TIDMDRUM
30 September 2020
Drumz plc
('Drumz' or the 'Company', formerly Energiser Investments Plc)
Interim Results to 30 June 2020
CHAIRMAN'S STATEMENT
I am pleased to present the interim results for Drumz for the six months ended
30 June 2020.
Board
These results are the first that I have presented to Drumz shareholders and are
for a period that predates my appointment to the Board, which was approved by
shareholders at the Annual General Meeting of the Company held on 30 June 2020
(the "AGM""). Also at the AGM Angus Forrest was appointed to the Board as Chief
Executive Officer ("CEO") and John Wakefield as a non-executive director. I am
delighted to report that Nishith Malde has agreed to remain on the Board as a
non-executive director. Following the changes approved by shareholders at the
AGM, Stephen Wicks and John Depasquale stepped down from the Board as agreed. I
would like to take this opportunity to thank Stephen Wicks and John Depasquale
for their service and their collective contributions.
The Board now comprises Angus Forrest (CEO), who has over 25 years' experience
in investing in technology companies and three non-executives, Nishith Malde
and John Wakefield, who both have significant commercial and City experience
and me (collectively the "New Board").
Results
The Group's results showed no revenue (30 June 2019: GBPNil) and an operating
loss of GBP36,000 (30 June 2019: loss GBP50,000).
Historically, the principal asset of the Company was its investment in KCR REIT
plc ("KCR"), an AIM quoted Real Estate Investment Trust ("REIT"), operating in
the private rented residential investment market. KCR's principal activity is
to acquire blocks of studio, one and two bedroom apartments that are rented to
private tenants in the UK.
This investment comprises 2,437,710 ordinary shares, representing 8.83% of the
issued share capital of KCR. KCR's share price performance fell in the six
months ended 30 June 2020 and as a result the Company suffered a loss on this
investment in the period of GBP414,000 (30 June 2019: loss GBP122,000). As at 30
June 2020 the investment had a carrying value of GBP767,000, equivalent to a KCR
price per ordinary share of 31.5 pence per share.
Principally due to the loss described above, the result for the period was a
loss before and after taxation of GBP450,000 (30 June 2019: loss of GBP172,000).
The loss per ordinary share amounted to GBP0.36p (30 June 2019: loss GBP0.14p). The
Company will not be declaring a dividend.
As at 30 June 2020, the net assets of the Company had decreased to GBP754,000 (30
June 2019: GBP1,104,000) which equates to a net asset value per ordinary share of
GBP0.61 pence (30 June 2019: GBP0.89p).
On 18 September 2020, KCR released its audited results for the year ended 30
June 2020 which included the following comments from their Chairman:
"The Coronavirus has had a global negative impact on demand, supply chains,
stock markets and consumer and business confidence. The economic impact is now
being felt by companies and families. This has the potential to negatively
impact the occupancy level and rentals that can be achieved in KCR's portfolio.
However, at the accounts issue date, KCR has maintained a high occupancy and
rental collection level of more than 95% and rents overall have continued to
increase.
There is greater supply of studio, one and two bed flats in the letting market
which has increased letting times from less than one week to up to three weeks
in our London portfolio. However, there continues to be strong tenant demand in
all the Company's locations. UK residential rented property remains
fundamentally under-supplied and KCR continues to target studio, one and two
bed units, that are in high demand and relatively short supply."
New Investing Policy
Previously, the Company had principally invested in real estate, but the then
Board had concluded that, following the COVID-19 worldwide pandemic, the short
term prospects for real estate in the UK might be adversely affected. With the
change in the Board, at the Company's AGM, shareholders approved a new
investing policy.
The Company's new investing policy will be to invest principally, but not
exclusively, in the technology sector within Europe ("New Investing Policy").
Although the Company intends the main focus of the New Investing Policy to be
on technology businesses, this will not preclude the Company from considering
investment in suitable projects in other sectors or geographies where the New
Board believes that there are high-growth opportunities.
In accordance with the New Investing Policy, the New Board will pursue a
strategy under which the Company will invest in and acquire technology
businesses, improve them by a combination of new management and investment and
then realise or retain the value created. The Company may be either an active
investor and acquire a controlling interest in companies or it may acquire
non-controlling shareholdings.
Whilst it is not possible to be entirely prescriptive, the Company will be
actively seeking investment opportunities which can be improved through the
introduction of management skills and expertise from the Board and/or further
investment capital. The Board considers that the broad collective experience of
the Directors together with their extensive network of contacts will assist
them in the identification, evaluation and funding of suitable investment
opportunities.
