TIDMVELA
RNS Number : 6979N
Vela Technologies PLC
26 September 2019
26 September 2019
Vela Technologies plc
("Vela" or the "Company")
Final Results for the year ended 31 March 2019
The Board of Vela (AIM: VELA) announces its final results for
the year ended 31 March 2019.
chairman's statement
for the year ended 31 March 2019
The 2018/19 financial year was another active one for our
investee companies. Regular RNS news releases were supplemented by
our activities in social media, further highlighting information
and news that helps investors build a better and deeper
understanding of our investee companies where that information
would not be deemed of sufficient importance for a regulatory
announcement.
During the year, and into the current financial year, Vela has
considered a number of new investment proposals. However, none of
these proved suitable for investment for a variety of reasons,
often due to what we viewed as an over-valuation of the
business.
In addition, Vela has considered other corporate transactions
which have included approaches from third parties, on an informal
basis, to the Board to utilise Vela as a reverse takeover vehicle,
as well as more substantial investments in listed companies. We
will continue to explore these opportunities. In the current market
malaise and lack of interest among investors for smaller listed
companies, we have become aware of a mis-match between the market
capitalisation of the Company and the value of its underlying
assets.
We will continue to have an open mind on these options, although
we are mindful of the potential substantial uplift in the value of
certain companies within the Vela portfolio and are keen to ensure
existing shareholders do not suffer excessive dilution.
At the current time Vela maintain investments in 12 companies.
By far the most prominent news in the financial year and
subsequently have related to three of these investee companies -
Portr, Vibe Group and Argo Blockchain.
We made a further investment of GBP91,341 in Portr Limited, the
owner of Airportr, the airline integrated home bag check-in and
delivery service that gives passengers the option to check in
online and have their baggage collected from their doorstep. This
was part of a two stage Series "A" funding round which completed in
August 2019. The investment by Vela was funded from a placing of
shares announced by Vela in April 2019. During the financial year
under review, Airportr announced tie-ups with several new airlines,
including easyJet and Virgin Atlantic.
In May 2018, Vela announced an investment of GBP200,000 in Vibe
Group Holdings Limited for a minority shareholding. This followed a
period when it had not proved possible to agree a refinancing of
Vela's investment in Vibe Tickets, resulting in the appointment of
administrators. Following the purchase of the Vibe Tickets assets
by the former Vibe Tickets management from the administrators, the
Vibe Tickets business was then purchased by Vibe Group Holdings.
Since then the original ticket business has evolved further and now
not only offers fans the opportunity to buy and sell tickets
without any fee but also introduced Vibe Verified, giving buyers
the opportunity to buy tickets from trusted and verified sellers.
Vibe Group has also extended its activities and will shortly launch
VibePay, a social payments platform authorised by the Financial
Conduct Authority (FCA) and created following the introduction of
Open Banking in early 2018. The first VibePay product, to be
launched at the end of September 2019, will enable people to
socially plan and pay in groups. There has been significant
interest in this launch.
Argo Blockchain completed the listing of its shares in August
2018 at a price of 16 pence per share, which compared to Vela's
original acquisition price of 8 pence as part of a pre-IPO funding
round where Vela invested GBP200,000. The timing of the listing
followed a period in which the cryptocurrency market as a whole had
weakened dramatically, and daily volatility increased. As a result,
the share price dropped to a low of 3 pence in February 2019. At
this point we decided to increase Vela's exposure to Argo noting
that balance sheet cash represented a significant premium to the
market capitalisation of Argo and invested a further c. GBP15,000
at an average price of 3.072 pence per share. Since that time, with
improved sentiment in some leading cryptocurrency markets as well,
the share price of Argo has recovered and now stands at 9.05 pence
as at 24 September 2019. This compares to Vela's average
acquisition price of 7.16 pence per share.
Moving onto the financials, after allowing for fair value
movement reduction of GBP1,193k and in the absence of any realised
gains compared to the substantial realised gains in the previous
year, the net loss for the year was GBP1.554m. Gross assets as at
31st March 2019 amounted to GBP2.1m (31 March 2018: GBP3.6m), again
reflecting the reduction in the fair value of Vela's assets. Cash
as at 31 March 2019 was GBP0.02 million and this has been
supplemented post year end by a placing to raise GBP400,000,
originally announced on 24 April 2019.
To conclude, Vela will continue to actively pursue the strategy
outlined above and, in addition, looks forward to updating
shareholders on further progress with its investee companies both
by RNS and, where appropriate, social media.
strategic report
for the year ended 31 March 2019
Business review
Further details and key points of the investments made, and the
Company's investee companies are detailed in the Chairman's
statement and note 8 to the financial statements.
