Primorus Inv. Regulatory News (PRIM)

6 September 2017

Primorus Investments plc

("Primorus" or the "Company")

Interim Results for the six months ended 30 June 2017

Primorus Investments plc announces its interim results for the six months ended 30 June 2017.

Overview

Primorus Investments plc ("Primorus") has a strong balance sheet with no debt and with current assets (including cash of £126,000) at 30 June 2017 amounting to £1,208,000 (30 June 2016: £2,006,000).

It has been a successful year for the Company on the investment front. We have, in line with our mandate, been able to attract a significant level of funding relative to our market capitalization and we have been able to deploy these funds into a number of new investments as well as support our existing portfolio.

The Company maintains its investments in two natural resource assets in the UK, being a 10% stake in Horse Hill Developments Limited ("HHDL"), and a 49% stake in Gold Mines of Wales Limited. We believe these investments will generate future shareholder value.

The Company was informed by HHDL that it understood that its planning application for long term production testing and further appraisal drilling would be determined at a scheduled Surrey County Council planning meeting in September 2017.

The Company announced an update on 2 May 2017 in regard to its existing investment in Fresho, a leading Australian B2B company servicing the Restaurant and Food Service industries. Fresho has informed us that annualised platform volume growth has risen 5-fold since investing.

The Company has this week been informed that product growth in the traditionally quiet southern hemisphere winter has exceeded expectations, with order numbers (numbers of discrete orders) and order volumes rising 20% quarter on quarter. Actual customer user numbers also increased some 40% quarter on quarter.

We are also particularly pleased to see that a large number of new suppliers have signed up to the platform and that plans to expand into New Zealand are well advanced. We expect Fresho to raise further funding to accelerate their development plans in early 2018. From our discussions to date we expect strong institutional support for this capital raising and believe it will be priced significantly above our investment entry price. We will review the value of this investment upon its successful completion.

Since the period end, the Company has also been able to secure new investments in several pre-IPO opportunities as detailed below in this interim report. During 2017 the Company has invested significant time in getting to know management, understand the core businesses, valuations and pathways to market. Pre-IPO is part of our investment strategy and we look forward to being able to demonstrate real value accretion for our shareholders as we begin to exit existing investments via trade sales and IPOs or other mechanisms to crystallise tangible value. The Board fundamentally believes the pre-IPO sector is both underserved and has the potential to offer significant returns over time to disciplined, risk-weighted investors.

Investments

Investment in Horse Hill Developments Limited: (10% interest in HHDL)

The Company currently owns a 10% direct interest in Horse Hill Developments Limited. HHDL is a special purpose company that owns a 65% participating interest and operatorship of Licence PEDL137 and the adjacent Licence PEDL246 in the UK Weald Basin.

As reported in March 2016, the final total aggregate stable dry oil flow rate from two Kimmeridge limestones plus the overlying Portland sandstone in HH-1 stands at 1,688 barrels of oil per day ("bopd"), a UK record for an onshore discovery well. Over the 30 to 90 hour flow periods from each of the 3 zones in HH-1, no clear indication of any reservoir pressure depletion was observed. 

During the reporting period it was announced that Xodus oil & gas consultants had upgraded the Portland sandstone P50 Oil in Place (OIP) to 32 million barrels, a 53 per cent increase on previous calculations. The Company also announced that it had been informed by the Operator, HHDL, that the Oil & Gas Authority ("OGA") had consented to extend the PEDL137 and PEDL246 licences until 2021. The Company was informed by HHDL that it understood that its planning application for long term production testing and further appraisal drilling would be determined at a scheduled Surrey County Council planning meeting by September 2017.

Investment in Gold Mines of Wales: (49% interest in Gold Mines of Wales Limited)

Option

Gold Mines of Wales Limited (49% owned by Primorus) owns 100% of Gold Mines of Wales (Operations) Limited ("GMOW"). GMOW continues to hold the Crown Estate ("Crown") Mines Royal Exploration Option ("Option") over the Dolgellau Gold-Belt.

