REG - Seed Innovations Ltd - Half-year Report
03/12/2024 07:00
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RNS Number : 4754O Seed Innovations Limited 03 December 2024
Seed Innovations Ltd / AIM: SEED / Sector: Closed End Investments
3 December 2024
SEED Innovations Limited ("SEED" or the "Company")
Interim Results
SEED Innovations Ltd, the AIM-quoted investment company offering exposure to
disruptive, high-growth, life sciences and technology ventures typically
inaccessible to everyday investors, is pleased to announce its Interim Results
for the six months ended 30 September 2024.
A copy of this announcement and the Interim Results will be available on the
Company's website: www.seedinnovations.co (http://www.seedinnovations.co) .
HIGHLIGHTS
· Strong portfolio and robust cash position enable SEED to take
advantage of emerging opportunities and drive meaningful returns.
· Delivered shareholder value with a £0.2 million Share Buyback
programme and £2 million Special Dividend - confident in ability to provide
similar high-value outcomes in the future.
· Proven opportunistic short-term trading strategy demonstrated by a
post-period divestment that realised a c. 35% gain on the original investment
within three months.
· Market capitalisation of £2.89 million trading at a notable discount
to estimated net asset value (NAV) of £10.6 million as at 30 September 2024.
· Share purchases by Chief Executive Officer and Finance Director
signalled their confidence in strategy and long-term vision.
· Strong cash position of £3.5 million at 30 September 2024 providing
resilience and flexibility to take advantage of emerging opportunities.
· Actively exploring several promising, undervalued opportunities both
in the UK and internationally.
· Committed to capital discipline and during the period reduced costs
9% to £0.37 million.
Commenting on the interim results, CEO, Ed McDermott said: "With a targeted
portfolio of innovative life sciences and technology ventures, alongside a
robust cash position, we believe SEED is well-positioned to deliver
substantial value for shareholders. This includes delivering near-term gains,
such as our recent investment in an AIM-listed company that generated profits
of £87,000 - a return of approximately 35% on our initial investment in just
three months. Furthermore, following a year shaped by global elections and
geopolitical shifts, we are optimistic that the market will soon recalibrate
and recognise the strength and strategic direction of our investments and that
the gap between our market capitalisation and NAV will narrow."
For further information please visit: www.seedinnovations.co or contact:
Ed McDermott SEED Innovations Ltd info@seedinnovations.co
Lance de Jersey
James Biddle Beaumont Cornish Limited, (0)20 7628 3396
Roland Cornish Nomad
Isabella Pierre Shard Capital Partners LLP (0)20 7186 9927
Damon Heath Broker
Ana Ribeiro St Brides Partners Ltd, seed@stbridespartners.co.uk
Isabel de Salis Financial PR
Seb Weller
CHAIRMAN'S STATEMENT
I am pleased to present our interim results and provide an update on our
ongoing commitment to generating value for our shareholders through
disciplined strategic investment. Our track record speaks volumes, with a
well-curated portfolio that has reliably produced liquidity events and
delivered meaningful rewards to shareholders. Earlier in 2024, we reinforced
our focus on delivering shareholder returns by implementing a Share Buyback
programme and issuing a Special Dividend. As our current investments progress,
we remain confident in our ability to provide similar high-value outcomes in
the future.
As highlighted in the table below, our portfolio remains robust and
diversified, featuring a mix of liquid assets and longer-term opportunities
across high-growth life sciences and technology ventures. We are also creating
value through our selectively opportunistic short-term trading strategy. Post
period end, in early November, we demonstrated this strength with profits of
approximately £87,000 achieved in just three months from our investment in
Pantheon Resources representing circ. 35% uplift on our original investment
As of 29 November 2024, our market capitalisation stands at £2.89 million,
trading at a notable discount to our estimated net asset value (NAV) of £10.6
million as at 30 September 2024. This disconnect underscores the inherent
value within our portfolio, which was reinforced by share purchases in
September 2024 by Ed McDermott, Chief Executive Officer and Lance de Jersey,
Finance Director of the Company, signalling their belief in our strategy and
long-term vision.
