Braveheart Investment Share Discussion Threads

[arthur_lame_stocks] 13/12/2018 07:31

Interesting news today:



I wonder what sort of price they could get for the fund management business and what they would do with the cash if they sold it?

I bought in primarily because I felt that the FM business was worth the price with the investments thrown in for free, i'm not sure I want to be invested in a pure early stage investment business.

[nextlink] 30/10/2018 08:23

Can't argue with Respectable if not particularly impressive results.
They hold a Portfolio of fairly early stage Companies.
None of these generate revenue for Braveheart and will only do so when
sold in whole or part or listed on a stock exchange.
The uplift from them the fund management business is their only revenue
at this time and is very welcome.
Looks like an whole raft of News due over the next six months.

[arthur_lame_stocks] 30/10/2018 08:14

Respectable if not particularly impressive results. The investments all seem to be going well, but without the uplift from them the fund management business would have made I loss.

At least it looks like we're getting a dividend at when the finals are published.

I'll continue to hold.

[nextlink] 22/10/2018 11:21

So much News in the pipeline.
Moving steadily in the right direction.

[arthur_lame_stocks] 18/10/2018 11:51

It looks like we're getting a dividend.

[nextlink] 10/10/2018 09:06

Steadily moving up on no news.
What will it do when any of a number of possible
announcements are made.

[nextlink] 27/9/2018 13:31

Dropping the bid to 15 pence whilst paying 16 pence for
a reasonable sized sell.
Today's buys already mopping up a large number of yesterdays
sells.
A whole raft of possible good news due, announcements could be
coming one after another.
Could be a good October holding Braveheart.

[nextlink] 24/9/2018 13:43

Today's announcement is another step to simplify the accounts.
A reduction in the cash pile, eliminating the loan notes to Paraytec Limited
and increasing their holding in that Company from 42% to 56.5%.
Regarding Paraytec, why convert the loan notes now.
Could be to satisfy the Court or is the sale of Paraytec under discussion.
I expect we will receive the update regarding the application to the Court
regarding the Proposed Reduction of Share Capital this week.

[arthur_lame_stocks] 17/9/2018 21:46

I wonder if they're still planning to sort out the balance sheet so they can pay a dividend? They can certainly afford it.

[draft11] 08/9/2018 12:15

Kirkstall recently signed a worldwide marketing and distribution agreement with a leading Swiss life-science company, Lonza – a group which had sales of £2.6 billion in 2017.

[draft11] 08/9/2018 12:11

hxxps://www.mnn.com/earth-matters/animals/stories/california-passes-bill-banning-sale-cosmetics-tested-animals

[costax1654x] 04/9/2018 11:15

buy SBTX (RNS next week),And Dish (RNS next week)

[nextlink] 04/9/2018 10:21

hughsey1995 has comprehensively outlined the potential
for a significant rerating in the near future.
News on the ability to pay a dividend was stated to be
six to eight weeks on from 19th July.
So Dividend news could be announced any day now.

[hughsey1995] 02/9/2018 17:33

Braveheart PLC
Share price: 16p
Market Cap: £4.33m

Fund management business and investment group, holding significant equity stakes in 3 businesses: Kirkstall Ltd, Paraytec Ltd and Gyrometric Ltd.

P/L Account
- Business highly profitable and cash generative from its fund management business, as well as profit recognised from changes to the fair value of its investments
- Trevor Brown very successfully streamlined business - reducing operating costs from £829k in 2017 to £486k in 2018. TB will continue to tightly manage costs as business grows.
- £1.492m profit in 2018, up from £779k in 2017

Balance Sheet
- Net assets at 2018 year end of £4m
- £1.1m cash
- Minimal receivables and no material debt

Major Shareholders
- Trevor Brown, CEO 29.82%
- Adam Norris, former Hargreaves Landsdown director, 19.1%
- DC Thompson Ltd 8.34%
- Major Shareholders hold 66%, free float very small.


