Primorus Investments plc

("Primorus" or the "Company")

Final Results and Notice of AGM

Primorus Investments plc (AIM: PRIM) is pleased to report its final results for the year ended 31 December 2020 and announce its Annual General Meeting will be held at 9:00 a.m. on 30 June 2021.

The following documents are now available on the Company's website www.primorusinvestments.com:

·      Annual Report & Accounts for the year ended 31 December 2020 ("Annual Report").

·      Notice of the 2021 Annual General Meeting ("AGM"), which will be held at 9:00 a.m. on 30 June 2021, together with a form of proxy.

Due to the uncertainty of what Government regulations applicable to the COVID-19 pandemic will be in place at the date of the AGM, it is intended that the minimum attendance (being two shareholders) required to form a quorum will be permitted to attend the AGM. Accordingly, shareholders are advised not to attend the meeting in person and are strongly urged to register their votes in advance of the meeting by appointing the Chairman of the AGM as their proxy, with their voting instructions. Further details are included in the Notice of AGM.

As provided for in the Company's articles of association, copies of both documents have been made available on the Company's website. In the interests of the environment and continuing to reduce the Company's costs, in line with the Board's previously announced strategic objectives, printed copies will not be sent. Whilst the Directors urge all shareholders to download electronic copies of the documents, specifically in the interests of the environment, any shareholders who wish to receive hard copies should email info@primorusinvestments.com.

This announcement contains inside information for the purposes of the UK Market Abuse Regulation and the Directors of the Company are responsible for the release of this announcement.

For further information, please contact:

Primorus Investments plc                                                        +44 (0)20 8154 7907

Rupert Labrum

Nominated Adviser and Broker

Cairn Financial Advisers LLP                                                        +44 (0)20 7213 0880

Sandy Jamieson / James Caithie

Chairman's statement

Overview

I am pleased to present the Chairman's Statement and Strategic Report for the financial results of Primorus Investments plc ("Primorus" or the "Company") for the year ended 31 December 2020.

Introduction

The period under review was one of significant change, both for Primorus and the global economy due to the COVID-19 pandemic. In late October, a newly constituted Board of Directors took over the management and operations of Primorus with a principal focus on reducing the annual running costs of the Company and changing the strategic focus of the business to provide stronger growth for the shareholders.

The first step of reducing costs has been accomplished, whereby the new Board implemented changes which equate to an annual saving of approximately 40% with directors' salaries and fees having been reduced by 75%. The second step of changing the Company's strategic focus involved carrying out a detailed review of each investment held by Primorus. This involved spending a significant amount of time in discussions with the management teams of the investee companies.

It was pleasing to learn of the progress which several of the investee companies had achieved, in the face of some exceptional challenges brought on by the COVID-19 pandemic. This was tempered slightly by the fact that some of the investee companies had clearly struggled in the economic environment and would need to raise capital.

Concurrent with reviewing existing investments, the management team was also presented with many new proposals and opportunities during the period. The management team carefully reviewed each opportunity but decided that it was in the best interests of the shareholders to put in place a robust strategy that underpins all future investments before committing to new opportunities.  Post-financial period, the Company has made two investments, further details of which are contained in note 6 to the financial statements.

Investment highlights

·      Fully exited investment in Greatland Gold Plc ("GGP"), realising a total return on investment of 746%. At the time of the new Board taking over at the Company in late October, the Company held 20 million shares in GGP. The Board felt GGP had enjoyed some significant success during the period, but the timing was right for divesting the stake in full. The remaining divestment achieved an average sale price of approximately 23 pence per share, realising gross proceeds of approximately £4.6 million.

·    Fresho Pty Ltd ("Fresho") experienced the successful launch of its B2C business, with over 90,000 sign-ups in 2020. B2B volumes increased significantly in the fourth quarter of the period to be 55% up on the quarter ending September and over 30% up on the same time in 2019.

