TIDMCRV
RNS Number : 0677V
Craven House Capital PLC
28 November 2019
Craven House Capital plc
("Craven House" or the "Company")
Annual Results for year ended 31 May 2019
CRAVEN HOUSE CAPITAL PLC
CHAIRMAN'S STATEMENT
FOR THE YEARED 31 MAY 2019
Dear Shareholder
I am pleased to provide an introduction to the annual report and
financial statements for Craven House Capital Plc for the year ending
31 May 2019.
As forecast in the 2018 accounts, the year to May 2019 saw an increased
level of activity in North America; In January 2019, the Company
successfully completed the sale of its subsidiary, IIU Inc., to
LM Funding America Inc ("LMFA") for $5.1m. $3.6m of this consideration
was paid by way of a convertible note and we retain the option to
convert this note into shares in LMFA (subject to LMFA shareholder
approval) and we have acquired further shares in LMFA in the market.
In addition we made a number of investments into other publicly
listed securities during the period as outlined in the Investment
Manger's report below.
Net Asset Value per share basis fell marginally from $9.95 to $9.89
(prior to accrual of performance fees payable to the Investment
Manager). An increase in the gross value of Craven's investment
holdings (from $27.0m to $27.4m) was offset marginally by an increase
in inter-company liabilities. Total liabilities relative to assets
remain very low; creditors external to the Company totaled $1.15m
at the year end, $800,000 of which is in the form of a convertible
loan not due until 2022 owing to GEM Global Yield Fund LLC relating
to historic fees ($300,000 of this loan was converted post year-end).
In accordance with the terms of the Management Services Agreement,
between the Investment Manager and the Company, as set out in the
annual report for the year ended 31 May 2014, the Investment Manager
is entitled to receive a management performance fee equal to 20%
of the increase in the net asset value per share above the prior
'high-water mark', subject to a hurdle rate of at least 5%. The
Investment Manager agreed to waive payment of the performance fee
in the prior two periods (May 2017 and May 2018). For the year to
May 2019 the Investment Manager has been awarded a performance fee
of $1.66m, which has been accrued under trade payables. This fee
is calculated on the increase in NAV per share from the previous
'high-water mark' of $6.57 in May 2016 to the NAV per share of $9.89
per share as of May 2019. As has been the case with all prior performance
fees, the Investment Manager will accept payment of fees in shares
of Craven at $12.50 per share. This value represents the highest
price at which shares were issued to investors and is a significant
premium to both the NAV and the prevailing share price. The board
are pleased to report this outcome as it confirms, once again, the
long-standing position of the Investment Manager that their interests
are aligned with Craven's shareholders.
As has been reported previously, the High Court has approved the
reduction in share capital related to the proposed share buy-back.
We will proceed with completion of this process at a time when the
Company benefits from a surplus in working / investment capital
and feels that other investment opportunities do not offer the potential
for more favourable returns than the acquisition of our own shares.
Further announcements will be made on this subject in due course
as required.
Mark Pajak
Acting Chairman
CRAVEN HOUSE CAPITAL PLC
INVESTMENT MANAGER'S REPORT
FOR THE YEARED 31 MAY 2019
Statement by the Investment Manager
For the year ending 31 May 2019, Craven House Capital Plc (the
"Company" or "Craven") reported an increase in the gross asset
value of its holdings from $27.0m to $27.4m. The Net Asset Value on
a per share basis fell marginally from $9.95 to $9.89 (prior to
accrual of performance fees payable to the Investment Manager).
The Company's investments are held at fair value in accordance
with the IPEVC guidelines. Details of valuation methodologies are
provided in the notes to the accounts. A summary of the Company's
investments is as follows with further information provided in
notes 8 and 14 below;
Investment Value at 31 May Value at 31 May
2019 2018
Shares in Craven Industrial Holdings
Plc $27,368,571 $26,993,468
Comprising:
Shares in DLC Holdings Corp. $8,757,041 $11,083,190
Shares in Qeton Ltd $413,617 $1,787,286
Shares in Craven House Angola LDA $7,921,212 $8,733,274
Shares in Craven House Capital
North America LLC $7,907,782 $2,677,994
Shares in Kwikbuild Corporation
Ltd $2,368,919 $2,711,724
DLC Holdings Corp.
During the period the performance of DLC remained steady with its
agricultural land holdings in Brazil and macadamia factory in South
Africa maintaining their value. The valuation of Craven Industrial
Holdings Plc's direct shareholding in DLC illustrated in the table
above has reduced as a result of the transfer of shares in DLC from
Craven Industrial Holdings to Craven House Capital North America
LLC during the period. Shares in DLC ended the period trading at
CAD$0.27 per share vs. CAD$0.25 per share in May 2018.
DLC is aggressively seeking acquisitions in North America that will
add value on a per share basis and balance the portfolio between
emerging market assets and developed market assets. These transactions
will have the added benefit of reducing Craven House's percentage
ownership in the business. Currently DLC's ability to grow while
it remains a subsidiary of Craven House is constrained by the prospective
triggering of reverse-takeover regulations at the Craven level.
DLC and Craven House are actively evaluating ways to reduce Craven's
ownership to a level where DLC will not be deemed a controlled subsidiary.
We have great confidence in the pipeline of acquisitions currently
under evaluation by DLC and believe DLC will prove to be a very
valuable and profitable holding for Craven House as well as a source
of future liquidity. Further information can be found in DLC's public
filings.
CRAVEN HOUSE CAPITAL PLC
INVESTMENT MANAGER'S REPORT - continued
FOR THE YEARED 31 MAY 2019
Craven House Angola Lda.
