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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Riverfort Global Opportunities Plc | LSE:RGO | London | Ordinary Share | GB00BKKD0862 | ORD 0.01P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 0.22 | 0.00 | 01:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| Crude Petroleum & Natural Gs | -134k | -866k | -0.0011 | -2.00 | 1.71M |
From Apr 2019 to Apr 2024
TIDMRGO
RNS Number : 0397P
RiverFort Global Opportunities PLC
05 June 2020
For immediate release 5 June 2020
RiverFort Global Opportunities plc
Financial Statements
for the year ended 31 December 2019
RiverFort Global Opportunities plc, the investment company listed on AIM, is pleased to announce its audited final results for the year ended 31 December 2019 (extracts from which are set out below) and that the financial statements will shortly be posted to shareholders and made available on the website www.riverfortglobalopportunities.com
For more information please contact:
Hot Features
Premium
RiverFort Global Opportunities
plc +44 20 7580 7576
Phillip Haydn-Slater,
Non-executive Chairman
-----------------
Nominated Adviser +44 20 7628 3396
-----------------
Beaumont Cornish
-----------------
Roland Cornish/Felicity
Geidt
-----------------
Joint Broker +44 20 7186 9950
-----------------
Shard Capital Partners
LLP
-----------------
Damon Heath/ Erik Woolgar
-----------------
Joint Broker +44 20 7562 3351
-----------------
Peterhouse Corporate
Finance
-----------------
Lucy Williams
-----------------
CHAIRMAN'S STATEMENT
During the year ended 31 December 2019, the Company has continued to operate as an investment company.
FINANCIAL REVIEW
For the year to 31 December 2019, the Company made a profit from continuing operations of GBP623,690 (2018: loss of GBP731,192). The net asset value of the Company as at 31 December 2019 was GBP7,878,417 (2018: GBP7,254,727).
The Company's investment portfolio at 31 December 2019 is divided into the following categories:
Category Cost or valuation
(GBP)
Debt and equity-linked debt investments 4,349,211
------------------
Equity investments and other 848,635
------------------
Cash resources 2,624,480
------------------
Total 7,822,326
------------------
REVIEW OF THE YEAR
2019 has been another very busy year during which the Company has been actively deploying its investment capital by investing principally in listed junior companies through debt and equity linked products.
These investment structures lower volatility and risk and enable the Company to drive profits and cash income. We believe that this is an attractive investment strategy and by investing in the Company, investors are able to gain access to this investment strategy via a publicly listed vehicle. As at the end of the year, the Company held around GBP4.3 million of its investment portfolio in this type of investment. The Company also has a small equity portfolio which now principally comprises its investment in Pires Investments plc.
As a result of the strategy described above, the Company's results for the year have significantly improved compared to the previous year and clearly validate the Company's focus on building its debt and equity-linked debt portfolio.
Income breakdown 2019 2018
GBP000 GBP000
------- -------
Investment income 889 513
------- -------
Net gain/(loss) from financial
instruments at FVTPL 128 (929)
------- -------
Net foreign exchange losses on
other financial instruments (69) (30)
------- -------
Total income 948 (446)
------- -------
Administration costs (303) (288)
------- -------
Other gains and losses (21) 3
------- -------
Operating profit/(loss) 624 (731)
------- -------
Investment income derives principally from the fees and interest income in relation to our debt and equity linked debt investments. The net gain/loss from financial instruments at FVTPL represents the impact of valuing the investment portfolio at fair value as described under IFRS 9 accounting policy.
More details of the company's investing activities and investment portfolio are set out in the Strategic Report.
OUTLOOK AND STRATEGY
Going forward, the Company is continuing to look to actively invest its capital in new opportunities and there continues to be ongoing interest for funding from junior listed companies which can deliver attractive investment returns, particularly given the current Covid-19 pandemic situation as funding has become more difficult. However, given the uncertainty created by the Covid-19 pandemic, the Company has held back on capital deployment during Q1 of 2020 and has focused on recovering cash from its investments in order to reduce risk. This has been achieved successfully and so, as a result, the Company still has a substantial cash balance to deploy. As the outlook becomes clearer, the Company will begin to deploy more capital.
As we have previously mentioned, we are focused on delivering returns to shareholders and, to this end, we have now successfully implemented a capital reorganisation and reduction which will enable us to pay both dividends and buy back shares. At this stage, however, given the Covid-19 pandemic situation, we believe that it is prudent to retain cash until the outlook is more certain.
In summary, we very much believe that the year's results demonstrate that the Company has made significant progress and is very well placed to build on this progress going forward into 2020.
Philip Haydn-Slater
Non-Executive Chairman
4 June 2020
REVIEW OF THE BUSINESS AND FUTURE DEVELOPMENTS
Introduction
The Company is an investment company listed on the AIM market of the London Stock Exchange. It is principally focused on investing in junior listed companies by way of debt or equity-linked debt investments. Returns are principally generated through a combination of fees, interest and other equity linked or performance-based instruments. This investing strategy enables the Company to reduce the risk and volatility normally associated with investing in junior companies solely by way of equity, and to generate cash income and returns.
Debt and equity linked portfolio
During the year, the Company has been focused on building up its portfolio and, as at the year end, the value of these investments amounted to GBP4,349,211. As at the year end, this portfolio comprised investments across seventeen different companies including Jubilee Metals plc, Savannah Petroleum plc, Infrastrata plc, Angus Energy plc and UK Oil and Gas plc.
These investments principally generate income in the form of fees and interest. Investments are either made directly or by way of participation certificates in RiverFort Global Opportunities PCC Limited, a Gibraltar based fund. These certificates are reference linked financial instruments that provide similar economic benefits to the holder as if they were co-investing directly in the underlying investment. Whilst there is no direct security into the underlying investment, the holder will benefit from the enforcement of any such security.