·     The Company subscribed for 2 million shares in Zuuse Limited ("Zuuse") at a price of A$1 per share in primary stock, although also subscribed for a portion of this in secondary stock at a slightly lower price. Primorus holds 2,057,205 shares in Zuuse and 1,000,000 options exercisable at A$0.50. Zuuse's revenue for the period was up by 15% compared to 2019 despite falling 7% during the second quarter. The business was also EBITDA and cashflow positive throughout the period, and enjoyed record sales in December 2020.

·    Engage Technology Partners Limited's ("Engage") revenues recovered in the period to pre-COVID levels and the belief is that revenues will continue to grow due to a strong pipeline of new work. Revenues for the financial period ending 31 December 2020 were £595,000.

Financial highlights

The operating profit for the year was £4.616 million (2019: £401,000 loss). The net profit after tax was £4.169 million (2019: £401,000 loss). The profit for the period is attributable to the divestment of the Company's full stake in GGP. Total assets including cash at 31 December 2020 amounted to £9.401 million (2019: £4.865 million).

The cash balance was £4.67 million at 31 December 2020.

Investee companies

All the Company's investments in underlying investee companies are minority investments. Whilst we may offer advice to management of the investee companies, specifically pertaining to their business objectives and goals, they can and sometimes do ignore such advice. Similarly, those investee companies which are privately held do not have similar disclosure obligations to publicly quoted companies and therefore any updates they provide in relation to their businesses can be piecemeal and, in certain cases, non-existent save where the Board specifically requests an update. Primorus does not operate its investee companies on a day-to-day basis, and whilst the Board will look to structure investments in a format where Primorus can have a high degree of oversight, this was not typically done with the Company's historic investments and, as such, there are inherent risks in that investee companies are not as accountable to the Company as the Board would prefer them to be.

Summary

The Board was pleased to learn of the progress achieved by a few of the Company's investee companies, whilst several of the investments were clearly struggling, principally due to a lack of funding, the availability of which was hampered due to the economic environment caused because of the COVID-19 pandemic. We spoke to all our investee companies, nearly all of which informed us that they would be raising new capital. It became clear to the Board that those investee companies which had struggled because of the pandemic were not necessarily aligned with the revised strategic focus of the Company going forward.

The Board decided not to invest further capital in those investee companies which had struggled due to the pandemic and instead prioritise on those investments which it believed would offer the most upside to our shareholders. The investments we prioritised were Fresho, Zuuse and Engage. The Board believes each of these investments present significant upside for our shareholders and we look forward to being able to share further positive news on each of them as their respective management teams deliver on their ambitious business objectives.

The Board spent a significant amount of time in the last two months of the period not only reviewing existing and new investment opportunities, but also reviewing the future outlook for Primorus. We noted that the Company had been fairly sector agnostic in its investment choices notwithstanding that there was a general theme of investing in natural resource opportunities, which reflected the previous directors' backgrounds and experience. We believe the current Board is comprised of individuals with a wider range of sector experience, and we are keen to exploit this for the benefit of Primorus. As we move forward, the Board is keen to adopt a more holistic approach for Primorus. As we seek to implement this approach, we would like to share with our shareholders some of the principal items we will focus on, as noted below.

Board changes

In October 2020, the previous Board members, numbering three, resigned from the Company, following which the Board was comprised of myself, as Executive Chairman, and Hedley Clark and Matthew Beardmore, each being Non-Executive Directors.  As new directors we are committed to the proper corporate governance of the Company as set out in the Corporate Governance Statement below.

2021

Moving forward, the Board has set the following strategic criteria for any new investment opportunity which it identifies:

·     It must enable Primorus the opportunity to acquire a meaningful stake in the investee company.

·     A clear and realistic exit route must be in place.

·  There should be an opportunity for the Board to play an active role in the investee company's development.

·    The Board and the investee company's management team must share a common vision and strategic alignment.

·     The investment committed by the Company will be proportionate to the risk/reward opportunity.

·   There should be a greater opportunity for the Company's shareholders to benefit directly from the increase in capital values from each investment.        

