Last checked at 29 Mar 2017 07:00
29 March 2017
Port Erin Biopharma Investments Limited
("Port Erin" or the "Company")
Interim Results for the six-month period ending 31 December 2016
The Board of Port Erin, the AIM quoted company focused on investing in the biotechnology and
biopharmaceutical sectors, is pleased to announce its interim results for the six-month period ending 31 December 2016.
Chairman's statement
Introduction
I am pleased to present the Interim Results for Port Erin Biopharma Investments Limited (the "Company") for the six-month period ending 31 December 2016.
Financial Review
The Company recorded a net profit of £429,311 for the half-year interim period (2015: loss of £184,674). During the period, our investment income including dividends, net realised gains on sales, and net unrealised gains was £546,062 (2015: loss of £96,448). Operating expenses were £119,781 (2015: £88,257). The prior period included no performance fee and no performance fee has been accrued for the period. Basic and diluted earnings per share increased to 1.85 pence (2015: loss of 0.79 pence).
Our invested assets at fair value were £2,348,237 (Year-end 2016: £2,187,075), and cash and equivalents were £66,642 (Year-end 2016: £11,985). Including receivables of £8,592 (Year-end 2016: £7,335) less payables of £41,962 (Year-end 2016: £54,197), our total net assets stood at £2,623,471 (Year-end 2016: £2,206,395). Thus, the net asset value per share at 31 December 2016 was 11.13 pence (Year-end 2016: 9.28 pence). The increase in the net asset value was as a result of the appreciation in investments for the period. There were no exceptional costs during the period.
Asset Review
Our principal investments include the Magna Biopharma Income Fund ("MBIF"), Luminor Medical Technologies ("Luminor") and Regent Pacific Group Limited ("RPG"). Of these, MBIF continues to perform well with a diverse portfolio of biopharma holdings, finishing the year at 10.16 pence per share. Luminor announced on 24 October 2016 that it had closed a financing round which raised approximately US$500,000 in both shares and convertible loans, to be used for general working capital purposes in developing its ground-breaking diabetes-screening device, Scout DS®. RPG continues the successful development and commercialisation of Fortacin™, which include the Type IB variation approval from the European Medical Agency allowing sales in the European Union.
Of our other holdings, the performance of SalvaRx Group Plc ("SalvaRx") is of particular note. SalvaRx announced on 28 February 2017 that it has agreed to invest in and collaborate with Luxembourg-based Nekonal SARL, forming a joint venture company Nekonal Oncology Ltd. Nekonal holds intellectual property rights for therapeutics and diagnostics in the area of autoimmune disorders and oncology. The new joint venture company will utilise SalvaRx's management and drug development expertise to explore Nekonal's technology in cancer immunotherapy. This transaction was followed by an investment in Rift Biotherapeutics Inc. ("Rift") announced on 20 March 2017. Rift is a biotechnology company focused on the development of antibodies for use in oncology. We hold 185,185 shares in SalvaRx representing 0.51 per cent of its issued share capital.
On 13 October 2016, we entered into a loan agreement with the Diabetic Boot Company Limited ("DBC") to provide it with a short-term loan of £200,000 less expenses, for working capital purposes in commercialising its ground breaking PulseFlowDF™ device for the treatment of diabetic foot ulcers. The loan pays a coupon of 7 per cent, is unsecured and is fully repayable on the earlier of 31 March 2017 or the date on which DBC secures additional equity funding of £1,000,000. We already hold 7,105 shares in DBC, representing 0.74 per cent of its issued share capital.
Strategy and Outlook
The results for the present period have reported reassuring gains which reflect the positive steps which had been taken to improve the Net Asset Value. However, the Company's share price still remains at a significant and disappointing discount to the underlying assets base, being over 50 per cent at year-end. The Company's investments continue to show significant growth potential for the remainder of 2017 and beyond. In addition, your board is currently considering a number of options in line with the investing policy adopted on 11 November 2013.
Jim Mellon
Chairman
The interim financial statements will be available on the Company's website www.porterinbiopharma.com.
