TIDMBRH
RNS Number : 0671P
Braveheart Investment Group plc
16 June 2022
Prior to publication, the information contained within this
announcement was deemed by the Company to constitute inside
information as stipulated under the UK Market Abuse Regulation.
With the publication of this announcement, this information is now
considered to be in the public domain.
16 June 2022
Braveheart Investment Group plc
("Braveheart", the "Company" or the "Group")
Final Results for the year ended 31 March 2022 & Notice of
AGM
Braveheart Investment Group plc (AIM: BRH) announces its audited
annual results for the financial year ended 31 March 2022,
highlights of which are set out below:
-- Earnings per share of 3.10 pence per share (2021: 36.30 pence per share)
-- Funds raised of GBP2.5 million before expenses during the year
-- Additional investment into Phase Focus Limited
-- Continued progress at Paraytec Limited
For further information:
Braveheart Investment Group plc Tel: 01738
587555
Trevor Brown, Chief Executive Officer
Allenby Capital Limited (Nominated Tel: 020
Adviser and Joint Broker) 3328 5656
David Worlidge / James Reeve / George
Payne
Peterhouse Capital Limited (Joint Tel: 020
Broker) 7469 0936
Heena Karani / Lucy Williams
Chief Executive Officer's Report
I am pleased to report to shareholders for the year ended 31
March 2022.
Overview
Group strategy continues to be application of the Board's
expertise and financial resources to those existing and newly
acquired businesses which the Board consider have the greatest
potential for outperformance. Details of these investments together
with operational updates about each of these companies follow
below.
Portfolio and Strategic Investments
As in previous years we have continued to divide our investments
into two categories, namely our Strategic Investments and Portfolio
Investments. Each of the Strategic Investments, of which there were
five at the end of the year under review, is summarised below in
this annual report. The Portfolio Investments are direct
investments into third party companies that were made by Braveheart
from 2002 until the summer of 2015 (the 'Portfolio Investments').
There are investments into a total of 13 different companies within
the Portfolio Investments as at 31 March 2022. Sentinel Medical
Limited is held in the accounts at GBP33, the original cost of
Braveheart's shareholding holding. This investment has been moved
out of Strategic Investments and into Portfolio Investments, until
the business reaches a point where it is determined to have
significant value. Therefore, at the end of the period under review
there were investments into a total of 18 companies. We will
continue to manage the Portfolio Investments with a view to seeking
exits wherever possible.
Strategic Investments Overview
Paraytec Limited ( Braveheart owns 100% per cent of the
company)
Paraytec Limited ("Paraytec") develops high performance
specialist detectors for the analytical and life sciences
instrumentation markets. In addition, the company has undertaken a
programme with the University of Sheffield to develop a rapid test
for identifying cancer and pathogens, including viruses.
As reported within our RNS on 15 November 2021, Paraytec has
continued to refine the platform technology that underpins its
proposed fast, sensitive COVID-19 test. The platform technology
(product reference "CX300") comprises a low-cost instrument that
utilises intense fluorescent light to detect small specific
pathogens or cells in a biological sample.
Although the market for COVID-19 tests has dramatically changed
in recent months, the Company believes there will continue to be a
significant long-term global market for point-of-care COVID-19
testing. In addition, it is clear that Paraytec's technology
platform has the potential for many other applications, and these
are primarily the focus of interest in ongoing discussions with
potential licensees and acquirers.
Paraytec has recently received ethical and HRA approval to
proceed with a clinical study at the Sheffield Teaching Hospitals
NHS Foundation Trust. This study will collect specimens from
COVID-19 positive participants for up to ten days and monitor the
ability of the Paraytec test to follow the course of infection by
comparison with the culture of SARS-CoV-2 virus from the specimens.
The test performance will also be compared with PCR (polymerase
chain reaction) and lateral flow tests. If successful, the
Directors believe these results will be a powerful demonstration of
the accuracy and uniqueness of the Paraytec test.
Professor Carl Smythe's team has established a CAT 3 laboratory
at the University of Sheffield to support the development of the
CX300 technology platform. This will allow the research team to
study a wide range of pathogens that cause infectious diseases,
including COVID-19. Potential acquirers have focused their interest
on a range of applications for the CX300, so the Paraytec team will
now concentrate on developing multiple tests, including those
previously commenced in bladder cancer and bacteraemia that causes
sepsis.
Phasefocus Holdings Limited (Braveheart owns 42.67 per cent of
the company)
Phasefocus Holdings Limited ("Phasefocus"), a spin-out from the
University of Sheffield, has developed a series of patented
computational imaging and analysis techniques that have a wide
range of applications including live cell imaging, engineering
metrology and electron microscopy. The company's novel method for
high fidelity quantitative imaging and microscopy is known in the
scientific literature as "ptychography".
