29 Apr 2014 16:51
Pires Investments plc
("Pires" or the "Company")
Audited Results for the year ended 31 October 2013
Chairman's Statement
During the period under review, Pires made a number of investments in quoted and unquoted stocks pursuant to its investment strategy, which is to invest principally in the resources and energy sector. We looked closely at a number of pre-IPO and other opportunities during the period and this resulted in the Company making its first significant such investment in the new financial year.
In July 2013, the Company raised £500,000 before expenses by way of the issue of 500 million new ordinary shares at a price of 0.1p per share. As at 31 October 2013 the Company had cash resources of approximately £1.2m (2012: £1.3m).
The cornerstone investee company is Rame Energy plc ("Rame"), in which we invested on a pre-IPO basis in February 2014 and which was admitted to trading on AIM on 10 April of this year. Our initial investment of £410,000 was in the form of a convertible loan note which was convertible at a minimum 25% discount to the IPO placing price. In addition, we invested a further £55,000 on admission in ordinary shares at the placing price; further details of the investment will be found on page 3 of this document under the heading "Investment Review".
Rame is a well-established UK based international specialist energy producer with a strong presence in Latin America, in particular Chile. Since establishing an office there in 2006, it has been involved in the construction of a significant proportion of wind power projects in that country, developing and implementing power solutions for many of Chile's major mining and industrial corporations. It has developed its own portfolio of projects and is now in the process of becoming an independent power producer in its own right, with significant equity positions in its future developments. We believe that it now has the capacity to make a quantum leap from being a well-respected but modest-sized consultancy company to becoming a substantial player in the energy industry in Chile, which is widely regarded as a stable and rapidly growing economy. The Board believes that the implementation of these plans will result in the further enhancement of the value of the Company's investment.
The Board believes that the investment in Rame will set the pattern for the Company's future investments. Our objective is to provide capital at the pre-IPO stage to well-established companies that are seeking to come to the market in the near term and where the Board believes that the Company's funding and assistance can hasten this process. Although we are looking at other resource and energy projects currently, we are also reviewing opportunities outside of this sector.
The Directors remain mindful of the need to restrain costs and generate additional income streams. The Board believes that the Company is now moving forward in a positive way and it looks forward to further positive developments in the current trading period.
Peter Redmond
Chairman
29 April 2014
Enquiries:
Pires Investments PLC
Peter Redmond, Director
Tel: 020 7580 7576
Nominated Adviser
Cairn Financial Advisers LLP
Liam Murray/Avi Robinson
Tel: 020 7148 7900
Broker
Peterhouse Corporate Finance
Jon Levinson/Lucy Williams
Tel: 020 7469 0935
Tel: 020 7469 0936
Audited Statement of Comprehensive Income
Notes | 2013 £ | 2012 (see note below) £ | |
CONTINUING ACTIVITIES | |||
Revenue | |||
Investment income | 5 | 4,327 | 835 |
Other income | 25,050 | 28,500 | |
Total revenue | 29,377 | 29,335 | |
Losses on investments held at fair value through profit or loss | 13 | (45,939) | - |
Operating expenses | (336,072) | (348,562) | |
Exceptional credit arising from CVA | - | 1,526,949 | |
Operating (loss) / profit from continuing activities | 3 | (352,634) | 1,207,722 |
Finance costs | 6 | - | (33,823) |
(Loss) / profit before taxation from continuing activities | (352,634) | 1,173,899 | |
Tax | 8 | - | - |
(Loss) / profit for the year from continuing activities | (352,634) | 1,173,899 | |
Loss on disposal of discontinued operations | 9 | - | (825,211) |
(Loss)/profit for the period and total comprehensive income attributable to equity holders of the Company | (352,634) | 348,688 | |
Basic (loss) / earnings per share | |||
Equity holders | |||
From continuing operations | 10 | (0.02)p | 0.12p |
From discontinued operations | - | (0.08)p | |
Basic and diluted | 10 | (0.02)p | 0.04p |
Note:
The financial statements for the year to 31 October 2012 were prepared on a consolidated basis, so the comparatives have been restated to reflect the results of the Company only.
