REG - Vela Technologies - Final results for the year ended 31 March 2022
28/09/2022 07:00
For best results when printing this announcement, please click on link below:
http://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20220928:nRSb9153Aa&default-theme=true
RNS Number : 9153A Vela Technologies PLC 28 September 2022
28 September 2022
Vela Technologies PLC (AIM: VELA)
("Vela" or "the Company")
Final results for the year ended 31 March 2022
The Board of Vela Technologies plc (AIM: VELA) is pleased to announce the
Company's final results for the year ended 31 March 2022.
Vela's Annual Report and Accounts for the year ended 31 March 2022 ("Annual
Report") and the Notice of Annual General Meeting ("AGM") will be posted to
shareholders today.
The Company's Annual Report and Notice of AGM will be available shortly on the
Company's website at http://www.velatechplc.com/ (http://www.velatechplc.com/)
.
The AGM will be held at 15 Victoria Mews, Mill Field Road, Cottingley Business
Park, Bingley, West Yorkshire BD16 1PY at Noon on 25 October 2022.
Highlights:
Financial:
· Net assets increased to £7,378,151 compared to £7,201,812 at 31
March 2021.
· Cash fell to £958,000 from £2,147,000 with the main
contributors being investments made (net of disposals) during the period of
£2,069,000, administrative expenditure of £354,000 (2021- £394,000) and
proceeds from shareholders' exercise of warrants of £1,234,000.
· Loss of £1,078,202 (after £685,000 fair value reduction)
compared to a profit of £379,775 (after £666,000 fair value increase in the
previous comparable period), reflecting the changes in values within the
Company's investment portfolio.
Operational:
· Vela invested £2,331,000 in five companies and realised
£262,000 from the sale of shares in two of its investee companies.
· Emma Wilson was appointed to the Board of Vela.
Post Period Highlights:
· On the listing on AIM of EnSilica in May 2022, Vela received
shares worth £882,394 from its investment in January 2022 of £750,000 in
convertible loans.
· St George Street Capital is progressing with commercialisation
talks for AZD1656 and also saw the ARCADIA Phase 2 clinical trial published in
the Lancet eClinicalMedicine.
· Antony Laiker re-joined the board as a non-executive director.
The Board will continue to update investors on the portfolio movements and
valuation in the Company's quarterly updates, the next one being due for the
quarter ended 30 September 2022.
chairman's statement
for the year ended 31 March 2022
I am pleased to present the Chairman's statement for the year ended 31 March
2022.
As shareholders will be aware, the period covered by these accounts was
overshadowed by two significant events. First, the on / off Covid-19
restrictions which dominated much of the financial year, and second the
invasion of Ukraine at the end of the financial year.
On top of this the macroeconomic headwinds were getting stronger with supply
chain interruptions, the prospect of a substantial rise in interest rates
coupled with the anticipation of a steep rise in inflation. These have weighed
on stock markets in the last quarter of the period covered by these accounts,
particularly impacting smaller companies and therefore had an impact on Vela's
listed investment portfolio.
Despite these negatives, during the final quarter EnSilica was reaching the
final phase of its listing on AIM, with the IPO completing soon after the end
of the financial year. This resulted in Vela receiving shares worth £882,394
at the IPO price, compared to the original investment of £750,000 in
convertible loan notes at the beginning of 2022.
As announced on 18 August 2022, the Board of Vela received a further update
from St George Street Capital (SGSC) regarding ongoing progress with
commercialisation talks for AZD1656 and also the positive news that the
results from the ARCADIA Phase 2 clinical trial had been published in the
Lancet eClincialMedicine. The Board of Vela continues to seek further
representations from SGSC regarding the commercialisation and trials of
AZD1656. Vela holds an economic interest in the commercialisation of AZD1656,
details of which were included in the announcement published by Vela on 20
October 2020.
Set against this, the overall value of a number of Vela's listed investments
are languishing. There have been some positive signs emanating from a few
investee companies (including, EnSilica Plc, Northcoders Group plc, Skillcast
Group plc and Cornerstone FS PLC), who have all produced upbeat news, which we
anticipate will continue.
Just before the year end Vela acquired a 28.82% stake in Igraine Plc. Upon
this acquisition, Vela became the largest single shareholder in Igraine.
During the year we welcomed Emma Wilson to the board. Emma is a Chartered
Accountant and her experience and support has already proved extremely
valuable to the Company.
Post the year end, Antony Laiker re-joined the board as a non-executive
director. As a significant shareholder and with extensive experience and
background in the small-cap market, as well as knowledge of Vela from
previously being on the board as an executive director, he will have an
important role as Vela seeks to create shareholder value.
