REG - Braveheart Inv Group - Revaluation of portfolio assets

Braveheart InvestmentAnnouncement

15/05/2024 11:30

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RNS Number : 5610O  Braveheart Investment Group plc  15 May 2024

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:

 Braveheart Investment Group plc                                Tel: 01738 587555
 Trevor Brown, Chief Executive Officer

 Viv Hallam, Executive Director

 Allenby Capital Limited (Nominated Adviser and Joint Broker)   Tel: 020 3328 5656
 James Reeve / George Payne

 Peterhouse Capital Limited (Joint Broker)                      Tel: 020 7469 0936
 Duncan Vasey / Lucy Williams

 

 

 

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