Often as part of the Company's investment, the investee company will issue warrants. The value of the warrants attributable to the Company's investments are calculated using the Black-Scholes option pricing model and the resulting figure is discounted by 75% to reflect the level of expected return associated with such holdings given their highly volatile nature.
Equity and other portfolio
At the year end, the Company's equity portfolio comprised the following:
Company Description Current value
of investment
GBP000
Pires Investments An investment company
plc listed on AIM 484
------------------------- ---------------
Various small holdings
in listed and unlisted
Other companies 364
------------------------- ---------------
Total 848
---------------
In February 2019, Pires Investments plc ("Pires") raised some additional funds and the Company invested in this fund raising in order to maintain its shareholding in Pires. During the course of 2019, Pires expanded its investing policy to include the technology sector and, since then, Pires has made some new technology investments which are doing well. In April 2020, Pires carried out a further fund raising such that once this is completed by the end of June 2020, the Company's holding in Pires will amount to 26,149,993 shares and 10,000,000 warrants.
KEY PERFORMANCE INDICATORS
The key performance indicators are set out below:
COMPANY STATISTICS 31 December 31 December
2019 2018 Change %
------------------------------------- ------------ ------------ --------
Net asset value GBP7,878,417 GBP7,254,727 +8.5%
Net asset value - fully diluted per
share 0.116p 0.107p +8.5%
Closing share price 0.075p 0.09p -17%
Net asset value premium to the share
price 55% 19%
Market capitalisation GBP5,092,000 GBP6,110,000 -17%
------------------------------------- ------------ ------------ --------
On 3 March 2020, a 1 for 10 share consolidation was approved by shareholders, as part of the capital reduction which was then carried out by the Company post the year end. The Company's current share price is 0.75 pence per share ie 10 times higher than as at the year end as set out in the table above.
KEY RISKS AND UNCERTAINTIES
Investments in junior companies can carry a high level of risk and uncertainty, although the returns can be attractive. At this stage there can be no certainty of outcome and the Company may have difficulty in realising the full value from its investments in a forced sale. Furthermore, the Company limits the amount of each commitment, both as to the absolute amount and percentage of the target company. Details of other financial risks and their management are given in Note 21 to the financial statements.
FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES
Details of the Company's financial risk management objectives and policies are set out in Note 21 to these financial statements.
The current Covid-19 situation will continue to be monitored and is expected to evolve over time. The rapid development and fluidity of the situation makes it difficult to predict its ultimate impact at this stage. However, due to the nature of the Company's activities, the impact on the Company has been minimal, with continuing interest from junior companies for our investment capital. Management will, however, continue to assess the impact of Covid-19 on the Company.
PROMOTION OF THE COMPANY FOR THE BENEFIT OF THE MEMBERS AS A WHOLE
S172 of the Companies Act 2006 requires the Board to promote the Company for the benefit of the members as a whole. In particular, the requirements of s172 are for the Directors to:
-- Consider the likely consequences of any decision in the long term -- Act fairly between the members of the Company -- Maintain a reputation for high standards of business conduct -- Consider the interests of the Company's employees -- Foster the Company's relationships with suppliers, customers and others and -- Consider the impact of the Company's operations on the community and the environment.
The Directors believe that during the year they have acted in the way most likely to promote the success of the Company for the benefit of its members as a whole and have adhered to the requirements set out above that are applicable to the Company given its scope of operations. So, for example, the Company, does not have any employees other than the directors, so considering employee interests is not relevant. However, the Company has been focused on implementing the investment strategy previously approved by shareholders in 2018 which has resulted in a significant improvement in financial performance compared to previous years.
GOING CONCERN
The Company's assets comprise mainly cash, debt securities and quoted securities. Since the year end and the onset of the Covid-19 pandemic, the Company has held back on capital deployment during Q1 2020 and has focused on recovering cash from its investments . Consequently, as at 1 June 2020, the Company's cash resources have continued to increase from the figure as at the year end. Furthermore, the Company has prepared cash forecasts to June 2021 that show that the Company has sufficient cash resources for the foreseeable future. The Directors have also considered the impact of Covid-19 and have concluded that, given the cash reserves in place and the level of the Company's ongoing costs, there are no material factors which are likely to affect the ability of the Company to continue as a going concern. Accordingly, the Directors believe that as at the date of this report it is appropriate to continue to adopt the going concern basis in preparing the financial statements.
INDEPENT AUDITOR'S REPORT TO THE MEMBERS OF RIVERFORT GLOBAL OPPORTUNITIES PLC FOR THE YEARED 31 DECEMBER 2019
Opinion
We have audited the financial statements of RiverFort Global Opportunities plc (the 'company') for the year ended 31 December 2019 which comprise the Statement of Comprehensive Income, the Statement of Financial Position, the Statement of Changes in Equity, the Statement of Cash Flows and notes to the financial statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and International Financial Reporting Standards (IFRSs) as adopted by the European Union.
In our opinion, the financial statements:
-- give a true and fair view of the state of the company's affairs as at 31 December 2019 and of its profit for the year then ended;
-- have been properly prepared in accordance with IFRSs as adopted by the European Union; and -- have been prepared in accordance with the requirements of the Companies Act 2006.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC's Ethical Standard as applied to listed entities, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Emphasis of matter
We draw your attention to Note 2 of the financial statements, which describes the company's assessment of the COVID-19 impact on its ability to continue as a going concern The company has explained that the events arising from the COVID-19 outbreak do not impact its use of the going concern basis for preparation nor do they cast significant doubt about the company's ability to continue as a going concern for a period of at least twelve months from the date when the financial statements are authorised for issue, due to the nature of the company's operations and the cash reserves available.
Our opinion is not modified in this respect.