At the period end the Company held GBP23k of cash (31 March
2018: GBP847k) and continues to keep administration costs to a
minimum so that the Company has sufficient resources to cover its
ongoing running costs and has maximum funds that can be dedicated
to further investments.
Additional funds totalling GBP400,000 (before expenses) were
raised after the end of the reporting period through the issue of
shares. These funds have provided the Company with additional
capital in order to make additional investments and cover running
costs. Further details regarding the shares issued after the period
end are provided in note 18.
The Company's overall total comprehensive income for the year
was a loss of GBP1,554k (2018: GBP1,014k loss). This loss primarily
arose due to fair value losses on the Company's investment
portfolio.
The valuation of the investment portfolio at 31 March 2019 was
GBP2,101k (2018: GBP2,761k), a decrease of GBP660k on the prior
year. During the year, Vela invested GBP533k in disruptive
technology businesses. Further details of these investment
additions are given in note 8. The Company also recorded a
reduction in the estimated fair value of the investment portfolio
of GBP1,193k in the period. We update shareholders regularly on
investee company performance through the dissemination of
regulatory announcements as information becomes available, and
further detailed information can be found on our website.
The Company has no employees and has a Board of one male
executive Director and one male non-executive Director.
Principal risks and uncertainties
The preservation of its cash balances and management of the
capital remain key risks for the Company, ensuring that investments
are commensurate with the level of risk.
The Company is committed to maintaining its minimal operational
costs.
Further information about the Company's principal risks are
detailed in note 14, specifically in the currency risk, credit
risk, liquidity risk and capital risk management sections.
Approved by the Board of directors and signed on behalf of the
Board on 25 September 2019
Nigel Brent Fitzpatrick MBE
Non-Executive Chairman
For further information, please contact:
Vela Technologies plc
Brent Fitzpatrick, Non-Executive
Chairman Tel: +44 (0) 7802 262
Antony Laiker, Director 443
Allenby Capital Limited
(Nominated Adviser)
Nick Athanas/Asha Chotai Tel: +44 (0) 20 3328
5656
Smaller Company Capital Limited
(Broker)
Rupert Williams/Jeremy Woodgate Tel: +44 (0) 20 3651
2910
About Vela Technologies
Vela Technologies (AIM: VELA) is an investing company focused on
early stage and pre-IPO long term disruptive technology
investments. There are currently 12 investments in the portfolio
which either have developed ways of utilising technology or
developing technology with a view to disrupting the businesses or
sector in which they operate. More recently, Vela Technologies has
also started to focus on existing listed companies where valuations
may offer additional opportunities.
statement of comprehensive income
for the year ended 31 March 2019
31 March 31 March
2019 2018
Notes GBP'000 GBP'000
-------------------------------------------- ------ --------- ---------
Revenue 1 - -
Administrative expenses
- other administrative expenses (234) (214)
- profit on disposal of available-for-sale
assets - 731
- fair value movements on investments (1,193) (551)
-------------------------------------------- ------ --------- ---------
Total administrative expenses (1,427) (34)
-------------------------------------------- ------ --------- ---------
Operating loss 2 (1,427) (34)
Finance expense 4 (127) (126)
-------------------------------------------- ------ --------- ---------
Loss before tax (1,554) (160)
Income tax 6 - -
-------------------------------------------- ------ --------- ---------
Loss (1,554) (160)
-------------------------------------------- ------ --------- ---------
Other comprehensive income:
Items that will or may be reclassified to profit or loss:
Fair value movement on available-for-sale
investments - 580
Reclassification of changes in
fair value of available-for-sale
investments to profit or loss - (1,434)
-------------------------------------------- ------ --------- ---------
Other comprehensive income for
the year - (854)
-------------------------------------------- ------ --------- ---------
Total comprehensive income (1,554) (1,014)
-------------------------------------------- ------ --------- ---------
Attributable to:
Equity holders of the Company (1,554) (1,014)
Earnings per share
Basic and diluted loss per share
(pence) 7 (0.19) (0.02)
-------------------------------------------- ------ --------- ---------
balance sheet
as at 31 March 2019
31 March 31 March
2019 2018
Notes GBP'000 GBP'000
------------------------------- ------ --------- ---------
Non-current assets
Investments 8 2,101 2,761
Current assets
Trade and other receivables 9 13 13