Phasefocus's flagship product, Livecyte(TM) , allows researchers
and biotechnology companies to characterise the dynamic behaviour
of live cells in ways previously not possible. Livecyte integrates
Phasefocus's patented label-free Quantitative Phase Imaging
technology with state-of-the-art automatic cell tracking
algorithms. This enables users to automatically characterize
growth, morphology and motility of large populations of cells in a
96-well plate assay format.
Since moving to a distribution sales model in 2019, partnerships
with a wide range of distributors have resulted in a marked
increase in awareness of the company's products in the marketplace.
The reach of distributors, such as Cytena (part of the BICO group,
formerly CELLINK Inc.) and SinsiTech in China, has helped
Phasefocus enter new territories and has led to a rapid growth in
revenues.
In the company's financial year ended 31 December 2021, revenue
increased by more than 125% over the prior year. The company's head
count also increased by more than 10% in 2021. To enable the
company to keep up with production demand, in March 2022 Phasefocus
opened an expanded production facility in Nottingham Science Park,
Nottingham, UK. The new facility has more than four times the floor
space of the previous production facility, with room to expand
further as demand grows in future years.
Kirkstall Limited (Braveheart owns 80% of the company)
Kirkstall Limited ("Kirkstall") operates in the market known as
'organ-on-a-chip', where it has developed Quasi Vivo(R), a system
of chambers for cell and tissue culture in laboratories. Its
patented technology is used by researchers in the growing
'organ-on-a-chip' market, where academia and drug development
companies need to maintain living cells in a nutrient flow.
With most of Europe's university research laboratories operating
fully again following relaxation of restrictions on non-COVID
related research, Kirkstall has seen a steady upturn in sales
enquiries and orders for its Quasi Vivo(R) products. The
versatility and uniqueness of these products has been able to
attract attention into wider application areas including inhalation
toxicity, parasitic infections, nanotechnology, biosystem
ecologies.
There has also been increased interest in its products from
non-European countries including USA, China, India and Singapore in
the field of non-animal micro-physiological in vitro models.
In the last year, the company identified three new peer reviewed
publications from research teams utilising Kirkstall's Quasi Vivo
(R) system. Kirkstall is a strong supporter of such research, as
publications like these are an excellent marketing tool.
The first study involved the evaluation of drug absorption via
gastrointestinal tract tissue and was conducted at Sheffield Hallam
University in collaboration with the Croda Group. The research is
the result of Kirkstall's partnership with Animal Free Research UK
that started two years ago to support human-relevant science and
the principle of the replacement of animals in research.
https://doi.org/10.3390/pharmaceutics14020364
The second study was conducted by the research group of Berthold
Huppertz at the Medical University of Graz, Austria. The study
involved ex vivo human placental tissue and concluded that
Kirkstall's Quasi Vivo (R) system is the most native-like in vitro
system that can be used to simulate blood flow from the mother to
placenta and back, and thus can enable novel and more physiological
study designs. https://doi.org/10.3390/ijms22147464
The third study was conducted by the group of Louise Carson,
School of Mechanical and Aerospace Engineering, Queens University
Belfast. The group utilised the Quasi Vivo (R) system to develop an
in vitro model to evaluate long term biocompatibility of bone
substitute biopolymer constructs. 10.1016/j.actbio.2021.07.049
Since September 2021, Kirkstall's Quasi Vivo(R) system has been
on public display at the Francis Crick Institute, London at their
'Outwitting Cancer' exhibition.
www.crick.ac.uk/whats-on/exhibitions/outwitting-cancer/outwitting-cancer-exhibition
A new Quasi Vivo(R)(TM) platform with advanced fluid flow is in
late stage development at Kirkstall. The system is a complete
redesign, incorporating new features which the directors of
Kirkstall believe are highly desired by both pharmaceutical and
academic users. Prototypes are currently undergoing user testing by
Kirkstall's partners in the CyGenTig European consortium, in which
new techniques are under development for the production of
engineered tissues by optogenetics, aiming to build replacement
human organs by controlling individual cell growth using coloured
laser light.
Autins Group plc (Braveheart owns 8.7% of the company)
During the period, Braveheart invested in Autins Group plc
("Autins") (AIM: AUTG) through market purchases of shares. Autins
specialises in solving acoustic and thermal problems in the
automotive industry and other specialist applications. In
particular, the company's leading product Neptune, a non-woven
microfibre web, is produced by a mixture of engineered polyester
fibre and melt-blown polypropylene. This material outperforms
traditional automotive insulation and is gaining traction in office
and flooring acoustics applications.
The Board considers that this investment fits well in its
portfolio of advanced technology businesses and seeks to identify
opportunities with Autins that will benefit both companies.
