TIDMPRIM
RNS Number : 2996Z
Primorus Investments PLC
16 May 2019
Primorus Investments plc
("Primorus" or the "Company")
Final results for year ended 31 December 2018
CHAIRMAN'S STATEMENT
I am pleased to present the Chairman's Statement and Strategic
report for the year ended 31 December 2018.
Overview
Primorus Investments plc ("Primorus") has a strong balance sheet
with total assets (including cash of GBP408,000) as at 31 December
2018 amounting to GBP5.276 million (2017: GBP5.047 million), and
net assets of GBP5.158 million (2017: GBP4.950 million)
It has been a successful year for the Company with the addition
of several new investments as detailed below. 2018 was dominated by
portfolio acquisition, consolidation and rationalisation through
the participation in further funding rounds; acquisition of an
initial stake in Greatland Gold PLC ("Greatland"); funding of loan
notes in Zuuse Pty Ltd ("Zuuse"); the sale of our 10% stake in
Horse Hill Developments Limited ("HHDL") and the strong growth seen
at Engage Technology Partners Limited ("Engage") and Fresho.
Highlights for the period were as follows:
-- Disposal of our 10% stake HHDL stake for net gain of approximately GBP1.1m
-- Investment in Greatland of approximately GBP630,000 to date
-- A further investment during 2018 in Engage of GBP1,000,000
-- Funding of loan notes in Zuuse during 2018 of approximately GBP275,000
Significant progress has also been made elsewhere in our
portfolio and we look forward to providing updates as key news
develops at TruSpine, Sport80, Fresho, Zuuse, WeShop, Nomad Energy,
SOA, and StreamTV.
We regularly meet the CEOs and management of companies which are
seeking funds to further their businesses. It is notable the
comments we receive on the perceived difficulty in securing funding
outside the VC/VCT and private equity universe. Several companies
pointed out to us that there is simply a dearth of investors able
to participate directly in pre-IPO and private funding rounds and
that VC/VCT funding terms are onerous to the point of being
unattractive.
It is important for shareholders to understand that whilst we do
everything possible to support our existing investments because it
is in our interest to do so, we do not have a direct effect on the
exact timing of any given IPO and or trade sale. We do however
maintain regular dialogue with the companies in question and use
the Board's extensive experience in public markets to make a value
judgement on when and if a transaction may occur.
Summary
As the Chairman of Primorus I would like to begin by thanking
shareholders for their continued support. We have achieved a lot in
the year including the first of our significant exits, the
construction of a better-balanced and growing portfolio of listed
and private investments. We have also gone through the year without
any need to raise further capital and therefore have issued no new
shares. All of this in the face of several difficult macro-economic
events and unprecedented political uncertainty in the UK. That
being said, and despite significant efforts, I believe none of this
has not been reflected in the price of our shares at the time of
writing.
The Board and I are well aware of the challenges that face
investment companies in terms of gaining recognition for the value
of their portfolios. Discounts to net asset values are the norm for
UK listed investment companies, however it is my firm belief that
the discount to value equation for Primorus is unduly wide. I can
reassure shareholders that through a combination of improving
market awareness and concluding successful exits we will endeavour
to make significant progress towards our goal of growing the
balance sheet to GBP25m in the short to medium term.
What we have achieved in the past year however should not be
understated as it puts us in a much stronger position going
forward.
As reflected in the accounts accompanying this report, we
managed to achieve a net gain of approximately GBP1.1m on disposal
of our 10% interest in HHDL. This involved several structured deals
involving cash and shares in other listed entities that we in turn
sold to realise the return. Not only was this complex and
multi-stage but the share sales were with hindsight well timed and
priced.
As well as being an excellent return on overall investment, the
HHDL exit should help demonstrate the ability of the company to
realise tangible cash returns on its private investment portfolio.
So whilst many of our investments are geared towards an
IPO/Post-IPO exit mechanism, as demonstrated by HHDL, there are
other ways to realise value from our portfolio.
It is my firm belief that if we can demonstrate a few more
successful exits in the coming year then, gains aside, there is a
strong case for the overall discount to net asset value of the
company to improve and thus by definition the shareprice. This is
what we are working towards.
Where we are materially different compared to previous years is
that we now have a significant weighting in publicly listed stock
and some interest-bearing corporate debt.
We own 37 million shares in Greatland Gold PLC ("Greatland")
which has recently announced it is soon to kick off exploration
across their projects and this includes the much-anticipated
Havieron which now forms part of a Farm-in Agreement with Newcrest
Mining (NCZ.AX) ('Newcrest"). We believe Greatland to be an
opportunity of the highest order and the flow-through effect of
success and newsflow has the potential to be a catalyst for our
share price.
