TIDMBRH
RNS Number : 6473E
Braveheart Investment Group plc
03 July 2023
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.
3 July 2023
Braveheart Investment Group plc
("Braveheart", the "Company" or the "Group")
Final Results for the year ended 31 March 2023
Braveheart Investment Group plc (AIM: BRH) announces its audited
annual results for the financial year ended 31 March 2023,
highlights of which are set out below:
-- Earnings per share of 2.68 pence per share (2022: 4.02 pence per share)
-- Strong technical and product development progress at Kirkstall, Paraytec and Phasefocus
-- These strategic investments are now well positioned for
growth in product, service and licence revenues
For further information:
Braveheart Investment Group plc Tel: 01738 587555
Trevor Brown, Chief Executive Officer
Viv Hallam, Executive Director
Allenby Capital Limited (Nominated Adviser Tel: 020 3328 5656
and Joint Broker)
James Reeve / George Payne
Peterhouse Capital Limited (Joint Broker) Tel: 020 7469 0936
Duncan Vasey / Lucy Williams
Chief Executive Officer's Report
I am pleased to report to shareholders for the year ended 31
March 2023.
I became CEO of Braveheart in August 2015. An investor buying
the shares at the then market price and selling them at the end of
the 2023 financial year would have enjoyed a total return (compound
annual growth rate "CAGR") of *28.59% pa. By comparison, over the
same period for the AIM All-Share index**, the CAGR was less than
2% pa (in the USA the CAGR of the S&P500 was 13% and Berkshire
Hathaway 14%). In the belief of the Directors, a total compound
return of 29% per annum places Braveheart amongst the best
performing UK listed investments during this period.
Our strategy is to invest shareholder funds in businesses that
we believe possess specific characteristics capable of generating
exceptional returns on disposal. The timing and price of such
disposals is impossible to forecast, and the Board acknowledges
that patience may be required of shareholders while waiting for
events to unfold. Although convention requires your directors to
offer guidance about the future, the reality is that your directors
have no more idea about timing of realisations than anyone else.
Where the directors do have control is in positioning the portfolio
to maximise exposure to potentially positive events.
Strategic Investments Overview
Paraytec Limited (Braveheart owns 100% per cent of the
company)
Paraytec develops high performance specialist detectors for the
analytical and life sciences instrumentation markets. In addition,
it has been undertaking a programme with the University of
Sheffield to develop rapid tests ("CX300") for identifying
pathogens, including viruses.
CX300 development programme and clinical study
As reported on 31 May 2023, the collection of patient specimens
for the COVID-19 clinical study at Sheffield Teaching Hospitals NHS
Foundation Trust was successfully completed. The data set has since
been 'locked' and passed to the independent clinical statisticians.
Paraytec is awaiting the findings of the statistical analysis and
initial reporting of results, which had been agreed for end June,
but due to delays at the clinical statistician service provider,
are now expected in July 2023.
Paraytec's programme to apply the CX300 technology to a test for
the rapid diagnosis of bacteraemia causing sepsis is underway. An
important element of this work has been to meet some of the UK's
leading clinicians who design and implement the NHS treatment
standards for the diagnosis and treatment of sepsis.
These meetings have concluded that the first target for Paraytec
will be an instrument for the rapid detection of bacteria in a
blood sample and if bacteria are present, to report whether these
bacteria are classed as Gram-positive or Gram-negative.
Differentiation between these two classes of bacteria is novel and
invaluable to clinicians for a number of reasons: firstly, it will
greatly help clinicians identify the likely source of the
infection; secondly, different antibiotics are used to treat
Gram-positive or Gram-negative bacteria, allowing clinicians to
immediately target the best antibiotic treatment; thirdly, this
will reduce the use of broad spectrum antibiotics to treat
patients, as this can cause the bacteria present to rapidly
increase their antibiotic resistance, making it even more difficult
to treat the patient.
Paraytec's novel CX300 technology can be a major tool in the
sepsis threat to global health and, as previously reported,
proof-of-concept is expected to be completed by the end of this
year. Antibiotic Stewardship is a challenge to global health. It
demands the responsible and strategic use of antibiotics to
optimise patient outcomes, minimize the development of antibiotic
resistance and preserve the effectiveness of these valuable drugs
for future generations.
Other applications
The CX300 instrument is now CE marked for laboratory use and
marketed for sale, details of which are on Paraytec's website,
www.paraytec.com/cx-300/ . Instruments are being produced and
initially sales will be direct to customer by Paraytec's team. As
volumes grow, the Company will seek volume manufacturing partners
and distributors. In parallel with the CX300 instrument sales,
there is potential for a substantial consumable market, which
Paraytec intends to develop and exploit.
Together with Professor Carl Smythe and his team at Sheffield
University, Paraytec has commenced a programme to test and develop
a series of user applications for the CX300. The first in this
series concerns the analysis of protein aggregation and a Technical
Note "Therapeutic Antibody Aggregation Analysis using CX-300 and
ParaySelect(TM) " is now available on the Paraytec website (
www.paraytec.com ). This shows users how the CX300 can quantify
aggregation in the monoclonal antibody Herceptin (TM) within 60
seconds, using a remarkably small sample of 30 microlitres.