The reduction in the valuation of our holding in Craven Angola reflects
loan repayments received during the year which reduced the outstanding
principal of balances owed to Craven Angola.
The economic situation on the ground in Angola remains challenging
for domestic and foreign corporations. The country's near total
dependency on the hydrocarbon industry and significant indebtedness
to China have dampened the economy since the collapse in oil prices
over four years ago. Capital controls remain in place and the availability
of foreign currency remains minimal. This is especially acute in
an economy that is dependent on the importation of most essential
goods and services. When we entered the market we were expecting
the economic cycle to be directly tied to the oil price and this
has proven to be the case. Although we are hedged in our foreign
currency exposure, we recognise that the currency movements have
been painful for our operating partners (counterparties) who continue
to adjust and reposition their offerings as the currency devalues.
We view ourselves more as partners than lenders and when we commit
to a partnership in a challenging emerging market we enter into
the relationship ready for the ebb and flow of crisis and recovery.
7 Mobile has been able to adjust to the currency fluctuations and
is wisely managing inventory and pricing to ensure they do not oversupply
the market. While they can re-price their handsets and tablets in
local currency to maintain margins, the consumer's purchasing power
takes longer to catch up. FMCH is in a privileged position because
it sells most of its refined petroleum products in US dollars to
major international companies who pay in US dollars. We are prepared
for a long slow period of stagnation in Angola until the reforms
initiated by the new government take hold. After decades of authoritarian
rule under the Dos Santos family, local businessmen and international
investors are watching with a wary eye to see just how liberal the
market reforms will be over the next four to five years. Even with
the best intentions and the most enlightened free market reforms,
we believe the Angolan economy will not turn a corner until oil
prices remain comfortably over $60 a barrel for a sustained period
of time.
Qeton Ltd.
Qeton continued to import electronics to Angola from China during
the period albeit at a more conservative pace than in the previous
year. Adjusted EBITDA earnings for the period to May 2019 were EUR148,075
vs. EUR612,753 for the prior year, resulting in a lower carrying
value for this investment which is based on a multiple of EBITDA.
The economic situation in Angola remains challenging and 7 Mobile's
management has prudently reduced inventory until the period of uncertainty
passes. Consumer confidence is lower year over year and the mobile
device industry is not immune to the effects of the weaker currency.
Demand for new mobile devices remains strong but the consumer is
waiting longer to replace their existing handsets than they were
before the recent rounds of currency devaluation. Qeton remains
profitable with high margins despite the lower volume. We believe
that over time the importation of consumer electronics in Angola
and other African nations will be a growth business.
Craven House Capital North America LLC
The increase in the valuation of our holding in Craven House North
America has resulted from the sale of the IIU business to LMFA during
the period as well as the transfer of shares in DLC Holdings Corp.
from the parent company Craven Industrial Holdings Plc.
As discussed in the 2018 report, North America presents significant
opportunities to build a portfolio of private and publicly listed
securities. The initial investment in IIU and subsequent sale to
LMFA is the first of what we hope to be a series of private acquisitions
that are subsequently sold to or merged with a publicly listed firm.
As is detailed elsewhere in this report, we believe market dynamics
provide for rare opportunities in micro cap companies listed in
the US and Canada. There is an excellent opportunity to become a
supportive and active shareholder in companies that have been abandoned
by a market fixated on passive investing products that by design
cannot purchase companies with a market capitalisation below $100
million dollars.
CRAVEN HOUSE CAPITAL PLC
INVESTMENT MANAGER'S REPORT - continued
FOR THE YEARED 31 MAY 2019
Craven House Capital North America LLC - continued
In the first volume of "Of Permanent Value", Andrew Kilpatrick highlights
that in the early years of the Buffet Partnership, Warren Buffet
divided investments into two primary categories; The first were
undervalued securities where he believed the market would eventually
re-price the company higher and the second and more interesting
were potential control positions where the partnership could slowly
build a controlling position in an undervalued company and then
take active measures to unlock value. We are taking a similar view
towards the small and micro capitalizations companies we own in
the US. In addition to LMFA which falls into the latter category,
we are building positions in several under the radar companies we
believe have been completely missed by the investing population
either by neglect or design. Below are a few anonymised examples,
the identities of which we have not disclosed because trading volumes
in these stocks are low and we do not want to cause price movement
as a result of our commentary:
Mining Companies: We are building meaningful positions in two listed
mining companies. Both now have market capitalizations below $100
million dollars with a very strong shareholder base of founding
partners and institutional investors. However, commodity companies,
especially small miners are completely out of favour. Both companies
have lost over 60% of their market capitalisation as their shares
sold off on very limited volume. As their market capitalisations
decreased fund managers with prohibitions against holding companies
below a certain size became forced sellers regardless of the manager's
view of the company's prospects. Because of their small size they
are not included in any indexes and they are not in the data set
of the algorithms who dominate the market. They have no built in
market. These companies both have cash flowing operating mines that
are fully financed and producing at or ahead of plan. Both are selling
for a fraction of their replacement cost and both have shareholder
friendly management teams who are significant shareholders in the
company. All of the assets are in mining friendly jurisdictions
where the rule of law is well established. Why do companies such
as these sell at such a low valuation? The answer is that when you
combine a cyclical industry with the recent abandonment of small
public companies by the asset management industry asymmetrical opportunities
arise.
By way of background, the last metals and mining bull market ran
from 2002 until 2011. Capital flowed aggressively into the largest
mining companies. When the global financial crisis hit fiscal and
monetary stimulus in China and other emerging markets increased
demand for commodities while all other market sectors suffered.
