Last checked at 27 Sep 2023 07:00
RiverFort Global Opportunities plc
("RGO" or the "Company")
Unaudited interim results for the 6 months ended 30 June 2023
RiverFort Global Opportunities plc is pleased to announce its unaudited interim results for the six months to 30 June 2023.
Highlights
· Total NAV of £10.2 million as at 30 June 2023
· NAV per share of 1.30 pence compared to the current share price of 0.59 pence
· Smarttech247 is progressing well as a listed company
· Around £2.4 million of net cash available for further investment
Philip Haydn-Slater, Non-Executive Chairman, commented:
"Given the difficult market conditions of 2022 continuing into 2023, RGO has continued to accumulate and preserve cash during the period such that at the period end the Company had a cash balance of £2.4 million. This strategy has, however, resulted in a reduction in investment income, although at the same time, the Company has broadly maintained its NAV against this background of difficult markets. In particular, Smarttech247 is progressing well as a listed company which has been reflected in an increase in its share price during the period. However, notwithstanding this and the maintenance of its NAV, disappointingly, the Company's current shares are trading at a 55% discount to its underlying NAV.
Post period end both in response to attractive investment opportunities and significant demand for the Company's capital, a number of new investments have been made which, going forward, we believe will generate attractive returns whilst offering downside protection. We believe that this combination continues to be an attractive investment strategy in current markets."
Chairman's statement
The analysis of income for the period is set out below:
| Half year to 30 June 2023 | Year to 31 December 2022 |
£000 | £000 | |
Investment income | 215 | 1,167 |
Net income from financial instruments at FVTPL | (141) | (1,450) |
Net foreign exchange gains/(losses) on financial instruments | (106) | 90 |
Total investment income | (32) | (193) |
During the period, the Company generated total investment income of £215,000 from its investment portfolio. The Company principally invests by way of debt and/or equity-linked instruments which provides equity upside with downside protection. Investment income is therefore principally generated from interest, fees, with additional income from equity conversion and warrants. Net income from financial instruments at FVTPL is derived from changes in the value of the Company's investment portfolio.
The Company's principal investment portfolio categories are summarised below:
Category | Cost or valuation at 30 June 2023 (£000) | Cost or valuation at 31 December 2022 (£000) |
Debt and equity- linked debt investments | 2,482 | 3,612 |
Pre IPO investments | 1,067 | 3,427 |
Equity and other investments | 3,277 | 1,067 |
Cash resources | 2,420 | 958 |
|
|
|
Total | 9,246 | 9,064 |
During the period, the Company has focused on recovering cash from its debt and equity linked portfolio. This portfolio currently includes over 20 companies, with principal investments in companies such as Jubilee Metals plc, Gaussin SA, Kibo Energy plc and Valoe Corp Oyj. Since the period end, investments have been made in companies including Gaussin SA, UK Oil and Gas plc, Cadence Minerals plc and Sareum Holdings plc.
The pre-IPO investment category now principally comprises the Company's holding in Emergent Entertainment ("Emergent") as Smarttech247 Group plc ("Smarttech247") was successfully listed on AIM in December 2022 and is now included in the equity and other investments category.
During the period, Emergent signed an LOI to secure development funding to develop a new game and is also in discussions on other projects. The launch of the VR game, Peaky Blinders, was positively received and further work is underway to increase sales. The company has agreed terms with a massive multiplayer roleplaying game developer to fast track the development of its Web3 game, Resurgence, which is expected to reduce development times by 12 months. The management team is also working on various initiatives to reduce the company's cost base and it expects 2023 revenues to be significantly ahead of the previous year.
The equity and other investments category principally comprises the Company's holdings in Smarttech247, Pires and its warrant portfolio.
Smarttech247 (AIM: S247) is an established global artificial intelligence-based cybersecurity business, specialising in automated managed detection and response. It has a successful track record of revenue growth and profitability and is positioned at the intersection of three major cyber security growth markets: security threat incidents, growth of cloud adoption and proliferation of cyber security data generation that needs to be integrated.
Recent full year and interim results of Smarttech247, along with some significant new contract wins have reinforced the company's growth trajectory. In May 2021, the Company invested €1.4 million in Smarttech247 to help fund its expansion and development. As at the period end, this holding was worth £2.4 million representing a significant uplift on investment.
Pires, is a company listed on AIM that invests in next generation technology companies with a focus on AI. Pires is continuing to build an attractive investment portfolio and, notwithstanding difficult markets for technology companies, has managed to maintain the value of its portfolio during the period. At the same time, a number its portfolio companies have been able to successfully raise new funds during the period demonstrating the quality of its portfolio. Further details can be found on the company's website which is www.piresinvestmentsplc.com.
