Braveheart Inv Regulatory News (BRH)

24 August 2015

Braveheart Investment Group plc

('Braveheart', the 'Company' or the 'Group')

Preliminary Unaudited Statement of Results for the year ended 31 March 2015 and Board Changes

Key Points

Financial:

· Full year loss from total operations of £768,000 (2014: loss £808,000) after redundancy and restructuring costs of £123,000 (2014: nil), a loss on revaluation of portfolio investments of £1,080,000 (2014: gain of £111,000), reduction in contingent consideration of £136,000 (2014: increase £97,000) and profit on portfolio disposals of £211,000 (2014: nil)

· Total portfolio fair value of £2,478,000 (2014: £3,725,000);

· Ongoing overheads reduced by £340,000 per annum;

· Loss per share of 2.78 pence (2014: loss of 3.45 pence) from total operations;

· Placed a total of 1,185,000 shares raising £130,000;

· Cash balances of £503,000 (2014: £159,000) together with unused bank facility of £500,000; and

· Net assets per share of 12.52 pence (2014: 15.51 pence).

Board and management changes

· Geoffrey Thomson, CEO, has stepped down as a director and CEO;

· Appointment of Trevor Brown (a non-executive director) as interim CEO;

· Appointment of Jonathan Freeman as an executive director; and

· Intention to appoint Andrew Burton, CEO of Viking Fund Managers Limited, the Group's principal fund management business, to the main board in the near future.

Operational:

· Fund management mandate extended by Finance Yorkshire as Extension Fund established;

· Northern Ireland Growth Loan Fund performing in line with expectations;

· Sale of one portfolio company, returning cash of around £2m to investment clients and £414,000 to the balance sheet.

The Company is pleased to release its preliminary unaudited results for the year ended 31 March 2015.

These show a modest decline in revenues to £1,864,000 (2014: £2,044,000), reflecting lower fees on funds under management. Whilst the Company was successful in selling one of its portfolio companies, realising £414,000 for the Company and £2m for its investor clients, the valuation of the balance of the portfolio has been written down by £1,080,000 with the portfolio valued at £2,478,000 (2014: £3,725,000). Taking into account the write-down, the Group made a loss for the year of £768,000 (2014: profit on continuing operations of £15,000). The Group's balance sheet remains strong relative to the Company's market capitalisation, with net assets of £3,388,000 (2014: £4,012,000) and net cash of approximately £460,000 (2014: approximately £116,000).

Geoffrey Thomson, who has been Braveheart's CEO for 18 years, has stepped down. Geoffrey was one of the founders of Braveheart and the Company would like to take this opportunity to thank him for his contribution over so many years and to wish him well for the future. He will remain on the Boards of the operating companies for a short time until various requisite regulatory approvals have been obtained.

Trevor Brown, a non-executive director of Braveheart, has been appointed as interim CEO. Jonathan Freeman has today been appointed as an executive director. Jonathan, an experienced corporate financier and company director, has extensive experience of quoted companies, financial services and of FCA regulated entities. In addition, the Company intends to appoint Andrew Burton, currently CEO of Viking Fund Managers Ltd, as an executive director on the main board with effect from the AGM to be held in September 2015. Andrew has been with the Group since 2009 and is an experienced fund manager. Further details regarding Andrew's appointment will be announced at the time of the AGM.

As previously announced, the Group restructured its head office during the year which led to Aileen Brown (Chief Financial Officer) and Carolyn Smith (Chief Investment Officer) stepping down; Ken Brown also stepped down as a non-executive director at the end of the financial year. The Company would like to thank all three of Aileen, Carolyn and Ken, together with all of our hard-working employees for their support.

The Company intends publishing its audited accounts by early September 2015, together with notice of the AGM, which is expected to be held in the second half of September.

With regard to the appointment of Jonathan Freeman, aged 50, the following information is required to be disclosed in accordance with Rule 17 and Schedule 2 paragraph (g) of the AIM Rules for Companies.

Jonathan Freeman was a non-executive director of Cobra Capital Limited, a Guernsey incorporated and regulated investment company, from 2004 until 2010. The company was wound up with the consent of the shareholders and its creditors in 2010.

He was a non-executive director of Hume Capital Securities plc, an FCA regulated retail broker and corporate finance business from August 2012 to when it was put into administration in March 2015. In addition he acted as the interim CEO from April to June 2014.

Jonathan Freeman has no interest in any ordinary shares in the Company.