Our cash position remains strong at £3.5 million at 30 September 2024
(increasing to over £3.8 million in November following the sale of the
Pantheon position), providing SEED with both resilience and the flexibility to
take advantage of emerging opportunities. To this end we have reviewed a
number of potential investments and, currently, are exploring several
promising, undervalued opportunities both in the UK and internationally.
This review work is inevitably carried on outside the gaze of publicity, which
may give the incorrect impression that the board is not working diligently. We
remain committed to having the patience to make well-timed and strategic
decisions rather than to make poor choices simply to be seen to be doing
something. Additionally, we remain committed to capital discipline and during
the period reduced costs 9% to £0.37 million (2023: £0.41 million).
In closing, I would like to thank all our shareholders for their ongoing
support and reaffirm our commitment to delivering lasting value through
careful portfolio management, strategic opportunity identification, and
proactive engagement in the market.
Ian Burns
Chairman
2 December 2024
REPORT OF THE CHIEF EXECUTIVE OFFICER
Although the UK government's recent budget initially raised concerns, its
impact on AIM-listed companies has been relatively modest. Having said this,
the outlined plans point towards a prolonged period of low economic growth.
While this may pose challenges for many businesses, we believe that our
diversified strategy and multinational investment portfolio leave us
well-placed to navigate these headwinds and counteract potential drawbacks.
Despite the challenging investment landscape, with SEED trading at a
significant discount to its NAV, a common trend among growth investment funds,
we believe our strong portfolio and robust cash position set us apart,
enabling us to take advantage of emerging opportunities and drive meaningful
returns.
Our NAV is primarily composed of cash and four core investments, reflecting
our focus on high-impact investments and medium-term value creation. Notably,
these four core investments maintain strong cash positions and have proven
their ability to attract capital, even in tough market conditions, with three
having raised funds at premiums to SEED's initial investment.
We are confident in the long-term growth potential of the medical cannabis
sector, particularly given the incoming US administration's stance on cannabis
rescheduling. This has the potential to drive significant upside, addressing a
key factor that has contributed to the sector's decline in recent years.
Accordingly, we believe that our two medical cannabis investee companies are
primed for growth. Avextra AG's exclusive partnerships and proprietary
cultivation facilities are yielding impressive results, while Little Green
Pharma demonstrates equal strength, as evidenced by its recent record-breaking
quarterly performance.
Meanwhile, Clean Food Group stands to benefit from a renewed focus on
healthier food production in America, especially as its non-GM food oils offer
a compelling alternative in a GM-dominated market. Furthermore, although
established biotech and pharma companies may face challenges, the growing
focus on longevity aligns with Juvenescence's mission to tackle age-related
diseases, positioning it for success in a shifting healthcare landscape.
While our core investment strategy remains unchanged, we are exploring
opportunities that align with shorter-term liquidity horizons and assets
capable of generating free cash flow within 24 months. We remain mindful of
global turbulence and its sectoral impacts but see these times as rich with
opportunity. We believe we are approaching one or more liquidity events within
our portfolio, underscoring our confidence in the months ahead.
Looking forward, we are committed to building on recent successes and
unlocking growth potential in our target emerging markets over the next six
months.
Ed McDermott
CEO
2 December 2024
INVESTMENT REPORT
The period was marked by political, macroeconomic, market, and regulatory
uncertainties, creating a challenging operating environment for our portfolio.
Nevertheless, we were pleased that our largest investee companies (by
percentage of NAV) maintained strong positions during this time.
Our strategy remains centred on maximising returns from a focused selection of
unique opportunities where value can often be unlocked relatively
independently of broader market trends. The Company typically holds
substantial stakes in investee companies, enabling meaningful engagement as a
significant shareholder. This approach inherently exposes the portfolio to
concentration risk, as ongoing investments or divestments can substantially
alter the relative weightings of holdings. We managed this risk by partially
divesting our stake in Avextra in September 2023, achieving a premium of
approximately 60% over our entry point. Despite that partial sale, Avextra
remained as of 30 September 2024 our largest investment by NAV, albeit with
reduced concentration than what would have been had we not partially sold our
stake.
During the period, we evaluated numerous new investment opportunities to
deploy our substantial cash reserves. However, we identified only a limited
number of mid- or long-term prospects that aligned with our strategy. While
some opportunities were near completion, they ultimately did not materialise.
