TIDMPRIM
RNS Number : 4369P
Primorus Investments PLC
08 February 2019
Primorus Investments plc
("Primorus" or the "Company")
Quarterly Investor Update
Primorus Investments plc (AIM: PRIM, NEX: PRIM) is pleased to
provide the quarter ending December 31 2018 ("Q4" or the "Quarter")
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 probably don't need to point out to shareholders that Q4 was a
pretty wild ride on global markets. Whilst our share price was
probably collateral damage in the lead up to Christmas, I am
pleased that we have, at very least, managed to recover some of our
value. However, we still are frustrated that the Company, in the
Board's opinion, remains so undervalued.
The Quarter was one dominated by realising certain profits on
holdings while ensuring we retain the right mix of investments that
not only seek to create value in the medium-term, as per our
investment mandate, but also increase the visibility of our
publicly tradable investments in order to achieve some concrete
look-through value on our share price.
As outlined below, I believe we have achieved many of the goals
set for the Quarter. We now have a more balanced portfolio of
pre-IPO and private company investments, publicly tradable
shareholdings and also some interest-earning corporate debt with
attached warrants.
I should mention that over the Quarter I have had a lot of
interaction with both existing and potential Primorus shareholders.
Throughout these discussions, which were predominantly positive,
two themes seemed to recur that I would like to briefly
address.
The first one is regarding the possibility of, at the
appropriate time, using excess funds to potentially buy back some
of our outstanding issued capital. Given our share price relative
to the Board's view of value this argument clearly has merit. We
are having a look at the ability and mechanisms to determine if
this is feasible. If the results of this are positive it will
certainly be one tool available to the Company to invest in itself
should the value proposition of its portfolio be as compelling as
we believe it is today.
Secondly a number of shareholders expressed the desire to see a
corporate marketing presence on social media and other such
platforms. Whilst I acknowledge this may be useful, we also see
significant challenges in ensuring a presence on social media
doesn't infringe upon our AIM and directors' duties, not to mention
MiFID and MAR requirements. Thus, we will continue to scope a
presence that is both appropriate and responsible and report back
to shareholders with our solution.
Now, onto some highlights for the period:
Over the Quarter, realised a circa GBP1m unaudited cash profit
on investment by selling most of our holdings in UKOG PLC at an
average weighted price of circa 1.77p.
Built a stake in Greatland Gold (GGP.L) totalling 35m shares or
just under 1.1% of the issued capital in GGP.L at an average price
of 1.71p based on outstanding drill results. Further drilling
released in February confirm exceptional potential of Haiveron
Project.
Former British Olympic Association chief executive Simon Clegg
has been appointed the Non-Executive Chairman of Sport:80. IPO has
been delayed as the company seeks to clean up its share register in
advance of its IPO. Expecting movement on IPO this Quarter.
Engage Technology platform continues outstanding growth rates in
terms of customer contracts with over 110 active corporate clients
(versus 75 end Q3) now using the platform at the end of 2018.
Strongly backed GBP1m (still at GBP22/share) targeted capital raise
secured nearly GBP2.6m in subscriptions. Now is the important
Quarter for scalable product releases.
SOA Energy ("SOA") farm-in with a large regional oil firm
covering both SOA's on-shore and offshore assets. We have been
advised that a lengthy final technical and legal process is now due
to close imminently. SOA management may then allow us to expand on
the farm-in partner and more detail on the deal, subject to any
confidentiality clauses. IPO and drilling programme still on track
for 2019.
StreamTV, in conjunction with Beijing Optical & Electrical
("BOE") release two new products at the CES (Consumer Electronics
Show) in Las Vegas in January. The latest version of the 65" "8K
Lite" 16M pixel panel and the gaming focussed 27" "8K Lite" PC
monitor. Outstanding industry interest
Fresho ticks through the A$1m per day gross order value
demonstrating further excellent platform growth. New payments
platform launched and international growth opportunities present
themselves. We are still eyeing a 2019 liquidity event.
Company finishes the Quarter debt-free and the Board still
foresees no short-term need or intention to raise capital.
Update on Investments
As described above we exited the most of our direct holding in
UKOG for gross proceeds above investment of over GBP1m returned to
treasury. The fact that we have sold most of our holding is not a
reflection on the HHDL-1 project and its potential but is firmly
based upon applying portfolio management principles. As I have
mentioned in previous Investor updates, we should be judged on our
ability to deliver tangible value and this, I am pleased to report,
represents tangible value to all shareholders.
Shareholders will no doubt be aware that in the Quarter we began
to build a share position in Greatland Gold PLC. At the time of
writing we have 35m shares representing just under 1.1% of the
issued capital, purchased at an average price of 1.71p per share.
This investment decision was predicated on the outstanding
exploration results released in December 2018 for the Haiveron Gold
Project near Telfer in Western Australia. We have been looking for
a quality gold-related investment for a while as we believe gold
exposure would be a good balancing influence in our portfolio.