Paraytec has instruments ready to demonstrate this procedure and is
setting up a contract service to analyse samples on behalf of
researchers.
Herceptin(TM) is an important biopharmaceutical used to treat
early and advanced Her2+ cancers, including breast, stomach and
oesophageal cancer, either alone or as an antibody-drug conjugate.
Aggregation is to be avoided because it results in loss of
function, decreased solubility, and, most importantly, enhances
unwanted immunogenicity. Aggregate information is highly valuable
to medical protein producers, who need to know if the material is
denatured or aggregated before they use it in drug production. The
CX300 can greatly increase aggregate detection over current
methods, which would assist the research, development and
production of better-quality drugs and diagnostics, whilst saving
time and cost.
Phasefocus Holdings Limited (Braveheart owns 44.19% of the
company)
Phasefocus' patented imaging and analysis technology uses a
novel computational method for high fidelity Quantitative Phase
Imaging ("QPI") and advanced microscopy, known in the scientific
literature as "ptychography". The technology is useful for a wide
range of applications including live cell imaging, engineering
metrology and electron microscopy. The company's principal
offering, Livecyte(R), combines its QPI technology with integrated,
proprietary, analysis software for live cell analysis. What sets
this system apart from its counterparts is its unique ability to
continuously track thousands of individual cells and sustain cell
health and viability over prolonged durations. This fundamental
feature facilitates longitudinal studies involving live cells,
thereby permitting a more thorough exploration of dynamic cellular
processes. The system enables users to automatically characterize
growth, morphology, and motility of large populations of cells in a
96-well plate assay format.
We believe that the Livecyte (R) imaging and analysis system
https://www.phasefocus.com/livecyte is truly market leading . Its e
asy-to-use image processing and cell tracking algorithms allow cell
biologists to identify and track individual cells in real time .
Researchers can now monitor the effect of drugs on cell behaviour
over many days, identifying cell division events and subsequent
daughter cells.
Many drug treatments used in cancer therapy aim to: (1) disrupt
the cell cycle to stop the tumour growing; or (2) reduce the
probability of cells causing secondary cancers through metastasis.
Livecyte(R) has been demonstrated to provide novel measurements
crucial to assessing the performance of both therapy targets; cell
growth, proliferation and division events are useful for
understanding (1) and cell motion and migration characteristics are
valuable for (2).
Stem cells are extremely sensitive to DNA damage, which makes
them very challenging to image with most high-content cell analysis
systems which use high-power laser sources and fluorescent
labelling. Livecyte (R), with its QPI technology, produces high
contrast images without the need for fluorescent labels or a
high-powered illumination source, making it more suited to stem
cell research. Cells analysed with Livecyte(R) are also left viable
for subsequent downstream use, e.g. for further cell growth or
additional analysis.
Unlike comparative QPI systems, Livecyte (R) removes the need
for expensive consumables, reduces set up times, improves image
quality, expands the field of view and greatly reduces time to
results through real-time data analysis .
Two new Livecyte(R) applications have been developed by
Phasefocus in response to customer requests and are scheduled for
launch before the end of 2023. These will be marketed as
proprietary assays, to meet the needs of cell biologists testing
drug performance in immuno-oncology and neuroscience
applications.
Livecyte(R) systems are already being used in research
laboratories across the globe, with over 40 scientific research
papers featuring Livecyte(R) data published to date. There is
substantial further potential; the global live cell imaging market
is estimated to be $2.7 billion in 2023 and expected to grow at
CAGR of 10.2% over the period to 2028.
https://www.marketsandmarkets.com/Market-Reports/live-cell-imaging-market-163914483.html#::text=The%20global%20live%20cell%20imaging,
trend%20analysis%20of%20the%20market .
Kirkstall Limited (Braveheart owns 86.11% of the company)
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 New Approach Methodologies ("NAMs"),
which enable human-relevant drug safety decisions to be made
without the need for animal testing.
Kirkstall is committed to delivering alternatives to animal
testing into the hands and mind-sets of researchers worldwide. With
Quasi Vivo and its associated test assays, the Directors believe
that Kirkstall has the potential to change the research landscape.
Quasi Vivo(R) systems enable precise control of flow and pressure,
to provide a significantly more human relevant research environment
than competitor systems, which enables the use of human
cells/tissue slices in 2D or 3D constructs (scaffolds, gels or
spheroids) in long term toxicology, mechanistic and metabolic
studies.
Kirkstall's new QV1200 product was launched in February 2023 and
has already attracted strong interest from academic and commercial
customers. The QV1200 combines all of the most useful features of
the previous Kirkstall products: it is easy to set up; allows
single and multi-organ experiments; has an air-liquid interface
(e.g. for use on lung experiments) and a liquid-liquid interface
(e.g. for use on blood brain barrier experiments); has a standard
microplate compatible with lab equipment and uses the standard
wells for cell experiments. In addition, the QV1200 has an
increased throughput, allows for cell imaging and uses improved
biocompatible materials. The QV1200 culture chambers are single
use, allowing Kirkstall to benefit from repeat sales from each
customer.