The opportunities are likely to have some or all of the following
characteristics, namely:
* a majority of their revenue derived from technology or the use of
technology, which the New Board believes is strongly positioned to benefit
from market growth;
* a trading history which reflects past profitability and potential for
significant capital growth; and
* where all or part of the consideration might be satisfied by the issue of
new ordinary shares or other securities in the Company.
The Company's financial resources may be invested in a small number of projects
or investments or potentially in just one investment. These investments may be
in either quoted or unquoted companies. The Company's investments may take the
form of equity, debt or convertible instruments. Investments may be made in all
types of assets falling within the remit of the New Investing Policy and there
will be no investment restrictions. The New Board may consider it appropriate
to take an equity interest in any proposed investment, which may range from a
minority position to 100 per cent ownership. The Company may be either an
active or passive investor.
The objective of the New Board is to generate investment returns principally
through capital appreciation. Any income generated by the Company will first be
applied to cover the Company's overheads and then any surplus will be added to
the funds available to further implement the New Investment Policy. In view of
this and the considerable deficit on the Company's profit and loss account, it
is extremely unlikely that the New Board will be in a position to recommend any
dividends in the early years of its existence without effecting a capital
reconstruction, which would need to be approved by the courts. However, the New
Board may recommend or declare dividends at some future date, depending on the
financial position of the Company at that time. Given the nature of the
Company's New Investing Policy, the Company does not intend to make regular
periodic disclosures or calculations of net asset value.
Placing
In order to facilitate the Company's New Investing Policy, the Company
undertook a placing of 130,000,000 new ordinary shares at a price of 0.5p per
ordinary share, which raised approximately GBP650,000 (before the expenses of the
issue) (the "Placing"). The Placing was approved by shareholders on 30 June
2020 and the new ordinary shares commenced trading on 1 July 2020.
First Technology Investment
Having changed the Company's investment policy and completed the Placing, the
Company was able in September 2020 to make its first new investment, being the
acquisition of a minority stake in Acuity Risk Management Ltd, ("Acuity"),
which operates an award winning software business specialising in risk
management. Acuity's business is the supply of its proprietary software, STREAM
T, and services for cyber security and risk management, used by organisations
globally for customers ISO 27001, GDPR, NIST Cyber Security Framework and other
programs.
The Company has invested GBP500,000 in cash for an initial 20 per cent.
shareholding in Acuity, with an option to acquire an additional 5 per cent. for
a further GBP125,000.
The Acuity business was founded in 2005 by a team who had previously built a
consultancy business specialising in cyber security which was later acquired by
Siemens. The founders encapsulated their knowledge in developing the STREAMT
software which was launched in 2007. This software enables a risk-based
approach to cyber security, reducing the risk of security breaches, optimising
cyber security activities and, in the event of a breach, mitigating damage
through a strategic risk-based approach.
Acuity's customers include government organisations, large and medium sized
private enterprises in the UK, Europe, Africa and North America. Gartner
reports the global market for Integrated Risk Management ('IRM') in 2020 to be
$7.3 billion with projected growth to $9.3 billion by 2023. This is being
driven by the development of new digital products and services designed to
propel a company's future growth. In turn this introduces new risks that
require IRM technology.
Acuity regularly wins awards including in Information Age and TechWorld's top
cyber security companies in the UK supplying cybersecurity services to
organisations globally. STREAMT has been awarded a five star rating in the SC
Media GRC, Risk and Policy Management Review for five consecutive years. In
2018, STREAMT was Continuity, Insurance and Risk magazine's cyber security
product of the year.
The last published accounts for the Acuity business were issued by Acuity RM
LLP for the 12 months to 31 March 2019 and show that the business generated a
profit before tax of GBP226,000 on revenues of GBP858,000. The net assets of Acuity
RM LLP as at 31 March 2019 were GBP11,000. Acuity RM LLP transferred its business
to Acuity earlier in 2020.
Outlook
This has been a productive period for your New Board, with the introduction of
the New Investment Policy, finalisation of the Placing and completion of the
Company's first technology Investment. I look forward to being able to report
on further progress made by Drumz, as and when appropriate.
