TIDMECP
RNS Number : 9162Q
Eight Capital Partners PLC
30 June 2022
EIGHT CAPITAL PARTNERS PLC
("Eight Capital", "ECP" or "the Company")
Annual Report and Financial Statements
For the year ended 31 December 2021
Eight Capital (AQSE: ECP), the investing company whose
investment strategy focuses on technology, media, telecoms and
financial services businesses, including listed investing
companies, is pleased to announce its final results for the year
ended 31 December 2021. The Company's audited report and accounts
can be found below. A copy of the final results will shortly be
available from the Company's website and will be sent to all
shareholders.
A separate announcement providing details of the 2021 Annual
General Meeting will be made shortly.
The Directors of the Company accept responsibility for the
content of this announcement.
For further information, please visit www.eight.capital or
contact:
Eight Capital Partners plc +44 20 3808 0029
Dominic White info@eight.capital
Cairn Financial Advisers LLP
AQSE Corporate Adviser
Jo Turner / James Lewis +44 20 7213 0880
Walbrook PR Limited +44 20 7933 8780
Paul Vann/Nick Rome Paul.vann@walbrookpr.com
About Eight Capital Partners:
Eight Capital Partners plc is an international financial
services operating company focused on owning and operating
businesses engaged in "Fintech" operations, from the digitisation
of banking services, through to blockchain-backed decentralised
finance companies and "crypto banks."
ECP provides equity, debt, and equity-related investment capital
to companies seeking capital for growth and development,
consolidation or acquisition, or pre-IPO financing. The Company
seeks to generate an attractive rate of return for shareholders,
predominantly through capital appreciation, by maximising the
revenues, profits and value of its operating subsidiaries, and
taking advantage of the increasing number of acquisition
opportunities within the continuously developing global technology,
media, telecoms and financial services sectors.
www.eight.capital
Eight Capital Partners operates two subsidiary businesses:
Epsion Capital:
Epsion Capital is an independent corporate advisory firm based
in London with an extensive experience in UK and European capital
markets. The team of senior and experienced ECM and M&A
professionals is specialised across multiple markets, sectors and
geographies and it prides itself on a commercial approach that
allows the clients to achieve their growth ambitions.
www.epsioncapital.com
Innovative Finance:
Innovative Finance is a corporate finance advisory business that
develops mergers and acquisitions and financing solutions across
multiple sectors, primarily in Europe, with access to international
transactions. It is currently working on transactions in the USA
and Europe which are linked to technological developments in the
financial services industry, AI, cybersecurity, e-commerce and
cannabis. www.innovfinance.com
Chairman's Statement
Dear Shareholder,
I am pleased to report on the Company's financial results for
the year ended 31 December 2021 and on a number of far-reaching
corporate developments that have occurred during the year,
particularly during the second half and which have continued into
2022.
Change of status to an Operating Group
The most important development during the period under review,
and announced in an extensive market update on 27 September 2021,
was the change in status from being an investing company to
becoming an operating Group. This Report, therefore, for the first
time, presents Eight Capital Partners Plc's ("ECP" or "Eight
Capital") financial statements under IFRS reporting standards,
consolidating the results and balance sheets of its wholly owned
subsidiaries, Epsion Capital Limited ("Epsion"), and Innovative
Finance Srl ("InnFin"), the latter acquired in May 2021 (together
"the operating subsidiaries").
ECP has therefore evolved into an international financial
services operating Group, whereby Epsion and InnFin source, advise
on, finance, and deliver transactions, primarily involving SME
businesses within the technology, media, telecoms and financial
services sectors and in which ECP itself will potentially
invest.
Results
Through its two subsidiaries, the Group recorded revenues for
the year under review of GBP772,000 with a gross margin of over
70%. This income was further supplemented by ECP itself providing
management services to certain investees and thereby recovering
GBP128,000 of overhead costs. Interest income less expense was a
net surplus of GBP41,000 and the net movement in fair value of both
realised and unrealised gains and losses on investments at fair
value (explained further below) was a gain of GBP314,000. Overheads
were relatively high, at GBP1.1 million; partly a reflection of the
substantial professional support for the change in status outlined
in the September update, and the Group result for the year was a
loss before tax of GBP98,000.
