changes in working capital
Decrease/(Increase) in inventories 24 (6)
(Increase) in trade and other receivables (105) (177)
Increase in trade and other payables 648 629
Cash used in operations (824) (1,428)
Income tax received 75 -
Net cash used in operating activities (749) (1,428)
Cash flows from investing activities
Purchase of property, plant and equipment (42) (41)
Purchase of equity investments classified as FVTOCI - (4)
Purchase of derivative financial assets classified as FVTPL - (43)
Capitalisation of development costs (113) (180)
Disposal of subsidiary stake, net of cash disposed of - 123
Disposal of equity investments classified as FVTOCI - 117
Net cash used in investing activities (155) (28)
Cash flows from financing activities
Lease payments (94) (94)
Repayment of borrowings (32) (44)
Proceeds from issue of equity instruments by subsidiaries 1,039 -
Proceeds of loan - 659
Proceeds from share issue 116 -
Net cash from financing activities 1,029 521
Increase/(decrease) in cash and cash equivalents 125 (935)
Cash and cash equivalents at beginning of the period 200 852
Exchange differences on cash and cash equivalents - (10)
Cash equivalents/(bank overdraft) at end of the period 325 (93)
NOTES TO THE UNAUDITED INTERIM FINANCIAL INFORMATION
FOR THE SIX MONTHS ENDED 30 JUNE 2024
1. ACCOUNTING POLICIES
Basis of preparation
The interim financial information, which is unaudited, has been prepared on
the basis of the accounting policies expected to apply for the financial year
to 31 December 2024 and in accordance with International Accounting Standards
in conformity with the requirements of the Companies Act 2006. Policies have
been consistently applied to all periods presented apart from where new
standards have been adopted during the period, see below for changes in
accounting policies.
The financial information for the period ended 30 June 2024 does not
constitute the full statutory accounts for that period. The Annual Report and
Financial Statements for the year ended 31 December 2023 have been filed with
the Registrar of Companies.
The Independent Auditor's Report on the Report and Financial Statements for
the year ended 31 December 2023 was qualified as Directors did not perform
year end valuations for some of the hard to value investments worth c.£1.1m
for the year ended 31 December 2023.
Going Concern
The 2023 Annual Report audit report drew attention to the material uncertainty
relating to going concern as follows:
"We draw attention to note 2 to the financial statements, which indicates the
Directors' consideration over going concern. The going concern of the Group
and Parent Company is dependent on additional funding being raised which has
not yet been executed. As stated in note 2, these events or conditions, along
with other matters as set forth in note 2, indicate that a material
uncertainty exists that may cast significant doubt on the Group and the Parent
Company's ability to continue as a going concern. Our opinion is not modified
in respect of this matter.
In auditing the financial statements, we have concluded that the Directors'
use of the going concern basis of accounting in the preparation of the
financial statements is appropriate."
In the 2023 Annual Report we set out the various options underpinning the
going concern assumptions.
The Directors are confident that the Company remains a going concern, and it
is appropriate to prepare the financial statements on this basis. Accordingly,
the financial statements do not include any adjustments that would be
necessary if the Group and Company were unable to continue as a going concern.
Business Combinations
The Group recognises identifiable assets acquired and liabilities assumed in a
business combination, regardless of whether they have been previously
recognised in the acquiree's financial statements prior to the acquisition.
Assets acquired and liabilities assumed are generally measured at their
acquisition-date fair values. Goodwill is stated after separate recognition of
identifiable intangible assets. It is calculated as the excess of the sum of:
a) fair value of consideration transferred; b) the recognised amount of any
non-controlling interest in the acquiree; and c) acquisition-date fair value
of any existing equity interest in the acquiree, over the acquisition-date
fair values of identifiable net assets. If the fair values of identifiable net
assets exceed the sum calculated above, the excess amount (i.e. gain on a
bargain purchase) is recognised in profit or loss immediately.
Change in accounting policies
The Group has applied the same accounting policies and methods of computation
in its interim consolidated financial statements as in its 2023 annual
financial statements. We do not expect accounting rule changes would impact
the Group as they are either not relevant to the Group's activities or require
accounting which is consistent with the Group's current accounting policies.
The Group does not expect any standards issued by the IASB, but not yet
effective, to have a material impact on the group.
Use of estimates and judgements
There have been no material revisions to the nature and estimate assumptions
as reported in prior periods, including:
(a) Impairment of goodwill;
(b) The valuation of intangibles;
(c) The valuation of equity investments; and
(d) The capitalisation of development costs
2. SIGNIFICANT EVENTS AND TRANSACTIONS
Global Environment
The Group is operating in an increasingly uncertain macroeconomic environment.
The after-effects of the pandemic, significant turmoil in the tech and capital
sectors, the geopolitical concerns, most notably the conflict in Ukraine, and
the more recent economic pressures are causing additional market volatility
and uncertainty.
The carrying value of the Group's assets have been assessed in light of
current events and the long-term impacts that these may have on the
investments of the Group. Overall, we believe that the sectors the Group is
active in are in a strong position and it was not seen as necessary to impair
the carrying value of any assets further. The recoverable amount was
determined based on values in use, which utilises current budgets/reforecasts
and cash flow projections. We are closely monitoring and managing the events,
and will take further actions if required, as the situation continues to
evolve. Cash planning and management is in place for all businesses, which
have been stress tested based on a number of scenarios. Importantly, as a
result of the various factors, the Company and several of its portfolio
companies are seeing new sustainable opportunities, offering potential for
future growth.
3. SEGMENTAL REPORTING
An operating segment is a component of the group that engages in business
activities from which it may earn revenues and incur expenses, for which
separate financial information is available and whose operating results are
evaluated and as identified by Board of Directors.
