REG - Paternoster Res. - Half-year Report

Riverfort Global OpportunitiesAnnouncement

19/09/2018 07:05

RNS Number : 1801B
Paternoster Resources PLC
19 September 2018
 


 
19 September 2018
 
 
PATERNOSTER RESOURCES PLC
("Paternoster" or the "Company")
 
 
Unaudited interim results for the 6 months ended 30 June 2018
 
Paternoster Resources plc is pleased to announce its unaudited interim results for the six months ended 30 June 2018.
 
 
Highlights
·      Partnership announced with RiverFort Global Capital
·      £5.4 million of new capital raised to support RiverFort-arranged opportunities
·      New shareholders including institutional investors
·      Over £600,000 invested in RiverFort-arranged opportunities by the period end, increasing to over £1 million to date
·      Cash and income already being generated
·      Significantly improved financial performance with a profit achieved in Q2
·      Majority of investment portfolio expected to be in debt and equity linked debt investments in Q4
·      Substantial cash balance available for further investment
 
Chairman's review
During the first half of 2018, the Company has made very significant progress in terms of its development as an investment company.  In early 2018, it entered into a partnership with RiverFort Global Capital Limited ("RiverFort"), the specialist arranger of funding solutions, primarily to the natural resources sector. A substantial amount of new capital has been raised, from both new and institutional investors and good progress has been made in deploying this new capital in investments that provide both income and downside protection.   The Board of the Company has also been added to and the Company is now well-positioned to become a leading investor in junior listed companies.
 
This evolution in the Company's strategy is clearly beginning to make a positive impact on its financial performance.  As a result, the Company has been able to significantly reduce its loss after tax for the six months ended 30 June 2018 to £97,482 compared to a loss after tax of £793,959 for the same period in 2017. As at 30 June 2018, the Company's net assets amounted to £7,416,437 compared to £2,448,769 as at 31 December 2017.
 
The Company's net income now comprises both unrealised and realised gains/losses from its equity portfolio, along with income from the RiverFort-arranged investments that principally comprise fees and interest. The analysis of income for the period is set out below and clearly demonstrates the success of the Company's new partnership with RiverFort: 
                                                                                   




 


 


£




Existing equity portfolio


 


(121,601)




RiverFort-arranged investments


 


181,241




 


 


 




Total net income


 


59,640




 
Whilst the first half of 2018, does not fully reflect all of the various initiatives that have recently been undertaken, good progress is clearly being made, such that, during the second quarter of 2018, the Company recorded a profit after tax.
 
 
 
 
The key unaudited performance indicators are set out below: 




Performance indicator


30 June 2018


31 December 2017


Change




Net investment income/(loss)


£59,640


£(799,533)


 




Net asset value


£7,416,437


£2,448,769


+202.9%




Net asset value - fully diluted per share


0.118p


0.242p


-51.2%




Closing share price


0.100p


0.130p


-23.1%




Net asset value premium to the share price


18.0%


86.2%


 




Market capitalisation


£6,289,335


£1,321,590


+475.9%




The Company's principal investment portfolio categories are summarised below:




Category


Description


Cost or valuation at 30 June 2018




 


 


 




Listed equity investments


Equity portfolio


1,696,793




Debt and equity- linked debt investments


Arranged by RiverFort


620,930




Cash resources


Includes cash proceeds from the placing completed prior to the period end and received in July


5,171,602




Unlisted equity investments


 


177,235




 


 


 




Total


 


7,666,560




 
 
The Company is now generating significant investment income from its new RiverFort arranged investments, principally from interest and fees.  At the same time, gains have been realised from certain of its existing equity investments such as I3 Energy plc and Arc Minerals plc; these companies have performed very strongly during this period.  These gains, however, have been offset, by the weakness in the share price of one of the Company's largest equity investments, Plutus PowerGen plc.
 
Given the evolution in the Company's investment strategy, the Company's equity portfolio is now less than 25% of the overall portfolio and so developments during the period are set out below just for the larger holdings in that portfolio.
 
I3 Energy plc ("I3 Energy")
 
During the period, the company raised additional funds and also announced that it was in advanced discussions with various possible partners regarding a potential joint venture relating to its 100% owned Liberator Oil Field and its licence award in the 30th Offshore Licencing Round. The I3 Energy's share price has increased significantly during this interim period and Paternoster has realised some significant gains from this investment.
 
Pires Investments plc ("Pires")
 
When Pires announced its results for the year to 31 October 2017, it indicated that its year end net assets had increased by around 30% from £628,000 to approximately £820,000.  Since then, the share price of two of its investments, ECO (Atlantic) Oil and Gas Limited and SalvaRx Group plc have continued to perform strongly.
 
 
 
 
Arc Minerals Limited ("Arc Minerals")
 
During the period, Arc Minerals increased its holding in both Casa Mining Limited ("Casa") and Zamsort Limited ("Zamsort").  It has also disposed of its shareholding in Andiamo Exploration Limited and extinguished a significant liability in connection with the original purchase of its Slovakian asset. This is all very much in line with its strategy to focus on its core assets.    Further work has now been carried out on both the Casa and Zamsort licences. In particular, the company has reported an increase in Akyanga's JORC mineral resource, part of its Casa project, from 1.6 million ozs to 3 million ozs.  During the period, the company's share price has performed strongly.
 