Subsidiary activities
Epsion, our wholly owned UK Corporate Finance subsidiary,
advised on approximately seven bonds from January through to July,
generating approximately GBP400,000 of revenue. During the rest of
2021, Epsion concentrated on two related companies, providing
advice ahead of potential standard listings. If these companies are
listed, there will be significant fee earnings derived from these
clients.
Innovative Finance S.r.l our wholly owned unregulated Italian
Corporate Finance subsidiary, acquired in May 2021, has
concentrated in the second half of the year on providing advice to
investors and companies ahead of listing on the Standard List of
the LSE. Approximately EUR350,000 of the fees are from advising
investors and the remaining EUR50,000 are fees for companies
considering a listing. If these companies are listed InnFin will
earn significant future fees.
Eight Capital: update on prior year's investments
ECP's investment portfolio now and as at 31 December 2021 is
comprised exclusively of quoted companies. The private investments
included in last year's report have either been sold (FPG - see
below) or integrated into the Group (Epsion and InnFin).
Finance Partners Group ("FPG") : Financial Services
This investment was disposed of during the year, originally
consisting of a receivable of EUR2 million with an ability to
convert into equity acquired for EUR1.9 million. The ability to
convert was exercised and the resultant holding in FPG of 28.7% was
sold for EUR2.15 million (equivalent to GBP1.83 million), of which
EUR1.57 million (GBP1.34 million) was paid on closing and the
balance of EUR580,000 (GBP487,000) payable in 2022. The gain on
disposal figure included in these accounts is GBP130,000
Retained investments : combined loss in value recorded in these
accounts: GBP116,000.
Supply@ME Capital Plc ("SYME ): Inventory securitisation
SYME is an inventory monetisation business based on a novel
asset securitisation concept, enabled by an innovative software
platform. SYME is listed on the Standard List of the London Stock
Exchange. SYME's share price has not performed well and ECP's
GBP250,000 investment, acquired at a share price of GBP0.11 has
seen a drop to GBP0.0017 at the year-end, with a total fall in
value of over GBP200,000 since purchase. The movement during the
year under review, included in the income statement, is a loss of
GBP90,000. Although the share price reduction has been a source of
concern, the Board recognises that the concept and possibilities
for SYME were, and still are, interesting once a critical mass of
investment capital to support securitisations can be delivered by
SYME's management.
Evrima Plc ("EVA") : Mining and exploration investment
Evrima was formerly Sports Capital Group ("SCG") and ECP
invested in a football related project from which SCG withdrew.
They reverted to their previous sector of investment: mining and
associated exploration and changed their name. The Company's
investment was approximately GBP140,000 and is currently
GBP131,000, based on its quote on AQSE Growth Market. We will
dispose of this investment in due course.
Greencare Capital Plc ("GRE"): Investment in Cannabis health
products and general wellness.
The Company invested both prior to and at IPO when GRE listed on
the AQSE Growth Market in December 2019. The total investment was
GBP280,000 and the average price paid per share was 10.9p. The
shares at the year-end - and currently - were quoted at 30.5p,
having fallen slightly since the end of 2020. It was recently
announced that Dominic White, Chairman of ECP, has become chairman
of GRE. We await positive developments.
Fair value adjustment on contingent liability
The terms of the acquisition of InnFin included an earn-out
formula contingent upon the attainment of certain levels of
profitability in future years, creating a contingent liability
towards the vendor at the date of acquisition in May 2021. The
fair-valuing of this liability at 31 December 2021 has resulted in
a positive adjustment in the income statement of GBP300,000.
Refined Growth Strategy
As part of its transformation into an operating group, ECP has
recently refined its growth strategy to focus increasingly on those
businesses engaged in "Fintech" operations, including the
digitisation of banking services and blockchain-backed
decentralised finance and other disruptive financial services
technologies, all of which seek to improve and automate the
delivery and use of financial services. Your Board also considers
there to be many value creation opportunities for shareholders from
the further aligning and expansion of the activities of Epsion and
InnFin.