The strategic criteria forms part of the rationale for proposing to shareholders for approval an updated investing policy to be adopted by the Company at the 2021 annual general meeting ("AGM"). The Board believes that by applying the above criteria to the proposed updated investing policy, the Company can target more capital accretive opportunities for the benefit of shareholders. Some highlights of the updated investing policy are as follows:

·    To establish and/or acquire a diverse portfolio of direct and indirect interests in companies and/or projects at any stage of their development or operational lifecycle with a particular focus on the natural resources, energy, clean technology, financial technology, business technology, infrastructure, property, consultancy, brand licensing and leisure sectors.

·   Invest by way of outright acquisition of assets, including the intellectual property, of a relevant business, or by entering into partnerships, joint ventures or other forms of collaborative arrangements.

·      Be an active and/or a passive investor depending on the nature of the individual investments, placing no minimum or maximum limit on the length of time that any investment may be held.

·   Invest, as a founder or co-founder investor, seed investor and/or cornerstone investor in special purpose acquisition companies ("SPACs") established for the purpose of identifying suitable acquisition targets; principally SPACs whose shares are traded on, or are intended to be traded on, the Standard Segment of the Main Market or the AIM market of the London Stock Exchange.

The full text of the proposed updated investing policy can be seen in the notice of AGM published by the Company on the same date as the release of these accounts.

Our operational targets for the remainder of 2021, in line with our proposed updated investing policy, are:

·    To continue to focus on applying financial resources diligently, with controlled corporate costs and focused investment.

·      To continue to build working capital, preferably through organic means, by exiting investments which have generated significant returns on investment.

·     To continue to build our external network and to develop our managerial team to provide confidence in the market of our abilities to achieve our strategic business objective of identifying significant value-enhancing investment opportunities.

·     To proactively continue the work the Board has already started to achieve crystallisation of value from certain investment opportunities which it has identified, which may be via their own listed entities.

·      Invest in a series of new special purpose acquisition companies ("SPACs") with Primorus as a founder investor, or as a co-founder investor where circumstances permit, where we seek to identify suitable target companies to reverse into the SPACs.

·      To invest in third party SPACs, where such opportunities fit within the Company's investing policy.

·    To continue to review new opportunities and where financially and operationally practical to acquire additional investment interests.

Outlook

The Board made excellent progress in addressing what it considered to be excessive historic costs, and alleviating administrative burdens on Primorus which seemed to offer little benefit to our shareholders. Decisions made in the period addressing these items included cancellation of the secondary quotation of the Company's shares on the Aquis Growth Market and the replacement of the Company's broker. The Company also cancelled historic share option awards.

After a period of transition and the divestment of our entire stake in GGP in 2020, we now look forward to 2021 as a year of growth; growth in those of the Company's investments which the Board has principally focused on, including its post-financial year further investment in Fresho and new investment in Mustang Energy PLC, combined with corporate activity relating to the establishment of our own SPACs. Our objectives are simple, to generate significant value for shareholders and to build our working capital rapidly and organically, while maintaining the strength of our balance sheet.

The Board would like to thank all shareholders for their continued support and understanding in these exceptional circumstances, and wish them well during this time.

s172 Statement

The Directors continue to act in a way that they consider, in good faith, to be most likely to promote the success of the Company for the benefits of the members as a whole, and in doing so have regard, amongst other matters to:

·      The likely consequences of any decision in the long term;

·      The interests of the Company's 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 as well as the environment;

·      The need to act fairly as between members of the Company, and

·      The desirability of the Company maintaining a reputation for high standards of business conduct

The Board has always recognised the relationships with key stakeholders as being central to the long-term success of the business and therefore seeks active engagement with all stakeholder groups, to understand and respect their views, in particular of those with the communities in which it invests, its host governments, employees and suppliers.

Details of the Board's decisions for the year ending 31 December 2020 to promote long-term success, and how it engaged with stakeholders and considered their interests when making those decisions, can be found throughout the Chairman's Statement, Directors' Report and Corporate Governance Statements.