Further information:

Braveheart Investment Group plc

Jeremy Delmar-Morgan, Chairman Tel: +44 1738 587555

Trevor Brown, CEO

Sanlam Securities UK Limited (Nominated Adviser and Broker to Braveheart)

Lindsay Mair/James Thomas Tel: +44 20 7628 2200

Chairman's statement

During the year and post year-end three executive directors, including Geoffrey Thomson, our CEO, left us. Geoffrey, who has been Braveheart's CEO for 18 years, was one of the founders of Braveheart and I would like to take this opportunity to thank him for his contribution over so many years and to wish him well for the future.

Trevor Brown, a non-executive director of Braveheart, has been appointed as interim CEO together with Jonathan Freeman as an executive director and the Company intends to appoint Andrew Burton, currently CEO of Viking Fund Managers Ltd, as an executive director.

We sold one of our investments in December and this saw a pleasing return to both our private client investors and ourselves. The team are working on other realisations.

The Group will continue to focus on growing the funds under management and achieving realisations from the portfolio to enhance earnings per share.

The economic climate has improved and with a stronger UK government in place I think we can look forward to a period of growth.

Jeremy H Delmar-Morgan

Chairman

Consolidated Unaudited Statement of Comprehensive Income for the year ended 31 March 2015

Consolidated Unaudited Statement of Cashflows for the year ended 31 March 2015

1. Basis of preparation

The consolidated financial information contained within this preliminary announcement is unaudited and has been prepared in accordance with International Financial Reporting Standards (IFRS) as adopted by the European Union (EU) and the Companies Act 2006 applicable to companies reporting under IFRS. The unaudited consolidated financial information in this report has been prepared under the historical cost convention as modified by the revaluation of certain financial assets and liabilities at fair value through profit and loss. The financial information included in this preliminary announcement does not include all the disclosures required by IFRS or the Companies Act 2006 and accordingly does not itself comply with IFRS or The Companies Act 2006.

The financial information set out in the announcement does not constitute the group's statutory accounts for the years ended 31 March 2015 or 2014 within the meaning of section 434 of the Companies Act 2006. The financial information for the year ended 31 March 2014 is derived from the statutory accounts for that year which have been delivered to the Registrar of Companies. The auditors reported on those accounts; their report was unqualified and did not contain a statement under Section 498 (2) or (3) of the Companies Act 2006. The statutory accounts for the year ended 31 March 2015 are expected to be finalised on the basis of the financial information presented by the directors in this unaudited preliminary announcement.

2. Revenue

Revenue is attributable to the principal activities of the Group. In 2015, 100% revenue arose within the United Kingdom. In 2014, 98% arose within the United Kingdom and 2% Channel Islands.

The business is regarded as one segment due to the nature of services provided and the methods used to provide these services. The business is managed and financial performance is reported to the Board on this basis.

3. Earnings per share

Basic (loss)/profit per share has been calculated by dividing the loss attributable to equity holders of the parent by the weighted average number of ordinary shares in issue during the year.

The calculations of (loss)/profit per share are based on the following loss and numbers of shares in issue:

There were no potentially dilutive ordinary shares at the year end.

4. Discontinued Operations

Discontinued operations relate to the sale of Envestors Ltd. to a management buyout team in 2013.

5. Investments at fair value through profit or loss

Investments, which include equity and debt investments, are designated on initial recognition as financial assets at fair value through profit or loss. This measurement basis is consistent with the fact that the Group's performance in respect of its portfolio investments is evaluated on a fair value basis in accordance with an established investment strategy. When investments are recognised initially, they are measured at fair value.

After initial recognition the fair value of listed investments is determined by reference to bid prices at the close of business on the reporting date.

Unlisted equity investments are measured at fair value by the directors in compliance with the principles of the International Private Equity and Venture Capital Guidelines, updated and effective December 2012, as recommended by the European Venture Capital Association (EVCA). The fair value of unlisted equity investments is determined using one of the valuation methodologies set out in the guidelines. These include using recent arm's length market transactions; reference to the current market value of another instrument, which is substantially the same; earnings or profit multiples; indicative offers; discounted cash flow analysis and pricing models.

The Group classifies its investments using a fair value hierarchy. Classification within the hierarchy has been determined on the basis of the lowest level input that is significant to the fair value measurement of the relevant investment as follows:

· Level 1 - valued using quoted prices in active markets for identical assets;

· Level 2 - valued by reference to valuation techniques using observable inputs other than quoted prices included within Level 1; and

· Level 3 - valued by reference to valuation techniques using inputs that are not based on observable market data.