By combining their advisory and transactional expertise with the
strategic utilisation of ECP's growing in-house capital resources,
ECP is able to provide significant support to the transactions
managed by the operating subsidiaries through the provision of
early-stage and growth co-investment capital to growing companies
seeking finance for expansion, development, consolidation or
acquisition, or as pre-IPO/RTO funding.
The competitive advantage of ECP's new operating structure is
its flexibility in terms of where it invests in the "capital stack"
pyramid, being equally comfortable with private or public debt
and/or equity positions, convertibles and structured equity or debt
facilities. Much of the financial services advisory market only
delivers third party capital and advice, without direct access to
supportive in-house capital, or having access to in-house capital
lines with a less flexible mandate.
Corporate Transactions during the year
Eight Capital successfully completed a number of corporate
transactions during the year, each one forming part of its
strategic objective to grow the market capitalisation of the
Company towards and beyond GBP50 million, and establishing a strong
balance sheet base from which to significantly expand its
operations and its own equity valuation.
To this end, in May 2021, the Company acquired InnFin, based in
Milan, which develops mergers and acquisitions and financing
solutions across multiple sectors, primarily in Europe.
In August, ECP disposed of its investment in Finance Partners
Group SPA ("FPG"), an Italian-based financial services business,
realising EUR2.15million. The profitable sale of this minority
stake has provided ECP with a better strategic alignment between
the Company's two remaining wholly owned subsidiaries and its other
activities with a primary focus on technological developments
within the financial services industry, such as fintech SME funding
solutions and digitisation of banking including decentralised
finance technology, to be key growth areas.
As announced on 4 August 2021 the purchaser agreed to pay ECP a
total of EUR2.15 million for the acquisition of FPG. The cash
element of EUR1.57 million was paid immediately. Discussions are
ongoing relating to the final part of the settlement EUR0.58
million, which remains due, and against which an extra amount of
Euros 10,000 has been paid to ECP plus further asset security
backing provided to support the receivable, to the benefit of the
Company. The agreed latest date of payment is now 1 September
2022.
In addition to these corporate transactions, and as part of the
Board's key strategic objective to build scale to the business by
further strengthening the Balance Sheet, in August the Company
purchased EUR40m 2.5% Fixed Rate Secured Bonds at Par from IWEP
Limited, a company controlled by Dominic White, ECP's chairman and
ECP's major shareholder, which significantly increased ECP's gross
assets. Consideration for the acquisition of the Bonds was settled
by a one-year vendor loan which was subsequently restructured into
a EUR15 million 4.8% Bond described below and a EUR25 million
interest-free vendor loan ("Vendor Loan").
In September, the Company launched a EUR25 million 4.8% Fixed
Rate five-year Bond Programme, with an initial tranche, placed at
launch and listed on The Vienna Stock Exchange. This Bond programme
also provided a logical next step towards the continuing expansion
of the Balance Sheet, whilst also providing better medium-term
visibility for the refinancing of ECP's existing 7% listed bonds
which mature in July of this year.
Corporate Transactions after the year end
On 23 May, the Company announced that it had issued a further
EUR5 million tranche of its 7% Bond to a third party that had
acquired EUR5 million of the Vendor Loan from IWEP. In that
announcement, ECP also reinforced its commitment to a
transformational strengthening of the Company's balance sheet
through IWEP seeking to convert, subject to regulatory and
shareholder consent, as much as possible of its debt with the
Company into equity.
On 24 June, the company announced that at a Bondholder meeting
held on the 23 June, an Extraordinary Resolution approved a
proposal to modify the terms and conditions of the 7% Bond such
that the terms align with the more recently issued EUR25m 4.8% Bond
repayable on 3 September 2026.
These current and proposed balance sheet transactions are
intended to consolidate and expand the Company's service offering
as well as helping it to develop a platform from which it can
develop as a multi-faceted financial services company, whilst also
providing a stronger base from which it can raise third party
capital.
Planned Placing and Open Offer
As announced in the Corporate Update in September 2021, it is
the Company's intention to raise new equity capital via a placing
once the restructuring of debt is completed. Your Board recognises
that those who have already invested in the Company may wish to
increase their investment and it is therefore anticipated that
current shareholders will be invited to participate in the
fundraise on the same terms as the debt conversions and equity
placing. Further information will be given in due course.
