Oberon Investments - Half-year Report
28/12/2023 07:00
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RNS Number : 9789X Oberon Investments Group PLC 28 December 2023
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Oberon Investments Group plc
('Oberon' or the 'Company' or the 'Group')
Unaudited results for the six months ended 30 September 2023,
Oberon Investments Group plc (AQSE: OBE), the boutique investment management,
wealth planning and corporate broking group, announces its unaudited results
for the six months ended 30 September 2023 (the 'period').
Highlights
· Group Revenue increased 28% to £3.4m (2022: £2.6m).
· Group revenue growth has been achieved despite continued difficult
conditions in the corporate broking market and a decline in revenues of 33% in
the Oberon Capital division.
· Acquisition of majority stake (69.1%) in Logic Investments completed
during the period.
· Acquisition of Nexus EIS fund signed in July 2023 and completed post
period end in December 2023.
· Increase in staff overheads due to a number of new team wins (prior
to revenue being achieved) as well as one-off, non-repeating deal costs during
the period.
· Increased investment in Logic Investments, prior to potential IPO in
Q1/Q2 2024.
· Fee earning Funds under Management and Administration ("FUMA")
increased by over £170m since end Sept 2022.
· Reduced loss of £1.59m (2022: £1.67m) with further improvement
expected in second half of the year.
Current trading, new business wins and outlook
· Oberon is in talks (or has signed contracts) with further teams, post
period end who are expected to add further growth in FUMA and revenue.
· Inflows of FUMA are expected to continue into the second half and
throughout 2024 as the effect of new team hires is felt.
· Oberon has now signed Heads of Terms to list Logic on the Alternative
Investment Market (AIM) at an £11m valuation. Should this progress, Oberon
is expected to retain a majority stake of c. 55%.
· Management has seen FUMA continue to grow post period end and expects
the Group to move into profit during 2024.
Chief Executive Officer Simon McGivern said:
"Our strategy of focusing on fee earning FUMA is bearing fruit, as we continue
to see strong growth and inflows in this area. There is often an element of
delay, as new teams join and incur overhead prior to establishing revenues,
however there is long term value in the strengthening of our teams and the
accompanying fee earning FUMA. The Oberon brand is growing in the market,
which should continue to help attract high quality teams and professionals.
Furthermore, the ongoing consolidation in the industry leaves Oberon as one of
the few true boutiques who are able to offer clients and investment managers a
bespoke and personalized service.
A number of costs in the first half are non-recurring and we expect this,
along with continued growth, to reflect in a positive 2024.
On a final note, management is looking at ways of realizing the value of our
majority stake in Logic, potentially through an IPO on AIM at some point
during 2024."
Enquiries:
Oberon Investments Group plc 020 3179 5300
Simon McGivern / Galin Ganchev
AQSE Corporate Adviser and Broker 020 7399 9400
Novum Securities Limited
Richard Potts / George Duxberry
Oberon Capital (Broker to the Company) 020 3179 5300
Mike Seabrook / Nick Lovering
Notes for editors
Oberon operates in the UK wealth and fund management sector and in the
corporate broking and financial advisory sectors. Since Oberon Investments Ltd
was established in April 2017, Oberon has grown organically by adding new
clients and new fund managers, attracted by the emerging brand and by a number
of small, selective and accretive acquisitions. Oberon Capital, the corporate
broking division, provides advice and raises capital for companies from seed
and early-stage funding through to IPO and beyond. In June 2023, Oberon
completed the acquisition of a majority stake into Logic Investments, a
fintech platform for custody and clearing.
CHIEF EXECUTIVE'S STATEMENT
Overview
Over the period, the FTSE 250 was up by just over 6%. In contrast, total
investment management revenues were up by 38.6%, mainly due to increases in
core discretionary FUMA, driven by new client wins and a number of the new
investment managers beginning to generate revenue. We expect this trend to
continue strongly into 2024 and beyond.
The Corporate Broking environment continues to be challenging, however the
second half of the year contains a strong pipeline of deals which may indicate
a reversal of this trend. A number of initiatives have been put in place
which we expect to bear fruit in the second half of the year.
