TIDMECP
RNS Number : 4636A
Eight Capital Partners PLC
29 September 2020
29 September 2020
EIGHT CAPITAL PARTNERS PLC
("Eight Capital" or the "Company")
UNAUDITED INTERIM REPORT FOR THE SIX MONTHSED 30 JUNE 2020
Eight Capital Partners plc (AQSE: ECP), announces its
consolidated interim results for the half year ending 30 June
2020.
Chairman's Interim Report
I report on the Company's interim results for the six months to
30 June 2020.
Eight Capital Partners plc (the "Company" or "Eight Capital") is
an investment vehicle quoted on the AQSE Growth Market. 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 TMT(1) and
financial services sectors (including in other investment
companies).
These interim results also consolidate the results of Epsion
Capital Limited ("Epsion"), the boutique corporate advisory company
that is a 100% owned investment.
Since I last reported to you on the full year results to
December 2019, the Company has seen the ongoing effects of the
COVID-19 pandemic and that the first half of 2020 forecasts of some
of our investments have not been realised as originally expected.
We are therefore reporting a loss for the half year, mainly created
through adverse currency movements and the volatile share price of
our listed company investment Supply@Me Capital plc.
Nevertheless, some investments have been very successful. We
invested GBP280,000 in Greencare Capital plc, also quoted on AQSE
(GRE), in December 2019. This investment at 30 June 2020 had a
quoted value of GBP704,000 and at the date of this report had a
quoted value of GBP832,000. Greencare Capital is an investment
vehicle seeking to identify investment opportunities in, and
acquisitions of companies in the rapidly changing regulatory
environment surrounding legal Medicinal Cannabis, as well as
investment opportunities within the Hemp and CBD wellness
sectors.
Epsion has also done well, with unaudited six-month revenues
growing to GBP540,000, and a pre-tax profit of GBP155,000.
The other major development in the period under review was the
reverse takeover (RTO) of Abal Group plc by Supply@Me S.r.l.
(Supply@ME) in March 2020 and its move from AIM to the Standard
Segment of the Main Market of the London Stock Exchange. Supply@ME
is an innovative international Fintech Platform which provides
inventory monetisation services to European manufacturing and
trading companies. This is a high-growth international sector with
a multi-trillion-dollar market size. Since its readmission to the
London Stock Exchange, Supply@ME's share price has been
particularly volatile in the context of delays to its business plan
and, on 30 June this year, being the end of the reporting period,
there was an unfortunate dip in the share price, which then
recovered. That dip in share price at the reporting date translated
into a GBP158,000 unrealised loss being borne by the income
statement. Nevertheless, this has not diminished the Board's belief
in this stock and it continues to have high hopes for the growth of
Supply@ME, particularly in light of recent funding partnership
announcements.
The Company owns shares directly in Supply@ME and indirectly
through its holding in Financial Partners Group (FPG), which is
expected to make a cash and shares distribution to its shareholders
in the next half year.
The Company also has an investment of EUR111,000 in a listed
bond issued by FPG. Repayment of the bond is imminent and there
will be a separate announcement in due course.
In May 2020, the Company agreed with IWEP Ltd that terms of a
vendor loan, granted as part consideration for the Company's
acquisition of the receivable due from FPG in August 2019, could be
modified to allow IWEP to convert GBP100,000 of the loan into
ordinary shares. Post period under review, the outstanding loan,
which was due to mature in August 2020, was extended to August
2021.
We announced in July that we would be restructuring our
investment in Finance Innovations Team (FIT). The restructuring,
which was agreed after the period under review and announced on 27
July 2020, is now being implemented.
Foreign exchange has been an additional negative factor with the
slump in the Pound against the Euro, causing us to record an
unrealised loss of over GBP300,000 on our Euro financing
liabilities. We would hope that some of the negative effect of this
non-cash movement may correct itself by the year end.
In summary, I believe that with FPG about to release liquidity,
Greencare's value moving very positively upwards, Epsion growing
well and Supply@ME making positive announcements, the core of our
portfolio is in good shape, despite the inevitable restrictions due
to the pandemic. We have completed the majority of our first round
of investment and are now beginning the phase of holding and
progressive realisation.
Dominic White
Chairman
This announcement contains inside information for the purposes
of Article 7 of EU Regulation 596/2014.