Velocity Composites plc (Braveheart owns 4.13% of the
company)
In September 2021, Braveheart acquired 4.13% of Velocity
Composites plc ("Velocity") (AIM: VEL) through the purchase of
shares. Velocity is a leading supplier of advanced composite
material kits to the Aerospace sector. Velocity Composites' clients
include multi-national manufacturers of composite parts and
assemblies, who in turn deliver to the world's leading civil and
military aircraft manufacturers. The Airbus A320, A330, A350, A380,
Eurofighter Typhoon, F35 Joint Strike Fighter, Boeing 737, Boeing
787 and V22 Osprey are all constructed using parts manufactured
from Velocity's kits.
The Board considers that this investment fits well in its
portfolio of advanced technology businesses.
Outlook
We have entered our new financial year acutely aware of the
geo-political and macro-economic challenges the world is facing.
However, we are hopeful that this turbulence will also present
interesting new investment opportunities and we will be positioned
to respond as events unfold.
Financial Review
During the year we continued the comprehensive review of our
cost base and continued to reduce the central costs.
Income Statement
Fee-based revenue was generated by Braveheart Investment Group
Plc. The principal revenue from the Group's operations comprises
investment management fees, with total revenue during the year
being GBP43,000 (2021: GBP60,000). Revenue derived from strategic
subsidiary undertakings has decreased by GBP64,000 from GBP205,000
in 2021 to GBP141,000 in 2022. Finance income was GBPNil (2021:
GBPNil), this being interest on outstanding loan notes within the
directly held portfolio.
As at 31 March 2022, the total number of directly held
investments in the portfolio of Strategic Investments and the
Portfolio Investments was 18 companies (2021: 19), of which two
have been consolidated into Braveheart's accounts. The fair value
of the directly held portfolio, excluding the two companies now
consolidated into the Company's accounts, was GBP4,716,080 (2021:
GBP613,847). During the year the group made investments of
GBP1,467,000 into three portfolio companies, Autins Group Plc,
Velocity Composites Plc and Phase Focus Holdings Limited. This
excludes investments made into investments that are controlled by
the Group. Two investments (being Kirkstall and Paraytec) that are
considered as Strategic Investments by the Board are now deemed to
be 'controlled' by the Company and as a result of this, those
companies have been consolidated into Braveheart's accounts (but
remain categorised by management as Strategic Investments). At the
year end, the value of these two investments was GBP220,622 (2021:
GBP220,622), although the value in the consolidation in terms of
goodwill stands at GBP205,775 (2021: GBP205,775, two companies).
Therefore, the fair value of the directly held portfolio (Strategic
Investments and Portfolio Investments and including the two
investments that have now been consolidated into the Company's
accounts) was GBP4,921,855 (2021: GBP819,622).
Total income for the year ended 31 March 2022, including
realised gains and unrealised revaluation gains and losses, was
GBP2,937,000 (2021: GBP16,562,000).
The average number of employees remained at 7 during the period
under review. The number of employees working within the Group,
excluding employees of Kirkstall and Paraytec, was 4 during the
year under review (2021: 3). Employee benefits expense was
GBP636,000 (2021: GBP1,341,000). Other operating and finance costs
decreased to GBP753,000 (2021: GBP954,000).
The total profit after tax decreased to GBP1,442,000 (2021:
GBP13,907,000), equivalent to a basic profit per share of 3.10
pence (2021: 36.30 pence).
Financial Position
The Group's net assets of GBP6,607,000 (2021: GBP2,564,000),
include goodwill of GBP206,000 (2021: GBP206,000).
The carrying value of goodwill was reviewed during the year. The
income method was not deemed appropriate for the companies under
review due to the difficulty of projecting the future income of
these companies, so market value approach was considered more
appropriate.
At the year end the Group had cash balances of GBP1,894,000
(2021: GBP2,143,000 (including discontinued operations)). There
were no material borrowings.
