RNS Number : 7520Q
Primorus Investments PLC
03 June 2024
 

Primorus Investments plc

("Primorus" or the "Company")

Final Results

Primorus Investments plc (AIM: PRIM) is pleased to report its final results for the year ended 31 December 2023.  The Annual Report & Accounts for the year ended 31 December 2023 ("Annual Report") are available on the Company's website, www.primorusinvestments.com.

 

Caution regarding forward looking statements

 

Certain statements in this announcement, are or may be deemed to be, forward-looking statements. Forward-looking statements are identified by their use of terms and phrases such as ''believe'', ''could'', "should" ''envisage'', ''estimate'', ''intend'', ''may'', ''plan'', ''potentially'', "expect", ''will'' or the negative of those, variations or comparable expressions, including references to assumptions. These forward-looking statements are not based on historical facts but rather on the Directors' current expectations and assumptions regarding the Company's future growth, results of operations, performance, future capital and other expenditures (including the amount, nature and sources of funding thereof), competitive advantages, business prospects and opportunities. Such forward-looking statements reflect the Directors' current beliefs and assumptions and are based on information currently available to the Directors. While management believes that these forward-looking statements are reasonable as and when made, there can be no assurance that future developments affecting the Company will be those that it anticipates.

 

 

This announcement contains inside information for the purposes of the UK Market Abuse Regulation and the Directors of the Company are responsible for the release of this announcement.

 

For further information please contact:

 

Primorus Investments plc

Matthew Beardmore, Chief Executive Officer

 

+44 (0) 20 8154 7907

 

Nominated Adviser

Cairn Financial Advisers LLP

Sandy Jamieson/James Caithie

 

+44 (0) 20 7213 0880

 

Chairman's statement incorporating the strategic report

For the year ended 31 December 2023

Overview

 

 

Introduction

 

.

 

Investment highlights

 

·     The Company made a further investment of £75,000 into Interpac Ltd ("Interpac"). Interpac was founded in 2013 to create a new corrugation process for the manufacture of cardboard which is more cost-efficient and environmentally friendly than current manufacturing processes.  Interpac has already secured initial customer sales, and with the additional investment it now has the balance sheet to fulfil its early orders and continue its growth strategy.

·     Primorus was repaid all monies owed from Bushveld Minerals Limited (BMN). The final balance was received in November 2023 and totalled approximately £925,000 (comprising the total principal amount owed and accrued interest of 10%).

·     Alteration Earth PLC ("ALTE") entered into a binding heads of terms agreement to acquire the entire issued share capital of Verdant Earth Technologies Limited. We look forward to ALTE fulfilling its strategy and delivering value enhancing outcome for its shareholders.

·     Fresho Pty Ltd ("Fresho") had another successful year and continued to progress throughout 2023. Engagement continues to increase year on year, and this resulted in an annualised gross merchandise volume of $2.4bn. Orders increased 30% to 480,000 per month with 38% more venues. This resulted in revenue increasing by 55%. With continued planned investment further significant growth is forecasted.



 

·     The Payapps group ("Payapps") continued to perform well during 2023 with both sales and revenue growth increasing over the comparative period for 2022. This growth reflects the investments made in the business in 2022 and has been supported by largely positive macroeconomic conditions in Australia and the UK post COVID lockdowns in 2022. Sales results have been very strong within all regions achieving a record sales year.  Following the year end Payapps was purchased by Autodesk Inc.  See Note 4 below for further information.

·     Engage Technology Partners Limited ("Engage"), the end-to end workforce management platform provider, had a difficult year and were seeking new funding to take them through to breakeven.  Subsequent to the year end, Engage undertook a significant restructure which resulted in the Company's shareholding in Engage being reduced from 4.49% to 1.97%.  We have reflected the impairment in value of this investment in the financial statements for this year.  See Note 4 below for further information.

·     Clean Power Hydrogen ("CPH2") encountered a number of issues. Supply chain problems meant commissioning and delivery of its first MF220 units experienced delays and therefore impacted planned commissioning schedules. A further issue was identified in the design and operation of the cryostat unit. The appointment of a CTO and the manufacturing agreement with Fabrum Solutions Ltd will hopefully lead to a resolution and accelerate the delivery of the technology to an ever-growing market.

Financial highlights

Investee companies

 

Summary and Outlook

2024

·     It must enable Primorus the opportunity to acquire a meaningful stake in the investee company.

·     A clear and realistic exit route must be in place.

·     There should be an opportunity for the Board to play an active role in the investee company's development.

·     The Board and the investee company's management team must share a common vision and strategic alignment.

·     The investment committed by the Company will be proportionate to the risk/reward opportunity.

·     There should be a greater opportunity for the Company's shareholders to benefit directly from the increase in capital values from each investment.