Conclusions relating to going concern
We have nothing to report in respect of the following matters in relation to which the ISAs (UK) require us to report to you where:
-- the directors' use of the going concern basis of accounting in the preparation of the financial statements is not appropriate; or
-- the directors have not disclosed in the financial statements any identified material uncertainties that may cast significant doubt about the company's ability to continue to adopt the going concern basis of accounting for a period of at least twelve months from the date when the financial statements are authorised for issue.
Our application of materiality
For the purposes of determining whether the financial statements are free from material misstatement, we define materiality as the magnitude of misstatement that makes it probable that the economic decisions of a reasonably knowledgeable person, relying on the financial statements, would be changed or influenced. We also determine a level of performance materiality which we use to assess the extent of testing needed, to reduce to an appropriately low level the probability that the aggregate of uncorrected and undetected misstatements exceeds materiality for the financial statements as a whole.
Materiality for the company financial statements as a whole was set at GBP120,000 (2018: GBP118,000). This has been calculated based on 1.5% of Gross Assets, being the same benchmark applied in the prior year. Using our professional judgement, we have determined this to be the principal benchmark within the financial statements as it is most relevant to stakeholders in assessing the financial performance of the company, based on the growth in the value of the company's investments.
We also determine a level of performance materiality which we use to assess the extent of testing needed to reduce to an appropriately low level the probability that the aggregate of uncorrected and undetected misstatements exceeds materiality for the financial statements as a whole. Performance materiality was set at GBP84,000 (2018: GBP76,700), being 70% of materiality for the financial statements as a whole respectively.
We agreed to report to those charged with governance all corrected and uncorrected misstatements we identified through our audit with a value in excess of GBP6,000 (2018: GBP5,900). We also agreed to report any other misstatements below that threshold that we believe warranted reporting on qualitative grounds.
An overview of the scope of our audit
Our audit is risk based and is designed to focus our efforts on the areas at greatest risk of material misstatement, aspects subject to significant management judgement as well as greatest complexity and size.
The financial asset investments balance is highly material and incorporates both equity investments and structured finance investments, which were introduced for the first time in the prior year. We carried out a detailed review of the classification of the financial assets as FVTPL and assessed the fair value of the instruments on a sample basis to ensure they are materially stated in these financial statements. This also incorporated the review of the net income from financial instruments at FVTPL.
We consider management override and related parties to be qualitatively material. Although it is not the responsibility of the auditor to discover fraud, clearly any instances of fraud which we detect are material to the users of the financial statements. We have tested manual and automated journal entries, including those journal entries at year end. Additionally, as part of our audit procedures to address fraud risk, we assessed the overall control environment and reviewed whether there had been any reported actual or alleged instances of fraudulent activity during the year. Our work on related parties included assessment of the company's procedures, as well as discussions with the directors.
Key audit matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial statements of the current period and include the most significant assessed risks of material misstatement (whether or not due to fraud) we identified, including those which had the greatest effect on: the overall audit strategy, the allocation of resources in the audit; and directing the efforts of the engagement team. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.
Key audit matter How the scope of our audit responded
to the key audit matter
Verification, classification Our work in this area included:
and ownership of Financial * Verifying ownership of the investments held at the
asset investments (Note year end;
13)
At the year end, the company
held non-current and current * Reviewing the valuation methodology for each type of
financial asset investments investment and ensuring that the carrying values were
of GBP5,197,846, which included appropriately supported;
Equity investments, Structured
Finance investments and
share warrants. * Validating that gains and losses charged through to
There is a risk that the the Statement of Comprehensive Income have been
financial asset investments classified and measured correctly;
are classified and valued
incorrectly and are not
owned by the company. * Obtaining direct confirmations of a sample of
This matter was considered investments held at the year end, and reconciling to
to be one of most significance the amounts due;
in the audit due to the
size, complexity and significance
of estimates and judgements * Reviewing the disclosures presented in the financial
required in valuing the statements to ensure they are adequate and in line
financial asset investments. with IFRS 9 requirements; and
* Reviewing the accounting treatment of the financial
assets and ensuring they are in line with IFRS.
------------------------------------------------------------------
Other information
The other information comprises the information included in the annual report, other than the financial statements and our auditor's report thereon. The directors are responsible for the other information. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether there is a material misstatement in the financial statements or a material misstatement of the other information. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of the audit:
-- the information given in the strategic report and the directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
-- the strategic report and the directors' report have been prepared in accordance with applicable legal requirements.
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the directors' report.
We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:
-- adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or
-- the financial statements are not in agreement with the accounting records and returns; or -- certain disclosures of directors' remuneration specified by law are not made; or -- we have not received all the information and explanations we require for our audit.
Responsibilities of directors
As explained more fully in the statement of directors' responsibilities, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, the directors are responsible for assessing the company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.
Auditor's responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at: https://www.frc.org.uk/auditorsresponsibilities . This description forms part of our auditor's report.
Use of our report
This report is made solely to the company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in an auditors' report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's members as a body, for our audit work, for this report, or for the opinions we have formed.
Eric Hindson (Senior Statutory Auditor)
15 Westferry Circus
For and on behalf of PKF Littlejohn LLP
Canary Wharf
Statutory Auditor
London E14 4HD
Date 4 June 2020
STATEMENT OF COMPREHENSIVE INCOME FOR THE
YEARED 31 DECEMBER 2019 2019 2018
Note GBP GBP
--------------------------------------------------- ---- --------- ---------
CONTINUING OPERATIONS:
Investment income 4 889,095 512,743
Net gain/(loss) from financial instruments
at FVTPL 5 127,960 (929,412)
Foreign exchange losses on other financial
instruments 6 (69,111) (29,645)
TOTAL OPERATING INCOME 947,944 (446,314)
Administrative expenses 7 (302,770) (288,006)
Other gains and losses 8 (21,484) 3,128
PROFIT/(LOSS) BEFORE TAXATION 623,690 (731,192)
Taxation 11 - -
--------------------------------------------------- ---- --------- ---------
PROFIT/(LOSS) FOR THE YEAR AND TOTAL COMPREHENSIVE INCOME 623,690 (731,192) --------------------------------------------------- ---- --------- --------- EARNINGS PER SHARE 12 Basic and fully diluted earnings/(loss) per share 0.009p (0.018p) --------------------------------------------------- ---- --------- ---------
.