Work programme

GMOW is working with SRK Exploration Services Ltd ("SRK ES") to advance GMOW's mineral assets in Wales. SRK ES recommends that this should include stream sediment sampling, geological mapping, soil sampling, hand auger drilling and geophysical surveying, and considers the drilling targets could be provided within a 10-month period at a cost of £350,000 - £400,000. Following this, if the necessary planning and environmental permissions can be secured by GMOW, diamond drilling could be undertaken to support the presence of a potential deposit.

GMOW, the project operator, are due to advise us when further ground works will commence. We understand GMOW are undertaking further project design activities to determine the best and most acceptable path forward in what is an environmentally sensitive region. GMOW is also currently working with its environmental consultants to commence environmental impact ("EIS") and conceptual planning studies.

Fresho Pty Ltd ("Fresho")

Fresho, a company in which Primorus holds an investment of £175,000, representing approx. 3.5% of Fresho's share capital, is positioning itself as a leading Australian B2B company servicing the restaurant and food service industries. By aggregating and streamlining the food order process via Fresho's unique cloud-based platform, both customers and suppliers are able to make savings in time, money and wastage and also generate powerful reporting and business data analytics. To date Fresho's customer base has been located in Melbourne with many of Australia's most iconic restaurants and suppliers using the product, however they are now expanding into a number of Australia's other cities and New Zealand.

The Company announced an update on 2 May 2017 in regard to its investment in Fresho, a leading Australian B2B company servicing the Restaurant and Food Service industries. It has informed us that annualised platform volume growth has risen 5-fold to circa A$100million.

Post Period End

On 7 July 2017, the Company announced that it has raised £500,000, gross of expenses, through the issue of 333,333,334 new ordinary shares of 0.01p each in the Company at a placing price of 0.15 pence per share with certain institutional and private investors.

On 2 August 2017, the Company announced that it has raised £1,650,000, gross of expenses, through the issue of 694,736,843 new ordinary shares of 0.01p each in the Company at a placing price 0.2375p pence per share with certain institutional and private investors.

On 23 August 2017, the Company announced it had made the following 3 investments:

- TruSpine Technologies Limited

Primorus invested, by way of subscription, £500,000 in TruSpine Technologies Limited ("TruSpine") on a pre-new money valuation of £15m. Founded in December 2014, TruSpine secured intellectual property and subsequently developed the Faci‐LOK and Cervi‐FAS minimally invasive spine stabilisation devices, and the VOSC Catheter atherosclerosis treatment product 'VOSC Catheter'. This development is on‐going and TruSpine is targeting FDA clearance and commercialisation of its first product, the Faci‐LOK. FDA submission is expected by the end of Q4 2017.

An AIM IPO is planned to take place following FDA approval, which is expected to be received in H1 2018. In the year ended 31 March 2016, TruSpine incurred a loss of £45,325.

- Sport:80 plc

Primorus invested, by way of subscription, £100,000 in Sport:80 plc ("Sport:80") on a pre-new money valuation of £10m as part of a fundraising of up to £1m. Sport:80 is a technology and management company with a proprietary cloud-based platform focused on transforming the business operations and management of sports organisations. The Sport:80 platform is used by 20 prominent sports organisations. Sport:80 is revenue-generating with four-fold revenue growth per annum since 2014. In the 12 months to 31 December 2016 it had total turnover of approximately £458,000 and made a loss before tax of approximately £269,000. An AIM IPO is planned for 2018.