·     To continue to focus on applying financial resources diligently, with controlled corporate costs and focused investment.

·     To continue to build working capital, preferably through organic means, by exiting investments which have generated significant returns on investment.

·     To continue to build our external network and to develop our managerial team to provide confidence in the market of our abilities to achieve our strategic business objective of identifying significant value-enhancing investment opportunities.

·     To proactively continue the work the Board has already started to achieve with the crystallisation of value from certain investment opportunities which it has identified.

·     To continue to review new opportunities and where financially and operationally practical to make investments in such opportunities which present the most upside to the Company.

·     To retain sufficient capital resources through cash or liquid investments to enable the Company to have access to immediate capital for the purposes of deploying into larger positions that are the most strategically aligned opportunities.

·     To divest the non-core investments when suitable liquidity events arise, or fair value can be achieved by alternative means.

Date       31 May 2024

 

Statement of Profit or Loss and Other Comprehensive Income

For the year ended 31 December 2023

 



2023

2022

 

Notes

£000

£000

Income




 Investment income


64

93

 Realised loss on financial investments


(684)

(288)

 Unrealised gain/(loss) on financial investments


465

(542)

Gross Loss

 

(155)

(737)

Operating expenses

 




 Administrative expenses


(504)

(401)





 Impairment of financial investments

2

(1,690)

(375)

 Loss before tax

 

(2,349)

(1,513)





 Taxation


-

29

Loss for the year

 

(2,349)

(1,484)





 Other comprehensive income for the year net of tax


-

-

Total comprehensive income


(2,349)

(1,484)

 




Earnings per share attributable to the ordinary equity holders of the parent



2023

2022



Pence

Pence

 Basic and diluted (loss) per share

3

(1.680)

(1.061)

 

 

The notes form part of these financial statements.

 

The Financial Statements were approved and authorised for issue by the board of directors on 31 May 2024.

 

R Labrum                                                                                         H Clark

Rupert Labrum                                                                               Hedley Clark

 

 

Statement of Financial Position

Company Registration Number 3740688

As at 31 December 2023

 





2023

 

2022

ASSETS

 

Notes

 

£000

 

£000

 







Non-Current Assets

 

 





Financial Investments


2


2,052

5

5,444





2,052


5,444

Current Assets

 

 





Financial Investments


2


2,502


2,064

Trade and other receivables




12


34

Bank and cash balances




775


114





3,289


2,212








Total Assets

 

 


5,341


7,656








LIABILITIES

 

 












Current Liabilities

 

 





Trade and other payables




144


110

Total Liabilities

 

 


144


110








Net Assets

 

 


5,197


7,546








EQUITY

 

 





 

 

 





Issued capital and reserves

 

 












Share capital




280


280

Retained earnings




4,917


7,266








Total Equity

 

 


5,197


7,546








 

 

 

 

 

Statement of Changes in Equity

For the year ended 31 December 2023

 

 

Share capital

Share premium

Share based payment reserve

Retained earnings

Total attributable to owners of the company

 

£000

£000

£000

£000

£000

 






Balance at 1 January 2022

280

-

13

8,616

8,909







Loss for the year

-

-

-

(1,484)

(1,484)

Total comprehensive income for the year

-

-

-

(1,484)

(1,484)

Share based payment expense

-

-

121

-

121

Reclassification upon cancellation of share options

-

-

(134)

134

-







Balance at 31 December 2022

280

-

-

7,266

7,546







Balance at 1 January 2023

280

-

-

7,266

7,546

Loss for the year

-

-

-

(2,349)

(2,349)

Total comprehensive income for the year

-

-

-

(2,349)

(2,349)













Balance at 31 December 2023

280

-

-

4,917

5,197

 

The notes form part of these financial statements.



Statement of Cash Flows

For the year ended 31 December 2023

 



2023

 

2022

 


£000

 

£000

Cash Flows from Operating Activities

 









Operating loss before tax


(2,349)


(1,484)

Adjustments for:





Loss on disposal of financial investments


684


288

Fair value movements on financial investments


(465)


542

Impairment provision on unlisted investments


1,690


375

Interest income on investments


(64)


(93)

Net foreign exchange loss/ (gain)


133


(112)

Share based payment expense


-


121

Income tax credit


-


(29)






 

 

(371)


(392)

Movement in working capital:





Decrease in trade and other receivables


22


-

Increase in trade and other payables


34


66

 





Cash used in operations

 

(315)

 

(326)

 





Income taxes paid


-


(36)

 





Net cash used in operating activities

 

(315)

 

(362)

 





Cash flows from investing activities





Proceeds from sale of financial investments

 

1,051


1,937

Purchase of financial investments

 

(75)


(2,402)



976


(465)






Net cash increase/(decrease) in cash and cash equivalents

 

661

 

(827)






Cash and Cash Equivalents at beginning of year

 

114

 

941






Cash and Cash Equivalents at end of year

 

775

 

114

 

 




 

The notes form part of these financial statements.