Cash and cash equivalents 13 23 847
------------------------------- ------ --------- ---------
Total current assets 36 860
------------------------------- ------ --------- ---------
Total assets 2,137 3,621
------------------------------- ------ --------- ---------
Equity and liabilities
Equity
Called up share capital 12 837 837
Share premium account 1,715 1,715
Available-for-sale reserve - 1,019
Share option reserve 130 130
Retained earnings (1,568) (1,033)
------------------------------- ------ --------- ---------
Total equity 1,114 2,668
------------------------------- ------ --------- ---------
Current liabilities
Trade and other payables 10 27 28
Loans and borrowings 11 996 445
Total current liabilities 1,023 473
------------------------------- ------ --------- ---------
Non current liabilities
Loans and borrowings 11 - 480
------------------------------- ------ --------- ---------
Total non current liabilities - 480
------------------------------- ------ --------- ---------
Total equity and liabilities 2,137 3,621
------------------------------- ------ --------- ---------
cash flow statement
for the year ended 31 March 2019
31 March 31 March
2019 2018
Notes GBP'000 GBP'000
------------------------------------------ ------ --------- ---------
Operating activities
Loss before tax (1,554) (160)
Profit on disposal of available-for-sale
assets - (731)
Fair value movements on investments 1,193 551
Finance expenses 127 126
Decrease in payables (1) -
Total cash flow from operating
activities (235) (214)
------------------------------------------ ------ --------- ---------
Investing activities
Consideration for disposal of
investments - 806
Consideration for purchase of
investments (533) (786)
Total cash flow from investing
activities (533) 20
------------------------------------------ ------ --------- ---------
Financing activities
Interest paid (56) (55)
Proceeds from the issue of ordinary
share capital - 713
Total cash flow from financing
activities (56) 658
------------------------------------------ ------ --------- ---------
Net increase in cash and cash
equivalents (824) 464
Cash and cash equivalents at
start of year 847 383
------------------------------------------ ------ --------- ---------
Cash and cash equivalents at
the end of the year 13 23 847
------------------------------------------ ------ --------- ---------
Cash and cash equivalents comprise:
Cash and cash in bank 23 847
------------------------------------------ ------ --------- ---------
Cash and cash equivalents at
end of year 13 23 847
------------------------------------------ ------ --------- ---------
statement of changes in equity
for the year ended 31 March 2019
Share Share Retained Available-for-sale Share Total
Option
Capital Premium Earnings Reserve Reserve Equity
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
----------------------------- -------- -------- ---------- ------------------- -------- --------
Balance at 1 April 2018 837 1,715 (1,033) 1,019 130 2,668
Change in accounting policy
due to adoption of IFRS
9 (note 1a) - - 1,019 (1,019) - -
Transactions with owners
Issue of share capital - - - - - -
----------------------------- -------- -------- ---------- ------------------- -------- --------
Transactions with owners - - - - - -
----------------------------- -------- -------- ---------- ------------------- -------- --------
Loss for the year - - (1,554) - - (1,554)
Other comprehensive income - - - - - -
----------------------------- -------- -------- ---------- ------------------- -------- --------
Total comprehensive income - - (1,554) - - (1,554)
----------------------------- -------- -------- ---------- ------------------- -------- --------
Balance at 31 March 2019 837 1,715 (1,568) - 130 1,114
----------------------------- -------- -------- ---------- ------------------- -------- --------
Balance at 1 April 2017 722 1,117 (873) 1,873 130 2,969
----------------------------- -------- -------- ---------- ------------------- -------- --------
Transactions with owners
Issue of share capital 115 598 - - - 713
Transactions with owners 115 598 - - - 713
Loss for the year - - (160) - - (160)
Other comprehensive income - - - (854) - (854)
Total comprehensive income - - (160) (854) - (1,014)
----------------------------- -------- -------- ---------- ------------------- -------- --------
Balance at 31 March 2018 837 1,715 (1,033) 1,019 130 2,668
----------------------------- -------- -------- ---------- ------------------- -------- --------
notes to the financial statements
for the year ended 31 March 2019
1 Revenue and segmental information
The Company is an investing company and as such there is only
one identifiable operating segment, being the holding and support
of investments. Furthermore, the Company operates in a single
geographic segment being the United Kingdom. The results and
balances and cash flows of the segment are as presented in the
primary statements.