Fund Management Business
- "£71m of funds under management across various regional and national funds... Braveheart also serves the investment appetites of high net worth individuals (HNWs), family offices, institutional investors and public sector organisations spanning the UK and Europe"
- Generated £820k revenue in 2018, and 340k profit after all costs for the entire group
- Many investment companies burn cash, by incurring PLC costs, without generating any revenues, whilst they wait for their investments to mature. Braveheart is different in that it is generating cash and profits through its fund management business, and so is accumulating cash, to either fund new investments or pay dividends, whilst giving the investments a chance to grow. There is no hurry to exit investments quickly to generate cash, allowing them to grow and maximise value to Braveheart.
- Announced on 16th July that Braveheart is in detailed talks with a “large UK financial organisation” to launch a new fund, funded 40% by the financial organisation and 60% by other investors.
- New fund expected to be ready to invest before end of 2018. TB confirmed to me on 31/8 that these timings are still on track so I would expect a further update imminently detailing who the financial organisation is and size of the new fund etc.

Kirkstall
- “Sells products for in vitro cell culture and operates in a worldwide market sector that is projected to grow by 38% annually”
- Achieved 35% sales growth in 2017 with own technical staff. SIGNIFICANTLY signed worldwide distribution and marketing agreement with Lonza, one of the world's leading bioscience companies
- “This agreement... provides technical validation..., enhancing the company's credibility, but also gives it much greater access to worldwide markets. Lonza has 600 sales staff operating in USA, which is the world's major market for in vitro cell culture and as a result Kirkstall anticipates accelerated growth in its product sales in 2018”
- “Recent successes in the USA have been sales to MIT (Massachusetts Institute of Technology) in Boston which is the centre appointed by US National Institute of Health to validate the emerging 'organ on a chip' technologies. The MIT scientists using Kirkstall products are recognised as key opinion leaders in the field.”
- “Kirkstall works with universities to develop applications for its products and its user base has grown from 70 to over 90 in the last 12 months. This will increase in 2018 with the award of €4.7million EU Grant to a consortium...”
- I am expecting the Lonza marketing and distribution agreement to have seen sales increase massively, which should be confirmed within the interim results in October/November, with projections of further accelerating sales.
- My expectation is that at some point Lonza will buyout Kirkstall Ltd. The Kirkstall directors in September 2017 put a valuation on Kirkstall at £5.6m, prior to a potential fundraise, which in the end was cancelled because the business instead signed the distribution agreement with Lonza, and therefore had no need to raise the money to hire sales staff, grow sales etc. I would expect the buyout to be at a price significantly higher than £5.6m given expected growth, perhaps somewhere in the region of £15m-£20m, which would value Braveheart’s stake at £5.6m-£7.5m, though this is obviously highly speculative.

Gyrometric
- “developed a patent protected system of hardware and software to accurately monitor the vibrations in rotating shafts. Warnings generated by this system help prevent expensive and untimely breakdowns in industry and transport”
- “Sales of marine drive monitoring systems continued to expand during the year. The order for the 60th system was taken and commitments for 2018 indicate a continuing acceleration. Feedback from sales agents has confirmed a market opportunity for monitoring additional engine and drive parameters that will broaden the marine market for Gyrometric.”
- “launching a new digitisation product at the SMM Ship Technology exhibition in Hamburg – 4th-7th September”. The leading international maritime trade fair”.
- Technology tested on a “7 Megawatt wind turbine nacelle at the ORE Catapult test facility in Blyth, Northumberland. The new system, the first for Gyrometric in wind turbines, incorporates world-leading technology for monitoring bearing run out. This technology has particular advantages in wind turbines because of its inherent effectiveness at low turning speeds”.
- Huge opportunity to expand into offshore wind turbine market. Results from ORE Catapult test facility extremely positive, so expect Gyrometric to be in discussions with Wind Turbine Manufacturers at present. Nigel Burton of AERO suggested these discussions are ongoing and contracts are expected imminently. Ultimate vision could be to see Gyrometric’s technology fitted onto all new wind turbines at the manufacturing stage, a massive opportunity for Gyrometric, offering a product which could have huge efficiency and cost saving benefits to wind turbine operators.
- There is multi billion pound investment into offshore wind at present, and this is expected to continue into the foreseeable future. This is a growing, and potentially highly profitable, market for Gyrometric.
- Patent protected technology, and Gyrometric are continually building their IP portfolio.