Business Review
Summary of revenues by activity
6m to 6m to %
Sept'23
Sept'22
change
£'000 £'000
Total Investment Management revenue 2,027 1,462 38.6%
Corporate Broking & Advisory 688 1,031 -33.3%
Other revenue 672 147 457.1%
Total revenue 3,387 2,640 28.3%
Investment Management and Wealth Planning
Funds Under Management and Administration ('FUMA') continued to grow over the
period due to considerable new net inflows. Total investment management
revenues, including commissions and investment income rose by 39% to £2.03m
(2022: £1.46m) reflecting the growth in discretionary FUMA.
Corporate Broking & Advisory
Corporate Broking and Advisory revenues declined by 33% to £0.69m in the
current year (H1'23) compared to £1.03m in the previous year (H1'22). This
decline is principally due to the challenging environment for fundraising
during the year, however current indications are that the second half will see
a considerable upturn in activity.
Operating Costs
6m to 6m to %
Sept'23
Sept'22
change
£'000 £'000
Staff costs (exc. share based charges) 2,937 2,184 34.5%
Other cash operating costs 1,845 1,744 5.8%
Total cash operating expenses 4,782 3,928 21.7%
Non-cash operating costs 197 180 9.4%
Total operating costs 4,979 4,108 21.2%
In line with the firm's strategy to develop the business for growth, staff
costs have risen compared to the prior period, reflecting both the increase in
the number of employees and the competitive nature of our industry. The
increase in staff costs have principally been in the compliance, operations
and front of office departments where we continue to strengthen the business
and position it for further growth.
Current trading and outlook
Following recent team wins and increases in FUMA (which we forecast to
continue strongly in the second half of the year and onwards), we feel we have
a robust and exciting platform for the future. We now have 15 Investment
Managers, alongside a very strong investment team. This is combined with a
solid infrastructure to monitor and control growth going forwards. A number
of new product launches in 2023/24 (such as our EIS fund, IHT and special
situations service, alongside a planned relaunch of our AIM VCT) are expected
to generate high margin revenue, alongside our continually growing
discretionary Investment Management business.
We are looking to grow the number of retainer-based clients to even out
revenues in this division. As and when this market recovers, we believe the
Oberon Capital division will be well placed to benefit, both from ongoing
recurring revenue, as well as increased revenue from fundraises.
As always, I would like to thank all our clients and shareholders for their
continued support and to express the appreciation of the entire Oberon Board
for the ceaseless hard work and commitment of our staff.
Simon McGivern
Chief Executive Officer
28 December 2023
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the six month period ended 30 September 2023
Six months Six months Year
Ended Ended Ended
30 Sept'22 Unaudited
30 Sept'23 Unaudited
31 Mar'23
Audited
Note £'000 £'000 £'000
Revenue 2 3,387 2,640 5,048
Operating expenses 3 (4,979) (4,108) (8,741)
Losses on investments (3) (178) (189)
Operating loss (1,595) (1,646) (3,882)
Finance income 9 - 11
Finance cost (6) (27) (30)
Loss before tax (1,592) (1,673) (3,901)
Tax on loss - - -
Loss after tax (1,592) (1,673) (3,901)
Loss attributable to equity holder of the parent (1,536) (1,673) (3,901)
Non-controlling interests (56) - -
Loss per share (p)
Basic
(p)
4
(0.29) (0.36)
(0.82)
Diluted
(p)
4
N/A
N/A N/A
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
At 30 September 2023
At 30 Sept At 30 Sept At 31 March 2023
Audited
2023 2022
Unaudited
Unaudited
Note £'000 £'000 £'000
Assets
Non-current assets
Intangible assets 1,308 1,631 1,571
Plant, property and equipment 245 262 233
Total non-current assets 1,553 1,893 1,804
Current assets
Investments 220 212 211
Debtors 1,987 2,725 1,589
6
Cash 3,878 2,287 2,415
Total current assets 6,085 5,224 4,215
Total assets 7,638 7,117 6,019
Creditors: amounts falling due within one year 7 (1,497) (2,281) (1,629)
Net Current Assets 6,141 2,943 2,586
Creditors: amounts falling due after one year 8 (20) (30) (24)
Net assets 6,121 4,806 4,366
Shareholders' equity
Share capital 3,027 2,350 2,601
Share premium account 10,141 6,002 7,506