Together with the launch of QV1200, Kirkstall has taken the
exciting step of establishing its own contract research
organisation (CRO) service to customers from its laboratory in
Sheffield. Kirkstall will use the power of its NAMs technology to
provide early stage, clinically transferrable data across a range
of applications, providing customers with greater confidence in the
success of their projects, at a fraction of the time and cost
www.kirkstall.com/contact-us/ .
Kirkstall's research team is developing toxicity test assays for
liver, lung and gut cells and will offer these to others, both
through its CRO service and by providing assay kit products for
other laboratories to use. In parallel work, researchers at Oxford
University are developing blood-brain barrier assays for Kirkstall.
The aim is to provide data to prove that QV1200 system replicates
the human physiology more effectively than other flow systems.
Kirkstall's products and services sit in the Cell Biology
Research and CRO markets, both of which are growing rapidly. The
global cell culture market size was USD 21.95 billion in 2021 and
is expected to surpass USD 52.65 billion by 2030 with a CAGR of
10.21% during the forecast period 2022 to 2030. The CRO market is
projected to reach USD 188.5 billion by 2030 from USD 73.4 billion
in 2022, at a CAGR of 12.5 %. Kirkstall's products support the
Early Phase
Development market which represents approximately 20% of this
market and is forecast to grow faster during this period due to the
increasing investment in the development of life-saving drugs.
https://www.fortunebusinessinsights.com/industry-reports/contract-research-organization-cro-services-market-100864
https://www.precedenceresearch.com/cell-culture-market
Listed Investments
At 31 March 2023, Braveheart held investments in the following
AIM listed companies:
-- Aukett Swanke Group plc (Braveheart owns 12.96% of the
company): a professional services group that principally provides
architectural and interior design services in the primary
international market sectors of offices, residential, education,
industrial, hospitality and mixed use or 'hybrid' developments.
-- Autins Group plc (Braveheart owns 15.98% of the company): an
industry-leading designer, manufacturer and supplier of acoustic
and thermal insulation solutions for the automotive industry and
other sectors.
-- Image Scan Group plc (Braveheart owns 7.05% of the company):
a specialist supplier of X-ray screening systems to the security
and industrial inspection markets.
-- Velocity Composites plc (Braveheart owns 1.26% of the
company): a UK based company and leading supplier of composite
material kits to aerospace and other high-performance
manufacturers.
Your Board believes these technology-driven companies each has a
significant opportunity to build sales and deliver profit. As
always, Braveheart is an active investor, regularly communicating
with their boards and seeking to introduce opportunities that help
deliver shareholder returns.
The Company also has a number of portfolio investments that are
smaller scale legacy investments. We will continue to manage these
investments and seek exits where appropriate.
Portfolio investments
The Company also has a number of portfolio investments that are
smaller scale legacy investments which we continue to manage and
seek exits where appropriate.
Prior-Year Restatement
Your Board has reviewed its accounting policy and concluded that
as Braveheart is an investment company and in accordance with IFRS
10, Kirkstall and Paraytec are not required to be consolidated and
thus these financial statements, including the prior year have been
restated to remove these previously consolidated entities.
Investment Strategy
When Braveheart became a company listed on AIM, the Admission
Document approved by shareholders on 27 March 2007 set out the
Investment Strategy which was appropriate to the business and the
market at that time. Over the years, Braveheart has moved away from
FCA regulated legacy fund management activities and has for some
years focused on making and managing direct investments made from
its own balance sheet resources. Your Board of directors now
considers that a New Investment Strategy is needed to reflect the
business opportunities and market conditions that the Company now
faces and recommends that this amendment to the Admission Document
be approved by shareholders at the forthcoming AGM.
Outlook
Shareholder funds are now deployed maximally to enhance the
attractiveness of our investments to potential acquirers. Intensive
work continues to further develop the attractiveness and value of
our 'cutting edge' science businesses. With the bait in the water,
masterful inactivity is probably the most appropriate stance for
your directors to take for now, as we wait for approaches.
Trevor Brown
Chief Executive Officer
30 June 2023
* Braveheart share price on 24/08/2015 was 7.5p and on 31/03/23
was 7.5p. Total dividend paid during the above period was 43.25p,
which equates to a CAGR of 28.59%.
**
https://www.londonstockexchange.com/indices/ftse-aim-all-share
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 GBP51,000 (2022: GBP64,000). Finance income was GBPNil (2022:
GBPNil), this being interest on outstanding loan notes within the
directly held portfolio.
As at 31 March 2023, the total number of directly held
investments in the portfolio of Strategic Investments and the
Portfolio Investments was 21 companies (2022: 18). The fair value
of the directly held portfolio was GBP9,458,000 (2022:
GBP4,937,000). During the year the group made investments of
GBP1,828,000 into six companies: Autins Group Plc, Aukett Swanke
Plc, Image Scan Holdings Plc, KDS Architecture Limited, Kirkstall
Limited and Phasefocus Holdings Limited.