Instead, we capitalised on a short-term opportunity in Pantheon Resources,
which we fully exited after the period end as already mentioned above.
Throughout, we remained focused on supporting our portfolio companies and
their management teams.
The NAV of the Company at 30 September 2024 was £10.6 million. (31 March
2024: £13.6 million), equal to net assets of 5.5p per Ordinary Share (31
March 2024: 6.7p per Ordinary Share). A substantial portion of the NAV
reduction (c.75%) was attributable to shareholder distributions, including a
£2 million Special Dividend paid in May 2024 and £0.2 million allocated to
the share buyback programme between 1 April and 30 May.
At 30 September 2024, the Company held equity or debt investments in seven
companies, compared to eight at the same point in 2023.
The table below lists the Company's holdings as of 30 September 2024, with
comparisons to 31 March 2024.
The movements in value at this valuation point are all attributable to
movements in the market price of listed investments and foreign exchange
movements. On this occasion there have been no movements in the prices of
privately held assets. The Company is optimistic of appreciation of some of
these investment positions in the coming months, and in fact has already seen
a step increase in the trading price of Little Green Pharma following the
publication of strong quarterly results.
Holdings Category Valuations at 31 March 2024 Valuations at 30 September 2024 % of Nav
£'000 £'000
Avextra AG Biotech/Cannabis 2,740 2,669 25.1%
Juvenescence Limited Biotech 2,509 2,368 22.2%
Clean Food Group Ltd Biotech 1,182 1,182 11.1%
Little Green Pharma Biotech/Cannabis 529 341 3.2%
Inveniam Capital Partners, Inc. Fintech 344 325 3.1%
Portage Biotech Inc. Biotech 17 9 0.1%
Pantheon Resources Plc Oil & Gas - 235 2.2%
Total Investment Value 7,321 7,128 67.0%
Cash and receivables, net of payables and accruals 6,283 3,518 33.0%
Net Asset Value 13,604 10,646 100.0%
Avextra AG (formally Eurox) ('Avextra')
Avextra is a leading European manufacturer and developer of Cannabis-based
medicines located in Germany. Recent news includes the approval by the Italian
Medicines Agency AIFA and the Italian Ministry of Health for a multi-centre
Phase II study to evaluate safety, and efficacy of an Avextra oral formulation
in managing the symptoms of patients suffering from Amyotrophic Lateral
Sclerosis (ALS), Alzheimer's Disease and Parkinson's Disease. Post period end,
in November, it announced the launch of an in-house breeding programme at its
Portuguese cultivation facility. Aimed at establishing proprietary cannabis
plant IP, this initiative highlights Avextra's dedication to R&D
excellence in partnership with CESPU, a leading Portuguese research
organisation.
Juvenescence Ltd ('Juvenescence')
UK based Juvenescence is a clinical-stage drug development company dedicated
to extending healthy lifespan through innovative medicines. Its approach
centres around developing medicines that target core pathways of aging to not
only treat but prevent age-related diseases, ensuring that longevity comes
with enhanced quality of life. Its portfolio companies represent strategic
investments across a diverse array of technologies spanning platform
technologies, cell therapies and regenerative medicines, as well as
nutritional supplement businesses. These include LyGenesis, which recently
dosed the first patient in its Phase 2a clinical trial of a first-in-class
regenerative cell therapy for patients with end-stage liver disease.
Clean Food Group Limited ('CFG')
CFG, a UK-based food-tech company, provides sustainable oils and fats
solutions for food and cosmetics manufacturers worldwide. Committed to
offering scalable, healthier, and competitively priced ingredients, CFG aims
to positively impact the planet's economic, environmental, and social
wellbeing. Amongst other progress, in October 2024, CFG announced a
partnership with THG LABS, a leading UK-based cosmetics manufacturer with
end-to-end service capabilities. This collaboration has the potential to
transform the cosmetics industry by introducing innovative, sustainable oil
alternatives, reducing dependency on environmentally taxing ingredients like
traditional, agriculture-intensive oils. With the global cosmetics market
valued at approximately $374 billion in 2023 and projected to nearly double by
2032, this partnership is strategically positioned to meet the rising demand
for eco-friendly solutions.
