TIDMCRV

RNS Number : 6286P

Craven House Capital PLC

18 February 2021

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION AS STIPULATED UNDER THE UK VERSION OF THE MARKET ABUSE REGULATION NO 596/2014 WHICH IS PART OF ENGLISH LAW BY VIRTUE OF THE EUROPEAN (WITHDRAWAL) ACT 2018, AS AMED. ON PUBLICATION OF THIS ANNOUNCEMENT VIA A REGULATORY INFORMATION SERVICE, THIS INFORMATION IS CONSIDERED TO BE IN THE PUBLIC DOMAIN.

Craven House Capital PLC

("Craven House" or the "Company")

Unaudited Interim Report for the period ended 30 November 2020

INVESTMENT MANAGER'S REPORT FOR THE SIX MONTH PERIODED

30 NOVEMBER 2020

Statement by the Investment Manager

Following the restructuring approved by shareholders on 22 May 2020, the Company's investment portfolio is significantly simplified and comprises minority shareholdings in five Swedish-managed eCommerce businesses.

The Company's investments are held at fair value in accordance with the IPEVC guidelines. Given the proximity of the acquisition date of the shareholdings in the businesses listed below to the period end, the original acquisition price of "Price of Recent Investment" has been applied as the valuation methodology.

 
 Investment                       Value at 30 Nov        Value at 31 May 
                                              2020                   2020 
 
  Shares in Garimon Ltd                 $1,600,000             $1,600,000 
  Shares in Rosedog Ltd                 $1,600,000             $1,600,000 
  Shares in OneBas.com Ltd              $1,600,000             $1,600,000 
  Shares in IZYRadio Ltd                $1,600,000             $1,600,000 
  Shares in YRRO Ltd                    $1,600,000             $1,600,000 
 

We are confident that the impact of the COVID-19 pandemic has not impaired the prospects or therefore the valuation of these businesses since the time of acquisition. Their respective strategies, which include the online marketing and distribution of magazines, music and dietary supplements are, in fact, likely to benefit from the shift in consumer behaviour resulting from the pandemic. The development of each business remains at an early stage and we look forward to reporting on material developments within the portfolio as appropriate.

Transactions after the period end

On 9 December 2020, the Company announced that Black Seas Property AS ("BSP") entered into a 6 month option agreement to acquire certain brand names and associated rights from its investee company YRRO Ltd. Under the terms of the agreement, consideration payable of NOK 130,000,000 is to be settled by the issuance of new shares in BSP to the shareholders of YRRO Ltd.

Desmond Holdings Ltd

Investment Manager to Craven House Capital Plc

For further information please contact:

 
 Craven House Capital Plc            Tel: 0203 286 8130 
  Mark Pajak 
  www.Cravenhousecapital.com 
 SI Capital                          Tel: 01483 413500 
  Broker 
  Nick Emerson 
  www.sicapital.co.uk 
 
   SPARK Advisory Partners Limited     Tel: 0203 368 3550 
   Nominated Adviser 
   Matt Davis/James Keeshan 
   www.Sparkadvisorypartners.com 
 

About Craven House Capital:

The Company's Investing Policy is primarily to invest in or acquire a portfolio of companies, partnerships, joint ventures, businesses or other assets participating in the e-Commerce sector.

CRAVEN HOUSE CAPITAL PLC

STATEMENT OF COMPREHENSIVE INCOME

FOR THE SIX MONTH PERIODED 30 NOVEMBER 2020

 
 
 
 
                                                   Six months ended           Year Ended 
                                             30 Nov 2020       30 Nov 2019   31 May 2020 
                                             (Unaudited)   )   (Unaudited)     (Audited) 
                                                   $'000             $'000         $'000 
 
 CONTINUING OPERATIONS 
 
 Changes in fair value                                 -           (6,893)       (6,892) 
 
   Intercompany loans written 
   off 
                                                       -                 -       (7,158) 
   Investment Manager fee 
   waived                                              -             1,657         1,446 
 