Turning to the financials, Vela reported a loss of £1,078,202 compared to a
profit of £379,775 in the previous comparable period. Almost all of this
difference, from an accounting perspective, reflects a £685,000 reduction in
fair value of investments in the year being reported on, compared to a similar
level of upwards fair value adjustment in the previous financial year. Net
assets increased to £7,378,151 compared to £7,201,812 at 31 March 2021 and
cash fell from £2,147,000 at the beginning of the period to £958,000 at the
balance sheet date, reflecting investments made (net of disposals) during the
period of £1,318,776 and administrative expenses in the period.
Subsequent to the year end, on 2 September 2022, Vela announced a strategic
update to shareholders in which, the board outlined the reinstatement of the
previous strategic plans from 2019 in which Vela would be seeking other larger
corporate transactions but would not divert from its current investing policy.
The board will continue to update shareholders, in line with regulatory
guidelines, via its quarterly investment updates and regulatory announcements.
The directors would like to thank shareholders for their continued support.
strategic report
for the year ended 31 March 2022
Business review
At the period end the Company held cash of £958,000 (31 March 2021:
£2,147,000). It continues to keep administrative costs to a minimum so that
it has sufficient resources to cover its ongoing running costs while retaining
the maximum funds for further investments.
During the year, Vela received additional equity funding of £1,233,504 (net
of directly attributable issue costs) as a result of the exercise of warrants
by shareholders. Future equity funding can only be raised if shareholders
grant the right to the Board at the next AGM (this is as a result of
shareholders voting against certain resolutions at the AGM held in January
2022). Details of shares issued during the year are provided in notes 13 to
the financial statements.
The Company's loss for the year was £1,078,202 (2021: profit of £380,000).
This loss has arisen primarily from fair value movements on the Company's
investment portfolio. The valuation of the investment portfolio at 31 March
2022 was £2,603,000 (31 March 2021: £1,969,000), an increase of £634,000 on
2021. This resulted from the investment of £1,580,705 in new and 'follow-on'
investments, disposals generating proceeds of £261,929, net of a decrease in
the valuation of the portfolio of £684,671. In addition to these investments
the Company holds a financial asset (St George Street Capital) valued at
£2,350,000 (31 March 2021: £2,350,000) and held at the year-end a £750,000
(2021: £nil) convertible loan note in EnSilica Plc.
We update shareholders on investee company performance through the
dissemination of investee company regulatory announcements. Additionally,
having started in February of this year, the Board has continued to publish
quarterly investment updates on the performance of the investment portfolio
and on acquisitions and sales. This quarterly investment update will
continue. Moreover, detailed information on the investment portfolio is
maintained on the Company's website.
During the year the company made significant investments in Cornerstone FS PLC
(£150,000), Northcoders Group plc (£750,000), Skillcast Group plc
(£250,000), EnSilica plc (£750,000) and Igraine plc (£430,705). Further
details and key points of the investments made and of the performance of the
Company's investee companies are detailed in note 8 to the financial
statements.
The Company had two employees and during the period had a Board of one male
Executive Director, one female Executive Director and one male Non-Executive
Director.
Principal risks and uncertainties
The preservation of its cash balances and the management of its capital
resources remain the key concerns for the Company. Further information about
the Company's principal risks, covering currency, credit, liquidity and
capital, is detailed in note 15 to the financial statements.
The Company remains committed to keeping operational costs to a minimum.
Approved by the Board of Directors on 27 September 2022; and signed on its
behalf by:
Brent Fitzpatrick MBE
Non-Executive Chairman
For further information, please contact:
Vela Technologies plc
Tel: +44 (0) 7410 886 830
Brent Fitzpatrick, Non-Executive Chairman
Email:info@velatechplc.com
James Normand, Executive Director
Allenby Capital Limited (Nominated Adviser) Tel: +44
(0) 20 3328 5656
Nick Athanas / Piers Shimwell
Peterhouse Capital Limited
(Broker) Tel: +44 (0) 20
7469 0930
Lucy Williams / Duncan Vasey / Eran Zucker / Lauren Riley
Novus Communications (PR and IR Adviser) Tel: +44 (0) 20 7448 9839
Alan Green / Jacqueline Briscoe
About Vela Technologies
Vela Technologies plc (AIM: VELA) is an investing company focused on early
stage and pre-IPO long term disruptive technology investments. Vela's
investee companies have either developed ways of utilising technology or are
developing technology with a view to disrupting the businesses or sector in
which they operate. Vela Technologies will also invest in already-listed
companies where valuations offer additional opportunities.