We also now hold in Zuuse A$500,000 in loan notes due December
2019 at an attractive rolled up coupon of 12% as well as some
options. Zuuse is an international construction payments and
lifecycle software vendor with significant operations in the UK,
United States and Australia.
Elsewhere as reported recently in our Q1 2019 Report to
shareholders our oil and gas portfolio has begun to clear some key
hurdles and with respect to SOA Energy we expect there to be news
of a drilling campaign on the Ofek Licence in Israel soon.
In our core pre-IPO investment portfolio most of our investee
companies continue to make significant progress despite a difficult
funding environment for unlisted companies. Our largest overall
investment, Engage, has begun sales of its pure SaaS, fully-self
serve product range and whilst early days, the spike in sales and
billable transactions is very impressive. Fresho has grown its
platform substantially and is busy expanding into new markets. They
have attracted significant funding and are well financed to execute
their business plan over the next 12 months. We have been made an
offer to sell our stock but we declined for now.
Other companies such as WeShop, TruSpine and Sport:80 have made
excellent progress however there is no doubt the timing to exits
have been affected by weak UK equity markets for IPOs and scarce
funding for smaller private companies.
We are committed to building up distributable returns such that
when appropriate we can either buy our own shares back in the
market or pay dividends to shareholders.
So reflecting on the last year and looking forward I am
confident that the overall balance of our investments should
enhance the potential for profitable returns and with no debt and
no foreseeable need to raise capital, we are in a good position to
maximise any potential uplifts and exits in our portfolio for
existing shareholders.
Financial Results
The operating loss for the year was GBP4,000 (2017: GBP703,000
loss). The net loss after tax was GBP4,000 (2017: GBP947,000 loss).
The decrease in the net loss is mainly due to net gains on AFS
investments of GBP913,000 (2017: GBP41,000).
Total assets including cash at 31 December 2018 amounted to
GBP5.276 million (2017: GBP5.047 million).
Outlook
The Board remains confident that the private and pre-IPO markets
remain significantly under-served and as such significant
opportunities exist for the Company going forward. We look forward
to 2019 being one in which we can further demonstrate our business
model by exiting some more of our investment positions, thereby
realising tangible value for all shareholders.
We will continue to seek out further investments in line with
the Company's investing strategy.
The directors would like to take this opportunity to thank our
shareholders, staff and consultants for their continued
support.
Jeremy Taylor-Firth
Chairman
16 May 2019
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
FINANCIAL STATEMENTS
STATEMENT OF COMPREHENSIVE INCOME
YEARED 31 DECEMBER 2018
2018 2017
Notes GBP000 GBP000
Revenue
Investment income 2 7 -
Realised gain on disposal of AFS investments 2 985 12
Unrealised gain on market value movement
of AFS investments 2 (79) 29
--------- ---------
Total gains on AFS investments 913 41
--------- ---------
Impairment provision on AFS investments 8 (100) -
Share based payments (212) (311)
Administrative costs (605) (433)
--------- ---------
Operating (loss) 3 (4) (703)
--------- ---------
Share of (loss) of associate 7 - (45)
Net (loss) on disposal of associate 7 - (199)
--------- ---------
(Loss) before tax (4) (947)
Taxation 5 - -
--------- ---------
(Loss) for the year attributable to equity
holders of the company (4) (947)
--------- ---------
(Loss) per Share
Basic and diluted (loss) per share (pence) 6 (0.0001) (0.0543)
--------- ---------
There are no other recognised gains or losses for the year.
The Accounting Policies and Notes form an integral part of these
Financial Statements.
STATEMENT OF FINANCIAL POSITION
AT 31 DECEMBER 2018
2018 2018 2017 2017
ASSETS Notes GBP000 GBP000 GBP000 GBP000
Non-Current Assets
Investment in Associate 7 - -
Available for Sale Investments 8 4,779 3,761
--------- ---------
4,779 3,761
Current Assets
Trade and other receivables 9 89 725
Cash and cash equivalents 10 408 561
--------- ---------
497 1,286
Total Assets 5,276 5,047
------- -------
LIABILITIES
Current Liabilities
Trade and other payables 11 (118) (97)
Total Liabilities (118) (97)
------- -------
Net Assets 5,158 4,950
======= =======
EQUITY
Equity Attributable to Equity
Holders
of the Company
Share capital 13 15,391 15,391
Share premium account 35,296 35,296
Share based payment reserve 683 471
Retained earnings (46,212) (46,208)
--------- ---------
Total Equity 5,158 4,950
======= =======
These Financial Statements were approved by the Board of
Directors and authorised for issue on 16 May 2019.
The Accounting Policies and Notes form an integral part of these
Financial Statements.
