TIDMECP
RNS Number : 6983N
Eight Capital Partners PLC
26 September 2019
26 September 2019
EIGHT CAPITAL PARTNERS PLC
("Eight Capital" or the "Company")
UNAUDITED INTERIM REPORT FOR THE SIX MONTHSED 30 JUNE 2019
Eight Capital Partners plc (NEX: ECP), is pleased to announce
its consolidated interim results for the half year ending 30 June
2019.
-- Successful launch of Corporate Bond of up to EUR5 million on the Vienna Stock Exchange
-- Bond sales of EUR2.8 million to date
-- Acquisition of EUR2 million receivable giving exposure to prospective flotations
-- Group sales of GBP282,000
-- GBP90,000 pre-tax loss before GBP215,000 negative fair-value adjustment
Chairman's Interim Report
I am very pleased to report on the Company's Interim results for
the six months to 30 June 2019.
Eight Capital Partners plc (the "Company" or "Eight Capital") is
an investment company. Its objective is to generate an attractive
rate of return for shareholders, predominantly through capital
appreciation, by taking advantage of opportunities principally to
invest in the technology, media, and telecom or financial services
sectors.
Since I last reported to you in May of this year, the Company
has made significant progress in obtaining working capital and
broadening its investment base. These are more fully explained in
note 9 to the financial results below and in our RNS announcements;
however, to summarise:
The Company launched a bond of up to EUR5 million on the Vienna
Stock Exchange after the six month reporting period, at the end of
July and has, to date, placed EUR2.8 million.
The Company has acquired, for EUR1.9 million, a receivable of
EUR2 million due from Finance Partners Group SPA (FPG), which has
investments in two companies which are expected to obtain a listing
on a prominent European stock exchange. The Company intends to
convert this receivable into equity in FPG to gain exposure to the
two flotations; furthermore, it has an option to acquire a further
receivable tranche of EUR2 million. This transaction completed
after this reporting period.
During the period under review, the Company also invested, by
way of an acquisition of a 70% interest, in Epsion Capital Ltd,
(Epsion) a boutique advisory business, where John Treacy, one of
Eight Capital's directors is both the remaining shareholder and a
director. Due to the Company's current holding in Epsion, the
investment is consolidated, however, the Company is not involved
with the operations of Epsion. Epsion had sales to third parties of
over GBP280,000 during the period up to 30 June this year with high
margins and we expect it to make a significant contribution to the
Group in terms of revenue and equity value as we go forward.
The results for the period were a consolidated loss before tax
of GBP90,000 (compared to a loss of GBP190,000 for the same period
in 2018) prior to impairing an earlier investment. The fair value
adjustments relating to Abal plc and Sport Capital Group plc were a
negative GBP215,000. This is mainly due to Abal having announced
that its shares were being suspended whilst it seeks an appropriate
reverse-takeover to satisfy AIM Rule 14, having become an AIM Rule
15 Cash Shell in late 2018. We will be updating the market in due
course as matters progress. Neither Abal plc nor Sport Capital
Group plc have been equity accounted in the Company's consolidated
results as the Board does not feel it exercises the relevant level
of control to justify that treatment.
The Company is analysing its next investment on which it expects
to update shareholders in the coming months.
In conclusion, the Company is well-funded and it has broadened
its investment base which has, for the first time, recorded
profitable revenues. These are all positive indicators.
Dominic White
Chairman
The directors of the Company take responsibility for this
announcement.