Strat Aero PLC
- Braveheart recently announced that it is to sell some of its Gyrometric shares in exchange for a 7% equity stake in Strat Aero PLC.
- Braveheart will retain an 18% equity stake in Gyrometric, whilst AERO will hold a controlling stake in the business.
- Alongside Gyrometric, AERO runs Geocurve, a business focused upon “providing survey and inspection services using a diverse range of technologies including UAVs, as well as ground- and water-based survey equipment”
- Geocurve has begun working with blue chip clients, such as AECOM, and is expected to sign agreements with a growing number of such clients.
- Historically business has been loss making thanks to low revenue and high costs. Trevor Brown and Nigel Burton have replaced the old board, with Trevor Brown taking close to a 30% equity stake, and they have reviewed the whole business and slashed operating costs, whilst growing the business. Interim results to be released in September should show growing revenues, and significantly reduced costs. Nigel Burton has said that the company has no expectation of any further placings for plc costs, suggesting that the business is running much closer to being cash break even, or cash generative. With this, and the likelihood of a growing number of clients for both the Geocurve and Gyrometric businesses, I expect the financial performance to show a massive improvement in the current year and beyond, and for the share price to appreciate accordingly, with the current £3.4m market cap pricing in very little potential for these two businesses.

Paraytec
- “Paraytec is a UK based scientific instrument company that developed the award winning ActiPix™ brand of ultra-violet (UV) area imaging detectors”
- “Two main licensees - Malvern Panalytical Ltd and Pion Inc. Concurrently, the company commenced two, key grant funded, R&D projects to develop new product lines for the future… The business is now profitable and cash positive”
- “The first R&D project is in Paraytec's traditional market of research instrumentation for the biopharmaceutical sector. In this project, Paraytec is a key member of a consortium including Malvern Panalytical, GSK, Medimmune, Fujifilm Diosynth Biotechnologies and others.”
- “The second R&D project is aimed at developing a new point of care diagnostic device for cancer detection and monitoring. Initially this is focussed on bladder cancer, but the technology should be applicable to detecting other cancers… Paraytec hopes to develop technology which will surpass the currently available tests and thus offer considerable cost savings to the healthcare systems worldwide as well as improving the patient experience and outcomes. Preliminary results have been highly promising.”
- “Engaged an adviser to raise £4 million of equity fundraising in order to fund the further development, regulatory approval and commercialisation of its innovative urine test for the detection and monitoring of bladder cancer”
- “'Paraytec's bladder cancer test shows excellent results in the laboratory and, once clinical trials are successfully completed, it will address a significant clinical need for a simple and non-invasive test for detecting and monitoring bladder cancer. The funds will be used to complete the development programme and conduct the clinical study required to obtain the necessary regulatory approvals and commercialise the test.”


Dividend
- At 31st March 2018, Braveheart had £1.13m in cash. Given profitable nature of the fund management business, this should have grown to about £1.3m by the interim results, and around £1.5m by the current year end. Presently, the business has a share premium account on its balance sheet, which is a non-distributable reserve, and so the company cannot pay dividends from it. However, Braveheart applied on the 19th July to cancel this share premium account to allow it to pay dividends, a process which is expected to be completed 6-8 weeks after application, so expect confirmation that this is completed in September.
- Given Braveheart’s cash balance, and consistent profitability of the fund management business, the company could comfortably pay an annual dividend that paid over 5% yield based on the current market, and then pay potentially very large special dividends as and when the business exits its investments.

Legacy Investments
- “In addition to our three strategic investments we have investments in a further 12 companies that were made by Braveheart from 2002 until the summer of 2015”
- Whilst none of these are very large equity stakes, or ever likely to be worth massive amounts of money, it is very possible that some of these investments prove successful, and yield a healthy return to Braveheart at some point in the future. For example in September 2016, Braveheart completed the sale of an equity stake of about 5% of mLED Limited for £367,000, resulting in a profit to the group of £271,000. Perhaps the most likely legacy investment to provide such a surprise profit in the future is a 2.2% equity stake in Dimensional Imaging Limited (Di4D), a world leading facial performance capture company that has been recently working on a number of high profile Hollywood movies.

