Source - RNS
RNS Number : 9173K
Primorus Investments PLC
16 April 2018
 

Primorus Investments plc

("Primorus" or the "Company")

Quarterly Investor Update

 

Primorus Investments plc (AIM: PRIM, NEX: PRIM) is pleased to provide the Quarter ending March 31, 2018 ("Q1") periodic portfolio update regarding its current holdings and activities acquired and managed as per its investing policy.

 

Executive Director's Quarterly Comment - Alastair Clayton

 

I am pleased to be able to provide shareholders and stakeholders with a review of our activities in Q1. As is customary now, I will make comment on certain underlying themes that are driving the investment decisions and also provide, where appropriate, some thoughts as to the potential outlook for the coming Quarter and beyond.

 

 

Highlights for the period were as follows:

 

 

·      Horse Hill Developments Limited ("HHDL") received final decision notices from Surrey County Council ("SCC"), discharging all of the pre-commencement conditions for the Extended Flow Test of the HH-1 oil discovery with site civil activities commenced;

 

·      Engage Technology Partners Limited ("Engage") reported significant growth in corporate users and Primorus invested a further £500,000 at £22 per share, being a 46% premium to its earlier investment level. Engage has commenced discussions regarding appointing a broker, paving way for a potential IPO in 2019.

 

·      Sale of a 5% interest in HHDL to Solo Oil Plc ("Solo") for £650,000 and 9,973,011 Solo Oil shares.

 

·      WeShop Limited ("WeShop") registered users surged 76% in Quarter to 150,000 and unique users topped 1m for the first time.

 

·      Sport:80 plc ("Sport:80") has informed us that it has commenced initial IPO documentation and discussions with advisers and funders to support the proposed IPO.

 

·      Fresho Pty Ltd ("Fresho") growth continues apace in Australia and also in New Zealand, where the business has signed 2 large suppliers and the first multi-venue user going live in the Quarter.

 

·      StreamTV Networks Inc ("StreamTV") announce joint cooperation with Beijing Optical and Electric ("BOE") to commercialise its Ultra-D Glasses-Free 3D technology in its next generation 8K panels.

 

·      TruSpine Technologies Ltd ("TruSpine") made key senior appointments whilst protracted funding negotiations begin to show progress.

 

 

With all the interruptions of New Year and Easter, Q1 is a short business Quarter but despite this we managed to complete a number of transactions in line with our investing policy. Furthermore, we continue to monitor closely the progress of a number of our investments as they move towards IPO and / or trade sale.

 

It is important for shareholders to understand that whilst we do everything possible to support our existing investments because it is in our interest to do so, we do not have a direct effect on the exact timing of any given IPO and or trade sale. We do however maintain regular dialogue with the companies in question and use the Board's extensive experience in public markets to make a value judgement on when and if a transaction may occur. Thus, these timings may change over time as the facts change but we will update shareholders as material changes occur.

 

With this in mind, the central message for Quarter is one of sustained core investment progress, portfolio rebalancing and more clarity on the likely timing of several of our investments towards IPO.

 

The central message for the outlook for the coming Quarter is we hope to receive material news from several of our investments as they commence the formal IPO process.

 

As announced in late February, Primorus sold a 5% stake in HHDL to Solo for £650,000 in cash and 9,973,011 ordinary shares in Solo. This sale was designed to increase existing cash reserves, rebalance the portfolio make-up and reduce the expected cash calls resulting from the soon-to-commence 90 day extended flow test ("EWT") of the HH-1 discovery well. As a result of this transaction, Primorus retains a 5% direct shareholding in HHDL. We remain optimistic that the EWT will return substantial flow-rates

 

Pleasingly the Fresho platform continues to perform strongly with order volumes and customers numbers in Australia and now New Zealand growing strongly. Fresho maintains a strong cash balance and it is anticipated that it should get to a breakeven basis, including R&D spend, sometime in the second half of 2018. Whilst much of the data regarding Fresho is now "commercial in confidence", the Board of Primorus believes the Fresho platform is exceeding our expectations.

 

Engage has developed, and is now selling, access to a unique, fully-integrated SaaS platform servicing the HR industry surrounding the contingent workforce in the UK. In recent shareholder updates we have been informed that the platform has already reached £1m of Annual Recurring Revenue ("ARR"). We upped our shareholding in February by subscribing for £500,000 worth of shares at £22 per share and now hold approximately 3.6% of the issued share capital of Engage. As flagged in our announcement of 13 March 2018, we remain optimistic regarding Engage as an investment because of the rapid pace of uptake of the product from UK corporates. It is also noteworthy that Engage has begun discussions with City brokers regarding a potential IPO in 2019. The Company is hoping to invest further in Engage in the coming Quarter should the opportunity arise.

 

As mentioned previously, our second-round investment in WeShop may well have been well timed. A larger fundraising WeShop had planned for completion in Q1 2018 has now been postponed, allowing the business to benefit from outstanding platform growth rates observed over the last few months. We have been informed by management that the key metric of Registered Users has grown to circa 150,000 versus 85,000 at the end of last Quarter (+76%) and unique users have grown to over 1,000,000 versus circa 750,000 at the end of the last Quarter (+33%). The Management of WeShop inform us that they are seeking an institutional fundraise ahead of a proposed IPO in 2018.