Total income for the year ended 31 March 2023, including
realised gains and unrealised revaluation gains and losses, was
GBP2,958,000 (2022: GBP2,691,000).
The average number of employees remained at four during the
period under review. Employee benefits expense was GBP556,000
(2022: GBP534,000). Other operating and finance costs increased to
GBP283,000 (2022: GBP226,000).
The total profit after tax decreased to GBP1,585,000 (2022:
GBP1,883,000), equivalent to a basic profit per share of 2.68 pence
(2022: 4.02 pence).
Financial Position
The Group's net assets of GBP10,520,000 (2022:
GBP7,486,000).
At the year end, the Group had cash balances of GBP935,000
(2022: GBP1,853,000). There were no material borrowings.
A summary analysis of the Group's performance is as follows:
2023 2022
GBP'000 GBP'000
========================================== ======== ========
Investment management revenue and sales 51 64
Finance income 21 -
========================================== ======== ========
Income before portfolio movements 72 64
========================================== ======== ========
Profit on disposal of investments 171 60
Change in fair value of investments,
gain on disposal of investments and
movement in contingent liability 2,958 2,691
========================================== ======== ========
Total income of continuing activities 3,201 2,815
========================================== ======== ========
Employee benefits expense (including
share- based payments) (556) (534)
Other operating and finance costs (286) (228)
========================================== ======== ========
Total costs on continuing activities (842) (762)
Profit before tax - continuing 2,359 2,053
Tax (774) (170)
========================================== ======== ========
Total profit and total comprehensive
profit for the year 1,585 1,883
------------------------------------------ -------- --------
Opening cash balance 1,853 2,134
Investment in portfolio companies (1,529) (1,467)
Proceeds from sale of equity investments 428 246
Amount paid to BBB (6) (171)
Warrants and share options exercised - 7
Funds raised - net of share issue costs 930 2,416
Other activities (741) (1,312)
Closing cash balance 935 1,853
========================================== ======== ========
Net assets 10,520 7,487
========================================== ======== ========
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:
2023 2022
------
Cash ('GBP000) 935 1,853
Share price (pence) 6.75 17.75
Income ('GBP000) 51 64
Value of investments 9,458 4,937
---------------------- ------ ------
Principal Risks and Uncertainties
Through its operations the Group is exposed to a number of
risks. The Group's risk management objectives and policies are
described in the Corporate Governance Statement. Braveheart is
ensuring that all necessary steps have been taken to maintain the
integrity of the Company's assets and the health and well-being of
our employees.
Section 172 Statement
Section 172 (1) of the Companies Act obliges the Directors to
promote the success of the Company for the benefit of the Company's
members as a whole. This section specifies that the Directors must
act in good faith when promoting the success of the Company and in
doing so, have regard (amongst other things) to:
a. the likely consequences of any decision in the long term,
b. the interests of the Company's employees,
c. the need to foster the Company's business relationship with
suppliers, customers and others,
d. the impact of the Company's operations on the community and
environment,
e. the desirability of the Company maintaining a reputation for
high standards of business conduct, and
f. the need to act fairly between members of the Company.
The Board of Directors is collectively responsible for
formulating the Company's strategy, which is to provide advisory
services to SMEs and invest in businesses where prospects appear to
be exceptional and deliver growth to its shareholders.
The Board places equal importance on all shareholders and
strives for transparent and effective external communications,
within the regulatory confines of an AIM-listed company. The
primary communication tool for regulatory matters and matters of
material substance is through the Regulatory News Service, ("RNS").
The Company's
website is also updated regularly and provides further details
on the business as well as links to helpful content such as our
latest investor presentations.
Our employees are one of the primary assets of our business and
will be critical to the future success of the Company. First and
foremost, the Directors strive to ensure a safe working environment
for all its staff and contractors, and we are proud of our safety
achievements in 2022/23. We also seek to reward employees with
remuneration packages which align the interests of the Company and
its shareholders with those of employees. Employees are also
provided with challenging work and external training opportunities
to ensure their continual development.
The Directors believe they have acted in the way they consider
most likely to promote the success of the Company for the benefit
of its members as a whole, as required by Section 172 (1) of the
Companies Act 2006.