A summary analysis of the Group's performance is as follows:
2022 2021
GBP'000 GBP'000
============================================= ========== ==============
Investment management revenue and sales 186 269
Finance income - -
============================================= ========== ==============
Income before portfolio movements 186 269
============================================= ========== ==============
Profit on disposal of investments 60 7,690
Profit on sale of subsidiary - 8,931
Change in fair value of investments, gain
on disposal of investments and movement in
contingent liability 2,691 (329)
============================================= ========== ==============
Total income of continuing activities 2,937 16,561
============================================= ========== ==============
Employee benefits expense (including share-
based payments) (636) (1,341)
Impairment of goodwill - (63)
Other operating and finance costs (755) (955)
============================================= ========== ==============
Total costs on continuing activities (1,391) (2,359)
Profit before tax - continuing 1,546 14,202
Loss on discontinued operations - (69)
Tax (104) (226)
============================================= ========== ==============
Total profit and total comprehensive profit
for the year 1,442 13,907
--------------------------------------------- ---------- --------------
Opening cash balance 2,143 685
Investment in portfolio companies (1,467) (250)
Proceeds from sale of equity investments 246 17,346
Amount paid to BBB (171) -
Dividends paid - (15,859)
Warrants and share options exercised 7 867
Funds raised - net of share issue costs 2,416 641
Other activities (1,280) (1,287)
Closing cash balance 1,894 2,143
============================================ =========== ==============
Net assets 6,607 2,564
============================================ =========== ==============
Key Performance Indicators (KPIs)
The KPIs we use to monitor business performance have been
changed in order to better reflect the emphasis that the Board has
placed upon the development of the Strategic Investments as the
best way to increase shareholder value over the short and medium
term. Given the nature of our business these KPI's remain as,
primarily, financial measures. They are:
2022 2021
------
Cash ('GBP000) 1,894 2,143
Share price (pence) 17.75 70.50
Income ('GBP000) 186 269
Value of investments 4,716 614
---------------------- ------ ------
On behalf of the Board
Trevor E Brown
Chief Executive Officer
15 June 2022
Consolidated Statement of comprehensive INCOME for the year
ended 31 March 2022
2022 2021
Notes GBP GBP
Revenue from contracts with customers 2 185,814 268,725
Change in fair value of investments 2,690,598 (329,083)
Profit on disposal of investments 4 60,414 7,690,287
Profit on sale of subsidiary 4 - 8,931,434
Total income 2,936,826 16,561,363
------------------------------------------- ------ ------------ ------------
Employee benefits expense (636,141) (1,340,954)
Impairment of goodwill 7 - (62,543)
Other operating costs (752,449) (953,791)
------------------------------------------- ------ ------------ ------------
Total operating costs (1,388,590) (2,357,288)
------------------------------------------- ------ ------------ ------------
Finance costs (2,349) (1,745)
Finance income 138 150
------------------------------------------- ------ ------------ ------------
Total costs (1,390,801) (2,358,883)
------------------------------------------- ------ ------------ ------------
Profit before tax 1,546,025 14,202,480
=========================================== ====== ============ ============
Tax (104,048) (226,367)
Profit from continuing operations 1,441,977 13,976,113
------------------------------------------- ------ ------------ ------------
Loss from discontinued operations, net of
tax - (69,350)
Total profit and total comprehensive loss
for the year 1,441,977 13,906,763
------------------------------------------- ------ ------------ ------------
Profit attributable to :
Equity holders of the parent 1,453,804 13,936,436
Non-controlling interest (11,827) (29,673)
------------------------------------------- ------ ------------ ------------
1,441,977 13,906,763
------------------------------------------- ------ ------------ ------------
Earnings per share Pence Pence
- basic 5 3.10 36.30
- diluted 5 2.82 35.25
consolidated statement of financial position as at 31 March
2022
2022 2021
Notes GBP GBP
ASSETS
Non-current assets
Property, plant and equipment 1,776 2,166
Intangible assets 26,103 28,152
Goodwill 205,775 205,775
Investments at fair value through
profit or loss 4,716,080 613,847
4,949,734 849,940
----------------------------------- ------ ---------- ----------
Current assets
Inventory 90,113 98,441
Trade and other receivables 123,412 105,772
Cash and cash equivalents 8 1,893,931 2,142,866
------------------------------------ ------ ---------- ----------
2,107,456 2,347,079
----------------------------------- ------ ---------- ----------
Total assets 7,057,190 3,197,019
==================================== ====== ========== ==========
LIABILITIES
Current liabilities
Trade and other payables (272,432) (591,079)
Deferred income (7,025) (41,843)
------------------------------------ ------ ---------- ----------
(279,457) (632,922)
----------------------------------- ------ ---------- ----------
Non-current liabilities
Deferred taxation (170,398) -
------------------------------------ ------ ---------- ----------
Total liabilities (449,855) (632,922)
==================================== ====== ========== ==========
Net assets 6,607,335 2,564,097
------------------------------------ ------ ---------- ----------
EQUITY
Called up share capital 1,044,807 766,148
Share premium reserve 4,371,343 2,226,671