STATEMENT OF CHANGES IN EQUITY
AT 31 DECEMBER 2018
Share Share Share Retained Total
capital premium based earnings attributable
payment to owners
reserve of the
Company
GBP000 GBP000 GBP000 GBP000 GBP000
Balance at 31 December 2016 15,223 32,205 160 (45,261) 2,327
========= ========= ========= ========== ==============
Loss for the year - - - (947) (947)
Total comprehensive income
for the year - - - (947) (947)
Shares issued 168 3,219 - - 3,387
Share Issue costs - (128) - - (128)
Share options issued - - 311 - 311
Transactions with owners
of the company 168 3,091 311 - 3,570
Balance at 31 December 2017 15,391 35,296 471 (46,208) 4,950
--------- --------- --------- ---------- --------------
Loss for the year - - - (4) (4)
Total comprehensive income
for the year - - - (4) (4)
Share options issued - - 212 - 212
Transactions with owners
of the company - - 212 - 212
Balance at 31 December 2018 15,391 35,296 683 (46,212) 5,158
========= ========= ========= ========== ==============
STATEMENT OF CASH FLOWS
YEARED 31 DECEMBER 2018
2018 2018 2017 2017
GBP000 GBP000 GBP000 GBP000
Cash Flows from Operating Activities
Operating Loss (4) (703)
Adjustments for:
Share based payment charge 212 311
Impairment provision 100 -
Change in trade and other receivables (47) (26)
Change in trade and other payables 21 59
Change in AFS Investments (175) (2,530)
Taxation (paid) - -
107 (2,186)
------- --------
Net Cash used in Operating Activities 107 (2,889)
Cash Flows from Investing Activities
Loan advanced to associate - (5)
Loan advanced to related party (260) (25)
Net Cash used in Investing Activities (260) (30)
Cash Flows from Financing Activities
Proceeds from share issues - 3,387
Share issue costs - (128)
------- --------
Net Cash in generated from Financing
Activities - 3,259
------- --------
Net Change in Cash and Cash Equivalents (153) 340
Cash and Cash Equivalents at beginning
of period 561 221
------- --------
Cash and Cash Equivalents at end
of period 408 561
======= ========
NOTES TO THE FINANCIAL STATEMENTS
YEARED 31 DECEMBER 2018
1. Accounting Policies
Basis of Preparation
Primorus Investments Plc is a company incorporated in the United
Kingdom. The Company's shares are listed on the AIM market of the
London Stock Exchange, and on the NEX Exchange Growth Market as
operated by NEX Exchange Limited ("NEX").
The Financial Statements are for the year ended 31 December 2018
and have been prepared under the historical cost convention and in
accordance with International Financial Reporting Standards as
adopted by the EU ("adopted IFRS"). These Financial Statements (the
"Financial Statements") have been prepared and approved by the
Directors on 16 May 2019 and signed on their behalf by Donald
Strang and Alastair Clayton.
The accounting policies have been applied consistently
throughout the preparation of these Financial Statements, and the
financial report is presented in Pound Sterling (GBP) and all
values are rounded to the nearest thousand pounds (GBP'000) unless
otherwise stated.
Investing Policy
The Company's investing policy is to acquire a diverse portfolio
of direct and indirect interests in exploration and producing
projects and assets in the natural resources sector in addition to
acquisition(s) in the leisure, corporate services, consultancy and
brand licensing sectors. The Company will consider possible
opportunities anywhere in the world.
The Directors have considerable experience investing, both in
structuring and executing deals and in raising funds. The Directors
will use this experience to identify and investigate investment
opportunities, and to negotiate acquisitions. Wherever necessary
the Company will engage suitably qualified technical personnel to
carry out specialist due diligence prior to making an acquisition
or an investment.
The Company may invest by way of outright acquisition or by the
acquisition of assets, including the intellectual property, of a
relevant business, or by entering into partnerships or joint
venture arrangements. Such investments may result in the Company
acquiring the whole or part of a company or project (which in the
case of an investment in a company may be private or listed on a
stock exchange, and which may be pre-revenue), and such investments
may constitute a minority stake in the company or project in
question.
The Company may be both an active and a passive investor
depending on the nature of the individual investments in its
portfolio. Although the Company intends to be a long-term investor,
the Directors will place no minimum or maximum limit on the length
of time that any investment may be held.
The Directors may offer new Ordinary Shares by way of
consideration as well as cash, thereby helping to preserve the
Company's cash for working capital and as a reserve against
unforeseen contingencies including by way of example, and without
limitation, delays in collecting accounts receivable, unexpected
changes in the economic environment and unforeseen operational
problems. The Company may in appropriate circumstances issue debt
securities or otherwise borrow money to complete an investment. The
Directors do not intend to acquire any cross-holdings in other
corporate entities that have an interest in the Ordinary
Shares.
There are no restrictions in the type of investment that the
Company might make nor on the type of opportunity that may be
considered other than set out in this Investing policy.
In addition, the Directors may consider from time to time other
means of facilitating returns to Shareholders including dividends,
share repurchases, demergers, and schemes of arrangements or
liquidation.
