REG - RiverFort Global Opp - Half-year Report

Riverfort Global OpportunitiesAnnouncement

27/09/2023 07:00

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RNS Number : 8105N  RiverFort Global Opportunities PLC  27 September 2023

 

 

RiverFort Global Opportunities plc

 

("RGO" or the "Company")

 

 

Unaudited interim results for the 6 months ended 30 June 2023

 

RiverFort Global Opportunities plc is pleased to announce its unaudited
interim results for the six months to 30 June 2023.

 

Highlights

·      Total NAV of £10.2 million as at 30 June 2023

·      NAV per share of 1.30 pence compared to the current share price
of 0.59 pence

·      Smarttech247 is progressing well as a listed company

·      Around £2.4 million of net cash available for further investment

 

Philip Haydn-Slater, Non-Executive Chairman, commented:

"Given the difficult market conditions of 2022 continuing into 2023, RGO has
continued to accumulate and preserve cash during the period such that at the
period end the Company had a cash balance of £2.4 million. This strategy has,
however, resulted in a reduction in investment income, although at the same
time, the Company has broadly maintained its NAV against this background of
difficult markets. In particular, Smarttech247 is progressing well as a listed
company which has been reflected in an increase in its share price during the
period. However, notwithstanding this and the maintenance of its NAV,
disappointingly, the Company's current shares are trading at a 55% discount to
its underlying NAV.

Post period end both in response to attractive investment opportunities and
significant demand for the Company's capital, a number of new investments have
been made which, going forward, we believe will generate attractive returns
whilst offering downside protection.  We believe that this combination
continues to be an attractive investment strategy in current markets."

Chairman's statement

 

The analysis of income for the period is set out below:

 

                                                               Half year to 30 June 2023  Year to 31 December 2022
                                                               £000                       £000
 Investment income                                             215                        1,167
 Net income from financial instruments at FVTPL                (141)                      (1,450)
 Net foreign exchange gains/(losses) on financial instruments  (106)                      90

 Total investment income                                       (32)                       (193)

 

During the period, the Company generated total investment income of £215,000
from its investment portfolio.  The Company principally invests by way of
debt and/or equity-linked instruments which provides equity upside with
downside protection.   Investment income is therefore principally generated
from interest, fees, with additional income from equity conversion and
warrants.  Net income from financial instruments at FVTPL is derived from
changes in the value of the Company's investment portfolio.

 

 

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

 

 Category                                  Cost or valuation at  Cost or valuation at

                                           30 June 2023          31 December 2022

                                            (£000)               (£000)
 Debt and equity- linked debt investments  2,482                 3,612
 Pre IPO investments                       1,067                 3,427
 Equity and other investments              3,277                 1,067
 Cash resources                            2,420                 958

 Total                                     9,246                 9,064

 

During the period, the Company has focused on recovering cash from its debt
and equity linked portfolio.  This portfolio currently includes over 20
companies, with principal investments in companies such as Jubilee Metals plc,
Gaussin SA, Kibo Energy plc and Valoe Corp Oyj.  Since the period end,
investments have been made in companies including Gaussin SA, UK Oil and Gas
plc, Cadence Minerals plc and Sareum Holdings plc.

The pre-IPO investment category now principally comprises the Company's
holding in Emergent Entertainment ("Emergent") as Smarttech247 Group plc
("Smarttech247") was successfully listed on AIM in December 2022 and is now
included in the equity and other investments category.

 

During the period, Emergent signed an LOI to secure development funding to
develop a new game and is also in discussions on other projects. The launch of
the VR game, Peaky Blinders, was positively received and further work is
underway to increase sales.  The company has agreed terms with a massive
multiplayer roleplaying game developer to fast track the development of its
Web3 game, Resurgence, which is expected to reduce development times by 12
months. The management team is also working on various initiatives to reduce
the company's cost base and it expects 2023 revenues to be significantly ahead
of the previous year.

 

The equity and other investments category principally comprises the Company's
holdings in Smarttech247, Pires and its warrant portfolio.