STATEMENT OF FINANCIAL POSITION FOR
THE YEARED 31 DECEMBER 2019 2019 2018
Note GBP GBP
------------------------------------ ---- ----------- -----------
NON-CURRENT ASSETS
Financial asset investments 13 1,758,801 1,540,456
------------------------------------ ---- ----------- -----------
1,758,801 1,540,456
------------------------------------ ---- ----------- -----------
CURRENT ASSETS
Financial asset investments 13 3,439,045 2,253,259
Trade and other receivables 14 195,708 206,107
Derivative financial assets 15 40,925 -
Cash and cash equivalents 16 2,624,480 3,597,734
------------------------------------ ---- ----------- -----------
6,300,158 6,057,100
------------------------------------ ---- ----------- -----------
TOTAL ASSETS 8,058,959 7,597,556
------------------------------------ ---- ----------- -----------
CURRENT LIABILITIES
Trade and other payables 17 180,542 307,013
Derivative financial liabilities 18 - 35,816
180,542 342,829
------------------------------------ ---- ----------- -----------
NET ASSETS 7,878,417 7,254,727
------------------------------------ ---- ----------- -----------
EQUITY
Share capital 19 10,042,273 10,042,273
Share premium account 19 3,191,257 3,191,257
Capital redemption reserve 20 27,000 27,000
Retained losses (5,382,113) (6,005,803)
------------------------------------ ---- ----------- -----------
TOTAL EQUITY 7,878,417 7,254,727
------------------------------------ ---- ----------- -----------
STATEMENT OF CHANGES
IN EQUITY FOR THE YEAR Share Other Retained TotalED 31 DECEMBER 2019 capital Share premium reserves losses equity
GBP GBP GBP GBP GBP
---------------------------------- ----------- -------------- ---------- ------------ ----------
BALANCE AT 1 JANUARY
2018 4,269,546 3,191,257 100,150 (5,112,184) 2,448,769
Total comprehensive income - - - (731,192) (731,192)
---------------------------------- ----------- -------------- ---------- ------------ ----------
Share option reserve
transfer following cancellation
of options - - (73,150) 73,150 -
Share issues 5,772,727 77,273 - - 5,850,000
Share issue expenses - (77,273) - (235,577) (312,850)
---------------------------------- ----------- -------------- ---------- ------------ ----------
Transactions with owners 5,772,727 - - (235,577) 5,537,150
---------------------------------- ----------- -------------- ---------- ------------ ----------
BALANCE AT 31 December
2018 10,042,273 3,191,257 27,000 (6,005,803) 7,254,727
Total comprehensive income - - - 623,690 623,690
---------------------------------- ----------- -------------- ---------- ------------ ----------
BALANCE AT 31 December
2019 10,042,273 3,191,257 27,000 (5,382,113) 7,878,417
---------------------------------- ----------- -------------- ---------- ------------ ----------
STATEMENT OF CASH FLOWS FOR THE YEAR 2019 2018ED 31 DECEMBER 2019
Note GBP GBP
------------------------------------------ ---- ----------- -----------
CASH FLOWS FROM OPERATING ACTIVITIES
Investment income received 888,676 329,536
Operating expenses paid (280,512) (259,110)
NET CASH INFLOW FROM OPERATING ACTIVITIES 634,299 70,426
------------------------------------------ ---- ----------- -----------
INVESTING ACTIVITIES
Purchase of investments (4,494,947) (3,204,994)
Disposal of investments 13 123,770 783,975
Debt instrument repayments 13 2,935,611 193,211
Settlement of forward currency contracts (98,279) -
------------------------------------------ ---- ----------- -----------
NET CASH USED IN INVESTING ACTIVITIES (1,533,845) (2,227,808)
------------------------------------------ ---- ----------- -----------
FINANCING ACTIVITIES
Net proceeds from share issues 19 - 5,537,150
NET CASH FROM FINANCING ACTIVITIES - 5,537,150
NET (DECREASE)/INCREASE IN CASH AND
CASH EQUIVALENTS (925,681) 3,379,768
Cash and cash equivalents at the
beginning of the year 3,597,734 211,795
Effect of foreign currency exchange
on cash (47,573) 6,171
------------------------------------------ ---- ----------- -----------
CASH AND CASH EQUIVALENTS AT THE OF THE YEAR 15 2,624,480 3,597,734
------------------------------------------ ---- ----------- -----------
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEARED 31 DECEMBER
2019
4 INVESTMENT INCOME
2019 2018
GBP GBP
---------------------------------------------------------------- ----------------- -------
Structured finance fees 392,080 394,869
Other interest receivable 497,015 117,874
889,095 512,743
----------------------------------------------------------------------------------- ----------------- -------
5 NET GAIN/(LOSS) ON INVESTMENTS
2019 2018
GBP GBP
------------------------------------------------ --------- ---------
Net realised losses on disposal of investments (474,890) (19,764)
Net movement in fair value of investments 680,568 (964,582)
Net foreign exchange (loss)/gain on investments (77,718) 54,934
Net gain/(loss) on investments 127,960 (929,412)
------------------------------------------------------------------- --------- ---------
6 FOREIGN EXCHANGE GAINS/(LOSSES) ON OTHER FINANCIAL INSTRUMENTS
2019 2018
GBP GBP
----------------------------------------------------------- ---------- ----------
Net loss on foreign currency forward contracts (21,538) (35,816)
Exchange (loss)/gain on foreign currency
cash balances (47,573) 6,171
(69,111) (29,645)
------------------------------------------------------------------------------ ---------- ----------
7 EXPENSES BY NATURE
2019 2018
GBP GBP
----------------------------------------------- ------- -------
Profit for the year has been arrived at
after charging:
Wages and salaries 118,130 87,612
Office rent - 8,740
