Pires Investments - Final Results
28/06/2023 07:01
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RNS Number : 2109E Pires Investments PLC 28 June 2023
Pires Investments plc
("Pires" or the "Company")
Final Results for the year ended 31 December 2022
The Board of Pires Investments plc (AIM: PIRI), the investment company
investing in next generation technology with a focus on AI, announces its
audited results for the year ended 31 December 2022.
Financial highlights
· Net asset value ("NAV") of £7,822,000 as at the year-end (31
December 2021: £7,223,000), an increase of 8.3% compared to the prior year
figure
· NAV per share of 4.28 pence per share (2021: 4.56 pence) a decrease
of 6.0% compared to the previous year
· Loss of £0.37 million for the year (year ended 31 December 2021:
profit before taxation of £1.49 million)
· Placing to raise £500,000 before expenses in August 2022
· Two-year debt funding facility amounting to £1.235 million announced
on 22 December 2022
· The Pires share price is currently at a 57% discount to its NAV per
share of 4.28 pence
Portfolio highlights
· Getvisibility- raised €10 million from two new venture capital
investors at a significantly increased valuation
· Investment in a second Sure Valley Ventures ("SVV2") fund, alongside
the British Business Bank ("BBB"), an investment arm of the UK Government. SVV
managed funds made new investments in Everyangle, Jaid and Retinize
· Portfolio companies continue to attract international investors such
as Alpha Intelligence Capital, Fortino Capital Partners, Act Venture Capital
and Furthr VC.
· Smarttech247 successfully achieved a listing on AIM, at a
significantly higher valuation compared to the original investment cost.
· Sure Valley Ventures Fund ("SVV1") enters realisation phase of its
investment cycle.
Review of activities
Pires Investments plc is an investment company focused on next generation
technology with a focus on Al. Pires invests in its portfolio companies
directly, or indirectly through (i) its investment in two funds managed by SVV
and (ii) its investment in Sure Ventures plc.
2022 was a testing year for small-cap listed companies and for those companies
with a technology focus. However, a significant uplift in value was achieved
both from the Company's investment in Getvisibility, and Smarttech247 achieved
a listing on AIM, notwithstanding difficult market conditions. More generally,
the Company has taken a prudent view on the value of its investment portfolio
and adjusted the value of certain of its investments downwards to reflect the
current weak economic background. Consequently, the net effect of these
non-cash adjustments has, unfortunately, led to an overall loss for the year.
The Company's principal investment portfolio categories are summarised below:
Cost or valuation at 31 December 2022 Cost or valuation at 31 December 2021
£000's £000's
Categories
SVV 5,219 4,146
Direct investments 2,901 2,835
Cash/other listed securities 856 409
Total 8,976 7,390
A. Investments in SVV funds
1. Sure Valley Ventures Fund ("SVV1")
SVV1 is SVV's first fund which has completed its new investment phase and has
now entered its realisation phase. It has already achieved three
realisations/liquidity events to date, including the recent listing of
Smarttech247, with more expected in the short term.
Within the SVV1 portfolio, highlights during 2022 include:
· Getvisibility raised €10 million from new investors including Alpha
Intelligence Capital, a global venture capital firm which invests in deep
artificial intelligence/machine learning technology based companies and
Fortino Capital Partners, a leading B2B software venture capital and growth
equity firm.
· Admix, the leading In-Play monetisation company that bridges the gap
between gaming content and brands, merged with LandVault Inc ("LandVault")
(https://landvault.io/), a builder of virtual experiences in metaverse worlds
aimed at attracting people into blockchain and metaverse ecosystems, in order
to enter into the Web3 space.
· A new investment was made in Everyangle. Everyangle is a Dublin-based
computer-vision company that helps physical retailers, hospitality venues and
convenience service stations optimise operations. Everyangle raised €2.7
million in a seed fundraise in October 2022. This fundraise marked the final
new company investment within SVV1, and the funds will be used to accelerate
sales, invest in ongoing product development, and drive further expansion in
the US and UK. The funding round was led by SVV, Act Venture Capital and
Furthr VC (formerly DBIC Ventures), with participation from Enterprise
Ireland.
