30 August 2024
Vela Technologies plc
("Vela" or "the Company")
Quarterly Investment Update
The Board of Vela (AIM:VELA), an AIM-quoted investing company focused on early-stage and pre-IPO disruptive technology investments, is pleased to report an update for the quarter ended 30 June 2024.
Key numbers as at 30 June 2024*
· The value of Vela's total assets (including cash) decreased during the quarter by £2,737,000 to £2,804,000 (quarter to 31 March 2024 - a decrease of £640,000 to £5,541,000).
· This decrease is entirely attributable to the collapse in the value of Conduit Pharmaceuticals Inc. ("Conduit") (an unrealised loss of £2,800,000).
· Of the remainder of the listed portfolio, a profit of £8,000 was realised on investments valued at £78,000 at 31 March 2024 and there was an unrealised gain of £137,000 on the remaining £1,658,000 of listed investments (excluding Conduit) brought forward at 31 March 2024.
· No acquisitions were made during the quarter.
· The fair value of the investment portfolio (excluding cash) at 30 June 2024 was £2,747,000 (31 March 2024 - £5,487,000).
· Vela's cash balance stood at £57,000 (31 March 2024 - £53,000).
\* The figures contained within this quarterly investment update are taken from unaudited management information.
Investments traded on a recognised stock market are valued using the accounting policies outlined in the notes to the annual financial statements. Unlisted investments and other financial assets are stated at the values attributed to them in the audited balance sheet as at 31 March 2023, unless there has been a transaction since that date which suggests a materially different valuation.
Changes in the investment portfolio during the quarter
The following table sets out the changes in the investment portfolio during the quarter ended 30 June 2024:
| | Holdings at |
| Quarter to |
| Holdings at 30 June 2024 | |||||||
|
| No. of shares | Fair value (£) |
| Realised profit | Unrealised profit (loss) |
| No. of | % of equity | Fair value (£) |
| ||
| Listed in the UK | | |||||||||||
| On the main market | ||||||||||||
| R8 Capital Investments plc (formerly Mode | 620,581 | 14,000 | | - | - | | 620,581 | < 1 | 14,000 |
| ||
| On AIM | | |||||||||||
| Northcoders Group plc | 347,499 | 547,000 | | - | 193,000 | | 347,499 | 4.3 | 740,000 |
| ||
| EnSilica plc | 776,707 | 447,000 | 4,000 | (93,000) | 666,707 | < 1 | 290,000 |
| ||||
| Skillcast Group plc | 675,676 | 199,000 | 4,000 | 59,000 | 625,676 | < 1 | 244,000 |
| ||||
| Finseta plc (formerly Cornerstone FS plc) | 400,000 | 120,000 | - | 30,000 | 400,000 | < 1 | 150,000 |
| ||||
| Tribe Technology plc | 3,125,000 | 180,000 | - | (52,000) | 3,125,000 | 1.3 | 128,000 |
| ||||
| MTI Wireless Edge Ltd | 200,000 | 92,000 | | - | (18,000) | | 200,000 | < 1 | 74,000 |
| ||
| On AQSE | | |||||||||||
| TruSpine Technologies plc | 6,000,000 | 57,000 | | - | 15,000 | | 6,000,000 | 3.9 | 72,000 |
| ||
| Igraine PLC | 23,928,080 | 72,000 | - | (6,000) | 23,928,080 | 27.7 | 66,000 |
| ||||
| Global Connectivity plc Broadband Solutions PLC) | 1,200,000 | 5,000 | - | 10,000 | 1,200,000 | < 1 | 15,000 |
| ||||
| Ethernity Networks Ltd | 350,000 | 3,000 | - | (1,000) | 350,000 | < 1 | 2,000 |
| ||||
| | 1,736,000 | | 8,000 | 137,000 | | | 1,795,000 | |||||
| Listed overseas | | |||||||||||
| NASDAQ | ||||||||||||
| Conduit Pharmaceuticals Inc Street Capital Limited) | 1,005,760 | 2,924,000 | | - | (2,800,000) | | 1,005,760 | 1.0 | 124,000 |
| ||
| | ||||||||||||
| Unlisted | | |||||||||||
| Community Social Limited) | 71,429 | 427,000 | | - | - | | 71,429 | < 1 | 427,000 |
| ||
| Aeristech Limited | 145,833 | 401,000 | - | - | 145,833 | 1.0 | 401,000 |
| ||||
| | | 828,000 | - | - | | 828,000 | ||||||
| | ||||||||||||
| Total investments |
| 5,488,000 |
| | 2,747,000 | |||||||
| Cash | 53,000 | 57,000 | ||||||||||
| Total assets | 5,541,000 | 2,804,000 | ||||||||||
Key developments in principal investee companies since the last quarter
Conduit Pharmaceuticals Inc. ("Conduit")
At 31 March 2024 Conduit's share price was $3.67. At 30 June 2024 this had fallen to $1.06 and has since sunk to $0.14 as at 28 August 2024. On 16 August 2024 Conduit announced that it had become aware that one of its directors had previously entered into certain collateral pledge agreements that resulted in the disposition of a substantial amount of shares in Conduit and that it had appointed an independent committee of the Board to establish the facts. Another independent committee of the Conduit board has been formed to investigate and review the trading patterns of certain of Conduit shareholders and determine if any action should be taken. It seems that the irregularities were instrumental in the collapse of the share price. The signing of a licensing agreement with AstraZeneca AB in August suggests that the commercial prospects for Conduit's clinical assets remains encouraging.