- Farina Investments (UK) Limited

Primorus invested, by way of subscription, £100,000 in Farina Investments (UK) Limited ("Farina") on a pre-new money valuation of £4m. Farina is a boutique corporate finance and asset management company which specialises in leveraging profit opportunity in the post-crisis financial landscape. Farina has been carefully structured and strategically placed to fully capitalise on these opportunities, thereby optimising capital growth, profitability and returns for both the company and investors. Farina is currently exploring various UK listing opportunities either via IPO or reverse takeover. In the year ended 31 July 2016, turnover was £1.9 million, net profit was £116,000 and assets under management were £1.8 million. Farina is not authorised and regulated by the Financial Conduct Authority.

On 1 September 2017, the Company announced it had made the following 3 investments:

- Engage Technology Partners Limited

Primorus invested, by way of subscription, £400,000 in Engage Technology Partners Limited ("Engage") on a pre-new money valuation of £15m as part of a fully subscribed £5.25m funding round. Founded in 2013, Engage builds software to assist with finding, hiring, compliance and paying of the rapidly growing contingent workforce in the UK. Their platform supports the entire workflow, and simultaneously services employers, recruitment agencies, payroll companies, accountants and workers. Having everyone in the supply chain sharing the same platform makes a difficult, expensive, and error-prone process simple and more cost effective. At present the recruitment industry is fragmented by dozens of software suppliers providing only part of the functionality required, to one customer at a time. This generates duplication of effort, administration errors and fraud as data is re-keyed and passed manually between parties. Engage's solution to this is a SaaS platform hosted on Amazon Web Services, available securely via the Cloud on any internet device, by the whole market, simultaneously. Engage is sold via a referral and viral sales model and does not have a marketing budget as part of its business model. Its directors believe it is already challenging the large enterprise-based incumbents via a low-cost SaaS model of charging £1.99 per worker per week.

Engage has rapidly gone from a minimally viable product to a fully saleable and scalable SaaS platform which has built up an impressive and rapidly growing customer base including many household names. The current funding round is largely being deployed to allow for more product automation in roll-out to customers with a view to providing a fully automated process by January 2018.An AIM IPO is planned to take place in 2018. In the year ended 31 May 2017, Engage incurred a loss of £1.71m and intends to break even in the current financial year.

- FOMO Money

Primorus invested, by way of subscription, A$400,000 (approximately £240,000) in FOMO Money Pty Ltd ("FOMO Money") on a pre-new money valuation of circa A$6m. FOMO Money is a new entrant into the Australian Fintech sector based in Melbourne which has been in development for the past 18 months. FOMO Money is an online lending business which will offer personal loans and, in time, brokered home loans that will target the millennial market. 

FOMO Money plans to commence lending in 2018 through a number of distribution arrangements with education providers offering courses to students in Australia (i.e. student loans). The business will also offer personal loans direct to consumers through its online lending platform to validate the forward looking scorecard of loan criteria it has built and the customer acquisition tool it has licensed in Australia. As a new corporate entity, FOMO Money does not have any historic financial information. 

- WeShop

Primorus invested, by way of subscription, £200,000 in WeShop Limited ("WeShop") on a pre-new money valuation of £25m. WeShop is a new way to shop online and earn rewards. Users can browse millions of products from many top brands, discover which have been recommended by people known to them and earn rewards to withdraw as cash or donate to charity. WeShop allows the user to shop with friends to share ideas and gain inspiration, with everyone earning rewards. An AIM IPO is planned to take place during 2018. In the year ended 31 May 2016, WeShop incurred a loss of £2,434,597.

Financial Results

The operating loss was £100,000 (30 June 2016 - £115,000 loss). The net loss after tax was £108,000 (30 June 2016: £156,000). Current assets, including cash of £126,000, at 30 June 2017 amounted to £1,208,000 (30 June 2016: £2,006,000).

In March 2017, the Company announced it had raised £237,000 through the issue of 158 million new shares at a placing price of 0.15 pence per share. The funds were used for general working capital purposes and to assist in seeking further investment opportunities. Also in March 2017, the Company obtained, at a general meeting, shareholder approval for an increased authority to issue new ordinary shares.

