Craven House Capital
Annual Results For Year Ended 31 May 2024
Craven House Capital PLC
15 November 2024
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES OF REGULATION (EU) 596/2014 AS IT FORMS PART OF DOMESTIC LAW IN THE UNITED KINGDOM BY VIRTUE OF THE EU (WITHDRAWAL) ACT 2018.
Craven House Capital plc
("Craven House" or the "Company")
Annual Results for year ended 31 May 2024
CRAVEN HOUSE CAPITAL PLC
CHAIRMAN'S STATEMENT
FOR THE YEAR ENDED 31 MAY 2024
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Dear Shareholder Updated valuations of Craven's portfolio companies are provided below. Positive progress was demonstrated during the year as the private companies in which Craven is a shareholder began to successfully execute their strategies of undertaking reverse take overs of publicly listed companies. Further information is provided in the Investment Manager's report below.
Mark Pajak |
CRAVEN HOUSE CAPITAL PLC
INVESTMENT MANAGER'S REPORT
FOR THE YEAR ENDED 31 MAY 2024
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Statement by the Investment Manager
The Company's investment portfolio comprises minority shareholdings in a number of Swedish-managed businesses operating in the eCommerce and pharmaceutical sector.
These portfolio companies are actively seeking transactions, including prospective reverse take overs, with public companies listed on Scandinavian stock exchanges and the LSE. The portfolio companies execute these transactions through a combination of vending their assets (such as pharmaceutical licences) into the public companies and undertaking fundraisings on behalf of the public companies in exchange for a substantial shareholding.
During and shortly after the period end, the portfolio companies successfully finalised two of these transactions;
BioVitos Medical Ltd (in which Craven is a 24.5% shareholder) completed an RTO with Hemcheck Sweden AB (a Swedish medical technology company, listed on the Stockholm Stock Exchange) following which Hemcheck has changed its name to BioVitos Pharma AB. On 5 June 2024 the Company announced the allocation of a pro-rata distribution of c.63,615,230 shares by investee company BioVitos Medical Limited in BioVitos Pharma AB. These shares amounted to a market value, at the time, of c.12 million Swedish Kroner / c.$1.136 US Dollars. 22,496,354 shares were sold to cover costs relating to the transaction. Following settlement of the transaction the Company has received 41,118,876 shares in BioVitos Pharma AB, representing 15.4% of BioVitos Pharma AB's issued share capital. Craven House remains a 24.5% shareholder in BioVitos Medical Limited and now owns 15.4% of BioVitos Pharma AB, a Sweden based medical technology company, listed on the Stockholm stock exchange.
RoseMonkey Ltd (in which Craven is a 24.4% shareholder) On 10 September 2024, the Company announced that RoseMonkey Limited (a new investee company in which on 2nd August 2024 the Company acquired a 24.4% shareholding) sold certain IP rights and participated in a financing transaction with Quiapeg Pharma AB ("QuiaPeg").Following completion of the transactions, RoseMonkey was awarded 1,416,007,811 shares in QuiaPeg. RoseMonkey distributed a proportionate amount of those shares to Craven House. Craven House has therefore received 345,505,096 shares representing 23.2% of QuiaPeg and a market value of approximately $758,792 as at 9 September 2024. QuiaPEG's shares are admitted to trading on Nasdaq First North Growth Market.
The Company's investments are held at fair value in accordance with the IPEVC guidelines. Holdings in the public companies highlighted above are held at market value. The valuation of Craven's holdings in private portfolio companies have been held at zero as of the end May 2024. Whilst each portfolio company retains potentially valuable assets and are seeking potential public company transactions, they remain at 'pre-revenue' stage of business development.
Craven's balance sheet therefore reflects just one investment as of May 2024; its shareholding in BioVitos Pharma AB, valued at its mark-to-market valuation of $515,000. Post year-end, the holding in Quiapeg Pharma will also be reflected.
The Company's holdings in private companies are as follows;
Garimon Limited (29.9% shareholding). Garimon's assets comprise ownership of the domain www.magazinos.com, a platform for digital magazine distribution, with over 10,000 magazines freely available for readers.
Stormfjord Limited (25.5% shareholding). Stormfjord's assets comprise ownership of the domain www.onebas.com, a digital music streaming service.
Rosedog Limited (28.6% shareholder). Rosedog is the owner of TV Zinos (www.tvzinos.com), a website which offers a number of free-to-view television channels.
CRAVEN HOUSE CAPITAL PLC
INVESTMENT MANAGER'S REPORT - continued
FOR THE YEAR ENDED 31 MAY 2024
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Honeydog Ltd (29.9% shareholder). Honeydog the 25% owner of the entity which owns the licence to manufacture and distribute the chemotherapy drug, SI-053 / 'Temodex' which is used in the treatment of brain tumour.
BioVitos Medical Limited (24.5% shareholding). Following the transaction with Hemcheck Sweden AB outlined above, Craven retains at 24.5% shareholding in BioVitos Medical Ltd.
RoseMonkey Ltd (24.4% shareholding). Following the transaction with Quiapeg Pharma AB
outlined above, Craven retains at 24.5% shareholding in RoseMonkey Ltd.
Further information on the Company's investments is provided in notes 7 and 13 below
Desmond Holdings Ltd
Investment Manager to Craven House Capital Plc
CRAVEN HOUSE CAPITAL PLC
STRATEGIC REPORT
FOR THE YEAR ENDED 31 MAY 2024
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The directors present the Strategic Report of Craven House Capital plc for the year ended 31 May 2024.
Principal activity
The Investing Policy is primarily to invest in or acquire a portfolio of companies, partnerships, joint ventures, businesses or other assets participating in the e-Commerce sector. The investments or acquisitions may be funded wholly by cash, the issue of new shares or debt, or a mix thereof, as the Board deems appropriate. The Company's equity interest in a proposed investment may range from a minority position to 100% ownership; the proposed investments may be either quoted or unquoted, although will likely be unquoted in the majority of cases. The Company will specifically target investments which the Board believes offer high growth opportunities or steady cash flows and where the exit will be a liquidity event, such as a trade sale or IPO.
Review of the Business in the year
A review of the Company's performance and business activities is included in the Investment Manager's Report above. The Company's portfolio comprises minority stakes in private e-commerce businesses and minority positions in public companies listed on Scandinavian Stock Exchanges. The status of the underlying investments is disclosed in further detail in notes 7 and 13 below. The only material movements in the Company's balance sheet during the year were adjustments to the valuation of the investment portfolio and an increase in amounts owing to Craven Industrial Holdings Plc in order to satisfy working capital requirements.
Position of the Company's business at the end of the year
Sufficient cash remains available to the Company from liquid investments to ensure it is able to meet its liabilities as they fall due. Other than directors, the Company has no employees and the majority of overhead expenditure continues to comprise regulatory, accounting and audit costs.
Principal risks and uncertainties facing the business
The principal risks to the business include the ability of the Company to successfully execute its Investing Policy and the early / pre-revenue stage of the development of the current portfolio of investments. Description of these risks are further detailed in note 13 below.
Corporate governance
The directors place a high degree of importance on ensuring that high standards of Corporate Governance are maintained and have therefore chosen to apply the framework as provided by the Quoted Companies Alliance Corporate Governance Code for small and medium size companies (2018) (the 'QCA Code').
