PIRI.L Regulatory News (PIRI)

Pires Investments PLC

("Pires" or the "Company")

Unaudited interim results for the six months to 30 April 2016

Chairman's Statement

During the period under review the Company continued to incur significant losses though at a lower rate than during the previous twelve months. Operating costs were lower during the period but the full benefit of the cost reduction programme referred to with the results for the year ended 31 October 2015 and announced in April this year had not begun to come through. Costs it is hoped will be significantly lower in the future.

Overall our investments suffered some diminution in value though this was very largely again due to a further drop in value of our holding in Rame Energy plc ("Rame"), about which more will be said below. In respect of our other holdings, our holding in SalvaRx Group plc ("SalvaRx") showed a further modest increase in value as did that in Kennedy Ventures plc ("Kennedy"), though both have fallen back somewhat since the end of the period. Armstrong Ventures plc ("Armstrong") (now called EVR Holdings plc) announced a reverse transaction but the shares unfortunately fell in price on the announcement of this transaction.

In operational terms, positive progress was made in three of our other investee companies. In March a reverse takeover was completed into the then 3Legs Resources plc to acquire SalvaRx Limited, a cancer immunotherapy development group, as described in our full year results issued on 29 April 2016. Since then two particular developments have been announced - the awarding of an Euro 8.3m EU grant to the consortium of which they are a part to take one of SalvaRx's products through phase 2 human testing and an investment in a further cancer drug development company, Intensity Therapeutics Inc, whose lead product is planned to enter human clinical trials this year.

Kennedy, which acquired a tantalite project in Namibia in 2015, began mining in the final months of 2015. It has very recently completed subject to shareholder approval a £2m equity raise to enable it to upgrade its tantalite recovery and to begin work on a potentially valuable lithium deposit that has been discovered in association with the tantalite.

Armstrong announced, just before the end of the period under review the reverse takeover of MelodyVR Limited which provides virtual reality music devices and content. This transaction has been approved by Armstrong shareholders and implemented, along with a change of name to EVR Holdings plc.

Our holdings in Kennedy and Armstrong are relatively small and we have in part profitably realised these investments and will likely continue to divest these holdings.

The performance of Rame, our largest holding, has been particularly disappointing. Having announced their intention to raise up to £2.8m of new equity on 28 April 2016, they have not to date done so and were unable to produce their results within the timescale set by the AIM rules. As a result their shares were suspended on 1 July 2016 and remain so today. The Board is not able to provide any clarification as to when and how this situation is likely to be resolved.

As previously indicated, we continue to seek a single investment or reverse opportunity if possible on a share-for-share basis and we have made further reductions in our operating costs.

The Company has been operating on limited cash resources for some time. In the Circular of 11 March 2016, the Company announced that, as an initial step towards delivering the strategy mentioned in the last paragraph, the Board was proposing to seek to raise fresh equity capital which was expected to be sufficient to enable the Company to investigate suitable opportunities and undertake adequate due diligence in order to move towards execution of a significant acquisition. However, it was later decided by the Board to undertake a smaller capital raise of £100,000, through a subscription at 4.73p, principally subscribed by our largest shareholder, Ambrosia Investment Limited ("Ambrosia"), which now has a 28.8 % holding in the Company.

In view of the position of the Company's investment portfolio and in particular the suspension of trading in the shares of Rame, the Board has arranged a working capital facility, which will be in the form of a convertible unsecured loan note or a similar instrument, with its major shareholder, Ambrosia, up to the value of £200,000 that may be drawn down over a period of eighteen months and will not be repayable until a significant transaction or equity fundraising has been completed.

Conversion of the unsecured loan note (and any interest) may not occur to the extent that, immediately following such conversion, the new fully paid shares which are the subject of such conversion to be issued to the noteholder would carry 30% or more of the voting rights of the Company, unless such conversion is affected as part of a sale of the entire issued share capital of the Company or is part of a mandatory offer for the remaining shares in the Company, under Rule 9 of the Takeover Code.

It is not of course possible in view of its present shareholding position for Ambrosia to subscribe for significantly more ordinary shares without triggering a bid obligation.

As Ambrosia is a related party, the independent directors of the Company, having consulted with our nominated adviser, believe that the terms of the facility are fair and reasonable insofar as shareholders are concerned.

Peter Redmond

Chairman

Enquiries:

UNAUDITED STATEMENT OF COMPREHENSIVE INCOME

for the six months ended 30 April 2016

UNAUDITED STATEMENT OF FINANCIAL POSITION

As at 30 April 2016

UNAUDITED CASH FLOW STATEMENT

For the six months ended 30 April 2016

Notes to the Unaudited Interim Report

1. GENERAL INFORMATION

Pires Investments PLC (the "Company") is a company domiciled in England whose registered office address is c/o Cooley Services Limited, Dashwood, 69 Old Broad Street, London EC2M 1QS. The condensed interim financial statements of the Company for the six months ended 30 April 2016 is that of the Company only. The Company disposed of its subsidiary, (Ventec Renewable Energy Limited), in February 2016. The condensed interim financial statements for the six months ended 30 April 2015 are those of the Group which had a subsidiary during that period.

The condensed consolidated interim financial statements do not constitute statutory accounts as defined in Section 434 of the Companies Act 2006.

The financial information for the year ended 31 October 2015 has been extracted from the statutory accounts for that period which were prepared in accordance with International Financial Reporting Standards ("IFRS"). The auditors' report on the statutory accounts was unqualified. A copy of those financial statements has been filed with the Registrar of Companies.

The financial information for the six months ended 30 April 2014 and 2015 was also prepared in accordance with IFRS.

The condensed consolidated interim financial statements do not include all of the information required for full annual financial statements. 

The condensed interim financial statements were authorised for issue on 30 July 2016.

2. BASIS OF ACCOUNTING

The consolidated financial statements are unaudited and have been prepared on the historical cost basis in accordance with International Financial Reporting Standards as adopted by the EU ("IFRS") using the same accounting policies and methods of computation as were used in the annual financial statements for the year ended 31 October 2015. As permitted, the interim report has been prepared in accordance with the AIM rules for Companies and is not compliant in all respects with IAS 34 Interim Financial Statements. The condensed consolidated interim financial statements do not include all the information required for full annual financial statements and hence cannot be construed as in full compliance with IFRS.

3. LOSS PER SHARE

The calculation of the basic loss per share is based on the following data:

4. STATEMENT OF CHANGES IN EQUITY

5. NOTES TO THE CASH FLOW STATEMENT

6. DISTRIBUTION OF INTERIM REPORT

Copies of the Interim Report for the six months ended 30 April 2016 can be obtained from the Registered Office during normal business hours and are available on the Company's website, www.piresinvestments.com.