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Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
---|---|---|---|---|---|
Vela Technologies Plc | LSE:VELA | London | Ordinary Share | GB00BYZ9XC29 | 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% | 0.012 | 0.011 | 0.013 | 0.012 | 0.012 | 0.012 | 11,780,277 | 01:00:00 |
Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
---|---|---|---|---|---|
Investment Advice | 0 | -378k | 0.0000 | N/A | 1.63M |
TIDMVELA
RNS Number : 6979N
Vela Technologies PLC
26 September 2019
26 September 2019
Vela Technologies plc
("Vela" or the "Company")
Final Results for the year ended 31 March 2019
The Board of Vela (AIM: VELA) announces its final results for the year ended 31 March 2019.
chairman's statement
for the year ended 31 March 2019
The 2018/19 financial year was another active one for our investee companies. Regular RNS news releases were supplemented by our activities in social media, further highlighting information and news that helps investors build a better and deeper understanding of our investee companies where that information would not be deemed of sufficient importance for a regulatory announcement.
During the year, and into the current financial year, Vela has considered a number of new investment proposals. However, none of these proved suitable for investment for a variety of reasons, often due to what we viewed as an over-valuation of the business.
In addition, Vela has considered other corporate transactions which have included approaches from third parties, on an informal basis, to the Board to utilise Vela as a reverse takeover vehicle, as well as more substantial investments in listed companies. We will continue to explore these opportunities. In the current market malaise and lack of interest among investors for smaller listed companies, we have become aware of a mis-match between the market capitalisation of the Company and the value of its underlying assets.
We will continue to have an open mind on these options, although we are mindful of the potential substantial uplift in the value of certain companies within the Vela portfolio and are keen to ensure existing shareholders do not suffer excessive dilution.
At the current time Vela maintain investments in 12 companies. By far the most prominent news in the financial year and subsequently have related to three of these investee companies - Portr, Vibe Group and Argo Blockchain.
We made a further investment of GBP91,341 in Portr Limited, the owner of Airportr, the airline integrated home bag check-in and delivery service that gives passengers the option to check in online and have their baggage collected from their doorstep. This was part of a two stage Series "A" funding round which completed in August 2019. The investment by Vela was funded from a placing of shares announced by Vela in April 2019. During the financial year under review, Airportr announced tie-ups with several new airlines, including easyJet and Virgin Atlantic.
In May 2018, Vela announced an investment of GBP200,000 in Vibe Group Holdings Limited for a minority shareholding. This followed a period when it had not proved possible to agree a refinancing of Vela's investment in Vibe Tickets, resulting in the appointment of administrators. Following the purchase of the Vibe Tickets assets by the former Vibe Tickets management from the administrators, the Vibe Tickets business was then purchased by Vibe Group Holdings. Since then the original ticket business has evolved further and now not only offers fans the opportunity to buy and sell tickets without any fee but also introduced Vibe Verified, giving buyers the opportunity to buy tickets from trusted and verified sellers. Vibe Group has also extended its activities and will shortly launch VibePay, a social payments platform authorised by the Financial Conduct Authority (FCA) and created following the introduction of Open Banking in early 2018. The first VibePay product, to be launched at the end of September 2019, will enable people to socially plan and pay in groups. There has been significant interest in this launch.
Argo Blockchain completed the listing of its shares in August 2018 at a price of 16 pence per share, which compared to Vela's original acquisition price of 8 pence as part of a pre-IPO funding round where Vela invested GBP200,000. The timing of the listing followed a period in which the cryptocurrency market as a whole had weakened dramatically, and daily volatility increased. As a result, the share price dropped to a low of 3 pence in February 2019. At this point we decided to increase Vela's exposure to Argo noting that balance sheet cash represented a significant premium to the market capitalisation of Argo and invested a further c. GBP15,000 at an average price of 3.072 pence per share. Since that time, with improved sentiment in some leading cryptocurrency markets as well, the share price of Argo has recovered and now stands at 9.05 pence as at 24 September 2019. This compares to Vela's average acquisition price of 7.16 pence per share.
Moving onto the financials, after allowing for fair value movement reduction of GBP1,193k and in the absence of any realised gains compared to the substantial realised gains in the previous year, the net loss for the year was GBP1.554m. Gross assets as at 31st March 2019 amounted to GBP2.1m (31 March 2018: GBP3.6m), again reflecting the reduction in the fair value of Vela's assets. Cash as at 31 March 2019 was GBP0.02 million and this has been supplemented post year end by a placing to raise GBP400,000, originally announced on 24 April 2019.