Enquiries
Port Erin Biopharma Investments Limited
| Northland Capital Partners Limited | Peterhouse Capital Limited |
Nominated Adviser and Joint Broker | Broker | |
Denham Eke +44 (0) 1624 639396 | Matthew Johnson / David Hignell +44 (0) 203 861 6625 | Lucy Williams +44 (0) 207 469 0936 |
Condensed statement of comprehensive income
Notes | Period ended 31/12/2016 (unaudited) | Period ended 31/12/2015 (unaudited) | |
£ | £ | ||
Investment gain / (loss) | 2 | 546,062 | (96,448) |
Operating expenses | |||
Performance fee | 3 | - | - |
Other costs | 4 | (119,845) | (92,520) |
Foreign exchange gains | 64 | 4,263 | |
Operating profit / (loss) | 426,281 | (184,705) | |
Interest received | 3,030 | 31 | |
Profit / (loss) before taxation | 429,311 | (184,674) | |
Taxation | - | - | |
Profit / (loss) for the period | 429,311 | (184,674) | |
Other comprehensive income | - | - | |
Total comprehensive profit / (loss) for the period |
429,311 |
(184,674) | |
Basic and diluted earnings / (loss) per share for profit / (loss) attributable to the equity holders of the Company during the period (pence) |
5 |
1.85 |
(0.79) |
The Directors consider that the Company's activities are continuing.
Condensed statement of financial position
Notes | 31/12/2016 (unaudited) | 30/06/2016 (audited) | |
£ | £ | ||
Current assets | |||
Financial assets at fair value through profit or loss | 6 | 2,348,237 | 2,187,075 |
Loan receivable | 7 | 200,000 | - |
Trade and other receivables | 8,592 | 7,335 | |
Cash and cash equivalents | 66,642 | 11,985 | |
Total assets | 2,623,471 | 2,206,395 | |
Equity | |||
Called up share capital | 23 | 23 | |
Share premium | 1,890,142 | 1,890,142 | |
Distributable reserves | 691,344 | 262,033 | |
Total equity | 2,581,509 | 2,152,198 | |
Current liabilities | |||
Trade and other payables | 8 | 41,962 | 54,197 |
Total liabilities | 41,962 | 54,197 | |
Total equity and liabilities | 2,623,471 | 2,206,395 |
These interim financial statements were approved by the Board of Directors on 22 March 2017 and were signed on their behalf by:
Denham Eke
Director
Condensed statement of changes in equity
Notes | Share capital £ | Share premium £ | Distributable reserves £ |
Total £ | ||||
Balance at 01 July 2015 (audited) | 23 | 1,890,142 | 796,402 | 2,686,567 | ||||
Total comprehensive income for the period: | ||||||||
Loss for the period | - | - | (184,674) | (184,674) | ||||
Other comprehensive income | - | - | - | - | ||||
Balance at 31 December 2015 (unaudited) |
23 |
1,890,142 |
611,728 |
2,501,893 |
Notes | Share capital £ | Share premium £ | Distributable reserves £ |
Total £ | ||||
Balance at 01 July 2016 (audited) | 23 | 1,890,142 | 262,033 | 2,152,198 | ||||
Total comprehensive income for the period: | ||||||||
Profit for the period | - | - | 429,311 | 429,311 | ||||
Other comprehensive income | - | - | - | - | ||||
Balance at 31 December 2016 (unaudited) |
23 |
1,890,142 |
691,344 |
2,581,509 |
Condensed statement of cash flows
Notes | Period ended 31/12/ 2016 | Period ended 31/12/2015 | |
(unaudited) | (unaudited) | ||
£ | £ | ||
Cash flows from operating activities | |||
Profit/(loss) for the period | 429,311 | (184,674) | |
Adjusted for: | |||
Interest received | (3,030) | (31) | |
Realised and unrealised (gains)/loss | 2 | (545,062) | 96,448 |
Changes in working capital: | |||
(Increase)/decrease in receivables | (1,257) | 1,304 | |
Decrease in payables | (12,235) | (8,408) | |
Cash flows from operations | (132,273) | (95,361) | |
Cash flows from investing activities | |||
Purchase of investments/investment loans | (200,000) | (136,486) | |
Disposal of investments | 383,900 | 259 | |
Interest received | 3,030 | 31 | |
Net cash generated from investing activities | 186,930 | (136,196) | |
Increase/(decrease) in cash and cash equivalents | 54,657 | (231,557) | |
Cash and cash equivalents at beginning of period | 11,985 | 255,568 | |
Cash and cash equivalents at the end of period | 66,642 | 24,011 |
Notes to the financial statements
1 Significant accounting policies
The accounting policies adopted by the Company in the preparation of these condensed interim financial statements are the same as those applied by the Company in its financial statements as at and for the year ended 30 June 2016. No new accounting policies were adopted during the period.