2 Loss from operations
Loss from operations is stated after charging/(crediting):
31 March 31 March
2019 2018
GBP'000 GBP'000
------------------------------------------ --------- ---------
Auditor's remuneration for auditing
of accounts 10 10
Auditor's remuneration for non-audit
services 1 1
Profit on disposal of available-for-sale
assets - (731)
Fair value movements on investments 1,193 551
------------------------------------------ --------- ---------
3 Staff costs
The average number of persons engaged by the Company (including
Directors) during the period was as follows:
31 March 31 March
2019 2018
--------------------------------- --------- ---------
Directors and senior management 2 2
Total 2 2
--------------------------------- --------- ---------
The aggregate amounts charged by these persons were as
follows:
31 March 31 March
2019 2018
GBP'000 GBP'000
------------------------------ --------- ---------
Aggregate wages and salaries 110 110
110 110
------------------------------ --------- ---------
The amounts noted above relate to amounts invoiced by the
Company's directors. Further details of directors' remuneration are
provided in note 5.
4 Finance expense
31 March 31 March
2019 2018
GBP'000 GBP'000
----------------------- --------- ---------
Loan note interest 36 37
Bond interest 91 89
----------------------- --------- ---------
Total finance expense 127 126
----------------------- --------- ---------
Included in finance expenses is GBP41k (2018 - GBP41k) in
respect of the amortisation of loan issue costs.
5 Directors and senior management
Directors' remuneration
31 March 2019
-------------------------------------------------
Salary Fees Pension Equity Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
N B Fitzpatrick - 46 - - 46
A Laiker - 64 - - 64
----------------- --------- -------- -------- -------- --------
- 110 - - 110
--------------------------- -------- -------- -------- --------
31 March 2018
---------------------------------------------------
Salary Fees Pension Equity Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
N B Fitzpatrick - 46 - - 46
A Laiker - 64 - - 64
------------------------ ---------- -------- -------- -------- ----------
- 110 - - 110
---------- -------- -------- -------- ----------
Directors' and senior management's interests in shares
The Directors who held office at 31 March 2019 held the
following shares:
31 March 31 March
2019 2018
----------------- ----------- -----------
N B Fitzpatrick 1,500,000 1,500,000
A Laiker 35,190,000 35,190,000
------------------ ----------- -----------
The total share-based payment costs in respect of options
granted are:
31 March 31 March
2019 2018
GBP'000 GBP'000
Directors - -
---------- --------- ---------
As at 31 March 2019, the total number of outstanding options
held by the Directors over ordinary shares is 29,124,854,
representing 3.5 per cent of the Company's issued share capital.
Each Director holds 14,562,427 options.
Further details regarding the options issued are provided in
note 16.
6 Tax
There was no charge to current or deferred taxation in the
current or prior period.
A deferred tax asset relating to losses carried forward has not
been recognised due to uncertainty over the existence of future
taxable profits against which the losses can be used. The Company
has unused tax losses of approximately GBP5m (2018: GBP3.9m).
Tax reconciliation
31 March 31 March
2019 2018
GBP'000 GBP'000
----------------------------------- --------- ---------
Loss before tax (1,554) (160)
Tax at 19% on loss before tax (295) (30)
Effects of:
Unrelieved losses carried forward 295 30
----------------------------------- --------- ---------
Total tax (credit)/expense - -
----------------------------------- --------- ---------
Legislation was announced in the Finance Act 2016 to reduce the
rate of corporation tax to 17% with effect from 1 April 2020.
7 Loss per share
Loss per share has been calculated on a loss after tax of
GBP1,554,000 (2018: GBP160,000) and the weighted number of average
shares in issue for the year of 836,973,115 (2018:
756,045,343).
The loss and weighted average number of shares used in the
calculations is set out below:
31 March 31 March
2019 2018
------------------------ --------- ---------
Loss (GBP'000) (1,554) (160)
Loss per share (pence) (0.19) (0.02)
------------------------ --------- ---------
8 Investments
31 March 31 March
2019 2018
GBP'000 GBP'000
------------------------------------------ --------- ---------
Opening balance 2,761 3,455
Additions during the year 533 786
Disposals during the year - (806)
Gain included in Other Comprehensive
Income - 580
Movement in fair value charged to profit
or loss (1,193) (1,254)
------------------------------------------ --------- ---------
Closing balance 2,101 2,761
------------------------------------------ --------- ---------
Additions during the year:
Investment in Vibe Group Holdings Limited
On 18 June 2018 the Company entered into a subscription
agreement to invest GBP200,000 in Vibe Group Holdings Limited
(VGHL). Following completion of the investment, Vela owns 5,674
ordinary shares in VGHL equivalent to approximately 4 per cent. of
the issued share capital of VGHL.
Investment in BlockchainK2 Corp.