To conclude, Vela will continue to actively pursue the strategy outlined above and, in addition, looks forward to updating shareholders on further progress with its investee companies both by RNS and, where appropriate, social media.
strategic report
for the year ended 31 March 2019
Business review
Further details and key points of the investments made, and the Company's investee companies are detailed in the Chairman's statement and note 8 to the financial statements.
At the period end the Company held GBP23k of cash (31 March 2018: GBP847k) and continues to keep administration costs to a minimum so that the Company has sufficient resources to cover its ongoing running costs and has maximum funds that can be dedicated to further investments.
Additional funds totalling GBP400,000 (before expenses) were raised after the end of the reporting period through the issue of shares. These funds have provided the Company with additional capital in order to make additional investments and cover running costs. Further details regarding the shares issued after the period end are provided in note 18.
The Company's overall total comprehensive income for the year was a loss of GBP1,554k (2018: GBP1,014k loss). This loss primarily arose due to fair value losses on the Company's investment portfolio.
The valuation of the investment portfolio at 31 March 2019 was GBP2,101k (2018: GBP2,761k), a decrease of GBP660k on the prior year. During the year, Vela invested GBP533k in disruptive technology businesses. Further details of these investment additions are given in note 8. The Company also recorded a reduction in the estimated fair value of the investment portfolio of GBP1,193k in the period. We update shareholders regularly on investee company performance through the dissemination of regulatory announcements as information becomes available, and further detailed information can be found on our website.
The Company has no employees and has a Board of one male executive Director and one male non-executive Director.
Principal risks and uncertainties
The preservation of its cash balances and management of the capital remain key risks for the Company, ensuring that investments are commensurate with the level of risk.
The Company is committed to maintaining its minimal operational costs.
Further information about the Company's principal risks are detailed in note 14, specifically in the currency risk, credit risk, liquidity risk and capital risk management sections.
Approved by the Board of directors and signed on behalf of the Board on 25 September 2019
Nigel Brent Fitzpatrick MBE
Non-Executive Chairman
For further information, please contact:
Vela Technologies plc Brent Fitzpatrick, Non-Executive Chairman Tel: +44 (0) 7802 262 Antony Laiker, Director 443 Allenby Capital Limited (Nominated Adviser) Nick Athanas/Asha Chotai Tel: +44 (0) 20 3328 5656 Smaller Company Capital Limited (Broker) Rupert Williams/Jeremy Woodgate Tel: +44 (0) 20 3651 2910
About Vela Technologies
Vela Technologies (AIM: VELA) is an investing company focused on early stage and pre-IPO long term disruptive technology investments. There are currently 12 investments in the portfolio which either have developed ways of utilising technology or developing technology with a view to disrupting the businesses or sector in which they operate. More recently, Vela Technologies has also started to focus on existing listed companies where valuations may offer additional opportunities.
statement of comprehensive income
for the year ended 31 March 2019
31 March 31 March 2019 2018 Notes GBP'000 GBP'000 -------------------------------------------- ------ --------- --------- Revenue 1 - - Administrative expenses - other administrative expenses (234) (214) - profit on disposal of available-for-sale assets - 731 - fair value movements on investments (1,193) (551) -------------------------------------------- ------ --------- --------- Total administrative expenses (1,427) (34) -------------------------------------------- ------ --------- --------- Operating loss 2 (1,427) (34) Finance expense 4 (127) (126) -------------------------------------------- ------ --------- ---------
Loss before tax (1,554) (160) Income tax 6 - - -------------------------------------------- ------ --------- --------- Loss (1,554) (160) -------------------------------------------- ------ --------- --------- Other comprehensive income: Items that will or may be reclassified to profit or loss: Fair value movement on available-for-sale investments - 580 Reclassification of changes in fair value of available-for-sale investments to profit or loss - (1,434) -------------------------------------------- ------ --------- --------- Other comprehensive income for the year - (854) -------------------------------------------- ------ --------- --------- Total comprehensive income (1,554) (1,014) -------------------------------------------- ------ --------- --------- Attributable to: Equity holders of the Company (1,554) (1,014) Earnings per share Basic and diluted loss per share (pence) 7 (0.19) (0.02) -------------------------------------------- ------ --------- ---------
balance sheet