 

Smarttech247 (AIM: S247) 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.

 

Recent full year and interim results of Smarttech247, along with some
significant new contract wins have reinforced the company's growth trajectory.
 In May 2021, the Company invested €1.4 million in Smarttech247 to help
fund its expansion and development. As at the period end, this holding was
worth £2.4 million representing a significant uplift on investment.

 

Pires, is a company listed on AIM that invests in next generation technology
companies with a focus on AI.  Pires is continuing to build an attractive
investment portfolio and, notwithstanding difficult markets for technology
companies, has managed to maintain the value of its portfolio during the
period.  At the same time, a number its portfolio companies have been able to
successfully raise new funds during the period demonstrating the quality of
its portfolio.  Further details can be found on the company's website which
is www.piresinvestmentsplc.com.

 

As previously announced, as part of the Company's overall strategy when making
investments, warrants or their equivalent are negotiated which can
significantly increase the level of investment return.  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 key unaudited performance indicators are set out below:

 Performance indicator                      30 June       31 December 2022  Change

                                             2023
 Investment income                          £215,035      £1,167,379
 Net asset value                            £10,164,956   £10,587,738       -4.0%
 Net asset value - fully diluted per share  1.30p         1.35p             -3.7%
 Closing share price                        0.63p         0.75p             -16.7%
 Market capitalisation                      £4,846,000    £5,816,000        -16.7%

 

The Company's overall net asset position has reduced slightly during the
period.  The decrease in the value of the Pires investment partially offset
by the increase in the value of the Company's holding in Smarttech247 and the
lower level of investment income was offset by administration and advisory
costs.  As referred to above, the Company has continued to grow its cash
balance during the period and is now well positioned to focus on making new
investments as attractive opportunities arise.

 

 

Philip Haydn-Slater

Non-Executive Chairman

27 September 2023

 

This announcement contains inside information for the purposes of Article 7 of
the Market Abuse Regulation (EU) 596/2014 as it forms part of UK domestic law
by virtue of the European Union (Withdrawal) Act 2018 ("MAR"), and is
disclosed in accordance with the Company's obligations under Article 17 of
MAR.

 

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 2023

 

                                                      Unaudited  Unaudited  Audited

                                                      6 months   6 months   Year ended

                                                      ended      ended      31 December

                                                      30 June    30 June    2022

                                                      2023        2022
                                                      £          £          £

 Investment income                                    215,035    417,476    1,167,379

 Net loss from financial instruments at FVTPL         (140,753)  (440,460)  (1,449,703)

 Foreign exchange (losses)/gains on financial         (106,529)  103,689    89,703

 instruments

 Total income                                         (32,247)   80,705     (192,621)

 Administration expenses                              (173,245)  (170,371)  (318,933)

 Investment advisory fees                             (151,565)  (214,879)  (413,746)

 Exchange translation (losses)/gains                  (65,725)   22,249     58,870

 Loss before taxation                                 (422,782)  (282,296)  (866,430)

 Taxation                                             -          -          -

 Loss for the period and total comprehensive expense  (422,782)  (282,296)  (866,430)

 Basic loss per share
 Continuing and total operations                      (0.05p)    (0.04p)    (0.11p)

 Fully diluted loss per share
 Continuing and total operations                      (0.05p)    (0.04p)    (0.11p)

 

 

UNAUDITED STATEMENT OF FINANCIAL POSITION

AS AT 30 JUNE 2023

 

                              Unaudited   Unaudited   Audited

                              6 months    6 months    Year ended

                              ended       ended       31 December

                              30 June     30 June     2022

                              2023         2022
                              £           £           £

 ASSETS
 Non-current investments
 Financial asset investments  5,545,225   7,434,772   5,962,814
 Total non-current assets     5,545,225   7,434,772   5,962,814
 Current assets
 Financial asset investments  1,280,498   2,456,686   2,152,879
 Trade and other receivables  1,444,766   299,102     1,854,870
 Cash and cash equivalents    2,419,917   1,718,844   958,135
 Total current assets         5,145,181   4,474,632   4,965,884