Little Green Pharma ('LGP')
LGP (ASX: LGP), an Australian, vertically integrated medical cannabis company,
reported record quarterly results for the period ending 30 September 2024.
Revenue reached A$10.2 million, with cash receipts at A$10.8 million, marking
40% and 30% growth, respectively, quarter-over-quarter. LGP is outperforming
competitors and generating positive cash flow from operations with minimal
long-term debt and a strengthened cash position. Accordingly, SEED sees
significant potential for its continued growth.
Inveniam Capital Partners ('Inveniam')
Inveniam is a private fintech company that built Inveniam.io, a technology
platform using big data, AI and blockchain technology to provide surety of
data and high-functioning use of that data in a distributed data ecosystem.
Pantheon Resources plc ("Pantheon")
As part of its opportunistic short-term trading strategy, SEED invested
£250,000 in Pantheon's oversubscribed c.US$29 million fundraise and retail
offer in August 2024. Post period end, on 11 November, SEED exited its entire
position for gross proceeds of £336,918.90, delivering a profit of
c.£87,000, or nearly 35%, in three months.
Portage Biotech, Inc ('Portage')
NASDAQ listed Portage (Ticker: PRTG) is a clinical-stage immuno-oncology
company advancing multi-targeted therapies to extend survival and improve the
lives of patients with cancer. SEED holds a small position in Portage and
continues to monitor its share price with the intention to sell as
appropriate.
CONDENSED HALF-YEARLY STATEMENT OF COMPREHENSIVE INCOME
FOR THE PERIOD ENDED 30 SEPTEMBER 2024
1 April 2024 to 30 September 2024 1 April 2023 to 30 September 2023
(unaudited) (unaudited)
Notes £'000 £'000
Net realised gain / (loss) on disposal of financial assets at fair value
through
profit and loss 5 - 1,112
Net unrealised (loss)/gain on revaluation of financial assets at fair value 5 (443) (2,148)
through profit and loss
Total investment (loss)/income (443) (1,036)
Other income
Bank Interest income 73 43
Total other income 73 43
Expenses
Directors' remuneration and expenses 12 (214) (179)
Legal and professional fees (32) (85)
Other Expenses (75) (91)
Administration fees (20) (20)
Adviser and broker's fees (32) (35)
Total expenses (373) (410)
Net (loss)/profit before losses and gains on foreign currency exchange (743) (1,403)
Net foreign currency exchange gains/(loss) (10) (17)
Total comprehensive (loss)/gain for the period (753) (1,420)
(Loss)/earnings per Ordinary share - basic and diluted 7 (0.39p) (0.67p)
The Company has no recognised gains or losses other than those included in the
results above.
CONDENSED STATEMENT OF FINANCIAL POSITION
AS AT 30 SEPTEMBER 2024
30 September 2024 31 March 2024
(unaudited)
Notes £'000 £'000
Non-current assets
Financial assets at fair value through profit or loss 5 6,893 7,321
6,893 7,321
Current assets
Cash and cash equivalents 3,517 3,885
Financial assets at fair value through profit or loss 5 235 -
Other receivables 22 2,426
3,774 6,311
Total assets 10,667 13,632
Current liabilities
Payables and accruals (21) (28)
(21) (28)
Net assets 10,646 13,604
Financed by
Share capital 11 1,929 2,020
Other distributable reserve 8,717 11,584
10,646 13,604
Net assets per Ordinary share 10 5.52 6.73
CONDENSED HALF-YEARLY STATEMENT OF CHANGES IN EQUITY
AS AT 30 SEPTEMBER 2024
Share Capital Other distributable reserve
£'000 £'000 Total
Balance as at 31 March 2024 2,020 11,584 13,604
Total comprehensive income for the period - (753) (753)
Acquisition of Treasury shares (91) (116) (207)
Dividend payment (1,998) (1,998)
Balance as at 30 September 2024 1,929 8,717 10,646
Balance as at 31 March 2023 2,127 13,905 16,032
Total comprehensive loss for the period - (1,420) (1,420)
Balance as at 30 September 2023 2,127 12,485 14,612
CONDENSED HALF-YEARLY STATEMENT OF CASHFLOWS
FOR THE PERIOD ENDED 30 SEPTEMBER 2024
1 April 2024 to 30 September 2024 1 April 2024 to 30 September 2023
(unaudited) (unaudited)
Notes £'000 £'000
Cash flows from operating activities
Total comprehensive (loss)/income for the period (753) (1,420)
Adjustments for:
Unrealised loss/(gain) on fair value adjustments on financial assets at 443 2,148
FVTPL - (1,112)
Realised loss/(gain) on disposal of financial assets at FVTPL