For more information, please visit: https://www.velatechplc.com
Follow us on Twitter at @velatech_plc
statement of comprehensive income
for the year ended 31 March 2022
Year ended Year ended
31 March 31 March
2022 2021
Notes £'000 £'000
Revenue 1 - -
Administrative expenses 2 (347) (421)
Fair value movements
- on investments 8 (685) 666
- on derivative instruments 11 (75) 138
Operating (loss) / profit 2 (1,107) 383
Finance income 4 29 16
Finance expense 4 - (19)
(Loss) / profit before tax (1,078) 380
Income tax 6 - -
(Loss) / profit for the year and total comprehensive income attributable to
the equity holders
(1,078) 380
(Loss) / earnings per share
Basic and diluted (loss) / earnings per share (pence) 7 (0.007) 0.005
statement of financial position
as at 31 March 2022
31 March 31 March
2022 2021
Notes £'000 £'000
Non-current assets
Investments 8 2,603 1,969
Trade and other receivables 9 3,024 2,995
Total non-current assets 5,627 4,964
Current assets
Trade and other receivables 10 751 1
Derivative financial instruments 11 63 138
Cash and cash equivalents 14 958 2,147
Total current assets 1,772 2,286
Total assets 7,399 7,250
Equity and liabilities
Equity
Called up share capital 13 3,291 3,048
Share premium account 7,594 6,603
Share option reserve 65 151
Retained earnings (3,572) (2,600)
Total equity 7,378 7,202
Current liabilities
Trade and other payables 12 21 48
Total current liabilities 21 48
Total equity and liabilities 7,399 7,250
These financial statements were approved by the Board, authorised for issue
and signed on their behalf on 27 September 2022 by:
Brent Fitzpatrick MBE
Non-Executive Chairman
Company registration number: 03904195
cash flow statement
for the year ended 31 March 2022
Year ended Year ended
31 March 31 March
2022 2021
Notes £'000 £'000
Operating activities
(Loss) / profit before tax (1,078) 380
Share-based payment 20 21
Fair value movements on investments 8 685 (666)
Fair value movement on derivative assets 75 (138)
Finance expenses - 19
Finance income (29) (16)
Decrease in receivables - 12
Decrease in payables (27) (6)
Total cash flow from operating activities (354) (394)
Investing activities
Proceeds from disposal of investments 262 512
Consideration for purchase of financial asset - (1,250)
Acquisition of loan notes (750) -
Consideration for purchase of investments (1,581) (1,248)
Total cash flow from investing activities (2,069) (1,986)
Financing activities
Interest paid - (19)
Proceeds from the issue of ordinary share capital 1,234 4,537
Total cash flow from financing activities 1,234 4,518
Net (decrease) / increase in cash and cash equivalents (1,189) 2,138
Cash and cash equivalents at start of year 2,147 9
Cash and cash equivalents at the end of the year 14 958 2,147
Cash and cash equivalents comprise:
Cash at bank 958 2,147
Cash and cash equivalents at end of year 14 958 2,147
statement of changes in equity
for the year ended 31 March 2022
Share
Share Share Retained Option Total
Capital Premium Earnings Reserve Equity
£'000 £'000 £'000 £'000 £'000
Balance at 1 April 2021 3,048 6,603 (2,600) 151 7,202
Transactions with owners
Share-based payment - - - 20 20
Lapse of share options in the period - - 106 (106) -
Issue of share capital 243 991 - - 1,234
Transactions with owners 243 991 106 (86) 1,254
Total comprehensive income for the year - - (1,078) - (1,078)
Balance at 31 March 2022 3,291 7,594 (3,572) 65 7,378
Balance at 1 April 2020 1,749 1,715 (2,980) 130 614
Transactions with owners
Share-based payment - - - 21 21
Issue of share capital 1,299 4,888 - - 6,187
Transactions with owners 1,299 4,888 - 21 6,208
Total comprehensive income for the year - - 380 - 380
Balance at 31 March 2021 3,048 6,603 (2,600) 151 7,202
notes to the financial statements
for the year ended 31 March 2022
1 Revenue and segmental information
The Company is an investing company and as such there is only one identifiable
operating segment, being the purchase, holding and sale of investments.
Similarly, the Company operates in only a single geographic segment, being the
United Kingdom. The results and balances and cash flows of the segment are as
presented in the primary statements.
2 (Loss) / profit from operations
The (loss) / profit from operations is stated after charging / (crediting):
31 March 31 March
2022 2021
£'000 £'000
Auditor's remuneration for the audit 18 16
Auditor's remuneration for corporation tax compliance services 2 2
Fair value movements on investments 685 (666)
Share-based payment 20 21
3 Staff costs
The average number of persons employed or engaged by the Company (including
Directors) during the period was as follows:
31 March 31 March
2022 2021
Directors and senior management 3 2
Total 3 2
The above included two individuals (2021 - none) employed by the Company and
one (2021 - two) engaged under the terms of a letter of appointment.
The aggregate amounts charged by these persons were as follows:
31 March 2022 31 March 2021
£'000 £'000
Wages and salaries 97 -
Social security costs 12 -
Amounts invoiced 62 174
Share-based payment charge 20 21
191 195
The amounts noted above relate to the Company's directors. Further details of
directors' remuneration is provided in note 5.
4 Finance income and expense
Finance income
31 March 2022 31 March 2021
£'000 £'000
Other interest receivable 29 16
Total finance income 29 16
Income of £29,000 (2021: £16,000), represents the unwinding of the discount
on the Company's loan receivable from BIXX Tech Limited. Further details are
provided in note 9.