On behalf of the Board
Trevor E Brown
Chief Executive Officer
30 June 2023
Consolidated Statement of comprehensive INCOME for the year
ended 31 March 2023
Restated
2023 2022
Notes GBP GBP
Revenue from contracts with customers 3 50,902 64,257
Change in fair value of investments 5 2,957,665 2,690,598
Profit on disposal of investments 5 170,576 60,414
Total income 3,179,143 2,815,269
------------------------------------------- ------ ---------- ----------
Employee benefits expense (556,146) (534,240)
Other operating costs (283,356) (225,780)
------------------------------------------- ------ ---------- ----------
Total operating costs (839,502) (760,020)
------------------------------------------- ------ ---------- ----------
Finance costs (2,154) (1,721)
Finance income 21,003 88
------------------------------------------- ------ ---------- ----------
Total costs (820,653) (761,653)
------------------------------------------- ------ ---------- ----------
Profit before tax 2,358,490 2,053,616
=========================================== ====== ========== ==========
Tax (773,652) (170,398)
Profit from continuing operations 1,584,838 1,883,218
------------------------------------------- ------ ---------- ----------
Total profit and total comprehensive loss
for the year 1,584,838 1,883,218
------------------------------------------- ------ ---------- ----------
Profit attributable to :
Equity holders of the parent 1,584,838 1,883,218
1,584,838 1,883,218
------------------------------------------- ------ ---------- ----------
Earnings per share Pence Pence
- basic 4 2.68 4.02
- diluted 4 2.68 3.38
The accompanying accounting policies and notes form part of
these financial statements.
consolidated statement of financial position as at 31 March
2023
Restated Restated
2023 2022 2021
Notes GBP GBP GBP
ASSETS
Non-current assets
Property, plant and equipment 418 796 421
Investments at fair value
through profit or loss 5 9,458,324 4,937,155 834,922
Debtors due in over one year 1,155,200 813,200 317,200
10,613,942 5,751,151 1,152,543
------------------------------- ------ ------------ ---------- ----------
Current assets
Trade and other receivables 64,510 211,782 188,921
Cash and cash equivalents 7 934,861 1,852,742 2,133,746
------------------------------- ------ ------------ ---------- ----------
999,371 2,064,524 2,322,667
------------------------------- ------ ------------ ---------- ----------
Total assets 11,613,313 7,815,675 3,475,210
=============================== ====== ============ ========== ==========
LIABILITIES
Current liabilities
Trade and other payables (149,656) (158,761) (473,173)
(149,656) (158,761) (473,173)
------------------------------- ------ ------------ ---------- ----------
Non-current liabilities
Deferred taxation (944,050) (170,398) -
------------------------------- ------ ------------ ---------- ----------
Total liabilities (1,093,706) (329,159) (473,173)
=============================== ====== ============ ========== ==========
Net assets 10,519,607 7,486,516 3,002,037
------------------------------- ------ ------------ ---------- ----------
EQUITY
Called up share capital 4 1,274,469 1,044,807 766,148
Share premium reserve 4 5,370,711 4,371,343 2,226,671
Share based payment reserve 471,203 309,835 137,200
Retained earnings 3,403,224 1,760,531 (127,982)
------------------------------- ------ ------------ ---------- ----------
Equity attributable to owners
of the Parent 10,519,607 7,486,516 3,002,037
Total equity 10,519,607 7,486,516 3,002,037
------------------------------- ------ ------------ ---------- ----------
The accompanying accounting policies and notes form part of
these financial statements.
Consolidated Statement of CAsh flows for the year ended 31 March
2023
Restated
2023 2022
GBP GBP
Operating activities
Profit before tax 2,358,490 2,053,616
Adjustments to reconcile profit before tax
to net cash flows from operating activities
Share based payment 219,223 177,930
Increase in the fair value movements of investments (2,957,665) (2,690,598)
Profit on disposal of equity investments (170,576) (60,414)
Investment movement owed to BBB 6,801 41,265
Depreciation and amortisation 378 271
Interest income (21,003) (138)
Increase in trade and other receivables (194,728) (518,861)
Decrease in trade and other payables (9,106) (314,412)
------------------------------------------------------- ------------ ------------
Cash flow from operating activities (768,186) (1,311,341)
------------------------------------------------------- ------------ ------------
Investing activities
Proceeds from sale of investments 428,066 245,871
Amount paid to BBB - (170,887)
Purchase of investments (1,529,127) (1,467,469)
Purchase of tangibles - (646)
Interest received 21,003 138
------------------------------------------------------- ------------ ------------
Net cash flow from investing activities (1,080,058) (1,392,993)
------------------------------------------------------- ------------ ------------
Financing activities
Warrants and share options exercised - 7,480
Funds raised, net of share issue costs 930,363 2,415,850
Net cash flow from financing activities 930,363 2,423,330
------------------------------------------------------- ------------ ------------
Net decrease in cash and cash equivalents (917,881) (281,004)
Cash and cash equivalents at the beginning
of the year 1,852,742 2,133,746
------------------------------------------------------- ------------ ------------
Cash and cash equivalents at the end of the
year 934,861 1,852,742
------------------------------------------------------- ------------ ------------
During the year, there were two share for share exchanges
involving Aukett Swanke plc that resulted in additional non cash
investment of GBP298,668 and an equal uplift in share capital and
share premium.
The accompanying accounting policies and notes form part of
these financial statements.
