Phoenix Digital - Annual results
28/06/2024 07:00
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RNS Number : 2505U Phoenix Digital Assets PLC 28 June 2024
This announcement contains information which, prior to its disclosure, was
inside information as stipulated under Regulation 11 of the Market Abuse
(Amendment) (EU Exit) Regulations 2019/310 (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.
Press release
28 June 2024
Phoenix Digital Assets PLC
("Phoenix" or the "Company")
Annual results
Notice of Annual General Meeting
Phoenix Digital Assets PLC (AQSE: PNIX), an investment company, is pleased to
announce its audited results for the 12 months ended 31 December 2023.
Financial highlights
· Post-tax profit for the year rose to £17.6m (2022: -£9.4m).
· Change in value of digital assets under management rose 558% to £25.2m (2022:
-£5.5m).
· Total assets under management rose to £46.1m (2022: £25.1m).
· Net cash stood at £0.7m (2022: £5.8m) as at 31 December 2023 following the
Company's capital deployment into the digital assets markets.
Notice of Annual General Meeting
The Company will hold its Annual General Meeting (AGM) on 25 July 2024 at
3:00p.m. at the offices of Fladgate LLP, 16 Great Queen Street, London, WC2B
5DG.
Details of the arrangements for this year's AGM are set out in the Notice of
AGM. The Notice of AGM, together with the Form of Proxy, will be posted to
shareholders on 2 July 2024.
Jonathan Bixby, Chairman of Phoenix, commented: "It has been an incredible
year for Phoenix. We correctly predicted the upturn in the digital assets
markets and deployed our capital to spectacular results - we have seen our
profits increase by £27m year-on-year. In the post-period, we carried through
on our promise of returning value to shareholders through a tender offer,
returning over £33m. I'd like to thank the Board of Directors and our
shareholders for their support in what has been a phenomenal year."
The Directors of Phoenix Digital Assets accept responsibility for this
announcement.
For further information please contact:
Phoenix Digital Assets PLC
Jonathan Bixby +44 7876 888 011
Executive Chairman
First Sentinel Corporate Finance Limited
Corporate Adviser +44 7858 888 007
Brian Stockbridge
Tancredi Intelligent Communication
UK & Europe Media Relations phoenix@tancredigroup.com
About Phoenix
Phoenix Digital Assets PLC invests in a diversified portfolio of
cryptocurrency, and/or in companies or funds which have exposure to NFT or
blockchain technology. The Company's leadership team have an extensive track
record in the cryptocurrency sector and previously founded Argo Blockchain
PLC, a global crypto miner. Phoenix is headquartered in London, UK, and its
shares are listed on the Aquis Stock Exchange Growth Market under the ticker
symbol PNIX. https://www.getphoenix.co.uk (https://www.getphoenix.co.uk)
Notes
This announcement may contain "forward-looking" statements and information
relating to the Company. These statements are based on the beliefs of Company
management, as well as assumptions made by and information currently available
to Company management. The Company does not undertake to update
forward‐looking statements or forward‐looking information, except as
required by law.
Chairman's statement
I am delighted to report Phoenix Digital Assets PLC's full-year results for
2023.
This period has been the most successful in Phoenix's history. Our post-tax
profit rose to £17.6m (2022 -£9.4m), an increase of £27m year-on-year. The
value of our digital asset holdings surged since last year, increasing in
value by £25.2m. The Company had a net asset value of £46.1m at the close of
the period, an increase of 83.74% from 2022.
We changed strategic focus in 2023, moving from a fund predominantly investing
in companies and assets related to non-fungible tokens (NFTs), to an
investment company with the intention of becoming the premier large cap crypto
currency fund in the UK. This strategic change was reflected in our name,
which we changed from NFT Investments PLC to Phoenix Digital Assets PLC in
January 2024. Phoenix better reflects our diverse range of crypto-assets and
investments across our high performing fund.
In last year's results, we noted that the cryptocurrency markets had begun to
recover, and we expected this trend to continue as the Bitcoin 'halving'
approached. The halving is an automated process every four years following
which the rewards of mining Bitcoin are halved, typically leading to an uptick
in the Bitcoin price. Our prediction of an increase in the price of Bitcoin
has been proven entirely correct, and as a result we have generated
significant value for our investors.
