TIDMVELA
RNS Number : 7260B
Vela Technologies PLC
06 June 2023
6 June 2023
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, today announces an update for the quarter ended 31
March 2023.
Executive Director, James Normand, commented:
"The disappointing result for the quarter, reversing the
positive result of the previous quarter, reflects the poor state of
the quoted markets generally and the market's continuing abstention
from the small cap sector in particular. Vela remains of the view
that many of the businesses in which it is invested are materially
undervalued. As a result of these under-valuations and poor
liquidity, Vela is of necessity taking a longer-term view than it
would prefer. Vela's ability to hold for the long term, however,
will, the Board believes, enable it to reap the benefits when
market conditions improve."
Key numbers as at 31 March 2023
-- The value of Vela's total assets decreased during the quarter
by GBP660,000 (9.5%) to GBP6,273,000 (quarter to 31 December 2022 -
increase of GBP532,000 to GBP6,933,000 (8.3%)).
-- Vela's portfolio comprised a total of 14 active investments
(31 December 2022 - 13). Two of these investments were unquoted,
eleven were quoted, and the final investment was the interest in
future royalties from the Covid-19 remedy being developed by St
George's Street Capital Limited (which is held in the balance sheet
as a financial asset).
-- The fair value of the investment portfolio was GBP5,552,000
(31 December 2022 - GBP6,068,000).
-- The change in the value of the investment portfolio reflects:
(i) disposals of investments valued at GBP151,000 at 31 December
2022 or on subsequent acquisition (generating a realised loss of
GBP7,000); (ii) a further investment of GBP126,000 in Ensilica plc;
(iii) a new investment in Ethernity plc of GBP49,000; and (iv) a
net unrealised decrease in the fair value of the investment
portfolio of GBP540,000.
-- Vela's cash balances decreased to GBP721,000 as at 31 March
2023 (31 December 2022 - GBP864,000).
Key developments in the quarter
-- On 20 January Vela subscribed GBP49,000 for 700,000 shares in
Ethernity Networks Limited, half of which it sold almost
immediately at a profit of GBP600.
-- On 24 February Vela sold 150,000 Kanabo Group plc shares,
generating gross proceeds of GBP5,000 and a realised profit of
GBP2,500 over the valuation at 31 December 2022.
-- On 9 March Vela subscribed GBP125,000 for 178,572 new shares
in EnSilica plc and later sold an aggregate of 113,632 shares,
generating gross proceeds of GBP114,000 and a realised profit of
GBP13,000 over the valuation at 31 December 2022.
Key developments in investee companies in the quarter
-- On 26 January Skillcast Group plc published a positive
trading update for the year ended 31 December 2022 and expressed
confidence that it continues to expect to achieve the objectives
set out at the time of its admission to trading on AIM in December
2021.
-- On 26 January Mode Global Holdings plc announced the
cessation of activities, following the collapse of the
crypto-currency markets. The residual management is endeavouring to
salvage some value for shareholders.
-- On 6 February and on 8 March Cornerstone FS PLC
("Cornerstone") announced revised arrangements with holders of loan
notes which Cornerstone expects will have the effect of materially
improving its future cash flow.
-- 0n 7 February Northcoders Group plc announced the acquisition
of Tech Returners Limited, a complementary training business, for
GBP1,576,000.
-- On 17 February EnSilica plc announced its interim results
(for the six months ended 30 November 2022). These showed
improvements over the same period in the previous year in all of
its key performance indicators.
-- On 9 March EnSilica plc announced that it had raised
approximately GBP2,000,000 of additional equity at 70p per share.
Vela participated in this subscription, as noted above.
-- On 13 March MTI Wireless Edge Limited announced its 2022
results, showing improvements in all its key performance
indicators, and a 7% increase in its final dividend.
-- During the quarter TruSpine Technologies plc made a number of
announcements concerning its funding, its Board and the status of
its application for FDA approval for its products.
Developments since 31 March 2023
-- On 20 April Vela entered into a put option agreement for the
potential sale of its economic interest in AZD 1656 for a total
consideration of GBP4.0 million. The option has been granted by
Conduit Pharmaceuticals Limited and its prospective parent company,
Murphy Canyon Acquisition Corp ('Murphy'), a company listed on
NASDAQ. Should the option be exercised by Vela the consideration
that would be payable to Vela would be satisfied through the
issuance of new Murphy shares. Vela paid Conduit GBP400,000 in cash
as the premium for the option.
-- On 25 April 2023 Northcoders Group plc announced its final
results for the year ended 31 December 2022 and reported an
increase in group revenue of 86% to GBP5.6 million and an adjusted
EBITDA slightly ahead of market expectations.
-- Mode Global Holdings plc shares were suspended from trading
on 2 May 2023 due to the delayed completion of its annual
audit.
-- On 5 May Vela sold 250,000 shares in Kanabo Group Plc,
generating gross proceeds of GBP7,750; and 13,000 shares in
EnSilica plc, generating gross proceeds of GBP8,970.
-- On 16 May 2023 Cornerstone FS PLC announced its final results
for the year ended 31 December 2022 and reported a 110% increase in
revenue to GBP4.8 million.
-- On 23 May Vela invested GBP250,000 from its cash resources in
a GBP2 million pre-IPO funding for Tribe Technology Group Limited,
a Belfast-based manufacturer of autonomous reverse circulation
drilling rigs.
-- The investments made since the quarter end have reduced the
Company's cash balances to c.GBP50,000 as at the date of this
announcement.
The figures contained within this quarterly investment update at
31 March 2023, and those at 31 December 2022 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 2022, unless there has been a
transaction since that date which suggests a materially different
valuation.
Investment portfolio
At 31 March 2023 the Company's portfolio of investments was
valued at GBP5,552,000 and comprised equity or loan interests in
the following 14 companies:
-- Aeristech Limited
-- Community Social Investment Limited (formerly WeShop Limited)
-- Cornerstone FS PLC
-- Ethernity Networks Ltd
-- EnSilica plc
-- Igraine PLC
-- Kanabo Group Plc
-- MTI Wireless Edge Ltd.
-- Mode Global Holdings plc
-- Northcoders Group plc
-- Rural Broadband Solutions PLC
-- Skillcast Group plc
-- St George Street Capital Limited
-- TruSpine Technologies plc
Since the publication of the last quarterly update in February
2023, the Board of Vela has met with representatives of the
following investee companies:
-- Aeristech Limited
-- Cornerstone FS PLC
-- EnSilica plc
-- Igraine PLC
-- MTI Wireless Edge Ltd
-- Northcoders Group plc
-- Skillcast Group plc
-- St George Street Capital Limited
-- TruSpine Technologies plc
For further information, please contact:
Vela Technologies plc Tel: +44 (0) 7421
Brent Fitzpatrick, Non-Executive Chairman 728875
James Normand, Executive Director
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
Lucy Williams / Duncan Vasey
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
Technologies will also invest in already-listed companies where
valuations offer additional opportunities.
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END
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