Share based payment reserve 309,835 137,200
Retained earnings 899,202 (559,897)
------------------------------------ ------ ---------- ----------
Equity attributable to owners
of the Parent 6,625,187 2,570,122
Non-controlling interest (17,852) (6,025)
------------------------------------ ------ ---------- ----------
Total equity 6,607,335 2,564,097
------------------------------------ ------ ---------- ----------
Consolidated Statement of CAsh flows for the year ended 31 March
2022
2022 2021
GBP GBP
Operating activities
Profit for the year 1,441,977 13,906,763
Adjustments to reconcile profit before tax
to net cash flows from operating activities
Share based payment 177,930 400,148
(Increase) / Decrease in the fair value movements
of investments (2,690,598) 329,083
Profit on disposal of subsidiary - (8,931,434)
Profit on disposal of equity investments (60,414) (7,690,287)
Fees taken from investment proceeds - 78,419
Bonus in lieu of cash - 300,000
Non-controlling interest on disposal - (92,673)
Investment movement owed to BBB 41,265 (15,528)
Depreciation and amortisation 12,919 11,755
Impairment of goodwill - 62,543
Interest income (138) (150)
Taxation 170,398 (4,136)
Decrease in inventory 8,328 39,253
Increase in trade and other receivables (17,640) (8,400)
(Decrease) / Increase in trade and other payables (353,465) 330,225
----------------------------------------------------- ------------ -------------
Cash flow from operating activities (1,269,438) (1,284,419)
----------------------------------------------------- ------------ -------------
Investing activities
Proceeds from sale of investments 245,871 17,346,338
Amount paid to BBB (170,887) -
Purchase of investments (1,467,469) (250,000)
Purchase of intangibles (9,834) (5,549)
Purchase of tangibles (646) (1,124)
Interest received 138 150
----------------------------------------------------- ------------ -------------
Net cash flow from investing activities (1,402,827) 17,093,951
----------------------------------------------------- ------------ -------------
Financing activities
Dividends paid - (15,859,160)
Warrants and share options exercised 7,480 866,980
Funds raised, net of share issue costs 2,415,850 640,623
Net cash flow from financing activities 2,423,330 (14,351,557)
----------------------------------------------------- ------------ -------------
Net (decrease) / increase in cash and cash
equivalents (248,935) 1,457,975
Cash and cash equivalents at the beginning
of the year 2,142,866 684,891
----------------------------------------------------- ------------ -------------
Cash and cash equivalents at the end of the
year 1,893,931 2,142,866
----------------------------------------------------- ------------ -------------
Consolidated Statement of ChAnges in Equity for the year ended
31 March 2022
Share
Called Share based Retained
up Share Premium payment Earnings/ Non-controlling Total
Capital Reserve Reserve (Deficit) Total interest Equity
GBP GBP GBP GBP GBP GBP GBP
At 1 April 2020 561,555 91,657 - 1,043,955 1,697,167 79,572 1,776,739
---------------------- ---------- ----------- ---------- ------------- ------------- ---------------- -------------
Profit and total
comprehensive profit
for the year - - - 13,936,436 13,936,436 (29,673) 13,906,763
Allotment of shares 204,593 2,135,014 - - 2,339,607 - 2,339,607
Dividend paid - - - (15,859,160) (15,859,160) - (15,859,160)
Non-controlling
interest on disposal - - - 55,924 55,924 (55,924) -
Share based payments - - 400,148 - 400,148 - 400,148
Transfer to retained
earnings - - (262,948) 262,948 - - -
---------------------- ---------- ----------- ---------- ------------- ------------- ---------------- -------------
Transactions with
owners, recognised
directly in equity 204,593 2,135,014 137,200 (1,603,852) 872,955 (85,597) 787,358
====================== ========== =========== ========== ============= ============= ================ =============
At 1 April 2021 766,148 2,226,671 137,200 (559,897) 2,570,122 (6,025) 2,564,097
====================== ========== =========== ========== ============= ============= ================ =============
Profit and total
comprehensive profit
for the year - - - 1,453,804 1,453,804 (11,827) 1,441,977
Allotment of shares 278,659 2,228,822 - - 2,507,481 - 2,507,481
Cost of shares
issued - (84,150) - - (84,150) - (84,150)
Share based payments - - 177,930 - 177,930 - 177,930
Transfer to retained
earnings - - (5,295) 5,295 - - -
---------------------- ---------- ----------- ---------- ------------- ------------- ---------------- -------------
Transactions with
owners, recognised
directly in equity 278,659 2,144,672 172,635 1,459,099 4,055,065 (11,827) 4,043,238
---------------------- ---------- ----------- ---------- ------------- ------------- ---------------- -------------
At 31 March 2022 1,044,807 4,371,343 309,835 899,202 6,625,187 (17,852) 6,607,335
---------------------- ---------- ----------- ---------- ------------- ------------- ---------------- -------------
Notes to the financial statements for the year ended 31 March
2022
1 Corporate information
The Group and Company financial statements of Braveheart
Investment Group plc (the Company) for the year ended 31 March 2022
were authorised for issue by the Board of Directors on 15 June 2022
and the statements of financial position were signed on the Board's
behalf by Trevor Brown.
Braveheart Investment Group plc is a public company incorporated
in the United Kingdom under the Companies Act 2006 limited by
shares. The address of the registered office is detailed at the
back of this report. The nature of the Group's operations and its
principal activities are set out in the Strategic Report and
Directors' Report. The Company is registered in Scotland. The
Company's ordinary shares are traded on the AIM market of the
London Stock Exchange.