Stock Exchange fees 13,845 22,158
Share registrars' fees 2,945 5,101
Nominated advisor fees 28,800 27,400
Corporate broking fees 35,400 24,000
Audit and tax compliance 29,040 27,304
Other legal and professional fees 47,595 49,258
Other administrative expenses 27,015 36,433
Total administrative expenses as per the
statement of comprehensive income 302,770 288,006
------------------------------------------------------------------ ------- -------
AUDITOR'S REMUNERATION
During the year the Company obtained the following services
from the Company's auditor:
2019 2018
GBP GBP
----------------------------------------------- ------- -------
Fees payable to the Company's auditor for
the audit of the parent company and the
Company financial statements 25,200 24,000
Fees payable to the Company's auditor and
its associates for other services:
Other services relating to taxation 3,840 3,304
------------------------------------------------------------------ ------- -------
29,040 27,304
------------------------------------------------------------------ ------- -------
8 OTHER GAINS AND LOSSES
2019 2018
GBP GBP
------------------------------ -------- -----
Currency exchange differences (21,484) 3,128
(21,484) 3,128
------------------------------------------------- -------- -----
9 DIRECTORS' EMOLUMENTS
2019 2018
GBP GBP
------------------------------------------ ------- -------
Aggregate emoluments 109,000 81,667
Social security costs 9,130 5,945
118,130 87,612
------------------------------------------------------------- ------- -------
Consultancy Total Total
Name of director Salaries fees 2019 2018
GBP GBP GBP GBP
----------------- -------- ------------- ------- ---------
P Haydn-Slater 12,000 * 23,000 35,000 -
N Lee 52,000 - 52,000 57,334
A van Dyke 22,000 - 22,000 24,333
A Nesbitt - - - -
86,000 23,000 109,000 81,667
------------------------------------ -------- ------------- ------- ---------
* P Haydn-Slater's consultancy fees were invoiced by Musgrave Merchant Ltd, a company controlled by him.
10 EMPLOYEE INFORMATION
2019 2018
GBP GBP
-------------------------------------- ---------------------- ----------------------
Wages and salaries 86,000 81,667
Consultancy fees 23,000 -
Social security costs 9,130 5,945
118,130 87,612
---------------------------------------------------------- ---------------------- ----------------------
Average number of persons employed:
2019 2018
Number Number
-------------------------------------- ---------------------- ----------------------
Office and management 3 2
---------------------------------------------------------- ---------------------- ----------------------
COMPENSATION OF KEY MANAGEMENT PERSONNEL
There are no key management personnel other than the Directors
of the Company.
11 INCOME TAX EXPENSE
2019 2018
GBP GBP
------------------------------------------------------- ----------- ---------
Current tax - continuing operations - -
------------------------------------------------------- ----------- ---------
The tax on the Company's profit before tax differs from
the theoretical amount that would arise using the weighted
average rate applicable to profits of the Consolidated entities
as follows:
2019 2018
GBP GBP
------------------------------------------------------- ----------- ---------
Profit/(loss) before tax from continuing
operations 623,690 (731,192)
--------------------------------------------------------------------------- ----------- ---------
Profit/(loss) before tax multiplied by
rate of corporation tax in the UK of 19%
(2018: 19%) 118,501 (138,926)
Expenses not deductible for tax purposes 356 1,182
Offset against tax losses brought forward (118,857) -
Unrelieved tax losses carried forward - 137,744
Total tax - -
--------------------------------------------------------------------------- ----------- ---------
Unrelieved tax losses of approximately GBP4,580,000 (2018:
GBP5,210,000) remain available to offset against future
taxable trading profits. No deferred tax asset has been
recognised in respect of the losses as recoverability is
uncertain.
12 EARNINGS PER SHARE
The basic earnings per share is based on the loss for the
year divided by the weighted average number of shares in
issue during the year. The weighted average number of ordinary
shares for the year assumes that all shares have been included
in the computation based on the weighted average number
of days since issue.
2019 2018
GBP GBP
----------------------------------------------- ------------- -------------
Profit/(loss) attributable to equity holders
of the Company:
Profit/(loss) from continuing operations 623,690 (731,192)
------------------------------------------------------------------- ------------- -------------
Profit/(loss) for the year attributable
to equity holders of the Company 623,690 (731,192)
------------------------------------------------------------------- ------------- -------------
Weighted average number of ordinary shares
in issue for basic and fully diluted earnings 6,789,335,226 4,152,597,991
EARNINGS PER SHARE
BASIC AND FULLY DILUTED:
- Basic earnings/(loss) per share from
continuing and total operations 0.009p (0.018p)
- Fully diluted earnings/(loss) per share
from continuing and total operations 0.009p (0.018p)
------------------------------------------------------------------- ------------- -------------
Following the share reorganisation in March 2020, each shareholder
received one new ordinary share in exchange for every 10
ordinary shares previously held and this will have the effect
in future periods that earnings per share will increase
by a factor of 10 compared to the year under review.