as at 31 March 2019
31 March 31 March 2019 2018 Notes GBP'000 GBP'000 ------------------------------- ------ --------- --------- Non-current assets Investments 8 2,101 2,761 Current assets Trade and other receivables 9 13 13 Cash and cash equivalents 13 23 847 ------------------------------- ------ --------- --------- Total current assets 36 860 ------------------------------- ------ --------- --------- Total assets 2,137 3,621 ------------------------------- ------ --------- --------- Equity and liabilities Equity Called up share capital 12 837 837 Share premium account 1,715 1,715 Available-for-sale reserve - 1,019 Share option reserve 130 130 Retained earnings (1,568) (1,033) ------------------------------- ------ --------- --------- Total equity 1,114 2,668 ------------------------------- ------ --------- --------- Current liabilities Trade and other payables 10 27 28 Loans and borrowings 11 996 445 Total current liabilities 1,023 473 ------------------------------- ------ --------- --------- Non current liabilities Loans and borrowings 11 - 480 ------------------------------- ------ --------- --------- Total non current liabilities - 480 ------------------------------- ------ --------- --------- Total equity and liabilities 2,137 3,621 ------------------------------- ------ --------- ---------
cash flow statement
for the year ended 31 March 2019
31 March 31 March 2019 2018 Notes GBP'000 GBP'000 ------------------------------------------ ------ --------- --------- Operating activities Loss before tax (1,554) (160) Profit on disposal of available-for-sale assets - (731) Fair value movements on investments 1,193 551 Finance expenses 127 126 Decrease in payables (1) - Total cash flow from operating activities (235) (214) ------------------------------------------ ------ --------- --------- Investing activities Consideration for disposal of investments - 806 Consideration for purchase of investments (533) (786) Total cash flow from investing activities (533) 20 ------------------------------------------ ------ --------- --------- Financing activities Interest paid (56) (55) Proceeds from the issue of ordinary share capital - 713 Total cash flow from financing activities (56) 658 ------------------------------------------ ------ --------- --------- Net increase in cash and cash equivalents (824) 464 Cash and cash equivalents at start of year 847 383 ------------------------------------------ ------ --------- --------- Cash and cash equivalents at the end of the year 13 23 847 ------------------------------------------ ------ --------- --------- Cash and cash equivalents comprise: Cash and cash in bank 23 847 ------------------------------------------ ------ --------- --------- Cash and cash equivalents at end of year 13 23 847 ------------------------------------------ ------ --------- ---------
statement of changes in equity
for the year ended 31 March 2019
Share Share Retained Available-for-sale Share Total Option Capital Premium Earnings Reserve Reserve Equity GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 ----------------------------- -------- -------- ---------- ------------------- -------- -------- Balance at 1 April 2018 837 1,715 (1,033) 1,019 130 2,668 Change in accounting policy due to adoption of IFRS 9 (note 1a) - - 1,019 (1,019) - - Transactions with owners Issue of share capital - - - - - - ----------------------------- -------- -------- ---------- ------------------- -------- -------- Transactions with owners - - - - - - ----------------------------- -------- -------- ---------- ------------------- -------- -------- Loss for the year - - (1,554) - - (1,554) Other comprehensive income - - - - - - ----------------------------- -------- -------- ---------- ------------------- -------- -------- Total comprehensive income - - (1,554) - - (1,554) ----------------------------- -------- -------- ---------- ------------------- -------- -------- Balance at 31 March 2019 837 1,715 (1,568) - 130 1,114 ----------------------------- -------- -------- ---------- ------------------- -------- -------- Balance at 1 April 2017 722 1,117 (873) 1,873 130 2,969 ----------------------------- -------- -------- ---------- ------------------- -------- -------- Transactions with owners Issue of share capital 115 598 - - - 713 Transactions with owners 115 598 - - - 713 Loss for the year - - (160) - - (160) Other comprehensive income - - - (854) - (854) Total comprehensive income - - (160) (854) - (1,014) ----------------------------- -------- -------- ---------- ------------------- -------- -------- Balance at 31 March 2018 837 1,715 (1,033) 1,019 130 2,668 ----------------------------- -------- -------- ---------- ------------------- -------- --------
notes to the financial statements
for the year ended 31 March 2019
1 Revenue and segmental information
The Company is an investing company and as such there is only one identifiable operating segment, being the holding and support of investments. Furthermore, the Company operates in a single geographic segment being the United Kingdom. The results and balances and cash flows of the segment are as presented in the primary statements.