Section 172(1) statement
The directors have acted in a way that they have considered, in good faith, to be most likely to promote the
success of Craven House Capital Plc for the benefit of its members, and in doing so had regard, amongst
matters to:
• the likely consequences of any decision in the long-term;
• the Company has no employees;
• the need to foster the Company's business relationships with suppliers, customers and others;
• the impact of the Company's operations on the community and the environment;
• the desirability of the Company's maintaining a reputation for high standards of business conduct;
• and to act fairly between members of the Company
The directors also took into account the views and interests of a wider set of stakeholders, the Government and non-government organisations.
CRAVEN HOUSE CAPITAL PLC
STRATEGIC REPORT - continued
FOR THE YEAR ENDED 31 MAY 2024
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Section 172(1) statement - continued
Considering the broad range of interests in the Company is an important part of the way the Board makes decisions; however, in balancing those different perspectives, it won't always be possible to deliver everyone's desired outcome.
How does the Board engage with stakeholders?
The Board engages with its stakeholders in a number of pre-planned ways, these include; review meetings with our brokers and advisors, shareholders have the ability to email the Company directly and the Board will reply to questions within the regulatory limits, the Company issues both RNS Reach and RNS communications on a regular basis and the Company's web site is continuously updated to inform our stakeholders. The Company's annual report is also an opportunity to update our stakeholders.
The Board has also adopted a code of conduct and follows specific guidance on all governance requirements which are regularly reviewed with its advisors to ensure full compliance.
The Board considers and discusses information from across the organisation to help it understand the impact of its operations, and the interests and views of our key stakeholders.
As a result of these activities, the Board has an overview of engagement with stakeholders, and other relevant factors, which enables the directors to comply with their legal duty under section 172 of the Companies Act 2006.
Due to the nature of the Company, no decisions were made by the directors during the reporting period which required them to have regard to the matters set out in section 172 of the Companies Act 2006.
CO2 Emissions
The Company is conscious of greenhouse gas emissions. The directors are mindful of their responsibilities in this regard and strive to seek opportunities where improvements may be made. The Company is exempt from the Streamlined Energy and Carbon Reporting (SECR) requirements since its energy consumption is less than 40,000 kWh per annum.
Mr M J Pajak - Director of behalf of the Board
14th November 2024
CRAVEN HOUSE CAPITAL PLC
REPORT OF THE DIRECTORS
FOR THE YEAR ENDED 31 MAY 2024
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The directors present their annual report with the audited financial statements of the Company for the year ended 31 May 2024.
DIVIDENDS
No dividends have been declared for the year ended 31 May 2024.
EVENTS SINCE THE END OF THE YEAR
Information relating to events since the end of the year is given in the note 16 to the financial statements.
DIRECTORS
The directors who held office during the year were:
Mr M J Pajak;
Mr B S Bindra; and
Mr C P Morrison.
Directors' remuneration and details of service contracts are given in note 3 to the financial statements.
POLITICAL AND CHARITABLE CONTRIBUTIONS
No charitable or political donations were made during the year.
FINANCIAL RISK MANAGEMENT POLICIES
Information on the use of financial instruments by the Company and its management of financial risk is disclosed in note 13 to the financial statements.
FUTURE DEVELOPMENTS
In the coming year the Company will continue to execute its investment strategy. Details of post year end transactions are disclosed in note 16.
SIGNIFICANT SHAREHOLDERS
Shareholders with holdings of more than 3% of the Company as of the date of this report are as follows;
Interactive Brokers LLC - 18.2%
Evangelos Kalimtzis - 16.9%
WB Nominees Ltd - 22.8%
HSBC Global Custody Nominee (UK) Ltd - 3.3%
The Bank Of New York (Nominees) Limited - 7.1%
DIRECTOR SHAREHOLDINGS
Shareholdings in the Company by directors as of the date of this report are as follows;
Mr M J Pajak indirect holdings (via Desmond Holdings Ltd) - 272,705 ordinary shares of $1.00
Mr B S Bindra - 14,440 ordinary shares of $1.00
Mr C P Morrison - 7,356 ordinary shares of $1.00
CRAVEN HOUSE CAPITAL PLC
REPORT OF THE DIRECTORS - continued
FOR THE YEAR ENDED 31 MAY 2024
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STATEMENT OF DIRECTORS' RESPONSIBILITIES
The directors are responsible for preparing the Annual Report and the financial statements in accordance with applicable law and regulations.
Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with International Financial Reporting Standards, UK adopted international standards and applicable law. Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Company, and of the profit or loss for that period. In preparing these financial statements, the directors are required to:
| - | select suitable accounting policies and then apply them consistently; |
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| - | make judgements and accounting estimates that are reasonable and prudent; |
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| - | state whether applicable accounting standards have been followed, subject to any material departures disclosed and explained in the financial statements; |
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| - | prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Company will continue in business. | |
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company's transactions and disclose with reasonable accuracy at any time the financial position of the Company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
The directors are responsible for the maintenance and integrity of the corporate and financial information included on the Company's website. Legislation in the United Kingdom governing the preparation and dissemination of the accounts and the other information included in annual reports may differ from legislation in other jurisdictions.
The Company is compliant with AIM Rule 26 regarding the Company's website.
STATEMENT AS TO DISCLOSURE OF INFORMATION TO AUDITORS
So far as the directors are aware, there is no relevant audit information (as defined by Section 418 of the Companies Act 2006) of which the Company's auditors are unaware, and each director has taken all the steps that he or she ought to have taken as a director in order to make himself or herself aware of any relevant audit information and to establish that the Company's auditors are aware of that information.
AUDITOR
A resolution for the re-appointment of Edwards Veeder (UK) Limited, Chartered Accountants & Business Advisors will be proposed in accordance with Section 489 of the Companies Act 2006 at the forthcoming Annual General Meeting.
Mr M J Pajak - Director of behalf of the Board
Date: 14th November 2024
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF
CRAVEN HOUSE CAPITAL PLC
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Opinion
We have audited the financial statements of Craven House Capital Plc (the 'company') for the year ended 31 May 2024 which comprise Statement of Profit or Loss and Other Comprehensive Income, the Statement of Financial Position, the Statement of Changes in Equity, the Statement of Cash Flows and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in the preparation of the financial statements is applicable law UK adopted international accounting standards.
In our opinion, the financial statements:
· give a true and fair view of the state of the company's affairs as at 31 May 2024 and of its loss for the year then ended;
· have been properly prepared in accordance with UK adopted international accounting standards; and
· have been prepared in accordance with the requirements of the Companies Act 2006.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC's Ethical Standard as applied to listed public interest entities, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate. Our evaluation of the directors' assessment of the entity's ability to continue to adopt the going concern basis of accounting included:
· Obtaining and reviewing management's going concern assessment (including the arithmetic accuracy thereof) and associated
· Cashflow forecasts for the period of 12 months from the date of approval of the financial statements;
· Challenging and reviewing the assumptions applied in the cashflow forecasts for reasonableness;
· Comparing the cashflow forecasts to historic financial information; and
· Performing sensitivity analysis where appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
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Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial statements of the current period and include the most significant assessed risks of material misstatement (whether or not due to fraud) we identified, including those which had the greatest effect on: the overall audit strategy, the allocation of resources in the audit; and directing the efforts of the engagement team. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.
Investments at fair value through profit or loss
Refer to Note 7 to the financial statements
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF
CRAVEN HOUSE CAPITAL PLC - continued
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| The company measured its investments at fair value through profit or loss with the changes in fair value recognised in the profit or loss. This fair value measurement is significant to our audit because the balance of investments at fair value through profit or loss of approximately $515,000 as at 31 May 2024 and the fair value loss of approximately $621,000 for the year then ended are material to the financial statements. In addition, the company's fair value measurement involves application of judgement and is based on assumptions and estimates.