13 FINANCIAL ASSETS
All financial assets are designated at fair value through
profit and loss ("FVTPL")
2019 2018
GBP GBP
----------------------------------------------------- ----------- ---------
At 1 January - fair value 3,793,715 2,252,373
Acquisition of investments designated at
FVTPL 4,335,552 3,647,940
Equity investment disposal proceeds (123,770) (983,975)
Debt security repayments (2,935,611) (193,211)
Net loss on disposal of investments (474,890) (19,764)
Movement in fair value of investments 680,568 (964,582)
Net foreign exchange (loss)/gain on debt
securities (77,718) 54,934
At 31 December - fair value 5,197,846 3,793,715
------------------------------------------------------------------------- ----------- ---------
Current Non-current
2019 2018 2019 2018
GBP GBP GBP GBP
------------------------------- --------- --------- ----------- ---------
Categorised as:
Level 1 - Quoted investments - - 609,704 507,880
Level 2 - Unquoted investments 3,439,045 2,253,259 1,110,166 943,658
Level 3 - Unquoted investments - - 38,931 88,918
--------------------------------------------------- --------- --------- ----------- ---------
3,439,045 2,253,259 1,758,801 1,540,456
--------------------------------------------------- --------- --------- ----------- ---------
The table of investments sets out the fair value measurements
using the IFRS 7 fair value hierarchy. Categorisation within
the hierarchy has been determined on the basis of the lowest
level of input that is significant to the fair value measurement
of the relevant asset as follows:
Level 1 - valued using quoted prices in active markets for
identical assets.
Level 2 - valued by reference to valuation techniques using
observable inputs other than quoted prices included within
Level 1.
Level 3 - valued by reference to valuation techniques using
inputs that are not based on observable market data.
The valuation techniques used by the company are explained
in the accounting policy note, "Investments held for trading".
LEVEL 2 FINANCIAL ASSETS
Level 2 financial assets comprise debt securities valued
by reference to their principal value, less appropriate
allowance where there is a doubt as to whether the principal
amount will be fully repaid in accordance with the contractual
terms of the obligation.
LEVEL 3 FINANCIAL ASSETS
Reconciliation of Level 3 fair value measurement of financial
assets
2019 2018
GBP GBP
----------------------------------------- ------------ -------------
Brought forward 88,918 177,235
Disposal proceeds - (200,000)
Loss on disposals - (100,000)
Fair value of share warrants - 50,418
Movement in fair value (49,987) 161,265
----------------------------------------- ------------ -------------
Carried forward 38,931 88,918
----------------------------------------- ------------ -------------
The Company's level 3 investments comprise shares in Eridge
Capital Limited ("Eridge") and a number of unquoted share
warrants. The shares in Eridge have been valued in line
with the approximate net asset value of Eridge. The share
warrants have been valued using the Black-Scholes valuation
model, discounted by 75% to allow for there being no trading
market for the warrant instruments and the underlying shares
are quoted on the London Stock Exchange's secondary Alternative
Investment Market.
In line with the investment strategy adopted by the Company,
Nicholas Lee is on the board of the following investee company:
% holding
2019 2018
----------------------------------------- ------------ -------------
Pires Investments plc 24.3% 24.6%
----------------------------------------- ------------ -------------
14 TRADE AND OTHER RECEIVABLES
2019 2018
GBP GBP
------------------------------- ------- -------
Other receivables 19,547 17,528
Prepayments and accrued income 176,161 188,579
--------------------------------------------------- ------- -------
195,708 206,107
--------------------------------------------------- ------- -------
The Directors consider that the carrying amount of other receivables is approximately equal to their fair value.
15 DERIVATIVE FINANCIAL ASSETS
2019 2018
GBP GBP
---------------------------------- ------ ----
Foreign currency forward contract 40,925 -
------------------------------------------------------ ------ ----
16 CASH AND CASH EQUIVALENTS
2019 2018
GBP GBP
-------------------------- --------- ---------
Cash and cash equivalents 2,624,480 3,597,734
---------------------------------------------- --------- ---------
The Directors consider the carrying amount of cash and cash equivalents approximates to their fair value.
17 TRADE AND OTHER PAYABLES
2019 2018
GBP GBP
----------------- ------- -------
Trade payables 43,723 21,989
Other payables 69,134 242,946
Accrued expenses 67,685 42,078
-------------------------------------- ------- -------
180,542 307,013
-------------------------------------- ------- -------
The Directors consider that the carrying amount of trade and other payables approximates to their fair value.
Trade payables and Other payables are all due within 6 months of the year end.
18 DERIVATIVE FINANCIAL LIABILITIES
2019 2018
GBP GBP
---------------------------------- ---- ------
Foreign currency forward contract - 35,816
- 35,816
------------------------------------------------------- ---- ------
19 SHARE CAPITAL
Number of shares Share capital Share
Deferred Ordinary Deferred Ordinary premium
GBP GBP GBP
-------------------- ------------ ------------- ---------- ---------- ---------
ISSUED AND FULLY
PAID:
At 1 January 2018:
Deferred shares
of 9.9p each 32,857,956 3,252,938
Ordinary shares
of 0.1p each 1,016,607,956 1,016,608 3,191,257
---------------------------------------- ------------ ------------- ---------- ---------- ---------
32,857,956 1,016,607,956 3,252,938 1,016,608 3,191,257
Issue of shares 5,772,727,270 5,772,727 -
---------------------------------------- ------------ ------------- ---------- ---------- ---------
At 31 December 2018 32,857,956 6,789,335,226 3,252,938 6,789,335 3,191,257
---------------------------------------- ------------ ------------- ---------- ---------- ---------
At 31 December 2019 32,857,956 6,789,335,226 3,252,938 6,789,335 3,191,257
---------------------------------------- ------------ ------------- ---------- ---------- ---------
The deferred shares have restricted rights such that they have no economic value.
There is no authorised amount of share capital.