Northcoders Group plc ("Northcoders")
In May Northcoders published its 2023 annual report and in July gave a trading update for the first half of 2024. 2023 showed a 27% increase in revenue over 2022 and the trading update reported a further 26% increase in revenue for the first half of 2024 versus the first half of 2023. The company had a cash balance of £1.3 million at 30 June 2024 and has reported continued strong growth in contracted business.
EnSilica plc ("EnSilica")
In May EnSilica announced that it expected to report record revenues of approximately £25 million for the year to 31 May 2024 (2023: £20.5 million) and profit after tax of approximately £1.9 million (2023: £1.8 million). During the quarter the company raised additional capital of £5.2 million at 45p per share to finance its growing business momentum and the development of its intellectual property. In July 2024 the company announced that it had won a contract that was expected to enhance revenue by $5 million in its current financial year with further supply revenue of $50 million over the 5-year life of the contract.
Skillcast Group plc ("Skillcast")
In April Skillcast reported its 2023 results which showed revenue growth of 15%, including a 37% increase in annualised recurring revenue, and a strong balance sheet with a £7.2 million cash balance. In July the company published a trading update which reported an expected 23% increase in revenue for the first half of 2024, including a 35% increase in recurring subscription revenue compared to the same period last year and an expectation of a small EBITDA profit for the full year.
Finseta plc (formerly Cornerstone FS plc) ("Finseta")
In May Finseta (whose name change was registered at Companies House that month) also reported its 2023 results. These showed a doubling of revenue and a maiden year of profitability and positive cash flow. In July Finseta published a trading update, reporting for the first half of 2024 a 42% increase in revenue, a quadrupling of adjusted EBITDA and a strong balance sheet with cash of £2.8 million (an increase in the half year of £0.5 million); and an expectation of continued strong growth for the remainder of 2024.
Tribe Technology plc ("TribeTech")
In June TribeTech announced that it had raised equity and loan capital of £1.4 million in order to provide additional working capital. In July the company reported that it had achieved a major milestone by shipping its first drill rig to Major Drilling Group International Inc for use on an iron ore deposit in Australia.
Aeristech Limited ("Aeristech")
Aeristech reported to its shareholders in June that it was generating material revenue from its first major customer, Cummins, the international engine manufacturer; and that this would be augmented by revenue from a number of other major customers during the remainder of 2024 and 2025. It also announced that it was in talks with significant providers of equity and loan funds. We understand that these negotiations continue.
Other activities
· Since the publication of the last quarterly update in June 2024, the Board of Vela has spoken or met with representatives of the following investee companies:
o Conduit Pharmaceuticals Inc.
o TruSpine Technologies plc
o Tribe Technology plc
o Aeristech Limited
o Igraine PLC
o Skillcast Group plc
· Vela's management team has had, and continues to have, discussions with a number of prospective investee companies. Protracted negotiations with Hamak Gold Limited resulted in investment at the beginning of July (announced on 17 July). The Board continues frequently to receive and appraise opportunities to invest.
James Normand, Executive Director of Vela, commented: "It is frustrating that events at Conduit Pharmaceuticals Inc. have overshadowed a steady performance from Vela's UK portfolio. Vela's principal other investments are trading well; and it is the Board's view that such results will in due course be reflected in their value on the listed markets."
For further information, please contact:
| Vela Technologies plc Brent Fitzpatrick, Non-Executive Chairman James Normand, Executive Director
| Tel: +44 (0) 7950 389469 |
| Allenby Capital Limited (Nominated Adviser) | Tel: +44 (0) 20 3328 5656 |
| Nick Athanas / Piers Shimwell
| |
| Peterhouse Capital Limited (Broker) | Tel: +44 (0) 20 7469 0930 |
| | |
| Novus Communications (PR and IR Adviser) | Tel: +44 (0) 20 7448 9839 |
| Alan Green / Jacqueline Briscoe
| |
About Vela Technologies
Vela Technologies plc (AIM: VELA) is an investing company focused on early stage and pre-IPO long term disruptive technology investments. Vela's investee companies have either developed ways of utilising technology or are developing technology with a view to disrupting the businesses or sector in which they operate. Vela will also invest in already-listed companies where valuations offer additional opportunities.
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