 

At TruSpine, work is ongoing for the FDA fast-track approval of both FaciLok and CerviFAS, but we have been informed TruSpine will require further funding to complete this. We understand TruSpine is in negotiations with a funder at the current time to provide all the funding required.

Importantly, TruSpine has appointed Mr Simon Stephens as its new interim CEO. Most recently, Simon has held the position of Research Director for London Valve Therapies, where he was responsible for the provision of a new service for the analysis of CT/Echocardiography scans for bleeding edge transcathether cardiac interventions mainly for Mitral Valve/Left Ventricular procedures. He is also a Research Fellow at the Royal Brompton & Harefield NHS Foundation Trust. In a previous role as CTO for Hometrack, he was responsible for developing software technologies that resulted in the company being sold in 2017 for £120m. In addition to Mr Stephens, Professor Abdallah Raweh has joined the medical advisory board.  He is a professor of Cardiology who was trained in Italy, the UK and US, and who now operates internationally.

 

We view the appointment of Mr Stephens and Professor Raweh as key steps in helping to secure the remaining funding required to complete the FDA fast-track approvals process and build a credible Board in advance of an IPO. We look forward to updating shareholders in the near future as to the progress of the aforementioned TruSpine funding, as that is key to unlocking the FDA fast-track and IPO processes.

Sport:80 remains on track to formally kick off the IPO process soon with our best estimate suggesting a likely Q3 2018 listing subject to financing and regulatory approvals. We view Sport:80 as a strong IPO candidate and subject to available funds, may participate in any IPO funding round.

 

In terms of our other oil and gas investments we are encouraged by funding progress made by SOA and whilst confidential, we expect a funding deal to be completed soon, subject to various Israeli Government approvals. At Nomad we have been informed that negotiations over off-take pricing for its domestic gas project are moving forward albeit more slowly than first anticipated. Completing this off-take is the final step in allowing Nomad to monetise the asset with its partner VITOL and thereby potential providing a good return on our investment. We will keep shareholders up to date as these matter progress.

 

The Board remains confident that the private and pre-IPO markets remain significantly under-served and, as such, significant opportunities exist for the Company going forward. We look forward to 2018 being one in which we can demonstrate our business model by exiting some more of our investment positions, thereby realising tangible value for all shareholders.

This announcement contains inside information for the purposes of Article 7 of EU Regulation 596/2014.

For further information, please contact:

Primorus Investments plc:               

+44 (0) 20 7440 0640

Alastair Clayton

 

 

 

Nominated Adviser:

+44 (0) 20 7213 0880

Cairn Financial Advisers LLP

 

James Caithie / Sandy Jamieson

 

 

 

Broker:

+44 (0) 20 3621 4120

Turner Pope Investments

 

Andy Thacker

 

 

 

Current Holdings:

 

Horse Hill Developments

 

The Company currently owns a 5% direct interest in Horse Hill Developments Limited, which is a special purpose company that owns a 65% participating interest and operatorship of Licence PEDL137 and the adjacent Licence PEDL246 in the UK Weald Basin.

 

As reported in March 2016, the final total aggregate stable dry oil flow rate from two Kimmeridge limestones plus the overlying Portland sandstone in HH-1 stands at 1,688 barrels of oil per day ("bopd"), a UK record for an onshore discovery well. Over the 30 to 90 hour flow periods from each of the 3 zones in HH-1, no clear indication of any reservoir pressure depletion was observed. 

 

The carrying value of this investment remains unchanged since our most recently published audits accounts, however the Board looks forward with considerable interest to the upcoming long-term extended flow test programme and its likely potential impact on our investment value going forward.

 

SOA Energy

 

SOA Energy is an oil exploration and development company with prospects in the Dead Sea region of Israel. Primorus holds 14,977 shares acquired for £6.67 per share. SOA is currently seeking a significant funding package to further their development plans. We expect significant news on this funding package in the coming Quarter.

 

 

Fresho

 

Fresho, a company in which Primorus holds an investment of approximately £250,000, representing approximately 3.1% of Fresho's issued share capital, is positioning itself as a leading Australian B2B company servicing the restaurant and food service industries. By aggregating and streamlining the food order process via Fresho's unique cloud-based platform, both customers and suppliers are able to make savings in time, money and wastage and also generate powerful reporting and business data analytics. Given the higher priced second round investment participated in, we expect to review the value of this investment at the next scheduled audit.

 

Nomad Energy

 

Nomad Energy is a private oil and gas exploration and development company primarily focussed on commercialising existing gas reserves in shallow offshore waters of the Ivory Coast. The Company is currently attempting to negotiate a gas sales agreement with local utilities for the supply of gas to existing and proposed power stations in the country. Primorus owns 40,000 shares at the last investor round price of US$7.50 per share. Upon any successful further funding levels by Nomad Energy we may review the value of this investment.