While the financial information included in this announcement
has been prepared in accordance with International Financial
Reporting Standards (IFRSs), this announcement does not itself
contain sufficient information to comply with IFRSs. The Group has
also published full financial statements that comply with IFRSs
available on its website and to be circulated shortly.
The financial information set out in the announcement does not
constitute the company's statutory accounts for the years ended 31
March 2022 or 2021. The financial information for the year ended 31
March 2021 is derived from the statutory accounts for that year,
which were prepared under IFRSs, on which the auditors gave a
qualified report, and which have been delivered to the Registrar of
Companies.
The financial information for the year ended 31 March 2022 is
derived from the statutory accounts for that year, which were
prepared under IFRSs, on which the auditors have given an
unqualified report that did not contain a statement under section
498(2) or 498(3) of the Companies Act 2006, and which will be
delivered to the Registrar of Companies.
2 Accounting policies
Basis of preparation
The Group and Company financial statements have been prepared in
accordance with UK-adopted international accounting standards in
accordance with the requirements of the Companies Act 2006 and in
accordance with the requirements of the AIM rules. The principal
accounting policies adopted by the Group and by the Company are set
out in the following notes.
The consolidated financial statements have been prepared on a
historical cost basis, except where otherwise indicated. The
financial statements are presented in sterling and all values are
rounded to the nearest pound (GBP) except where otherwise
indicated.
3 Revenue from contracts with customers
Revenue is attributable to the principal activities of the
Group. In 2022 and 2021, all revenue arose within the United
Kingdom.
2022 2021
GBP GBP
Investment management 1,500 3,600
Consultancy 43,090 59,634
Sale of goods 33,537 54,333
Grant income 74,984 111,181
Royalties 32,703 39,977
------------------------ -------- --------
185,814 268,725
----------------------- -------- --------
Of the revenue stated above, GBP43,090 (2021: GBP59,634) related
to The Lachesis Seed Fund Limited Partnership.
The group derives revenue from the transfer of goods and
services over time and at a point in time in the following major
product lines:
Investment Grant
management Consultancy Sale of goods income Royalties Total
2022
Timing of
revenue recognition
At a point
in time 1,500 - 33,537 74,984 - 110,021
Over time - 43,090 - - 32,703 75,793
============ ============ ================== ======== ========== ==========
1,500 43,090 33,537 74,984 32,703 185,814
============ ============ ================== ======== ========== ==========
2021
Timing of
revenue recognition
At a point
in time 3,600 - 54,333 111,181 - 169,114
Over time - 59,634 - - 39,977 99,611
============ ============ ================== ======== ========== ==========
3,600 59,634 54,333 111,181 39,977 268,725
============ ============ ================== ======== ========== ==========
4 Profit on sale of investment and subsidiary
During the previous year, the company disposed of its
shareholding in Pharm 2 Farm Limited in exchange for 310,354,815
shares in Remote Monitored Systems Plc. The sale was completed on 5
November 2020, and the group made a profit of GBP8,931,434 on the
initial investment of GBP225,000.
The group also sold 519,992,405 shares in Remote Monitored
Systems Plc for GBP17,424,757. The shares were acquired during the
previous year through a share for share exchange, cash investment
and the sale of Pharm 2 Farm Limited. The consideration of these
various transactions was GBP9,734,470, resulting in a profit on
disposal of GBP7,690,287.
5 Earnings per share
Basic earnings per share has been calculated by dividing the
profit attributable to equity holders of the parent by the weighted
average number of ordinary shares in issue during the year.
The calculations of profit per share are based on the following
profit and numbers of shares in issue:
2022 2021
GBP GBP
Profit for the year 1,441,977 13,906,763
----------------------------------------------- ----------- -----------
Weighted average number of ordinary shares in No. No.
issue:
For basic profit per ordinary share 46,870,999 38,307,451
Potentially dilutive ordinary shares 4,596,000 1,140,000
----------------------------------------------- ----------- -----------
For diluted earnings per ordinary share 51,466,999 39,447,451
----------------------------------------------- ----------- -----------
Dilutive earnings per share adjusts for share options granted
where the exercise price is less than the average price of the
ordinary shares during the period. At the current year end there
were 4,596,000 (2021: 1,140,000) potentially dilutive ordinary
shares.
The diluted loss per Ordinary Share is calculated by adjusting
the weighted average number of Ordinary shares outstanding to
consider the impact of options, warrants and other dilutive
securities.