Foreign exchange movement 10 17
Changes in working capital:
(Increase)/decrease in other receivables and prepayments 2,404 (4,901)
Decrease in other payables and accruals (7) (39)
Net cash outflow from operating activities 2,097 (5,306)
Cash flows from financing activities
Ordinary Share buyback (207) -
Dividend (1,998) -
Net cash inflow/(outflow) from financing activities (2,205) -
Cash flows from investing activities
Acquisition of financial assets at fair value through profit or loss 5 (250) (216)
Disposal of financial assets at fair value through profit or loss 5 - 7,695
Net cash inflow/(outflow) from investing activities (250) 7,479
(Decrease)/Increase in cash and cash equivalents (358) 2,172
Cash and cash equivalents brought forward 3,885 30
(Decrease)/Increase in cash and cash equivalents (358) 2,172
Foreign exchange movement (10) (17)
Cash and cash equivalents carried forward 3,517 2,185
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 30 SEPTEMBER 2024
1. General Information
SEED Innovations Limited (the "Company") is an authorised closed-ended
investment scheme. The Company is domiciled and incorporated as a limited
liability company in Guernsey. The registered office of the Company is Suite
8, Upper House, 16-20 Smith Street, St. Peter Port, Guernsey GY1 2JQ.
The Company's objective is set out in its Investing Policy which can be found
at https://seedinnovations.co/about/investing-policy and as detailed on pages
9 to 10 of these financial statements.
The Company's Ordinary Shares are quoted on AIM, a market operated by the
London Stock Exchange and is authorised as a Closed- ended investment scheme
by the Guernsey Financial Services Commission (the "GFSC") under Section 8 of
the Protection of Investors (Bailiwick of Guernsey) Law, 2020 and the
Authorised Closed-Ended Investment Schemes Guidance and Rules 2021.
2. Statement of Compliance
These condensed half-yearly financial statements, which have not been
independently reviewed or audited by the Company auditors, have been prepared
in accordance with International Accounting Standard 34: Interim Financial
Reporting. They do not include all of the information required for full annual
financial statements and should be read in conjunction with the audited
financial statements for the year ended 31 March 2024.
The unaudited condensed half-yearly financial statements were approved by the
Board of Directors on 02 December 2024.
3. Significant Accounting Policies
These unaudited condensed half-yearly financial statements have adopted the
same accounting policies as the last audited financial statements, which were
prepared in accordance with International Financial Reporting Standards
("IFRS"), issued by the International Accounting Standards Board,
interpretations issued by the IFRS Interpretations Committee and applicable
legal and regulatory requirements of Guernsey Law and reflect the accounting
policies as disclosed in the Company's last audited financial statements,
which have been adopted and applied consistently.
The Company has adopted all revisions and amendments to IFRS issued by the
IASB, which may be relevant to and effective for the Company's financial
statements for the annual period beginning 1 April 2024. No new standards or
interpretations adopted during the period had an impact on the reported
financial position or performance of the Company.
4. Critical Accounting Estimates and Judgements
The preparation of financial statements in conformity with IFRS requires the
Board to make judgements, estimates and assumptions that affect the
application of accounting policies and the reported amounts of assets and
liabilities, income and expenses. The estimates and associated assumptions are
based on historical experience and various other factors that are believed to
be reasonable under the circumstances, the results of which form the basis of
making the judgements about carrying values of assets and liabilities that are
not readily apparent from other sources. Actual results may differ from these
estimates.
The Board makes estimates and assumptions concerning the future. The resulting
accounting estimates will, by definition, seldom equal the related actual
results.