Our audit procedures included, among others: · Obtaining the valuation reports to discuss and challenge the valuation process, methodologies used and market evidence to support significant judgments and assumptions applied in the valuation model; · Checking key assumptions and input data in the valuation model to supporting evidence; and · Checking arithmetical accuracy of the valuation model.
We consider that the company's measurement of its investments at fair value through profit or loss is supported by the available evidence.
Our approach to the audit Our scoping of the company audit was tailored to enable us to give an opinion on the financial statements as a whole. The company was subject to a full scope audit.
Our application of materiality In planning and performing our audit we applied the concept of materiality. An item is considered material if it could reasonably be expected to change the economic decisions of a user of the financial statements. We used the concept of materiality to both focus our testing and to evaluate the impact of misstatements identified.
Based on our professional judgement, we determined overall materiality for the financial statements as a whole to be approximately $11,000, based on 2% of total assets.
We used different level of materiality ('performance materiality') to determine the extent of our testing for the audit of the financial statements. Performance materiality is set based on the audit materiality as adjusted for the judgements made as to the entity risk and our evaluation of the specific risk of each audit area having regard to the internal control environment. This is set at approximately $8,730 for the company.
Where considered appropriate performance materiality may be reduced to a lower, such as, for related party transactions and directors' remuneration.
We agreed to report to it all identified errors in excess of approximately $545. Errors below that threshold would also be reported to it if, in our opinion as auditor, disclosure was required on qualitative grounds.
Other information The other information comprises the information included in the annual report, other than the financial statements and our auditor's report thereon. The directors are responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon.
Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF CRAVEN HOUSE CAPITAL PLC - continued
Matters on which we are required to report by exception In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the Strategic Report or the Report of the Directors.
We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:
· adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or · the financial statements are not in agreement with the accounting records and returns; or · certain disclosures of directors' remuneration specified by law are not made; or · we have not received all the information and explanations we require for our audit.
Responsibilities of directors As explained more fully in the Statement of Directors' Responsibilities set out on page 8 the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, the directors are responsible for assessing the company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.
Auditor's responsibilities for the audit of the financial statements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
A further description of our responsibilities for the audit of the financial statements is available on the Financial Reporting Council's website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.
Extent to which the audit was considered capable of detecting irregularities, including fraud Irregularities, including fraud, are instances of non-compliance with laws and regulations. We identified and assessed the risks of material misstatement of the financial statements from irregularities, whether due to fraud or error, and discussed these between our audit team members. We then designed and performed audit procedures responsive to those risks, including obtaining audit evidence sufficient and appropriate to provide a basis for our opinion.
We obtained an understanding of the legal and regulatory frameworks within which the company operates, focusing on those laws and regulations that have a direct effect on the determination of material amounts and disclosures in the financial statements. The laws and regulations we considered in this context were the Companies Act 2006 together with the UK adopted international accounting standards. We assessed the required compliance with these laws and regulations as part of our audit procedures on the related financial statement items. INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF CRAVEN HOUSE CAPITAL PLC - continued
In addition, we considered provisions of other laws and regulations that do not have a direct effect on the financial statements but compliance with which might be fundamental to the company's ability to operate or to avoid a material penalty. We also considered the opportunities and incentives that may exist within the company for fraud. The laws and regulations we considered in this context for the UK operations were General Data Protection Regulation (GDPR), taxation legislation, and employment legislation.
Auditing standards limit the required audit procedures to identify non-compliance with these laws and regulations to enquiry of the directors' and other management and inspection of regulatory and legal correspondence, if any.
We identified the greatest risk of material impact on the financial statements from irregularities, including fraud, to be within judgement and estimates, and the override of controls by management. Our audit procedures to respond to these risks included enquiries of management about their own identification and assessment of the risks of irregularities, sample testing on the posting of journals, reviewing accounting estimates for biases, and reading minutes of meetings of those charged with governance.
Owing to the inherent limitations of an audit, there is an unavoidable risk that we may not have detected some material misstatements in the financial statements, even though we have properly planned and performed our audit in accordance with auditing standards. For example, the further removed non-compliance with laws and regulations (irregularities) is from the events and transactions reflected in the financial statements, the less likely the inherently limited procedures required by auditing standards would identify it. In addition, as with any audit, there remained a higher risk of non-detection of irregularities, as these may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal controls. We are not responsible for preventing non-compliance and cannot be expected to detect non-compliance with all laws and regulations.
Use of our report This report is made solely to the company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's members as a body, for our audit work, for this report, or for the opinions we have formed.
Lee Lederberg
Senior Statutory Auditor for and on behalf of Edwards Veeder (UK) Limited Chartered Accountants & Statutory Audit Firm Ground Floor, 4 Broadgate, Broadway Business Park, Chadderton, Greater Manchester, United Kingdom, OL9 9XA
Date: 11th November 2024
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CRAVEN HOUSE CAPITAL PLC
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 MAY 2024
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| 2024 | | 2023 | |
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| Notes | |
| $'000 | | $'000 | |
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| CONTINUING OPERATIONS | | |
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Changes in fair value | | |
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(621) | |
(5,264) | |
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| Administrative expenses | | |
| (197) | | (186) | |
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OPERATING LOSS
Interest expense
LOSS BEFORE INCOME TAX |
4 | |
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(818)
(75)
(893) | |
(5,450)
(65)
(5,515) | |
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| Income tax | 5 | |
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| LOSS FOR THE YEAR AND TOTAL COMPREHENSIVE INCOME | | |
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(893) | |
(5,515) | |
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| Loss per share expressed | | |
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| Basic and diluted | 6 | |
| (23.11) | | (142.74) | |
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The notes on pages 17 to 34 form part of the financial statements.
CRAVEN HOUSE CAPITAL PLC Company Number 05123368
STATEMENT OF FINANCIAL POSITION
AS AT 31 MAY 2024
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| 2024 | | | 2023 | ||||
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| Notes |
| $'000 | | | $'000 | ||||
| ASSETS | |
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| NON-CURRENT ASSETS | |
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| Investments at fair value through | |
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| profit or loss | 7 |
| 515 | | | 1,136 | ||||
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| 515 | | | 1,136 | ||||
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| CURRENT ASSETS | |
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| Trade and other receivables | 8 |
| 29 | | | 38 | ||||
| Cash and cash equivalents | 9 |
| 2 | | | 4 | ||||
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| 31 | | | 42 | ||||
| TOTAL ASSETS | |
| 546 | | | 1,178 | ||||
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| EQUITY | |
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| SHAREHOLDERS' EQUITY | |
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| Called up share capital | 10 |
| 3,802 | | | 3,802 | ||||
| Share premium | |
| 11,153 | | | 11,153 | ||||
| Accumulated deficit | |
| (16,232) | | | (15,339) | ||||
| TOTAL EQUITY | |
| (1,277) | | | (384) | ||||
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| LIABILITIES | |
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| CURRENT LIABILITIES | |
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| Trade and other payables NON-CURRENT LIABILITES Other payables | 11
12 |
| 241
1,582 | | | 109
1,453
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| TOTAL LIABILITIES | |
| 1,823 | | | 1,562 | ||||
| TOTAL EQUITY AND LIABILITIES | |
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546 | | |
1,178 | ||||
Approved and authorised for issue by the Board on 14th November 2024 and signed on its behalf by:
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Mr M J Pajak - Director
The notes on pages 17 to 34 form part of the financial statements.