The Company also intends to provide an opportunity for all debt
investors to convert debt to equity on the same terms.
Strengthening of the Management Team
Integral to the success of the Company's transition to an
operating business has been the strengthening of its senior
management team, with the appointment to the Board in June 2021 of
former Bank of England Chief Accountant, David Bull, who joined
initially as a Non-Executive Director and then, following the
Company's successful transition to operating group status, was
appointed full-time Chief Executive Officer.
David has responsibility for leading the further development of
ECP's financial services business, both organically and through
acquisition, all within the context of fintech services. His
knowledge and experience of technology and the way it relates to
asset and commercial finance, international banking and the
digitisation of banking services, combined with his strong risk
management skills and proven business leadership qualities are
already proving invaluable as we move towards more advanced
technologies in the financial services sector. He will also be
strengthening the operational management team with further
additions in financial management and compliance, which will be at
the heart of the Company's operating activities.
The Group is also delighted to have announced on 13 May 2022,
the appointment of Richard Day to the Board of Epsion as its
Non-Executive Chairman. Richard was co-founder of institutional
stockbroker Arden Partners plc, where, from 2002 to when he left in
2015, he was head of corporate finance for much of that time,
whilst playing an important role in building its sectoral and
geographical presence. He currently holds chairmanships of two
quoted companies: Pelatro plc, a "Big Data" analytics company on
AIM and The British Honey Company plc, the premium British honey
and craft spirits producer. He also chairs Eden Geothermal Limited,
a private company drilling its first of two geothermal wells,
adjacent to the Eden Project in Cornwall in the south-west of
England. Richard's broad experience of public markets, corporate
finance and corporate governance across diverse business sectors is
already having a significant influence and will without doubt be a
huge asset not only to Epsion, but to the Group as a whole.
Outlook
2021 was a watershed year for Eight Capital. It successfully
transitioned into a financial service operating group, completing a
number of complementary corporate and financial transactions,
strengthening both the Company's operational capabilities and
putting in place actions to radically strengthen its Balance Sheet.
It has a clear strategy in place for the transformation of the
business in terms of its size, market value and influence within
the fintech sector of financial services and through our
wholly-owned subsidiaries, Epsion and InnFin.
The Board's strategy is to grow the business both organically
through the development of new financial, "fintech-led" services
and by selective acquisitions to boost revenue and market presence,
thereby significantly increasing shareholder returns.
The Group has made a good start to the current financial year.
We are nurturing earnings potential and structuring the business
and the Balance Sheet for future sustained growth, while building
value for shareholders. We have a growing pipeline of opportunities
that we intend to deliver through our business model and the
management team in place to deliver growth over the next two years.
The Board views the future with increasing confidence.
Dominic White
Chairman
Consolidated Statement of Comprehensive Income
For the year ended 31 December 2021
2021
GBP'000
GROUP
---------
Revenue 772
Cost of Sales (252)
---------
Gross Profit 520
Administrative expenses (1,101)
Net change in unrealised/realised gains and losses
on investments at fair value through profit or loss 314
Other income 128
Operating loss (139)
Interest income 418
Finance expense (377)
---------
Loss before tax (98)
Taxation -
Loss for the financial year (98)
Other comprehensive income:
Items that may be subsequently reclassified to profit
or loss:
Currency translation differences (1)
---------
Other comprehensive income/ (loss) for the year,
net of tax (1)
Total comprehensive income attributable to the owners
of the Parent (99)
Earnings per share (pence) from continuing operations
attributable to owners of the
Company - Basic & Diluted (0.01)
Consolidated Statement of Financial Position
At 31 December 2021
2021
GROUP Note GBP'000
Non-current assets
Goodwill 15 3,867
Intangible Assets 17 13
Property, plant & equipment 16 23