Consolidated Statement of ChAnges in Equity for the year ended
31 March 2023
Share
Called Share based Retained Non-controlling
up Share Premium payment Earnings/ interest Total
Capital Reserve Reserve (Deficit) Total Equity
GROUP GBP GBP GBP GBP GBP GBP GBP
At 1 April 2021 766,148 2,226,671 137,200 (559,897) 2,570,122 (6,025) 2,564,097
----------------------- ---------- ----------- --------- ----------- ----------- ------------------ -----------
Prior year adjustment - - - 431,915 431,915 6,025 437,940
----------------------- ---------- ----------- --------- ----------- ----------- ------------------ -----------
At 1 April 2021
restated 766,148 2,226,671 137,200 (127,982) 3,002,037 - 3,002,037
----------------------- ---------- ----------- --------- ----------- ----------- ------------------ -----------
Profit and total
comprehensive profit
for the year - - - 1,883,218 1,883,218 1,883,218
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 1,888,513 4,484,479 4,484,479
----------------------- ---------- ----------- --------- ----------- ----------- ------------------ -----------
At 1 April 2022
restated 1,044,807 4,371,343 309,835 1,760,531 7,486,516 7,486,516
======================= ========== =========== ========= =========== =========== ================== ===========
Profit and total
comprehensive profit
for the year - - - 1,584,838 1,584,838 1,584,838
Allotment of shares 229,662 1,034,118 - - 1,263,780 1,263,780
Cost of shares
issued - (34,750) - - (34,750) (34,750)
Share based payments - - 219,223 - 219,223 219,223
Transfer to retained
earnings - - (57,855) 57,855 - -
----------------------- ---------- ----------- --------- ----------- ----------- ------------------ -----------
Transactions with
owners, recognised
directly in equity 229,662 999,368 161,368 1,642,693 3,033,091 3,033,091
----------------------- ---------- ----------- --------- ----------- ----------- ------------------ -----------
At 31 March 2023 1,274,469 5,370,711 471,203 3,403,224 10,519,607 10,519,607
----------------------- ---------- ----------- --------- ----------- ----------- ------------------ -----------
Share capital is the number of shares issued in the company at
their nominal value. The share premium account represents the gross
proceeds from issue of shares, less their nominal value.
Notes to the financial statements for the year ended 31 March
2023
1 Corporate information
The Group and Company financial statements of Braveheart
Investment Group plc (the Company) for the year ended 31 March 2023
were authorised for issue by the Board of Directors on 30 June 2023
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.
2 Accounting policies
(a) 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), which is also the functional
currency of the company and its subsidiaries, except where
otherwise indicated.
The Group's business activities (together with the factors
likely to affect its future development, performance and position)
and its financial position is set out in the Chief Executive
Officer's Report. The Group's risk management objectives and
policies are described in the Corporate Governance Statement .
Further information regarding the Group's financial risk management
objectives and policies, including those in relation to credit
risk, liquidity risk and market risk, is provided in n ote 21 to
the financial statements. The Group's capital management objectives
are stated on page 47, note (n).
3 Revenue from contracts with customers
Revenue is attributable to the principal activities of the
Group. In 2023 and 2022, all revenue arose within the United
Kingdom.
Restated
Group Group
2023 2022
GBP GBP
Investment management 15,000 21,167
Monitoring fees 3,600 -
Consultancy 32,302 43,090
50,902 64,257
----------------------- ------- ---------
Of the revenue stated above, GBP32,302 (2022: GBP43,090) 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 Monitoring
management fee Consultancy Total
2023
Timing of
revenue recognition
At a point
in time 15,000 3,600 - 18,600
Over time - - 32,302 32,302
============ =========== ============ =======
15,000 3,600 32,302 50,902
============ =========== ============ =======
2022 Restated
Timing of
revenue recognition
At a point
in time 21,167 - - 21,167
Over time - - 43,090 43,090
============ =========== ============ =======
21,167 - 43,090 64,257
============ =========== ============ =======
4 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:
Restated
2023 2022
GBP GBP
Profit for the year 1,584,838 1,883,218
----------------------------------------------- ----------- -----------
Weighted average number of ordinary shares in No. No.
issue:
For basic profit per ordinary share 59,104,950 46,870,999
Potentially dilutive ordinary shares - 1,633,195
----------------------------------------------- ----------- -----------
For diluted earnings per ordinary share 59,104,950 48,504,194
----------------------------------------------- ----------- -----------
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 Nil (2022: 1,633,195) 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.
5 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
GROUP GBP GBP GBP GBP GBP GBP
At 1 April 2021
Restated - - - 834,922 - 834,922
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 1 April 2022
Restated 1,133,854 - - 3,803,301 - 4,937,155
Additions at Cost 1,177,139 - - 650,656 - 1,827,795
Disposals (257,490) - - - - (257,490)
Amount owed to
creditors - - - (6,801) - (6,801)
Change in Fair Value (41,626) - - 2,999,291 - 2,957,665
----------------------- ------------- ------------- ----------------- ------------- ----------------- ----------
At 31 March 2023 2,011,877 - - 7,446,447 - 9,458,324
----------------------- ------------- ------------- ----------------- ------------- ----------------- ----------
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 GBP24,242 would be due to the British
Business Bank on disposal. This liability is shown in the accounts
within other creditors.