Finance expense
31 March 2022 31 March 2021
£'000 £'000
Bond interest - 19
Total finance expense - 19
5 Directors and senior management
Directors' remuneration
Year ended 31 March 2022
Salary Fees Pension Equity Total
£'000 £'000 £'000 £'000 £'000
N B Fitzpatrick - 62 - - 62
J Normand 62 - - - 62
E Wilson (appointed 1 September 2021) 35 - - - 35
97 62 - - 159
Year ended 31 March 2021
Salary Fees Pension Equity Total
£'000 £'000 £'000 £'000 £'000
N B Fitzpatrick - 62 - - 62
A Laiker (resigned 26 August 2020) - 67 - - 67
J Normand (appointed 26 August 2020) - 45 - - 45
- 174 - - 174
Directors' and senior management's interests in shares
The Directors who held office at 31 March 2022 held the following shares:
31 March 31 March
2022 2021
N B Fitzpatrick 1,500,000 1,500,000
J Normand - -
E Wilson (appointed 1 September 2021) - -
The total share-based payment costs in respect of options granted are:
31 March 31 March
2022 2021
£'000 £'000
Directors 20 21
As at 31 March 2022, the total number of outstanding options held by the
Directors over ordinary shares was 278,444,780 (2021: 284,562,427),
representing 1.7 per cent of the Company's issued share capital. A total of
6,117,647 options lapsed in the period.
Further details regarding the options issued are provided in note 17.
6 Tax
There was no charge to current or deferred taxation in the current or prior
period.
A deferred tax asset relating to losses carried forward has not been
recognised due to uncertainty over the existence of future taxable profits
against which the losses can be used. The Company has unused tax losses of
approximately £5.3m (2021: £4.4m).
Tax reconciliation
31 March 31 March
2022 2021
£'000 £'000
(Loss) / profit before tax (1,078) 380
Tax at 19% on (loss) / profit before tax (205) 72
Effects of:
Loss relief carried / (brought) forward 205 (72)
Total tax expense - -
7 (Loss) / profit per share
(Loss) / profit per share has been calculated on a loss after tax of
£1,078,000 (2021: profit after tax of £380,000) and the weighted average
number of shares in issue for the year of 15,091,929,620 (2021:
7,383,146,119).
8 Investments
31 March 31 March
2022 2021
£'000 £'000
Opening fair value 1,969 1,196
Additions during the year at cost 1,581 1,248
Fair value of disposals made during the year (262) (1,141)
Movement in fair value charged to profit or loss (685) 666
Closing balance 2,603 1,969
Investments are held at fair value through profit and loss using a three-level
hierarchy for estimating fair value.
Note 15 provides details of the three-level hierarchy used.
Additions during the year:
Investment in Cornerstone FS Plc
In April 2021, the Company completed the subscription for an additional
245,902 new ordinary shares in Cornerstone at a cost of £150,000, as part of
Cornerstone's admission to AIM. Following this transaction, Vela's aggregate
shareholding in Cornerstone represented approximately 3.2% of its then issued
share capital.
Investment in Northcoders Group PLC
In July 2021, the Company invested £750,000 in Northcoders Group PLC on its
admission to AIM. The Company acquired 416,666 new ordinary shares of 1p
each at a price of 180p per share. These shares represented 6% of the
enlarged share capital of Northcoders on admission to AIM.
Investment in Skillcast Group PLC
In December 2021, the Company invested £250,000 in Skillcast Group PLC on the
admission of its shares to trading on AIM. The Company acquired 675,676 new
ordinary shares of 1p each at a price of 37p per share. These shares
represented 0.76% of the then issued share capital of Skillcast.
Investment in Igraine PLC
In March 2022, the Company invested £430,705 to acquire 23,928,080 ordinary
shares of 1p each in Igraine PLC at a price of 1.8p per share. These shares
represented 28.8% of the share capital of Igraine. The directors have applied
the exemption set out in paragraph 18 of IAS 28 to account for this investment
at fair value in accordance with IFRS 9, rather than applying equity
accounting under IAS 28.
Disposals during the year:
Disposal of North Peak Resources Ltd
In April 2021 the Company disposed of its remaining shares in North Peak
Resources Ltd. The carrying value of the shares held as at 31 March 2021 was
£74,858 and the sales proceeds amounted to approximately £80,000.
Part disposal of Northcoders Group Plc
In January 2022 the Company disposed of part of its shareholding in
Northcoders Group Plc. The Company sold 25,000 of its holding of 416,666
shares at £2.40 per share and a further 50,000 at £2.45 per share. The
sales proceeds amounted to £182,500 and generated a net profit of £46,398.
Post disposal Vela was interested in 341,666 shares which represented 4.9 per
cent of the issued share capital.