   Other income                    2                   -                 -           144 
 Administrative expenses                           (119)             (440)         (727) 
 
 OPERATING LOSS                                    (119)           (5,676)      (13,187) 
                                            ------------      ------------  ------------ 
 
 
   LOSS BEFORE INCOME TAX                          (119)           (5,676)      (13,187) 
 
 Income tax                       3                    -                 -             - 
                                            ------------      ------------  ------------ 
 
 LOSS FOR THE PERIOD                               (119)           (5,676)      (13,187) 
                                            ============      ============  ============ 
 
 
 Earnings per share expressed 
 In cents per share: 
 Basic and diluted                6               (3.08)          (223.70)      (456.52) 
 
 
 
 
 
 
 
 
 
 
 
 
                                         3 
 

CRAVEN HOUSE CAPITAL PLC

STATEMENT OF FINANCIAL POSITION

AS AT 30 NOVEMBER 2020

 
 
 
 
                                              Six months ended              Year Ended 
                                        30 Nov 2020         30 Nov 2019    31 May 2020 
                                        (Unaudited)         (Unaudited)      (Audited) 
                                              $'000               $'000          $'000 
 ASSETS 
 NON-CURRENT ASSETS 
 Investments at fair value 
  through 
 profit or loss                  4            8,000       20,476                   8,000 
                                          ---------    ---------          -------------- 
                                              8,000       20,476                   8,000 
                                          ---------    ---------          -------------- 
 
 CURRENT ASSETS 
 Trade and other receivables                     28          951                      46 
 Cash and cash equivalents                        3           16                       6 
                                          ---------    ---------          -------------- 
                                                 31          967                      52 
                                          ---------    ---------          -------------- 
 TOTAL ASSETS                                 8,031       21,443                   8,052 
                                          =========    =========          ============== 
 
 
 EQUITY 
 SHAREHOLDERS' EQUITY 
 Called up share capital         5            3,802       12,759                   3,802 
 Share premium                               11,153       25,443                  11,153 
 Accumulated deficit                        (7,276)     (20,342)                 (7,157) 
                                          ---------    ---------          -------------- 
 TOTAL EQUITY                                 7,679       17,860                   7,798 
                                          ---------    ---------          -------------- 
 
 LIABILITIES 
 CURRENT LIABILITIES 
 Trade and other payables                       352        3,083                     254 
 NON-CURRENT LIABILITIES 
 Loans and borrowings            7                -          500                       - 
                                          ---------    ---------          -------------- 
 TOTAL LIABILITIES                              352        3,583                     254 
                                          ---------    ---------          -------------- 
 TOTAL EQUITY AND LIABILITIES                 8,031       21,443                   8,052 
                                          =========    =========          ============== 
 
 

4

CRAVEN HOUSE CAPITAL PLC

STATEMENT OF CHANGES IN EQUITY

FOR THE SIX MONTH PERIODED 30 NOVEMBER 2020

 
 
 
 
                                 Called 
                               up share         Share premium             Accumulated 
                                capital                 $'000                 deficit       Total 
                                  $'000                                         $'000       $'000 
 
 
   Balance at 1 June 
   2019                          12,594                25,128                (14,666)      23,056 
 
 Changes in equity 
 Issue of share capital             165                   315                       -         480 
                             ----------      ----------------          --------------  ---------- 
 Transactions with 
  owners                         12,759                25,443                (14,666)      23,536 
                             ----------      ----------------          --------------  ---------- 
 Loss for the period                  -                     -                 (5,676)     (5,676) 
 
 Balance at 30 November 
  2019                           12,759                25,443                (20,342)      17,860 
                             ----------      ----------------          --------------  ---------- 
 
 Changes in equity 
 Issue of share capital           1,200                10,710                       -      11,910 
  Cancellation of deferred 
   shares 
  Reduction in share 
   premium                     (10,157)                     -                  10,157           - 
  Dividend in specie                  -              (25,000)                  25,000           - 
                                      -                     -                (14,461)    (14,461) 
                             ----------      ----------------          --------------  ---------- 
 Transactions with 
  owners                          3,802                11,153                     354      15.309 
                             ----------      ----------------          --------------  ---------- 
 Loss for the period                  -                     -                 (7,511)     (7,511) 
 