Commodities seemed immune to the overall economic crisis and more
capital flowed into the sector. Management teams were encouraged
by analysts and shareholders to build capacity and thus borrowed
billions to finance an exploration and acquisition spree. When the
commodity cycle turned and the major international mining companies
started haemorrhaging cash, investors demanded they reduce debt
and limit CAPEX. Both of the companies we own bought assets from
global companies for a fraction of what the majors had invested
in the projects. This happens frequently in the metals and mining
industry. The small companies then apply focus and financial discipline
to develop these assets. If history is any guide these companies
or their assets will be bought for a significant premium when the
cycle turns. The current bear market has been brutal and many marginal
companies have gone bust. We believe we have at least another year
to quietly build our position in these superior companies before
one or both are sold at a significant premium.
Energy Infrastructure: A similar story exists within the energy
infrastructure complex. The oil and gas industry has been abandoned
by the market since the oil crash of 2015. While only a few short
years ago investors couldn't get enough of pipelines and storage
companies, today they are being priced as if fossil fuels and petroleum
based products will no longer be needed in a few years. During the
bull market for oil and gas companies, the midstream energy companies
could tap the capital markets at will for almost any growth initiative.
Public companies expanded at a rapid pace with secondary equity
offerings a regular occurrence. Then when the oil price collapsed
so did the funding. The biggest players could no longer raise equity
to fund committed capital expenditures and their debt loads looked
precarious. This also coincided with the US Federal Reserve's foray
into quantitative tightening. It was a perfect storm and investors
fled the sector. Management teams were forced to postpone or cancel
projects. Struggling E&P customers started to pay slowly or cancel
contracts.
Ratings agencies became concerned. As a final act of capitulation
management teams slashed or suspended dividends.
CRAVEN HOUSE CAPITAL PLC
INVESTMENT MANAGER'S REPORT - continued
FOR THE YEARED 31 MAY 2019
Craven House Capital North America LLC - continued
The income investors who had long been attracted to the utility
like distributions sold out and share prices cratered. Nearly five
years later the balance sheets are stronger, revenues and profits
are increasing and dividends have been resumed.
Regardless of the improved outlook, many of these companies are
trading as if they are heading for bankruptcy. One midstream
company in which we have a growing position is profitable, pays an
11% dividend, owns a nationwide portfolio of pipelines and storage
assets, and requires no new funding to complete the next four years
of growth projects. Its balance sheet is getting stronger while its
share price is hitting new lows. We believe it is an ideal time to
build a position and compound the distributions.
Another company in which we own a position has been around since
the late 19(th) Century and pays nearly a 15% dividend. It is
completely ignored by the market and most institutional investors
won't purchase the shares because the company is controlled by a
family who has owned their stake for almost half a century. We like
the stability of a family with a long-term multi generational
outlook but it doesn't seem to coincide with the current flavour of
corporate governance.
A third company we own is one of the largest manufacturers and
distributors of asphalt and other specialty petroleum products.
They are well positioned for the growth in infrastructure spending
and pay a steady distribution of over 10%. This company also has a
family business as the controlling shareholder. They have the type
of long-term outlook that we admire. We have a position in both the
common shares and preferred shares. We believe that the entire
sector will rebound and these shares will be re-priced to yield in
the 5% range. That should result in over a 100% increase from our
cost basis. In the interim we are happy to reinvest distributions
and compound at a rate well above 10% annually. It is important to
note that the tax situation in the US and Canada is relatively
complicated for foreign investors. However, because we invest
through our local subsidiaries we are not only not subject to
withholding taxes, we are also able to take advantage of
significant tax benefits specific to the oil and gas industry in
North America. Over time these tax savings are significant and
allow for more rapid compounding.
Kwikbuild Corporation Ltd
The reduction in the carrying value of KwikBuild Corporation has
resulted from a revised valuation being applied to the real-estate
holdings owned by KwikBuild's South African subsidiary, combined
with a weakening of the Rand vs. the US Dollar during the
period.
Where We Are Today
As highlighted in last year's annual letter and the four
previous letters as well, we remain surprised by the current
markets. Political risk and economic risks are elevated beyond
levels we can comprehend. According to Morningstar Research and
Deutsche Bank over 90% of the volume on the NYSE is derived from
algorithmic trading, exchange traded funds or Index linked
products. Funds continue to flow into products that require no
analysis of the underlying companies. The flood of capital into
structured products without the need for price discovery and the
ability of corporations to borrow at very low rates to repurchase
shares has led to rising share prices of every company included in
an index. In our estimation, the price of these shares and
therefore the index has risen largely without an increase in the
actual value of the underlying businesses. The major share markets
are determined by algorithms and capital flows.
If one considers the current situation in the equity markets odd
then the debt market is truly mystifying. Unprecedented monetary
policies enacted by the world's central banks have resulted in an
artificial cycle of significant malinvestment and price distortion.
Fixed income investors in the developed markets cannot cover the
cost of administration, not to mention inflation with current
yields. The market for the trillions of dollars of negative
interest rate sovereign bonds is concentrated in regulated
institutions such as banks and pension funds. Government regulators
impose liquidity standards that necessitate the need to hold
sovereign debt regardless of yield. The other buyer of those issues
are managers so fearful of future returns elsewhere yet mandated to
hold liquid securities. These bond buyers must prefer a guaranteed
small loss over the prospect of a much larger potential losses in
the corporate debt or equity markets.