CRAVEN HOUSE CAPITAL PLC
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 MAY 2024
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Share premium $'000 |
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Accumulated deficit $'000
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Total $'000 |
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| Balance at 1 June 2022 | 3,802 | | 11,153 | | | (9,824) | 5,131 |
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| Loss for the year | - | | - | | | (5,515) | (5,515) |
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| Balance at 31 May 2023 | 3,802 | | 11,153 | | | (15,339) | (384) |
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| Loss for the year | - | | - | | | (893) | (893) |
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| Balance at 31 May 2024 | 3,802 | | 11,153 | | | (16,232) | (1,277) |
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CRAVEN HOUSE CAPITAL PLC
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 MAY 2024
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| 2024 | | 2023 |
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| $'000 | | $'000 |
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| Cash flows from operating activities | | |
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| Loss before income tax | | |
| (893) | | (5,515) |
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| Adjustments for non-cash items | | |
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| Fair value adjustment arising on investments Decrease in trade and other receivables | | |
| 621 9 | | 5,264 5 |
|
| Increase in trade and other payables Interest expense | | |
| 132 75 | | 33 65 |
|
| Net cash outflow from operating activities | | |
| (56) | | (148) |
|
|
| | |
|
| | |
|
| Cash flows from financing activities Loans received Net cash inflow from financing activities | | |
|
54 54 | |
151 192 |
|
|
Net (decrease)/increase in cash and cash equivalents |
|
|
|
(2) |
|
3 |
|
|
| | |
|
| | |
|
| Cash and cash equivalents at the beginning | | |
|
| | |
|
| of the year | | 9 |
| 4 | | 1 |
|
|
| | |
|
| | |
|
| Cash and cash equivalents at the end of the year | | 9 |
| 2 | | 4 |
|
|
| | |
|
| | |
|
|
| | |
|
| | |
|
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| | |
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| | | |
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| | |
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| | | |
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| | | |
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| | |
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| The notes on pages 17 to 34 form part of the financial statements. |
| ||||||
CRAVEN HOUSE CAPITAL PLC
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2024
|
1. ACCOUNTING POLICIES
Basis of preparation These financial statements have been prepared in accordance with International Financial Reporting Standards and IFRIC interpretations and with those parts of the Companies Act 2006 applicable to companies reporting under UK adopted international standards.
Craven House Capital plc is a public company incorporated in the United Kingdom under the Companies Act 2006. The address of the registered office is given on the company information page. The Company is listed on the AIM Market of the London Stock Exchange (ticker: CRV).
The directors have considered the definition of an investment entity in IFRS 10 as well as the associated application guidance. The directors consider that the Company has met the definition of an investment entity. The significant judgments and assumptions made by the directors in determining that the Company is an investment entity are that; it has obtained funds from investors (its shareholders) and is providing those investors with investment management services; it commits to its investors that its business purpose is to invest funds solely for returns from capital appreciation, investment income, or both; and it measures and evaluates the performance of substantially all of its investments on a fair value basis.
The main accounting implications for the preparation of the accounts as an investment entity are that the accounts are not prepared on a consolidated basis. Instead the Company's investments in its subsidiaries are accounted for at fair value through its profit and loss account.
The financial statements have been prepared under the historical cost convention, except to the extent varied below for fair value adjustments required by accounting standards, and in accordance with applicable UK adopted international standards. The principal accounting policies are set out below.
The financial statements are presented in US dollars which is the Company's functional currency. Amounts are rounded to the nearest thousand, unless otherwise stated.
Going concern The Company's business activities, together with the factors likely to affect its future development, performance and position are set out in the Investment Manager's Report. The financial statements include the Company's objectives, policies and processes for managing its capital; its financial risk management objectives; details of its financial instruments; and its exposures to credit risk and liquidity risk. The directors believe that the Company is well placed to manage its business risks successfully. The directors have a reasonable expectation that the Company has adequate resources to continue in operational existence for the foreseeable future. Thus they continue to adopt the going concern basis of accounting in preparing the annual financial statements.
The Company maintains minimal cash reserves, however in addition to the cash on the Company's statement of financial position, sufficient cash is available to the Company via liquid investments to ensure it is able to meet its liabilities as they fall due and there is therefore no risk to the going concern status of the Company.
There are currently no commitments to provide support to any subsidiary, however the Company may elect to provide capital to its subsidiaries at any time to further its stated Investing Policy.
|
CRAVEN HOUSE CAPITAL PLC
NOTES TO THE FINANCIAL STATEMENTS - continued
FOR THE YEAR ENDED 31 MAY 2024
| |
1. ACCOUNTING POLICIES - continued
The Company has applied for the first time certain amendments to the standards
Amendments to IFRS 17 Insurance Contracts (effective for annual periods beginning on or after 1 January 2023, endorsed by the European Union on 19 November 2021).
Amendments to IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors: Definition of Accounting Estimates (effective for annual periods beginning on or after 1 January 2023, endorsed by the European Union on 2 March 2022).
Amendments to IAS 1 Presentation of Financial Statements and IFRS Practice Statement 2: Disclosure of Accounting policies (effective for annual periods beginning on or after 1 January 2023, endorsed by the European Union on 2 March 2022).
Amendments to IAS 12 Income Taxes: Deferred Tax related to Assets and Liabilities arising from a Single Transaction (effective for annual periods beginning on or after 1 January 2023, endorsed by the European Union on 11 August 2022).
Amendments to IFRS 17 Insurance Contracts: Initial Application of IFRS 17 and IFRS 9 - Comparative Information (effective for annual periods beginning on or after 1 January 2023, endorsed by the European Union on 8 September 2022)
Amendments to IAS 12 Income taxes: International Tax Reform - Pillar Two Model Rules (effective immediately and for annual periods beginning on or after 1 January 2023, endorsed by the European Union on 8 November 2023).
The following new and revised standards and interpretations have not been adopted by the Company, whether endorsed by the European Union or not
Amendments to IFRS 16 Leases: Lease Liability in a Sale and Leaseback (effective for annual periods beginning on or after 1 January 2024, endorsed by the European Union on 20 November 2023).
Amendments to IAS1 Presentation of Financial Statements: Classification of Liabilities as Current or Non-current and Non-current liabilities with Covenants (effective for annual periods beginning on or after 1 January 2024, endorsed by the European Union on 19 December 2023).
Amendments to IAS 7 Statement of Cash Flows and IFRS 7 Financial Instruments: Disclosures: Supplier Finance Arrangements (effective for annual periods beginning on or after 1 January 2024, endorsed by the European Union on 15 May 2024).
The Company has assessed the impact of the adoption of these standards and interpretations on its financial statements on initial adoption and do not expect these standards to have a material impact.
CRAVEN HOUSE CAPITAL PLC
NOTES TO THE FINANCIAL STATEMENTS - continued
FOR THE YEAR ENDED 31 MAY 2024
1. ACCOUNTING POLICIES - continued
Financial assets
Purchases or sales of financial assets are recognised at the date of the transaction. Where appropriate criteria are met, the Company makes use of the option of measuring non current investments upon initial recognition as financial assets at fair value through profit or loss. These criteria include that the fixed asset investment should meet the Company's published Investing Policy and form part of the Company's managed portfolio or similar investments. Such financial assets are carried at fair value and movements in fair value are recognised through profit and loss. For quoted securities, fair value is either the bid price or the last traded price, depending on the convention of the exchange on which the investment is quoted.