20 OTHER RESERVES
Capital Share
redemption option Total
reserve reserve Other reserves
GBP GBP GBP
------------------------------------- ------------ --------- ----------------
Balance at 1 January 2018 27,000 73,150 100,150
Transfer to Profit and Loss account
on cancellation of options - (73,150) (73,150)
--------------------------------------------------------- ------------ --------- ----------------
Balance at 31 December 2018 27,000 - 27,000
--------------------------------------------------------- ------------ --------- ----------------
Balance at 31 December 2019 27,000 - 27,000
--------------------------------------------------------- ------------ --------- ----------------
21 RISK MANAGEMENT OBJECTIVES AND POLICIES
The Company is exposed to a variety of financial risks which
result from both its operating and investing activities.
The Company's risk management is coordinated by the Board
of Directors and focuses on actively securing the Company's
short to medium term cash flows by minimising the exposure
to financial markets.
The main risks the Company is exposed to through its financial
instruments are credit risk, foreign currency risk, liquidity
risk, market price risk and operational risk.
CAPITAL RISK MANAGEMENT
The Company's objectives when managing capital are:
* to safeguard the Company's ability to continue as a
going concern, so that it continues to provide
returns and benefits for shareholders;
* to support the Company's growth; and
* to provide capital for the purpose of strengthening
the Company's risk management capability.
The Company actively and regularly reviews and manages its
capital structure to ensure an optimal capital structure
and equity holder returns, taking into consideration the
future capital requirements of the Company and capital efficiency,
prevailing and projected profitability, projected operating
cash flows, projected capital expenditures and projected
strategic investment opportunities. Management regards total
equity as capital and reserves, for capital management purposes.
The Company is not subject to externally imposed capital
requirements.
CREDIT RISK
The Company's financial instruments that are subject to
credit risk are cash and cash equivalents and loans and
receivables. The credit risk for cash and cash equivalents
is considered negligible since the counterparties are reputable
financial institutions. The credit risk for loans and receivables
is mainly in respect of short term loans, made on market
terms, which are monitored regularly by the Board.
The Company's maximum exposure to credit risk is GBP2,684,952
(2018: GBP3,615,262) comprising cash and cash equivalents
and other receivables.
The ageing profile of trade and other receivables was:
2019 2018
Total book Total book
value value
GBP GBP
----------------------------------------- -------------- --------------
Current 60,472 17,528
Overdue for less than one year - -
60,472 17,528
------------------------------------------------------------- -------------- --------------
LIQUIDITY RISK
Liquidity risk arises from the possibility that the Company
might encounter difficulty in settling its debts or otherwise
meeting its obligations related to financial liabilities.
The Company manages this risk through maintaining a positive
cash balance and controlling expenses and commitments. The
Directors are confident that adequate resources exist to
finance current operations.
FOREIGN CURRENCY RISK
The Company invests in financial instruments and enters
into transactions that are denominated in currencies other
than its functional currency, primarily in US dollars (USD).
Consequently, the Company is exposed to the risk that the
exchange rate of its currency relative to other foreign
currencies may change in manner that has an adverse effect
on the fair value of the future cashflows of the Company's
financial assets denominated in currencies other than the
GBP.
The Company's policy is to use derivatives to manage its
exposure to foreign currency risk. The instruments used
are foreign currency forward contracts. The Company does
not apply hedge accounting.
The carrying amounts of the Company's foreign currency denominated
monetary assets and monetary liabilities at the reporting
date are as follows:
Liabilities Assets
---------------------------- ------------------------
31 Dec 31 Dec 31 Dec 31 Dec
2019 2018 2019 2018
GBP GBP GBP GBP
--------------------- ------------ -------------- ----------- -----------
US Dollars 2,300,000 *2,272,730 3,391,429 3,301,087
--------------------- ------------ -------------- ----------- -----------
2,300,000 2,272,730 3,391,429 3,301,087
--------------------- ------------ -------------- ----------- -----------
*This amount is in respect of a forward contract settled
on 31 January 2019.
The following table details the Company's sensitivity to
a 5 per cent increase and decrease in GBP against the US
Dollar. 5 per cent is the sensitivity rate used when reporting
foreign currency risk internally to key management personnel
and represents management's assessment of the reasonably
possible change in the GBP/USD rate. The sensitivity analysis
includes only outstanding foreign currency denominated monetary
items and adjusts their translation at the year-end for
a 5 per cent change in the GBP/USD rate. A positive number
below indicates an increase in profit and other equity where
GBP weakens 5 per cent against the relevant currency. For
a 5 per cent strengthening of GBP against the relevant currency,
there would be a comparable impact on the profit and other
equity, and the balances below would be negative.
US Dollars
------------------------
31 Dec 31 Dec
2019 2018
GBP GBP
--------------------- ------------ -------------- ----------- -----------
Profit and loss 54,571 51,418
--------------------- ------------ -------------- ----------- -----------
54,571 51,418
--------------------- ------------ -------------- ----------- -----------
INTEREST RATE RISK
Interest rate risk is the risk that the fair value of future
cash flows of a financial instrument will fluctuate because
of changes in market interest rates. The risk is mitigated
by the Company only entering into fixed rate interest agreements,
therefore detailed analysis of interest rate risk is not
disclosed.
MARKET PRICE RISK
The Company's exposure to market price risk mainly arises
from potential movements in the fair value of its investments.
The Company manages this price risk within its long-term
investment strategy to manage a diversified exposure to
the market. If each of the Company's equity investments
were to experience a rise or fall of 10% in their fair value,
this would result in the Company's net asset value and statement
of comprehensive income increasing or decreasing by GBP63,000
(2018: GBP80,000).
Exposure to market price risk also arises in respect of
the Company's investments in debt securities which are mainly
denominated in US Dollars.