CRAVEN HOUSE CAPITAL PLC
INVESTMENT MANAGER'S REPORT - continued
FOR THE YEARED 31 MAY 2019
Where We Are Today - continued
Many investors not mandated to hold only these traditional fixed
income securities have re-allocated further afield and further out
on the risk curve. Some of these traditionally conservative
investors have bought into the major equity indexes at all time
highs deep into the longest bull market in history. Others have
chased the extra hundred basis points to the ends of the earth.
Oaktree Capital's Howard Marks openly admits that many of his
clients are what he classifies as "handcuffed volunteers" because
they normally would not venture into alternative investments were
they not forced into it by the lack of yield in the sovereign and
investment grade corporate bond markets. In the case of the 100
year Argentine bond we wrote about in 2017 the end of the earth may
well be the end of the road.
What happens Next? Is 2020 the Year the Cycle Turns?
While we readily admit we cannot predict when this cycle will
turn we remain confident it will be violent when it reverses.
Institutional memories are short and expectations are more commonly
set by the last few years' performance (and bonuses) than
historical precedent. There is also a sense of fear, fatigue and
capitulation setting in amongst prominent market participants. Many
of the largest fund managers who have been lifted with the tide of
rising prices since the beginning of the decade are tempering their
expectations while many of those who have been shouting from deep
within the financial wilderness about the "everything bubble" or
the evils of "QE and Negative Rates" have either lost their voice
or their ability to hold out against investor anger. We remain
steadfast that time and patience will reward the prudent.
As we head into 2020 we believe there are five multi-decade long
trends, many of them interwoven, which are ready for imminent
reversal. These trends are largely driving the flow of capital and
thus investment returns for at least the next several decades if
not a generation. These trends, broadly defined are demographics,
international political order, domestic politics, wealth
consolidation, and technological revolution.
Demographics As Destiny
We continue to believe that the aging demographics globally will
have the most significant effect on market returns. The significant
concentration of capital that drives European and North American
markets is derived mostly from the post war generation known
collectively as the "Baby Boomers." This capital either provided
directly via individual investors or through private and state
pension funds reached its peak in 2009. Much of this capital has
been allocated to greater risk assets in the wake of the financial
crisis but is now exiting the market either by prudence, fear or
edict. In North America regulation requires investors over 70 to
withdraw a set amount from their tax-deferred pensions or face
significant tax penalties. In most of Europe the pendulum has swung
to the point where more withdrawals are required to meet
obligations than is currently being paid into the system. These
funds were the primary providers of debt and equity capital for the
past three decades and are now being withdrawn from the system with
far fewer people in the following generations to take up the slack.
Additionally, as is often the case with subsequent generations
those who experience a crisis in early adulthood display a lower
tolerance for financial risk throughout their life. Unlike the baby
boomers who came of age during the period of post war prosperity,
younger workers today have experienced financial crisis, job losses
and rising debt levels that make them less inclined towards risk
assets later in life.
Europe, Canada, and China all have a critical shortage of
younger workers, which render their current economic systems
unsustainable without significant reform. The US also has a similar
but less drastic imbalance because the millennial generation is
larger than the rest of the developed world. Regardless of the
jurisdiction, the basic social contract as designed in the post war
period must be rewritten and expectations reset.
Our primary concern is that the reversal of these trends will be
exacerbated and accelerated by the above market dynamics. If most
of the market volume is now driven by fund flows into structured
products and algorithmic trading then gains that developed slowly
over a long period of time could reverse rapidly and violently.
Most older workers or retirees cannot bear another drawdown similar
to the 2008-2009 period. They may have been comfortable chasing the
extra hundred basis points for the past few years even as the
longest bull market in history started to show its age but at the
first sign of a meaningful correction or recession we suspect they
will hit the eject button in hopes of a peaceful retirement.
CRAVEN HOUSE CAPITAL PLC
INVESTMENT MANAGER'S REPORT - continued
FOR THE YEARED 31 MAY 2019
Demographics As Destiny - continued
The obvious issue is that if a significant number of these
investors or their advisors decide to exit the markets the same
indiscriminate index driven volume would be much more violent on
the way down. Whereas trillions of dollars entered the passive
markets over the past decade the selling pressure would be
concentrated in several months and compounded by algorithmic
trading methodologies designed to extend trends in price movement.
It is not inconceivable that any significant economic weakness
could trigger the market equivalent of yelling fire in a crowded
theatre. As value investors we relish the opportunity to acquire
shares at a discount and panicked selling is the mother of such
valuations yet we realise the pain may be prolonged before we
return to an era of security analysis and rational price discovery
in the markets.
The International Political Order
Last year we discussed our view that the post war economic order
was changing forever. We highlighted our belief that the US led
global security and trading systems were rapidly changing and not
just because of the current administration's policy. A year further
into this analysis we believe we may have previously understated
the case for concern. Despite the political animosity between
opposition parties in the US, the national mood is becoming more
isolationist and more resentful of European and Asian nations that
have benefited from the US military's protection of global trade
routes and subsidies provided in the name of free trade. Whereas a
decade ago, Americans seemed proud of their international role,
today they seem resentful of the burden. We pass no judgement on
the validity of the sentiments. We merely recognise it and try to
analyse the investment implications. The US is the country least
dependant on exports and trade outside of its territorial borders
and that of its continental neighbours. Newly energy independent
and openly questioning the benefits of the global trading regime as
framed by the WTO the US is revaluations many long held
beliefs.
In the last six months the rhetoric on both sides of the
political spectrum has turned aggressively hostile towards China.