Outlook
The share price of Braveheart is little changed in the last couple of years, despite all areas of the business making significant progress. The future of the Braveheart investment group looks extremely bright, and I expect a significant rerate of the company’s share price, initially to around 30p (88% upside from the current price), but with the potential for much higher in the future, given the potential of their portfolio companies. I expect this rerate to begin imminently, thanks to a number of pieces of news flow that are due in the coming months:
- Interim Results: expect a detailed operational update on the 3 investments, and the results to show the continued profitability of the fund management business, and a growing cash pile. Likely the most exciting item will be the Kirkstall operational update, which will be the first time we have had an update on the business’ growth since it signed the worldwide marketing and distribution agreement with Lonza – this could be extremely positive and really show just how much potential Kirkstall has under the guidance of Lonza.
- Paraytec – Completion of the proposed fundraising, which alone should see a significant uplift in the value of Braveheart’s stake. I think this is certainly due before the end of 2018. We know that Paraytec is profitable and cash generative; interim results will hopefully talk of continued success through the 2 licenses which it has. We are then also due an update on the development and testing of its bladder cancer detector, and time scales for the development and commercialisation of this technology going forwards.
- Gyrometric and Geocurve – Per recent interview by Nigel Burton, very significant contract wins are expected for Gyrometric and Geocurve imminently. Geocurve winning a big contract with a blue chip client like AECOM, or Gyrometric getting a contract with a big wind turbine manufacturer, could be transformational for Braveheart, through its direct investment into Gyrometric, and its equity stake in Strat Aero PLC. News of such wins could come anytime, and are a very genuine possibility before the end of 2018.
- Fund Management Business – the new fund is expected to be ready to invest prior to the end of 2018. I would therefore expect a further update on this in September/October. I expect this fund to be of very material size to Braveheart, and could begin adding significant profits within the current financial year. If the fund is £50m+, or is with a very big name financial organisation, or there is any suggestion that further new funds could follow, and this could be massive news for Braveheart.
- Completion of the share premium account reduction is expected in September. Braveheart could decide to begin its policy of paying dividends by distributing some of its excess cash as a special dividend with its interim results, otherwise expect the first dividend with the year-end accounts, or a special dividend on any sale, or partial sale, or an investment.

[hughsey1995] 15/6/2018 11:41

Getting very close to results day now (Tuesday - probably 7AM). Very interested to hear about how Kirkstall is progressing and the impact that the Lonza agreement is having. We already know that it is being used in over 70 different labs in over 15 different countries, and this product is not inexpensive, so it would be very interesting to hear how that is equating to sales and profits, and what the potential growth figures look like.

Then consider that the organ on a chip market is expected to grow from $5 million in 2016, to reach $170 million by 2023, growing at a CAGR of 63.2% from 2017 to 2023 (hxxps://www.alliedmarketresearch.com/press-release/organ-on-chip-market.html). So Kirkstall are operating in a market which is expected to grow incredibly quickly, and the Lonza deal should really allow Kirkstall to take advantage of this explosive market growth.

They're running a webinar on Monday (hxxp://www.kirkstall.com/ali/) to discuss the applications of Quasi Vivo and a study that was completed on it:

"Chandorkar et al. (2017) recently demonstrated that the QV600 system provides significant benefits in the development of airway cells. The perfusion of media provides cells with a constant supply of nutrients and removal of waste, resulting in NHBE cells showing;

• Significantly accelerated and higher ciliogenesis
• Increased cilia movement
• Enhanced mucus production
• Improved barrier function

This improved functionality under perfusion can reduce the time taken for experimental procedures by up to two thirds"

I'm not going to pretend to understand the science of it, but the last line in particular, as well as the tie-up with Lonza, its already widespread application in labs worldwide etc, suggests to me that we have a very beneficial product here, designed to overcome "the failures of traditional in vitro research and animal research models." (hxxp://www.kirkstall.com/about-kirkstall/)

The board of Kirkstall believe this business is currently worth £5.6m, which would value BRH's stake at over £2m (versus their currently recognised value of about ~£200k), and I really wouldn't be surprised to see this increase very significantly over the coming months and years, as Kirsktall continue to grow their product offering, and have the Quasi vivo products adopted into an ever-growing number of labs worldwide.