Share option reserves 222 140 172
Merger relief reserve 11,337 11,337 11,337
Reverse acquisition reserve (9,558) (9,558) (9,558)
Retained earnings (9,229) (5,465) (7,693)
Non-controlling interest 181 - -
Total equity 6,121 4,806 4,366
CONSOLIDATED STATEMENT OF CASH FLOWS
For the six month period ended 30 September 2023
Six months Six months Year ended 31 March
ended ended
30 Sept 2023 30 Sept 2022 2023
Unaudited Unaudited Audited
£'000 £'000 £'000
Operating activities before tax
Loss from ordinary activities after tax (1,592) (1,673) (3,901)
Adjustments for:
Losses on current asset investments 3 178 189
Depreciation 36 32 64
Amortisation 111 115 232
Investment income (75) (32) (11)
Finance costs - 27 30
Employment related share based charges 50 33 66
(Increase)/decrease in debtors (360) 754 1,890
Decrease in creditors (190) (395) (1,118)
Cash used in operations (2,017) (961) (2,559)
Investing activities
Purchases of property, plant and equipment (42) (23) (27)
Purchase of intangible assets - - (62)
Deferred consideration paid (61) (28) -
Acquisition of subsidiary (306) - -
Acquisition of cash in acquired business 844 - -
Cash invested in current asset investments (10) - (32)
Cash from sale of current asset investments - 151 151
Repayment of loans advanced by the Group - - 10
Dividends received - - 11
Corporation tax paid - (8) (8)
Interest paid - (27) (30)
Interest received - 32 -
Net cash from investing activities 425 97 13
Financing activities
Issue of equity 3,060 - 1,811
Repayment of borrowings (5) (8) (10)
Net cash flows from financing activities 3,055 (8) 1,801
Increase/(decrease) in cash and cash equivalents 1,463 (872) (745)
Cash and cash equivalents at the beginning of the period 2,415 3,159 3,160
Cash and cash equivalents at the end of the period 3,878 2,287 2,415
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the six month period ended 30 September 2023
Share Share Merger relief Reverse acquisition Warrant Option Retained Minority Total
capital premium reserve reserve reserve reserve losses interests equity
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
Balance as at 31 March 2022 (audited) 2,345 5,951 11,337 (9,558) - 106 (3,792) - 6,389
Exercise of warrants - - - - - - - - -
Issue of shares 5 52 - - - - - - 57
Share based charges - - - - - 33 - - 33
Profit for the period - - - - - - (1,673) - (1,673)
Balance as at 30 September 2022 (unaudited) 2,350 6,003 11,337 (9,558) - 139 (5,465) - 4,806
Issue of shares 251 1,503 - - - - - - 1,754
Costs of raising funds - 1 - - - - - - 1
Share based charges - - - - - 33 - - 33
Loss for the period - - - - - - (2,228) - (2,228)
Balance as at 31 March 2023 (audited) 2,601 7,507 11,337 (9,558) - 172 (7,693) - 4,366
Issue of shares 426 2,634 - - - - - - 3,060
Acquisition of subsidiary - - - - - - - 307 307
Acquisition of non-controlling interest - - - - - - - (70) (70)
Share based charges - - - - - 50 - - 50
Loss for the period - - - - - - (1,536) (56) (1,592)
Balance as at 30 September 2023 (unaudited) 3,027 10,141 11,337 (9,558) - 222 (9,229) 181 6,121
NOTES TO THE CONDENSED FINANCIAL STATEMENTS
1) Basis of preparation
As permitted under AQSE listing rules, IAS 34, 'Interim Financial Reporting'
has not been applied in this interim report.
The financial information presented in this report has been prepared using
accounting policies that are expected to be applied in the preparation of the
financial statements for the year ending 31 March 2024.
The financial statements have been prepared in accordance with applicable
United Kingdom accounting standards, including Financial Reporting Standard
102 - 'The Financial Reporting Standard applicable in the United Kingdom and
Republic of Ireland' ('FRS 102'), and the Companies Act 2006, and these
principles are disclosed in the Financial Statements for the year ended 31
March 2023.
The financial information in this interim report does not constitute statutory
accounts within the meaning of Section 435 of the Companies Act 2006.
The Annual Report and Financial Statements for 2023 have been filed with the
Registrar of Companies. The Independent Auditors' Report on the Annual Report
and Financial Statement for 2023 was unqualified, did not draw attention to
any matters by way of emphasis, and did not contain a statement under 498(2)
or 498(3) of the Companies Act 2006.