Impairment of financial assets
A financial asset not classified at fair value through profit or loss is assessed at each reporting date to determine whether there is objective evidence that it is impaired. A financial asset is impaired if objective evidence indicates that a loss event has occurred after the initial recognition of the asset, and that the loss event had a negative effect on the estimated future cash flows of that asset that can be estimated reliably.
The new impairment model requires forward looking information, which is based on assumptions for the future movement of different economic drivers and how these drivers will affect each other. It also requires management to assign probability to various categories of receivables. Probability of default constitutes a key input in measuring an ECL and entails considerable judgment; it is an estimate of the likelihood of default over a given time horizon, the calculation of which includes historical data, assumptions and expectation of future conditions.
The directors have determined that the application of IFRS 9's impairment requirements does not have a material impact on the financial statements.
CRAVEN HOUSE CAPITAL PLC
NOTES TO THE FINANCIAL STATEMENTS - continued
FOR THE YEAR ENDED 31 MAY 2024
| |
1. ACCOUNTING POLICIES - continued
Measurement
Financial assets at fair value through profit or loss are initially recognised at fair value. Transaction costs are expensed through profit and loss. Subsequent to initial recognition, all financial assets at fair value through profit or loss are measured at fair value in accordance with International Private Equity and Venture Capital Valuation ("IPEVCV") guidelines, as the Company's business is to invest in financial assets with a view to profiting from their total return in the form of capital growth and income. Gains and losses arising from changes in the fair value of the financial assets at fair value through profit or loss are presented in the year in which they arise.
Valuation of investments
A number of the Company's assets are measured at fair value for financial reporting purposes. The Investment Manager determines the appropriate valuation techniques and inputs for fair value measurements.
In estimating the fair value of an asset, the Investment Manager uses market-observable data to the extent it is available. The Investment Manager reports its findings to the Board of Directors of the Company every quarter to explain the cause of fluctuations in the fair value of the assets.
Information about the valuation techniques and inputs used in determining the fair value of various assets and liabilities are disclosed in notes 7 and 13.
Financial instruments that are measured subsequent to initial recognition at fair value are grouped into Levels 1 to 3 based on the degree to which the fair value is observable:
Level 1 fair value measurements are those derived from quoted prices (unadjusted) in active markets for identical assets or liabilities;
Level 2 fair value measurements for those derived from inputs other than quoted prices included within Level 1 that are observable for the assets or liability, either directly or indirectly; and Level 3 fair value measurements are those derived from inputs that are not based on observable market data.
a) Quoted investments
Where investments are quoted on recognised stock markets and an active market in the shares exists, the company values those investments at closing mid-market price on the reporting date. Where an active market does not exist those quoted investments are valued by the application of an appropriate valuation methodology as if the relevant investment was unquoted.
b) Unquoted investments
In estimating the fair value for an unquoted investment, the Company applies a methodology that is appropriate in light of the nature, facts and circumstances of the investment and its materiality in the context of the total investment portfolio using reasonable data, market inputs, assumptions and estimates. Any changes in the above data, market inputs, assumptions and estimates will affect the fair value of an investment.
Financial liabilities and equity
Financial liabilities are recognised when the Company becomes party to the contractual provisions of the financial instrument and are measured initially at fair value adjusted for transaction costs. Financial liabilities are measured subsequently at amortised cost using the effective interest method.
An equity instrument is any contract that evidences a residual interest in the assets of the Company after deducting all its liabilities.
In accordance with IFRIC 19, when a financial liability is extinguished by the issue of equity, the equity instrument issued is measured at fair value and any difference between the financial liability extinguished and the measurement of the equity instrument is recognised in profit and loss.
CRAVEN HOUSE CAPITAL PLC
NOTES TO THE FINANCIAL STATEMENTS - continued
FOR THE YEAR ENDED 31 MAY 2024
| |
1. ACCOUNTING POLICIES - continued
Current and deferred tax
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the income statement because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The Company's liability for current tax is calculated using tax rates that have enacted by the statement of financial position date.
Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the statement of financial position date where transactions or events that result in an obligation to pay more tax in the future or a right to pay less tax in the future have occurred at the statement of financial position date. Timing differences between the Company's taxable profits and its results as stated in the financial information that arises from the inclusion of gains and losses in tax assessments in periods different from those in which they are recognised in the financial information.
A deferred tax asset is only recognised for an unused tax loss carried forward if it is considered probable that there will be sufficient future taxable profits against which the loss can be utilised.
Foreign currencies
In preparing the financial statements of the Company, transactions in currencies other than the entity's functional currency are recorded at the rates of exchange prevailing at the dates of the transactions. At each statement of financial position date, monetary items denominated in foreign currencies are retranslated at the rates prevailing at the date when the fair value was determined. Non-monetary items that are measured in terms of historical cost in a foreign currency are not retranslated.
Exchange differences are recognised in profit or loss in the period in which they arise except for exchange differences on monetary items receivable from or payable to a foreign operation for which settlement is neither planned nor likely to occur; which form part of the net investment in a foreign operation and which are recognised in the foreign currency translation reserve.
For the purposes of presenting US dollar financial statements, the assets and liabilities of the Company's foreign operations are expressed using exchange rates prevailing at the statement of financial position date. Income and expense items are translated at the average exchange rate for the period, unless exchange rates fluctuated significantly during that period, in which case the exchange rates at the dates of the transactions are used. Exchange differences arising, if any, are classified as equity and recognised in a foreign currency translation reserve.
Segment reporting
Operating segments are reported in a manner consistent with the internal reporting provided to the directors. The directors, who are responsible for allocating resources and assessing performance of the operating segments, have been identified as the senior management that make strategic decisions.
Critical accounting estimates and judgements
Preparation of financial statements in conformity with IFRS requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis of making judgements about carrying values of assets and liabilities that are not readily apparent from other sources. Further information regarding the assumptions relied upon and sensitivity analysis around these assumptions is provided in note 13 below.
In particular, significant areas of estimation, uncertainty and critical judgements in applying accounting policies that have the most significant effect on the amount recognised in the financial statements relate to the valuation of investments.
CRAVEN HOUSE CAPITAL PLC
NOTES TO THE FINANCIAL STATEMENTS - continued
FOR THE YEAR ENDED 31 MAY 2024
| |
1. ACCOUNTING POLICIES - continued
Critical accounting estimates and judgements - continued
The Company has made a number of investments in the form of equity instruments in private companies operating in emerging markets. The investee companies are generally at a key stage in their development and operating in an environment of uncertainty in capital markets. Should planned development prove successful, the value of the Company's investment is likely to increase, although there can be no guarantee that this will be the case. Should planned development prove unsuccessful, there is a material risk that the Company's investments may be impaired. The carrying amounts of investments are therefore highly sensitive to the assumption that the strategies of these investee companies will be successfully executed.
The directors have also determined that the Company meets IFRS 10's definition of an investment company and that the functional currency is appropriate given that underlying transactions, events and conditions that are most likely to impact on the Company's performance are more closely linked to the US dollar than GB sterling.
Share capital and share premium
Share capital represents the nominal (par) value of shares that have been issued.
Share premium includes any premium received on issue of share capital. Any transaction costs associated with the issuing of shares are deducted from share premium.