Going Concern
The Directors noted the losses that the Company has made for the
Year Ended 31 December 2018. The Directors have prepared cash flow
forecasts for the period ending 31 May 2020 which take account of
the current cost and operational structure of the Company.
The cost structure of the Company comprises a high proportion of
discretionary spend and therefore in the event that cash flows
become constrained, costs can be quickly reduced to enable the
Company to operate within its available funding.
These forecasts demonstrate that the Company has sufficient cash
funds available to allow it to continue in business for a period of
at least twelve months from the date of approval of these financial
statements. Accordingly, the financial statements have been
prepared on a going concern basis.
It is the prime responsibility of the Board to ensure the
Company remains a going concern. At 31 December 2018 the Company
had cash and cash equivalents of GBP408,000 and no borrowings. The
Company has minimal contractual expenditure commitments and the
Board considers the present funds sufficient to maintain the
working capital of the Company for a period of at least 12 months
from the date of signing the Annual Report and Financial
Statements. For these reasons the Directors adopt the going concern
basis in the preparation of the Financial Statements.
New standards, amendments and interpretations adopted by the
Company
No new and/or revised Standards and Interpretations have been
required to be adopted, and/or are applicable in the current year
by/to the Company, as standards, amendments and interpretations
which are effective for the financial year beginning on 1 January
2018 are not material to the Company.
New standards, amendments and interpretations not yet
adopted
At the date of authorisation of these financial statements, the
following Standards and Interpretations which have not been applied
in these financial statements, were in issue but not yet effective
for the year presented:
- IFRS 16 in respect of Leases which will be effective for
accounting periods beginning on or after 1 January 2019.
- IFRS 17 Insurance Contracts (effective date 1 January
2021).
There are no other IFRSs or IFRIC interpretations that are not
yet effective that would be expected to have a material impact on
the Company.
Sources of Estimation and Key Judgements
The preparation of the Financial Statements requires the Company
to make estimates, judgements and assumptions that affect the
reported amounts of assets, liabilities, revenues and expenses and
related disclosure of contingent assets and liabilities. The
Directors base their estimates on historic experience and various
other assumptions that they believe are reasonable under the
circumstances, the results of which form the basis of making
judgements about the carrying value of assets and liabilities that
are not readily apparent from other sources. Actual results may
differ from these estimates under different assumptions or
conditions.
Revenue
Revenue is measured by reference to the fair value of
consideration received or receivable by the Company for services
provided, excluding VAT and trade discounts. Revenue is credited to
the Income Statement in the period it is deemed to be earned.
Interest income from financial assets at FVPL is included in the
net fair value gains/(losses) on these assets. Interest income on
financial assets at amortised cost and financial assets at,
available-for-sale securities, held-to-maturity investments and
loans and receivables is calculated using the effective interest
method is recognised in the statement of profit or loss as part of
investment or other income.
Finance Income and Costs
Finance income and costs are reported on an accruals basis.
Taxation
Current tax is the tax currently payable based on taxable profit
for the year.
Deferred income taxes are calculated using the liability method
on temporary differences. Deferred tax is generally provided on the
difference between the carrying amounts of assets and liabilities
and their tax bases. However, deferred tax is not provided on the
initial recognition of goodwill, nor on the initial recognition of
an asset or liability unless the related transaction is a business
combination or affects tax or accounting profit. Deferred tax on
temporary differences associated with shares in subsidiaries and
joint ventures is not provided if reversal of these temporary
differences can be controlled by the Company and it is probable
that reversal will not occur in the foreseeable future. In
addition, tax losses available to be carried forward as well as
other income tax credits to the Company are assessed for
recognition as deferred tax assets.
Deferred tax liabilities are provided in full, with no
discounting. Deferred tax assets are recognised to the extent that
it is probable that the underlying deductible temporary differences
will be able to be offset against future taxable income. Current
and deferred tax assets and liabilities are calculated at tax rates
that are expected to apply to their respective period of
realisation, provided they are enacted or substantively enacted at
the balance sheet date.
Changes in deferred tax assets or liabilities are recognised as
a component of tax expense in the income statement, except where
they relate to items that are charged or credited directly to
equity in which case the related deferred tax is also charged or
credited directly to equity.
Foreign Currencies
Transactions in foreign currencies are translated at the
exchange rate ruling at the date of the transaction. Monetary
assets and liabilities in foreign currencies are translated at the
rates of exchange ruling at the balance sheet date. Non-monetary
items that are measured at historical cost in a foreign currency
are translated at the exchange rate at the date of the transaction.
