REG - RiverFort Global Opp - Half-year Report

Riverfort Global OpportunitiesAnnouncement

22/09/2020 07:00

RNS Number : 6519Z
  
RiverFort Global Opportunities PLC
  
22 September 2020
  
 

22 September 2020
 
 
RiverFort Global Opportunities plc
 
("RGO" or the "Company")
 
 
Unaudited interim results for the 6 months ended 30 June 2020
 
RiverFort Global Opportunities plc is pleased to announce its unaudited interim results for the six months to 30 June 2020.
 
Highlights
·      Total income generated of £770,380 
·      Net profit of £569,165 and cash generated of £555,173
·      Net asset value of £8.45 million- an increase of 7.2% since the beginning of the year 
·      NAV per share of 1.24p, representing a 46% premium to the period end share price
·      Net profit margin of 73.9%, with an operating cash flow margin of 72.1% 
·      £3.3 million of cash available for further investment 
·      Continued demand for investment capital
·      Successful implementation of a capital reorganisation
 
Chairman's review
The Company has had a very busy first six months of 2020 and has achieved excellent results for the period under review.  During the early part of the year, given the uncertainty created by the Covid-19 pandemic, the Company held back on its level of capital deployment and focused on recovering cash from its investments in order to reduce the level of risk within its investment portfolio.  This was managed successfully and, since then, our investment activity has increased substantially with the Company making a number of new investments during the period.  Since the period end, this level of investment activity has continued and includes a substantial investment in Tanzanian Gold Corporation, the gold production company which is listed on the New York Stock Exchange and TSX with a market capitalisation of over US$150 million.
 
The analysis of income for the period is set out below:  
                                                                                    




 


 


Half year to 30 June 2020 


Year to 31 December 2019 




 


 


£000


£000




Investment income


 


514


889




Net income from financial instruments at FVTPL


 


180


128




Net foreign exchange gains/(losses) on financial instruments


 


76


(69)




 


 


 


 




Total investment income


 


770


948




 
During the period, the Company generated total investment income of £770,380 from its investment portfolio, with this level of profit being underpinned by strong cash generation from operations.  The Company principally invests by way of debt and/or equity-linked debt instruments which provides equity upside with downside protection, with income principally being generated from interest, fees, equity conversion upside and warrants.
 
 
 
 
 
 
The key unaudited performance indicators are set out below:  




Performance indicator


30 June 2020


31 December 2019


Change




Investment income


£770,380


£947,944


 




Net asset value


£8,447,582


£7,878,417


+7.2%




Net asset value - fully diluted per share


1.24p


1.16p


+7.2%




Closing share price


0.85p


0.75p


+13.3%




Market capitalisation


£5,770,936


£5,092,000


+13.3%




The above table is based on the Company's figures post the implementation of the 10 for 1 share consolidation as part of the capital reorganisation that became effective during the second quarter of 2020. The figures as at 31 December 2019 have therefore been adjusted accordingly.
The Company's principal investment portfolio categories are summarised below:




Category


Cost or valuation at 30 June 2020 




 


 




Debt and equity- linked debt investments


3,615,659




Equity and other investments


1,148,817




Cash resources


3,263,326




 


 




Total


8,027,802




 
 
The Company continues to grow its net asset value, with an increase of 7.2% generated over the 6 months since the beginning of the year.  As previously announced, as part of the Company's overall strategy when making investments, warrants or their equivalent are sought which can significantly increase the level of investment return. During Q2 2020, the Company exercised warrants in Eqtec plc with the shares then being sold at a price some 92% higher than the exercise price.  This resulted in an additional return to the Company of over £90,000 The warrant portfolio includes warrants in a number of companies whose share prices have increased since the beginning of the year.  However, due to the inherent volatility associated with this form of instrument, the potential value of this warrant portfolio is not fully reflected in the Company's net asset value and a return is only crystallised when the respective warrants are exercised and resulting shares sold.
 