Going concern
The Directors believe that the recent fundraise has generated considerable
amount of cash and the Group will have adequate resources to continue in
operational existence for the foreseeable future. The Directors are aware that
revenue is slightly behind forecast due to a persistently tough environment
for raising funds, which has impacted the corporate finance revenues, and an
increased level of investment into Logic Investments. However, the Investment
Management team has continued to grow and is generating a steady stream of
revenue , together with the Group's strong cash position, has reassured the
Directors that there are sufficient liquid assets that could be accessed at
short notice should market conditions deteriorate further. For this reason,
the Directors continue to believe it is appropriate to adopt the going concern
basis in preparing the Financial Statements.
Accounting policies
The same accounting policies, presentation and methods of computation are
followed in these set of financial statements as are applied in the Group's
latest audited Report and Accounts for the year ended 31 March 2023.
2) Revenue
Year ended
Six months Six months 31 March
ended ended
30 Sept 2023 30 Sept 2022 2023
Unaudited Unaudited Audited
£'000 £'000 £'000
Investment management revenue 2,027 1,462 3,080
Corporate finance revenue 688 1,031 1,657
Other revenue 672 147 311
Total revenue 3,387 2,640 5,048
3) Operating costs
Year ended
Six months Six months 31 March
ended ended
30 Sept 2023 30 Sept 2022 2023
Unaudited Unaudited Audited
£'000 £'000 £'000
Staff costs 2,937 2,184 4,878
Other operating costs 1,845 1,744 3,501
Staff and other costs 4,782 3,928 8,379
Share based payments 50 33 66
Depreciation of tangible assets 36 32 64
Amortisation of intangible assets 111 115 232
Total operating costs 4,979 4,108 8,741
4) Loss per share
The basic loss per share of 0.31p (2022: loss per share of 0.36p) is
calculated on a loss after tax and non-controlling interests of £1,536k
(2022: loss after tax of £1,673k) and a weighted average number of ordinary
shares in issue during the period of 536,163,575 (2022: 469,676,755). For the
year to 31 March 2023, the basic loss per share of 0.82p is calculated on a
loss after tax of £3,901k and a weighted average number of ordinary shares in
issue during the year of 478,347,749.
The loss incurred by the Group means that the effect of any outstanding
options would be considered anti-dilutive and is ignored for the purposes of
the loss per share calculation for both the 6 month period to 30 September
2023 and the year ended 31 March 2023.
5) Business combinations
Effective on 9 June 2023 the Group completed the acquisition of a 63% stake of
Logic Investments Limited. Logic Investments Limited is incorporated in the UK
and its nature of business is to provide custody and operations services to
third-party wealth managers. On 5 September 2023 the Group acquired a further
6%, bringing the total stake in Logic Investments to 69%.
The business combination has been accounted for using acquisition based
accounting and we have assumed that the maximum amount of shares will be
issued.
The following amounts of assets, liabilities and contingent liabilities were
recognised at the acquisition date:
£'000
Net assets of Logic Investments
Fixed assets 5
Current assets (excl. cash) 38
Cash 844
Total assets 887
Total liabilities (59)
Net assets (at book value) at acquisition 828
OIG's 63% of Net assets (at book value) at acquisition 521
Non-controlling interest 307
Fair value of net assets acquired 521
Negative goodwill on acquisition (283)
Total consideration 238
Total acquisition costs 238
On 12 December 2023 the Group completed the acquisition of the Nexus
Investments Evergreen EIS Scale-Up Fund ('Nexus EIS Fund') from Nexus Central
Management Services Limited. The Acquisition was funded through the issue of
7.5m new ordinary shares in Oberon. The Nexus EIS Fund has a 15-company strong
portfolio across Digital, Data, EdTech and Health which strengthens Oberon's
offering to investors who wish to benefit from Enterprise Investment Scheme
tax relief ('EIS') and companies seeking EIS investment. The Acquisition of
the Nexus EIS Fund will augment Oberon's existing 'Oberon EIS Fund' and
complements our offer to growing companies seeking investment through Oberon
Capital and Oberon Private Ventures divisions, thus further enhancing Oberon's
expertise in these verticals.
