This announcement
contains inside
information for the purposes of Article
7 of the UK version of the
Market Abuse
Regulation (EU) no.596/2014, which
forms part of UK law by virtue of the European Union (Withdrawal)
Act 2018 ("UK MAR"). With the publication of this
announcement, this information is now considered to be in the
public domain.
15 May
2024
Braveheart Investment Group
plc
("Braveheart", the
"Company" or the
"Group")
Revaluation of portfolio
assets
Braveheart Investment Group plc
(AIM: BRH) announces an update on the
valuation of two assets within its investment portfolio
ahead of the publication
of its audited annual results for the
financial year ended 31 March 2024 ("FY2024
Accounts").
As part of the process of the
preparation of the FY2024 Accounts, the
Board of Braveheart ("Board") has conducted
a review of the value
of Braveheart's portfolio
investments. Following this review, a decision has
been made to write down the value of the
Company's equity investments in Paraytec
Limited ("Paraytec")
(book value at 31 March
2023: £3.04m) and Kirkstall Limited
("Kirkstall") (book
value at 31 March 2023: £1.67m) to zero
in the FY2024 Accounts, subject to finalisation of
the audit.
The Company had previously announced
that it had been seeking a buyer for Paraytec and, on
4 March 2024, it
announced that it
had been unable to secure
a suitable offer, with the Board
deciding to retain
Paraytec within its investment portfolio to continue
the development of
Paraytec's sales and
marketing, with the aim of enhancing its appeal to a potential acquirer
or future partner. Since then,
the performance by
Paraytec and its prospects have significantly reduced and the Board no
longer believes that Braveheart's outstanding loans to Paraytec
(totalling £1.44 million as at 31 March 2024), will
be repaid in the
short-term.
In addition, Kirkstall
has been unable
to achieve certain
sales milestones and discussions with M&A
advisers and potential acquirers have not progressed.
Therefore, the Board no longer believes that
Braveheart's outstanding loans to Kirkstall (totalling £0.16
million as at 31 March 2024), will be repaid in the
short-term.
It is anticipated that other legacy
private company investments in the portfolio will be valued in the
usual way, based on last round investment price less provisions for
debt, lack of liquidity and other factors.
The write downs of the investment
values, together with the sale of the Company's interest in Phase
Focus Holdings Limited ("Phase
Focus") for £2.1 million, mean the book value of the
Company's equity investment portfolio is expected to be
significantly reduced compared to the prior year, at approximately £1.75 million (31
March 2023 equity portfolio value: £9.46 million), consisting
primarily of the Company's investments in UK listed companies as
well as the legacy private company investments. The outstanding
loans to Paraytec and Kirkstall are also being impaired to
zero.
The Board believes
that, with time, Kirkstall and Paraytec have
the potential to increase in value
and provide exit
opportunities for the Company, but it is prudent
to write the values down to zero at the current time. Going
forward, the Board has taken the
decision to focus
on finding new investment opportunities that will
be transformative for the Company. Additionally,
the Board has implemented
a range of actions to rationalise the Company's cost
base and to
preserve it cash,
which stood at approximately £1.74 million
on 31 March 2024. Furthermore, the Company will be utilising the
proceeds of the sale of Phase Focus to seek new investment
opportunities as opposed to making a distribution by way of a
special dividend.
For further information:
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Braveheart Investment Group plc
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Tel: 01738 587555
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Trevor Brown, Chief Executive
Officer
Viv Hallam, Executive
Director
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Allenby Capital Limited (Nominated Adviser and Joint
Broker)
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Tel: 020 3328 5656
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James Reeve / George
Payne
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Peterhouse Capital Limited (Joint
Broker)
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Tel: 020 7469 0936
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Duncan Vasey / Lucy
Williams
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