2 Loss from operations
Loss from operations is stated after charging/(crediting):
31 March 31 March 2019 2018 GBP'000 GBP'000 ------------------------------------------ --------- --------- Auditor's remuneration for auditing of accounts 10 10 Auditor's remuneration for non-audit services 1 1 Profit on disposal of available-for-sale assets - (731) Fair value movements on investments 1,193 551 ------------------------------------------ --------- ---------
3 Staff costs
The average number of persons engaged by the Company (including Directors) during the period was as follows:
31 March 31 March 2019 2018 --------------------------------- --------- --------- Directors and senior management 2 2 Total 2 2 --------------------------------- --------- ---------
The aggregate amounts charged by these persons were as follows:
31 March 31 March 2019 2018 GBP'000 GBP'000 ------------------------------ --------- --------- Aggregate wages and salaries 110 110 110 110 ------------------------------ --------- ---------
The amounts noted above relate to amounts invoiced by the Company's directors. Further details of directors' remuneration are provided in note 5.
4 Finance expense
31 March 31 March 2019 2018 GBP'000 GBP'000 ----------------------- --------- --------- Loan note interest 36 37 Bond interest 91 89 ----------------------- --------- --------- Total finance expense 127 126 ----------------------- --------- ---------
Included in finance expenses is GBP41k (2018 - GBP41k) in respect of the amortisation of loan issue costs.
5 Directors and senior management
Directors' remuneration
31 March 2019 ------------------------------------------------- Salary Fees Pension Equity Total GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 N B Fitzpatrick - 46 - - 46 A Laiker - 64 - - 64 ----------------- --------- -------- -------- -------- -------- - 110 - - 110 --------------------------- -------- -------- -------- -------- 31 March 2018 --------------------------------------------------- Salary Fees Pension Equity Total GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 N B Fitzpatrick - 46 - - 46 A Laiker - 64 - - 64 ------------------------ ---------- -------- -------- -------- ---------- - 110 - - 110 ---------- -------- -------- -------- ----------
Directors' and senior management's interests in shares
The Directors who held office at 31 March 2019 held the following shares:
31 March 31 March 2019 2018 ----------------- ----------- ----------- N B Fitzpatrick 1,500,000 1,500,000 A Laiker 35,190,000 35,190,000 ------------------ ----------- -----------
The total share-based payment costs in respect of options granted are:
31 March 31 March 2019 2018 GBP'000 GBP'000 Directors - - ---------- --------- ---------
As at 31 March 2019, the total number of outstanding options held by the Directors over ordinary shares is 29,124,854, representing 3.5 per cent of the Company's issued share capital. Each Director holds 14,562,427 options.
Further details regarding the options issued are provided in note 16.
6 Tax
There was no charge to current or deferred taxation in the current or prior period.
A deferred tax asset relating to losses carried forward has not been recognised due to uncertainty over the existence of future taxable profits against which the losses can be used. The Company has unused tax losses of approximately GBP5m (2018: GBP3.9m).
Tax reconciliation
31 March 31 March 2019 2018 GBP'000 GBP'000 ----------------------------------- --------- --------- Loss before tax (1,554) (160) Tax at 19% on loss before tax (295) (30) Effects of: Unrelieved losses carried forward 295 30 ----------------------------------- --------- --------- Total tax (credit)/expense - - ----------------------------------- --------- ---------
Legislation was announced in the Finance Act 2016 to reduce the rate of corporation tax to 17% with effect from 1 April 2020.
7 Loss per share
Loss per share has been calculated on a loss after tax of GBP1,554,000 (2018: GBP160,000) and the weighted number of average shares in issue for the year of 836,973,115 (2018: 756,045,343).
The loss and weighted average number of shares used in the calculations is set out below:
31 March 31 March 2019 2018 ------------------------ --------- --------- Loss (GBP'000) (1,554) (160) Loss per share (pence) (0.19) (0.02) ------------------------ --------- ---------
8 Investments
31 March 31 March 2019 2018 GBP'000 GBP'000 ------------------------------------------ --------- --------- Opening balance 2,761 3,455 Additions during the year 533 786 Disposals during the year - (806) Gain included in Other Comprehensive Income - 580 Movement in fair value charged to profit or loss (1,193) (1,254) ------------------------------------------ --------- --------- Closing balance 2,101 2,761 ------------------------------------------ --------- ---------
Additions during the year:
Investment in Vibe Group Holdings Limited
On 18 June 2018 the Company entered into a subscription agreement to invest GBP200,000 in Vibe Group Holdings Limited (VGHL). Following completion of the investment, Vela owns 5,674 ordinary shares in VGHL equivalent to approximately 4 per cent. of the issued share capital of VGHL.