9 Trade and other receivables - non-current
31 March 31 March
2022 2021
£'000 £'000
Loan due from BIXX Tech Limited 674 645
Other financial asset 2,350 2,350
3,024 2,995
Loan due from BIXX Tech Limited
The loan represents the consideration receivable for the disposal of certain
investment assets in August 2020, as detailed in the prior year financial
statements. The total consideration receivable is £855,000, which is
receivable after seven years. The consideration has been discounted at a
market interest rate of 4.5% to reflect the deferred payment term. Income of
£29,000 (2021: £16,000), represents the unwinding of the discount and is
recognised within finance income in note 4.
Under the terms of the loan agreement, the Company has provided an undertaking
to distribute a sum equal to any repayment of the loan to the holders of the
Special Deferred Shares (see note 13). This distribution will be by way of a
dividend declared on the Special Deferred Shares ("the Special Dividend"). In
the event that insufficient distributable reserves exist at the end of the
seven-year loan term, the repayment of the loan will be deferred for a further
year. This deferral will continue until such a time as the Company has
sufficient distributable reserves to be able to pay the Special Dividend.
Other financial asset - Investment in St George Street Capital
On 20 October 2020, the Company entered into a contract with St George Street
Capital ("SGSC") for an 8% economic interest in the potential future
commercialisation of SGSC's asset to treat individuals with diabetes who are
suffering with COVID-19 ("the Asset"). The consideration payable under the
terms of the contract was £2.35m which was settled by cash of £1.25m and the
issue of 1,100,000,000 locked-in consideration shares at a price of 0.1 pence
per share. The directors considered that this represented the fair value of
the contract at the date of investment.
The contract gives the Company a right to future economic benefits and has
been classified as a financial asset measured at fair value through profit and
loss. The directors estimate that the contract will not be realised within 12
months of the reporting date and so the asset has been classified as
non-current.
At the time of the investment, SGSC was in the process of recruiting for Phase
II clinical trials of the Asset and this recruitment was still ongoing as at
the previous reporting date. In the current period, the Phase II trials were
successfully completed and SGSC has moved on to the process of investigating
options for funding Phase III clinical trials (which would involve a
significantly larger sample of patients than Phase II) and onward
commercialisation of the Asset. The development of the Asset continues to
progress along the typical drug development pipeline. However, the need for
SGSC to raise further funding in order to commence the Phase III trials, to
successfully complete those trials and achieve commercialisation of the drug
gives rise to an inherent level of risk in respect of the ultimate realisation
of the Asset, which the directors have taken into consideration when
estimating its fair value. The directors have considered the current position
and are of the view that there have not been any major developments (either
positive or negative) or milestones achieved between the date of investment
and the reporting date which would give rise to a material change in the fair
value of the contract during this time. Accordingly, the original
consideration payable under the contract represents the directors' best
estimate of its fair value as at 31 March 2022.
10 Trade and other receivables
31 March 31 March
2022 2021
£'000 £'000
Other receivables 1 1
Convertible loan 750 -
751 1
In January 2022, the Company invested £750,000 by way of a convertible loan
note in EnSilica Limited. The loan notes attracted interest at a rate of
10 per cent per annum and were repayable on 9 January 2023 unless they had
been repaid or converted before this date. The loan notes converted
automatically on an IPO of Ensilica into new ordinary shares at a discount of
12% of the shares subscribed for in the IPO. Note 20 on events following the
year end includes a note that EnSilica's shares were admitted to trading on
AIM in May 2022, at which point the Company exercised its conversion rights.
11 Derivative financial instruments
31 March 31 March
2022 2021
£'000 £'000
Warrants 63 138
63 138
The Company holds warrants providing it with the right to acquire additional
shares in certain of its investee companies at a fixed price in the future,
should the directors decide to exercise them. The warrants have been
recognised as an asset at fair value, which has been calculated using an
appropriate option pricing model.
12 Trade and other payables
31 March 31 March
2022 2021
£'000 £'000
Trade payables 1 24
Accruals 20 24
21 48
13 Share capital
31 March 31 March
2022 2021
£'000 £'000
Allotted, called up and fully paid capital
16,252,335,184 (2021:13,818,450,084) Ordinary Shares of 0.01 pence each 1,625 1,382
1,748,943,717 Deferred Shares of 0.08 pence each 1,399 1,399
2,665,610,370 Special Deferred Shares of 0.01 pence each 267 267
3,291 3,048
Share issues in the period
Exercise of warrants and issue of equity
On 30 March 2021, the Company announced an application to issue 24,751,750 new
ordinary shares of 0.01p pursuant to the exercise of warrants to subscribe for
new Ordinary Shares at a price of 0.06p per Ordinary Share. The share
allotment was completed on 7 April 2021, generating gross proceeds of
£14,851.
On 6 July 2021, the Company issued 35,000,000 new ordinary shares of 0.01p
pursuant to the exercise of warrants to subscribe for new Ordinary Shares at a
price of 0.06p per Ordinary Share, generating gross proceeds of £21,000.