Hong Kong's democracy movement is gaining supporters in congress
and even those who were the driving force behind US involvement in
the Trans Pacific Partnership are starting to highlight the CCP's
abysmal record on human rights and property rights. In the span of
the last several years the prevailing perception of China has
evolved from critical economic partner to an "Orwellian" and
totalitarian regime. It appears that the paradigm has been reset
and regardless of the 2020 election results the US role in the
world will be renegotiated. The European Union and NATO will no
longer have the same significance for American leaders. This will
result in significant budgetary shortfalls as EU members will need
to fund their own defence without the outsized contribution of the
US. In light of the demographic problems outlined above this
couldn't happen at a more inconvenient time for Germany and France.
Tax policies will certainly be impacted at a time when European
economies are slowing. If global trade is disrupted either by
increased tariffs or the US withdrawing naval resources dedicated
to keeping the sea-lanes open and unmolested export reliant nations
will suffer. While this would have seemed outrageous to contemplate
a few short years ago it is a realistic possibility today. An
energy independent and war weary United States is increasingly
looking towards regional trade as the solution for their
demographic and economic challenges and no longer feels an
obligation towards its traditional allies in Europe.
This leads us to evaluate whom, if any other nation, would be
able to step into the void. A few years ago the consensus would
have been China. However, China has significant social issues of
its own to cope with in Hong Kong and on the mainland. The one
child policy has created a critical shortage of young productive
people at the end of the most spectacular credit expansion. Recent
analysis by prominent market participants indicate that China may
be facing a hard currency shortage that would cripple its ability
to finance the purchase of imported goods. Without the ability to
finance raw material and food their economy would quickly devolve
into chaos. Our own analysis leads us to believe that the Chinese
economy and thus its political system may struggle to survive
another economic crisis. Capital flight and civil unrest are very
real prospects and with it a potential disruption in the global
economic system. Closer to home, export-reliant countries in
Northern Europe would struggle to cope with meaningful reduction in
Chinese demand for their goods and services.
.
CRAVEN HOUSE CAPITAL PLC
INVESTMENT MANAGER'S REPORT - continued
FOR THE YEARED 31 MAY 2019
The International Political Order - continued
Our concern is that the markets are mispricing or not pricing
the possibility of significant global disruptions in trade and
security. Markets, already priced for perfection, move marginally
from tweet to tweet with the expectation that the uncertainty
derives not from a tectonic shift in the international political
order but rather with the personality of a particularly colourful
US president. We believe we are heading for a return to regional
trading blocs and ideologically motivated international political
alignment. Brexit and the change in US international policy will
have ramifications well beyond the political machinations
dominating the headlines today
Domestic Politics
For the first time in recent memory the major western economies
of the world are all moving towards greater state involvement in
the economy. British politicians of all stripes are promising to
spend more from the public purse. The days of austerity are clearly
over. Even the Germans are starting to waiver. In North America the
Canadians have already leapt to the left with higher taxes and
social policies that hadn't been discussed in over thirty years. In
the United States both parties have abandoned any pretence of
fiscal discipline. It seems to us that the unprecedented experiment
with quantitative easing and aggressive monetary intervention has
emboldened even the most prudent of policy makers. There is a
greater acceptance of the idea that deficits do not matter and a
feeling of comfort gained by the fact that "everyone else is doing
it." Japan has been the great demographic and economic laboratory
of monetary and fiscal experimentation. There seems to be a
prevailing attitude amongst politicians that Japan may have had a
lost decade or two but it wasn't the catastrophe predicted by many.
The clear trend is now towards greater state involvement in the
economy and away from the classical liberal economics that has held
sway since the end of the Cold War. The great Austrian economist
Ludwig Von Mesies who inspired and influenced the likes of Heyak,
Friedman and Laffer wrote that there are only two ways for a
credit-fuelled expansion to end. Either the credit is removed from
the system and the economy corrects and contracts or the credit is
perpetuated and the currency is devalued. This is logical and
throughout history has proven to be an accurate statement. It is
also appealing to those who believe it is moral to live within ones
means and those who do not should bear the consequences of
profligacy. Every time politicians have tried to suspend economic
gravity through the expansion of credit beyond a short period of
systemic crisis it has ended in economic catastrophe. Maybe this
time it is different? Perhaps quantitative easing, negative
interest bonds and reserve banks buying equities is the new
paradigm and those of us clinging to out-dated views on the role of
government and economic policy are doomed to the dustbin of
history? We do not know how this will play out eventually but we
are quite certain that there is a meaningful shift in political
positioning and the traditional left and right are willing to fight
over who will be the champions of government action to achieve
aggressive social and economic goals. This is a significant change
and those positioning their portfolio's for a return to laissez
faire policies and conservative fiscal policies will suffer.
Wealth Concentration and Wealth Redistribution
John D. Rockefeller was reported to have said that he "feared
the boom" because the masses violently resent the boom but coalesce
in times of hardship. In "The Lessons of History" by Will and Ariel
Durant the authors observe that history revolves around the
accumulation and redistribution of wealth. It is looking
increasingly likely that we may have reached another inflection
point in this cycle. The western world has experienced forty years
of wealth accumulation. This has coincided largely with the
increases in economic freedom and policies designed to allow
individuals to maximise their potential. We might argue that this
is both the moral and the most beneficial system of organizing
society. However, it also results in greater wealth disparity.
Human beings are not always rational. Politicians are almost always
practical. We believe we are entering a period where those who have
never seen or known anyone who has experienced the tyranny of
equality will reach the critical electoral mass. The younger
generation in the US and Europe seem determined to experiment with
some form of mandatory wealth redistribution. Some may rightfully
decry this as socialism while others may laude it as the natural
rebalancing needed to curb excess within the free market system.