Total non-current assets 3,903
Current assets
Investments 18 34,569
Trade and other receivables 19 1,270
Cash and cash equivalents 202
Total current assets 36,041
Current liabilities
Trade and other payables 20 428
Borrowings 22 21,380
Total current liabilities 21,808
Non-current liabilities
Long term bond 21 16,431
Liability for contingent consideration 1,311
Borrowings 22 203
Total non-current liabilities 17,945
Net assets 191
Capital and reserves
Share capital 24 1,453
Share premium 2,068
Share option & warrant reserve 26 15
Convertible loan note 27 84
Currency translation reserve (5)
Retained earnings (3,424)
Total equity 191
Consolidated Statement of Changes in Equity
For the year ended 31 December 2021
Share Share Share Convertible Currency Retained Total
capital premium option loan note translation earnings
& warrant reserve reserve
reserve
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
--------- --------- ----------- ------------ ------------- ---------- --------
As at 30
December 2020 1,431 2,001 11 84 - (3,326) 201
--------------------- --------- --------- ----------- ------------ ------------- ---------- --------
Loss for the
year - - - - (98) (98)
Other comprehensive
income for
the year - - - - (1) - (1)
--------------------- --------- --------- ----------- ------------ ------------- ---------- --------
Total Comprehensive
Income - - - - (1) (98) (99)
--------------------- --------- --------- ----------- ------------ ------------- ---------- --------
Movement in
reserves - - - - (4) - (4)
Share based
payment - - 4 - - - 4
Issue of shares 22 67 - - - - 89
--------------------- --------- --------- ----------- ------------ ------------- ---------- --------
Total Transactions
with Owners 22 67 4 - - - 93
--------------------- --------- --------- ----------- ------------ ------------- ---------- --------
As at 31
December 2021 1,453 2,068 15 84 (5) (3,424) 191
--------------------- --------- --------- ----------- ------------ ------------- ---------- --------
Consolidated Statement of Cash Flows
For the year ended 31 December 2021
2021
GBP'000
Cash from operating activities
Loss before tax (98)
Adjustments for:
Net interest expense /(income) 41
Net change in unrealised gains on investments
at fair value through profit and loss (314)
Share based payment expense 4
Provisions -
Foreign exchange (205)
Increase in trade and other receivables (1,117)
Increase/(decrease) in trade and other payables 308
Net cash used in operating activities (1,381)
Cash flow from investing activities
Purchase of investments (33,620)
Proceeds on disposal of investments 1,830
Acquisition of subsidiary, net of cash acquired
(InnFin) (902)
Acquisition of subsidiary, net of cash acquired
(Epsion) (120)
Purchase of property, plant and equipment (3)
Interest income 418
Net cash used in investing activities (32,397)
Cash flows from financing activities
Proceeds from issue of shares (net of issue costs) -
Loans received/(cancelled) 20,969
(Repayment)/Proceeds from bond issue 13,185
Finance charges (377)
Net cash from financing activities 33,777
Net cash flow for the year (1)
Cash and cash equivalents at beginning of year 203
Cash and cash equivalents at end of year 202
Net change in cash and cash equivalents (1)
EIGHT CAPITAL PARTNERS PLC
Notes to the consolidated financial statements
For the year ended 31 December 2021
1. General information
Eight Capital Partners Plc ("the Company") is a public limited
company limited by shares and incorporated in England. Its
registered office is Kemp House, 160 City Road, London, EC1V
2NX.
The Company's shares are traded on the Aquis Stock Exchange
Growth Market under ticker ECP and ISIN number GB00BYT56612.
The consolidated financial statements of the Company consist of
the following companies (together "the Group"):
Eight Capital Partners plc UK registered company
Epsion Capital Limited UK registered company
Innovative Finance srl ("InnFin") Italian registered company
The Group's objective is to generate an attractive rate of
return for shareholders, predominantly through capital
appreciation, by taking advantage of opportunities to invest in the
financial services and technology, media, and telecoms (TMT)
sectors.
The information contained in this announcement has been
extracted from the full report and accounts and, as such,
references, notes and page numbers may be incorrect. Shareholders
should read the full report and accounts, a copy of which is
available on the Company's website.
2. Accounting policies
The principal accounting policies applied in the preparation of
these consolidated financial statements are set out below.