Plutus PowerGen plc ("Plutus")
 
During the period, Plutus commissioned two new 20MW flexible energy generation sites in Stowmarket, Suffolk and energised two sites in Ipswich.  The company now has 120MW of flexible energy generation sites in operation with a further three 20MW sites expected to come into operation in 2018.  More generally, the company is currently focused on moving into gas powered energy generation, energy storage and hybrid generation sites.  Gas powered sites offer significantly more attractive returns compared to diesel powered sites and hybrid sites allow power generation sites of various types to partner with storage technologies giving the company access to additional revenue streams.  During the period, the performance of Plutus share price has, however, been disappointing, which, given that it is one of the Company's larger investments, has negatively impacted the valuation of the Company's equity portfolio.
 
 
Since the period end, the deployment of capital has been accelerated and, to date, a total of over £1million has now been deployed in RiverFort-arranged investments.  At the same time, the Company's equity exposure has been reduced and the majority of the Company's investment portfolio is expected to comprise debt and equity-linked debt investments by Q4 2018. The liquidity in the Company's shares has improved significantly with the majority of the Company's shares now being held by investors that are supportive of the Company's investment strategy.
 
The Company has a substantial cash balance left to invest which continues to grow as cash is regularly received back from the RiverFort-arranged investments made earlier in the year. The Company is therefore focused on deploying this cash during the remainder of 2018.  During this phase of building its investment portfolio, it has been agreed with RiverFort that they will waive their investment adviser fees for 2018.  In consideration for this, the Company has agreed to extend the current term of the investment adviser agreement with RiverFort by an additional year.  Under the AIM Rules, RiverFort, as the Company's investment adviser, is regarded as a Related Party so the variation of the investment agreement is a Related Party Transaction under the AIM Rules. To that end, the Independent Directors (being all the Directors with the exception of Mr Andrew Nesbitt who is a consultant to RiverFort) who have consulted with the Company's nomad, believe that this variation of the investment agreement is fair and reasonable in so far as the shareholders are concerned.
 
The Company is currently reviewing a number of attractive investment opportunities so that, going forward, I am confident that we will be able to continue to deploy our cash and continue to improve the financial performance of the Company.
 
 
N Lee
Chairman
19 September 2018
 
For more information, please contact:
 
Paternoster Resources plc:                                                        
Nicholas Lee, Chairman                                                              +44 (0) 20 7580 7576
                                                                                               
Nominated Adviser:
Beaumont Cornish                                                                     +44 (0) 20 7628 3396
Roland Cornish/Felicity Geidt
 
Joint Broker:                                                                              +44 (0) 20 7601 6100
Shard Partners LLP
Damon Heath/Erik Woolgar
 
Joint Broker:                                                                              +44 (0) 20 7562 3351
Peterhouse Capital Limited
Lucy Williams
 
 
 
 
UNAUDITED STATEMENT OF COMPREHENSIVE INCOME
FOR THE SIX MONTHS ENDED 30 JUNE 2018
 




 


Unaudited
6 months
ended
30 June
2018


Unaudited
6 months
ended
30 June
 2017


Audited
Year ended
31 December
2017




 


£


£


£




 


 


 


 




Net (losses)/gains on investments


(110,119)


(627,081)


(811,467)




 


 


 


 




Fees and investment income


169,759


1,871


11,934




 


 


 


 




Total income


59,640


(625,210)


(799,533)




 


 


 


 




Administration expenses


(157,122)


(168,749)


(336,152)




 


 


 


 




(Loss)/profit before taxation


(97,482)


(793,959)


(1,135,685)




 


 


 


 




Taxation


-


-


-




 


 


 


 




(Loss)/profit for the period and total comprehensive income


 
(97,482)


 
(793,959)


(1,135,685)




 


 


 


 




 


 


 


 




Basic (loss)/earnings per share


 


 


 




Continuing and total operations


(0.005)p


(0.078)p


(0.112)p




 


 


 


 




Fully diluted (loss)/earnings per share


 


 


 




Continuing and total operations


(0.005)p


(0.078)p


(0.112)p




 


 


 


 




 
 
UNAUDITED STATEMENT OF CHANGES IN EQUITY
FOR THE SIX MONTHS ENDED 30 JUNE 2018
 




 


Called up
 share
  capital


Share premium
account


Other reserves


 
Retained
deficit


 
Total
equity




 


£


£


£


£


£




 


 


 


 


 


 




Balance at
1 January 2017


4,269,546


3,191,257


100,150


(3,976,499)


3,584,454




Loss for the year and total comprehensive expense


-


-


-


(1,135,685)


(1,135,685)




 


 


 


 


 


 




Balance at
31 December 2017


4,269,546


3,191,257


100,150


(5,112,184)