The Bitcoin price rose from $16,625 as at 1 January 2023 to $42,823 as at 1
January 2024. The price continued to rise in the post-period, reaching $61,222
as at 24 June 2024 (source: CoinMarket Cap, 2024). Other cryptocurrencies have
followed Bitcoin's positive trend, with the price of Ether increasing 40%
between January 1 and 24 June 2024.
The price increase was spurred on by the US' Securities and Exchange
Commission (SEC) approving the first Bitcoin exchange traded funds (ETFs) in
January 2024, which increased inflows of institutional capital into the
digital asset markets. We expect volatility in the digital asset markets to
continue to decrease as institutional involvement rises.
Our investment success further widened the share price discount to NAV,
supporting the Board of Directors' intention to return value to shareholders
via a tender offer after the Bitcoin halving. In 2023 and the post-period we
took a number of steps to facilitate the tender offer and correct the price
discrepancy. In March 2023 the High Court of England and Wales confirmed the
reduction of our share capital by way of cancellation of our share premium
account, which paved the way for the tender offer.
Following shareholder approval at a General Meeting on 11 June 2024, we
purchased 625,000,000 Ordinary Shares from our shareholders at the tender
price of 5.39p, equal to Phoenix's NAV per share as at 21 May 2024, a 35%
premium to the share price at the same time.
In total, we returned £33,687,500 to our shareholders, and reduced our issued
share capital from 1,085,875,000 to 460,875,000, a reduction of 57.56%. This
has successfully shrunk the distance between NAV and the Company's share
price.
Our intention remains to create value for our investors by leveraging our
team's expertise to generate returns in the digital asset markets. I would
like to take this opportunity to thank our shareholders for their continued
support and look forward to a successful 2024.
Jonathan Bixby, Executive Chairman
Note 2023 2022
£ £
Revenue - -
Fair value movements (including impairment and exchange differences) in
investments
10 (2,381,246) (2,686,079)
Fair value movements in digital assets and 9 25,263,683 (5,531,034)
tokens
22,882,437 (8,217,113)
Share based payment 16 (153,184) -
Administrative expenses 3 (2,530,188) (1,556,872)
Impairment of intangible asset 9 (62,500) -
Operating profit/(loss) 20,136,565 (9,773,985)
Finance income 5 - 402,083
Profit/(loss) before taxation 20,136,565 (9,371,902)
Taxation 7 (2,570,736) -
Profit/(loss) after taxation and total comprehensive profit/(loss) for the
year
17,565,829 (9,371,902)
Earnings/(loss) per ordinary share:
Basic earnings/(loss) per share (pence) 8 1.75 (0.93)
Diluted earnings/(loss) per share (pence) 8 1.66 (0.93)
Group Company
2023 2022 2023 2022
Notes £ £ £ £
Non-Current Assets
Intangible assets 9 43,873,668 15,448,382 43,873,668 15,448,382
Investments 10 1,534,940 3,691,186 1,534,941 3,691,187
Total non-current assets 45,408,608 19,139,568 45,408,609 19,139,569
Current Assets
Trade and other receivables 11 1,284 125,765 388,356 157,837
Cash and cash equivalents 12 695,760 5,847,274 308,687 5,815,201
Total current assets 697,044 5,973,039 697,043 5,973,038
Total assets 46,105,652 25,112,607 46,105,652 25,112,607
Shareholders' equity
Share capital 15 1,009,000 1,003,000 1,009,000 1,003,000
Share premium 15 18,000 33,323,133 18,000 33,323,133
Share based payments reserve 16 3,049,183 2,925,908 3,049,183 2,925,908
Distributable reserve 15 33,359,133 - 33,359,133 -
Retained earnings 5,381,281 (12,241,657) 5,381,281 (12,241,657)
Total shareholders' equity 42,816,597 25,010,384 42,816,597 25,010,384
Non-Current Liabilities
Deferred tax liabilities 13 2,543,536 - 2,543,536 -
Total non-current liabilities 2,543,536 - 2,543,536 -
Current Liabilities
Trade and other payables 14 745,519 102,223 745,519 102,223
Total current liabilities 745,519 102,223 745,519 102,223
Total liabilities 3,289,055 102.223 3,289,055 102.223
Total equity and liabilities 46,105,652 25,112,607 46,105,652 25,112,607