Regardless of our view it seems inevitable that the pendulum will
swing back towards forced redistribution of wealth.
CRAVEN HOUSE CAPITAL PLC
INVESTMENT MANAGER'S REPORT - continued
FOR THE YEARED 31 MAY 2019
Wealth Concentration and Wealth Redistribution - continued
We believe that like the fiscal and monetary policies described
above there may be an entirely modern manifestation of this turn of
the age old cycle. Quantitative Easing has been described as
"socialism for the rich" because it utilized public policy to
inflate the value of financial assets held primarily by the
wealthiest members of society. It seems that the recent discussions
and widespread acceptance of Modern Monetary Theory (MMT) is the
equivalent of "People's QE". Social theorists and economists of
different ideological persuasions are starting to adopt the idea or
at least willingly contemplate the idea of "helicopter money" or as
the woke techies call it Universal Basic Income provided directly
from the Treasury or the Exchequer. The debate is no longer about
if it would work or if it is moral but rather how it will be
implemented and who will claim the credit. MMT is the ultimate and
likely final point of fiscal stimulus. Given that politicians and
central bankers have been unwilling and
unable to effect any Quantitative Tightening (raising rates)
without creating a cacophony of public outrage, it seems to us that
"People's QE" will be attempted as a first step towards wealth
redistribution. It may work or it may end in tears.
Summary Thoughts
As old fashioned deep value investors we have lamented the lack
of opportunities for the better part of a decade. Since the lows of
2009 asset prices have been stimulated and indexed to heights we
cannot comprehend. Each year since 2016 we have predicted that
valuations will return to our comfort level. There is little reason
to believe we are any closer to that point this year than we were
last year. There is even less reason to believe we are better
prognosticators of big economic, political and social trends than
we are at calling a market top or bottom. We readily admit that we
know we do not know. We are, however, highly confident that the
economic and political mood is changing and while economic gravity
seems to have been temporarily suspended, demographic destiny is
harder to avoid. We believe the pendulum has started to swing away
from financial assets, away from the post war international order,
away from free markets and away from wealth concentration. Each of
these trends will be long lasting and will effect the investment
landscape in ways we cannot entirely comprehend. Sadly each has the
potential to cause disruption and even violence. Each will
certainly stretch if not tear the societal fabric which has cloaked
the past half century.
The Value of an AIM Quote
Last year we wrote about our concerns regarding the costs of an
AIM quotation. We are reiterating that concern and highlighting the
fact that AIM regulations and the AIM Rules are now proving to be
an impediment to our growth. The market is not suitable for a
diversified investment holding company with such eclectic and some
may say Quixotic holdings. Perhaps it is more accurate to say we
are not suitable for the market. The only benefit we see to
remaining on the AIM market is to give small shareholders the
limited liquidity provided by a quote. Once again we are prepared
to put this to shareholders to decide if they find value in
remaining a public company.
Desmond Holdings Ltd
Investment Manager to Craven House Capital Plc
CRAVEN HOUSE CAPITAL PLC
STRATEGIC REPORT
FOR THE YEARED 31 MAY 2019
The directors present the Strategic Report of Craven House
Capital plc for the year ended 31 May 2019.
Principal activity
The Company's Investing Policy is to invest in or acquire a
portfolio of companies, partnerships, joint ventures, businesses or
other assets globally in any geographic jurisdiction. The Company
will invest in both developed and developing markets and may from
time to time invest in special situations including distressed
equity and debt. The investments or acquisitions may be funded
wholly by cash, the issue of new shares or debt, or a mix thereof,
as the Board deems appropriate. The Company's equity interest in a
proposed investment may range from a minority position to 100%
ownership; the proposed investments may be either quoted or
unquoted, although will likely be unquoted in the majority of
cases. It is anticipated that the investments will be held for the
medium-to-long term but the Board will place no minimum or maximum
limit on the length of time that any investment may be held. The
Company intends to deliver Shareholder returns through capital
growth with a medium term objective of implementing a dividend
policy.
Key performance indicators considered by the Company
The Company focuses on the key performance areas as outlined in
its Investing Policy and concentrates on the Net Asset Value of
investments, calculated on a per share basis. The Company's
Investment Manager, Desmond Holdings Ltd, submits regular
management reports to the Board of Directors, which includes a
calculation of the Company's Net Asset Value. During the year NAV
per share decreased marginally from $9.95 per share in May 2018 to
$9.89 per share in May 2019 whereby a small increase in the value
of gross assets was offset by increases in inter-company
liabilities. The increase in NAV per share from the previous
high-water mark of $6.57 per share in May 2016 resulted in a
performance fee becoming payable to the Investment Manager of
$1,657,439. The Investment Manager agreed to waive payment of the
performance fee in the prior two periods (May 2017 and May 2018).
Net of performance fees, administrative expenses were reduced from
$988k to $627k during the year, resulting in an overall operating
loss of $1.8m for the year.
Review of the Business in the year
A comprehensive review of the Company's performance and business
activities is included in the Investment Manager's Report above.