The Company's equity portfolio principally comprises its investment in Pires Investments plc, the investment company listed on AIM that invests in next generation technology.  The value of this investment has increased significantly since the end of the first quarter of the year hence the increase in value of this investment category.  Furthermore, since the period end the share price of Pires Investments plc has increased by over 30%.
 
During the period, the Company has been able to generate substantial cash through its cash recovery exercise and the generation of investment returns thereby providing the Company with a significant cash balance for further investment. 
Whilst the Company is continuing to grow its net asset value, generate a significant level of investment income and is profitable, the Company's shares are still trading at a very substantial discount given its net asset value and ability to generate profits. The Company is continuing to actively deploy its investment capital and is seeing a number of interesting investment opportunities where it can deploy its investment funds in order to make attractive returns. We are very confident that the Company will continue to make good progress as we move into the second half of the year.
 
Philip Haydn-Slater
Non-Executive Chairman
22 September 2020
This announcement contains inside information for the purposes of Article 7 of EU Regulation 596/2014. 
For more information, please contact:
 
RiverFort Global Opportunities plc:                                            +44 (0) 20 3368 8978
Philip Haydn-Slater, Non-Executive Chairman
Nicholas Lee, Investment Director
                                                            
                                                                                                
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 2020
 




 


Unaudited
6 months
ended 
30 June
2020


Unaudited
6 months
ended
30 June
 2019


Audited
Year ended
31 December
2019




 


£


£


£




 


 


 


 




Investment income


513,643


454,497


889,095




 


 


 


 




Net gain/(loss) from financial instruments at FVTPL 


179,662


249,653


127,960




 


 


 


 




Foreign exchange gains/(losses) on financial 
instruments


77,075


(122,983)


(69,111)
 




 


 


 


 




Total income


770,380


581,167


947,944




 


 


 


 




Administration expenses


(187,181)


(165,957)


(302,770)




 


 


 


 




Exchange translation (losses)/gains


(14,034)


8,225


(21,484)




 


 


 


 




Profit/(loss) before taxation


569,165


423,435


623,690




 


 


 


 




Taxation


-


-


-




 


 


 


 




Profit/(loss) for the period and total comprehensive income


569,165


423,435


623,690




 


 


 


 




 


 


 


 




Basic earnings/(loss) per share


 


 


 




Continuing and total operations


0.08p


0.06p


0.09p




 


 


 


 




Fully diluted earnings/(loss) per share


 


 


 




*Continuing and total operations


0.08p


0.06p


0.09p




 
*The comparative earnings per share figures for June 2019 and December 2019 have been adjusted for the share consolidation in March 2020.
 
 
UNAUDITED STATEMENT OF CHANGES IN EQUITY
FOR THE SIX MONTHS ENDED 30 JUNE 2020 
 




  


Called up
 share 
  capital


Share premium
account


Other reserves 


 
Retained
earnings


 
Total 
equity




 


£


£


£


£


£




 


 


 


 


 


 




Balance at 
1 January 2019


10,042,273


3,191,257


27,000


(6,005,803)


7,254,727




Loss for the year and total comprehensive expense


-


-


-


623,690


623,690




 


 


 


 


 


 




Balance at 
31 December 2019


10,042,273


3,191,257


27,000


(5,382,113)


7,878,417




Profit for the period and total comprehensive income 


-


-


-


569,165


423,435




Capital reorganisation


(9,974,380)


(3,191,257)


(27,000)


13,192,637


-




 


 


 


 


 


 




Balance at 
30 June 2020


67,893


-


-


8,379,689


8,447,582




 
 
UNAUDITED STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2020
 




 


Unaudited
6 months
ended
30 June
2020 


Unaudited
6 months
ended
30 June
 2019


Audited
Year ended
31 December
2019




 


£


£


£




 


 


 


 




ASSETS


 


 


 




Non-current investments


 