· Smarttech247 Group plc ("Smarttech247") (AIM: 5247) is an established
global artificial intelligence-based cybersecurity business, specialising in
automated managed detection and response. It has a successful track record of
revenue growth and profitability and is positioned at the intersection of
three major cyber security growth markets: security threat incidents, growth
of cloud adoption and proliferation of cyber security data generation that
needs to be integrated.
On 15 December 2022, the company's shares were admitted to trading on the
London Stock Exchange's AIM market raising gross proceeds of £3.7 million
through a placing at a price of 29.66 pence per new ordinary share.
Smarttech247's share price as at 19 June 2023 was 34.5 pence per share,
representing an increase of approximately 16% since listing and a significant
uplift compared to the level at which the investment was initially made. The
recent full year and interim results of Smarttech247 support the company's
growth trajectory.
As at the year end, SVV1 had a portfolio of 15 investee companies at different
stages of development spanning a range of sectors. The portfolio provides
Pires with exposure to a number of key, cutting-edge and rapidly growing
technology sectors. Further details of the portfolio companies and recent
developments are set out below:
Artificial intelligence
Ambisense Provides an artificial intelligence platform to deliver environmental risk
assessment to allow realtime gas and environmental monitoring using both loT
(Ambisense Limited) and sensor solutions. The company has already been awarded a number of major
contracts and has a substantial pipeline of opportunities.
Buymie An artificial intelligence based same day grocery delivery company operating
in both the UK and Ireland working with companies such as Tesco, Lidl, Asda
(Buymie Technologies) and the Co-op.
EveryAngle An artificial intelligence platform that uses machine learning to provide
enterprises, such as large retailers, with line of business solutions to
reduce fraud, churn and waste using machine vision.
Security
Nova Leah An artificial intelligence cyber-security risk assessment and protection
platform for connected medical devices.
(Nova Leah Limited)
connected medical devices.
Getvisibility An artificial intelligence security company addressing the substantial problem
faced by corporations in storing, sorting, accessing and protecting data.
(Visibility Blockchain Limited) Recently raised additional funds at a significant premium and has been voted
as one of Ireland's top 18 start-ups.
PreCog An artificial intelligence security solution platform company that provides
data intelligence to combat crime, terrorism and protect vulnerable people.
(Polience Limited) Customers include leading law enforcement and security agencies, and transport
infrastructure groups.
Smarttech247 An established global artificial intelligence-based cybersecurity business,
(Smarttech247 Group PLC) specialising in automated managed detection and response. The company is
listed on AIM.
Immersive Technologies
Engage XR A developer of virtual reality and immersive experiences with a specific focus
on education and enterprise learning and development. The company is listed on
(Engage XR Holdings plc) AIM, has over 100 commercial customers and is rapidly growing revenue and
margins.
LandVault (Formerly Admix) A platform enabling the monetisation of interactive programmatic brand
placements in, for example, video games and other AR/VR applications. The
(WAM Group Limited) company is rapidly growing revenues and numbers of active users and merged
with Landvault in June.
Warducks An AR/VR game development studio which has produced leading VR games and will
soon launch a new AR game, Edge of Earth.
(Warducks Limited)
VividQ A deep tech software company which has developed a framework for real-time 3D
holographic displays for use in heads-up displays and AR headsets and glasses.
(VividQ Limited)
Volograms An artificial intelligence deep learning company that uses Al to create 3D
augmented reality from 2D photos and videos. The company has launched a
(Volograms Limited) consumer AR Camera app called Volu and has pro user and enterprise versions in
development.in development.
Virtex A company building a platform for the next-generation of live, immersive
entertainment within the virtual reality gaming and esports industries. It is
(Virtex Limited) actively developing its new stadium app.