Craven House continued to seek to acquire businesses in emerging
and developed markets utilising its AIM quoted shares as
acquisition currency. We also continue to target businesses with
distressed shareholders in need of rapid liquidity. As forecast in
the 2018 accounts, the year to May 2019 saw an increased level of
activity in North America; In January 2019, the Company
successfully completed the sale of its subsidiary, IIU Inc., to LM
Funding America Inc. ("LMFA") in a transaction whereby the majority
of the consideration ($3.6m) was paid by way of a convertible loan
note, convertible into shares of LMFA, subject to the approval of
LMFA shareholders. In addition Craven House, via its subsidiary,
acquired shares in LMFA via a private placing and acquired further
shares in the open market (LMFA is listed on the Nasdaq). The
result of this activity is that Craven House currently owns 26% of
the share capital of LMFA with the option to convert the
outstanding loan note (upon approval from LMFA shareholders) to
increase their shareholding to c.49.9% of the share capital of
LMFA. Separately, the Company is pleased to report a dividend of
$100,000 was received from its subsidiary, Qeton Ltd during the
year and reported as 'Other Income'. The status of the underlying
investments of Craven Industrial Holdings Plc are disclosed in
further detail in note 8 and note 14 below.
Position of the Company's business at the end of the year
The Company's NAV decreased slightly from $24.9 million to $24.7
million during the year (prior to accrual of the performance fee
payable to the Investment Manager). Total liabilities relative to
assets remain low; creditors external to the Company totaled $1.15m
at the year end, $800,000 of which is in the form of a convertible
loan not due until 2022 ($300,000 of this loan was converted post
year-end, with $500,000 remaining outstanding as of the date of
this report). Accrual of the performance fee and an increase in
inter-company loan balances resulted in an increase in payables
from $2.47m to $4.49m. The Company maintains minimal cash reserves
as excess cash is deployed for investment at the subsidiary level.
Sufficient cash is available to the Company from its subsidiaries
to ensure it is able to meet its liabilities as they fall due.
Outside of the board of directors, the Company has no employees;
the majority of overhead expenditure relates to regulatory,
accounting and audit costs.
CRAVEN HOUSE CAPITAL PLC
STRATEGIC REPORT - continued
FOR THE YEARED 31 MAY 2019
Principal risks and uncertainties facing the business
The principal risks to the business continue to be the inherent
instability in some of the markets in which we operate. Our
strategy is directly exposed to swings in currencies, political and
economic instability. Our continued focus on emerging markets and
distressed sellers in developed markets expose the Company to these
type of risks. These are risks that the Company actively seek as
they provide the opportunity to acquire assets at a discount to
their intrinsic value utilising our share capital at a premium to
market prices. Description of these risks are further detailed in
note 14 below.
Corporate governance
The directors place a high degree of importance on ensuring that
high standards of Corporate Governance are maintained and have
therefore chosen to apply the framework as provided by the Quoted
Companies Alliance Corporate Governance Code for small and medium
size companies (2018) (the 'QCA Code'). Further details are
available on the Company's website.
Mr M J Pajak - Director of behalf of the Board
Date
CRAVEN HOUSE CAPITAL PLC
REPORT OF THE DIRECTORS
FOR THE YEARED 31 MAY 2019
The directors present their annual report with the audited
financial statements of the Company for the year ended 31 May
2019.
DIVIDS
No dividends have been distributed during the year ended 31 May
2019. A fair review of the business and disclosure of the Company's
activities and principal risks and uncertainties are included in
the Investment Manager's Report and the Strategic Report.
EVENTS SINCE THE OF THE YEAR
Information relating to events since the end of the year is
given in the note 17 to the financial statements.
DIRECTORS
The directors who held office during the year were:
Mr R Burrows (resigned 17 October 2018);
Mr M J Pajak;
Mr B S Bindra; and
Mr C P Morrison.
Directors' remuneration and details of service contracts are
given in note 3 to the financial statements.
POLITICAL AND CHARITABLE CONTRIBUTIONS
No charitable or political donations were made during the
year.
FINANCIAL RISK MANAGEMENT POLICIES
Information on the use of financial instruments by the Company
and its management of financial risk is disclosed in note 14 to the
financial statements.
FUTURE DEVELOPMENTS
In the coming year the Company will continue to execute its
ongoing investment strategy by seeking transformative acquisition
targets. Details of post year end transactions are disclosed in
note 17.
SIGNIFICANT SHAREHOLDERS
Shareholders with holdings of more than 3% of the Company as of
the date of this report are as follows;
Vidacos Nominees Ltd - 14.7%
Aurora Nominees Ltd - 13.6%
WB Nominees Ltd - 9.8%
Desmond Holdings Ltd - 9.1%*
Xenod Tour Oikod Epeix Afon - 8.0%
Mr. Martin Brink - 6.2%
Lynchwood Nominees Ltd - 4.2%
Ferlim Nominees 3.4%
HSBC Client Holdings Nominee (UK) - 3.1%
*Connected to Mark Pajak, Non-Executive Director and Acting
Chairman.
CRAVEN HOUSE CAPITAL PLC
REPORT OF THE DIRECTORS - continued
FOR THE YEARED 31 MAY 2019
DIRECTOR SHAREHOLDINGS
Shareholdings in the Company by directors as of the date of this
report are as follows;
Mr B S Bindra - 9,536 ordinary shares of $1.00
Mr C P Morrison - 2,452 ordinary shares of $1.00
Mr M J Pajak's indirect holdings (via Desmond Holdings Ltd) are
disclosed in 'significant shareholdings' above.
STATEMENT OF DIRECTORS' RESPONSIBILITIES
The directors are responsible for preparing the Annual Report
and the financial statements in accordance with applicable law and
regulations.
Company law requires the directors to prepare financial
statements for each financial year. Under that law the directors
have elected to prepare the financial statements in accordance with
International Financial Reporting Standards (IFRSs) as adopted by
the European Union and applicable law. Under company law the
directors must not approve the financial statements unless they are
satisfied that they give a true and fair view of the state of
affairs of the Company, and of the profit or loss for that period.