For further information, please contact:
Eight Capital Partners plc +44 20 3808 0029
Dominic White info@eight.capital
John Treacy
NEX Exchange Growth Market Corporate
Adviser
Cairn Financial Advisers LLP +44 (0) 20 7213 0880
Jo Turner / David Coffman
Financial PR
Damson PR +44 (0)20 7812 0645
Abigail Stewart-Menteth eightcapitalplc@damsonpr.com
Eight Capital Partners plc
Consolidated Statement of total comprehensive income
for the six months ended 30 June 2019
Six months ended 30 June Six months ended 30 June Year ended
2019 2018 31 December 2018
Unaudited Unaudited Audited
Note GBP'000 GBP'000 GBP'000
Income
Revenue 2 282 - -
Interest income 4 - 3
Net change in unrealised
gains on investments at
fair value through profit
and loss - - 148
Total income 286 - 151
----------------------------- ----------------------------- ------------------
Cost of sales (120) - -
Net change in unrealised (215)
losses on investments at
fair value through profit
and loss - -
Loss on disposal of (2)
investments - -
Administrative expenses (253) (190) (434)
Loss from operations (304) (190) (7)
----------------------------- ----------------------------- ------------------
Finance expense (2) - -
-----------------------------
Loss before tax (306) (190) (7)
Tax expense 3 (12) - -
Loss for the period (318) (190) (7)
Total comprehensive loss
attributable to: Equity
holders of the parent
company (333) (190) (7)
Non-controlling interests 15 - -
----------------------------- ----------------------------- ------------------
(318) (190) (7)
----------------------------- ----------------------------- ------------------
Loss per share attributable
to the equity holders of the
parent
Basic and diluted (pence): 4 (0.060) (0.038) (0.001)
Eight Capital Partners Plc
Consolidated Statement of financial position at 30 June 2019
As at As at As at
30 June 2019 Unaudited 30 June 2018 Unaudited 31 December 2018
GBP'000 GBP'000 Audited
Note GBP'000
Current assets
Trade and other receivables 232 9 16
Investments 6 425 - 582
Cash and cash equivalents 18 773 91
Total current assets 675 782 689
------------------------ ------------------------ ------------------
Total assets 675 782 689
------------------------ ------------------------ ------------------
Current liabilities
Trade and other payables 261 43 18
Total current liabilities 261 43 18
------------------------ ------------------------ ------------------
Provisions 12 - 3
Total liabilities 273 43 21
------------------------ ------------------------ ------------------
Net assets 402 739 668
------------------------ ------------------------ ------------------
Equity
Share Capital 7 1,360 1,383 1,350
Share premium account 1,894 1,891 1,891
Convertible loan notes 8 85 - 48
Share option and warrant reserve 8 276 8
Retained earnings (2,962) (2,811) (2,629)
Non-controlling interests 17 - -
Total equity 402 739 668
------------------------ ------------------------ ------------------
Eight Capital Partners Plc
Notes to the Interim Consolidated Financial Statements
For the six months ended 30 June 2019
1. Accounting policies
Basis of preparation
These interim consolidated financial statements have been
prepared in accordance with the principles of applicable United
Kingdom accounting standards, including Financial Reporting
Standard 102 - 'The Financial Reporting Standard applicable in the
United Kingdom and Republic of Ireland' ('FRS 102').
They do not include all disclosures that would otherwise be
required in a complete set of financial statements and should be
read in conjunction with the 2018 annual report. The statutory
financial statements for the year ended 31 December 2018 were
prepared in accordance with FRS 102 and in accordance with the
requirements of the Companies Act 2006. The auditors reported on
those financial statements; their Audit Report was unqualified.
The interim financial information is unaudited and does not
constitute statutory accounts as defined in the Companies Act
2006.
The interim financial information was approved and authorised
for issue by the board of directors on 25 September 2019.
Going concern
As an investment business, the Company has limited operating
cash flow and is dependent on the performance of its investments
and convertible bond facilities for its working capital
requirements. Annualised normal running costs of the Company,
excluding commissions on capital-raising, are currently circa
GBP320,000. As at the date of this report, the Company had free
cash reserves in excess of GBP 1 million following the launch of
its corporate bond.
The Directors are therefore of the opinion that the Company has
adequate financial resources to enable it to continue in operation
for the foreseeable future. For this reason, it continues to adopt
the going concern basis in preparing the financial statements.
Basis of consolidation
The consolidated financial information incorporates the
financial statements of the Company and its subsidiary, Epsion
Capital Limited. Subsidiaries are entities over which the Group has
control. The Group controls an investee if the Group has power over
the investee, exposure to variable returns from the investee, and
the ability to use its power to affect those variable returns.
Control is reassessed whenever facts and circumstances indicate
that there may be a change in any of these elements of control.
Subsidiaries are consolidated from the date on which control is
obtained by the Group up to the effective date on which control is
lost, as appropriate.
2. Revenue
Six months ended 30 June 2019 Six months ended 30 June 2018 Year ended
GBP'000 GBP'000 31 December 2018
GBP'000
Product sales 246 - -
Commission income 10 - -
Services income 26 - -
Total revenue 282 - -
------------------------------ ------------------------------ ------------------
3. Income tax
Six months ended 30 June 2019 Six months ended 30 June 2018 Year ended
GBP'000 GBP'000 31 December 2018
GBP'000
Current tax expense
UK corporation tax at 19% 12 - -
Total tax expense 12 - -
------------------------------ ------------------------------ ------------------
4. Earnings per share
Six months ended 30 June 2019 Six months ended 30 June 2018 Year ended
GBP'000 GBP'000 31 December 2018
GBP'000
Loss for the year attributable
to owners of the Company (333) (190) -
Weighted average number of
shares:
Basic and diluted (number) 553,024,641 495,166,760 522,413,335
Earnings per share (pence) (0.060) (0.038) (0.001)
------------------------------ ------------------------------ ------------------
The basic and diluted earnings per share were determined by
dividing the loss attributable to the equity holders of the Company
by the weighted average number of shares outstanding during the
periods. Dilutive instruments are ignored when the overall result
is a loss.