[hughsey1995] 05/6/2018 21:31

Results just 9 trading days away now. From the April update we know this should show an improved performance of the fund management unit, and substantial increases in the value of investments in Paraytec Limited and Kirkstall Limited. This should give a substantially increased profit after tax for the year. Given profit last year was £780k, I would expect profit to be around £1m+ for the year.

We also know that Kirkstall has a worldwide marketing and distribution agreement in place with Lonza, who are a big global player in supplying to the pharm and biomedical industries. The directors of Kirkstall are trying to raise money at a pre-money valuation of £5.6m. Given Braveheart hold 43%, or 37.6% diluted, this could value their share at £2m+, when BRH currently recognise the value of their share at £287k, so this could mean a revaluation (and effective profit to BRH) of over £1.5m if the funding is successful.

We know that Paraytec produce a range of award winning UV area imaging detectors, used in scientific research. Given the expected significant revaluation of Braveheart's investment, I expect to hear that this business is performing strongly and growing its customer base.

Gyrometric produce a digital measurement system that has the potential to improve efficiency and save money when applied to various industries, such as the operation of ships, and wind turbines. The company has suggested its focus on developing the wind turbine market, and 2 recent posts on their website suggest that this is progressing well.

The group also has its fund management business, which generated good revenue, and achieved a profit of £300k+ in the prior year, and the April update suggested that this was improved upon in 2018.

So the results on the 19th, in my opinion, should show significant progress has been made by the group and its portfolio, with a profit of around £1m, £1m+ in cash, and net assets of £3.5m+. I also expect a bullish outlook for 2019 performance, with further progress expected to be made in all 3 of the group's key investments. Versus a market cap of £4.4m, this seems very good value to me.

[bahiflyer] 26/4/2018 07:38

Not heard from these for a while and still hold quite a few so good to hear things progressing on all fronts.
This is one to buy and leave for a couple of years while their investment's mature.

[clocktower] 12/2/2018 14:53

Thanks for those links ydderF

[smudgedan] 19/10/2017 21:18

sales havent collapsed. They just havent realised any of the legacy investments during the reporting period which they did last year. On a like for like basis profits have actually increased. BRH is all about the three strategic investments but unlike most investment companies they also have the fund management business to pay for the PLC costs, so it doesnt erode the cash pile.

Added more today

[walbrock82] 19/10/2017 14:46

Apart from sales and profits collapsing, this firm is too volatile for me to invest because of inconsistent returns.
For other companies’ result, click

[thirty fifty twenty] 13/9/2017 09:11

great announcement from BRH this morning.

1 of their 3 strategic invetsments is being valued at 5.6m and they have in the books at 300k.
They own 46%.
So i simple terms this adds c.2m to NAV - thats 7p a share.

More importantly is that it will give visibility to the bsuiness and its 3 recent strategic invetsments which will now be scrutinised for furtehr hidden value. Not to mention the legacy investments before th enew mgt team came on board.

So in this dot com like world of valuations i think to raise funds at 5.6m opens up the possibility that it might grow to be worth 20m+ , and suddenly the portfolio of investments become exciting.
it also gives the management credibility which means they can acquire scale.

Their UK VC fund mgt business provides a nice stream of underlying profitability and they say that imminent realisations their will create value.

The also have 1.6m in CASH (8p a share)

And it is nicely confirmed with a 7 YEAR chart break out on volume as a whole new set of investors come on board.

So of course there is mega risk, but I do see downside as being very limited,
and upside is a multi bagger, especially if you can get < 20p


All IMHO, DYOR + BoL
BRH is in my portfolio (small speculative outside ISA)

[falia] 18/8/2017 15:35

SOMETHING DEFO UP, INTO THE 20S NOW