On 30 May 2018, the Company acquired 272,000 shares in
BlockchainK2 Corp. for a subscription price of C$1.25 per share,
equating to a total cost of GBP200,589.
Investment in Nektan plc
In June 2018 the Company purchased 85,000 shares in Nektan, the
AIM quoted gaming technology platform and services provider, for a
consideration of GBP18,614. In July 2018 the Company purchased a
further 50,000 shares in Nektan for a consideration of GBP9,319. In
September 2018 the Company purchased a further 50,000 shares in
Nektan for a consideration of GBP9,508.
The Company has made a total investment of GBP37,441 in Nektan
for 185,000 shares.
Investment in StreamTV
On 6 December 2018, the Company entered into a subscription
agreement with StreamTV to invest $100,000 in StreamTV from the
Company's existing cash resources. The Company has subscribed for
66,666 Class A Common Stock in StreamTV at a price of $1.50 per
share. In addition, in recognition of Vela's existing shareholding
in StreamTV, Vela has been issued a total of 333,335 warrants
(equivalent to approximately 5 warrants for each Class A Common
Stock subscribed for) exercisable at a price of $1.50 per Class A
Common Stock, vesting in the event of a liquidity event at StreamTV
and exercisable for five years from the date of issuance.
Investment in Argo Blockchain plc
On 15 February 2019, the Company purchased 500,000 shares in
Argo Blockchain plc at an average price of 3.072 pence per share,
for a total cost of GBP15,553. The investment took the Company's
total holding in Argo Blockchain plc to 3,000,000 shares.
9 Trade and other receivables
31 March 31 March
2019 2018
GBP'000 GBP'000
------------------- --------- ---------
Other receivables 13 13
13 13
------------------- --------- ---------
10 Trade and other payables
31 March 31 March
2019 2018
GBP'000 GBP'000
------------------------------ --------- ---------
Trade payables 4 4
Accruals and deferred income 23 24
27 28
------------------------------ --------- ---------
11 Loans and borrowings
Loans due within one year 31 March 31 March
2019 2018
GBP'000 GBP'000
--------------------------- --------- ---------
Convertible loan notes 480 445
Bonds 516 -
996 445
--------------------------- --------- ---------
Loans due after more than one year 31 March 31 March
2019 2018
GBP'000 GBP'000
------------------------------------ ---------- ---------
Bonds - 480
------------------------------------ ---------- ---------
- 480
----------------------------------------------- ---------
Under the terms of the loan note agreement dated 9 September
2016, the convertible loan notes ('Loan Notes') were originally
repayable on 30 September 2018, or capable of conversion into new
ordinary shares in the Company, at a price of 0.15 pence per share,
at any time up until the repayment date. The Loan Notes carried an
annual interest rate of 8 per cent and were unsecured.
On 29 November 2018, the Company entered into an agreement with
the Loan Note holders to extend the repayment date to 30 September
2019. All other terms of the Loan Notes remained unchanged. The
Directors consider the convertible loan notes to represent a
compound financial instrument. The Directors consider the equity
element of the instrument to be immaterial. Accordingly, the full
balance is classified as a financial liability.
Following the end of the reporting period, the Loan Notes were
converted into new ordinary shares at a price of GBP0.10 pence per
share, as detailed in note 18.
On 1 February 2017, the Company launched the issue of secured
bonds, through UK Bond Network, to raise GBP550,000 for the
Company. The Bonds have a coupon of 10% and a term of 3 years with
full repayment in cash of the principal amount of the Bonds due at
maturity. The Bonds may be repaid at the option of Vela together
with all accrued (but unpaid) interest on the amount prepaid. The
Bonds will not be convertible into ordinary shares in the capital
of the Company. The Bonds are secured by way of fixed and floating
charges over all assets of the Company present and future. The
Bonds are due for repayment on 17 February 2020.
12 Share capital
31 March 31 March
2019 2018
GBP'000 GBP'000
-------------------------------------------- --------- ---------
Authorised capital
9,999,520,000 ordinary shares of 0.1 pence
each 10,000 10,000
10,000 10,000
-------------------------------------------- --------- ---------
Allotted, called up and fully paid capital
836,973,115 ordinary shares of 0.1 pence
each 837 837
837 837
-------------------------------------------- --------- ---------
Allotments during the period
The Company allotted the following ordinary shares during the
year:
31 March 2019
---------------------------------- --------------
Shares in issue at 1 April 2018 836,973,115
Shares issued during the year -
---------------------------------- --------------
Shares in issue at 31 March 2019 836,973,115
---------------------------------- --------------
31 March 2018
--------------------------------- --------------
Shares in issue at 1 April
2017 721,588,500
Shares issued during the period 115,384,615
--------------------------------- --------------
Shares in issue at 31 March
2018 836,973,115
--------------------------------- --------------
13 Cash and cash equivalents
Cash and cash equivalents comprise the following:
31 March 31 March
2019 2018
GBP'000 GBP'000
------------------------------------------ --------- ---------
Cash and cash in bank:
Pound sterling 23 847
Cash and cash equivalents at end of year 23 847
------------------------------------------ --------- ---------
Included within cash and cash equivalents in 2018 was GBP201k
that was held in an escrow account and used to purchase an
investment in BlockchainK2 Corp, which completed on 30 May
2018.