 


 




Financial asset investments


1,900,693


883,588


1,758,801




Total non-current assets


1,900,693


883,588


1,758,801




Current assets


 


 


 




Financial asset investments


2,863,783


4,828,672


3,439,045




Trade and other receivables


513,917


242,096


195,708




Derivative financial assets


-


-


40,925




Cash and cash equivalents


3,263,326


2,090,220


2,624,480




Total current assets


6,641,026


7,160,988


6,300,158




 


 


 


 




Total assets


8,541,719


8,044,576


8,058,959




 


 


 


 




LIABILITIES


 


 


 




Current liabilities


 


 


 




Trade and other payables


87,612


273,516


180,542




Other financial liabilities


6,525


92,898


-




Total current liabilities


94,137


366,414


180,542




 


 


 


 




Net assets


8,447,582


7,678,162


7,878,417




 


 


 


 




EQUITY


 


 


 




Share capital


67,893


9,542,273


10,042,273




Share premium account


-


3,191,257


3,191,257




Capital redemption reserve


-


27,000


27,000




Retained earnings/(losses)


8,379,689


(5,582,368)


(5,382,113)




 


 


 


 




Total equity


8,447,582


7,678,162


7,878,417




 


 


 


 




 
 
 
 
UNAUDITED STATEMENT OF CASH FLOWS
FOR THE SIX MONTHS ENDED 30 JUNE 2020
 
 




 
 


Unaudited
6 months
ended
30 June
 2020


Unaudited
6 months
ended
30 June
2019


Audited
Year ended
31 December
2019




 


£


£


£




 


 


 


 




Cash flows from operating activities


 


 


 




Investment income received


361,559


518,743


888,676




Operating expenses paid


(217,024)


(101,869)


(280,512)




Net cash inflow/(outflow) from operating activities


144,535


416,874


634,299




 


 


 


 




Cash flows from investing activities


 


 


 




Purchase of investments


(974,419)


(3,032,776)


(4,494,947)




Proceeds from disposal of investments


175,461


69,678


123,770




Debt instrument repayments


1,422,057


1,097,132


2,935,611




Settlement of forward currency contracts


(212,461)


(65,899)


(98,279)




Net cash used in investing activities


410,638


(1,931,865)


(1,533,845)




 


 


 


 




Net (decrease)/increase in cash and cash equivalents


555,173


(1,514,991)


(925,681)




Cash and cash equivalents at beginning of period


2,624,480


3,597,734


3,597,734




Effect of foreign currency exchange on cash


83,673


7,477


(47,573)




 


 


 


 




Cash and cash equivalents at end of period


3,263,326


2,090,220


2,624,480




 


 


 


 




 
 
 
 
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 2019, 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 2019. 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.         Earnings per share
Earnings per share is calculated by dividing the profit/(loss) attributable to equity shareholders by the weighted average number of shares in issue.
 




 


Six months ended
30 June
2020
(unaudited)


Six months ended
30 June
2019
(unaudited)


 
Year ended
31 December
 2019
(audited)




 


 


 


 




Weighted average number of shares in the period


678,933,600


678,933,600


678,933,600




 
Profit/(Loss) from continuing and total operations


£569,165


£425,435


£623,690




 
Basic and fully diluted earnings per share:


 


 


 




*From continuing and total operations


0.08p


0.06p


0.09p




*The comparative earnings per share figures for June 2019 and December 2019 have been adjusted for the share consolidation in March 2020.
There are no share options or warrants outstanding that would be dilutive for earnings per share, so the weighted average number of shares in issue is the same for both basic and fully diluted earnings per share calculations.




 
3.         Copies of the interim report can be obtained from: The Company Secretary, RiverFort Global Opportunities plc, Suite 39, 18 High Street, High Wycombe, Buckinghamshire, HP10 8NJ and are available to view and download from the Company's website : www.riverfortglobalopportunities.com
 

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