Internet of things
CameraMatics An artificial intelligence platform enabling transport fleet managers to
reduce risk, increase driver safety and comply with growing industry
(MySafe Drive Limited) governance and compliance. The company recently raised £3 million from
existing investors to assist with funding growth. The company is expanding
into new geographies, with good traction being gained in the US and new
clients being won including customers such as Maritime Transport, one of the
UK's largest privately owned transport companies.
Wia Provides a platform solution for smart buildings. Its platform provides full
device and application management, security, data capture and storage,
(WIA Technologies Limited) analysis and control.
2. Sure Valley Ventures UK Software Technology Fund ("SVV2")
In March 2022, the Company invested in a second SVV fund, the Sure Valley
Ventures UK Software Technology Fund. The principal investor in SVV2 is the
British Business Bank ("BBB") an investment arm of the UK Government. The
first close of this fund amounted to £85 million, with the BBB investing up
to £50 million and other investors ("Private Investors"), including Pires,
investing up to £35 million over the 10 year life of the fund.
Pires expects to invest up to £5 million in total over the life of the fund
which would provide it with a circa 5.9% interest. SVV2 will invest in a range
of private UK software companies with a focus on companies in the artificial
intelligence sector and within the subsectors of enterprise, Immersive
Technologies (such as AR/VR) and cybersecurity sectors.
SVV2 is managed by the same SVV team which, to date, has been highly
successful in achieving a number of cash realisations from, and upward
revaluations of, companies in the SVV1 portfolio. The profit share
arrangements within SVV2 are designed to encourage the involvement of private
investors alongside the BBB, meaning that Pires and the other private
investors would expect to receive a significantly enhanced share of the total
return generated by the fund compared to industry standard.
During 2022, SVV2 has made two investments which are outlined below:
RetÌnÍZE Limited
RETiniZE Limited, the award-winning creative-tech company based in Belfast,
Northern Ireland, successfully raised £2 million in a seed round led by SVV.
The company is developing an innovative software product called Animotive that
is harnessing the latest VR and Generative Al technologies to transform the 3D
animation production process. The proceeds of the seed round will drive the
next two-year plan for growth and the global rollout of Animotive.
Jaid
Jaid is a rapidly growing platform that uses Al as a Service (AIaaS) solution
to help businesses reduce costs, improve efficiency and make data-driven
decisions, including client service automation, sales automation, payment
exception processing and claims administration processing. On 14 December
2022, the company raised £3 million in seed funding to enable it to make
additional hires within the machine learning team, increase its presence
within the US and Europe and to launch in the Asian market. In addition, the
company is set to expand into various other sectors, such as healthcare, after
previously focusing solely on the finance industry.
Whilst further investments for this fund are being reviewed, the funding
requirement is expected to be relatively limited in the short-term and will be
met from existing cash resources and/or realisations from SVV1.
3. Sure Ventures plc ("SV plc")
SV plc (LSE: SURE) is a London-listed venture capital fund which invests in
early-stage software companies in the rapidly growing technology areas of
Augmented Reality, Virtual Reality, Internet of Things and artificial
intelligence. Pires has a 22.6% shareholding in SV plc whose principal
investment is a 25.9% interest in SVV1 and a commitment to SVV2. Pires
therefore has an aggregate (direct and indirect) interest in SVV1 of around
19%, which comprises its original direct 13% interest in SVV1 and an indirect
interest of 5.9%, through its 22.6% shareholding in SV plc. SV plc also has
direct shareholdings in VividQ and Let's Explore Group.
B. Direct investments
Getvisibility
Getvisibility is a cybersecurity company focusing on data visibility and
control. It uses state-of-the-art artificial intelligence to classify and
secure unstructured information. Its methods allow organisations to quickly
visualise their data footprint where new and changing data risks have become
evident, thus allowing for proactive data management and security. Its dual
approach provides flexibility to employees to manually classify data whilst
also being created with suggestions and automated checking. Getvisibility also
provides risk and compliance assessments as well as enforcing protection on
sensitive data.