On 7 July 2021, the Company issued 44,079,000 new ordinary shares of 0.01p
pursuant to the exercise of warrants to subscribe for new Ordinary Shares at a
price of 0.06p per Ordinary Share, generating gross proceeds of £26,447.
On 19 July 2021, the Company issued 117,083,332 new ordinary shares of 0.01p
pursuant to the exercise of warrants to subscribe for new Ordinary Shares at a
price of 0.06p per Ordinary Share, generating gross proceeds of £70,250.
On 27 August 2021, the Company issued 1,391,421,209 new ordinary shares of
0.01p pursuant to the exercise of warrants to subscribe for new Ordinary
Shares at a price of 0.06p per Ordinary Share, generating gross proceeds of
£834,853.
On 7 September 2021, the Company issued 821,549,809 new ordinary shares of
0.01p pursuant to the exercise of warrants to subscribe for new Ordinary
Shares at a price of 0.06p per Ordinary Share, generating gross proceeds of
£362,530.
Share rights
The Deferred and Special Deferred Shares are not listed on AIM and do not
carry any rights to receive notice of or attend or speak or vote at any
general meeting or class meeting. There are also no dividend rights, other
than the "Special Dividend" on the Special Deferred Shares. As described in
note 9, upon repayment to the Company of any amount(s) owed to it pursuant to
the loan agreement between the Company and BIXX Tech Limited, the Company
shall, in priority to any payment of dividend to the holders of the ordinary
shares or any other class of shares, declare and pay to the holders of the
Special Deferred
Shares a Special Dividend of an aggregate amount equal to the amount of such
sum repaid, pro rata according to the number of Special Deferred Shares paid
up.
On a return of capital, the holders of the Special Deferred Shares shall be
entitled to receive only the amount paid up on such shares up to a maximum of
0.01 pence per Special Deferred Share after (i) the holders of the Ordinary
Shares have received the sum of £1,000,000 for each Ordinary Share held by
them, and (ii) the holders of the Deferred Shares have received the sum equal
to the amount paid up on such Deferred Shares.
14 Cash and cash equivalents
Cash and cash equivalents comprise the following:
31 March 31 March
2022 2021
£'000 £'000
Cash and cash in bank:
Pound sterling 958 2,147
Cash and cash equivalents at end of year 958 2,147
15 Financial instruments
The Company uses various financial instruments which include cash and cash
equivalents, loans and borrowings and various items such as trade receivables
and trade payables that arise directly from its operations. The main purpose
of these financial instruments is to raise finance for the Company's
operations and manage its working capital requirements.
The fair values of all financial instruments are considered equal to their
book values. The existence of these financial instruments exposes the Company
to a number of financial risks which are described in more detail below.
The main risks arising from the Company's financial instruments are currency
risk, credit risk and liquidity risk. The Directors review and agree the
policies for managing each of these risks and they are summarised below. The
Company does not have any borrowings on which interest is charged at a
variable rate. The Directors, therefore, do not consider the Company to be
exposed to material interest rate risk.
Currency risk
The Company's shareholdings in North Peak were denominated in Canadian
Dollars, which, until their disposal in April 2021 (see note 8), gave rise to
exposure to a foreign currency risk. The Directors considered the risk and did
not deem it necessary to enter into any specific risk management arrangements.
Credit risk
This section, along with the liquidity risk and capital risk management
sections below, also forms part of the Strategic Report.
The Company's exposure to credit risk is limited to the carrying amount of
financial assets recognised at the balance sheet date, as summarised below:
31 March 31 March
2022 2021
Classes of financial assets - carrying amounts £'000 £'000
Financial assets measured at fair value through profit or loss
5,016 4,457
Financial assets measured at amortised cost 1,425 646
6,441 5,103
The Company's management considers that all of the above financial assets that
are not impaired for each of the reporting dates under review are of good
credit quality.
The Company is required to report the category of fair value measurements used
in determining the value of its financial assets measured at fair value
through profit or loss, to be disclosed by the source of its inputs, using a
three-level hierarchy. There have been no transfers between Levels in the fair
value hierarchy.
Quoted market prices in active markets - "Level 1"
Inputs to Level 1 fair values are quoted prices in active markets for
identical assets. An active market is one in which transactions occur with
sufficient frequency and volume to provide pricing information on an ongoing
basis. The Company has eight (2021: six) investments classified in this
category all of which are listed on a regulated exchange with publicly
available market prices used to determine the year end value. The aggregate
historic cost of the eight investments is £2,343,803 (2021: £1,270,672) and
the fair value as at 31 March 2022 was £1,738,769 (2021: £1,192,164).
Valued using models with significant observable market parameters - "Level 2"
Inputs to Level 2 fair values are inputs other than quoted prices included
within Level 1 that are observable for the asset, either directly or
indirectly. The Company has two (2021: two) unquoted investments classified
in this category. The historic cost of these investments is £450,000 (2021:
£450,000) and the fair value as at 31 March 2022 was £864,644 (2021:
£777,144). These investments were valued using the latest transaction prices
for shares in the investee companies which were obtained through either (a)
publicly available information (e.g. registrar), (b) information in respect of
recent transactions which the Company was invited to participate or, where
available, (c) direct liaison with the investee company. The Company also
holds warrants for shares in three investee companies, which have been valued
using an option pricing model with observable inputs. The fair value of these
assets as at 31 March 2022 was £63,194 (2021: £138,246).