2,448,769




Loss for the period and total comprehensive income


-


-


-


(97,482) 


(97,482)




Share issue


5,272,727


77,273


-


-


5,350,000




Share issue expenses


-


(77,273)


-


(207,577)


(284,850)




Transactions with owners


5,272,727


-


-


(207,577)


5,065,150




 


 


 


 


 


 




Balance at
30 June 2018


9,542,273


3,191,257


100,150


(5,417,243)


7,416,437




 
 
UNAUDITED STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2018
 




 


Unaudited
6 months
ended
30 June
2018


Unaudited
6 months
ended
30 June
 2017


Audited
Year ended
31 December
2017




 


£


£


£




 


 


 


 




ASSETS


 


 


 




Current assets


 


 


 




Investments held for trading


2,494,958


2,490,218


2,252,373




Trade and other receivables (note 1)


4,424,824


37,009


37,863




Cash and cash equivalents


871,452


327,228


211,795




Total current assets


5,296,276


364,237


249,658




 


 


 


 




Total assets


7,791,234


2,854,455


2,502,031




 


 


 


 




LIABILITIES


 


 


 




Current liabilities


 


 


 




Trade and other payables


374,797


63,960


53,262




Total current liabilities


374,797


63,960


53,262




 


 


 


 




Net assets


7,416,437


2,790,495


2,448,769




 


 


 


 




EQUITY


 


 


 




Share capital


9,542,273


4,269,546


4,269,546




Share premium account


3,191,257


3,191,257


3,191,257




Capital redemption reserve


27,000


27,000


27,000




Share option reserve


73,150


73,150


73,150




Retained losses


(5,417,243)


(4,770,458)


(5,112,184)




 


 


 


 




Total equity


7,416,437


2,790,495


2,448,769




 


 


 


 




 
Note 1:
Trade and other receivables includes cash proceeds from the placing completed but not received prior to the period end.
 
 
UNAUDITED STATEMENT OF CASH FLOWS
FOR THE SIX MONTHS ENDED 30 JUNE 2018
 
 




 
 


Unaudited
6 months
ended
30 June
 2018


Unaudited
6 months
ended
30 June
2017


Audited
Year ended
31 December
2017




 


£


£


£




 


 


 


 




Cash flows from operating activities


 


 


 




Loss before tax


(97,482)


(793,959)


(1,135,685)




Net losses on investments


110,119


627,081


811,467




Investment income


(169,759)


(1,871)


(11,934)




 


(157,122)


(168,749)


(336,152)




Increase in trade and other receivables


(86,812)


(7,868)


(8,721)




Increase in trade and other payables


321,535


21,590


10,892




Net cash used by operating activities


77,601


(155,027)


(333,981)




 


 


 


 




Cash flows from investing activities


 


 


 




Purchase of investments


(609,199)


(280,800)


(321,167)




Proceeds from disposal of investments


256,496


113,019


206,844




Investment income received


169,759


1,871


11,934




Net cash used in investing activities


(182,944)


(165,910)


(102,389)




 


 


 


 




Financing activities


 


 


 




Net proceeds of share issues


765,000


-


-




Net cash from financing activities


765,000


-


-




 


 


 


 




Net increase/(decrease) in cash and cash equivalents


659,657


(320,937)


(436,370)




 


 


 


 




Cash and cash equivalents at beginning of period


211,795


648,165


648,165




 


 


 


 




Cash and cash equivalents at end of period


871,452


327,228


211,795




 


 


 


 




 
 
 
NOTES TO THE INTERIM REPORT
 
1.         The financial information set out in this interim report does not constitute statutory accounts as defined in section 434 of the Companies Act 2006.  The group's statutory financial statements for the period ended 31 December 2017, prepared under International Financial Reporting Standards (IFRS), have been filed with the Registrar of Companies.  The auditor's report on those financial statements was unqualified and did not contain a statement under section 498 (2) or (3) of the Companies Act 2006.
The interim financial information has been prepared in accordance with the recognition and measurement principles of International Financial Reporting Standards (IFRS) and on the same basis and using the same accounting policies as used in the financial statements for the year ended 31 December 2017. The interim financial statements have not been audited or reviewed in accordance with the International Standard on Review Engagement 2410 issued by the Auditing Practices Board.
The financial statements have been prepared on a going concern basis under the historical cost convention.
The Directors believe that the going concern basis is appropriate for the preparation of the financial statements as the Company is in a position to meet all its liabilities as they fall due.
2.         The calculation of basic and fully diluted earnings per share is based on the loss for the 6 months to 30 June 2018 of £97,482 (2017: Loss £793,959) and a weighted average number of ordinary shares of 1,811,936,934 (2017: 1,016,607,956). 
3.         No interim dividend will be paid.
4.         Copies of the interim report can be obtained from: The Company Secretary, Paternoster Resources plc, 30, Percy Street, London W1T 2DB and are available to view and download from the Company's website : www.paternosterresources.com
 
 
 
 
 
 
 
 
 
 




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