Riverfort Global Opportunities : Half-year report

RNS Number : 8928L

RiverFort Global Opportunities PLC

11 September 2019

11 September 2019

RiverFort Global Opportunities plc

("RGO" or the "Company")

Unaudited interim results for the 6 months ended 30 June 2019

RiverFort Global Opportunities plc is pleased to announce its unaudited interim results for the six months to 30 June 2019.

Highlights

• Τotal income generated of £676,000 in the six months to 30 June 2019
• Increase in net asset value since the beginning of the year of almost 6%
• De-riskedinvestment portfolio with around 90% now comprising debt instruments and cash
• NAV per share is at a 49% premium to the period end share price
• The Company is continuing to build on the progress made in 2018 and is generating significant level of investment income
• Profit for the six month period of £423,000 and cash generated from operations of £417,000
• Net profit margin of 63% and operating cash flow margin of 62% achieved during the period
• In excess of £2 million of cash available for further investment
• Additional investments made during 2019 in companies including Jubilee Metals Group plc, Anglo African Oil and Gas plc and UK Oil and Gas plc
• Continued strong demand for investment capital

Chairman's review

We have continued to make good progress in Q2 2019, delivering a significantly improved result for the first six months of 2019 compared to the whole of 2018. The majority of the £549,000 of total investment income for the half year is being generated from RiverFort-arranged investments and, overall, after administration and other costs, we have been able to deliver a profit of over £400,000 for the half year underpinned by cash flow from operations of a similar figure .

The analysis of income for the period is set out below:

		Half year to 30	Year to 31 December
		June 2019	2018
		£	£
Investment income		549	513
Net income from financial instruments at FVTPL		127	(929)
Total investment income		676	(416)

This significantly improved level of total investment income in 2019 has been driven by the returns made from the Company's investment in RiverFort-generated opportunities. During this period, administration costs amounted to £252,000, which included fees payable to RiverFort Global Capital Limited for advisory services of £97,000, which are primarily linked to the generation of income, whilst keeping the fixed costs of the business to a minimum.

The key unaudited performance indicators are set out below:

Performance indicator	30 June 2019	31 December	Change
	2018
Investment income	£549,000	£513,000
Net asset value	£7,678,162	£7,254,727	+5.8%
Net asset value - fully diluted per share	0.113p	0.107p	+5.8%
Closing share price	0.076p	0.090p	-15.5%
Net asset value premium to the share price	49%	19%
Market capitalisation	£5,159,895	£6,110,000	-15.5%

Whilst the Company is continuing to grow its net asset value, generate a significant level of investment income and is profitable, the Company's shares are trading at a very substantial discount to net asset value. This is against the background of a significant reduction in the risk profile of the Company's investment portfolio, where some 90% is represented by debt instruments and cash.

The Company's principal investment portfolio categories are summarised below:

Category	Cost or valuation at 30 June 2019
Debt and equity- linked debt	4,863,204	62.3%
investments
Equity investments	649,056	8.3%
Other	200,000	2.6%
Cash resources	2,090,220	26.8%
Total	7,802,480	100.0%

The Company's net asset value has increased by 6% since the beginning of the year and the Company has continued to build its investment portfolio of RiverFort -arranged investments. Also, during the half year, the Company's equity portfolio has reduced as a result of dispos als of equity holding and a fall in the share price of Plutus PowerGen plc offset by a further investment made in Pires Investments plc ("Pires"). The valuation of Pires is now very solidly underpinned by that company's cash resources and investment in Eco (Atlantic) Oil and Gas Limited. Further details about the Company's investment portfolio are set out on the Company's website at www.riverfortglobalopportunities.com.

As the Company continues to build its investment portfolio, it has been agreed with RiverFort that it will waive certain of its investment adviser fees for the first half 2019. In consideration for this, the Company has agreed to extend the current term of the investment adviser agreement with RiverFort by an additional six months. Under the AIM Rules, RiverFort, as the Company's investment adviser, is regarded as a Related Party so the variation of the investment agreement is a Related Party Transaction under the AIM Rules. To that end, the Independent Directors (being all the Directors with the exception of Mr Andrew Nesbitt who is a consultant to RiverFort) who have consulted with the Company's nomad, believe that this variation of the investment agreement is fair and reasonable in so far as the shareholders are concerned.

The Company is continuing to see a number of interesting investment opportunities where it can deploy its investment funds in order to make attractive returns. Furthermore, given the Company's ability to generate significant levels of investment income and profits, going forward, the Board is looking carefully at ways to enhance returns to shareholders that may include dividends and share buybacks.