Non-monetary items that are measured at fair value in a foreign
currency are translated using the exchange rates at the date when
the fair value was determined. Any exchange differences arising on
the settlement of monetary items or on translating monetary items
at rates different from those at which they were initially recorded
are recognised in the profit or loss in the period in which they
arise. Exchange differences on non-monetary items are recognised in
other comprehensive income to the extent that they relate to a gain
or loss on that non-monetary item taken to other comprehensive
income, otherwise such gains and losses are recognised in the
income statement.
The Company's functional currency and presentational currency is
Sterling.
Equity
Equity comprises the following:
-- "Share capital" representing the nominal value of equity shares.
-- "Share premium" representing the excess over nominal value of
the fair value of consideration received for equity shares, net of
expenses of the share issue.
-- "Share based payment reserve" represents the value of equity
benefits provided to employees and directors as part of their
remuneration and provided to consultants and advisors hired by the
Company from time to time as part of the consideration paid.
-- "Retained earnings" representing retained profits.
Financial Assets
Financial assets are divided into the following categories:
loans and receivables and available-for-sale financial assets.
Financial assets are assigned to the different categories by
management on initial recognition, depending on the purpose for
which they were acquired, and are recognised when the Company
becomes party to contractual arrangements. Both loans and
receivables and available for sale financial assets are initially
recorded at fair value.
Loans and receivables are non-derivative financial assets with
fixed or determinable payments that are not quoted in an active
market. Trade, most other receivables and cash and cash equivalents
fall into this category of financial assets. Loans and receivables
are measured subsequent to initial recognition at amortised cost
using the effective interest method, less provision for impairment.
Any change in their value through impairment or reversal of
impairment is recognised in the income statement.
Provision against trade receivables is made when there is
objective evidence that the Company will not be able to collect all
amounts due to it in accordance with the original terms of those
receivables. The amount of the write-down is determined as the
difference between the asset's carrying amount and the present
value of estimated future cash flows.
A financial asset is derecognised only where the contractual
rights to the cash flows from the asset expire or the financial
asset is transferred and that transfer qualifies for derecognition.
A financial asset is transferred if the contractual rights to
receive the cash flows of the asset have been transferred or the
Company retains the contractual rights to receive the cash flows of
the asset but assumes a contractual obligation to pay the cash
flows to one or more recipients. A financial asset that is
transferred qualifies for derecognition if the Company transfers
substantially all the risks and rewards of ownership of the asset,
or if the Company neither retains nor transfers substantially all
the risks and rewards of ownership but does transfer control of
that asset.
Available-for-sale financial assets are non-derivative financial
assets that are either designated to this category or do not
qualify for inclusion in any of the other categories of financial
assets. The Company's available-for-sale financial assets include
listed and unlisted securities. These available-for-sale financial
assets are measured at fair value. Gains and losses are recognised
in the income statment and reported within revenue, except for
impairment losses and foreign exchange differences, which are
recognised separately within the income statement. When the asset
is disposed of or is determined to be impaired, the cumulative gain
or loss is recognised in the income statement.
Financial Liabilities
Financial liabilities are obligations to pay cash or other
financial assets and are recognised when the Company becomes a
party to the contractual provisions of the instrument.
All financial liabilities initially recognised at fair value
less transaction costs and thereafter carried at amortised cost
using the effective interest method, with interest-related charges
recognised as an expense in finance cost in the income statement. A
financial liability is derecognised only when the obligation is
extinguished, that is, when the obligation is discharged or
cancelled or expires.
Cash and Cash Equivalents
Cash and cash equivalents comprise cash on hand and demand
deposits, together with other short-term, highly liquid investments
that are readily convertible into known amounts of cash and which
are subject to an insignificant risk of changes in value.
Share-Based Payments
The Company operates a number of equity-settled, share-based
compensation plans, under which the entity receives services from
employees as consideration for equity instruments (options) of the
Company. The fair value of the employee services received in
exchange for the grant of the options is recognised as an expense.
The total amount to be expensed is determined by reference to the
fair value of the options granted:
-- including any market performance conditions;
-- excluding the impact of any service and non-market
performance vesting conditions (for example, profitability or sales
growth targets, or remaining an employee of the entity over a
specified time period; and
-- including the impact of any non-vesting conditions (for
example, the requirement for employees to save).
Non-market vesting conditions are included in assumptions about
the number of options that are expected to vest. The total expense
is recognised over the vesting period, which is the period over
which all of the specified vesting conditions are to be
satisfied.
In addition, in some circumstances, employees may provide
services in advance of the grant date, and therefore the grant-date
fair value is estimated for the purposes of recognising the expense
during the period between service commencement period and grant
date.
At the end of each reporting period, the entity revises its
estimates of the number of options that are expected to vest based
on the non-market vesting conditions. It recognises the impact of
the revision to original estimates, if any, in profit or loss, with
a corresponding adjustment to equity.
When the options are exercised, the Company issues new shares.