Investment in BlockchainK2 Corp.
On 30 May 2018, the Company acquired 272,000 shares in BlockchainK2 Corp. for a subscription price of C$1.25 per share, equating to a total cost of GBP200,589.
Investment in Nektan plc
In June 2018 the Company purchased 85,000 shares in Nektan, the AIM quoted gaming technology platform and services provider, for a consideration of GBP18,614. In July 2018 the Company purchased a further 50,000 shares in Nektan for a consideration of GBP9,319. In September 2018 the Company purchased a further 50,000 shares in Nektan for a consideration of GBP9,508.
The Company has made a total investment of GBP37,441 in Nektan for 185,000 shares.
Investment in StreamTV
On 6 December 2018, the Company entered into a subscription agreement with StreamTV to invest $100,000 in StreamTV from the Company's existing cash resources. The Company has subscribed for 66,666 Class A Common Stock in StreamTV at a price of $1.50 per share. In addition, in recognition of Vela's existing shareholding in StreamTV, Vela has been issued a total of 333,335 warrants (equivalent to approximately 5 warrants for each Class A Common Stock subscribed for) exercisable at a price of $1.50 per Class A Common Stock, vesting in the event of a liquidity event at StreamTV and exercisable for five years from the date of issuance.
Investment in Argo Blockchain plc
On 15 February 2019, the Company purchased 500,000 shares in Argo Blockchain plc at an average price of 3.072 pence per share, for a total cost of GBP15,553. The investment took the Company's total holding in Argo Blockchain plc to 3,000,000 shares.
9 Trade and other receivables
31 March 31 March 2019 2018 GBP'000 GBP'000 ------------------- --------- --------- Other receivables 13 13 13 13 ------------------- --------- ---------
10 Trade and other payables
31 March 31 March 2019 2018 GBP'000 GBP'000 ------------------------------ --------- --------- Trade payables 4 4 Accruals and deferred income 23 24 27 28 ------------------------------ --------- ---------
11 Loans and borrowings
Loans due within one year 31 March 31 March 2019 2018 GBP'000 GBP'000 --------------------------- --------- --------- Convertible loan notes 480 445 Bonds 516 - 996 445 --------------------------- --------- --------- Loans due after more than one year 31 March 31 March 2019 2018 GBP'000 GBP'000 ------------------------------------ ---------- --------- Bonds - 480 ------------------------------------ ---------- --------- - 480 ----------------------------------------------- ---------
Under the terms of the loan note agreement dated 9 September 2016, the convertible loan notes ('Loan Notes') were originally repayable on 30 September 2018, or capable of conversion into new ordinary shares in the Company, at a price of 0.15 pence per share, at any time up until the repayment date. The Loan Notes carried an annual interest rate of 8 per cent and were unsecured.
On 29 November 2018, the Company entered into an agreement with the Loan Note holders to extend the repayment date to 30 September 2019. All other terms of the Loan Notes remained unchanged. The Directors consider the convertible loan notes to represent a compound financial instrument. The Directors consider the equity element of the instrument to be immaterial. Accordingly, the full balance is classified as a financial liability.
Following the end of the reporting period, the Loan Notes were converted into new ordinary shares at a price of GBP0.10 pence per share, as detailed in note 18.
On 1 February 2017, the Company launched the issue of secured bonds, through UK Bond Network, to raise GBP550,000 for the Company. The Bonds have a coupon of 10% and a term of 3 years with full repayment in cash of the principal amount of the Bonds due at maturity. The Bonds may be repaid at the option of Vela together with all accrued (but unpaid) interest on the amount prepaid. The Bonds will not be convertible into ordinary shares in the capital of the Company. The Bonds are secured by way of fixed and floating charges over all assets of the Company present and future. The Bonds are due for repayment on 17 February 2020.