 Balance at 31 May 
  2020                            3,802                11,153                 (7,157)       7,798 
                             ----------      ----------------          --------------  ---------- 
 
 Changes in equity 
 Issue of share capital               -                     -                       -           - 
                             ----------      ----------------          --------------  ---------- 
 Transactions with 
  owners                          3,802                11,153                 (7,157)       7,798 
                             ----------      ----------------          --------------  ---------- 
 Loss for the period                  -                     -                   (119)       (119) 
 
 Balance at 30 November 
  2020                            3,802                11,153                 (7,276)     (7,679) 
                             ----------      ----------------          --------------  ---------- 
 

CRAVEN HOUSE CAPITAL PLC

STATEMENT OF CASH FLOWS

FOR THE SIX MONTH PERIODED 30 NOVEMBER 2020

 
 
 
 
                                                          Six months ended                 Year Ended 
                                                    30 Nov 2020       30 Nov 2019         31 May 2020 
                                                    (Unaudited)       (Unaudited)           (Audited) 
                                                          $'000             $'000               $'000 
 
 Cash flows from operating activities 
  Loss before income tax                                  (119)           (5,676)            (13,187) 
  Adjustments for non-cash items 
  Fair value movement arising on 
   investments                                                -             6,893               6,892 
  Intercompany loans written off                              -                 -               7,158 
  Management fee accrual waived                               -                 -             (1,657) 
  Costs paid by shares                                        -                 -                 190 
  Repairs                                                     -                 -                   5 
  Dividend income                                             -                 -               (144) 
  Decrease/(increase) in trade and 
   other receivables 
  Increase/(decrease) in trade and 
   other payables                                            18              (18)             (3,394) 
  Decrease in loans and borrowings                           98           (1,409)                 103 
  Non-cash issue of ordinary shares                           -             (300)                   - 
                                                              -               480                   - 
                                                   ------------      ------------      -------------- 
 Net cash used in operating activities 
 
  Cash flows from investing activities                      (3)              (30)             (4,034) 
 Dividends received from joint 
  ventures and associates                                     -                 -                 144 
                                                   ------------      ------------      -------------- 
 Net cash generated by investing 
  activities                                                  -                 -                 144 
 
 Cash flows from financing activities 
 Proceeds from issue of shares                                -                 -               3,900 
  Repayment of loan                                           -                 -                (50) 
                                                   ------------      ------------      -------------- 
 Net cash from financing activities                           -                 -               3,850 
 
 
   Net decrease in cash and cash 
   equivalents                                              (3)              (30)                (40) 
 
 Cash and cash equivalents at the 
  beginning 
 of the period                                                6                46                  46 
 
 Cash and cash equivalents at the 
  end of the period                                           3                16                   6 
                                                   ============      ============      ============== 
 
 
 
 
 
 
 
 
 
                                                   6 
 
 

CRAVEN HOUSE CAPITAL PLC

NOTES TO THE FINANCIAL INFORMATION

FOR THE SIX MONTH PERIODED 30 NOVEMBER 2020

 
 
 
   1.        ACCOUNTING POLICIES 

General Information

Craven House Capital Plc is a company incorporated in the United Kingdom under the Companies Act 2006. The address of the registered office is given on the company information page. The Company is listed on the AIM Market of the London Stock Exchange (ticker: CRV).

The next annual financial statements of Craven House Capital Plc will be prepared in accordance with applicable International Financial Reporting Standards (IFRS) as adopted for use by the European Union. Accordingly, the interim financial information in this report has been prepared using accounting policies consistent with IFRS. IFRS are subject to amendment and interpretation by the International Accounting Standards Board (IASB) and the International Financial Reporting Interpretations Committee (IFRIC) and there is an on-going process of review and endorsement by the European Commission. The financial information has been prepared on the basis of the IFRS that the directors expect to be applicable as at 31 May 2020.