6 Investments at fair value through profit or loss
Level 1 Level 2 Level 3
Equity Equity Equity
investments investments Debt investments investments Debt investments
in quoted in unquoted in unquoted in unquoted in unquoted
companies companies companies companies companies Total
GBP GBP GBP GBP GBP GBP
At 1 April 2020 - - - 724,402 - 724,402
Additions at Cost 9,734,470 - - 203,000 - 9,937,470
Disposals (9,734,470) - - - - (9,734,470)
Amount owed to
creditors - - - 15,528 - 15,528
Change in Fair Value - - - (329,083) - (329,083)
--------------------- ------------- ------------- ----------------- ------------- ----------------- ------------
At 1 April 2021 - - - 613,847 - 613,847
Additions at Cost 1,420,534 - - 46,935 - 1,467,469
Disposals - - - (48,274) - (48,274)
Amount owed to
creditors - - - (7,560) - (7,560)
Change in Fair Value (286,680) - - 2,977,278 - 2,690,598
--------------------- ------------- ------------- ----------------- ------------- ----------------- ------------
At 31 March 2022 1,133,854 - - 3,582,226 - 4,716,080
--------------------- ------------- ------------- ----------------- ------------- ----------------- ------------
Included in the balance above are investments that would be owed
to the British Business Bank through the Revenue Share Agreement.
At the year end, an amount of GBP31,043 would be due to the British
Business Bank on disposal. This liability is shown in the accounts
within other creditors.
As at 31 March 2022, the group total value of investments in
companies was GBP4,716,080 (2021: GBP613,847). The group total
change in fair value during the year was a profit of GBP2,690,598
(2021: loss GBP329,083).
Investments, which is made up of equity investments, are
designated on initial recognition as financial assets at fair value
through profit or loss. This measurement basis is consistent with
the fact that the Group's performance in respect of its portfolio
investments is evaluated on a fair value basis in accordance with
an established investment strategy. When investments are recognised
initially, they are measured at fair value.
After initial recognition the fair value of listed investments
is determined by reference to bid prices at the close of business
on the reporting date. Unlisted equity investments are measured at
fair value by the directors in compliance with the principles of
the International Private Equity and Venture Capital Guidelines,
updated and effective December 2015, as recommended by the European
Venture Capital Association. The fair value of unlisted equity
investments is determined using the most appropriate of the
valuation methodologies set out in the guidelines. These include
using recent arm's length market transactions; reference to the
current market value of another instrument, which is substantially
the same; earnings or profit multiples; indicative offers;
discounted cash flow analysis and pricing models.
The Group classifies its investments using a fair value
hierarchy. Classification within the hierarchy has been determined
on the basis of the lowest level input that is significant to the
fair value measurement of the relevant investment 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;
and
-- Level 3 - valued by reference to valuation techniques using
inputs that are not based on observable market data.
The fair values of quoted investments are based on bid prices in
an active market at the reporting date. All unquoted investments
have been classified as Level 3 within the fair value hierarchy,
their respective valuations having been calculated using a number
of valuation techniques and assumptions, notwithstanding that the
basis of the valuation methodology preferred by the Group is 'price
of most recent investment'. To reflect the potential impact of
alternative assumptions and a lack of liquidity in these holdings,
a discount of 15% has been applied to all Level 3 valuations. When
using the DCF valuation method, reasonably possible alternative
assumptions could have a material effect on the fair valuation of
investments.
The methodologies used in the year are broken down as
follows:
% of portfolio
valued
on this
Methodology Description Inputs Adjustments basis
-------------- ----------------------- ----------------------- -------------------------------- ------------------
A liquidity discount
is applied, typically
Used for unquoted 15%. Where last
investments where funding round is
there has been greater than twelve
a funding round, months then further
generally within The price of the discounts ranging
the last twelve most recent between 0% and 100%
Fund Raising months investment are applied. 26%
-------------- ----------------------- ----------------------- -------------------------------- ------------------
Used for investments Earnings multiples
which we can are applied to
determine the earnings of
a set of listed the company to
companies with determine the A liquidity discount
similar enterprise is applied, typically
Earnings characteristics value 15% 0%
-------------- ----------------------- ----------------------- -------------------------------- ------------------
The fair value
of debt investment
is deemed to be
cost less any
Debt/Loan impairment Impairment provision
notes Loan investments provision if deemed necessary 0%
-------------- ----------------------- ----------------------- -------------------------------- ------------------
Used where an
investment
is in a sales
process, A discount between
a price has been 5% - 10% is applied
agreed but the Contracted proceeds to reflect any uncertain
Indicative transaction has or best estimate adjustments to expected
offers not yet settled of expected proceeds proceeds 74%
-------------- ----------------------- ----------------------- -------------------------------- ------------------
Long term cash
flows are discounted
at a rate considered
appropriate for
Used for companies the business, A liquidity discount
Discounted with long-term typically is applied, typically
cash flow cash flows 9% - 12.5% 15% 0%
-------------- ----------------------- ----------------------- -------------------------------- ------------------
Group Group
Change in fair value in the year: 2022 2021
GBP GBP
Fair value gains 2,982,077 11,895
Fair value losses (291,479) (340,978)
------------------------------------------------------------------------------ -------------- ----------------
2,690,598 (329,083)
------------------------------------------------------------------------------ -------------- ----------------
The gain in the year came from the uplift of the valuation in
Phase Focus.