Valued using models with significant unobservable market parameters - "Level
3"
Inputs to Level 3 fair values are unobservable inputs for the asset.
Unobservable inputs may have been used to measure fair value to the extent
that observable inputs are not available, thereby allowing for situations in
which there is little, if any, market activity for the asset at the
measurement date (or market information for the inputs to any valuation
models). As such, unobservable inputs reflect the assumptions the Company
considers that market participants would use in pricing the asset. The
Company has two (2021: two) unquoted investments classified in this category.
The historic cost of these investments is £300,000 (2021: £300,000) and the
fair value as at 31 March 2022 was £nil (2021: £nil). The nature of some of
the investments that the Company holds, i.e. minority shareholdings in private
companies with limited publicly available information, means that significant
judgement is required in estimating the value to be applied in the year end
accounts. Management uses knowledge of the sector and any specific company
information available to determine a valuation estimate. The Company also
holds a non-current financial asset described in note 9 to the financial
statements at a fair value of £2,350,000, which is also the historic cost of
the asset. Further details regarding the determination of the fair value of
this asset are provided in note 9.
Liquidity risk
The Company maintains sufficient cash to meet its liquidity requirements.
Management monitors rolling forecasts of the Company's liquidity on the basis
of expected cash flow in accordance with practice and limits set by the
Company. In addition, the Company's liquidity management policy involves
projecting cash flows and considering the level of liquid assets necessary to
meet these.
Maturity analysis for financial liabilities
31 March 2022 31 March 2021
Within Later than Within Later than
1 year 1 year 1 year 1 year
£'000 £'000 £'000 £'000
At amortised cost 21 - 48 -
Capital risk management
The Company's objectives when managing capital are to safeguard the Company's
ability to continue as a going concern in order to provide returns for
shareholders and benefits for other stakeholders and to maintain an optimal
capital structure to reduce the cost of capital. This is achieved by making
investments commensurate with the level of risk. The Company is performing in
line with the expectations of the Directors.
The Company monitors capital on the basis of the carrying amount of equity.
The Company policy is to set the amount of capital in proportion to its
overall financing structure, i.e. equity and long-term loans. The Company
manages the capital structure and makes adjustments to it in the light of
changes in economic conditions and the risk characteristics of the underlying
assets. In order to maintain or adjust the capital structure, the Company may
adjust the amount of dividends paid to shareholders, issue new shares or loan
notes, or sell assets to reduce debt.
16 Reconciliation of net funds
As at 1 April 2021 Non-cash movement As at 31 March 2022
Cash
flow
£'000 £'000 £'000 £'000
Cash and cash equivalents 2,147 (1,189) - 958
2,147 (1,189) - 958
17 Share-based payments
On 26 August 2020 two of the Directors were granted equity settled share-based
payments. The principal terms of these grants are as follows:
James Normand was granted 180,000,000 options to subscribe for ordinary shares
of 0.01p each in the Company. The options have an exercise price of 0.024p and
are exercisable for a period of ten years from the date of the grant. Half the
options became exercisable 12 months after grant, subject to the Company's
closing mid-market share price being at least 0.048p per Ordinary Share for 30
consecutive business days, and the remaining half become exercisable 24 months
after grant, subject to the Company's closing mid-market share price being at
least 0.072p per Ordinary Share for 30 consecutive business days.
In addition, on the same date, Brent Fitzpatrick, Non-Executive Chairman of
the Company, was granted 90,000,000 options to subscribe for Ordinary Shares
in the Company. The options have an exercise price of 0.024p and are
exercisable for a period of ten years from the date of the grant. Half the
options became exercisable 12 months after grant, subject to the Company's
closing mid-market share price being at least 0.048p per Ordinary Share for 30
consecutive business days, and the remaining half become exercisable 24 months
after grant, subject to the Company's closing mid-market share price being at
least 0.072p per Ordinary Share for 30 consecutive business days. Following
this grant of options, Brent Fitzpatrick now holds a total of 104,562,427
share options equivalent to 1.46 per cent. of the issued share capital of the
Company.
None of the options granted have been exercised.
The options issued in August 2020 have been valued using the Monte Carlo
option pricing model. The amount of remuneration expense in respect of the
share options granted amounts to £20,000 (2021: £21,000).
Options were also granted to directors in September and October 2015. If not
exercised beforehand, these will lapse in September and October 2022. They
have been valued using the Black Scholes option pricing model.