Shareholders may not be aware I researched my thesis on
intrusive-related gold deposits in these relatively obscure regions
of WA and the Northern Territory and studied the nearby Telfer Mine
geology and geochemistry. I am of the belief that Haiveron may
prove to be one of the most significant gold discoveries globally
in recent times and I am pleased that we have been able to build a
meaningful stake. We note that on 5 February Greatland announced a
host of what we consider to be outstanding results for the second
half of the discovery drill programme at Haiveron, comprising holes
HAD006 - HAD009.
These excellent results only further compound our view that
Haiveron has the hallmarks of a globally significant gold-copper
deposit in a world class mining jurisdiction. Furthermore, we
believe the recent drop in the Greatland share price to be
completely unrelated to the quality of the results published. We
will be investigating expanding our stake in Greatland should funds
be available to do so as we believe they will be firmly on the
radar of industry players looking for potential Tier 1
projects.
Elsewhere within our portfolio of oil and gas investments it is
pleasing to note that both Nomad Energy ("Nomad") and SOA Energy
are both moving forwards following the breakthrough of an impasse
in the Ivorian Government and the expected finalisation of a major
farm-in deal respectively.
Clearly we are not privy to, and regardless nor could we
disclose, any commercially sensitive information about the gas
supply negotiations between Nomad, its partner VITOL and the
Ivorian Government. However we have been informed that whilst no
agreement is yet in place, the negotiations are now moving in the
right direction having being stalled for some considerable time.
There is a sense of confidence at Nomad that a deal may be done in
the near term and clearly this would help unlock the value of our
US$300,000 investment we made back in 2017.
We expect to hear from SOA very soon that the final farm-in deal
has reached commercial close. We should then, subject to any
prevailing confidentiality clauses, be able to talk in much more
breadth about the farm-in partner and the exciting drill and test
programme for 2019. SOA has reaffirmed that it will be seeking a
listing on the AIM market in 2019.
Both of these investments highlight a recurring theme that as
the more our investments mature and grow, sometimes the less
Primorus is able to say about them. This is because commercial
confidence and IP demands from our investee companies weigh on our
ability to transmit news.
With this in mind I move on to Fresho where the management team
have rightly requested that some sections of its own Quarterly
Shareholder Report remain confidential. What we can say is that
metric we have been following for some time, Gross Order Volume
(GOV) went through A$1m per day mark during the December Quarter.
Furthermore, several opportunities to potentially launch
internationally on the back of large local customers have presented
themselves. New to Fresho has been the launch of the Fresho Payment
Platform which seeks to monetise more of the GOV by providing an
innovative trade finance offering as part of the general use of the
platform.
We expect the reported solid growth in the Fresho business to
continue through 2019 and despite a cash balance undiminished since
the last Quarter the company is contemplating further external
investment to accelerate international growth opportunities.
Importantly the price at which this is done should allow us to
better benchmark the potential value of our investment to date and
also provide a look-through to when we might exit this investment.
Ideally, we will seek crystallise some gains on this investment in
2019.
Last week we had a very productive meeting with Engage
management at their Paddington HQ to discuss what really is a
critical upcoming quarter or so for the company as a myriad of
long-awaited product releases begin to become available for
customer release. The exciting news is that these are on track and
their effects will hopefully begin to be felt this quarter. As
Engage aims to be a totally viral and self-service product with
unlimited scalability, it potentially represents a very lucrative
financial performance opportunity.
It appears we are not the only ones who feel this way either. A
small GBP1m planned capital raise in December attracted nearly
GBP2.6m in investment, which the Company feels is encouraging given
the global market turmoil experienced at the time. We did not
participate this time as we already have a large holding. This was
the last of the GBP22/share investment level available. We invested
at both GBP15 and GBP22 per share in previous investor rounds, and
have an average buy-in price of GBP20.13 per share.
In terms of a few metrics Engage reported 110 signed corporate
contracts live or onboarding as of Christmas 2018 and have picked
up another 10 or so in 2019 already. This compares to 75 at the end
of Q3. This will take the number of workers paid through Engage to
over 20,000 between now and April. As mentioned above, the quarter
was heavily focussed on re-tooling for scale, including formalising
the Customer Success function - hiring the ex-Bullhorn Customer
Success Director - and releasing the first elements of a new
scalable and automated V3 Payroll.
Engage is load testing successfully to deal with 100,000 paid
workers with multiple transactions per week, and 10,000+ customer
service tickets per week with current product and resources to stay
ahead of demand. In the coming quarters, Engage aims to develop the
automation to lift all limitations.
The key challenge for management as they grow rapidly is to
ensure that large corporate client contracts with high customer
service demands and specific functionality requirements don't pull
product development too out of shape and don't become burdensome on
short-term financial performance as Engage strives to meet
break-even in Q3 2019. We are very pleased that management
highlighted this challenge to us and in our opinion are balancing
the demands of the very large clients with the need for a fully
self-service product to mass market to small and medium enterprises
as this where the true eventual sales volume lies.
We believe all of this means that the 2019 plan to commence IPO
documentation in the summer is still very much on track and I
believe Engage has the potential to be a step-change investment for
Primorus in terms of meeting our stated aim of growing the balance
sheet to at least GBP25m.