Details of investments where the nominal value of the holding in
the undertaking is 20% or more of any class of share are as
follows:
Caledonia Portfolio Realisations Limited ('CPR') holds a 20%
aggregate shareholding in Verbalis Limited ('Verbalis'), a design
and production of automated language translation systems company .
Neither CPR nor the Company is represented on the Board or within
management of Verbalis and in the opinion of the directors, this
shareholding does not entitle the Company to exert a significant or
dominant influence over Verbalis. The carrying value of Verbalis is
GBPnil (2021: GBPnil).
The Company holds a 6.43% aggregate holding on Gyrometric
Systems Limited, this company has developed a patent protected
system of hardware and software to accurately monitor the
vibrations in rotating shafts. During the year Braveheart announced
that it and Remote Monitored Systems plc ("RMS") had entered into a
share purchase agreement with the founders of Gyrometric Systems
Limited to return of control of Gyrometric to the founders of the
company, David Orton, Dr Paul Orton and Dr Janet Poliakoff. Under
the terms of the reorganisation, Braveheart's 19.5% interest in
Gyrometric was reduced to 6.43% and Braveheart wrote off a loan of
GBP39,200. The carrying value of Gyrometric is GBP1 (2021:
GBP1).
The Company holds a 42% aggregate holding on Phase Focus
Holdings Limited, has developed a series of patented computational
imaging techniques that have a wide range of applications including
live cell imaging, engineering metrology and electron microscopy.
The Company is represented on the Board and in the opinion of the
directors, this shareholding nor the representative entitles the
Company to exert a significant or dominant influence over Phase
Focus. The carrying value of Phase Focus is GBP3,418,573 (2021:
GBP389,913).
The Company holds a 38% aggregate holding on Sentinel Medical
Limited, this company is developing a point of care diagnostic
device for bladder cancer detection and monitoring . The Company is
represented on the Board and in the opinion of the directors, this
shareholding nor the representative entitles the Company to exert a
significant or dominant influence over Sentinel. The carrying value
of Sentinel is GBP33 (2021: GBP33).
The registered addresses for these entities are as follows:
Verbalis Limited Frostineb Cottage, Fala, Pathhead, Midlothian, EH37 5TB
Gyrometric Systems Limited Dockholme Lock Cottage, 380 Bennett
Street, Long Eaton, Nottingham, NG10 4JF
Phase Focus Holdings Limited 125 Wood Street, London, United Kingdom, EC2V 7AW
Sentinel Medical Limited York House, Outgang Lane, Osbaldwick, York, England, YO19 5UP
7 Goodwill
Paraytec Kirkstall Pharm 2 Total
Farm
GBP GBP GBP GBP
Cost - At 31 March
2020 571,137 944,409 131,359 1,646,905
Disposals - - (131,359) (131,359)
Cost - At 31 March
2021 571,137 944,409 - 1,515,546
Disposals - -
======================= ========== ========== ========== ============
Cost - At 31 March
2022 571,137 944,409 - 1,515,546
======================= ========== ========== ========== ============
Impairment - At 31
March 2020 (365,362) (881,866) - (1,247,228)
Impairment (62,543)- - (62,543)
Impairment - 31 March
2021 (365,362) (944,409) - (1,309,771)
Impairment - - - -
Impairment - 31 March
2022 (365,362) (944,409) - (1,309,771)
======================= ========== ========== ========== ============
Net Book Value - At
1 April 2022 205,775 - - 205,775
======================= ========== ========== ========== ============
Net Book Value - At
1 April 2021 205,775 - - 205,775
======================= ========== ========== ========== ============
The income approach was not deemed a reliable method for valuing
the goodwill of Paraytec and Kirkstall. Therefore, the market value
method was used in order to ascertain the value of goodwill at the
year end.
8 Cash and cash equivalents
2022 2021
GBP GBP
Cash at bank and on hand 1,893,931 2,142,866
========================== ========== ==========
Cash balances are held with HSBC Bank plc and Bank of Scotland
plc and earn interest at floating rates based on daily bank deposit
rates.
9 Posting of audited results for the year ended 31 March 2022
and Notice of AGM
The Company is pleased to announce that it expects to post its
audited report and accounts for the year ended 31 March 2022 to
shareholders shortly. It is also posting notice of its annual
general meeting ("Notice of AGM"), to be held on 13 July 2022 at
10.30 am. Copies of the final report and accounts and the Notice of
AGM will also be available to view on the Company's website
shortly, at http://www.braveheartgroup.co.uk/.
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END
FR SFSEDIEESESM
(END) Dow Jones Newswires
June 16, 2022 02:00 ET (06:00 GMT)
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