2. SEGMENTAL REPORTING
The operating segment has been determined and reviewed by the directors to be used to make strategic decisions. The directors consider there to be a single business segment being that of investing activities, therefore there is only one reportable segment.
3. EMPLOYEES AND DIRECTORS
|
| | 2024 | | 2023 |
|
| | $'000 | | $'000 |
| Wages and salaries - directors' remuneration | | - | | - |
|
| |
| | |
The average monthly number of employees (including directors) during the year was as follows:
|
| | 2024 | | 2023 |
| Directors | | 3 | | 3 |
The Company has no employees other than the directors.
CRAVEN HOUSE CAPITAL PLC
NOTES TO THE FINANCIAL STATEMENTS - continued
FOR THE YEAR ENDED 31 MAY 2024
| |
3. EMPLOYEES AND DIRECTORS - continued
The service contracts of the directors who served during the year are as follows:
|
| | Basic annual fee | |
| Mr M J Pajak | | $nil | |
| Mr B S Bindra Mr C P Morrison | | $5,000** $5,000** | |
** Payable in new ordinary shares of the company at $1.00 per share and issued on a bi-annual basis.
Desmond Holdings Ltd is the Company's Investment Manager. The directors are the key management of the Company. There were no directors (2023: none) to whom retirement benefits were accruing under money purchase schemes.
4. LOSS BEFORE INCOME TAX
The loss before income tax is stated after charging:
|
| | 2024 | | 2023 |
|
| | $'000 | | $'000 |
| Fees payable to the Company's auditor for the audit of the Company's annual accounts | |
17 | |
17 |
| | |
| | |
| | |
| | |
|
| |
| | |
CRAVEN HOUSE CAPITAL PLC
NOTES TO THE FINANCIAL STATEMENTS - continued
FOR THE YEAR ENDED 31 MAY 2024
| |
5. INCOME TAX
Analysis of charge in the year
|
| | 2024 | | 2023 |
|
| | $'000 | | $'000 |
| Current tax: | | - | | - |
| Deferred tax | | - | | - |
| | |
| | |
| Tax on loss on ordinary activities | | - | | - |
|
| |
| | |
|
| | 2024 | | 2023 |
|
| | $'000 | | $'000 |
| Loss on ordinary activities before tax | | (893) | | (5,515) |
Analysis of charge in the year
|
| |
| |
|
|
| | 2024 | | 2023 |
|
| | $'000 | | $'000 |
| Loss on ordinary activities multiplied by the Company's rate of corporation tax in the UK of 19% (2023: 19%) | |
(170) | |
(1,048) |
| | |
| | |
| Effects of: | |
| | |
| Losses carried forward | | 170 | | 1,048 |
| Current tax charge for the year as above | | - | | - |
|
| |
| | |
At 31 May 2024, the Company had UK tax losses of $6,126,134 (2023: $5,691,105) available to be carried forward and utilised against future taxable profits. A deferred tax asset of $1,163,964 (2023: $1,081,310) has not been recognised due to uncertainties over the timing of when taxable profits will arise.
6. EARNINGS PER SHARE
Basic earnings per share is calculated by dividing the earnings attributable to ordinary shareholders by the weighted average number of ordinary shares outstanding during the period.
Diluted earnings per share has not been disclosed as the inclusion of the unexercised warrants would be non-dilutive.
CRAVEN HOUSE CAPITAL PLC
NOTES TO THE FINANCIAL STATEMENTS - continued
FOR THE YEAR ENDED 31 MAY 2024
| |
6. EARNINGS PER SHARE - continued
Reconciliations are set out below.
| |
| 2024 |
|
| | Earnings $'000 | Weighted average number of shares | Per-share amount cents |
| Basic EPS | | | |
| Earning attributable to ordinary shareholders |
(893) |
3,863,590 |
(23.11) |
| | |
| |
| | | 2023 | |
| | Earnings $'000 | Weighted average number of shares | Per-share amount cents |
| Basic EPS | | | |
| Earning attributable to ordinary shareholders |
(5,515) |
3,863,590 |
(142.74) |
| 7. | INVESTMENTS
Investments at fair value through profit or loss |
The Company adopted the valuation methodology prescribed in the IPEVCV guidelines to value its investments at fair value through profit and loss.
The Company had the following holdings at 31 May 2024:
| Name | Holding | Principal Place of Business | Ownership Interest |
|
| | | |
| Garimon Limited | Direct | UK / Sweden | 29.9% |
| Stormfjord Limited | Direct | UK / Sweden | 25.5% |
| Honeydog Limited | Direct | UK / Sweden | 29.9% |
| Rosedog Limited | Direct | UK / Sweden | 28.6% |
| BioVitos Medical Limited | Direct | UK / Sweden | 24.5% |
CRAVEN HOUSE CAPITAL PLC
NOTES TO THE FINANCIAL STATEMENTS - continued
FOR THE YEAR ENDED 31 MAY 2024
| | |
| 7. | INVESTMENTS -continued
|
Investments at fair value through profit or loss
|
|
|
|
|
| Quoted equity investments $'000
|
| Unquoted equity investments $'000
|
Total $'000 |
|
|
| | | | | | | | |
|
| At 1 June 2022 | | | | | - | | 6,400 | 6,400 |
|
|
Fair value movement
| | | | |
- | |
(5,264) |
(5,264) |
|
| At 31 May 2023 | | | | | - | | 1,136 | 1,136 |
|
|
Fair value movement | | | | |
- | |
(621) |
(621) |
|
| At 31 May 2024 | | | | | - | | 515 | 515 |
|
| | | | | | | | | |
|
| | |||||||||
The value of Investments at 31 May 2024 represents holdings in unquoted investments and have therefore been measured on a Level 3 basis as no observable market data is available. Further information on each investment holding is as follows;
Shares in Garimon Limited are valued at $nil representing a 29.9% holding. Garimon Limited is the owner of "Magazinos.com", an on-line media magazine and periodical content provision service. Despite the potential future value of this investment, the fair value has been impaired to zero due to the current absence of tangible arm's length or market-based valuation metrics.
Shares in Stormfjord Limited are valued at $nil representing a 25.5% holding. Stormfjord is the owner of the domain www.onebas.com, an optimised search engine providing a portal to music content freely circulating online. Despite the potential future value of this investment, the fair value has been impaired to zero due to the current absence of tangible arm's length or market-based valuation metrics.
Shares in Honeydog Limited are valued at $nil representing a 29.9% holding. Honeydog Limited is the 25% owner of the entity which owns the licence to manufacture and distribute the chemotherapy drug, Temodex, which is used in the treatment of brain tumours. Despite the potential future value of this investment, the fair value has been impaired to zero due to the current absence of tangible arm's length or market-based valuation metrics.
Shares in Rosedog Limited are valued at $nil representing a 28.6% holding, unchanged from the prior year. Rosedog Limited is the owner of TV Zinos (www.tvzinos.com), a website which offers a number of free-to-view television channels. Despite the potential future value of this investment, the fair value has been impaired to zero due to the current absence of tangible arm's length or market-based valuation metrics.