The financial statements were approved by the Board of Directors and
authorised for issue on 27 June 2024 and were signed on its behalf by:
Nicholas Lyth - Director
Share-based payments reserve
Share capital Share Premium Retained earnings Distributable reserve
Total
x £ £ £ £ £
Year ended 31 December 2022
At 1 January 2022 1,003,000 33,323,133 (2,869,755) 2,925,908 - 34,382,286
Loss for the year and total comprehensive loss - - (9,371,902) - - (9,371,902)
At 31 December 2022 1,003,000 33,323,133 (12,241,657) 2,925,908 - 25,010,384
Year ended 31 December 2023
At 1 January 2023 1,003,000 33,323,133 (12,241,657) 2,925,908 - 25,010,384
Profit for the year and total comprehensive profit - - 17,565,829 - - 17,565,829
Shares issued in the year 6,000 54,000 - - - 60,000
Share based payments - - - 153,184 - 153,184
Deferred tax on share based payments - - - 27,200 - 27,200
Warrants exercised in the year - - 57,109 (57,109) - -
Cancellation of share premium account - (33,359,133) - - 33,359,133 -
At 31 December 2023 1,009,000 18,000 5,381,281 3,049,183 33,359,133 42,816,597
(1) There were no transactions in the Subsidiary and thus no impact on the
Statement of Changes in Equity
Share capital
Share capital represents the nominal value on the issue of the Company's
equity share capital, comprising £0.001 ordinary shares.
Share premium
Share premium represents the amount subscribed for the Company's equity share
capital in excess of nominal value.
Any transaction costs associated with the issuing of shares are deducted from
share premium, net of any related income tax benefits.
Retained earnings
Retained earnings represent the cumulative net income and losses of the Group
recognised through the statement of comprehensive income.
Share based payment reserve
Share based payment reserve represents the cumulative cost of share-based
payments.
Distributable reserve
Distributable reserve represents the Share premium that was cancelled during
the year as part of the intended share buyback process. These reserves will be
utilised to implement the share buyback.
Profit/(loss) of Parent Company
As permitted by Section 408 of the Companies Act 2006, the statement of
comprehensive income of the Parent Company is not presented as part of these
financial statements. The Parent Company's profit after tax for the financial
year was £17,565,829 (2022: £9,371,902 loss).
Group Company
2023 2022 2023 2022
£ £ £ £
Operating activities
Profit/(loss) for the year 17,565,829 (9,371,902) 17,565,829 (9,371,902)
Adjustments:
8,260 65,548 8,260 65,548
Loss on disposal of digital assets and tokens
(Profit)/loss on revaluation of digital assets and tokens (26,150,407) 7,477,130 (26,150,407) 7,477,130
Loss on valuation of investments 711,109 2,258,239 711,109 2,258,239
Impairment of investments 1,491,767 - 1,491,767 -
Impairment of intangible assets 62,500 - 62,500 -
Share based payments 153,184 - 153,184 -
Foreign exchange 1,056,834 (475,901) 1,056,834 (475,901)
Finance Income - (402,083) - (402,083)
Deferred tax expense 2,570,736 - 2,570,736 -
Working capital adjustments:
Decrease/(increase) in trade and other receivables 124,481 - (230,519) (32,072)
Increase/(decrease)in trade and other payables 643,296 (22,204) 643,296 (22,204)
Net cash used in operating activities (1,762,411) (471,173) (2,117,411) (503,245)
Investing activities
Purchase of digital assets and tokens (4,697,212) (15,949,540) (4,697,212) (15,949,540)
9
Purchase of fixed assets investments 10 - (817,958) - (817,959)
Sale of intangible fixed assets 9 1,248,109 780,138 1,248,109 780,138
Interest received - 402,083 - 402,083
Net cash used in investing activities (3,449,103) (15,585,277) (3,449,103) (15,585,278)
Financing activities
Share issue 60,000 - 60,000 -
Net cash from financing activities 60,000 - 60,000 -
Net decrease in cash and cash equivalents (5,151,514) (16,056,450) (5,506,514) (16,088,523)
Cash and cash equivalents at start of year 12 5,847,274 21,903,724 5,815,201 21,903,724
Cash and cash equivalents at end of year 12 695,760 5,847,274 308,687 5,815,201
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