The Directors believe that the underlying assumptions are appropriate and that
the financial statements are fairly presented. Estimates and assumptions that
have a significant risk of causing a material adjustment to the carrying
amounts of assets and liabilities within the remaining financial year are
outlined below:
Judgements
Going concern
After making reasonable enquiries, and assessing all data relating to the
Company's liquidity, the directors have a reasonable expectation that the
Company has adequate resources to continue in operational existence for the
foreseeable future and do not consider there to be any threat to the going
concern status of the Company. For this reason, they continue to adopt the
going concern basis in preparing the financial statements.
Assessment as an investment entity
In determining the Company meeting the definition of an investment entity in
accordance with IFRS 10, it has considered the following:
· the Company has raised the commitments from a number of investors
in order to raise capital to invest and to provide investor management
services with respect to these private equity investments;
· the Company intends to generate capital and income returns from
its investments which will, in turn, be distributed to the investors; and
· the Company evaluates its investment performance on a fair value
basis, in accordance with the policies set out in these financial statements.
Although the Company met all three defining criteria, management has also
assessed the business purpose of the Company, the investment strategies for
the private equity investments, the nature of any earnings from the private
equity investments and the fair value model. Management made this assessment
in order to determine whether any additional areas of judgement exist with
respect to the typical characteristics of an investment entity versus those of
the Company. Management have therefore concluded that from the assessments
made, the Company meets the criteria of an investment entity within IFRS 10.
Part of the assessment in relation to meeting the business purpose aspects of
the IFRS 10 criteria also requires consideration of exit strategies. Given
that the Company does not intend to hold investments indefinitely, management
have determined that the Company's investment plans support its business
purpose as an investment entity.
The Board has also concluded that the Company meets the additional
characteristics of an investment entity, in that: it holds more than one
investment; the investments will predominantly be in the form of equities,
derivatives and similar securities; it has more than one investor and the
majority of its investors are not related parties.
Estimates and assumptions
Fair value of securities not quoted in an active market.
The Company may value positions by using its own models or commissioning
valuation reports from professional third-party valuers. The models used in
either case are based on valuation methods and techniques generally recognised
as standard within the industry and in accordance with International Private
Equity and Venture Capital Valuation (IPEV) Guidelines. The inputs into these
models are primarily revenue or earnings multiples and discounted cash flows.
The inputs in the revenue or earnings multiple models include observable data,
such as the earnings multiples of comparable companies to the relevant
portfolio company, and unobservable data, such as forecast earnings for the
portfolio company. In discounted cash flow models, unobservable inputs are the
projected cash flows of the relevant portfolio company and the risk premium
for liquidity and credit risk that are incorporated into the discount rate. In
some instances, the cost of an investment is the best measure of fair value in
the absence of further information. Models are calibrated by back-testing to
actual results/exit prices achieved to ensure that outputs are reliable, where
possible.
Models use observable data, to the extent practicable. However, areas such as
credit risk (both own and counterparty), volatilities and correlations require
management to make estimates. Changes in assumptions about these factors could
affect the reported fair value of financial instruments. The sensitivity to
unobservable inputs is based on management's expectation of reasonable
possible shifts in these inputs, taking into consideration historical
volatility and estimations of future market movements.
The determination of what constitutes 'observable' requires significant
judgement by the Company. The Company considers observable data to be market
data that is readily available, regularly distributed or updated, reliable and
verifiable, not proprietary, and provided by independent sources that are
actively involved in the relevant market.
5. Investments designated at fair value through profit or loss
A reconciliation of the opening and closing balances of assets designated at
fair value through profit or loss classified as Level 1 is shown below:
30 September 2024 31 March 2024
£'000 £'000
Fair value of investments brought forward 548 811
Purchases during the period/year 250 -
Disposals proceeds during the period/year - -
Realised gains/(losses) on disposals - -
Net unrealised change in fair value (211) (263)
Fair value of investments carried forward 587 548
A reconciliation of the opening and closing balances of assets designated at
fair value through profit or loss classified as Level 3 is shown below:
30 September 2024 31 March 2024
£'000 £'000
Fair value of investments brought forward 6,773 15,208
Purchases during the period/year - 216
Disposals proceeds during the period/year - (7,694)
Realised gains/(losses) on disposals - 1,077
Net unrealised change in fair value (232) (2,034)
Fair value of investments carried forward 6,541 6,773
During the period there were no transfers between the
levels.