5 Investments at fair value through profit or loss
(continued)
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
COMPANY GBP GBP GBP GBP GBP GBP
At 1 April 2021
Restated - - - 731,366 - 731,366
Additions at Cost 1,420,534 - - 46,935 - 1,467,469
Disposal - - - (126) - (126)
Change in Fair Value (286,680) - - 2,980,518 - 2,693,838
---------------------- ------------- ------------- ----------------- ------------- ----------------- ----------
At 1 April 2022
Restated 1,133,854 - - 3,758,693 - 4,892,547
Additions at Cost 1,177,139 - - 650,717 - 1,827,856
Disposal (257,490) - - - - (257,490)
Change in Fair Value (41,626) - - 3,002,195 - 2,960,569
---------------------- ------------- ------------- ----------------- ------------- ----------------- ----------
At 31 March 2023 2,011,877 - - 7,411,605 - 9,423,482
---------------------- ------------- ------------- ----------------- ------------- ----------------- ----------
As at 31 March 2023, the group total value of investments in
companies was GBP9,458,324 (2022: GBP4,937,155). The group total
change in fair value during the year was a profit of GBP2,957,665
(2022: profit GBP2,690,598).
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 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 for level 3 investments are
broken down as follows:
% of
portfolio
valued
on this
Methodology Description Inputs Adjustments basis
-------------- --------------------- ----------------------- ---------------------- ------------
A liquidity
discount is
applied, typically
15%. Where
last funding
Used for unquoted round is greater
investments where than twelve
there has been months then
a funding round, further discounts
generally within The price of ranging between
the last twelve the most recent 0% and 100%
Fund Raising months investment are applied. 2.4%
-------------- --------------------- ----------------------- ---------------------- ------------
The fair value
of debt investment
is deemed to
be cost less Impairment
Debt/Loan any impairment provision if
notes Loan investments provision deemed necessary 0.7%
-------------- --------------------- ----------------------- ---------------------- ------------
Long term cash
flows are discounted
at a rate considered
appropriate
Used for companies for the business,
with long-term typically 25%.
cash flows and Revenue multiples
Discounted having comparable are typically A liquidity
cash flow transactions/ 5 to 10 times discount is
and revenue companies in of forward looking applied, typically
multiples the listed segment revenue. 20% 96.9%
-------------- --------------------- ----------------------- ---------------------- ------------
Group Group
Change in fair value in the year: 2023 2022
GBP GBP
Fair value gains 4,722,538 2,982,077
Fair value losses (1,764,873) (291,479)
--------------------------------------------------------------- -------------------- --------------
2,957,665 2,690,598
--------------------------------------------------------------- -------------------- --------------
The gain in the year came from the uplift of the valuations in
Phasefocus Holdings, Paraytec and Kirkstall
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 (2022: GBPnil).
The Company holds a 100% aggregate holding in Paraytec Limited,
which develops high performance specialist detectors for the
analytical and life sciences instrumentation market. The valuation
of Paraytec has been reviewed following new patent filing of
intellectual property, launch of its new product and associated
business plans. The Company is represented on the board. The
carrying value of Paraytec GBP3,038,625 (2022: GBP220,622).
The Company holds a 86% aggregate holding in Kirkstall Limited,
a biotechnology company which developed a system of interconnected
chambers for cell and tissue culture in laboratories. The valuation
of Kirkstall has been reviewed following development of new
intellectual property, patent application and launch of its new
product and associated business plans. The Company is represented
on the Board. The carrying value of Kirkstall is GBP1,678,844
(2022: GBPNil).
The Company holds a 42% aggregate holding on PhaseFocus 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, neither this shareholding nor the representative
entitles the Company to exert a significant or dominant influence
over PhaseFocus. The valuation method has changed following
consultation with Phasefocus representatives and their advisers.
The carrying value of Phase Focus is GBP2,502,512 (2022:
GBP3,418,573).
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 (2022: GBP33).
The Company holds a 38.65% aggregate holding in KDS Architecture
Limited, a company which provides architectural services. The
Company is not represented on the Board or within management of KDS
Architecture and in the opinion of the directors, this shareholding
does not entitle the Company to exert a significant or dominant
influence over KDS Architecture. The carrying value of KDS
Architecture is GBP76,074 (2022: GBPnil).