The proceeds received, net of any directly attributable transaction
costs, are credited to share capital (nominal value) and share
premium.
2. Segment Reporting & Revenue
The Company is now operating as a single UK based segment with a
single primary activity to invest in businesses so as to generate a
return for the shareholders. The revenue from this segment,
generated from sale of investments, was GBP985,000 (2017 -
GBP12,000). The non-current assets of the segment is GBP4,779,000
(2017 - GBP3,761,000).
2018 2017
GBP000 GBP000
Revenue
Investment income - interest received on 7 -
loan notes
Realised gain on disposal of AFS investments 985 12
Unrealised gain on market value movement
of AFS investments (79) 29
913 41
------- -------
3. Operating Activities and Auditor's Remuneration
2018 2017
GBP000 GBP000
Included within results from operating activities
are the following:
Operating lease rentals - land and buildings 35 10
Auditor's remuneration:
Audit services:
- Company statutory audit 10 10
Non-audit services:
- Taxation compliance - -
------- -------
4. Information Regarding Directors and Employees
2018 2017
GBP000 GBP000
Employment costs, including Directors, during
the year:
Wages and salaries 336 190
Share based payments - 311
336 501
------- -------
Average number of persons, including Directors No. No.
employed
Administration 4 4
------- -------
4 4
------- -------
Directors' remuneration GBP000 GBP000
Emoluments 320 489
------- -------
The Company operates only the basic pension plan required under
UK legislation, contributions thereto during the year amounted
to GBPnil (2017: GBP15).
Emoluments of the Individual Directors
Fees and Share based
salaries payments Total
(non-cash)
2018 GBP000 GBP000 GBP000
A Clayton 200 106 306
J Taylor Firth 60 106 166
D Strang 60 - 60
320 212 532
--------------- --------- ------------ -------
2017 GBP000 GBP000 GBP000
A Clayton 112 156 268
J Taylor Firth 42 - 42
D Strang 24 155 179
178 311 489
--------------- --------- ------------ -------
Directors' interest in share options is set out in Note 14.
Key Management Personnel
The key management personnel are considered to be the Directors.
Their remuneration is included in Note 4 above.
5. Income Tax (Credit)/Expense
The relationship between the expected tax (credit)/expense based
on the effective tax rate of the Company at 19% (2017 - 19/20%) and
the tax (credit)/expense actually recognised in the income
statement can be reconciled as follows:
2018 2017
GBP000 GBP000
Loss for the year before tax (4) (947)
Tax rate 19% 19/20%
Expected tax credit (1) (182)
Expenses not deductible for tax purposes 41 68
Deferred tax asset not recognised - 114
Set off against tax losses (40) -
Actual tax expense - -
------- -------
Deferred Tax
The amount of approximate unused tax losses for which no
deferred tax asset is recognised in the statement of financial
position is GBP1,759,000 (2017 - GBP1,973,000).
6. Loss per Share
Weighted Basic per
average share amount
No. of shares
2018 GBP000 (pence)
Loss after tax (4)
Earnings attributable to ordinary
shareholders (4)
=======
Weighted average number of shares 2,796,619,344
Total basic and diluted loss
per share (0.0001)
==============
2017 GBP000 (pence)
Loss after tax (947)
Earnings attributable to ordinary
shareholders (947)
=======
Weighted average number of shares 1,743,253,998
Total basic and diluted loss
per share (0.0543)
==============
7. Investment in associate
2018 2017
GBP000 GBP000
Investment in associate - -
--------- --------
2018 2017
GBP'000 GBP'000
Carrying amount at 1 January - 155
Share of associate loss - (45)
Value at disposal of associate - (110)
--------- --------
Carrying amount at 31 December - -
--------- --------
On 1 December 2017, the Company completed the sale of its entire
49% interest in Gold Mines of Wales Limited to Alba Mineral
Resources PLC ("Alba") for a total consideration of 83,333,333
shares in Alba. Alba's closing share price on December 1 2017 was
0.38p, these shares had a market value of approximately GBP316,667
and representED 3.6% of the enlarged issued share capital of Alba
at that date. These shares are subject to a six month orderly
market agreement and were issued immediately upon completion of the
sale.
Disposal of Associate GBP'000
Sale Proceeds 316
Value of loan to associate satisfied on
disposal (405)
Value of associate at disposal (110)
--------
(Loss) on disposal of associate (199)
--------
8. Available for Sale Investments
2018 2017
Investment in listed and unlisted securities GBP000 GBP000
Valuation at beginning of the period 3,761 915
Additions at cost 3,621 3,052
Disposal proceeds (4,332) (247)
Investee loan "sold" included within equity sale 943 -
Gains on disposals 985 12
(Loss) / gain on Market value revaluation (79) 29
Impairment in value of unlisted investment (100) -
Foreign exchange loss (20) -
------------ ---------
Valuation at the end of the period 4,779 3,761
============ =========
The available for sale investments splits are as below:
Non-current assets - listed 902 466
Non-current assets - unlisted 3,872 3,295
4,779 3,761
The Directors have reviewed the carrying value of the unlisted investments, and have considered
an impairment of GBP100,000 against the Company's investment in Farina Investments (UK) Limited
is appropriate on the basis of Farina Investments (UK) Limited's current difficult trading
position. For the year ended 31 December 2017, an impairment of GBPnil against the Company's
investment.