 Total assets                 10,690,406  11,909,404  10,918,698

 LIABILITIES
 Current liabilities
 Trade and other payables     525,450     442,879     330,960
 Total current liabilities    525,450     442,879     330,960

 Net assets                   10,164,956  11,466,525  10,587,738

 EQUITY
 Share capital                77,540      77,540      77,540
 Share premium account        1,568,353   1,568,353   1,568,353
 Share options reserve        201,034     201,034     201,034
 Retained earnings            8,318,029   9,619,598   8,740,811

 Total equity                 10,164,956  11,466,525  10,587,738

 

 

 

UNAUDITED STATEMENT OF CHANGES IN EQUITY

FOR THE SIX MONTHS ENDED 30 JUNE 2023

 

                                                      Called up    Share premium  Share options reserve

                                                       share       account                               Retained                                                                                         Total

                                                        capital                                          earnings                                                                                         equity
                                                      £            £              £                      £                                                                                                £

 Balance at                                           77,540       1,568,353      201,034                9,901,894                                                                                        11,748,821

 1 January 2022
 Loss for the year and total comprehensive expense    -            -              -                      (866,430)                                                                                        (866,430)
 Dividend payment                                     -            -              -                      (294,653)                                                                                        (294,653)

 Balance at                                           77,540       1,568,353      201,034                8,740,811                                                                                        10,587,738

 31 December 2022
 Loss for the period and total comprehensive expense  -            -              -                      (422,782)                                                                                        (422,782)

 Balance at                                           77,540       1,568,353      201,034                8,318,029                                                                                        10,164,956

 30 June 2023

 

 

UNAUDITED STATEMENT OF CASH FLOWS

FOR THE SIX MONTHS ENDED 30 JUNE 2023

 

 

                                                       Unaudited  Unaudited    Audited

                                                       6 months   6 months     Year ended

                                                       ended      ended        31 December

                                                       30 June    30 June      2022

                                                        2023      2022
                                                       £          £            £

 Cash flows from operating activities
 Investment income received                            401,514    43,938       500,099
 Operating expenses paid                               (146,885)  (244,386)    (1,026,445)
 Net cash inflow/(outflow) from operating activities   254,629    (200,448)    (526,346)

 Cash flows from investing activities
 Purchase of investments                               (808,089)  (2,807,144)  (5,384,144)
 Proceeds from disposal of investments                 -          27,316       27,316
 Debt instrument repayments                            2,059,394  2,582,948    5,033,776
 Net cash from/(used in) investing activities          1,251,305  (196,880)    (323,052)

 FINANCING ACTIVITIES
 Dividend payment                                      -          -            (294,653)
 Net cash used in financing activities                 -          -            (294,653)

 Net increase/(decrease) in cash and cash equivalents  1,505,934  (397,328)    (1,144,051)
 Cash and cash equivalents at beginning of period      958,135    2,012,483    2,012,483
 Effect of foreign currency exchange on cash           (44,152)   103,689      89,703

 Cash and cash equivalents at end of period            2,419,917  1,718,844    958,135

 

 

 

 

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 2022, 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 2022. 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  Six months ended

                                                                               30 June           30 June           Year ended

                                                                               2023              2022              31 December

                                                                               (unaudited)       (unaudited)        2022

                                                                                                                   (audited)
                                                                               (£422,782)        (£282,296)        (£866,430)

 (Loss)/profit from continuing and total operations
 Weighted average number of shares in the period for basic earnings

                                                                               775,404,187       775,404,187       775,404,187
 Weighted average number of shares in the period for fully diluted earnings

                                                                               775,404,187       775,404,187       775,404,187

 Basic and fully diluted (loss)/earnings per share:
 Basic (loss)/earnings per share from continuing and total operations          (0.05p)           (0.04p)           0.11p
 Fully diluted (loss)/earnings per share from continuing and total operations  (0.05p)           (0.04p)           0.11p
 For the current period exercise of the outstanding warrants would be
 anti-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
(http://www.riverfortglobalopportunities.com)

 

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