As previously announced, as part of the Company's overall strategy when making investments, warrants or their equivalent are negotiated which can significantly increase the level of investment return. However, due to the inherent volatility associated with this form of instrument, the potential value of this warrant portfolio is not fully reflected in the Company's net asset value and a return is only crystallised when the respective warrants are exercised and resulting shares sold.
The key unaudited performance indicators are set out below:
Performance indicator | 30 June 2023 | 31 December 2022 | Change |
Investment income | £215,035 | £1,167,379 | |
Net asset value | £10,164,956 | £10,587,738 | -4.0% |
Net asset value - fully diluted per share | 1.30p | 1.35p | -3.7% |
Closing share price | 0.63p | 0.75p | -16.7% |
Market capitalisation | £4,846,000 | £5,816,000 | -16.7% |
The Company's overall net asset position has reduced slightly during the period. The decrease in the value of the Pires investment partially offset by the increase in the value of the Company's holding in Smarttech247 and the lower level of investment income was offset by administration and advisory costs. As referred to above, the Company has continued to grow its cash balance during the period and is now well positioned to focus on making new investments as attractive opportunities arise.
Philip Haydn-Slater
Non-Executive Chairman
27 September 2023
This announcement contains inside information for the purposes of Article 7 of the Market Abuse Regulation (EU) 596/2014 as it forms part of UK domestic law by virtue of the European Union (Withdrawal) Act 2018 ("MAR"), and is disclosed in accordance with the Company's obligations under Article 17 of MAR.
For more information, please contact:
RiverFort Global Opportunities plc: +44 (0) 20 3368 8978
Philip Haydn-Slater, Non-Executive Chairman
Nicholas Lee, Investment Director
Nominated Adviser:
Beaumont Cornish +44 (0) 20 7628 3396
Roland Cornish/Felicity Geidt
Joint Broker: +44 (0) 20 7601 6100
Shard Partners LLP
Damon Heath/Erik Woolgar
Joint Broker: +44 (0) 20 7562 3351
Peterhouse Capital Limited
Lucy Williams
UNAUDITED STATEMENT OF COMPREHENSIVE INCOME
FOR THE SIX MONTHS ENDED 30 JUNE 2023
Unaudited 6 months ended 30 June 2023 | Unaudited 6 months ended 30 June 2022 | Audited Year ended 31 December 2022 | |
£ | £ | £ | |
Investment income | 215,035 | 417,476 | 1,167,379 |
Net loss from financial instruments at FVTPL | (140,753) | (440,460) | (1,449,703) |
Foreign exchange (losses)/gains on financial instruments | (106,529) | 103,689 | 89,703
|
Total income | (32,247) | 80,705 | (192,621) |
Administration expenses | (173,245) | (170,371) | (318,933) |
Investment advisory fees | (151,565) | (214,879) | (413,746) |
Exchange translation (losses)/gains | (65,725) | 22,249 | 58,870 |
Loss before taxation | (422,782) | (282,296) | (866,430) |
Taxation | - | - | - |
Loss for the period and total comprehensive expense | (422,782) | (282,296) | (866,430) |
| |||
| |||
Basic loss per share | |||
Continuing and total operations | (0.05p) | (0.04p) | (0.11p) |
Fully diluted loss per share | |||
Continuing and total operations | (0.05p) | (0.04p) | (0.11p) |
UNAUDITED STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2023
| Unaudited 6 months ended 30 June 2023 | Unaudited 6 months ended 30 June 2022 | Audited Year ended 31 December 2022 |
| £ | £ | £ |
| |||
ASSETS | |||
Non-current investments | |||
Financial asset investments | 5,545,225 | 7,434,772 | 5,962,814 |
Total non-current assets | 5,545,225 | 7,434,772 | 5,962,814 |
Current assets | |||
Financial asset investments | 1,280,498 | 2,456,686 | 2,152,879 |
Trade and other receivables | 1,444,766 | 299,102 | 1,854,870 |
Cash and cash equivalents | 2,419,917 | 1,718,844 | 958,135 |
Total current assets | 5,145,181 | 4,474,632 | 4,965,884 |
| |||
Total assets | 10,690,406 | 11,909,404 | 10,918,698 |
LIABILITIES | |||
Current liabilities | |||
Trade and other payables | 525,450 | 442,879 | 330,960 |
Total current liabilities | 525,450 | 442,879 | 330,960 |
Net assets | 10,164,956 | 11,466,525 | 10,587,738 |
EQUITY | |||
Share capital | 77,540 | 77,540 | 77,540 |
Share premium account | 1,568,353 | 1,568,353 | 1,568,353 |
Share options reserve | 201,034 | 201,034 | 201,034 |
Retained earnings | 8,318,029 | 9,619,598 | 8,740,811 |
| |||
Total equity | 10,164,956 | 11,466,525 | 10,587,738 |
|
UNAUDITED STATEMENT OF CHANGES IN EQUITY
FOR THE SIX MONTHS ENDED 30 JUNE 2023
Called up share capital | Share premium account | Share options reserve |