14 Financial instruments
The Company uses various financial instruments which include
cash and cash equivalents, loans and borrowings and various items
such as trade receivables and trade payables that arise directly
from its operations. The main purpose of these financial
instruments is to raise finance for the Company's operations and
manage its working capital requirements.
The fair values of all financial instruments are considered
equal to their book values. The existence of these financial
instruments exposes the Company to a number of financial risks
which are described in more detail below.
The main risks arising from the Company's financial instruments
are currency risk, credit risk and liquidity risk. The Directors
review and agree the policies for managing each of these risks and
they are summarised below. The Company does not have any borrowings
on which interest is charged at a variable rate. The Directors,
therefore, do not consider the Company to be exposed to material
interest rate risk.
Currency risk
The Company's shareholdings in Interbit and BlockchainK2 are
denominated in Canadian Dollars and the investment in Stream TV is
denominated in US Dollars, which gives rise to exposure to foreign
currency risk. The Directors have considered the risk and do not
deem it necessary to enter into any specific risk management
arrangements at the present time. The Directors will continue to
review the position going forward to ensure this remains
appropriate in the context of the Company's risk profile.
Credit risk
This section, along with the liquidity risk and capital risk
management sections below, also forms part of the Strategic
Report.
The Company's exposure to credit risk is limited to the carrying
amount of financial assets recognised at the balance sheet date, as
summarised below:
31 March 31 March
2019 2018
Classes of financial assets - carrying GBP'000 GBP'000
amounts
----------------------------------------- --------- ---------
Financial assets measured at fair value
through profit or loss 2,101 2,761
Financial assets measured at amortised
cost 13 13
----------------------------------------- --------- ---------
2,114 2,774
----------------------------------------- --------- ---------
The Company's management considers that all of the above
financial assets that are not impaired for each of the reporting
dates under review are of good credit quality.
The Company's financial assets are pledged as security, as
detailed in note 11.
The Company is required to report the category of fair value
measurements used in determining the value of its financial assets
measured at fair value through profit or loss, to be disclosed by
the source of its inputs, using a three-level hierarchy. There have
been no transfers between Levels in the fair value hierarchy.
Quoted market prices in active markets - "Level 1"
Inputs to Level 1 fair values are quoted prices in active
markets for identical assets. An active market is one in which
transactions occur with sufficient frequency and volume to provide
pricing information on an ongoing basis. The Company has five
(2018: two) investments classified in this category. The aggregate
historic cost of the five investments is GBP904,284 (2018:
GBP450,698) and the fair value as at 31 March 2019 was GBP657,337
(2018: GBP1,470,044).
Valued using models with significant observable market
parameters - "Level 2"
Inputs to Level 2 fair values are inputs other than quoted
prices included within Level 1 that are observable for the asset,
either directly or indirectly. The Company has five (2018: one)
unquoted investments classified in this category. The historic cost
of these investments is GBP1,271,581 (2018: GBP745,479) and the
fair value as at 31 March 2019 was GBP1,293,380 (2018: GBP644,612).
These investments were valued using the latest transaction prices
for shares in the investee companies.
Valued using models with significant unobservable market
parameters - "Level 3"
Inputs to Level 3 fair values are unobservable inputs for the
asset. Unobservable inputs may have been used to measure fair value
to the extent that observable inputs are not available, thereby
allowing for situations in which there is little, if any, market
activity for the asset at the measurement date (or market
information for the inputs to any valuation models). As such,
unobservable inputs reflect the assumptions the Company considers
that market participants would use in pricing the asset. The
Company has three (2018: three) unquoted investments classified in
this category. The historic cost of these investments is GBP725,000
(2018: GBP725,000) and the fair value as at 31 March 2019 was
GBP150,000 (2018: GBP200,000). Two of these investments have been
written down to GBPnil.