Audited Statement of Changes in Equity
Share Capital £ | Share Premium £ |
Shares to be issued £ | Capital Redemption Reserve £ | Retained Earnings £ | Total £ | |
Balance at 1 November 2011 | 9,587,103 | 3,017,818 | - | 164,667 | (13,632,330) | (862,742) |
Total comprehensive income for the year ended 31 October 2012 |
- |
- | - |
- |
348,688 | 348,688 |
Issue of shares | 1,700,000 | - | 82,611 | - | - | 1,782,611 |
Share issuance costs | - | (104,212) | - | - | - | (104,212) |
Cost of share based payments | - | 19,212 | - | - | 19,212 | 38,424 |
As at 31 October 2012 | 11,287,103 | 2,932,818 | 82,611 | 164,667 | (13,264,430) | 1,202,769 |
Total comprehensive income for the year ended 31 October 2013 | - | - | - | - | (352,634) | (352,634) |
Issue of shares | 566,089 | 16,522 | (82,611) | - | - | 500,000 |
Share issuance costs | - | (44,500) | - | - | - | (44,500) |
As at 31 October 2013 | 11,853,192 | 2,904,840 | - | 164,667 | (13,617,064) | 1,305,635 |
Audited Statement of Financial Position
Note | 2013 £ | 2012 £ | |
Non-current assets | |||
Property, plant and equipment | 11 | 1,812 | - |
Investments in subsidiary undertakings | 16 | - | - |
Total non-current assets | 1,812 | - | |
Current assets | |||
Investments | 13 | 84,966 | - |
Trade and other receivables | 17 | 128,588 | 89,023 |
Cash and cash equivalents | 1,195,379 | 1,240,610 | |
Total current assets | 1,408,933 | 1,329,633 | |
Total assets | 1,410,745 | 1,329,633 | |
Equity | |||
Issued share capital | 18 | 11,853,192 | 11,287,103 |
Share premium | 18 | 2,904,840 | 2,932,818 |
Equity share capital to be issued (including premium) | - | 82,611 | |
Retained earnings | (13,617,064) | (13,264,430) | |
Capital redemption reserve | 164,667 | 164,667 | |
Total equity | 1,305,635 | 1,202,769 | |
Liabilities | |||
Current liabilities | |||
Trade and other payables | 19 | 105,110 | 126,864 |
Total liabilities and current liabilities | 105,110 | 126,864 | |
Total equity and liabilities | 1,410,745 | 1,329,633 |
Audited Statement of Cash Flows
Note | 2013 £ | 2012 £ | ||
Cash flows from operating activities | ||||
Net cash absorbed by operating activities | 20 | (372,045) | (297,905) | |
Cash flows from investing activities | ||||
Payments to acquire tangible fixed assets | (2,109) | - | ||
Payments to acquire investments | (863,206) | - | ||
Proceeds of disposal of investments | 732,302 | - | ||
Finance income received net | 4,327 | 835 | ||
Net cash used in investing activities | (128,686) | 835 | ||
Cash flows from financing activities | ||||
Net (repayments)/advances on borrowings | - | (26,531) | ||
Cash from subscriptions for new shares | 500,000 | 1,700,000 | ||
Expenses of share issue | (44,500) | (85,000) | ||
Finance cost paid | - | (50,789) | ||
Net cash from financing activities | 455,500 | 1,537,680 | ||
Net (decrease)/increase in cash and cash equivalents during the year | (45,231) | 1,240,610 | ||
Cash and cash equivalents at beginning of year | 1,240,610 | - | ||
Cash and cash equivalents at end of year | 1,195,379 | 1,240,610 | ||
| ||||
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 October 2013
1. ACCOUNTING POLICIES |
General Information |
Pires Investments plc ("the Company") was throughout the year an investing company with an investing policy adopted on 16 April 2012 and re-adopted on 21 March 2013. In the previous year, the Company and its then subsidiaries were the operators of leisure activities. These businesses ceased to operate or were disposed of by 16 April 2012. |
The Company is a limited liability company incorporated and domiciled in England. |
The address of the registered office is c/o Morrison & Foerster, CityPoint, One Ropemaker Street, London EC2Y 9AW. |
These financial statements are prepared in Pounds Sterling, because that is the currency of the primary economic environment in which the Company operates. |
Basis of preparation |
The financial statements have been prepared in accordance with International Financial Reporting Standards (IFRSs) and IFRIC interpretations as adopted by the European Union applicable to companies reporting under IFRSs. The financial statements have also been prepared under the historical cost convention. For all periods up to and including the year ended 31 October 2012, financial statements were prepared on a Group Consolidated basis. The 31 October 2012 financial information has been restated to show the Company financial information as there is no longer the requirement to prepare Group financial statements. The preparation of financial statements in conformity with IFRSs requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the Company's accounting policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the financial statements are disclosed later in these accounting policies. |
Going Concern |
The financial statements have been prepared on the going concern basis. The Directors have prepared cash flow forecasts through to 30 April 2015, which show that the Company will have sufficient available cash resources to provide for its future requirements. In preparing their forecasts the Directors have given due regard to the risks and uncertainties affecting the business as set out in the Strategic Report and the liquidity risk disclosed in note 14. On this basis, the Directors have a reasonable expectation that the Company has adequate resources to continue operating for the foreseeable future. For this reason they continue to adopt the going concern basis in preparing the Company's financial statements. |
2. DISCONTINUED ACTIVITIES
On 16 April 2012, the Company sold two subsidiaries, Oak Heritage Limited and Rother Valley Steam Railway Limited, and also sold the assets of a further subsidiary, Ringwood Town & Country Experience Limited. The activities of Oak Heritage Limited and Ringwood Town & Country Experience Limited are treated as discontinued activities in the year ended 31 October 2012. As referred to above, Rother Valley Steam Railway was treated as having ceased business in October 2011, during the year ended 31 October 2011. The consideration for the disposals was £25,002 together with the discharge by the acquirer of certain loans outstanding at the date of transaction totalling £190,230. The net loss attributable to discontinued activities comprised loss on disposal, and provision against the value, of equity shares of £25,201 and the write off of intra company debts of £800,010. As a result the total loss on disposal of discontinued operations was £825,211.