Progress is picking up pace at StreamTV, who, in conjunction
with Beijing Optical & Electrical ("BOE") released two new
products at the CES (Consumer Electronics Show) in Las Vegas in
January. The latest version of the 65" "8K Lite" 16M pixel panel
and the gaming focussed 27" "8K Lite" PC monitor. We have received
several reports from the company that the response to the products
from a myriad of household names in the TV, gaming, technology and
content industries was outstanding. With commercially available
products making their way to market in 2019 I very much look
forward to shareholders seeing the products for themselves and
being satisfied that the Company was an early stage investor in
this amazing technology.
We are expecting more significant news soon on industry
participation into StreamTV and perhaps then we can quantify what
that may mean for our potential return on investment then.
Sport:80 was, subject to no unforeseen delays, ready to hit the
road to for its IPO funding round in December. However, an issue
around tightening up the shareholder register prior to the IPO
subsequently delayed the process. In reality however, avoiding the
tumultuous markets of December was probably in everyone's best
interests regardless. The good news is Sport:80 assure me the
matter is moving towards resolution and more importantly the
business continues to add users in the UK and overseas and is
expected to be EBITDA positive for FY 2019. We do see the
appointment of Former British Olympic Association chief executive
Simon Clegg as the Non-Executive Chairman of Sport:80 effective 30
January as a huge positive. As evidenced by his CV, Mr Clegg is a
highly experienced sports businessman who has held numerous board
positions, including his role with the BOA, and Ipswich Town FC,
where he was chief executive between 2009 and 2013. He was also the
Chief Operating Officer of the $1-billion inaugural 2015 European
Games in Baku, Azerbaijan, and holds the same position with Expo
2020 in Dubai. He was awarded an OBE in 2001, upgraded to CBE four
years later. So, whilst the delay to the IPO is a little
frustrating because I am personally keen to demonstrate a full
investment exit, the important point is the quality of the business
and its leadership underpins the eventual value of our reward and
we are prepared to be patient when investing.
TruSpine has been a slow-burn for us and there is no doubt that
the new management team has, largely through events outside their
control, taken longer to put the company on a sustainable funding
path than we had hoped. This impacted their product development
goals for 2018. This is a real shame because the core product
offering remains one that generates a significant amount of
interest from industry. We recently received an update from Simon
Stephens and his team and we walked away very satisfied that whilst
been very frank about the difficulty in securing the funding they
wanted in a more timely fashion and also concluding any joint
ventures being discussed the core proposition has not changed and
they have been able to secure enough funding to avoid any
compromise to existing share structure and value proposition. We
look forward to a more fruitful 2019 for TruSpine as we haven't
changed our view on the company itself, but we have had to adjust
or estimates of timing to exit accordingly.
We have yet to receive our WeShop investor update and will have
to return to this in the near future. We have been told however
that it is in the process of taking its product inventory from 5m
to over 150m products in the UK. There has also been significant
progress on the direct integration platform and WeShop is in
negotiations with a number of global brands and retailers. There is
a marketing plan in place to drive volumes of users in Q2 of 2019.
The company continues to evaluate a potential IPO in 2019.
Summary
We ended 2018 with a successful exit from most of the HHDL
investment that yielded us an unaudited cash profit on investment
of over GBP1m. This compares favourably to our market
capitalisation on percentage-terms. It has been pleasing to be able
to take some money off the table and into treasury where we have
been able to deploy some of it into building a meaningful stake in
Greatland Gold amongst other things. We are debt free and the board
foresees no reason to raise additional capital in the short to
medium-term. With the delay in the Sport:80 IPO we have still not
gone through the full pre-IPO to IPO investment cycle but as our
sale of HHDL has proven there are several ways to achieve the
objective of generating solid returns above investment. We now have
a good balance of private and public investments and we are hopeful
that the implied increase in look-through value can better assist
our share price to reflect underlying portfolio value.
Most importantly our core holdings are preforming well. We hope
for a seminal year ahead for Engage and expect its true potential
to become evident to industry and the broader investment community.
StreamTV products should begin to hit the market and the growth
achieved since investment at Fresho should begin to be quantified
as the company finally raises more capital. Our other oil
investments in SOA and Nomad are, after some time, making real
progress towards commercialisation and WeShop we shall return to
once we receive our final update from them. We also have managed to
begin to accrue some income through the coupon on the Zuuse debt
instrument we purchased and also have the added benefit of some
attaching warrants.
So despite the turmoil that swept global markets at the end of
2018, the Board believes Primorus is very good shape to keep
delivering returns on investment such as the one we delivered this
quarter via HHDL. We look forward to 2019 with considerable
excitement and we thank our shareholders for their patience and
support.
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
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 or visit www.rns.com.
END
UPDDBGDDGSGBGCR
(END) Dow Jones Newswires
February 08, 2019 02:00 ET (07:00 GMT)
Primorus Investments (LSE:PRIM)
Gráfica de Acción Histórica
De Mar 2024 a Abr 2024
Primorus Investments (LSE:PRIM)
Gráfica de Acción Histórica
De Abr 2023 a Abr 2024