In March 2022, Getvisibility raised €10 million in new funds from Alpha
Intelligence Capital, a global venture capital firm which invests in deep
artificial intelligence/machine learning technology based companies and
Fortino Capital Partners, a leading B2B software venture capital and growth
equity firm. Based on the post-funding round valuation, Pires' direct stake in
Getvisibility is now valued at circa €1,500,000 or over 4 times its total
investment cost to date since it made its first investment in March 2020. In
addition, Pires has a further interest in Getvisibility via its 13% interest
in SVV1 and an indirect interest through its holding in Sure Ventures plc,
which together are valued at circa €1,280,000. Pires' effective interest in
Getvisibility, in aggregate, is therefore now valued at circa €2,780,000.
The company is growing rapidly, with a significant number of new channel
partners being onboarded in the last quarter of 2022, leading to a substantial
increase in its number of enterprise customers.
Low6
Low6 is a leader in sports gaming technology that powers franchises with their
own branded gaming experiences to engage and monetise their digital fanbases.
In October 2022, the company restructured its capital base which included the
conversion of the outstanding convertible notes and the raising of £2.4
million in new funds. The new funding was cornerstoned by a leading Australian
wagering operator, with operations in Australia and the US, for approximately
£0.5 million, with major shareholders also supporting the transaction.
Low6 is now focused on free-to-play and affiliate markets in North America
with the ambition to be the global leader in fan engagement. A number of new
partnerships have been established, including the appointment as the National
Hockey League ("NHL") free to play provider for a period of 3 years, who have
also invested in Low6. Trading is in line with expectations for the year to 30
June 2023, having achieved circa US$5 million in contracted revenue for the
first six months, with the company focused on achieving a breakeven EBITDA.
Precog
PreCog is a security solution platform company that provides data intelligence
to combat crime, terrorism and protect vulnerable people. Its customers
include leading law enforcement and security agencies, and transport
infrastructure groups. The company has continued to develop its product
offering and, in particular, it has developed an "off the shelf product" which
is expected to minimise manufacturing risk. The company operates in an
exciting security sector with significant potential demand for its products
expected going forward.
Emergent
Pluto Digital was a crypto technology and operations company with a focus on
decentralised finance and the metaverse (blockchain gaming and NFTs). In
October 2022, Pluto Digital announced a merger with Maze Theory, a
London-based digital entertainment studio, to create Emergent Entertainment
("Emergent"). Emergent is focused on becoming a next-generation entertainment
company, bringing audiences and storytellers together by harnessing emerging
technologies. Since then, the company has launched a VR game, Peaky Blinders,
and is making good progress on the development of its Web3 game, Resurgence.
In addition to this, the company is actively discussing the co-development of
a new game with a global games publishing group and has been in ongoing
conversations with numerous leading organisations regarding upcoming projects.
The management team is also working on reducing the company's cost base and
has revised its 2023 revenue forecasts upwards.
Other
In June 2022, Pires was the subject of a share for share offer from Tern plc,
on terms that equated to 8 pence per Pires share, representing a 53.6% premium
to the Pires share price prior to announcement, based on the respective
companies share prices just prior to announcement. Whilst this offer was
accepted by the majority of the Pires shareholders, the requisite percentage
to effect a scheme of arrangement was not achieved and so the offer lapsed.
Financial
For the year under review, the Company reported a loss before taxation of
£0.37 million (for the year ended 31 December 2021: profit of £1,491,000).
The profit or loss for the Company includes unrealised gains/losses in the
portfolio of quoted equity investments which are marked to market, plus any
return from and adjustment to the carrying value of its unlisted investments.
Net asset value as at the end of the year amounted to £7,822,000 (31 December
2021: £7,223,000). We continue to believe that absolute NAV does not fairly
represent the Company's financial potential, given the scope for significant
valuation uplift of the companies within the portfolio. This is clearly
demonstrated by the gains, both realised and unrealised, that are regularly
being achieved to date from the investment portfolio. Furthermore, it is worth
reiterating that realisations achieved within the SVV portfolio result in cash
distributions to the Company and are not retained within the fund.