The interim financial statements are unaudited. The audited financial statements of the Company as at and for the year ended 30 June 2016 are available at the Company's website below:
http://www.porterinbiopharma.com/financial_reports.php
2 Investment income
31/12/2016 (unaudited) £ | 31/12/2015 (unaudited) £ | |
Dividend income | - | - |
Net realised gains on sale of investments | 51,421 | 65 |
Net unrealised gains/(loss) on investments | 493,641 | (96,513) |
Other income | 1,000 | - |
Total investment income | 546,062 | (96,448) |
3 Performance fee
31/12/2016 (unaudited) £ | 31/12/2015 (unaudited) £ | |
Performance fee | - | - |
Shellbay Investments Limited receives performance fees for the provision of Mr James Mellon as Non-Executive Chairman of the Company. The fees are calculated at 15 per cent. of any increase in the net asset value of the Company over each quarterly period, subject to an initial high watermark of 10 pence per share. No fees were payable for the current period (31 December 2015: £nil).
4 Other costs
31/12/2016 (unaudited) £ | 31/12/2015 (unaudited) £ | |
Directors' fees | 5,000 | 5,000 |
Auditors' remuneration for the current period | 8,373 | 10,329 |
Bank charges | 51 | 166 |
Insurance | 3,283 | 2,937 |
Marketing | - | - |
Professional fees | 103,138 | 74,088 |
Sundry expenses | - | - |
Total other costs | 119,845 | 92,520 |
The Company has no employees other than the Directors.
5 Basic and diluted earnings per share
The calculation of basic earnings per share of the Company is based on the profit for the period of £423,911 (31 December 2015: loss of £184,674) and the weighted average number of shares of 23,195,558 (31 December 2015: 23,195,558) in issue during the period.
Diluted earnings per share are calculated by adjusting the weighted average number of ordinary shares outstanding to assume conversion of all dilutive potential ordinary shares such as warrants and options. There is no dilutive effect in the current or prior period as there were no outstanding warrants or options.
6 Financial assets at fair value through profit or loss
31/12/2016 (unaudited) £ | 30/06/2016 (audited) £ | |
Quoted | 2,001,017 | 1,785,204 |
Unquoted | 347,220 | 401,871 |
Total financial assets at fair value | 2,348,237 | 2,187,075 |
Equities | 2,348,237 | 2,185,960 |
Warrants | - | 1,115 |
Total financial assets at fair value | 2,348,237 | 2,187,075 |
7 Loan receivable
On 13 October 2016, the company entered into a loan agreement with the Diabetic Boot Company Limited to provide it with a short-term loan of £200,000 less expenses, for working capital purposes. This loan pays a coupon of 7 per cent, is unsecured and is fully repayable on the earlier of 31 March 2017 or the date on which DBC secures additional equity funding of £1,000,000.
8 Trade and other payables
31/12/2016 | 30/06/2016 | |
(unaudited) £ | (audited) £ | |
Provision for audit fee | 25,119 | 16,746 |
Shellbay Investments Limited | - | - |
Other | 16,843 | 37,451 |
Total trade and other payables | 41,962 | 54,197 |
9 Related party transaction
Under an agreement dated 1 December 2011, Burnbrae Limited, a company related to both Jim Mellon and Denham Eke, provide certain services, principally accounting and administration, to the Company. This agreement may be terminated by either party on three months' notice. The Company incurred a total cost of £18,000 (31 December 2015: £18,000) during the period under this agreement of which £nil was outstanding as at the period end (30 June 2016: £9,000).
Under an agreement dated 6 May 2011, Shellbay Investments Limited, a company related to both Jim Mellon and Denham Eke, provide the services of Jim Mellon as Non-Executive Chairman of the Company (see note 3). The charge for services provided in the period was £nil (31 December 2015: £nil). No amount was outstanding at the period-end (30 June 2016: £nil).
The Company entered into a Letter of Engagement with Mediqventures Limited in July 2014 to research and propose potential investment opportunities for the Company. Under the agreement, Mediqventures Limited is paid US$ 60,000 per annum. Jim Mellon is a controller of Mediqventures Limited and both Jim Mellon and Denham Eke are directors.
10 Commitments and contingent liabilities
There are no known commitments or contingent liabilities as at the period end.
11 Events after the reporting date
There were no events after the reporting date.