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
AQSE Exchange Growth Market Corporate
Adviser
Cairn Financial Advisers LLP +44 (0) 20 7213 0880
Jo Turner / James Lewis
Eight Capital Partners plc
Consolidated Statement of total comprehensive income
for the six months ended 30 June 2020
Six months ended Six months ended Year ended
30 06 2020 30 06 2019 31 12 2019
Unaudited Unaudited Company only
GBP'000 GBP'000 Audited*
Note GBP'000
Income
Revenue 2 556 282 -
Other income 54 - 50
Total income 610 282 50
----------------- ------------------- ----------------------
Cost of sales (291) (120) -
Net change in unrealised gains/ (losses)
on investments at fair value through
profit and loss 88 (215) 164
Unrealised foreign exchange losses on (312)
financing - -
Loss on disposal of investments - (2) -
Administrative expenses (456) (253) (543)
Loss from operations (361) (308) (329)
----------------- ------------------- ----------------------
Interest income 4 4 7
Finance expense (107) (2) (110)
-----------------
Loss before tax (464) (306) (432)
Tax expense 3 - (12) -
Loss for the period (464) (318) (432)
Total comprehensive loss attributable to:
Equity holders of the parent company (464) (333) (432)
Non-controlling interests - 15 -
----------------- ------------------- ----------------------
(464) (318) (432)
----------------- ------------------- ----------------------
Loss per share attributable to the equity
holders of the parent
Basic and diluted (pence): 4 (0.06) (0.06) (0.07)
* The 2019 audited accounts related only to the Company and did
not consolidate Epsion Capital (see note 5)
Eight Capital Partners plc
Consolidated Statement of financial position at 30 June 2020
As at As at As at
30 06 2020 Unaudited 30 06 2019 Unaudited 31 12 2019
GBP'000 GBP'000 Audited*
Note GBP'000
Company only
Current assets
Trade and other receivables 482 232 73
Investments 6 3,778 425 3,790
Cash and cash equivalents 287 18 420
Total current assets 4,547 675 4,283
---------------------- ---------------------- -------------
Total assets 4,547 675 4,283
---------------------- ---------------------- -------------
Current liabilities
Trade and other payables 336 261 135
Borrowings 363 - 338
Provisions 32 12 11
---------------------- ---------------------- -------------
Total current liabilities 731 273 484
---------------------- ---------------------- -------------
Non-current liabilities
Long term bond 3,300 - 3,005
Borrowings 442 - 508
Total non-current liabilities 3,742 - 3,513
---------------------- ---------------------- -------------
Total liabilities 4,473 273 3,997
---------------------- ---------------------- -------------
Net assets 74 402 286
---------------------- ---------------------- -------------
Equity
Share Capital 7 1,430 1,360 1,360
Share premium account 2,001 1,894 1,895
Convertible loan notes 8 84 85 84
Share option and warrant reserve 8 8 8
Retained earnings (3,449) (2,962) (3,061)
Non-controlling interests - 17 -
Total equity 74 402 286
---------------------- ---------------------- -------------
* The 2019 audited accounts related only to the Company and did
not consolidate Epsion Capital (see note 5)
Eight Capital Partners plc
Notes to the Interim Consolidated Financial Statements
For the six months ended 30 June 2020
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 2019 annual report. The statutory
financial statements for the year ended 31 December 2019 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, has not been
reviewed by the Company's auditors 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
22 September 2020.
Going concern
As an investment business, the Company has limited operating
cash flow and is dependent on the performance of its investments
and bond facilities for its working capital requirements. A number
of its investments are either cash-generative or traded on liquid
markets and it supports its cash flow by providing chargeable
management services. As at the date of this report, the Company had
in excess of GBP200,000 in cash reserves and approximately
GBP100,000 of near term receivables. It is also anticipating a
number of substantial cash-generative liquidity events in the near
term.
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 100% owned investment,
Epsion Capital Limited.
2. Revenue
Six months ended 30 June 2020 Six months ended 30 June 2019 Year ended
GBP'000 GBP'000 31 December 2019
GBP'000
Product sales 541 246 -
Commission income - 10 -
Services income 15 26 -
Total revenue 556 282 -
------------------------------ ------------------------------ ------------------
3. Income tax
Six months ended 30 June 2020 Six months ended 30 June 2019 Year ended
GBP'000 GBP'000 31 December 2019
GBP'000
Current tax expense
UK corporation tax at 19% - 12 -
Total tax expense - 12 -
------------------------------ ------------------------------ ------------------
4. Losses per share
Six months ended 30 June 2020 Six months ended 30 June 2019 Year ended
GBP'000 GBP'000 31 December 2019
GBP'000
Loss for the year attributable
to owners of the Company (464) (333) (432)
Weighted average number of
shares:
Basic and diluted (number) 796,642,433 553,024,641 618,720,310
Loss per share (pence) (0.060) (0.060) (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 and/or when such dilutive instruments were not
operative.
5. Subsidiary investment
On 4 November 2019, further to an initial investment in March
2019, the Company acquired the entire share capital Epsion Capital
Limited ("Epsion"), a boutique financial advisory and investment
firm based in London. At 31 December 2019, the Board was holding
Epsion for a partial sale that would have reduced its holding to
below 50%. For this reason, and given the independence of Epsion's
Board, the results of Epsion were not consolidated at 31.12.2019.
This strategy has since been reconsidered and the activities of
Epsion have been consolidated with effect from 1 January 2020.
Epsion contributed GBP540,000 of revenue for the period between
the date of acquisition and the balance sheet date and GBP155,000
of profit before tax.