 

TruSpine Technologies

 

Primorus invested £500,000 in TruSpine Technologies Limited on a pre-new money valuation of £15m.  Founded in December 2014, TruSpine secured intellectual property and subsequently developed the Faci-LOK and Cervi-FAS minimally invasive spine stabilisation devices, and the VOSC Catheter atherosclerosis treatment product 'VOSC Catheter'. This development is on-going and TruSpine is targeting FDA clearance and commercialisation of its first product, the Faci-LOK with a view to an AIM IPO.  

 

Sport:80

 

Primorus invested £100,000 in Sport:80 plc on a pre-new money valuation of £8m as part of a fundraising of up to £1m.  Sport:80 is a technology and management company with a proprietary cloud-based platform focused on transforming the business operations and management of sports organisations. The Sport:80 platform is used by 20 prominent sports organisations. Sport:80 is revenue-generating with four-fold revenue growth per annum since 2014.  In the 12 months to 31 December 2016 it had total turnover of approximately £458,000 and made a loss before tax of approximately £269,000. It is the intention of Sport:80 to pursue an AIM IPO.

 

Farina Investments

 

Primorus invested £100,000 in Farina Investments (UK) Limited on a pre-new money valuation of £4m.  Farina is a boutique corporate finance and asset management company which specialises in leveraging profit opportunity in the post-crisis financial landscape.  Farina has been carefully structured and strategically placed to fully capitalise on these opportunities, thereby optimising capital growth, profitability and returns for both the company and investors. Farina is currently exploring various UK listing opportunities either via IPO or reverse takeover. 

 

Engage

 

The Company invested £400,000 in Engage Technology Partners Limited ("Engage") on a pre-new money valuation of £15m as part of a fully subscribed £5.25m funding round.  Primorus has subsequently invested a further £500,000 at a £30m pre-money valuation as part of a rolling £4m fundraising. Founded in 2013, Engage builds software to assist with finding, hiring, compliance and paying of the rapidly growing contingent workforce in the UK.  Engage has rapidly gone from a minimally viable product to a fully saleable and scalable SaaS platform which has built up an impressive and rapidly growing customer base including many household names. An AIM IPO is planned to take place in 2019.  

 

FOMO Money

 

Primorus invested A$400,000 (approximately £240,000) in FOMO Money Pty Ltd ("FOMO Money") on a pre-new money valuation of circa A$6m.  FOMO Money is a new entrant into the Australian Fintech sector based in Melbourne which has been in development for the past 21 months. FOMO Money is an online lending business which will offer personal loans and, in time, brokered home loans that will target the millennial market. As a new corporate entity, FOMO Money does not have any historic financial information. 

 

WeShop

 

Primorus invested £200,000 in WeShop Limited ("WeShop") on a pre-new money valuation of £25m in September 2017.  It invested a further £675,000 at a £30m valuation in November 2017. WeShop is a new way to shop online and earn rewards. Users can browse millions of products from many top brands, discover which have been recommended by people known to them and earn rewards to withdraw as cash or donate to charity.  WeShop allows the user to shop with friends to share ideas and gain inspiration, with everyone earning rewards. An AIM IPO is planned to take place during 2018. Given the higher priced second round investment participated in we expect to review the value of this investment at the next scheduled audit.

 

Stream TV

 

Primorus invested US$200,000 on a fully-diluted valuation of US$336m. Stream TV is a Philadelphia-based new media company created to serve a consumer market seeking enhanced entertainment and communications experiences through devices with unlimited accessibility and superior quality.  Through its wholly-owned research subsidiary, SeeCubic B.V., Stream TV has developed breakthrough glasses-free 3D display technology launched under the trade name Ultra-D. Stream TV is on the cusp of commercially launching, via license, a range of TV, tablet and smartphone glasses-less 3D screens in 2018. Recently Stream TV has added to their product plan 8K displays which produce effects approaching hologram-like quality as new prototypes used by prospective customers. Further licensed products will follow including laptops, PCs, gaming, medical, and automotive. Stream TV is seeking to IPO in the near future.

FORWARD LOOKING STATEMENTS:

Except for statements of historical fact, this news release contains certain "forward-looking information" within the meaning of applicable securities law. Forward-looking information is frequently characterized by words such as "plan", "expect", "project", "intend", "believe", "anticipate", "estimate" and other similar words, or statements that certain events or conditions "may" or "will" occur.  Although we believe that the expectations reflected in the forward-looking information are reasonable, there can be no assurance that such expectations will prove to be correct. We cannot guarantee future results, performance or achievements. Consequently, there is no representation that the actual results achieved will be the same, in whole or in part, as those set out in the forward-looking information.

Forward-looking information is based on the opinions and estimates of management at the date the statements are made, and are subject to a variety of risks and uncertainties and other factors that could cause actual events or results to differ materially from those anticipated in the forward-looking information.


This information is provided by RNS
The company news service from the London Stock Exchange
 
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