Philip Haydn-Slater

Non-Executive Chairman

11 September 2019

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

For more information, please contact:
RiverFort Global Opportunities plc:	[phone]
Philip Haydn-Slater,Non-Executive Chairman
Nicholas Lee, Investment Director
Nominated Adviser:
Beaumont Cornish	[phone]
Roland Cornish/Felicity Geidt
Joint Broker:	[phone]
Shard Partners LLP
Damon Heath/Erik Woolgar
Joint Broker:	[phone]
Peterhouse Capital Limited
Lucy Williams

UNAUDITED STATEMENT OF COMPREHENSIVE INCOME

FOR THE SIX MONTHS ENDED 30 JUNE 2019

	Unaudited	Unaudited
	6 months	6 months	Audited
	ended	ended	Year ended
	30 June	30 June	31 December
	2019	2018	2018
	£	£	£
Net gain/(loss) from financial instruments at	126,670	(110,119)
FVTPL			(965,228)
Investment income	549,137	169,759	512,743
Total income	675,807	59,640	(452,485)
Administration expenses	(252,372)	(157,122)	(278,707)
Profit/(loss) before taxation	423,435	(97,482)	(731,192)
Taxation	−	−	−

	Profit/(loss) for the period and total
	comprehensive income		423,435	(97,482)	(731,192)
	Basic earnings/(loss) per share
	Continuing and total operations		0.006p	(0.005)p	(0.018)p
	Fully diluted earnings/(loss) per share
	Continuing and total operations		0.006p	(0.005)p	(0.018)p
UNAUDITED STATEMENT OF CHANGES IN EQUITY
FOR THE SIX MONTHS ENDED 30 JUNE 2019
		Called up	Share
		share	premium	Other	Retained	Total
		capital	account	reserves	deficit	equity
		£	£	£	£	£
	Balance at
	1 January 2018	4,269,546	3,191,257	100,150	(5,112,184)	2,448,769
	Loss for the year and total	−	−	−
	comprehensive expense	(731,192)	(731,192)
	Share option reserve transfer
	following cancellation of	−	−			−
	options	(73,150)	73,150
	Share issues	5,772,727	77,273	−	−	5,850,000
	Share issue expenses		(77,273)	−	(235,577)	(312,850)
	Transactions with owners	5,772,727	−	−	(235,577)	5,537,150
	Balance at
	31 December 2018	10,042,273	3,191,257	27,000	(6,005,803)	7,254,727
	Profit for the period and total	−	−	−
	comprehensive income	423,435	423,435
	Balance at
30 June 2019	9,542,273	3,191,257	27,000	(5,582,368)	7,678,162
UNAUDITED STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2019
			Unaudited	Unaudited
			6 months	6 months	Audited
			ended	ended	Year ended
			30 June	30 June	31 December
				2019	2018	2018
				£	£	£
	ASSETS
	Non-current investments				−
	Financial asset investments		883,588	1,540,456

Total non-current assets	883,588	−	1,540,456
Current assets
Financial asset investments	4,828,672	2,494,958	2,253,259
Trade and other receivables	242,096	4,424,824	206,107
Cash and cash equivalents	2,090,220	871,452	3,597,734
Total current assets	7,160,988	7,791,234	6,057,100
Total assets	8,044,576	7,791,234	7,597,556
LIABILITIES
Current liabilities
Trade and other payables	273,516	374,797	307,013
Other financial liabilities	92,898	−	35,816
Total current liabilities	366,414	374,797	342,829
Net assets	7,678,162	7,416,437	7,254,727
EQUITY
Share capital	10,042,273	9,542,273	10,042,273
Share premium account	3,191,257	3,191,257	3,191,257
Capital redemption reserve	27,000	27,000	27,000
Share option reserve	−	73,150	−
Retained losses	(5,582,368)	(5,417,243)	(6,005,803)
Total equity	7,678,162	7,416,437	7,254,727

UNAUDITED STATEMENT OF CASH FLOWS

FOR THE SIX MONTHS ENDED 30 JUNE 2019

	Unaudited	Unaudited
	6 months	6 months	Audited
	ended	ended	Year ended
	30 June	30 June	31 December
	2019	2018	2018
	£	£	£
Cash flows from operating activities
Investment income received	518,743	78,904	332,664
Operating expenses paid	(101,869)	(122,319)	(277,396)
Net cash inflow/(outflow) from operating
activities	416,874	(43,415)	55,268
Cash flows from investing activities
Purchase of investments	(3,032,776)	(318,424)	(3,204,994)
Proceeds from disposal of investments	69,678	256,496	783,975
Debt instrument repayments	1,097,132	−	193,211
Net payments on forward exchange contracts	(65,899)	−	−
Net cash used in investing activities	(1,931,865)	(61,928)	(2,227,808)