5. Subsidiary investment
On 8 March 2019, the Company subscribed for new ordinary shares
in Epsion Capital Limited ("Epsion"), a boutique financial advisory
and investment firm based in London, equating to 70 per cent. of
the share capital of Epsion. The consideration for the new shares
was GBP3,500.
The activities of Epsion have been consolidated with effect from
the date of acquisition of the interest.
Epsion contributed GBP282,000 of revenue for the period between
the date of acquisition and the balance sheet date and GBP63,000 of
profit before tax.
John Treacy, a Non-executive Director of Eight Capital, is also
the sole director and 30% shareholder of Epsion, therefore, the
investment in Epsion constituted a related-party transaction
pursuant to the NEX Exchange Growth Market Rules for Issuers.
6. Investments
Fair value Net change Fair value
at Conversion Realised in unrealised at
31 December of Convertible gains gains/ 30 June
2018 Purchases Loan Notes / (losses) (losses) 2019
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Quoted equity
securities:
Abal Group plc 233 - 165 (2) (207) 189
Sport Capital
Group plc 82 60 - - (8) 134
------------- ----------- --------------- ------------------------- --------------- -----------
315 60 165 (2) (215) 323
------------- ----------- --------------- ------------------------- --------------- -----------
Quoted debt
securities:
Finance
Partners
Group: S.p.A.
corporate
bonds 102 - - - - 102
Abal Group plc:
Convertible
loan
notes 165 - (165) - - -
------------- ----------- --------------- ------------------------- --------------- -----------
267 - (165) - - 102
------------- ----------- --------------- ------------------------- --------------- -----------
Total
investments 582 60 - (2) (215) 425
------------- ----------- --------------- ------------------------- --------------- -----------
Abal Group plc:
The Investment in Abal Group plc (AIM: ABAL) comprises
22,256,725 ordinary shares of 0.002p representing approximately
22.0 per cent of the company's share capital.
Conversion of Abal Group loan notes
In January 2019, the Company converted the convertible loan
notes in Abal Group plc into 8,311,270 ordinary shares in the
company, bringing the Company's interest to approximately 22.6 per
cent. of the company's issued share capital.
On 10 January 2018 the Company sold 600,000 shares in Abal Group
for a consideration of GBP8,000, bringing the Company's interest to
approximately 22.0 per cent. of the company's issued share
capital.
The Company's investment has not been treated as an associated
company as it does not participate in the policy-making process,
including participation in decisions about dividends or other
distributions
Sport Capital Group plc:
Sport Capital Group plc (NEX: SCG) is an investment vehicle
focused on sports and leisure sectors, including associated
intellectual property and media, and infrastructure, such as real
estate. The investment comprises 29,833,333 ordinary shares of
GBP0.01 each, representing 25.3% per cent of Sport Capital Group's
issued share capital.
In January 2019, the Company completed the purchase of
13,333,333 shares at a price of 0.45 pence, for a total
consideration of GBP60,000. The completion of this transaction, as
announced on 6 December 2019, was subject to certain conditions
that were subsequently met.
The Company's investment has not been treated as an associated
company as it does not participate in the policy-making process,
including participation in decisions about dividends or other
distributions
Finance Partners Group S.p.A.:
The investment in Finance Partners Group S.p.A. ("FP Group"), a
regulated Italian financial services company, comprises EUR111,100
of listed 8% yielding FP Group corporate bonds, expiring in
2020.
FP Group's regulated fund manager has permissions to operate a
range of funds including real estate funds, hedge funds and other
alternative investment funds. FP Group has granted a pledge over
20% of the shares of its advisory arm, Financial Innovations Team
SPA, as additional security for the corporate bonds.
Value Added Fund, a significant shareholder in Eight Capital, is
a sub-fund of Cosmos SICAV Plc ("Cosmos"). Cosmos is an umbrella
collective investment scheme that administers a number of
sub-funds, each with its own investors, board and management.
7. Share capital
Movements in Ordinary share capital during the period are
summarised below:
Number of Ordinary Nominal value
Shares of 0.01p GBP'000
------------------- ---------------
As at 31 December 2018 540,166,760 54
Issued during the period 93,091,058 10
As at 30 June 2019 633,257,818 64
------------------- ---------------
In June 2019, Cosmos SICAV plc Value Added Fund converted
GBP13,155.83 of the Convertible Bond facility (see Note 7 below)
announced on 26 October 2018 into 93,091,058 ordinary shares in the
Company.