CRAVEN HOUSE CAPITAL PLC
NOTES TO THE FINANCIAL STATEMENTS - continued
FOR THE YEAR ENDED 31 MAY 2024
|
7. INVESTMENTS - continued
Shares in BioVitos Medical Limited are valued at $515,000 representing a 24.5% holding. BioVitos is the owner of the licence to market a patented heart drug 'Succifer' (also marketed as 'Inofer'). The valuation of this shareholding is supported by an RTO undertaken by BioVitos during the period into Hemcheck Sweden AB (a Swedish medical technology company, listed on the Stockholm Stock Exchange) in a transaction which values Succifer at $5,000,000. As a result BioVitos were be issued 259,654,000 shares in Hemcheck, of which 41,118,876 shares were subsequently distributed to Craven after the period.
The businesses of all of the above portfolio investments are presently loss-making although their cost bases are low and there is minimal committed future expenditure, meaning that the extent and timing of the Company's further investment in the businesses are highly controllable. The Company and the incumbent management teams of the investee companies will continue to work together with the aim that these businesses become financially self-sustaining and generating surpluses within the short- to medium-term and to crystallise additional capital value for shareholders through strategic, third-party partnerships.
8. TRADE AND OTHER RECEIVABLES
9. CASH AND CASH EQUIVALENTS
The amounts disclosed in the statement of cash flows in respect of cash and cash equivalents are in respect of the following statement of financial position amounts:
CRAVEN HOUSE CAPITAL PLC
NOTES TO THE FINANCIAL STATEMENTS - continued FOR THE YEAR ENDED 31 MAY 2024
10. CALLED UP SHARE CAPITAL
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
The aggregate nominal values of shares include exchange differences arising from the translation of shares at historic rates and the translation at the rate prevailing at the date of the change in functional currency.
11. TRADE AND OTHER PAYABLES
|
| | 2024 | | 2023 |
|
| | $'000 | | $'000 |
| Current: | |
| | |
| Trade payables | | 93 | | 72 |
| Accruals and deferred income | | 148 | | 37 |
| | | 241 | | 109 |
12. OTHER PAYABLES
|
| | 2024 | | 2023 |
|
| | $'000 | | $'000 |
| Non-current: | |
| | |
| Other payables | | 1,582 | | 1,453 |
| | | 1,582 | | 1,453 |
CRAVEN HOUSE CAPITAL PLC
NOTES TO THE FINANCIAL STATEMENTS - continued
FOR THE YEAR ENDED 31 MAY 2024
|
13. FINANCIAL INSTRUMENTS
Financial risk management objectives and policies
Management has adopted certain policies on financial risk management with the objective of:
i. ensuring that appropriate funding strategies are adopted to meet the Company's short-term and long-term funding requirements taking into consideration the cost of funding, gearing levels and cash flow projections;
ii. ensuring that appropriate strategies are also adopted to manage related interest and currency risk funding; and
iii. ensuring that credit risks on receivables are properly managed.
Financial instrument by category
The accounting policies for financial instruments have been applied to the line items below:
Financial assets at fair value through profit or loss
Financial instruments that are measured subsequent to initial recognition at fair value are grouped into Levels 1 to 3 based on the degree to which the fair value is observable:
Level 1 fair value measurements are those derived from quoted prices (unadjusted) in active markets for identical assets or liabilities;
Level 2 fair value measurements for those derived from inputs other than quoted prices included within Level 1 that are observable for the assets or liability, either directly or indirectly; and
Level 3 fair value measurements are those derived from inputs that are not based on observable market data.
Unquoted equity investments held at fair value through profit or loss are valued in accordance with the IPEVCV guidelines as follows;
|
CRAVEN HOUSE CAPITAL PLC
NOTES TO THE FINANCIAL STATEMENTS - continued
FOR THE YEAR ENDED 31 MAY 2024
|
13. FINANCIAL INSTRUMENTS - continued
IFRS 13 and IFRS 7 requires the directors to consider the impact of changing one or more of the inputs used as part of the valuation process to reasonable possible alternative assumptions.
The Level 3 valuations listed above include inputs based on non-observable market data as outlined in note 7 above. The Investment Manager has derived a fair value for these investments based on the value of the underlying net assets of the respective investments and / or has considered prospective enterprise values for these investments from the perspective of a market participant.
The directors have considered a number of reasonable possible alternative assumptions regarding the value of the Level 3 investments. IFRS 13 requires an entity to disclose quantitative information about the significant unobservable inputs used.
A summary of the unobservable inputs, judgements and estimates made in relation to the Level 3 investments is as follows:
As of the year end, the valuation the Company's minority shareholdings in each its investee companies has been valued on a Price of Recent Investment basis, adjusted for current facts and circumstances which the directors consider represents the best indication of the fair value at the year end. All five of these businesses are presently loss-making although their cost bases are low and there is minimal committed future expenditure, meaning that the extent and timing of the Company's further investment in the businesses are highly controllable.
However, each business operates in a competitive market place and there can be no guarantee that any of the investee companies will ultimately be successful and that the future carrying value of these companies will not need to be impaired. |
CRAVEN HOUSE CAPITAL PLC
NOTES TO THE FINANCIAL STATEMENTS - continued
FOR THE YEAR ENDED 31 MAY 2024
|
13. FINANCIAL INSTRUMENTS - continued
The valuation method applied to each equity investment is that which is considered most appropriate with regard to the stage of development of the investee business and the IPEVCV guidelines.
All other financial instruments, including cash and cash equivalents, trade and other receivables, trade and other payables and loans and borrowings, are measured at amortised cost.
Due to their short-term nature, the carrying values of cash and cash equivalents, trade and other receivables, trade and other payables and loans and borrowings approximates their fair value.
Credit risk
The Company's credit risk is primarily attributable to other receivables. Management has a credit policy in place and the exposure to credit risks is monitored on an ongoing basis. In respect of other receivables, individual credit evaluations are performed whenever necessary. The Company's maximum exposure to credit risk is represented by loans, both those held as unquoted investments and included in other receivables, and cash balances. The Company monitors the financial position of borrowing entities on an ongoing basis and is satisfied with the quality of the debt. Investment of surplus cash balances are reviewed on an annual basis by the Company and it is satisfied with the choice of institution. The directors have assessed the amounts owed to connected parties for impairment in accordance with IFRS 9 and concluded that there is no material impact.
Interest rate risk
The Company currently operates with positive cash and cash equivalents as a result of issuing share capital in anticipation of future funding requirements. As the Company has no borrowings from the bank and the amount of deposits in the bank are not significant, the exposure to interest rate risk is not significant to the Company.
Liquidity risk
The Company manages its liquidity requirements by the use of both short-term and long-term cash flow forecasts. The Company's policy to ensure facilities are available as required is to issue equity share capital in accordance with agreed settlement terms with vendors or professional firms, and are typically due within one year unless otherwise stated.
The Company maintains minimal cash reserves, however in addition to the cash on the Company's statement of financial position, sufficient cash is available to the Company via credit facilities to ensure it is able to meet its liabilities as they fall due. |
CRAVEN HOUSE CAPITAL PLC
NOTES TO THE FINANCIAL STATEMENTS - continued
FOR THE YEAR ENDED 31 MAY 2024
| |
13. FINANCIAL INSTRUMENTS - continued
The table below summarises the maturity profile of the Company's financial liabilities based on contractual discounted payments.
|
| On | | Less than |
| 3 to 12 |
| More than | |
| | Demand |
| 3 months |
| months |
| 12 Months | Total |
| Year ended 31 May 2024 | $'000 |
| $'000 |
| $'000 |
| $'000 | $'000 |
|
| | | | | | | | |
| Trade payables | 93 | | - | | - | | - | 93 |
| Other payables | - | | - | | - | | 1,582 | 1,582 |
| Accruals and deferred income | 148 | | - | | - | | - | 148 |
| | 241 |
| - |
| - |
| 1,582 | 1,823 |
|
| | | | | | | | |
| Year ended 31 May 2023 | | | | | | | | |
| Trade payables | 72 | | - | | - | | - | 72 |
| Other payables | - | | - | | - | | 1,453 | 1,453 |
| Accruals and deferred income | 37 | | - | | - | | - | 37 |
| | 109 | | - | | - | | 1,453 | 1,562 |
Price risks
The Company's securities are susceptible to price risk arising from uncertainties about future value of its investments. This price risk is the risk that the fair value of future cash flows will fluctuate because of changes in market prices, whether those changes are caused by factors specific to the individual investment or financial instrument or its holder or factors affecting all similar financial instruments or investments traded in the market.