Simon Bennett
Chairman
29 September 2020
Group statement of comprehensive income
Unaudited Unaudited Audited
6 months 6 months year to
to 30 to 30 June 31
June 2020 2019 December
2019
Note GBP'000 GBP'000 GBP'000
Continuing operations
Revenue arising in the course of ordinary activities - - 2
Cost of sales - - -
Gross profit - - 2
Reversal of accrued remuneration for former director - - 117
Administrative expenses (36) (50) (76)
Operating (loss) / profit 5 (36) (50) 43
Loss on investments (414) (122) (134)
Recovery of bad debt written off in previous periods - - 19
Loss before and after taxation 5 (450) (172) (72)
Loss for the period attributable to shareholders of the (450) (172) (72)
Company
Total comprehensive loss (450) (172) (72)
Loss per share
Basic and diluted loss per share from total and 4 (0.36)p (0.14)p (0.06)p
continuing operations
Diluted earnings per share is taken as equal to basic earnings per share as the
Group's average share price during the period is lower than the exercise price
and therefore the effect of including share options is anti-dilutive.
Group statement of financial position
Unaudited Unaudited Audited as
as at 30 as at 30 at 31
June 2020 June 2019 December
2019
Note GBP'000 GBP'000 GBP'000
ASSETS
Non-current assets
Investments 6 767 1,193 1,181
767 1,193 1,181
Current assets
Trade and other receivables 9 15 5
Cash and cash equivalents 25 163 96
34 178 101
Total assets 801 1,371 1,282
LIABILITIES
Current liabilities
Trade and other payables 47 267 78
Total liabilities 47 267 78
Net assets 754 1,104 1,204
EQUITY
Share capital 2,392 2,392 2,392
Share premium account 7,189 7,189 7,189
Convertible loan 88 88 88
Merger reserve 1,012 1,012 1,012
Retained earnings (9,927) (9,577) (9,477)
Total equity 754 1,104 1,204
Group statement of changes in equity
Share
Share premium Convertible Merger Retained Total
capital account loan reserve earnings equity
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Balance at 1 January 2019 2,392 7,189 88 1,012 (9,405) 1,276
Total comprehensive - - - - (172) (172)
profit
Balance at 30 June 2019 2,392 7,189 88 1,012 (9,577) 1,104
Total comprehensive - - - - 100 100
profit
Balance at 31 December 2,392 7,189 88 1,012 (9,477) 1,204
2019
Total comprehensive loss - - - - (450) (450)
Balance at 30 June 2020 2,392 7,189 88 1,012 (9,927) 754
Group statement of cash flows
Unaudited Unaudited Audited
6 months 6 months year to
to 30 June to 30 31
2020 June 2019 December
2019
GBP'000 GBP'000 GBP'000
Cash flows from operating activities
(Loss)/profit before taxation (450) (172) (72)
Adjustments for:
Fair value adjustment for listed investments 414 122 134
Changes in working capital:
- (Increase)/decrease in trade and other receivables (4) (7) 3
- (Decrease)/increase in trade and other payables (31) 43 (146)
Net cash used in operating activities (71) (14) (81)
Net decrease in cash and cash equivalents (71) (14) (81)
Cash and cash equivalents at beginning of period 96 177 177
Cash and cash equivalents at end of period 25 163 96
Notes
1. Nature of operations and general information
The principal activity of the Group is as an investing company investing in
quoted and unquoted companies to achieve capital growth.
Drumz plc is the Group's ultimate parent company. It is incorporated and
domiciled in Great Britain. The address of Drumz plc's registered office is
Burnham Yard, London End, Beaconsfield, Buckinghamshire, HP9 2JH.
Drumz plc's shares are quoted on AIM, a market operated by the London Stock
Exchange. The consolidated half-yearly financial report has been approved for
issue by the Board of Directors on 29 September 2020.
The financial information set out in this half-yearly financial report does not
constitute statutory accounts as defined in Sections 434(3) and 435(3) of the
Companies Act 2006. The Group's statutory financial statements for the year
ended 31 December 2019 have been filed with the Registrar of Companies and are
available at www.drumzplc.com. The auditor's report on those financial
statements was unqualified and did not contain any statement under Section 498
(2) or Section 498(3) of the Companies Act 2006.
2. Basis of preparation
This consolidated half-yearly financial report has been prepared in accordance
with International Accounting Standard 34 - Interim Financial Reporting.
On 11 March 2020, the World Health Organisation declared the coronavirus
(COVID-19) a global pandemic. There are no comparable recent events which may
provide guidance as to the effect of the spread of COVID-19 and a potential
pandemic, and, as a result, the ultimate impact of the COVID-19 outbreak or a
similar health epidemic is uncertain. As such, there is still significant
uncertainty as to what foreseen or unforeseen action or actions the Group may
be required to take in order to respond to any circumstances that may arise in
the future.