Movements in Deferred share capital are summarised below:
Number of Deferred Nominal value
Shares of 0.24p GBP'000
---------------
As at 1 January 2018 - -
Sub-division of Ordinary Shares 540,166,760 1,296
As at 31 December 2018 and
30 June 2019 540,166,760 1,296
------------------- ---------------
8. Convertible Loan Notes
Convertible bonds
GBP'000
As at 1 January 2018 -
Issued in the year 48
As at 31 December 2018 48
Issued in the period 50
Converted in the period (13)
As at 30 June 2019 85
------------------
On 25 January 2019, the Company's issued a further GBP50,000
tranche of nominal of Convertible Bonds to Cosmos SICAV plc Value
Added Fund for general working capital purposes.
The issued Bonds bear interest at the rate of 5% per annum,
although the Company may, subject to certain conditions, elect to
convert any interest due to the Investor into ordinary shares of
0.01 pence each in the Company at an issue price of 10 per cent.
below the 20-trading day average mid-price of the Ordinary
Shares.
Cosmos SICAV plc Value Added Fund converted GBP13,155.83 of the
Convertible Bond facility as described above in Note 7.
9. Subsequent events
Issue of bonds
In July 2019, the Company launched a bond to raise up to EUR5
million on the Vienna Stock Exchange's multilateral trading
facility ("MTF") and placed an initial EUR800,000. The funds raised
will be used for the appraisal and making of further investments
and general working capital.
The principal terms of the bond are as follows:
- Issue price and redemption at par;
- Interest of 7% per annum paid semi-annually in arrears;
- Issue date of 26 July 2019 with a redemption date of 26 July 2022;
- Admission to trading on the Vienna MTF as "EUR5,000,000 7.00
per cent. Notes due 26 July 2022" with ISIN XS2027405880.
The Bond was arranged by the Company's 70 per cent owned
subsidiary Epsion Capital Limited. John Treacy, a director of the
Company who is also a 30 per cent shareholder and director of
Epsion. This therefore constitutes a related party transaction.
As described below, the acquisition of a EUR2 million receivable
was partly settled by a EUR1 million placing of the bonds with IWEP
and on 14 August 2019, the Company placed a further EUR1,000,000 of
the Company's bonds which trade on the Vienna Stock Exchange's
multilateral trading facility.
The Company has thus placed a total of EUR2,800,000 of bonds
under the above instrument as at the date of this report.
Acquisition of EUR2 million receivable
On 7 August 2019, the Company completed the acquisition of a
EUR2m receivable as outlined in its announcement of 1 June 2019
Notice of AGM (resolution 6 "IWEP Acquisition").
Finance Partners Group SPA ("FPG") is an Italian financial
services company that, among other things, takes minority stakes in
private companies seeking future listings on public markets. Its
main holding is The Avantgarde Group ("TAG"), a growing fintech
company. In September 2018 the Company invested EUR111,100 in an 8%
bond in FPG.
FPG owns a minority interest in TAG and We Arena ("WE"), a
digital media gaming company. TAG has been valued by an
international firm of accountants at EUR75 million. Management of
FPG have valued We Arena at EUR5 million. TAG is in the process of
obtaining a stock market listing in a prominent European market. WE
is in pre-IPO growth phase and is expected to seek a listing in
2020. The proposed strategy is for FPG to list these two investee
companies, liquidate or redeem the shares and return profits to its
shareholders, including Eight Capital Partners.
IWEP Ltd ("IWEP") owns a receivable of EUR4 million from FPG
resulting from a sale of TAG shares to FPG. Eight Capital has
acquired half of the receivable asset from IWEP. The receivable has
a face value of EUR2 million. The price paid was EUR1.9 million.
The Company has a six-month option to acquire the remainder of the
receivable from IWEP at the same price. Eight Capital intends to
convert this receivable into an equity holding in FPG and gain
exposure to the potential upside from FPG's investee company
transactions.
Settlement of the EUR1.9 million consideration was effected
through EUR1 million of Eight Capital's 7% bonds, a EUR600,000
vendor loan at a 5% interest rate with a duration of one year, and
EUR300,000 in cash.
IWEP is a company connected to the Company's Chairman Dominic
White. This transaction therefore constituted a related party
transaction. IWEP continues to have a direct shareholding in TAG.
Dominic White agreed to become a non-executive board member of TAG
to monitor the Company and IWEP's interests.
This announcement contains inside information for the purposes
of Article 7 of EU Regulation 596/2014.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
NEXKMGZLVKVGLZM
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