The registered addresses for these entities are as follows:
Verbalis Limited Frostineb Cottage, Fala, Pathhead, Midlothian,
Scotland, EH37 5TB
Paraytec Limited York House, Outgang Lane, Osbaldwick, York,
England, YO19 5UP
Kirkstall Limited York House, Outgang Lane, Osbaldwick, York,
England, YO19 5UP
Gyrometric Systems Limited Dockholme Lock Cottage, 380 Bennett
Street, Long Eaton, Nottingham, England, NG10 4JF
Phasefocus Holdings Limited 125 Wood Street, London, England, EC2V 7AW
Sentinel Medical Limited York House, Outgang Lane, Osbaldwick, York, England, YO19 5UP
KDS Architecture Limited 42 Lytton Road, Barnet, England, EN5 5BY
6 Investment in subsidiaries
The Company has the following interests in subsidiary
undertakings:
Country % Interest
Name of Incorporation Nature of Business
------------------------------------------ ------------------- ------------------------- -----------
Caledonia Portfolio Realisations
Limited (i) Scotland Investment management 100%
Braveheart Academic Seed Funding
GP Limited (i) England Investment management 100%
Ridings Holdings Limited (i) England Investment management 100%
The Ridings Early Growth Investment
Company Limited (ii) England Investment management 100%
Development of high
performance specialist
Paraytec Limited (iii) England detectors 100%
Kirkstall Limited (iii) England Biotechnology 86%
Combrook Holdings England Investment management 60%
(i) Direct subsidiary of Braveheart
Investment Group plc
(ii) Indirect subsidiary of Braveheart
Investment Group plc
(iii) Not consolidated
Group entities act as General Partner to, and have an interest
in, the following limited partnerships:
Place of % Interest
Name Business
-------------------- ----------- -----------
Lachesis Seed Fund England 0%
The registered addresses for the subsidiary undertakings are as
follows:
Caledonia Portfolio Realisations Limited 1 George Square,
Glasgow, Scotland, G2 1AL
Braveheart Academic Seed Funding GP Limited One Fleet Place,
London, EC4M 7WS
Ridings Holdings Limited One Fleet Place, London, EC4M 7WS
The Ridings Early Growth Investment Company Limited One Fleet
Place, London, EC4M 7WS
Paraytec Limited York House, Outgang Lane, Osbaldwick, York,
North Yorkshire, YO19 5UP
Kirkstall Limited York House, Outgang Lane, Osbaldwick, York,
North Yorkshire, YO19 5UP
Combrook Holdings Limited Old Linen Court, 83-85 Shambles
Street, Barnsley,South Yorkshire, England, S70 2SB
7 Cash and cash equivalents
Restated Restated
Group Group Company Company
2023 2022 2023 2022
GBP GBP GBP GBP
Cash at bank and on hand 934,861 1,852,742 684,532 1,602,140
========================== ======== ========== ======== ==========
Cash balances are held with HSBC Bank plc and earn interest at
floating rates based on daily bank deposit rates.
8 Prior year adjustment
The accounts have been restated in order to take Kirkstall
Limited and Paraytec Limited out of the group accounts. IFRS 10
provides mandates that an investment entity shall not consolidate
its subsidiaries or apply IFRS 3 when it obtains control of another
entity, excluding any subsidiary that is itself an investment
entity and whose main purpose and activities are providing services
that relate to the investment entity's investment activities. As
such, the consolidation of Kirkstall Ltd and Paraytec Ltd in the
prior year's financial statements is deemed to be not in accordance
with IFRS 10 and as such requires correction and the prior-year
figures should be restated to reflect this change. The effects are
stated below.
Changes to the Consolidated Statement of Financial Position
As previously Adjustment Adjustment Restated
at at
reported 1 April 31 March 31 March
2021 2022 2022
GBP GBP GBP GBP
Non current assets
Property, plant and equipment 1,776 (1,745) 765 796
Intangible assets 26,103 (28,152) 2,049 -
Goodwill 205,775 (205,775) - -
Investments at fair value through
profit or loss 4,716,080 221,075 - 4,937,155
Debtors due in over one year - 371,200 442,000 813,200
8 Prior year adjustment (Continued)
As previously Adjustment Adjustment Restated
at at
Reported 1 April 31 March 31 March
31 March 2021 2022 2022
2022
GBP GBP GBP GBP
Current assets
Inventory 90,113 (98,441) 8,328 -
Trade and other receivables 123,412 (69,292) 157,662 211,782
Cash and cash equivalents 1,893,931 (9,120) (32,069) 1,852,742
Current liabilities
Trade and other payables (272,432) 117,906 (4,235) (158,761)
Deferred income (7,025) 41,843 (34,818) -
-------------- -------------- ----------- ----------
Equity
Retained earnings 899,202 431,915 429,414 1,760,531
Total equity 6,607,335 437,940 441,241 7,486,516
-------------- -------------- ----------- ----------
Changes to the consolidated
income statement
As previously Restated
Reported Adjustment 31 March
31 March 2022
2022
GBP GBP GBP
Total income 185,814 (121,557) 64,257
Total costs (1,390,801) 629,148 (761,653)
Tax (104,048) (66,350) (170,398)
Profit for the year 1,441,977 441,241 1,883,218
-------------- ----------- ----------
Changes to the consolidated cash flow
As previously Restated
Reported Adjustment 31 March
31 March 2022
2022
GBP GBP GBP
Cash flow from operating activities (1,269,438) (41,903) (1,311,341)
Net cash flow from investing
activities (1,402,827) 9,834 (1,392,993)
Net cash flow from financing
activities 2,423,330 - 2,423,330
-------------- ----------- ------------
Net decrease in cash and cash
equivalents (248,935) (32,069) (281,004)
Cash and cash equivalents at
the beginning of the year 2,142,866 (9,120) 2,133,746
Cash and cash equivalents at
the end of the year 1,893,931 (41,189) 1,852,742
-------------- ----------- ------------
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