30 Apr 2020 07:00
Pires Investments plc
("Pires" or the "Company")
Results for the year to 31 October 2019
The Board is pleased to announce the audited results of Pires for the year ended 31 October 2019.
Highlights
- Pre-tax profits achieved of over £865,000 with net asset value in excess of £2,564,000
- Investment strategy expanded to include the technology sector which is already yielding positive results
- Net cash proceeds of £1.6 million and net profit of almost £1 million realised from the disposal of investment in Eco Atlantic
- Investment returns and recent fund raisings leave the Company well-funded to implement its strategy going forward
Chairman's Statement
I am pleased to report significant further progress in the year to 31 October 2019. The Company achieved a pre-tax profit of £865,510 (2018: £322,069) with the value of our investment portfolio rising to £1,165,409 (2018: £1,029,526) after investment realisations during the period of £1,016,114 (2018: £264,882). Net asset value at the year-end was £2,564,582 (2018: £949,617), equivalent to 3.56p per share, and earnings were 1.64p per share (2018: 0.95p).
In February 2019, we raised just over £780,000 in new equity capital. In October 2019, we obtained shareholder approval for an extension of our investing policy to include technology and invested £1.1 million for a 13% stake in Sure Valley Ventures ("SVV"), a venture capital fund which invests in the software technology sector with a specific focus on artificial intelligence ("AI"), the internet of things ("IoT") and augmented and virtual reality ("AR/VR"). To date, we have made further investments in SVV in line with our funding commitment totalling approximately £370,000. Our technology investments now represent much the larger part of our portfolio, reflecting our change of investment emphasis.
Shareholders will also be aware that on 24 April 2020, the Company completed a placing to raise further funds amounting to £1.06 million of which £454,286 has been firmly placed and £605,714 placed conditional upon approval at the forthcoming Annual General Meeting. As part of the placing, we are pleased to welcome the well-known technology investor, Chris Akers, as a significant shareholder in the Company. The Company is now seeing a growing number of new investment opportunities and the Board believes that the Company now has the resources to enable it to take advantage of them as they arise.
Our results in the last financial year were largely the result of the increased value and partial realisation of our holding in Eco (Atlantic) Oil & Gas Limited ("Eco Atlantic") which has proved a very successful investment for the Company. The Company has now disposed of the majority of its holding in Eco Atlantic, prior to the share price fall triggered by recent market conditions and the sharp fall in oil prices. Overall, we have generated total net cash proceeds of £1.6 million and realised a total net profit on disposal of almost £1 million from this investment.
Our recent focus on technology has proved successful to date. In December 2019, very soon after our initial investment in SVV, one of its portfolio companies, Artomatix Limited, was acquired at a price 500% the valuation at which the investment was made. As realisations when achieved are paid out to investors, Pires received a cash distribution of over €720,000 with a balance of €82,000 due eighteen months after the sale.
A number of the other portfolio companies have also made significant progress since our investment. For example, the share price of VR Education Holdings plc which is quoted on AIM has increased by almost 30% since the beginning of the year. In March 2020, VividQ Limited raised a further £2.4 million from two strategic venture capital funds. VividQ has leading edge software providing holography to consumer electronics. In April 2020, Admix (the trading name for WAM Group Limited), which has developed a programmatic monetization platform for gaming and other entertainment developers, raised US$6.1 million from existing and new investors at a 450% premium to the valuation at which SVV's initial investment was made. Also, in April 2020, environmental technology specialist, Ambisense Limited, announced its involvement in ground surveys for a very large UK infrastructure project - the Lower Thames Essex-Kent Crossing. More recently, SVV has invested in Buymie Technologies Limited, a company that has created a platform that uses artificial intelligence to provide consumers with access to multiple large retailers - a particular pertinent investment given the Covid-19 crisis.
In March 2020, Pires announced a direct investment of €250,000 in Getvisibility (the trading name for Visibility Blockchain Limited), an artificial intelligence security company, addressing the substantial and increasing problem which corporations face in storing, sorting, accessing and protecting data. It has developed and launched a software platform using artificial intelligence that delivers visibility over a wide range of data.
In view of the current Covid-19 pandemic, it is appropriate to make some comment on the position of the Company. Pires, unlike very many other companies, remains able to carry on its activities effectively. Furthermore, we believe that the Company's technology investments are well positioned against the background of Covid-19. We are, however, keeping all such matters under close review
In summary, the Company has made good progress during the financial year and beyond. The Board's intention is to build a broadly based technology investment company with interests in a range of companies with exciting growth potential. We believe that the fundraisings that we completed, the successful realisation of a key part of our existing portfolio and the investments that we have made represent valuable first steps in this direction. We look forward to further progress in the current financial year.
