RiverFort Global Opp – Final Results

RiverFort Global Opp – Final Results

RiverFort Global Opportunities plc, the investment company listed on AIM, is pleased to announce its audited final results for the year ended 31 December 2018 (extracts from which are set out below) and that the financial statements will shortly be posted to shareholders and made available on the website www.riverfortglobalopportunities.com

Highlights for 2018

  • Successful transition of Company and adoption of expanded investing policy
  • RiverFort Global Capital Limited appointed as investment adviser
  • Over £6 million in new equity raised to deploy in new investment opportunities
  • Significant improvement in operating results compared to 2017
  • Over £500,000 of investment income generated from RiverFort-arranged investments
  • Around £3 million held in debt and equity-linked debt investments at the period end, with £5.5 million deployed to date.
  • Substantial cash balance available for further investment.
  • Company’s name changed to RiverFort Global Opportunities plc.

INTRODUCTION

During the year ended 31 December 2018, the Company has continued to operate as an investment company.

FINANCIAL

For the year to 31 December 2018, the Company made a loss from continuing operations of £731,192 (2017: loss of £1,135,685). The net asset value of the Company as at 31 December 2018 was £7,254,727 (2017: £2,448,769).

The Company’s investment portfolio at 31 December 2018 is divided into the following categories:

Category

Cost or valuation (£)

Debt and equity-linked debt investments

2,996,917

Equity investments

546,380

Other

250.418

Cash resources

3,597,734

Total

7,391,449

 REVIEW OF THE YEAR

2018 has been an extremely busy year for the Company.  During the year, the Board announced that the Company had entered into an arrangement with RiverFort Global Capital Ltd, the specialist provider of capital to junior companies whereby the Company would have the opportunity to invest in transactions arranged by RiverFort alongside other co-investors. This arrangement was subsequently approved by shareholders in a general meeting on 8 June 2018. 

The purpose of this arrangement was to provide greater access to investment opportunities, lower the volatility and risk associated with pure equity investment and drive the development of cash income and returns for the Company.  It also enabled investors to gain access to the RiverFort investment strategy via a publicly listed vehicle. 

Against this background, during the course of the year, the Company raised almost £6 million in new funds from a range of new investors, both private and institutional, in order to have the capital available to deploy in the opportunities arranged by RiverFort.  By the end of the year, the Company held around £3 million in RiverFort-arranged investments.  At the same time, the Company’s equity portfolio has been reduced in order to lower the risk profile of the Company’s investment portfolio. 

As a result of these new investments, along with a focus on a reduction of costs, the Company’s results for the year have significantly improved compared to the previous year. 

Income breakdown

2018

2017

£000

£000

Investment income

513

12

Net loss from financial instruments at FVTPL

(929)

(812)

Total income

(416)

(800)

Administration costs

279

336

Other gains and losses

(35)

Operating profit

(731)

(1,136)

Investment income derives principally from the fees and interest income in relation to the RiverFort-arranged investments. The net loss from financial instruments at FVTP represents the impact of valuing the investment portfolio at fair value as described under the new IFRS 9 accounting policy. The principal contributor to this loss during 2018 was the unrealised loss recorded on the investment in Plutus PowerGen plc, held within the Company’s existing equity portfolio.  This company’s share price decreased by almost 80% during 2018 and, as at the year end, the Company’s holding was valued at £213,440. 

In overall terms, these results clearly validate the Company’s focus on building its debt and equity-linked debt portfolio and entering into the investment adviser agreement with RiverFort. Furthermore, these results have been achieved against the background of the Company’s available investment funds only being partially invested over this period and with a reduced cost base again for only part of the period.  

The Company’s Board has also been strengthened with the addition of Andrew Nesbitt, a qualified mining engineer, with over 20 years of experience in the natural resources sector and I joined the Board effective 1 January 2019. Towards the end of the year, the Company changed its name to RiverFort Global Opportunities plc and expanded its investing policy to include healthcare and technology. 

More details of the company’s investing activities and investment portfolio are set out in the Strategic Report.

OUTLOOK AND STRATEGY

Going forward the Company is continuing to actively invest its capital in new opportunities and, to date, has now invested around £5.5 million in RiverFort-arranged investments. There continues to be strong demand for funding from junior listed companies which can deliver attractive investment returns. The Company still has a substantial cash balance to deploy as a result of the return of principal from its investments, the generation of investment income and its fund-raising activities. It is therefore particularly well placed to continue to build on the results for 2018 and grow its portfolio significantly and rapidly by making investments that can generate income and capital growth whilst offering downside protection.  We firmly believe that 2019 will be another positive year for the Company.

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