 

Notes to the Financial Statements

For the year ended 31 December 2023

 

1.    Accounting Policies

 

Basis of Preparation

 

Primorus Investments plc is a public company incorporated and domiciled in the United Kingdom. The Company's registered office is 48 Chancery Lane, London, WC2A 1JF. The Company's shares are listed on the AIM market of the London Stock Exchange.

 

The Company meets the definition of an investment company.

 

The Financial Statements are for the year ended 31 December 2023 and 2022 and have been prepared under the historical cost convention, except for financial investments measured at fair value.

 

The financial statements have been prepared in accordance with UK-adopted international accounting standards in accordance with the requirements of the Companies Act 2006.

 

These financial statements have been prepared and approved by the Directors on 31 May 2024 and signed on their behalf by Rupert Labrum and Hedley Clark.

 

The accounting policies have been applied consistently throughout the preparation of these financial statements and the financial report is presented in Pound Sterling (£) and all values are rounded to the nearest thousand pounds (£000) unless otherwise stated.

 

 

Going Concern

 

The Directors noted the operating losses that the Company has made for the year ended 31 December 2023. The Directors have prepared cash flow forecasts for a period of at least twelve months from the date of the approval of these financial statements.

 

The cost structure of the Company comprises a high proportion of discretionary spend and therefore in the event that cash flows become constrained, costs can be quickly reduced to enable the Company to operate within its available funding.

 

These forecasts demonstrate that the Company has sufficient cash and liquid funds (i.e investments in listed companies) available to allow it to continue in business for a period of at least twelve months from the date of the approval of these financial statements. Accordingly, the financial statements have been prepared on a going concern basis.

 

It is the prime responsibility of the Board to ensure the Company remains a going concern. At 31 December 2023 the Company had cash and cash equivalents of £775,000. The Company also has listed financial investments of

£868,000 as at 31st December 2023. Following the year end the Company disposed on one of its unlisted investments for approximately  USD 6.1 million, further enhancing its cash reserves (see Note 4 below for further details).  The Company has minimal contractual expenditure commitments and the Board considers the present funds, including those raised from the sales of its unlisted investment,  and future disposals of its listed financial investments sufficient to maintain the working capital of the Company for a period of at least 12 months from the date of signing the Annual Report and Financial Statements. For these reasons the Directors adopt the going concern basis in preparation of the Financial Statements.

 

 

2.    Financial investments

 


 

£000

£000

£000

£000


 

Level 1

Level 2

Level 3

Total

Fair Value at 31 December 2021

 

633

-

7,409

8,042

Additions

 

2,153

-

1,552

3,705

Transfer

 

350

-

(350)

-

Fair value changes

 

(542)

-

-

(542)

Loss on disposals

 

(288)

-

-

(288)

Disposal

 

(696)

-

(2,450)

(3,146)

Impairment (provision)/reversal

 

(407)

-

32

(375)

Foreign Exchange

 

-

-

112

112

Fair Value at 31 December 2022

 

1,203

-

6,305

7,508

Additions


-

-

75

75

Interest - Unlisted Convertible Loan


-

-

64

64

Fair value changes


465

-

-

465

Loss on disposals


(684)

-

-

(684)

Disposal


(116)

-

(935)

(1,051)

Impairment provision


-

-

(1,690)

(1,690)

Foreign Exchange


-

-

(133)

(133)

Fair Value at 31 December 2023

 

868

-

3,686

4,554

 

 

 

 

 

 

The 2023 financial assets are split as follows:

 

 

 

 

 

Current assets - listed

 

868

-

-

868

Current assets - unlisted

 

-

-

1,634

1,634

Non-current assets - unlisted

 

-

-

2,052

2,052

Total

 

868

-

3,686

4,554

 

 

 

 

 

 

The 2022 financial assets are split as follows:

 

 

 

 

 

Current assets - listed

 

1,203

-

-

1,203

Current assets - unlisted convertible loans

 

-

-

861

861

Non-current assets - unlisted

 

-

-

5,444

5,444

Total

 

1,203

-

6,305

7,508

 

 

 

 

£000

£000

£000

£000

 

Level 1

Level 2

Level 3

Total

Loss on investments held at fair value through profit or loss for 2023

Fair value gain on investments

465

-

-

465

Realised loss on disposal of investments

(684)

-

-

(684)

Net loss on investments held at fair value through profit or loss

(219)

-

-

(219)

 

 

£000

£000

£000

£000

 

Level 1

Level 2

Level 3

Total

Loss on investments held at fair value through profit or loss for 2022

Fair value gain on investments

(542)

-

-

(542)

Realised loss on disposal of investments

(288)

-

-

(288)

Net loss on investments held at fair value through profit or loss

(830)

-

-

(830)

 

 

Level 1         represents those assets, which are measured using unadjusted quoted prices for identical assets.