The Company has no (2018: three) unquoted investments that are
held at cost, as the directors' best estimate of fair value. In the
prior year, the cost and fair value of the investments was
GBP446,504.
Liquidity risk
The Company maintains sufficient cash to meet its liquidity
requirements. Management monitors rolling forecasts of the
Company's liquidity on the basis of expected cash flow in
accordance with practice and limits set by the Company. In
addition, the Company's liquidity management policy involves
projecting cash flows and considering the level of liquid assets
necessary to meet these.
Maturity analysis for financial liabilities
31 March 2019 31 March 2018
------------------ ------------------
Within Later Within Later
than than
1 year 1 year 1 year 1 year
GBP'000 GBP'000 GBP'000 GBP'000
-------------------------- -------- -------- -------- --------
At amortised cost:
Financial liabilities at
amortised cost 1,023 - 473 480
1,023 - 473 480
-------------------------- -------- -------- -------- --------
Capital risk management
The Company's objectives when managing capital are to safeguard
the Company's ability to continue as a going concern in order to
provide returns for shareholders and benefits for other
stakeholders and to maintain an optimal capital structure to reduce
the cost of capital. This is achieved by making investments
commensurate with the level of risk. The Company is performing in
line with the expectations of the Directors.
The Company monitors capital on the basis of the carrying amount
of equity. The Company policy is to set the amount of capital in
proportion to its overall financing structure, i.e. equity and
long-term loans. The Company manages the capital structure and
makes adjustments to it in the light of changes in economic
conditions and the risk characteristics of the underlying assets.
In order to maintain or adjust the capital structure, the Company
may adjust the amount of dividends paid to shareholders, issue new
shares or loan notes, or sell assets to reduce debt.
15 Reconciliation of net debt
As at As at
1 April Cash Non-cash 31 March
2018 flow movement 2019
GBP'000 GBP'000 GBP'000 GBP'000
--------------------------- --------- -------- ---------- ----------
Cash and cash equivalents 847 (824) - 23
Convertible loan notes (445) - (35) (480)
Bonds (480) - (36) (516)
(78) (824) (71) (973)
--------------------------- --------- -------- ---------- ----------
Non-cash movements relate to the amortisation of loan issues
costs and rolled up unpaid interest.
As detailed in note 18, the Convertible loan notes were
converted to 481,970,602 new ordinary shares at a subscription
price of 0.10 pence per share after the year-end.
16 Share-based payments
The Company rewards its Directors using equity settled
share-based payments.
No new share options have been issued in the current accounting
period and the total number of options outstanding at 31 March 2019
was 29,124,854 (2018: 29,124,854). None of the options issued have
either lapsed or been exercised in the period.
The options have historically been valued using the Black
Scholes option pricing model.
The amount of remuneration expense in respect of the share
options granted amounts to GBPNIL (2018: GBPNIL).
Details of the options outstanding at the year end and the
inputs to the option pricing model are as follows:
Options Options Options Options
granted granted granted granted
22 October 18 September 2 October 8 April
2015 2015 2014 2014
--------------------------- ----------- ------------- ---------- ----------
Share price at grant
date (pence) 0.21 0.19 0.33 1.50
Exercise price (pence) 0.21 0.15 0.33 0.85
Expected life (years) 7 7 7 7
Annualised volatility
(%) 79.47 70.98 95.16 74.23
Risk-free interest rate
(%) 2.0 2.0 2.0 2.0
Fair value determined
(pence) 0.15 0.13 0.26 1.17
Number of options granted 6,400,000 10,489,560 4,000,000 8,235,294
Options exercisable
at 31 March 2019 6,400,000 10,489,560 4,000,000 8,235,294
---------------------------- ----------- ------------- ---------- ----------
None of the options outstanding as at 31 March 2019 are subject
to any performance criteria.
17 Related party transactions
During the period the Company entered into the following related
party transactions. All transactions were made on an arm's length
basis.
Ocean Park Developments Limited
Nigel Brent Fitzpatrick, Non-Executive Director, is also a
Director of Ocean Park Developments Limited. During the year the
Company paid GBP46,000 (2018: GBP46,000) in respect of his
Directors fees to the Company. The balance due to Ocean Park
Developments Limited at the year end was GBPnil (2018: GBPnil).
Risk Alliance Insurance Brokers Limited
Nigel Brent Fitzpatrick, Non-Executive Director, is also a
Director of Risk Alliance Insurance Brokers Limited. During the
year the Company paid GBP5,551 (2018: GBP5,700) in respect of
insurance fees at arm's length. The balance due to Risk Alliance
Insurance Brokers Limited at the year end was GBPnil (2018:
GBPnil).
