RiverFort Global Opp – Half-year Report

RiverFort Global Opp – Half-year Report

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

 

Highlights

·      Total 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-risked investment 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 June 2019

Year to 31 December 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

31 December 2018

Change

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 investments

4,863,204

62.3%

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 disposals 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. 

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