The Company's strategy for the management of market risk
is driven by the Company's investment objective, which is
focused on deploying its capital in investments that provide
both income and downside protection. It is expected that
the Company will deliver returns to shareholders through
a combination of capital growth and dividend income.
The Company's market risk is managed on a continuous basis
by the Investment Advisor in accordance with the policies
and procedures in place. The Company's market positions
are monitored on a quarterly basis by the board of directors.
OPERATIONAL RISK
Operational Risk is the risk of direct or indirect loss
arising from a wide variety of causes associated with the
processes, technology and infrastructure supporting the
Company's activities with financial instruments, either
internally within the Company or externally at the Company's
service providers such as cash custodians/brokers, and from
external factors other than credit, market and liquidity
risks such as those arising from legal and regulatory requirements
and generally accepted standards of investment management
behaviour.
The Company's objective is to manage operational risk so
as to balance the limiting of financial losses and damage
to its reputation with achieving its investment objective
of generating returns to shareholders.
The primary responsibility for the development and implementation
of controls over the operational risk rests with the board
of directors. This responsibility is supported by the development
of overall standards for the management of operational risk,
which encompasses the controls and processes over the investment,
finance and financial reporting functions internally and
the establishment of service levels with various service
providers, in the following areas:
* Appropriate segregation of duties between various
functions, roles and responsibilities;
* Reconciliation and monitoring of transactions
* Compliance with regulatory and other legal
requirements;
The directors' assessment of the adequacy of the controls
and processes at the service providers with respect to operational
risk is carried out via ad hoc discussions with the service
providers. Substantially all the of the assets of the Company
are held by Barclays Bank UK, Shard Capital Brokers, Monex
Europe. The bankruptcy or insolvency of the Company's cash
custodian/brokers may cause the Company's rights with respect
to the securities or cash and cash equivalents held by cash
custodian/ broker to be limited. The board of directors'
monitors capital adequacy and reviews other publicly available
information of its cash custodian/broker on a quarterly
basis.
22 FINANCIAL INSTRUMENTS
The Company uses financial instruments, other than derivatives,
comprising cash to provide funding for the Company's operations.
CATEGORIES OF FINANCIAL INSTRUMENTS
The IFRS 9 categories of financial asset included in the
statement of financial position and the headings in which
they are included are as follows:
2019 2018
GBP GBP
------------------------------------------------- --------- ---------
FINANCIAL ASSETS :
Cash and cash equivalents 2,624,480 3,597,734
Financial assets at amortised cost 60,472 17,528
Financial assets at fair value through profit
or loss 5,197,846 3,793,715
--------------------------------------------------------------------- --------- ---------
FINANCIAL LIABILITIES AT AMORTISED COST:
The IFRS 9 categories of financial liabilities included
in the statement of financial position and the headings
in which they are included are as follows:
2019 2018
GBP GBP
------------------------------------------------- --------- ---------
Trade and other payables 112,857 264,935
Liability under foreign currency exchange
contract - 35,816
--------------------------------------------------------------------- --------- ---------
23 RELATED PARTY TRANSACTIONS
The compensation payable to Key Management personnel comprised
GBP109,000 (2018: GBP81,667) paid by the Company to the
Directors in respect of services to the Company. Full details
of the compensation for each Director are provided in Note
8.
Nicholas Lee's directorships of companies in which Riverfort
Global Opportunities plc has an investment are detailed
in Note 13.
Riverfort Global Capital Limited ("RGCL") acts as investment
adviser to the Company and under the AIM Rules it is therefore
regarded as a related party. RGCL charges advisory fees
which comprise an annual fee based on two per cent. of the
Company's net assets and a performance fee based on 20 per
cent. of the realised profits generated for the Company
from each new investment arranged for it by RGCL. RGCL agreed
to waive these fees for 2019 in return for a one year extension
by the Company of the advisory agreement between the Company
and RGCL.
24 Contingent LIABILITIES AND CAPITAL COMMITMENTS
There were no contingent liabilities or capital commitments
at 31 December 2019 or 31 December 2018.
25 POST YEAR EVENTS
The current Covid-19 situation will continue to be monitored
and is expected to evolve over time. The rapid development
and fluidity of the situation makes it difficult to predict
its ultimate impact at this stage. However, due to the nature
of the Company's activities, the impact on the Company has
been minimal, and in fact has actually resulted in an increase
demand for our investment capital. Management will, however,
continue to assess the impact of Covid-19 on the Company.
Post the year end, the Company embarked on a 10 for 1 share
consolidation and capital reduction in order to reduce the
deficit on reserves so as to enable the Company to pay a
dividend and buyback of its own shares. The capital reduction
became effective on 29 April 2020.
On 24 April 2020, Pires Investments plc ("Pires"), in which
the Company has a significant shareholding, undertook a
placing to raise new funds from both existing and new investors
In order to continue its strategy of investing in the technology
sector. Once the placing completes fully at the end of June
2020, the Company will own 26,149,993 shares and 10,000,000
warrants in Pires.
26 ULTIMATE CONTROLLING PARTY
The Directors do not consider there to be a single ultimate
controlling party.
NOTE TO THE ANNOUNCEMENT
In accordance with section 435 of the Companies Act 2006,
the directors advise that the financial information set
out in this announcement does not constitute the Group's
statutory financial statements for the year ended 31 December
2019 or 2018, but is derived from these financial statements.
The financial statements for the year ended 31 December
2018 have been delivered to the Registrar of Companies.
The financial statements for the year ended 31 December
2019 have been prepared in accordance with International
Financial Reporting Standards as adopted by the European
Union and will be forwarded to the Registrar of Companies
following the Company's Annual General Meeting. The Auditors
have reported on these financial statements; their reports
were unqualified and did not contain statements under Section
498(2) or (3) of the Companies Act 2006.
This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.
END
FR SSSFALESSEDM
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