TIDMPRIM
RNS Number : 9557U
Primorus Investments PLC
18 July 2018
Primorus Investments plc
("Primorus" or the "Company")
Quarterly Investor Update
Primorus Investments plc (AIM: PRIM, NEX: PRIM) is pleased to
provide the Quarter ending June 30, 2018 ("Q2") periodic portfolio
update regarding its current holdings and activities acquired and
managed as per its investment mandate.
Executive Director's Quarterly Comment - Alastair Clayton
I am pleased to be able to provide shareholders and stakeholders
with a review of our activities in Q2. As evidenced below, many of
our investments are maturing to the point where we hope to soon see
tangible rewards via either IPO or trade sale. Add to this the
long-awaited commencement of the HH-1 Extended Well Test and we are
confident that the coming Quarter will be a very exciting one for
shareholders.
Highlights for the period were as follows:
-- Horse Hill Developments Limited's ("HHDL") Extended Flow Test
of the HH-1 oil discovery has commenced. Relevant updates as they
are received from HHDL will be released to shareholders.
-- In recent days we invested a further GBP250,000 at GBP22 per
share in Engage Technology Partners, taking our total investment in
this GBP22 per share round to GBP750,000. Engage have recently
added a very high-profile global fast-food chain to its customer
list and now has 55 corporate users, up from 24 last quarter.
Engage now discussing investment entry points with several large
technology investors in advance of planned IPO in 2019.
-- WeShop appointed Andrew Lawley, former Group Director of
Strategy at Dixons Carphone Warehouse PLC as Managing Director.
Early-stage IPO preparations underway.
-- Sport:80 have nearly completed IPO documentation and we have
been advised that, subject to successful completion and capital
raise, admission to AIM is expected to occur in Q3 or Q4 2018.
-- SOA final approvals from the Israeli Government for a
farm-in/funding deal may be imminent. Should this approval be
granted we understand the Company will target a UK listing late in
Q1 2019.
-- Fresho continues to grow strongly and we are informed by
management that gross order value run rate is over A$200m per year.
The number of new businesses waiting to be "onboarded" to the
platform is now quite significant and points to impressive product
take-up.
-- TruSpine have been informed the FaciLOK patent is ready to be
granted and have also received an R&D Tax Credit Rebate of
approximately GBP425,000. Strategic partnerships and FDA approvals
progressing well.
-- StreamTV continues commercial negations with key
international investor groups. We await their successful
conclusion.
-- Nomad Energy continued to negotiate a gas sales agreement
with the Government of Ivory Coast to commercialise its gas
reserves.
-- FOMO full investment returned to Primorus treasury following
FOMO's inability to secure debt on terms acceptable to
shareholders.
Investment news flow can be a little like busses in that you
don't see much for a while, and then a whole lot all comes along at
once. That is a good analogy for Q2 in that we have in recent days
and weeks received many updates from our investment portfolio that
we have included in this review.
Key to our central strategy of investing in Pre-IPO is then
demonstrating tangible IPO results and pleasingly two of our
investments, Sport:80 and WeShop are undergoing the formal IPO
process and are proposing to gain admission in Q3/Q4 2018 and Q1
2019 respectively.
Sport:80 has now largely completed its IPO documentation
following the appointment of both a broker and NOMAD to support
admission to the AIM market. In a recent meeting with management we
were informed that they have received encouraging marketing
responses from potential investors in the IPO and once the
traditionally slow summer period draws to a close, Sport:80 intends
to raise the IPO funds and, subject to this, gain admission to the
AIM market in Q3 or Q4 2018.
Whilst we only have a GBP100,000 investment in Sport:80 we
expect this to be our first investment to go through to IPO. In
that respect it will be pleasing for us as management to
demonstrate the investment model in action.
WeShop is one of our larger investments with GBP875,000 invested
in two tranches. Our initial investment of GBP200,000 was at
GBP5.36 per share and our later GBP675,000 at GBP5.98 per share. On
the 9(th) of July we were pleased to read that another AIM-listed
investment company, Two Shields Investments Plc (TSI.L) invested
GBP150,000 at GBP5.98 per share. Furthermore, the already
impressive Board of WeShop was significantly bolstered by the
appointment of Andrew Lawley, former group director of strategy at
Dixons Carphone Warehouse PLC, to the role of Managing
Director.
Subsequently we have been informed by WeShop that they have
commenced the IPO documentation process with the goal of listing on
the main market (Standard Segment) of the LSE by Q1 2019.
We look forward to keeping shareholders abreast of progress
towards a WeShop IPO as it progresses, especially given the
relative size of our investment in this company.
Shareholders will recall that Fresho provides seamless
middleware to allow large national and global food suppliers to
interact directly with a myriad of small and medium-sized
businesses. Uptake of the platform by industry continues to grow so
fast that the backlog of prospective users requiring onboarding to
the Fresho platform is now very large. As a result, the key
technology spend at Fresho involves improving an automating the
onboarding process for new users. As this technology enhancement
evolves we expect the new user backlog reduce and unleash the full
potential of the platform.
We are informed by management that gross order value run rate is
over A$200m per year. We will be likely to give shareholders a
further, more detailed update on Fresho once we meet management in
mid-September but as it stands we still hope to see a liquidity
event on this investment in 2019.
We have GBP500,000 invested in TruSpine and it is one of our
earlier investments. TruSpine is an example of a company that has
been hamstrung by lack of funding in the past. As reported in our
last Quarterly review we believed that the appointment of Simon
Stephens as the new CEO would help unlock funding and we are
pleased to report we were largely correct.