The Board of Directors assess the performance of the operating segment using
financial information which is measured and presented in a manner consistent
with that in the financial statements.
Revenue from contracts with customers by segment
30 June 2024 Delivered Goods Service Fees Total
£000s £000s £000s
EMV Capital - 988 988
ProAxsis 146 - 146
146 988 1,134
30 June 2023 Delivered Goods Service Fees Total
£000s £000s £000s
EMV Capital - 699 699
ProAxsis 30 41 71
30 740 770
Total Loss for the period by segment
Unaudited Unaudited
Six months Six months ended 30 June
ended 30 June 2023
2024 £000s
£000s
NetScientific (699) (403)
EMV Capital 61 9
ProAxsis (437) (559)
Glycotest (648) (712)
Cetromed (88) 45
(1,811) (1,620)
The above losses reflect investment in R&D by Glycotest and ProAxsis,
which add value for the future through new product and clinical trials.
ProAxsis has seen further investment through proportional Grant funding.
4. OTHER OPERATING INCOME
Unaudited Unaudited
Six months Six months ended 30 June
ended 30 June 2023
2024 £000s
£000s
Gain on available for sale investments - 64
Gain on sale of subsidiary stake - 276
R&D tax credit above the line 23 -
Miscellaneous income 14 44
37 384
5. LOSS PER SHARE
The basic and diluted loss per share is calculated by dividing the loss for
the financial period by the weighted average number of ordinary shares in
issue during the period. Potential ordinary shares from vested outstanding
options at 30 June 2024 of 1,435,610 (30 June 2023: 1,669,540; 31 December
2023: 1,462,353) are not treated as dilutive as the group is loss making.
Unaudited Unaudited
Six months Six months
ended 30 June ended 30 June
2024 2023
£000s £000s
Loss attributable to equity holders of the Company
Continuing operations (1,692) (1,364)
Total Loss attributable to equity holders of the Company (1,692) (1,364)
Number of shares
Weighted average number of ordinary shares in issue 23,874,381 23,488,148
6. CALLED UP SHARE CAPITAL
The total number of voting rights in the Company and issued capital at 30 June
2024 is 23,945,828 5p ordinary shares (30 June 2023: 23,488,148, 31 December
2023: 23,574,303).
On 5 February 2024 the Company announced the exercise by John Clarkson (the
Company's former Chair) of options over 254,977 ordinary shares in the capital
of the Company for an aggregate exercise price of £116,015 and the
subscription for 116,548 new ordinary shares in the capital of the Company at
a price of £0.626 per share by John Clarkson and two other service providers
to the Company in settlement of services provided by them to the Company to
such value.
7. RELATED PARTY DISCLOSURES
Beckman Group and Melvin Lawson, who is interested in 16.08% (31 December
2023: 16.36%) of the issued share capital of the Company, is also considered
and presumed to be acting in concert with Dr Ilian Iliev, as defined by The
City Code on Takeovers and Mergers.
During 2023 ProAxsis entered into a 6-month unsecured £365k loan facility
with AB Group part of the Beckman Group and Melvin Lawson. Interest is
currently charged at 12%. The loan is repayable on demand and remains unpaid
at the date of issue.
EMV Capital provides corporate finance, consulting and management services to
Vortex Biosciences Inc. and Vortex Biotech Holdings Limited a related party by
common substantial shareholders. During the period revenue was booked
totalling £54k (H1 2023: £50k). The balance outstanding at 30 June 2024 is
£85k (31 December 2023: £31k).
EMV Capital also provided corporate finance, consulting and management
services to Wanda Inc. and Wanda Connected Health Systems Limited a related
party by common substantial shareholders. During the period revenue was booked
totalling £162k (H1 2023: £55k). The balance outstanding at 30 June 2024 is
£165k (31 December 2023: £129k).
A Director of ProAxsis had provided an unsecured loan in the form of
convertible loan notes to ProAxsis for £25k during 2023, which converted to
equity on 12 April 2024.
Except as noted above, there are no additional related party transactions that
could have a material effect on the financial position or performance of the
Group and of the Company during this financial period under review.
8. EVENTS AFTER THE REPORTING PERIOD
Q-Bot Fundraising: The Company announced on 30 July 2024 that portfolio
company Q-Bot, a robotics-as-a-service construction tech company, successfully
closed a fundraising of £1.5m. The Fundraising was led and syndicated
by EMV Capital Partners and includes a subscription for £1.25m of new
shares in the capital of Q-Bot and a loan facility of £250,000 (such loan
facility amount being part of a re-financed loan of c.£785,000).
The Company participated directly in the Q-Bot Fundraising, including:
· a £349,968.22 subscription for Q-Bot shares, such amount settled
by the Company issuing to Q-Bot 411,727 new ordinary shares in the capital of
the Company (Consideration Shares) at a price of £0.85 per Consideration
Share, a 35.0 per cent. premium to the closing price of the Company's ordinary
shares on 29 July 2024; and
· a £198,143.92 advance subscription pursuant to an ASA, converting
outstanding fees due to EMV Capital into Q-Bot shares.
The post-balance sheet date fair value is £2.7m, a decrease of 28.3 per cent.
from the £3.8m reported as at 31 December 2023. In addition, other assets
under management equate to a post-balance sheet date fair value of £6.0m, a
decrease of 30.3 per cent. from the £8.6m reported as at 31 December 2023.
Rebrand: The Company announced on 26 September 2024 the rebrand and name
change to EMV Capital Plc. The rebranding marks the culmination of
NetScientific's strategic evolution since acquiring EMV Capital in 2020.
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