Basis of preparation
These consolidated financial statements have been prepared and
approved by the Directors in accordance with the UK-adopted
international accounting standards. These are the Group's first
financial statements prepared in accordance with the UK-adopted
international accounting standards. (see note 4).
The Company was classified as an investment vehicle in the prior
years ending 31 December 2021. On 1 July 2021 Eight Capital Plc
changed its status from an investment vehicle to an operating
company. As a result, and in accordance with IFRS 10, some of the
Company's investments have been consolidated from this date. No
consolidated comparative information has been disclosed as the
Company was an investment vehicle and none of its investments met
the requirements of IFRS 10 for an investment company.
These consolidated financial statements are prepared on a going
concern basis, under the historical cost convention, as modified by
the recognition of listed investments at fair value.
These consolidated financial statements are presented in Pounds
Sterling, rounded to the nearest thousand (GBP'000), which is the
Company's presentation and functional currency.
The presentational currency for Epsion Limited is Pounds
Sterling and for InnFin is Euro as the subsidiary is registered in
Italy.
The preparation of financial statements in conformity with IFRS
requires the use of certain critical accounting estimates. It also
requires management to exercise its judgement in the process of
applying the Group's accounting policies. The areas involving a
higher degree of judgement or complexity, or areas where
assumptions and estimates are significant to the consolidated
financial statements are disclosed in note 3.
Basis of consolidation
The Group financial statements consolidate the financial
statements of the Company and all its subsidiaries ("the
Group").
Subsidiaries include all entities over which the Group is
exposed, or has rights, to variable returns from its involvement
with the investee and has the ability to affect those returns
through its power over the investee. The existence and effect of
potential voting rights that are currently exercisable or
convertible are considered when assessing whether the Group
controls another entity. Subsidiaries are consolidated from the
date on which control commences until the date that control ceases.
Intra-group balances and any unrealised gains and losses on income
or expenses arising from intra-group transactions, are eliminated
in preparing the consolidated financial statements.
The acquisition method of accounting is used to account for
business combinations. The cost of an acquisition is measured as
the fair value of the assets given, equity instruments issued, and
liabilities incurred or assumed at the date of exchange, and the
equity interests issued. Identifiable assets acquired, and
liabilities and contingent liabilities assumed in a business
combination are measured initially at their fair value at the
acquisition date. Acquisition related costs are expensed as
incurred. Where necessary, amounts reported by subsidiaries have
been adjusted to conform with the Group's accounting policies.
Going concern
As at 31 December 2021, the Group had cash of GBP202,000 and
current investments of GBP34,569,000.
As an operating business, the Group has fee income from its
corporate finance activities and the performance and income from
its investments, supported by aggregate bond facilities of up to
EUR35 million (of which EUR24 million has been utilised to date).
Annualised normal running costs of the Company are circa GBP1.5
million including debt service, reduced by rebilling of shared
services of approximately GBP120,000 and interest income of
GBP860,000. As at the date of this report, the Company had
approximately GBP100,000 cash at bank and anticipated near-term
divesting revenues of up to GBP650,000, of which GBP500,000 is
contractual for delivery in September 2022, and with a further
GBP750,000 of investment assets at current market value earmarked
for disinvestment in the second half of 2022. At Group level
additional fee income of circa GBP1.2 million is expected.
The Directors are therefore of the opinion that the Group has
adequate financial resources to enable it to continue in operation
for the foreseeable future. For this reason, it continues to adopt
the going concern basis in preparing the financial statements.
New standards, amendments and interpretations adopted by the
Group and Company
The following IFRS or IFRIC interpretations were effective for
the first time for the financial year beginning 1 January
2021.:
Standards /interpretations Application
--------------------------- -----------------------------------------------------------------------------------------
IAS 1 & IAS 8 amendments Definition of Material
IFRS 3 amendments Business Combinations
IFRS 16 Amendments to provide lessees with an exemption from assessing whether a COVID-19
related
rent concession is a lease modification
New standards, amendments and interpretations not yet
adopted
Standards /interpretations Application
--------------------------- -----------------------------------------------------------------------------------------
IAS 1 amendments Presentation of Financial Statements: Classification of Liabilities as Current or
Non-Current.