During the year under review, the Company did not hedge against movements in the value of its investments. A 10% increase/decrease in the fair value of investments would result in a $51,500 (2023: $113,600 increase/decrease in the net asset value).
While investments in companies whose business operations are based in emerging markets may offer the opportunity for significant capital gains, such investments also involve a degree of business and financial risk, in particular for unquoted investments.
Generally, the Company is prepared to hold unquoted investments for a medium to long time frame, in particular if an admission to trading on a stock exchange has not yet been planned. Sale of securities in unquoted investments may result in a discount to the book value.
Currency risks
The Company is exposed to foreign currency risk on its investments held at fair value and adverse movements in foreign exchange rates will reduce the values of these investments. There is no systematic hedging in foreign currencies against such possible losses on translation/realisation.
Foreign exchange volatility is significantly reduced following the transition to US Dollar as the Company's currency exposures are now more closely matched to its functional and reporting currency. The Company's exposure to other foreign currency changes is not deemed to be material as the Company's investments are US Dollar based.
CRAVEN HOUSE CAPITAL PLC
NOTES TO THE FINANCIAL STATEMENTS - continued
FOR THE YEAR ENDED 31 MAY 2024
| |
13. FINANCIAL INSTRUMENTS - continued
Capital management
The Company's financial strategy is to utilise its resources to further grow its portfolio. The Company keeps investors and the market informed of its progress with its portfolio through periodic announcements and raises additional equity finance at appropriate times. The Company regularly reviews and manages its capital structure for the portfolio companies to maintain a balance between the higher shareholder returns that might be possible with certain levels of borrowing for the portfolio and the advantages and security afforded by a sound capital position, and makes adjustments to the capital structure of the portfolio in the light of changes in economic conditions. Although the Company has utilised loans from shareholders to acquire investments, it is the Company's policy as far as possible to finance its investing activities with equity and not to have gearing in its portfolio.
At the statement of financial position date the capital structure of the Company consisted of cash and cash equivalents and equity comprising issued capital and reserves.
The table below sets out the Company's classification of each class of financial assets/liabilities, their fair values (where appropriate) and under which valuation method they are valued:
|
|
Notes |
|
Level 1 $'000 |
|
Level 2 $'000
|
|
Level 3 $'000
| Total carrying amount and Fair Value $'000 | ||
| 31 May 2024 | | | | | | | | | ||
| Loans and receivables | | | | | | | | | ||
| Trade and other receivables | 8 | | - | | - | | 29 | 29 | ||
| Cash and cash equivalents | 9 | | 2 | | - | | - | 2 | ||
| | | | 2 | | - | | 29 | 31 | ||
| Liabilities at amortised cost | | | | | | | | | ||
| Trade and other payables | 11&12 | | - | | - | | (1,823) | (1,823) | ||
| | | | | | | | | | ||
| Fair value through profit and loss Investments |
7 | |
- | |
515 | |
- |
515 | ||
| | | | 2 | | 515 | | (1,794) | (1,277) | ||
| 31 May 2023 | | | | | | | | | ||
| Loans and receivables | | | | | | | | | ||
| Trade and other receivables | 8 | | - | | - | | 38 | 38 | ||
| Cash and cash equivalents | 9 | | 4 | | - | | - | 4 | ||
| | | | 4 | | - | | 38 | 42 | ||
| Liabilities at amortised cost | | | | | | | | | ||
| Trade and other payables | 11&12 | | - | - | | | (1,562) | (1,562) | ||
|
Fair value through profit and loss Investments |
7 | |
- |
- | | |
1,136 |
1,136 | ||
| | | | 4 | - | | | (388) | (384) | ||
|
CRAVEN HOUSE CAPITAL PLC
NOTES TO THE FINANCIAL STATEMENTS - continued FOR THE YEAR ENDED 31 MAY 2024
| ||||||||||
14. RELATED PARTY DISCLOSURES
During the year, Craven Industrial Holdings Plc made loans to and incurred costs on behalf of the Company.
Loan interest charged for the year at 5% amounted to $74,984 (2023: $65,365).
At the year end, a balance of $1,582,929 (2023: $1,453,408) was due from the Company to Craven Industrial Holdings Plc.
Despite the common director in Mr M J Pajak, the board of Craven House Capital Plc do not believe that Craven House Capital Plc or Craven Industrial Holdings Plc are able to exert control or influence over each other and neither are accustomed to act in accordance with instructions from the other.
Directors and key management
All key management personnel are directors and appropriate disclosure with respect to them is made in note 3 of the financial statements. There are no other contracts of significance in which any director has or had during the year a material interest.
15. ULTIMATE CONTROLLING PARTY
The directors consider that there is no ultimate controlling party.
16. EVENTS AFTER THE REPORTING PERIOD
On 5 June 2024 the Company announced the allocation of a pro-rata distribution of c.63,615,230 shares by investee company BioVitos Medical Limited in BioVitos Pharma AB. These shares amounted to a market value, at the time, of c.12 million Swedish Kroner / c.$1.136 US Dollars. 22,496,354 shares were sold to cover costs relating to the transaction. Following settlement of the transaction the Company has received 41,118,876 shares in BioVitos Pharma AB, representing15.4% of BioVitos Pharma AB's issued share capital. Craven House remains a 24.5% shareholder in BioVitos Medical Limited and now owns 15.4% of BioVitos Pharma AB, a Sweden based medical technology company, listed on the Stockholm stock exchange.
On 10 September 2024, the Company announced that RoseMonkey Limited (a new investee company in which on 2 August 2024 the Company acquired a 24.4% shareholding) sold certain IP rights and participated in a financing transaction with Quiapeg Pharma AB ("QuiaPeg").Following completion of the transactions, RoseMonkey was awarded 1,416,007,811 shares in QuiaPeg. RoseMonkey distributed a proportionate amount of those shares to Craven House. Craven House has therefore received 345,505,096 shares representing 23.2% of QuiaPeg and a market value of approximately $758,792 as at 9 September 2024. QuiaPEG's shares are admitted to trading on Nasdaq First North Growth Market.
The Annual Results for year ended 31 May 2024 will be available to download from the Company's website at: http://www.cravenhousecapital.com
~ Ends ~
For further information please contact:
| Craven House Capital Plc Mark Pajak
| Tel: 0203 286 8130
|
| SI Capital Broker Nick Emerson | Tel: 01483 413500 |
|
SPARK Advisory Partners Limited Nominated Adviser Matt Davis
|
Tel: 0203 368 3550
|
About Craven House Capital:
The Company's Investing Policy is primarily to invest in or acquire a portfolio of companies, partnerships, joint ventures, businesses or other assets participating in the e-Commerce sector.
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