During the year to 31 October 2012, discontinued activities generated £25,000 from investing activities and absorbed £26,529 from financing activities.
3. (LOSS)/EARNINGS PER SHARE
2013 £ | 2012 £ | |
(Loss)/profit attributable to the owners of the Company | ||
Continuing Operations | (327,634) | 1,173,899 |
Discontinued Operations | - | (825,211) |
(327,634) | 348,688 | |
2013 No. of shares | 2012 No. of shares | |
Weighted average number of shares for calculating basic loss per share | 1,945,616,874 | 954,477,964 |
2013 £ | 2012 £ | |
Basic and diluted loss per share | ||
Continuing Operations | (0.02) | 0.12 |
Discontinued Operations | - | (0.08) |
(0.02) | 0.04 |
There were no dilutive instruments which would give rise to diluted earnings per share.
4. | INVESTMENTS | ||||
| Investments held at fair value through profit or loss |
| |||
| Investments at fair value at 1 November 2012 | - | |||
| Purchase of investments | 863,207 | |||
| Investment disposals | (732,302) | |||
| Gain on disposal of investments | 15,424 | |||
| Movement in investment holding losses | (61,363) | |||
| Investments at fair value at 31 October 2013 | 84,966 | |||
| Categorised as | ||||
| Level 1 - quoted prices | 56,971 | |||
| Level 3 - Unquoted investments | 27,995 | |||
| The valuation techniques used by the Company are explained in the accounting policy note, "financial assets designated at fair value through profit or loss". | ||||
| |||||
| Gains / (losses) on investments held at fair value through profit or loss | ||||
| Realised gain on disposal of investments | 15,424 | |||
| Movement in investment holding losses | (61,363) | |||
| Net loss on investments held at fair value through profit or loss | (45,939) | |||
| |||||
| Unquoted investments (Level 3) The value of the unquoted investments as at 31 October 2013 was £27,995 and the amount comprised a holding in Shale Energy PLC. Shale Energy PLC is an independent gas business and emerging coal bed methane and shale gas developer. The Company is focused on producing shale gas through sites based in the UK. The holding is valued on the basis of evaluation of subsequent pre-IPO fundraising. The latest fundraising price and liquidity of private investors are reflected in determining the fair value of the investment holding. The Directors consider this value to be supported by information they have received over the course of the financial year. | ||||
5. | CASH ABSORBED BY OPERATIONS |
| ||
| 2013 £ | 2012 £ | ||
| (Loss)/profit | (327,634) | 348,688 | |
| Depreciation | 296 | 50 | |
| Realised gain on disposal of investments | (15,424) | - | |
| Fair value movements in investments | 61,363 | - | |
| Loss on disposal of discontinued activities | - | 774,205 | |
| Extraordinary credit from CVA | - | (1,526,949) | |
| Share based payments | - | 19,212 | |
| Finance income | (4,327) | (835) | |
| Finance costs | - | 50,789 | |
| Decrease/(increase) in receivables | (64,565) | (89,929) | |
| (Decrease)/increase in payables | (21,754) | 126,864 | |
| Cash absorbed by operations | (372,045) | (297,905) | |
6 .POST BALANCE SHEET EVENTS |
| |
| Since 31 October 2013, the Company has made an investment of £410,000 in Rame Energy plc by way of a convertible loan. On 10 February 2014, the Company's convertible loan note was converted into 3,037,037 new ordinary shares In Rame Energy plc, which would realise £547,000 at the placing price. In addition, as part of the IPO for Rame Energy, the Company has subscribed for 308,233 new ordinary shares in Rame Energy. Following the conversion and subscription the Company has an interest of 3,345,270 ordinary shares, representing approximately 3.5 per cent of Rame Energy's issued share capital. | |