Peter Redmond
Chairman
STATEMENT OF COMPREHENSIVE INCOME
| Notes | 2019 £ | 2018 £ |
CONTINUING ACTIVITIES |
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Income |
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Other Income |
| 1,368 | 11 |
Total income |
| 1,368 | 11 |
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Gain on investments held at fair value through profit or loss |
| 1,151,997 | 574,987 |
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Operating expenses |
| (287,855) | (252,929) |
Operating profit from continuing activities |
| 865,510 | 322,069 |
Profit before taxation from continuing activities |
| 865,510 | 322,069 |
Tax |
| - | - |
Profit for the year from continuing activities |
| 865,510 | 322,069 |
Other Comprehensive Income |
| - | - |
Total Comprehensive Income attributable to equity holders of the Company |
| 865,510 | 322,069 |
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Basic profit per share |
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Equity holders |
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Basic and diluted |
| 1.64p | 0.95p |
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STATEMENT OF CHANGES IN EQUITY
| Share Capital £ | Share Premium £ | Capital Redemption Reserve £ | Retained Earnings £ | Total £ |
Balance at 1 November 2017 | 11,914,727 | 3,581,055 | 164,667 | (15,032,901) | 627,548 |
Profit and total comprehensive profit for the year |
- |
- |
- | 322,069 | 322,069 |
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As at 31 October 2018 | 11,914,727 | 3,581,055 | 164,667 | (14,710,832) | 949,617 |
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Profit and total comprehensive profit for the year | - | - | - | 865,510 | 865,510 |
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Issue of shares (net of costs) | 81,429 | 668,026 | - | - | 749,455 |
As at 31 October 2019 | 11,996,156 | 4,249,081 | 164,667 | (13,845,322) | 2,564,582 |
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STATEMENT OF FINANCIAL POSITION
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| 2019 £ | 2018 £ |
Non-current assets |
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Investment in subsidiaries |
| 1 | 1 |
Total non-current assets |
| 1 | 1 |
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Current assets |
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Investments |
| 1,165,409 | 1,029,526 |
Trade and other receivables |
| 11,307 | 11,357 |
Cash and cash equivalents |
| 1,426,799 | 48,028 |
Total current assets |
| 2,603,515 | 1,088,911 |
Total assets |
| 2,603,516 | 1,088,912 |
Equity |
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Issued share capital |
| 11,996,156 | 11,914,727 |
Share premium |
| 4,249,081 | 3,581,055 |
Retained earnings |
| (13,845,322) | (14,710,832) |
Capital redemption reserve |
| 164,667 | 164,667 |
Total equity |
| 2,564,582 | 949,617 |
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Liabilities |
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Current liabilities |
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Trade and other payables |
| 38,934 | 139,295 |
Total liabilities and current liabilities |
| 38,934 | 139,295 |
Total equity and liabilities |
| 2,603,516 | 1,088,912 |
| 1. OPERATING PROFIT | |||
| 2019 £ | 2018 £ |
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Operating profit from continuing activities is stated after charging: |
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Depreciation of property, plant and equipment | - | - |
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| 2. EARNINGS PER SHARE | |||
| 2019 £ | 2018 £ |
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Profit attributable to the owners of the Company |
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Continuing Operations | 865,510
| 322,069
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| 2019 No. of Shares | 2018 No. of shares |
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Weighted average number of shares for calculating basic profit per share | 52,900,940 | 33,900,805 |
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| 2019 Pence | 2018 Pence |
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Basic and diluted profit per share |
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Continuing Operations - basic and diluted | 1.64 | 0.95 |
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Copies of the accounts will shortly be posted to shareholders and will be available on the Company's website at www.piresinvestments.com
This announcement contains inside information for the purposes of Article 7 of EU Regulation 596/2014.
Enquiries:
Pires Investments plc: +44 (0) 20 3 368 8961
Peter Redmond, Director
Nicholas Lee, Director
Nominated Adviser: +44 (0) 20 7213 0880
Cairn Financial Advisers LLP
Liam Murray
Ludovico Lazzaretti
Broker: +44 (0) 20 7562 3351
Peterhouse Capital Limited
Duncan Vasey / Lucy Williams
Financial Media and IR: +44 (0) 20 3004 9512
Yellow Jersey pires@yellowjerseypr.com
Sarah Hollins
Henry Wilkinson
Annabel Atkins
Caution regarding forward looking statements
Certain statements in this announcement, are, or may be deemed to be, forward looking statements. Forward looking statements are identified by their use of terms and phrases such as ''believe'', ''could'', "should" ''envisage'', ''estimate'', ''intend'', ''may'', ''plan'', ''potentially'', "expect", ''will'' or the negative of those, variations or comparable expressions, including references to assumptions. These forward looking statements are not based on historical facts but rather on the Directors' current expectations and assumptions regarding the Company's future growth, results of operations, performance, future capital and other expenditures (including the amount, nature and sources of funding thereof), competitive advantages, business prospects and opportunities. Such forward looking statements reflect the Directors' current beliefs and assumptions and are based on information currently available to the Directors.