12 Share capital
31 March 31 March 2019 2018 GBP'000 GBP'000 -------------------------------------------- --------- --------- Authorised capital 9,999,520,000 ordinary shares of 0.1 pence each 10,000 10,000 10,000 10,000 -------------------------------------------- --------- --------- Allotted, called up and fully paid capital 836,973,115 ordinary shares of 0.1 pence each 837 837 837 837 -------------------------------------------- --------- ---------
Allotments during the period
The Company allotted the following ordinary shares during the year:
31 March 2019 ---------------------------------- -------------- Shares in issue at 1 April 2018 836,973,115 Shares issued during the year - ---------------------------------- -------------- Shares in issue at 31 March 2019 836,973,115 ---------------------------------- -------------- 31 March 2018 --------------------------------- -------------- Shares in issue at 1 April 2017 721,588,500 Shares issued during the period 115,384,615 --------------------------------- -------------- Shares in issue at 31 March 2018 836,973,115 --------------------------------- --------------
13 Cash and cash equivalents
Cash and cash equivalents comprise the following:
31 March 31 March 2019 2018 GBP'000 GBP'000 ------------------------------------------ --------- --------- Cash and cash in bank: Pound sterling 23 847 Cash and cash equivalents at end of year 23 847 ------------------------------------------ --------- ---------
Included within cash and cash equivalents in 2018 was GBP201k that was held in an escrow account and used to purchase an investment in BlockchainK2 Corp, which completed on 30 May 2018.
14 Financial instruments
The Company uses various financial instruments which include cash and cash equivalents, loans and borrowings and various items such as trade receivables and trade payables that arise directly from its operations. The main purpose of these financial instruments is to raise finance for the Company's operations and manage its working capital requirements.
The fair values of all financial instruments are considered equal to their book values. The existence of these financial instruments exposes the Company to a number of financial risks which are described in more detail below.
The main risks arising from the Company's financial instruments are currency risk, credit risk and liquidity risk. The Directors review and agree the policies for managing each of these risks and they are summarised below. The Company does not have any borrowings on which interest is charged at a variable rate. The Directors, therefore, do not consider the Company to be exposed to material interest rate risk.
Currency risk
The Company's shareholdings in Interbit and BlockchainK2 are denominated in Canadian Dollars and the investment in Stream TV is denominated in US Dollars, which gives rise to exposure to foreign currency risk. The Directors have considered the risk and do not deem it necessary to enter into any specific risk management arrangements at the present time. The Directors will continue to review the position going forward to ensure this remains appropriate in the context of the Company's risk profile.
Credit risk
This section, along with the liquidity risk and capital risk management sections below, also forms part of the Strategic Report.
The Company's exposure to credit risk is limited to the carrying amount of financial assets recognised at the balance sheet date, as summarised below:
31 March 31 March 2019 2018 Classes of financial assets - carrying GBP'000 GBP'000 amounts ----------------------------------------- --------- --------- Financial assets measured at fair value through profit or loss 2,101 2,761 Financial assets measured at amortised cost 13 13 ----------------------------------------- --------- --------- 2,114 2,774 ----------------------------------------- --------- ---------
The Company's management considers that all of the above financial assets that are not impaired for each of the reporting dates under review are of good credit quality.
The Company's financial assets are pledged as security, as detailed in note 11.
The Company is required to report the category of fair value measurements used in determining the value of its financial assets measured at fair value through profit or loss, to be disclosed by the source of its inputs, using a three-level hierarchy. There have been no transfers between Levels in the fair value hierarchy.
Quoted market prices in active markets - "Level 1"
Inputs to Level 1 fair values are quoted prices in active markets for identical assets. An active market is one in which transactions occur with sufficient frequency and volume to provide pricing information on an ongoing basis. The Company has five (2018: two) investments classified in this category. The aggregate historic cost of the five investments is GBP904,284 (2018: GBP450,698) and the fair value as at 31 March 2019 was GBP657,337 (2018: GBP1,470,044).
Valued using models with significant observable market parameters - "Level 2"
Inputs to Level 2 fair values are inputs other than quoted prices included within Level 1 that are observable for the asset, either directly or indirectly. The Company has five (2018: one) unquoted investments classified in this category. The historic cost of these investments is GBP1,271,581 (2018: GBP745,479) and the fair value as at 31 March 2019 was GBP1,293,380 (2018: GBP644,612). These investments were valued using the latest transaction prices for shares in the investee companies.
Valued using models with significant unobservable market parameters - "Level 3"
Inputs to Level 3 fair values are unobservable inputs for the asset. Unobservable inputs may have been used to measure fair value to the extent that observable inputs are not available, thereby allowing for situations in which there is little, if any, market activity for the asset at the measurement date (or market information for the inputs to any valuation models). As such, unobservable inputs reflect the assumptions the Company considers that market participants would use in pricing the asset. The Company has three (2018: three) unquoted investments classified in this category. The historic cost of these investments is GBP725,000 (2018: GBP725,000) and the fair value as at 31 March 2019 was GBP150,000 (2018: GBP200,000). Two of these investments have been written down to GBPnil.