Widdington Limited
Antony Laiker, Director, is also a Director of Widdington
Limited. During the year the Company paid GBP64,000 (2018:
GBP64,000) in respect of his Directors fees to the Company. The
balance due to Widdington Limited at the year end was GBPnil (2018:
GBPnil).
Kevin Sinclair
Kevin Sinclair, a shareholder of the Company, holds GBP100,000
of the bonds under the Company's 10% bond issue in February 2017.
At 31 March 2019, Kevin Sinclair held 106,449,000 (12.72%) of the
issued share capital of the Company through JIM Nominees Ltd and is
classified as a substantial shareholder under the AIM Rules.
Scott Fletcher
Scott Fletcher, a shareholder of the Company, holds GBP200,000
of the 8% convertible loan notes issued by the company in September
2016.
Scott Fletcher held 63,944,656 Ordinary Shares at 31 March 2019
representing 7.64 per cent. of the issued share capital of the
Company at that time in addition to the 8% convertible loan notes
above. He is also the chairman of UK Bond Network Limited, which
acted on behalf of the Company in relation to the bond issue.
As detailed in notes 11 and 18, these loan notes were converted
to 240,985,301 new ordinary shares after the year-end at a
subscription price of 0.10 pence per share.
Antony Laiker loan notes
Antony Laiker, Director, holds GBP200,000 of the 8% convertible
loan notes issued by the company in September 2016. As detailed in
notes 11 and 18, these loan notes were converted to 240,985,301 new
ordinary shares after the year-end at a subscription price of 0.10
pence per share.
18 Events after the balance sheet date
Share placing and conversion of loan notes
In May 2019, the Company announced a placing to raise
GBP400,000, before deduction of fees, through the issue of
400,000,000 shares at a price of 0.10 pence per share. As part of
this placing it was announced that Antony Laiker, a Director of the
Company, intended to subscribe for 25,000,000 of the placing
shares. The placing of 375,000,000 shares was completed in May 2019
and the placing of 25,000,000 shares to Antony Laiker was completed
in August 2019. Investors subscribing for these shares also
received one warrant for every four placing shares, exercisable at
a price of 0.15 pence per placing warrant for a period of up to two
years from the placing date.
In addition, the Company entered into an agreement with Scott
Fletcher, a related party, to vary the terms of his GBP200,000 of
loan notes, such that the principal and accrued interest were
converted into new ordinary shares at a conversion price of 0.10
pence per share, equivalent to the placing price. This resulted in
240,985,301 new shares being issued.
Following the placing, Scott Fletcher's holding increased to
304,929,997 shares, representing 17.74% of the current issued share
capital and Kevin Sinclair, an existing shareholder, increased his
holding to 151,449,000 representing 8.81% of the total share
capital.
Further investment in Portr Limited
On 12 August 2019, the Company announced that it had entered
into an agreement to subscribe for 91,341 shares in Portr Limited,
equating to an investment of GBP91,341. Following completion of the
investment, the Company held approximately 3.6% of Portr Limited's
share capital.
Conversion of Antony Laiker loan notes
On 24 April 2019, the Company announced that it had entered into
an agreement to repay Antony Laiker's GBP200,000 loan notes,
together with accrued interest. As part of the agreement, it was
intended that the entire proceeds of the repayment would be used by
Antony Laiker to subscribe for 240,985,301 new ordinary shares at a
price of 0.10 pence per share. The share subscription was approved
by shareholders on 30 August 2019.
Following admission of the new shares, Antony Laiker became
beneficially interested in 301,175,301 Ordinary Shares,
representing approximately 17.52% of the Company's enlarged share
capital.
Extraction of information in this announcement
The financial information, which comprises the statement of
comprehensive income, balance sheet, cashflow statement, statement
of changes in equity, and related notes to the financial
statements, is derived from the full Company financial statements
for the year ended 31 March 2019, which have been prepared under
European Union endorsed International Financial Reporting Standards
(IFRS) and those parts of the Companies Act 2006 applicable to
companies reporting under IFRS. It does not constitute full
financial statements within the meaning of section 434 of the
Companies Act 2006. This financial information has been agreed with
the auditor for release.
The full annual report and financial statements for the year
ended 31 March 2019, on which the auditor has given an unqualified
report, and which does not contain a statement under section 498 of
the Companies Act 2006, will be delivered to the Registrar of
Companies in due course.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
FR LAMFTMBATBBL
(END) Dow Jones Newswires
September 26, 2019 02:00 ET (06:00 GMT)
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