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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 AMENDED. 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 PERIOD ENDED
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.
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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 LtdInvestment Manager to Craven House Capital Plc
For further information please contact:
Craven House Capital Plc Mark Pajak www.Cravenhousecapital.com
| Tel: 0203 286 8130
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SI Capital Broker Nick Emerson www.sicapital.co.uk | Tel: 01483 413500 |
SPARK Advisory Partners Limited Nominated Adviser Matt Davis/James Keeshan www.Sparkadvisorypartners.com
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Tel: 0203 368 3550
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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 PERIOD ENDED 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
Investment Manager fee waived |
-
- |
-
1,657 |
(7,158)
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 | ||||||||
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CRAVEN HOUSE CAPITAL PLC
STATEMENT OF CHANGES IN EQUITY
FOR THE SIX MONTH PERIOD ENDED 30 NOVEMBER 2020
|
Called up share capital $'000 |
Share premium $'000 |
Accumulated deficit $'000
|
Total $'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 Cancellation of deferred shares Reduction in share premium Dividend in specie | 1,200
(10,157) - - | 10,710
- (25,000) - | -
10,157 25,000 (14,461) | 11,910
- - (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 PERIOD ENDED 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 Adjustments for non-cash items Fair value movement arising on investments Intercompany loans written off Management fee accrual waived Costs paid by shares Repairs Dividend income Decrease/(increase) in trade and other receivables Increase/(decrease) in trade and other payables Decrease in loans and borrowings Non-cash issue of ordinary shares |
(119)
- - - - - -
18 98 - - |
(5,676)
6,893 - - - - -
(18) (1,409) (300) 480 |
(13,187)
6,892 7,158 (1,657) 190 5 (144)
(3,394) 103 - - | |||||
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 Repayment of loan | - - | - - | 3,900 (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 PERIOD ENDED 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.
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CRAVEN HOUSE CAPITAL PLC
NOTES TO THE FINANCIAL INFORMATION - continued
FOR THE SIX MONTH PERIOD ENDED 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 | |||||||||
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Dividends received | - | - | 144 |
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- | - | 144 |
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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
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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. Onebas.com Ltd is the owner of "ONEBas.com Music", an optimised search engine providing a portal to music content freely circulating online.
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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™, an online marketer of vitamins and diet supplements and Omega 3 North Norway™, 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™, a distributor of branded collagen supplements and Norwegian Fish Oil™, 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:
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.
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CRAVEN HOUSE CAPITAL PLC
NOTES TO THE FINANCIAL INFORMATION - continued
FOR THE SIX MONTH PERIOD ENDED 30 NOVEMBER 2020
6. Earnings per share
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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