Level 2         applies inputs other than quoted prices included in Level 1 that are observable for the assets either directly (as prices) or indirectly (derived from prices).

Level 3         applies inputs, which are not based on observable market data.

 

Investments are held at fair value through profit and loss using a three-level hierarchy for estimating fair value.

 

The Directors have reviewed the carrying value of the investments and have determined an impairment is required of £1,689,777 (2022: £374,805). This represents an impairment of £1,617,561 in respect of Engage Technology Partners Limited and £100,000 in respect of SOA Energy UK Limited.  The directors have also reversed a previous impairment of £7,984 in respect of the Supernatural Foods Limited shares that were disposed of during the year and £19,800 in respect of Sport80 plc, which is still held by the Company.

 

Investments comprise both listed and unlisted investments. The listed investments are traded on stock markets throughout the world and are held by the Company as a mix of strategic and short-term investments.

 

Significant additions and disposals during the year and subsequent to the year end

 

Disposal in Bushveld Minerals Limited

During the year the Company was repaid the convertible loan note owed by Bushveld Minerals Limited.  The final payment was received in November 2023.  During the year the Company received £64,000 of interest on the outstanding loan notes.

 

Sale of Payapps Limited ("Payapps)

Following the year end Payapps was purchased by Autodesk Inc.  This resulted in the Company receiving approximately USD 6.1m.  The purchase was for the the Payapps' Construction Payment Management businesses (Payapps, GCPay and Webcontractor) and the acquisition did not include the Facilities Management ("FMI") business, which was separated out of Payapps prior to the closing of the acquisition and retained for the benefit of Payapps' existing shareholders. A separate sale process will be conducted with the net proceeds from the sale of the FMI business to be distributed to Payapps shareholders as additional consideration.

 

 

Impairment in value of Engage Technology Partners Limited ("Engage")

In April 2024 Engage undertook a significant restructure which resulted in the Company's shareholding in Engage being reduced from 4.49% to 1.97%.  This dilution, along with a reassessment by the directors of the current valuation of Engage, has resulted in a reduction in the carrying value of Engage in the Company's balance sheet to £158,000, approximately an 89% reduction.

 

Purchase of shares in Virtualstock Holding Limited

In May 2024 the Company purchased 250,000 shares in Virtualstock Holdings Limited for £2.00 per share, a total investment of £500,000.

 

Significant additions and disposals in 2022

 

 

3.    Earnings per share

 

Basic and diluted earnings per share

2023

2022




From continuing operations attributable to the ordinary equity holders of the Company

(1.680)

(1.061)

Total basic and diluted earnings per share attributable to the ordinary equity holders of the Company

(1.680)

(1.061)




The calculation of the loss per share is based on the loss after taxation divided by the weighted average number of shares in issue during the period:

2023

2022


£000

£000

Loss for the year

(2,349)

(1,848)

 

 

 

Weighted average number of shares used as the denominator




2023

2022

Weighted average number of ordinary shares used as the denominator in calculating basic earnings per share

139,830,968

139,830,968

Options

-

-

Weighted average number of ordinary shares and potential ordinary shares used as the denominator in calculating diluted earnings per share

139,830,968

139,830,968

 

 

4.    Events after the reporting date

 

Following the year end Payapps was purchased by Autodesk Inc.  This resulted in the Company receiving approximately USD 6.1m.  The purchase was for the Payapps' Construction Payment Management businesses (Payapps, GCPay and Webcontractor) and the acquisition did not include the Facilities Management ("FMI") business, which was separated out of Payapps prior to the closing of the acquisition and retained for the benefit of Payapps' existing shareholders. A separate sale process will be conducted with the net proceeds from the sale of the FMI business to be distributed to Payapps shareholders as additional consideration.

 

In March 2024 the Company announced the payment of a special dividend to shareholders of 1.5p per share, amounting to a distribution of proceeds to shareholders of approximately £2.1m, in aggregate.  This dividend was paid to shareholders on 10th April 2024.

 

Since the year end the Company has acquired an additional 329,808 shares ins Fresho Pty Limited at an average price of AUD$0.862 per share for a total consideration of AUD$284,301.

 

In April 2024 Engage undertook a significant restructure which resulted in the Company's shareholding in Engage being reduced from 4.49% to 1.97%.  This dilution, along with a reassessment by the directors of the current valuation of Engage, has resulted in a reduction in the carrying value of Engage in the Company's balance sheet to £158,000, approximately an 89% reduction.

 

In May 2024 the Company purchased 250,000 shares in Virtualstock Holdings Limited for £2.00 per share, a total investment of £500,000.

 

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