Administration costs for the period were significantly higher than the
previous period as they include the costs associated with the offer by Tern
plc for Pires that did not ultimately proceed.
Since 1 January 2022, the holders of 12,211,433 warrants over ordinary shares
in the Company have exercised their warrants at 4 pence per share for a total
consideration of £488,000. Unexercised warrants currently comprise 6,250,000
in relation to the August 2022 placing and 47,839,284 in relation to the loan
facility put in place in December 2022. These outstanding warrants expire in
August 2023 and December 2025 respectively.
On 1 August 2022, the Company placed shares at a price of 4 pence per share,
raising gross proceeds of £500,000, The shares were placed at a 4 per cent.
premium to the closing mid-price of the ordinary shares on 29 July 2022.
Placees also received one warrant for every two ordinary shares subscribed
for, exercisable at 8 pence from the date of admission and expiring on the
one-year anniversary of the date of Admission. In aggregate, 6,250,000 placing
warrants were issued.
On 22 December 2022, the Company entered into a two-year £1.235 million
unsecured loan facility accruing interest at 7.5% per annum with a bullet
repayment of principal and interest at the end of the term. Warrants over
47,839,284 new ordinary shares were issued to the investors which will vest if
the average of the Company's volume-weighted average price over five
consecutive trading days exceeds 5.163 pence within the three-year exercise
period of the warrants. The warrant exercise price is 4 pence, which
represented a 60% premium to the closing mid-market price of 2.5 pence per
Pires ordinary share on 21 December 2022.
Post year end
On 23 February 2023, Pires announced that it had agreed to invest in SVV's new
venture capital fund, Sure Valley Ventures III Limited Partnership("SVV3"),
alongside Enterprise Ireland, the fund's cornerstone investor that committed
50% or €15 million to the fund. SVV3 plans to invest in circa 15 high-growth
Al software companies in sectors such as Enterprise, Immersive Technologies
and Cybersecurity across the Republic of Ireland.
Whilst new investments for this fund are being reviewed, the funding
requirement is expected to be relatively limited in the short-term and will be
met from existing cash resources and/or realisations from SVV1.
Outlook
Whilst 2022 has been a difficult year, the Company believes that it has
managed to safely navigate its way through the period relatively unscathed. It
has also achieved some excellent results such as the valuation uplifts from
Getvisibility and Smarttech247.
Our investment strategy is focused on next generation technology businesses
with an emphasis on Al focused businesses. We remain encouraged by the
progress made to date by our investments and the outlook for the respective
sectors in which they operate.
We expect that in the coming months we will see some additional realisations
or liquidity events from the investment portfolio. Furthermore, it is
important to note that, as previously mentioned, SVV1 has now completed its
deployment phase and has moved to its realisation phase which is expected to
generate further cash inflows for the Company.
In summary, we believe that our investment strategy in the technology sector
has already proven to have been successful. Going forward, the Company is well
positioned as a leading next generation technology investment company with an
exciting portfolio of technology companies that have the potential for
significant growth and the delivery of real returns for shareholders.