Available-for-sale investments comprise both listed and unlisted investments. The listed investments
are traded on stock markets throughout the world, and are held by the Company as a mix of
strategic and short term investments.
9. Trade and Other Receivables
Current trade and other receivables 2018 2017
GBP000 GBP000
Trade receivables - -
Other receivables 30 24
Due from related party (see Note 16) - 683
Prepayments and accrued income 59 18
89 725
------- -------
The directors consider that the carrying amount of trade and
other receivables approximates to their fair value.
10. Cash at Bank and Cash Equivalents
2018 2017
GBP000 GBP000
Cash at Bank 408 561
------- -------
11. Trade and Other Payables
2018 2017
Current trade other payables GBP000 GBP000
Trade payables 19 44
Taxation and social security 15 13
Accruals and deferred income 84 40
------- -------
118 97
------- -------
All amounts are short term and the carrying values are
considered to be a reasonable approximation of fair value.
12. Risk Management Objectives and Policies
Financial assets by category
The categories of financial asset included in the balance sheet
and the headings in which they are included are as follows:
Current assets 2018 2017
GBP000 GBP000
Loans and receivables 30 725
Cash 408 561
------- -------
438 1,268
------- -------
Financial Liabilities by Category
The categories of financial liability included in the balance
sheet and the headings in which they are included are as
follows:
Current liabilities
Financial liabilities measured at amortised
cost 118 97
---- ---
The Company is exposed to market risk through its use of
financial instruments and specifically to credit risk, and
liquidity risk which result from both its operating and investing
activities. The Company's risk management is coordinated at its
headquarters, in close co-operation with the board of Directors,
and focuses on actively securing the Company's short to medium term
cash flows by minimising the exposure to financial markets. Long
term financial investments are managed to generate lasting returns.
The Company does not actively engage in the trading of financial
assets for speculative purposes nor does it write options. The most
significant financial risks to which the Company is exposed to are
described below.
Interest rate sensitivity
The Company is not substantially exposed to interest rate
sensitivity, other than in relation to interest bearing bank
accounts.
Credit risk analysis
The Company's exposure to credit risk is limited to the carrying
amount of trade receivables. The Company continuously monitors
defaults of customers and other counterparties, identified either
individually or by Company, and incorporates this information into
its credit risk controls. Where available at reasonable cost,
external credit ratings and/or reports on customers and other
counterparties are obtained and used. Company's policy is to deal
only with creditworthy counterparties. Company management considers
that trade receivables that are not impaired for each of the
reporting dates under review are of good credit quality, including
those that are past due.
None of the Company's financial assets are secured by collateral
or other credit enhancements.
The credit risk for liquid funds and other short-term financial
assets is considered negligible, since the counterparties are
reputable banks with high quality external credit ratings.
Liquidity risk analysis
The Company's continued future operations depend on the ability
to raise sufficient working capital through the issue of equity
share capital. The Directors are confident that adequate funding
will be forthcoming with which to finance operations. Controls over
expenditure are carefully managed.
Capital Management Policies
The Company's capital management objectives are:
-- to ensure the Company's ability to continue as a going concern; and
-- to provide a return to shareholders
The Company monitors capital on the basis of the carrying amount
of equity less cash and cash equivalents.
13. Share Capital
2018 2017
GBP000 GBP000
Allotted, issued and fully paid
2,796,619,344 ordinary shares of 0.01p each
(2017 - 2,796,619,344 of 0.01p each) 279 279
28,976,581 deferred shares of 45p each (2017
- 28,976,581) 13,040 13,040
28,976,581 A deferred shares of 4p each (2017-
28,976,581) 1,159 1,159
92,230,985 B deferred shares of 0.99p each
(2017- 92,230,985) 913 913
------- -------
15,391 15,391
------- -------
The deferred shares and the A and B deferred shares do not carry
voting rights.
Ordinary Nominal
Shares Value
Number GBP'000
Ordinary shares of 0.01p each
As at 31 December 2016 1,110,549,167 111
-------------- --------
2 March 2017 - Placing for cash at 0.15p
per share 158,000,000 16
7 July 2017 - Placing for cash at 0.15p
per share 333,333,334 33
2 August 2017 - Placing for cash at 0.15p
per share 694,736,843 69
23 November 2017 - Placing for cash at 0.20p
per share 500,000,000 50
As at 31 December 2017 2,796,619,344 279
-------------- --------
No issue of shares during the period - -
As at 31 December 2018 2,796,619,344 279
-------------- --------
Details of the share options and warrants the Company has in
issue are disclosed in Note 14.