Effective: Annual periods beginning on or after 1 January 2023
IFRS 3 amendments Business Combinations - Reference to the Conceptual Framework.
Effective: Annual periods beginning on or after 1 January 2022
IFRS 7, IFRS 9, IFRS 16 Amendments regarding replacement issues in the contract of IBOR reform.
Effective: Annual periods beginning on or after 1 January 2021
IFRS 16 Amended by Covid-19 Related Rent Concessions beyond 30 June 2021 (amendment to IFRS 16)
Effective: Annual periods beginning on or after 1 April 2021
IAS 1 amendments Presentation of Financial Statements: Classification of Liabilities as Current or
Non-Current.
Effective: Annual periods beginning on or after 1 January 2023
There are no IFRS's or IFRIC interpretations that are not yet
effective that would be expected to have a material impact on the
Company or Group.
3. First-time adoption of IFRS
These financial statements, for the year ended 31 December 2021,
are the first the Group has prepared in accordance with IFRS. For
periods up to and including the year ended 31 December 2020, the
Parent Company prepared its financial statements in accordance with
United Kingdom Accounting Standards, including Financial Reporting
Standard 102, "The Financial Reporting Standard applicable in the
United Kingdom and the Republic of Ireland" ("FRS 102").
Accordingly, the Group has prepared financial statements that
comply with UK-adopted international accounting standards as at 31
December 2021, as described in the summary of significant
accounting policies. In preparing the financial statements, the
Group's opening statement of financial position was prepared as at
1 January 2020, the Group's date of transition to IFRS.
There were no material adjustments applied to the Group
financial statements during the transition to IFRS.
4. Earnings per share
2021 2020 2019
Earnings (GBP)
Loss used in calculating basic and diluted earnings:
Loss for the year (GBP98,000) (GBP432,000) (GBP432,000)
-------------
Number of shares
Weighted average number of shares for the purposes of basic and
diluted earnings per share 1,479,362,244 1,069,696,174 618,720,310
Loss per share (pence) (0.01) (0.04) (0.07)
The calculation of basic earnings per share of (0.01) pence is
based on the loss attributable to equity owners of the Company of
GBP98,000 and on the weighted average number of ordinary shares of
1,479,362,244 in issue during the period. Dilutive instruments are
ignored when the overall result is a loss.
5. Investments in subsidiaries
Shares in
Company group undertakings
GBP'000
---------------------
Cost
At 1 January 2021 -
Acquisition of Epsion Capital Limited
(Note 11.1) 100
Acquisition of Innovative Finance
S.r.l (Note 11.2) 3,710
---------------------
At 31 December 2021 3,810
---------------------
At 31 December 2021, the Group consisted of a parent company,
Eight Capital Partners plc, registered in England and Wales and its
two wholly owned subsidiaries.
Subsidiaries:
Epsion Capital Limited
Registered Office: 8-10 Hill Street, London, United Kingdom,
W1J 5NG
Nature of business: Financial intermediation.
Class of share % Holding
------------------------------------ --------------------------
Ordinary shares 100
------------------------------------ --------------------------
Innovative Finance S.r.l
Registered Office: Via Turati 26 20121 Milano Italy
Nature of business: Financial Advisory
Class of share % Holding
------------------------------------------- ----------
Ordinary shares 100
------------------------------------------- ----------
6. Investments
The table below sets out the fair value measurements.
Categorisation has been determined on the basis of listed or
unlisted investments as follows:
Group Unlisted Listed Total
Investments Investments
GBP'000 GBP'000 GBP'000
------------- ------------- ---------
Fair value at 1 January 2020 2,817 973 3,790
------------- ------------- ---------
Investment disposals (854) - (854)
Fair value gain on investment - 202 202
Effects of foreign exchange 41 - 41
Fair value at 31 December 2020 2,004 1,175 3,179
------------- ------------- ---------
Investment disposals (1,701) (1,701)
Investment in subsidiaries (413) (413)
Investment additions: 1AF2 bond - 33,620 33,620
Fair value (loss) on listed investments - (116) (116)
Foreign exchange adjustment 110 (110) -
Fair value at 31 December 2021 - 34,569 34.569
------------- ------------- ---------
Gains on investments held at fair value through
profit or loss
Fair value (loss) on listed investments (116) (116)
Fair value gain on contingent liability of InnFin acquisition 300 - 300
Realised gain on disposal of investments 130 - 130
--- ----- -----
Net gain on investments held at fair value
through profit or loss 430 (116) 314
=== ===== =====
Further Information on each investment can be found in the
Chairman's Statement on page 2.