The valuations used to determine fair values are validated and periodically
reviewed by experienced personnel, in most cases this validation and review is
undertaken by members of the Board, however professional third-party valuation
firms are used for some valuations and the Company also has access to a
network of industry experts by virtue of the personal networks of the
directors and substantial shareholders. The valuations prepared by the Company
or received from third parties are in accordance with the International
Private Equity and Venture Capital Valuation Guidelines. The valuations, when
relevant, are based on a mixture of:
· Market approach (utilising EBITDA or Revenue multiples, industry
value benchmarks and available market prices approaches);
· Income approach (utilising Discounted Cash Flow, Replacement Cost
and Net Asset approaches);
· Price of a recent transaction when transaction price/cost is
considered indicative of fair value; and
· Proposed sale price.
6. Segmental Information
In accordance with IFRS 8: Operating Segments, it is mandatory for the Company
to present and disclose segmental information based on the internal reports
that are regularly reviewed by the Board in order to assess each segment's
performance and to allocate resources to them.
Operating segments are reported in a manner consistent with the internal
reporting used by the chief operating decision-maker. The chief operating
decision-maker, who is responsible for allocating resources and assessing
performance of the operating segments, has been identified as the Board as a
whole. The board is responsible for the Company's entire portfolio and
considers the business to have a single operating segment. Asset allocation
decisions are based on a single, integrated investment strategy, and the
Company's performance is evaluated on an overall basis.
7. (Loss)/Earnings per Ordinary Share
The loss per Ordinary Share of -0.39p (30 September 2023: -0.67p loss per
ordinary share) is based on the loss for the period of £753,000 (30 September
2023: loss £1,420,000) and on a weighted average number of 194,676,570
Ordinary Shares in issue during the period (30 September 2023: 212,747,395
Ordinary Shares).
There are no dilutive effects on earnings per Ordinary Share.
8. Dividends
On 16 April 2024, the Company declared a special dividend of 1.0 pence
(£0.01) per Ordinary Share.
The Directors do not propose an interim dividend for the period ended 30
September 2024 (30 September 2023: £Nil).
9. Tax effects of other comprehensive income
The Income Tax Authority of Guernsey has granted the Company exemption from
Guernsey income tax under the Income Tax (Exempt Bodies) (Guernsey)
(Amendment) Ordinance, 2012 and the income of the Company may be distributed
or accumulated without deduction of Guernsey income tax. Exemption under the
above mentioned Ordinance entails payment by the Company of an annual fee of
£1,200 for the calendar year ended 31 December 2023 and £1,600 from 1
January 2024 for each year in which the exemption is claimed. It should be
noted, however, that interest and dividend income accruing from the Company's
investments may be subject to withholding tax in the country of origin.
There were no tax effects arising from the other comprehensive income
disclosed in the Statement of Comprehensive Income (30 September 2023: £Nil).
10. Net Assets per Ordinary Share
The net asset value per Ordinary Share is based on the net assets attributable
to equity shareholders of £10,646,000 (31 March 2024: £13,604,000) and on
192,949,895 Ordinary Shares (31 March 2024: 202,032,895 Ordinary Shares) in
issue at the end of the period.
11. Share Capital, Warrants, Options, Treasury shares and Other
distributable reserves
30 September 2024 31 March 2024
£'000 £'000
Authorised:
1,910,000,000 Ordinary Shares of 1p (2023: 1,910,000,000 Ordinary Shares) 19,100 19,100
100,000,000 Deferred Shares of 0.9p (2023: 100,000,000 Deferred Shares) 900 900
20,000 20,000
Allotted, called up and fully paid:
192,949,895 Ordinary Shares of 1p (31 March 2024: 202,032,895 Ordinary Shares) (i) 1,929 2,020
Nil Deferred Shares of 0.9p (2023: Nil) (ii) - -
Treasury Shares:
22,269,946 Treasury Shares of 1p (31 March 2024: 13,186,946) (iii) 223 132
(i) Ordinary Shares
During the period ended 30 September 2024 9,083,000 Ordinary shares were
bought by the Company as part of a share buyback programme (31 March 2024:
10,714,500).