Recently TruSpine secured additional investment funding from a
private investor as well as a circa GBP425,000 R&D Tax Credit
rebate from HM Treasury allowing the patent and FDA processes to
get moving again. As a result, the TruSpine has been now been
informed that its pending patent for its FaciLOK product is now
ready to be granted. On top of this, the additional funding has
allowed TruSpine to keep its first FDA clearance moving.
In terms of bigger picture funding to complete the FDA approvals
process and commence the IPO, we have been informed by management
that TruSpine has been involved in detailed talks with two separate
groups, both of which involve a potential significant investment,
and assistance with product commercialisation and manufacturing.
Whilst successful outcomes of these discussions are not guaranteed
we believe these overtures illustrate the value in the company's
products and potential.
Given the mature nature of the discussions with both funding
groups above, we expect in the coming weeks and months to be above
to be able to update shareholders further on progress at TruSpine
if/when contractual negotiations on any of the above complete.
It is testimony to the level of activity in our portfolio that
our discussion regarding Engage Technology Partners has taken this
long to get to in this document. As outlined above in the
highlights we invested a further GBP250,000 at GBP22 per share in
Engage Technology Partners, taking our total investment in this
GBP22 per share round to GBP750,000. We have also invested
GBP400,000 in an earlier GBP15 share round back in 2017 taking our
total investment to GBP1,150,000 representing circa 3% of the
equity in Engage.
The growth and sales at Engage has been particularly pleasing.
Notably Engage have recently added a very high-profile global
fast-food chain to its customer list and now has 55 corporate users
in the UK, up from 24 last quarter and its sales pipeline is
extensive. On the corporate side we are informed by management that
Engage is now discussing investment entry points with several large
and noteworthy technology investors and is working closely with a
City broker to close a large investment in the coming months as a
pathway to the planned 2019 IPO. We are aware that two global
players in the HR/Payroll technology industry are already seeking
negotiations with Engage to discuss options. Management have told
us they believe it is still too early to contemplate any deals just
yet and we tend to agree with them.
In the coming months we are likely to dedicate a larger and more
detailed shareholder update on Engage as we hope that several key
sales, product and corporate discussions understood to be in train
come to a conclusion.
NOMAD energy continues to negotiate with the Ivorian Government
regarding an off-take for its domestic gas reserves in conjunction
with its project partner VITOL. We look forward to updating
shareholders if/when these negotiations reach a conclusion.
In recent discussions with management, we are told that StreamTV
continues commercial negations with key international investor
groups. If any funding deal is contractually concluded we will
update shareholders as appropriate.
Sometimes we make investments in a company that, for a range of
reasons, don't work, FOMO Money is an example of this. Shareholders
may recall Primorus invested A$400,000 (approximately GBP240,000)
in FOMO Money Pty Ltd ("FOMO Money") on a pre-new money valuation
of circa A$6m. FOMO Money is an online lending business which was
to offer personal loans and, in time, brokered home loans that will
target the millennial market.
Key to FOMO's business model was securing senior debt on a scale
and at a price that made its products competitive. Subsequently,
and largely due to a deterioration in the alternative lending
markets associated with significant banking reform in Australia, we
were informed that FOMO's preferred senior debt provider was no
longer able to offer attractive financing. After a broader search
for better-priced debt lasting some 6-9 months, it was concluded
recently that the offers available to FOMO were materially
different to those contemplated when we invested.
As such, it was agreed jointly between Primorus and FOMO that we
would effectively cancel the binding obligation to invest, and our
total investment monies would be freed to invest elsewhere.
Pleasingly we can confirm that this has indeed occurred and that
we have been able to re-deploy some of this investable cash into
more Engage shares as outlined above. We would like to thank the
Board of FOMO Money for being so open and transparent with us
throughout this protracted process and believe they have acted in a
manner that is a credit to themselves and their Company. We wish
them well for the future.
So in summary and as evidenced above, the portfolio continues to
evolve and mature over time to the point where we are expecting the
first of our investments to IPO in the coming Quarter or just
after. We continue to invest heavily in Engage Technology as it
grows and develops its business and may look to invest further
should the opportunity arise. Our oil and gas investments are
dominated by our interest in the HHDL and the ongoing EWT at the
HH-1 oil discovery. We are however hopeful that further news
regarding SOA and NOMAD will be forthcoming in the quarter. We look
forward to reporting back from our meeting with Fresho management
in mid-September.
Lastly we would like to thank our shareholders for their
continued support and I look forward to keeping all stakeholders
updated with news regarding our portfolio as it occurs.
This announcement contains inside information for the purposes
of Article 7 of EU Regulation 596/2014.
For further information, please contact:
Primorus Investments plc: +44 (0) 20 7440 0640
Alastair Clayton
Nominated Adviser: +44 (0) 20 7213 0880
Cairn Financial Advisers LLP
James Caithie / Sandy Jamieson
Broker: +44 (0) 20 3621 4120
Turner Pope Investments
Andy Thacker
FORWARD LOOKING STATEMENTS:
Except for statements of historical fact, this news release
contains certain "forward-looking information" within the meaning
of applicable securities law. Forward-looking information is
frequently characterized by words such as "plan", "expect",
"project", "intend", "believe", "anticipate", "estimate" and other
similar words, or statements that certain events or conditions
"may" or "will" occur. Although we believe that the expectations
reflected in the forward-looking information are reasonable, there
can be no assurance that such expectations will prove to be
correct. We cannot guarantee future results, performance or
achievements. Consequently, there is no representation that the
actual results achieved will be the same, in whole or in part, as
those set out in the forward-looking information.
Forward-looking information is based on the opinions and
estimates of management at the date the statements are made, and
are subject to a variety of risks and uncertainties and other
factors that could cause actual events or results to differ
materially from those anticipated in the forward-looking
information.
This information is provided by RNS, the news service of the
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END
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