The Directors have considered the possible impact of COVID-19 on Drumz and its
business activities, which are now increasingly focussed on software
businesses. They believe that many businesses in the software sector can be
operated remotely in a virtual environment which should reduce the impact of
COVID-19 on their activities.
The net proceeds of the placing were used to make the Group's first technology
investment of GBP500,000 (further details of which are set out in Note 7 Post
Balance Sheet Events) and to provide additional working capital. In addition
the Group has an existing investment in KCR REIT plc, further details of which
are included in the Chairman's statement, which could be realised. As a result,
the Directors consider it appropriate to prepare the interim report on the
going concern basis.
The consolidated half-yearly financial report should be read in conjunction
with the annual financial statements for the year ended 31 December 2019, which
have been prepared in accordance with IFRS as adopted by the European Union.
3. Accounting policies
The accounting policies applied are consistent with those of the annual
financial statements for the year ended 31 December 2019.
4. Loss per ordinary share
The loss per ordinary share is based on the weighted average number of ordinary
shares in issue during the period of 123,912,957 ordinary shares of 0.1p (2018:
123,912,957 ordinary shares of 0.1p) and the following figures:
Unaudited Unaudited Audited
6 months 6 months year to
to 30 to 30 31
June 2020 June 2019 December
2019
Loss attributable to equity shareholders GBP'000 (450) (172) (72)
Loss per ordinary share (0.36)p (0.14)p (0.06)p
Diluted loss per share is taken as equal to basic earnings per share as the
Group's average share price during the period is lower than the exercise price
and therefore the effect of including share options is anti-dilutive.
5. Income and segmental analysis
Unaudited Unaudited Audited year
6 months to 6 months to to 31
30 June 30 June December 2019
2020 2019
GBP'000 GBP'000 GBP'000
Segment result
Investment activities:
Reversal of accrued remuneration for former director - - 117
Administrative expenses (36) (50) (76)
(36) (50) 41
Rental activities:
Rental income - - 2
- - 2
Operating loss (36) (50) 43
Finance income
Other gains and losses (414) (122) (115)
Loss before tax (450) (172) (72)
Unaudited Unaudited Audited
as at 30 as at 30 as at 31
June 2020 June 2019 December
2019
GBP'000 GBP'000 GBP'000
Segment assets
Investment activities:
Non-current assets 767 1,193 1,181
Current assets - other 34 178 101
801 1,371 1,282
Total assets 801 1,371 1,282
Segment liabilities
Investment activities:
Current liabilities 47 267 78
47 267 78
Total liabilities 47 267 78
Total assets less total liabilities 754 1,104 1,204
The activity of both the investments and rentals arose wholly in the United
Kingdom. No single customer accounts for more than 10% of revenue.
6. Investments
During the year ended 31 December 2018 the Group acquired 2,435,710 shares in
KCR Residential Reit PLC, an AIM listed real estate investment trust who
specialise in the acquisition and management of rented residential portfolios
in the UK.
Investments
GBP'000
Cost
At 1 January 2019, 30 June 2019 and 31 December 2019 1,705
At 30 June 2020 1,705
Fair value losses
At 1 January 2019 (390)
Change in fair value recognised in profit and loss (122)
At 30 June 2019 (512)
Change in fair value recognised in profit and loss (12)
At 31 December 2019 (524)
Change in fair value recognised in profit and loss (414)
At 30 June 2020 (938)
Fair Value
At 30 June 2020 767
At 31 December 2019 1,181
At 30 June 2019 1,193
7. Post balance sheet events
On 1 July 2020, the Company placed 130,000,000 new ordinary shares of 0.1 pence
each at a price of 0.5p each. Following the placing, the Company had a total of
253,912,957 ordinary shares in issue.
On 4 September 2020 the Group made its first technology investment in Acuity
Risk Management Limited ("Acuity"), which operates an award winning software
business specialising in risk management. Drumz invested GBP500,000 in cash for
an initial 20% shareholding in Acuity with an option to acquire an additional
5% for a further GBP125,000. Further details can be found in the Chairman's
Statement.
END
(END) Dow Jones Newswires
September 30, 2020 02:00 ET (06:00 GMT)
Energiser Investments (LSE:ENGI)
Gráfica de Acción Histórica
De Feb 2024 a Mar 2024
Energiser Investments (LSE:ENGI)
Gráfica de Acción Histórica
De Mar 2023 a Mar 2024