Details of the options outstanding at the year end and the inputs to the
option pricing model are as follows:
Options granted Options granted Options granted
26 August 22 October 18 September
2020 2015 2015
Share price at grant date (pence) 0.05 0.21 0.19
Exercise price (pence) 0.024 0.21 0.15
Expected life (years) 10 7 7
Annualised volatility (%) 86.9 79.47 70.98
Risk-free interest rate (%) 2.0 2.0 2.0
Fair value determined (pence) 0.03 0.15 0.13
Number of options granted 270,000,000 6,400,000 10,489,560
Options exercisable at 31 March 2022 270,000,000 6,400,000 10,489,560
The expected future annualised volatility was calculated using historic
volatility data for the Company's share price.
The options issued in 2015 are not subject to any performance criteria.
However the options issued in 2020 are subject to performance criteria.
During the period, 8,235,294 options granted in April 2014 and 4,000,000
options granted in October 2014 lapsed. The fair value of these options
recorded in the financial statements and processed as historic remuneration
expense was £106,000.
The options granted in 2015 are set to lapse in 2022. The fair value of
these options has been recorded in the financial statements as historic
remuneration expense.
18 Contingent liabilities
Under the terms of the Company's loan receivable from BIXX Tech Limited,
described in note 9, the Company has provided an undertaking to distribute a
sum equal to any repayment of the loan to the holders of the Special Deferred
Shares (see note 13). This distribution will be by way of a dividend declared
on the Special Deferred Shares ("the Special Dividend"). In the event that
insufficient distributable reserves exist at the end of the seven-year loan
term, the repayment of the loan will be deferred for a further year. This
deferral will continue until such a time as the Company has sufficient
distributable reserves to be able to pay the Special Dividend. As at 31 March
2022, the carrying value of the loan receivable was £674,000 (2021:
£645,000) and, at the scheduled maturity date, the final settlement value
will be £855,000.
19 Related party transactions
During the period the Company entered into the following related party
transactions. All transactions were made on an arm's length basis.
Ocean Park Developments Limited
Brent Fitzpatrick, Non-Executive Director, is also a Director of Ocean Park
Developments Limited. During the year, the Company paid £62,000 (2021:
£62,000) in respect of his Director's fees to the Company. The balance due to
Ocean Park Developments Limited at the year-end was £nil (2021: £nil).
BIXX Tech Limited
Antony Laiker, a significant shareholder of Vela and recently appointed
Director is also a director of BIXX Tech Limited.
On 26 August 2020, the Company transferred certain investments to a newly
formed wholly owned subsidiary, BIXX Tech Limited, for consideration totalling
£855,000 repayable after seven years. Following the transfer of the
investments, BIXX Tech Limited was sold to a newly formed company, BIXX
Limited, with the same shareholders as Vela Technology Plc for consideration
of £1. As at 31 March 2022, the carrying value of the balance due from BIXX
Tech Limited was £674,000 (2021: £645,000).
The disposal constituted a related party transaction under the AIM Rules as
Antony Laiker, a director of the Company was the sole shareholder of BIXX
Limited prior to the disposal.
20 Events after the balance sheet date
Investment in EnSilica Plc
In May 2022, EnSilica successfully completed its admission onto the AIM
market. On admission Vela's investment of £750,000 in convertible loan
notes and accrued interest were converted into 1,764,788 ordinary shares
representing 2.3 per cent of the issued share capital.
Investment in TruSpine Plc
In June 2022, the Company completed the subscription for 6,000,000 ordinary
shares in TruSpine for a cost of £300,000, representing 5.07 per cent of
TruSpine's issued share capital.
Disposal of investment in Northcoders Plc
In September 2022, the Company disposed of 25,000 shares in Northcoders at a
price of £3.50 generating gross proceeds of £87,500. Following the disposal
Vela was interested in 316,666 shares representing 4.6 per cent of the issued
share capital.
Extraction of information in this announcement
The financial information, which comprises the statement of comprehensive
income, balance sheet, cashflow statement, statement of changes in equity, and
related notes to the financial statements, is derived from the full Company
financial statements for the year ended 31 March 2022, which have been
prepared under UK endorsed International Financial Report Standards (IFRS) and
those parts of the Companies Act 2006 applicable to companies reporting under
IFRS. It does not constitute full financial statements within the meaning of
section 434 of the Companies Act 2006. This financial information has been
agreed with the auditor for release.
The full annual report and financial statements for the year ended 31 March
2022, on which the auditor has given an unqualified report, and which does not
contain a statement under section 498 of the Companies Act 2006, will be
delivered to the Registrar of Companies in due course.
This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
or visit
www.rns.com (http://www.rns.com/)
.
RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
. END FR SEUESWEESELURecent news on Vela Technologies
See all newsREG - Vela Technologies - Issue of Equity
AnnouncementREG - Vela Technologies - Holding in Company
AnnouncementREG - Vela Technologies - Quarterly Investment Update
AnnouncementREG - Vela Technologies - Holding(s) in Company
AnnouncementREG - Vela Technologies - Interim Results
Announcement