The financial information has been prepared under the historical cost convention, except to the extent varied for fair value adjustments required by accounting standards, and in accordance with applicable International Financial Reporting Standards (IFRS) as adopted for use by the European Union. The principal accounting policies have been applied to all periods presented.

This financial information is unaudited and does not constitute statutory financial statements within the meaning of Section 434 of the Companies Act 2006. The financial statements of the Company for the year ended 31 May 2020, which were prepared in accordance with IFRS as adopted for use by the European Union, have been reported on by the Company's auditors and delivered to the Registrar of Companies. The report of the auditors was unqualified and did not include any statement under Section 498 of the Companies Act 2006.

This financial information is presented in United States dollar, rounded to the nearest $'000.

The directors do not propose the issuance of a dividend.

The interim financial information for the six months ended 30 November 2020 was approved by the directors on 18th February 2021.

Going concern

The directors consider that the Company is well placed to manage its business risks successfully and have a reasonable expectation that the Company has adequate resources to continue in operational existence for the foreseeable future. Thus, they continue to adopt the going concern basis of accounting in preparing the financial information.

7

CRAVEN HOUSE CAPITAL PLC

NOTES TO THE FINANCIAL INFORMATION - continued

FOR THE SIX MONTH PERIODED 30 NOVEMBER 2020

 
 
 

2. Other operating income

 
                                                   Six months ended                     Year Ended 
                                           30 Nov 2020              30 Nov 2019             31 May 
                                                                                              2020 
                                           (Unaudited)              (Unaudited)          (Audited) 
                                                 $'000                    $'000              $'000 
 
    Dividends received                                         -                   -         144 
                              -                   -                                         144 
            -------------------  ------------------                                  ---------- 
 
 
 

3. Taxation

No tax charges arose in the period or in comparative periods as a result of losses incurred.

4. Investments at fair value through profit or loss

 
                                                      Unquoted 
                                            equity investments 
                                                         $'000     Total 
                                                                   $'000 
 
 As at 1 June 2020 and 30 November 
  2020                                                   8,000     8,000 
                                          --------------------  -------- 
 
 

As part of a group reconstruction in May 2020, the Company's beneficial ownership of its historic portfolio was transferred to Ordinary Shareholders via a dividend in specie of shares in its wholly owned subsidiary, Craven Industrial Holdings Plc.

The value of Investments therefore represents the Company's acquisitions on 13 March 2020 of a 29.9% interest, at consideration of $1.6m each, in the below-named five UK entities. These are all unquoted investments and have therefore been measured on a Level 3 basis as no observable market data is available. Further information on each investment holding is as follows;

Shares in Garimon Ltd are valued at $1,600,000 representing a 29.9% holding. This shareholding has been valued on a Price of Recent Investment basis which the directors consider represents the best indication of the fair value at the year end. Garimon is the owner of "Magazinos.com", the world's largest-by-content on-line media magazine and periodical content provision service. The management of Magazinos are currently evaluating options available to broaden Magazinos' shareholder base by means of IPO and/or partnering with a major industry investor.

Shares in Onebas.com Ltd are valued at $1,600,000 representing a 29.9% holding. This shareholding has been valued on a Price of Recent Investment basis which the directors consider represents the best indication of the fair value at the year end. On ebas.com Ltd is the owner of "ONEBas.com Music", an optimised search engine providing a portal to music content freely circulating online.

8

CRAVEN HOUSE CAPITAL PLC

NOTES TO THE FINANCIAL INFORMATION - continued

FOR THE SIX MONTH PERIOD ENDED 30 NOVEMBER 2020

 
 
 
              4. Investments at fair value through profit or loss (continued) 
 
           Shares in IZYRadio Ltd are valued at $1,600,000 representing a 29.9% 
              holding. This shareholding has been valued on a Price of Recent 
             Investment basis which the directors consider represents the best 
              indication of the fair value at the year end. IZYRadio Ltd is a 
             UK/Swedish-based B2B and B2C venture which aims to offer superior 
        music quality and music videos to radio stations via software applications. 
 