There was no impact to the fair value of the investments held by
the Group due to the transition from FRS 102 to IFRS.
7. Long-term bonds
Group 2021 2020 2020
GBP'000 GBP'000 GBP'000
IFRS Restated FRS 102
IFRS
--------- --------- ---------
Opening balance at 1 January 2,945 3,005 3,005
Bonds issued 13,675 176 176
Bonds returned - (403) (403)
Foreign exchange adjustment (189) 167 167
--------- ---------
Closing balance at 31 December 16,431 2,945 2,945
--------- --------- ---------
The Company launched 5,000 bonds of EUR1,000 each (the "7%
Bonds") to raise up to EUR5 million on the Vienna Stock Exchange's
multilateral trading facility ("MTF") on 26 July 2019. The
principal terms of the Bonds are as follows: - Issue price and
redemption at par; - Interest of 7% per annum paid semi-annually in
arrears; - Issue date of 26 July 2019 with a redemption date of 26
July 2022.
Bonds that are not issued to third parties remain as issued to
the Company for future trading and only those that are issued to
third parties are recognised as liabilities. At 31 December 2021 a
total of 3,990 (2020: 3,290) bonds representing a liability of
EUR3,990,000 (2020: EUR3,290,000) had been issued to third parties
and 1,010 (2020: 1,710) Bonds with a par value of EUR1,010,000
(2019: EUR1,710,000) were issued to the Company and available to be
traded.
In September 2021, the Company launched a EUR25million 4.8%
Fixed Rate five year Bond Programme, with two initial tranches,
totalling EUR15,050,000 (equivalent to GBP13,675,000) placed at and
shortly after launch and listed on The Vienna Stock Exchange.
On 19 May 2022, the Company issued a further 5,000 7% Bonds of
EUR1,000 (New 7% Bonds) each to various Bondholders, within the
same issuing structure and on the same terms as the original 7%
Bonds
8. Related party transactions
Administrative services
During the year, the Company was invoiced GBP15,500 (2020:
GBP31,400) for administrative services provided by Marker
Management Services Ltd, a company controlled by Martin Groak, a
director of Eight Capital.
Acquisition of a EUR2 million receivable from Finance Partners
Group and conversion to equity
On 7 August 2019 the Company announced the acquisition from IWEP
Ltd. ("IWEP") of a EUR2 million convertible receivable (the
"Receivable") from Finance Partners Group SpA ("FPG"), an Italian
financial services company that invests in private companies
seeking future listings on public markets and whose principal
investment was in The AvantGarde Group.
On 14 May 2021, the Company converted GBP27,000 of the loan with
IWEP Ltd into 67,699,173 new ordinary shares at a price of
GBP0.00039 per share.
IWEP is a company connected to Eight Capital Partners' Chairman
Dominic White. In August 2019 Dominic White agreed to become a
non-executive board member of The Avantgarde Group to monitor the
Company's and IWEP's interests.
9. Post balance sheet events
On 23 May 2022, the Company announced that it had issued a
further EUR5 million tranche of its 7% Bond to a third party that
had acquired EUR5 million of the Vendor Loan from IWEP. In that
announcement, ECP also reinforced its commitment to a
transformational strengthening of the Company's balance sheet
through IWEP seeking to convert, subject to regulatory and
shareholder consent, as much as possible of its debt with the
Company into equity.
On 24 June 2022, the company announced that at a Bondholder
meeting held on 23 June, an Extraordinary Resolution approved a
proposal to modify the terms and conditions of the 7% Bond such
that the terms align with the more recently issued EUR25m 4.8% Bond
repayable on 3 September 2026.
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END
NEXSDIFWSEESEFM
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June 30, 2022 13:15 ET (17:15 GMT)
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