The Company has no (2018: three) unquoted investments that are held at cost, as the directors' best estimate of fair value. In the prior year, the cost and fair value of the investments was GBP446,504.
Liquidity risk
The Company maintains sufficient cash to meet its liquidity requirements. Management monitors rolling forecasts of the Company's liquidity on the basis of expected cash flow in accordance with practice and limits set by the Company. In addition, the Company's liquidity management policy involves projecting cash flows and considering the level of liquid assets necessary to meet these.
Maturity analysis for financial liabilities
31 March 2019 31 March 2018 ------------------ ------------------ Within Later Within Later than than 1 year 1 year 1 year 1 year GBP'000 GBP'000 GBP'000 GBP'000 -------------------------- -------- -------- -------- -------- At amortised cost: Financial liabilities at amortised cost 1,023 - 473 480 1,023 - 473 480 -------------------------- -------- -------- -------- --------
Capital risk management
The Company's objectives when managing capital are to safeguard the Company's ability to continue as a going concern in order to provide returns for shareholders and benefits for other stakeholders and to maintain an optimal capital structure to reduce the cost of capital. This is achieved by making investments commensurate with the level of risk. The Company is performing in line with the expectations of the Directors.
The Company monitors capital on the basis of the carrying amount of equity. The Company policy is to set the amount of capital in proportion to its overall financing structure, i.e. equity and long-term loans. The Company manages the capital structure and makes adjustments to it in the light of changes in economic conditions and the risk characteristics of the underlying assets. In order to maintain or adjust the capital structure, the Company may adjust the amount of dividends paid to shareholders, issue new shares or loan notes, or sell assets to reduce debt.
15 Reconciliation of net debt
As at As at 1 April Cash Non-cash 31 March 2018 flow movement 2019 GBP'000 GBP'000 GBP'000 GBP'000 --------------------------- --------- -------- ---------- ---------- Cash and cash equivalents 847 (824) - 23 Convertible loan notes (445) - (35) (480) Bonds (480) - (36) (516) (78) (824) (71) (973) --------------------------- --------- -------- ---------- ----------
Non-cash movements relate to the amortisation of loan issues costs and rolled up unpaid interest.
As detailed in note 18, the Convertible loan notes were converted to 481,970,602 new ordinary shares at a subscription price of 0.10 pence per share after the year-end.
16 Share-based payments
The Company rewards its Directors using equity settled share-based payments.
No new share options have been issued in the current accounting period and the total number of options outstanding at 31 March 2019 was 29,124,854 (2018: 29,124,854). None of the options issued have either lapsed or been exercised in the period.
The options have historically been valued using the Black Scholes option pricing model.
The amount of remuneration expense in respect of the share options granted amounts to GBPNIL (2018: GBPNIL).
Details of the options outstanding at the year end and the inputs to the option pricing model are as follows:
Options Options Options Options granted granted granted granted 22 October 18 September 2 October 8 April 2015 2015 2014 2014 --------------------------- ----------- ------------- ---------- ---------- Share price at grant date (pence) 0.21 0.19 0.33 1.50 Exercise price (pence) 0.21 0.15 0.33 0.85 Expected life (years) 7 7 7 7 Annualised volatility (%) 79.47 70.98 95.16 74.23 Risk-free interest rate (%) 2.0 2.0 2.0 2.0 Fair value determined (pence) 0.15 0.13 0.26 1.17 Number of options granted 6,400,000 10,489,560 4,000,000 8,235,294 Options exercisable at 31 March 2019 6,400,000 10,489,560 4,000,000 8,235,294 ---------------------------- ----------- ------------- ---------- ----------
None of the options outstanding as at 31 March 2019 are subject to any performance criteria.
17 Related party transactions
During the period the Company entered into the following related party transactions. All transactions were made on an arm's length basis.
Ocean Park Developments Limited
Nigel Brent Fitzpatrick, Non-Executive Director, is also a Director of Ocean Park Developments Limited. During the year the Company paid GBP46,000 (2018: GBP46,000) in respect of his Directors fees to the Company. The balance due to Ocean Park Developments Limited at the year end was GBPnil (2018: GBPnil).
Risk Alliance Insurance Brokers Limited
Nigel Brent Fitzpatrick, Non-Executive Director, is also a Director of Risk Alliance Insurance Brokers Limited. During the year the Company paid GBP5,551 (2018: GBP5,700) in respect of insurance fees at arm's length. The balance due to Risk Alliance Insurance Brokers Limited at the year end was GBPnil (2018: GBPnil).