14. Share-based payments
Details of share options and warrants granted to Directors,
employees & consultants, over the ordinary shares are as
follows:
Exercised
or
At Issued expired At Exercise Date from
1 January during during 31 December price which Expiry
2018 the year the year 2018 exercisable date
No. No. No. No. GBP
Share options
D. Strang 10,000,000 - - 10,000,000 0.004 14/11/2013 14/11/2023
D. Strang 12,000,000 - - 12,000,000 0.003 30/11/2015 31/12/2020
A Clayton 12,000,000 - - 12,000,000 0.003 30/11/2015 31/12/2020
J Taylor-Firth 12,000,000 - - 12,000,000 0.003 30/11/2015 31/12/2020
Consultants 10,000,000 - - 10,000,000 0.004 14/11/2013 14/11/2023
D Strang 75,000,000 - 75,000,000 0.003 03/08/2017 03/08/2022
A Clayton 75,000,000 - 75,000,000 0.003 03/08/2017 03/08/2022
A Clayton - 75,000,000 - 75,000,000 0.003 09/01/2018 09/01/2025
J Taylor-Firth - 75,000,000 - 75,000,000 0.003 09/01/2018 09/01/2025
------------ ------------ ---------- -------------
206,000,000 150,000,000 - 356,000,000
------------ ------------ ---------- -------------
Warrants
Various 4,075,000 - 4,075,000 - 0.004 29/10/2013 14/11/2018
------------ ------------ ---------- -------------
4,075,000 - 4,075,000 -
------------ ------------ ---------- -------------
The share price range during the year was GBP0.0020 to
GBP0.00095 (2017 - GBP0.00075 to GBP0.0036).
The weighted average values of options are 2018 2017
as follows:
Weighted average exercise price of options
granted 0.30p 0.30p
Weighted average exercise price of options
exercisable at the
end of the year 0.30p 0.31p
Weighted average option life remaining 4.53 years 4.43 years
For those options granted where IFRS 2 "Share-Based Payment" is
applicable, the fair values were calculated using the Black-Scholes
model. The inputs into the model were as follows:
Risk free Share price Expected Share
rate volatility life price
at date
of grant
9 January 2018 1.10% 102.63% 7.00 years GBP0.0018
Expected volatility was determined by calculating the historical
volatility of the Company's share price for 12 months prior to the
date of grant. The expected life used in the model has been
adjusted, based on management's best estimate, for the effects of
non-transferability, exercise restrictions and behavioural
considerations.
The Company recognised total expenses of GBP212,000 (2017:
GBP311,000) relating to equity-settled share-based payment
transactions during the year, and GBPnil was transferred via equity
to retained earnings on the exercise of nil options (2017: nil
options) during the year (2017: GBPnil).
During the year, 4.075m warrants expired (2017: nil).
15. Capital Commitments
The directors have confirmed that there were no contingent
liabilities or capital commitments which should be disclosed at 31
December 2018. No provision has been made in the financial
statements for any amounts in relation to any capital expenditure
requirements of the Company's associate or investments, and such
costs are expected to be fulfilled in the normal course of the
operations of the Company.
16. Related Party Transactions
The Company had the following amounts outstanding from its
investee companies (Note 9) at 31 December:
2018 2017
GBP'000 GBP'000
Horse Hill Development Ltd ("Horse Hill") - 683
---------- ---------
The above loan outstanding was included within trade and other
receivables, Note 9. The loan to Horse Hill has been made in
accordance with the terms of the investment agreement whereby it
accrues interest daily at the Bank of England base rate and is
repayable out of future cashflows.
During the year, the Company sold its full investment in Horse
Hill, and included therin was the novation of the loan to the
purchaser. The Company received GBP150,001 in cash compensation for
the loan balance of GBP943,000 at the date of novation. The
effective loss on the transfer of the loan has been included within
the net calculation of the realised gain on sale of the equity
investment.
Key Management Personnel
The key management personnel are considered to be the Directors.
There remuneration is included in Note 4 to the accounts. There is
no other management compensation to be disclosed.
17. Events after the end of the reporting period
There are no events after the end of the reporting period to
disclose.
18. Ultimate Controlling Party
There is not considered to be an ultimate controlling party of
the company.
19. Posting of Accounts
The Report and Accounts for the year ended 31 December 2018 will
be posted to shareholders and uploaded to the Company's website 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 or visit www.rns.com.
END
FR SFFFEMFUSEDI
(END) Dow Jones Newswires
May 16, 2019 08:45 ET (12:45 GMT)
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