(ii) Deferred Shares
There was no issue of shares during the period ended 30 September 2024 (31
March 2024: Nil).
(iii) Directors' Authority to Allot Shares
The Directors are generally and unconditionally authorised to exercise all the
powers of the Company to allot relevant securities. The Directors may
determine up to a maximum aggregate nominal amount of 50% of the issued share
capital during the period until the following Annual General Meeting. The
Guernsey Companies Law does not limit the power of Directors to issue shares
or impose any pre-emption rights on the issue of new shares.
(iv) Shares held in Treasury
As part of a share buyback programme, share repurchases in the period saw the
number of Ordinary Shares held as Treasury shares increase to 22,269,946 (31
March 2024: 13,186,946).
12. Related Parties
Ian Burns
Mr Burns is the legal and beneficial owner of Smoke Rise Holdings Limited,
which held 1,674,024 (0.87%) Ordinary Shares (2023: 1,674,024 (0.65%)) in the
Company at 30 September 2024 and the date of signing this report.
Mr Burns is entitled to an annual remuneration of £36,000.
Ed McDermott
Mr McDermott held 6,130,000 (3.18%) Ordinary Shares (2023: 4,680,000 (2.32%))
in the Company at 30 September 2024 and at the date of signing this report.
Mr McDermott is entitled to an annual remuneration of £160,000 (2023:
£160,000) and pension contributions amounting to 1.1% of salary.
Lance De Jersey
Mr De Jersey, Finance Director of the Company held 1,400,000 (0.73%) Ordinary
Shares (2023: 400,000 (0.2%)) in the Company as at 30 September 2024 and at
the date of signing of this report.
Mr De Jersey is entitled annual remuneration of £106,000 (2023:
£106,000).
Luke Cairns
Mr Cairns is entitled to an annual remuneration of £36,000.
Alfredo Pascual
Mr Pascual is entitled to an annual remuneration of €106,000 (£88,500) per
annum.
30 September 2024 30 September 2023
Directors' Directors'
Remuneration Remuneration
£'000 £'000
Ian Burns 18 18
Ed McDermott 81 81
Lance De Jersey 53 53
Luke Cairns 18 18
Alfredo Pascual 45 9
214 179
13. Capital Management Policy and Procedures
The Company's capital structure is derived solely from the issue of Ordinary
Shares.
The Company does not currently intend to fund any investments through debt or
other borrowings but may do so if appropriate. Investments in early stage
assets are expected to be mainly in the form of equity, with debt potentially
being raised later to fund the development of such assets. Investments in
later stage assets are more likely to include an element of debt to equity
gearing. The Company may also offer new Ordinary Shares as consideration as
well as cash, thereby helping to preserve the Company's cash for working
capital and as a reserve against unforeseen contingencies including, for
example, delays in collecting accounts receivable, unexpected changes in the
economic environment and operational problems.
The Board monitors and reviews the structure of the Company's capital on an ad
hoc basis. This review includes:
· The need to obtain funds for new investments, as and when they
arise;
· The current and future levels of gearing;
· The need to buy back Ordinary Shares for cancellation or to be
held in treasury, which takes account of the difference between the net asset
value per Ordinary Share and the Ordinary Share price;
· The current and future dividend policy; and
· The current and future return of capital policy.
The Company is not subject to any externally imposed capital requirements.
14. Events after the Financial Reporting Date
Between 28 October and 11 November 2024 the Company exited its entire position
in AIM listed Pantheon Resources plc ("Pantheon") at an average price of
22.91p per share for gross proceeds of £336,919.
Nominated Adviser Statement
Beaumont Cornish Limited ("Beaumont Cornish"), is the Company's Nominated
Adviser and is authorised and regulated in the United Kingdom by the Financial
Conduct Authority. Beaumont Cornish's responsibilities as the Company's
Nominated Adviser, including a responsibility to advise and guide the Company
on its responsibilities under the AIM Rules for Companies and AIM Rules for
Nominated Advisers, are owed solely to the London Stock Exchange. Beaumont
Cornish is not acting for and will not be responsible to any other persons for
providing protections afforded to customers of Beaumont Cornish nor for
advising them in relation to the proposed arrangements described in the
announcement or any matter referred to in it.
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