6) Debtors
Year ended
Six months Six months 31 March
ended ended
30 Sept 2023 30 Sept 2022 2023
Unaudited Unaudited Audited
£'000 £'000 £'000
Trade debtors 179 1,332 127
Rent and other deposits 74 64 69
Other debtors 523 119 531
Prepayments and accrued income 1,211 1,210 862
Total 1,987 2,725 1,589
7) Creditors: amounts falling due within one year
Year ended
Six months Six months 31 March
ended ended
30 Sept 2023 30 Sept 2022 2023
Unaudited Unaudited Audited
£'000 £'000 £'000
Trade creditors 430 1,469 469
Other taxes and social security 267 170 178
Other creditors 37 62 82
Borrowings 10 10 10
Deferred consideration - 97 98
Finance lease creditor - - 4
Accruals and deferred income 753 473 788
Total 1,497 2,281 1,629
8) Creditors: amounts falling due after one year
Year ended
Six months Six months 31 March
ended ended
30 Sept 2023 30 Sept 2022 2023
Unaudited Unaudited Audited
£'000 £'000 £'000
Borrowings 19 29 24
Deferred consideration - - -
Other creditors 1 1 -
Total 20 30 24
INDEPENDENT REVIEW REPORT TO OBERON INVESTMENTS GROUP PLC
We have been engaged by the company to review the condensed set of financial
statements in the half-yearly financial report for the six months ended 30
September 2023 which comprises the Consolidated Statement of Comprehensive
Income, Consolidated Statement of Financial Position, Consolidated Statement
of Changes in Equity, Consolidated Cash Flow Statement and related notes.
Based on our review, nothing has come to our attention that causes us to
believe that the condensed set of financial statements in the half-yearly
financial report for the six months ended 30 September 2023 is not prepared,
in all material respects, in accordance with UK Accounting Standards.
Basis for Conclusion
We conducted our review in accordance with International Standard on Review
Engagements (UK) 2410, "Review of Interim Financial Information Performed by
the Independent Auditor of the Entity" ("ISRE") issued for use in the United
Kingdom. A review of interim financial information consists of making
enquiries, primarily of persons responsible for financial and accounting
matters, and applying analytical and other review procedures. A review is
substantially less in scope than an audit conducted in accordance with
International Standards on Auditing (UK) and consequently does not enable us
to obtain assurance that we would become aware of all significant matters that
might be identified in an audit. Accordingly, we do not express an audit
opinion.
As disclosed in note 1, the annual financial statements of the company are
prepared in accordance with UK Accounting Standards. The condensed set of
financial statements have also been prepared in accordance with UK Accounting
Standards.
Conclusions Relating to Going Concern
Based on our review procedures, which are less extensive than those performed
in an audit as described in the Basis of Conclusion section of this report,
nothing has come to our attention to suggest that management have
inappropriately adopted the going concern basis of accounting or that
management have identified material uncertainties relating to going concern
that are not appropriately disclosed.
This conclusion is based on the review procedures performed in accordance with
this ISRE, however future events or conditions may cause the entity to cease
to continue as a going concern.
Responsibilities of directors
The directors are responsible for preparing the half-yearly financial report
in accordance with the Disclosure Guidance and Transparency Rules of the
United Kingdom's Financial Conduct Authority.
In preparing the half-yearly financial report, the directors are responsible
for assessing the company's ability to continue as a going concern,
disclosing, as applicable, matters related to going concern and using the
going concern basis of accounting unless the directors either intend to
liquidate the company or to cease operations, or have no realistic alternative
but to do so.
Auditor's Responsibilities for the review of the financial information
In reviewing the half-yearly report, we are responsible for expressing to the
Company a conclusion on the condensed set of financial statement in the
half-yearly financial report. Our conclusion, including our Conclusions
Relating to Going Concern, are based on procedures that are less extensive
than audit procedures, as described in the Basis for Conclusion paragraph of
this report.
Use of our report
Our report has been prepared in accordance with the terms of our engagement to
assist the Company in meeting its responsibilities in respect of half-yearly
financial reporting in accordance with the Disclosure Guidance and
Transparency Rules of the United Kingdom's Financial Conduct Authority and for
no other purpose. No person is entitled to rely upon this report unless such a
person is a person entitled to rely on this report by virtue of and for the
purpose of our terms of engagement or has been expressly authorised to do so
by our prior written consent. Save as above, we do not accept responsibility
for this report to any other person or for any other purpose and we hereby
expressly disclaim any and all such liability.
Haysmacintyre LLP
Chartered
Accountants
10 Queen Street Place
London
28 December 2023
EC4R 1AG
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