Nicholas Lee
Director
27 June 2023
STATEMENT OF COMPREHENSIVE INCOME
Year Ended 31 December 2022 £000's Year ended 31 December 2021 £000's
CONTINUING ACTIVITIES - -
Income
Other Income
Total income - -
Gain on investments held at fair value through profit or loss 420 2,081
Operating expenses (786) (590)
Operating (loss) / profit from continuing activities (366) 1,491
Loss / profit before taxation from continuing activities (366) 1,491
Taxation - ‐
Loss / profit for the year from continuing activities (366) 1,491
Other Comprehensive Income - ‐
Total Comprehensive Income attributable to equity holders of the Company (366) 1,491
Basic (loss) / profit per share
Equity holders
Basic (0.20p) 1.00p
Fully diluted (0.20p) 0.8p
STATEMENT OF CHANGES IN EQUITY
Share Share Premium £000's Capital Redemption Reserve £000's Retained Earnings £000's Total £000's
Capital
£000's
Balance at 1 January 2021 12,135 5,158 165 (14,533) 2,926
Profit and total comprehensive ‐ ‐ ‐ 1,491 1,491
profit for the period
Issue of shares (net of costs) 90 2,716 - 2,806
Cancellation of deferred shares (11,830 - 11,830 - -
As at 31 December 2021 396 7,874 11,995 (13,042) 7,223
Loss and total comprehensive loss for the period - - - (366) (366)
Issue of shares (net of costs) 61 904 - - 965
As at 31 December 2022 457 8,778 11,995 (13,408) 7,822
STATEMENT OF FINANCIAL POSITION
31 December 31 December
2022 £000's 2021 £000's
Current assets 8,129 7,016
Investments 373 8
Trade and other receivables 847 374
Cash and cash equivalents
Total current assets 9,349 7,398
Total assets 9,349 7,398
Equity
Issued share capital 457 396
Share premium 8,778 7,874
Retained earnings (13,408) (13,042)
Capital redemption reserve 11,995 11,995
Total equity 7,822 7,223
Non-current Liabilities
Term Loan 1,235 -
--Current liabilities
Trade and other payables 292 175
Total liabilities 1,527 175
Total equity and liabilities 9,349 7,398
EARNINGS PER SHARE
2022 2021
£000's £000's
Profit attributable to the owners of the Company
Continuing Operations (366) 1,491
2022 2021
No. of No. of
Shares shares
Weighted average number of shares for calculating basic (loss)/profit per 171,274,697 149,021,386
share
Weighted average number of shares for calculating the fully diluted 171,274,697 177,639,789
(loss)/profit per share
2022 2021
Pence Pence
Basic and diluted profit per share
Continuing Operations - basic (0.20) 1.00
Continuing Operations - diluted (0.20) 0.80
Copies of the accounts will shortly be posted to shareholders and will be
available on the Company's website at www.piresinvestments.com
(http://www.piresinvestments.com) .
This announcement contains inside information for the purposes of the UK
Market Abuse Regulation and the Directors of the Company are responsible for
the release of this announcement.
Enquiries:
Pires Investments plc Tel: +44 (0) 20 3368 8961
Nicholas Lee, Director
Nominated Adviser Tel: +44 (0) 20 7213 0880
Cairn Financial Advisers LLP
Liam Murray / Ludovico Lazzaretti
Broker Tel: +44 (0) 20 7469 0935
Peterhouse Capital Limited Tel: +44 (0) 20 7469 0936
Duncan Vasey/Lucy Williams
Financial media and PR Tel: +44 (0) 20 3004 9512
Yellow Jersey
Sarah Hollins
Annabelle Wills
Jazmine Clemens
Notes to Editors
About Pires Investments plc
Pires Investments plc (AIM: PIRI) is an investment company providing investors
with access to a portfolio of next-generation technology businesses with
significant growth potential.
The Company is building an investment portfolio of high-tech businesses across
areas such as Artificial Intelligence ("AI"), Internet of Things ("IoT"),
Cyber Security, Machine Learning, Immersive Technologies and Big Data, which
the Board believes demonstrate evidence of traction and the potential for
exponential growth, due to increasing global demand for development in these
sectors.
For further information, visit: https://piresinvestments.com/
(https://piresinvestments.com/) .
Caution regarding forward looking statements
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looking statements. Forward looking statements are identified by their use of
terms and phrases such as ''believe'', ''could'', "should" ''envisage'',
''estimate'', ''intend'', ''may'', ''plan'', ''potentially'', "expect",
''will'' or the negative of those, variations or comparable expressions,
including references to assumptions. These forward looking statements are not
based on historical facts but rather on the Directors' current expectations
and assumptions regarding the Company's future growth, results of operations,
performance, future capital and other expenditures (including the amount,
nature and sources of funding thereof), competitive advantages, business
prospects and opportunities. Such forward looking statements reflect the
Directors' current beliefs and assumptions and are based on information
currently available to the Directors.
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