Outlook

The Board is encouraged by progress made on its investments over the period.

The Horse Hill-1 well has added significant additional value to the Company. It contains both a commercial conventional Portland Sandstone discovery and a major new play in the Kimmeridge Limestones that has very significant potential. We will work closely with HHDL on potentially increasing our oil production and reserves from the existing fields.

GMOW continues with its exploration activities and we await further updates.

We look forward to updating shareholders on the progress of Fresho, as well as all our post period end investments.

The Company continues to actively assess additional new investment opportunities in line with our investment policy and will make further investments in suitable ventures as and when it is considered appropriate.

The Board would like to take this opportunity to thank our shareholders, staff and consultants for their continued support.

Jeremy Taylor-Firth

Chairman

6 September 2017

For further information please contact:

Unaudited Condensed Company Statement of Comprehensive Incomefor the six months ended 30 June 2017

Unaudited Condensed Company Statement of Financial Positionas at 30 June 2017

Unaudited Condensed Company Statement of Changes in Equityfor the six months ended 30 June 2017

Unaudited Condensed Company Statement of Cash Flowsfor the six months ended 30 June 2017

Notes to the condensed interim financial statements

1. General Information

The condensed interim financial information for the 6 months to 30 June 2017 does not constitute statutory accounts for the purposes of Section 434 of the Companies Act 2006 and has not been audited or reviewed. No statutory accounts for the period have been delivered to the Registrar of Companies.

The condensed interim financial information in respect of the year ended 31 December 2016 has been produced using extracts from the statutory accounts for that period. Consequently, this does not constitute the statutory information (as defined in section 434 of the Companies Act 2006) for the year ended 31 December 2016, which was audited. The statutory accounts for this period have been filed with the Registrar of Companies. The auditors' report was unqualified and did not contain a statement under Sections 498 (2) or 498 (3) of the Companies Act 2006.

The Report was approved by the Directors on 6 September 2017 and is available on the Company's website at www.primorusinvestments.com .

Basis of preparation and accounting

The financial information has been prepared on the historical cost basis. The Company's business activities, together with the factors likely to affect its future development, performance and position are set out in the Chairman's Statement. This statement also includes a summary of the Company's financial position and its cash flows.

These condensed interim financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS) as adopted by the European Union with the exception of International Accounting Standard ('IAS') 34 - Interim Financial Reporting. Accordingly the interim financial statements do not include all of the information or disclosures required in the annual financial statements and should be read in conjunction with the Company's 2016 annual financial statements.

2. Earnings per share

The calculation of the basic earnings per share is based on the earnings attributable to ordinary shareholders divided by the weighted average number of shares in issue during the year. The calculation of diluted earnings per share is based on the basic earnings per share, adjusted to allow for the issue of shares and the post-tax effect of dividends and/or interest, on the assumed conversion of all dilutive options and other dilutive potential ordinary shares.

Reconciliations of the earnings and weighted average number of shares used are set out below.

3. Events after the reporting date

On 7 July 2017, the Company announced that it has raised £500,000, gross of expenses, through the issue of 333,333,334 new ordinary shares of 0.01p each in the Company at a placing price of 0.15 pence per share with certain institutional and private investors.

On 2 August 2017, the Company announced that it has raised £1,650,000, gross of expenses, through the issue of 694,736,843 new ordinary shares of 0.01p each in the Company at a placing price 0.2375p pence per share with certain institutional and private investors.

On 3 August 2017, the Company announced that it has agreed to grant 75 million share options to Alastair Clayton (Executive Director) and 75 million share options to Donald Strang (Non-Executive Director) ("New Options"). Each New Option will entitle the holder to subscribe for new ordinary shares of 0.01p each in the Company ("Shares") at an exercise price of 0.30 pence per Share (being a 26.3% premium to the Placing Price of the Placing announced on 2 August 2017) and are exercisable at any time within 5 years from the date of grant.