Rupert Labrum

Chairman

7 June 2021

Statement of comprehensive income
year ended 31 December 2020

Statement of financial position

At 31 December 2020

Consolidated statement of changes in equity
for the year ended 31 December 2020

Statement of cash flows
year ended 31 December 2020

Notes

1. Basis of Preparation

Primorus Investments plc is a company incorporated in the United Kingdom. The Company's registered office is 48 Chancery Lane, London, WC2A 1JF.  The Company's shares are listed on the AIM market of the London Stock Exchange.

The Financial Statements are for the year ended 31 December 2020 and have been prepared under the historical cost convention).

The financial statements have been prepared in accordance with the Companies Act 2006 and International Accounting Standards (IAS) and International Financial Reporting Standards (IFRS) and related interpretations.

These Financial Statements (the "Financial Statements") have been prepared and approved by the Directors on 7^th June 2021 and signed on their behalf by Rupert Labrum and Hedley Clark.

The accounting policies have been applied consistently throughout the preparation of these Financial Statements, and the financial report is presented in Pound Sterling (£) and all values are rounded to the nearest thousand pounds (£'000) unless otherwise stated.

2. Going Concern

The Directors noted the profits that the Company has made for the Year Ended 31 December 2020. The Directors have prepared cash flow forecasts for the period ending 30 June 2022 which take account of the current cost and operational structure of the Company.

The cost structure of the Company comprises a high proportion of discretionary spend and therefore in the event that cash flows become constrained, costs can be quickly reduced to enable the Company to operate within its available funding.

These forecasts demonstrate that the Company has sufficient cash funds available to allow it to continue in business for a period of at least twelve months from the date of approval of these financial statements. Accordingly, the financial statements have been prepared on a going concern basis.

It is the prime responsibility of the Board to ensure the Company remains a going concern. At 31 December 2020 the Company had cash and cash equivalents of £4.560m, net of borrowings. The Company has minimal contractual expenditure commitments and the Board considers the present funds together with future disposals of its financial investments sufficient to maintain the working capital of the Company for a period of at least 12 months from the date of signing the Annual Report and Financial Statements. For these reasons the Directors adopt the going concern basis in the preparation of the Financial Statements.

3. Profit per Share

4. Related Party Transactions

Key Management Personnel

The key management personnel are considered to be the Directors. Included in their remuneration is an amount of £24,000 paid as consultancy fees to NW Consulting, a company controlled by Mr D Strang.  There was no balance outstanding at the end of the year. See Note 4 in the full Annual Report and Accounts.

During the year, the Company sold shares it held in Doriemus PLC, a company in which Mr D Strang was a director.  Furthermore, the Company also purchased and sold shares in Artemis Resources Limited, a company in which Mr A Clayton was a director, having been appointed on 29th January 2020.

5. Prior year restatement

During the year, the prior year accounting treatment of the investments held, which were classified as available for sale investments, has been revisited. The investments should be treated as financial assets at fair value through profit or loss in accordance with IFRS 9.

The impact of the prior year restatement in respect of the classification of the investments held are as follows:

6. Events after the end of the reporting period

Since the year end the Company made a further investment in Fresho Pty Limited ("Fresho") by way of a subscription for 2,000,000 new shares for total consideration of A$1,150,000 (approximately £637,000), thereby increasing its holding to approximately 5% on a fully diluted basis. The Company now holds, in aggregate, 3,415,723 shares in the issued share capital of Fresho.

Since the year end the Company made a US$2,500,000 investment in Mustang Energy PLC by way of a subscription of 50 convertible loan notes of US$50,000 each.

Following the year end the company granted 3 million share options to each of the directors and the company secretary, a total of 12 million share options.

7. Publication of the Annual Report and Accounts

The Annual Report and Accounts for the year ended 31 December 2020 are now available on the Company's websitewww.primorusinvestments.com.