            Shares in Rosedog Ltd are valued at $1,600,000 representing a 29.9% 
              holding. This shareholding has been valued on a Price of Recent 
             Investment basis which the directors consider represents the best 
             indication of the fair value at the year end. Rosedog Ltd is the 
              owner of Pro Vitos(TM), an online marketer of vitamins and diet 
            supplements and Omega 3 North Norway(TM), a distributor of branded 
                                     diet supplements. 
 
             Shares in YRRO Ltd are valued at $1,600,000 representing a 29.9% 
              holding. This shareholding has been valued on a Price of Recent 
             Investment basis which the directors consider represents the best 
              indication of the fair value at the year end. YRRO is the owner 
           of Ocean Skin Labs(TM), a distributor of branded collagen supplements 
          and Norwegian Fish Oil(TM), a distributor of branded diet supplements. 
 
          The businesses of all of the above portfolio investments are presently 
            loss-making although their cost bases are low and there is minimal 
             committed future expenditure, meaning that the extent and timing 
             of the Company's further investment in the businesses are highly 
              controllable. The Company and the incumbent management teams of 
            the investee companies will continue to work together with the aim 
          that these businesses become financially self-sustaining and generating 
         surpluses within the short- to medium-term and to crystallise additional 
        capital value for shareholders through strategic, third-party partnerships 
                                             . 
 
 
                                5. Called up share capital 
             Authorised, issued and fully paid share capital as at 30 November 
       2020 is as follows:  Number      Class:     Nominal        30 Nov      31 May 
                                        Value            2020          2020 
                                                  (Unaudited)     (Audited) 
                                                        $'000         $'000 
 
                 3,863,590   Ordinary   $1.00           3,802         3,802 
                                                        3,802         3,802 
                                                 ------------  ------------ 
 
 
           The aggregate nominal values of the ordinary shares include exchange 
           differences arising from the translation of shares at historic rates 
           and the translation at the rate prevailing at the date of the change 
                                  in functional currency. 
 
             During the year ended 31 May 2018, the Company extended the time 
            scale of 78,632 fully transferable exercisable warrants which were 
              originally issued in the year ended 31 May 2012. At the date of 
             issue, the warrants could be exercised on or before 30 June 2014, 
              this period has now been extended to 30 June 2020. The warrants 
                      are exercisable at a price of $15.00 per share. 
 
 
 
                                             9 
 

CRAVEN HOUSE CAPITAL PLC

NOTES TO THE FINANCIAL INFORMATION - continued

FOR THE SIX MONTH PERIOD ENDED 30 NOVEMBER 2020

 
 
 
  6. Earnings per share 
 

The calculation of basic earnings per share is based on the loss attributable to the equity holders of $119,000 divided by the weighted average number of shares in issue during the period of 3,863,590 (six months ended 30 November 2019: loss of $5,676,000 and 2,537,354 shares; year ended 31 May 2020: loss of $13,187,000 and 2,888,529 shares).

Diluted earnings per share has not been disclosed as the inclusion of the unexercised warrants described in note 5 would be non-dilutive.

7. Convertible loan note

As part of the group reconstruction in May 2020, $500,000 of the convertible loan note which was outstanding at 30 November 2019 was assigned to the Company's wholly owned subsidiary, Craven Industrial Holdings Plc.

8. Related party disclosures

Craven Industrial Holdings Plc

During the period, now commonly owned, former subsidiary Craven Industrial Holdings Plc paid costs on behalf of and advanced loans to the Company. At the period end, the outstanding balance due to Craven Industrial Holdings Plc was $204,241.

9. Events after the reporting period

On 9 December 2020, the Company announced that Black Seas Property AS ("BSP") entered into a 6 month option agreement to acquire certain brand names and associated rights from its investee company YRRO Ltd. Under the terms of the agreement, consideration payable of NOK 130,000,000 is to be settled by the issuance of new shares in BSP to the shareholders of YRRO Ltd.

10

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