6. Investments
Fair value Net change Fair value
at in unrealised at
31 12 2019 gains/ (losses) 30 06 2020
GBP'000 GBP'000 GBP'000
Quoted equity securities:
Supply@Me Capital
plc 189 (158) 31
Greencare Capital
plc 653 51 704
Sport Capital Group
plc 132 1 133
------ ----------------- ------------
974 (106) 868
------ ----------------- ------------
Unquoted equity securities:
Finance Partners Group
SPA 1,608 115 1,723
Finance Innovations
Team 1,015 73 1,088
------ ----------------- ------------
2,623 188 2,811
------ ----------------- ------------
Quoted debt securities:
Finance Partners Group:
S.p.A. corporate bonds 93 6 99
93 6 99
------ ----------------- ------------
Total investments 3,690 88 3,778
------ ----------------- ------------
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 2019 633,257,818 64
Issued during the period 708,000,000 71
As at 30 June 2019 1,341,257,818 135
------------------- ---------------
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 2019 - -
Sub-division of Ordinary Shares 540,166,760 1,296
As at 31 December 2019 and
30 June 2020 540,166,760 1,296
------------------- ---------------
8. Convertible Loan Notes
Convertible bonds
GBP'000
As at 1 January 2020 84
Issued in the year -
As at 30 June 2020 84
------------------
This facility expires on 26 October 2020. The bonds, interest
and attached warrants are redeemable against equity in the Company
at the Company's option, subject to certain maximum shareholding
criteria and are therefore treated as quasi-equity in the balance
sheet.
9. Related party transactions
Further to the reverse takeover of Abal plc by Supply@ME S.r.l.
(SYME) in March 2020, Dominic White, who is a director of Eight
Capital, also became a non-executive director of SYME, which has
therefore become a Related Party in accordance with AQSE Growth
Market Rules for Issuers.
In May 2020, the Company amended terms of a loan with IWEP
Limited such that part of the loan may be converted. Further, the
Company granted options to directors. These transactions constitute
related party transactions pursuant to Rule 52 of the AQSE Growth
Market Rules for Issuers.
10. Subsequent events
Investment in Financial Innovations Team srl
On 27 July, the Company announced it had completed the
restructuring of its investment in Financial Innovations Team Srl
("FIT"). On 2 December 2019, the Company announced that it had
acquired 59.9% of FIT, a financial services business operating in
Europe. The aggregate consideration of EUR1.2 million for the
acquisition was satisfied by way of EUR350,000 of cash, EUR450,000
of Eight Capital's bonds and a short-term vendor loan of
EUR400,000. In its report and accounts for the year to 31 December
2019, which was notified on 6 July 2020, the Company advised that
FIT had been impacted negatively by the COVID-19 pandemic in terms
of advisory revenues and potential M&A fees.
In light of this, Eight Capital renegotiated its investment
pursuant to the terms of the original share purchase agreement and
enforced its rights against the vendors of the interest in FIT
("Vendors") to unwind its investment and seek recovery of the funds
invested. The shares of FIT have been returned to the Vendors and
an initial reimbursement of EUR750,000 of the investment cost is
being effected through the cancellation of the EUR400,000 vendor
loan and the return of EUR350,000 of Eight Capital's bonds, both
issued as part consideration for the acquisition.
Following completion of the restructuring, the Company will
recognise a reimbursement of EUR750,000 and it expects that the
reimbursement should increase to at least EUR850,000 as the
remainder of the Eight Capital bond held by the Vendor becomes
unencumbered, representing approximately 70 per cent of the initial
investment, within the next 12 months.
As further potential compensation, Eight Capital has paid GBP1
to secure an eighteen month option from the Vendors to acquire 60
per cent. of the issued share capital of Innovative Finance Srl
("InnFin"), an early stage Italian financial services business
which is unrelated to FIT. The Board will be monitoring InnFin's
pipeline of M&A transactions, revenue stream and value closely
in the coming months Should Eight Capital exercise the option, a
valuation will be provided by a jointly appointed independent
valuer and, if acceptable to Eight Capital, settlement would be
offset against any outstanding balance owed to it.
Further to signing the commitment letter of 22 June 2020 to
extend a vendor loan note with IWEP Ltd, In July 2020, the Company
completed this agreement and the outstanding loan notes with IWEP
Ltd that were due to mature on 6 August 2020 have been extended to
7 August 2021 on the same terms. IWEP Ltd is classified as a
related party due to sharing a common director, Dominic White and,
therefore, entering the agreement to extend the loans is a related
party transaction pursuant to Rule 52 of the AQSE Rules for
Issuers.
_____________________________
(1) Technology Media and Telecoms
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.
RNS may use your IP address to confirm compliance with the terms
and conditions, to analyse how you engage with the information
contained in this communication, and to share such analysis on an
anonymised basis with others as part of our commercial services.
For further information about how RNS and the London Stock Exchange
use the personal data you provide us, please see our Privacy
Policy.
END
NEXGZGZLMLMGGZM
(END) Dow Jones Newswires
September 29, 2020 07:05 ET (11:05 GMT)
Eight Capital Partners (AQSE:ECP)
Historical Stock Chart
From Oct 2024 to Nov 2024
Eight Capital Partners (AQSE:ECP)
Historical Stock Chart
From Nov 2023 to Nov 2024