Widdington Limited
Antony Laiker, Director, is also a Director of Widdington Limited. During the year the Company paid GBP64,000 (2018: GBP64,000) in respect of his Directors fees to the Company. The balance due to Widdington Limited at the year end was GBPnil (2018: GBPnil).
Kevin Sinclair
Kevin Sinclair, a shareholder of the Company, holds GBP100,000 of the bonds under the Company's 10% bond issue in February 2017. At 31 March 2019, Kevin Sinclair held 106,449,000 (12.72%) of the issued share capital of the Company through JIM Nominees Ltd and is classified as a substantial shareholder under the AIM Rules.
Scott Fletcher
Scott Fletcher, a shareholder of the Company, holds GBP200,000 of the 8% convertible loan notes issued by the company in September 2016.
Scott Fletcher held 63,944,656 Ordinary Shares at 31 March 2019 representing 7.64 per cent. of the issued share capital of the Company at that time in addition to the 8% convertible loan notes above. He is also the chairman of UK Bond Network Limited, which acted on behalf of the Company in relation to the bond issue.
As detailed in notes 11 and 18, these loan notes were converted to 240,985,301 new ordinary shares after the year-end at a subscription price of 0.10 pence per share.
Antony Laiker loan notes
Antony Laiker, Director, holds GBP200,000 of the 8% convertible loan notes issued by the company in September 2016. As detailed in notes 11 and 18, these loan notes were converted to 240,985,301 new ordinary shares after the year-end at a subscription price of 0.10 pence per share.
18 Events after the balance sheet date
Share placing and conversion of loan notes
In May 2019, the Company announced a placing to raise GBP400,000, before deduction of fees, through the issue of 400,000,000 shares at a price of 0.10 pence per share. As part of this placing it was announced that Antony Laiker, a Director of the Company, intended to subscribe for 25,000,000 of the placing shares. The placing of 375,000,000 shares was completed in May 2019 and the placing of 25,000,000 shares to Antony Laiker was completed in August 2019. Investors subscribing for these shares also received one warrant for every four placing shares, exercisable at a price of 0.15 pence per placing warrant for a period of up to two years from the placing date.
In addition, the Company entered into an agreement with Scott Fletcher, a related party, to vary the terms of his GBP200,000 of loan notes, such that the principal and accrued interest were converted into new ordinary shares at a conversion price of 0.10 pence per share, equivalent to the placing price. This resulted in 240,985,301 new shares being issued.
Following the placing, Scott Fletcher's holding increased to 304,929,997 shares, representing 17.74% of the current issued share capital and Kevin Sinclair, an existing shareholder, increased his holding to 151,449,000 representing 8.81% of the total share capital.
Further investment in Portr Limited
On 12 August 2019, the Company announced that it had entered into an agreement to subscribe for 91,341 shares in Portr Limited, equating to an investment of GBP91,341. Following completion of the investment, the Company held approximately 3.6% of Portr Limited's share capital.
Conversion of Antony Laiker loan notes
On 24 April 2019, the Company announced that it had entered into an agreement to repay Antony Laiker's GBP200,000 loan notes, together with accrued interest. As part of the agreement, it was intended that the entire proceeds of the repayment would be used by Antony Laiker to subscribe for 240,985,301 new ordinary shares at a price of 0.10 pence per share. The share subscription was approved by shareholders on 30 August 2019.
Following admission of the new shares, Antony Laiker became beneficially interested in 301,175,301 Ordinary Shares, representing approximately 17.52% of the Company's enlarged share capital.
Extraction of information in this announcement
The financial information, which comprises the statement of comprehensive income, balance sheet, cashflow statement, statement of changes in equity, and related notes to the financial statements, is derived from the full Company financial statements for the year ended 31 March 2019, which have been prepared under European Union endorsed International Financial Reporting Standards (IFRS) and those parts of the Companies Act 2006 applicable to companies reporting under IFRS. It does not constitute full financial statements within the meaning of section 434 of the Companies Act 2006. This financial information has been agreed with the auditor for release.
The full annual report and financial statements for the year ended 31 March 2019, on which the auditor has given an unqualified report, and which does not contain a statement under section 498 of the Companies Act 2006, will be delivered to the Registrar of Companies in due course.
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.
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(END) Dow Jones Newswires
September 26, 2019 02:00 ET (06:00 GMT)
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