Retained earnings |
Total equity | |
£ | £ | £ | £ | £ | |
| |||||
Balance at 1 January 2022 | 77,540 | 1,568,353 | 201,034 | 9,901,894 | 11,748,821 |
Loss for the year and total comprehensive expense | - | - | - | (866,430) | (866,430) |
Dividend payment | - | - | - | (294,653) | (294,653) |
| |||||
Balance at 31 December 2022 | 77,540 | 1,568,353 | 201,034 | 8,740,811 | 10,587,738 |
Loss for the period and total comprehensive expense | - | - | - | (422,782) | (422,782) |
| |||||
Balance at 30 June 2023 | 77,540 | 1,568,353 | 201,034 | 8,318,029 | 10,164,956 |
UNAUDITED STATEMENT OF CASH FLOWS
FOR THE SIX MONTHS ENDED 30 JUNE 2023
| Unaudited 6 months ended 30 June 2023 | Unaudited 6 months ended 30 June 2022 | Audited Year ended 31 December 2022 |
£ | £ | £ | |
Cash flows from operating activities | |||
Investment income received | 401,514 | 43,938 | 500,099 |
Operating expenses paid | (146,885) | (244,386) | (1,026,445) |
Net cash inflow/(outflow) from operating activities | 254,629 | (200,448) | (526,346) |
Cash flows from investing activities | |||
Purchase of investments | (808,089) | (2,807,144) | (5,384,144) |
Proceeds from disposal of investments | - | 27,316 | 27,316 |
Debt instrument repayments | 2,059,394 | 2,582,948 | 5,033,776 |
Net cash from/(used in) investing activities | 1,251,305 | (196,880) | (323,052) |
| |||
FINANCING ACTIVITIES | |||
Dividend payment | - | - | (294,653) |
Net cash used in financing activities | - | - | (294,653) |
| |||
Net increase/(decrease) in cash and cash equivalents | 1,505,934 | (397,328) | (1,144,051) |
Cash and cash equivalents at beginning of period | 958,135 | 2,012,483 | 2,012,483 |
Effect of foreign currency exchange on cash | (44,152) | 103,689 | 89,703 |
Cash and cash equivalents at end of period | 2,419,917 | 1,718,844 | 958,135 |
NOTES TO THE INTERIM REPORT
1. The financial information set out in this interim report does not constitute statutory accounts as defined in section 434 of the Companies Act 2006. The group's statutory financial statements for the period ended 31 December 2022, prepared under International Financial Reporting Standards (IFRS), have been filed with the Registrar of Companies. The auditor's report on those financial statements was unqualified and did not contain a statement under section 498 (2) or (3) of the Companies Act 2006.
The interim financial information has been prepared in accordance with the recognition and measurement principles of International Financial Reporting Standards (IFRS) and on the same basis and using the same accounting policies as used in the financial statements for the year ended 31 December 2022. The interim financial statements have not been audited or reviewed in accordance with the International Standard on Review Engagement 2410 issued by the Auditing Practices Board.
The financial statements have been prepared on a going concern basis under the historical cost convention.
The Directors believe that the going concern basis is appropriate for the preparation of the financial statements as the Company is in a position to meet all its liabilities as they fall due.
2. Earnings per share
Earnings per share is calculated by dividing the profit/(loss) attributable to equity shareholders by the weighted average number of shares in issue.
| Six months ended 30 June 2023 (unaudited) | Six months ended 30 June 2022 (unaudited) |
Year ended 31 December 2022 (audited) |
(Loss)/profit from continuing and total operations | (£422,782) | (£282,296) | (£866,430) |
Weighted average number of shares in the period for basic earnings |
775,404,187 |
775,404,187 |
775,404,187 |
Weighted average number of shares in the period for fully diluted earnings |
775,404,187 |
775,404,187 |
775,404,187 |
Basic and fully diluted (loss)/earnings per share: | |||
Basic (loss)/earnings per share from continuing and total operations | (0.05p) | (0.04p) | 0.11p |
Fully diluted (loss)/earnings per share from continuing and total operations | (0.05p) | (0.04p) | 0.11p |
For the current period exercise of the outstanding warrants would be anti-dilutive for earnings per share, so the weighted average number of shares in issue is the same for both basic and fully diluted earnings per share calculations. | |||
3. Copies of the interim report can be obtained from: The Company Secretary, RiverFort Global Opportunities plc, Suite 39, 18 High Street, High Wycombe, Buckinghamshire, HP10 8NJ and are available to view and download from the Company's website : www.riverfortglobalopportunities.com