In preparing these financial statements, the directors are required
to:
- select suitable accounting policies and then apply them consistently;
- make judgements and accounting estimates that are reasonable
and prudent;
- state whether applicable accounting standards have been followed,
subject to any material departures disclosed and explained in
the financial statements;
- prepare the financial statements on the going concern basis unless
it is inappropriate to presume that the Company will continue
in business.
The directors are responsible for keeping adequate accounting
records that are sufficient to show and explain the Company's
transactions and disclose with reasonable accuracy at any time the
financial position of the Company and enable them to ensure that
the financial statements comply with the Companies Act 2006. They
are also responsible for safeguarding the assets of the Company and
hence for taking reasonable steps for the prevention and detection
of fraud and other irregularities.
The directors are responsible for the maintenance and integrity
of the corporate and financial information included on the
Company's website. Legislation in the United Kingdom governing the
preparation and dissemination of the accounts and the other
information included in annual reports may differ from legislation
in other jurisdictions.
The Company is compliant with AIM Rule 26 regarding the
Company's website.
STATEMENT AS TO DISCLOSURE OF INFORMATION TO AUDITORS
So far as the directors are aware, there is no relevant audit
information (as defined by Section 418 of the Companies Act 2006)
of which the Company's auditors are unaware, and each director has
taken all the steps that he or she ought to have taken as a
director in order to make himself or herself aware of any relevant
audit information and to establish that the Company's auditors are
aware of that information.
AUDITOR
RBK Business Advisers, Chartered Accountants & Statutory
Audit Firm will be proposed for re-appointment in accordance with
Section 489 of the Companies Act 2006 at the forthcoming Annual
General Meeting.
Mr M J Pajak - Director of behalf of the Board
Date
INDEPENT AUDITOR'S REPORT TO THE MEMBERS OF
CRAVEN HOUSE CAPITAL PLC
Opinion
We have audited the financial statements of Craven House Capital
plc (the 'company') for the year ended 31 May 2019 which comprise
the statement of comprehensive income, the statement of financial
position, the statement of changes in equity, the statement of
cash flows and notes to the financial statements, including a summary
of significant accounting policies. The financial reporting framework
that has been applied in their preparation is applicable law and
International Financial Reporting Standards (IFRSs) as adopted
by the European Union.
In our opinion, the financial statements:
* give a true and fair view of the state of the
company's affairs as at 31 May 2019 and of its loss
for the year then ended;
* have been properly prepared in accordance with IFRSs
as adopted by the European Union; and
* have been prepared in accordance with the
requirements of the Companies Act 2006.
Basis for opinion
We conducted our audit in accordance with International Standards
on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities
under those standards are further described in the auditor's responsibilities
for the audit of the financial statements section of our report.
We are independent of the company in accordance with the ethical
requirements that are relevant to our audit of the financial statements
in the UK, including the FRC's Ethical Standard, as applied to
SME listed entities and we have fulfilled our other ethical responsibilities
in accordance with these requirements. We believe that the audit
evidence we have obtained is sufficient and appropriate to provide
a basis for our opinion.
Conclusions relating to going concern
We have nothing to report in respect of the following matters in
relation to which the ISAs (UK) require us to report to you where:
* the directors' use of the going concern basis of
accounting in the preparation of the financial
statements is not appropriate; or
* the directors have not disclosed in the financial
statements any identified material uncertainties that
may cast significant doubt about the company's
ability to continue to adopt the going concern basis
of accounting for a period of at least twelve months
from the date when the financial statements are
authorised for issue.
Key audit matters
Key audit matters are those matters that, in our professional judgment,
were of most significance in our audit of the financial statements
of the current period and include the most significant assessed
risks of material misstatement (whether or not due to fraud) we
identified, including those which had the greatest effect on: the
overall audit strategy, the allocation of resources in the audit;
and directing the efforts of the engagement team. These matters
were addressed in the context of our audit of the financial statements
as a whole, and in forming our opinion thereon, and we do not provide
a separate opinion on these matters.
Key audit Description How the scope of our
matters of risk audit addressed the
risk
Investment
valuation
The Our audit work included
For the company's but was not restricted
financial year assessment to:
ended 31 May of the
2019, valuation * We reviewed the high level controls in operation in
investments of relation to investment valuations;
measured investments
at fair value measured
amounted at fair
to $27,368,571 value
which requires
represents 97% significant
of total judgement.
assets.
------------ ----------------------------------------------------------
INDEPENT AUDITOR'S REPORT TO THE MEMBERS OF
CRAVEN HOUSE CAPITAL PLC - continued
Key audit Description How the scope of our
matters of risk audit addressed the
risk
Investment
valuation
(continued) * We considered if the company's valuation policy is in
There is a line with The International Private Equity and
The risk that Venture Capital Valuation (IPEV) guidelines and IFRS;
valuation the
of application
investments of an
is inappropriate * We reviewed and assessed the reasonableness of the
considered valuation assumptions applied in the investment managers'
a key methodology valuation memo for the financial year ended 31 May
audit and/or the 2019;
matter as use of
investments inappropriate
represent assumptions
significant could result * For investments valued on a net assets basis, we
balances on in the reviewed the relevant financial statements and
the valuation of material assets and liabilities were selected for
statement investments substantive testing; and
of being
financial materially
position. misstated as
at 31 May * For listed investments, we obtained the share price
2019. from an independent third party and recalculated the
valuation as at 31 May 2019.
There is a
risk that
these
investments
are
not valued
correctly
in accordance
with IFRS
9 "Financial
Instruments"
and IFRS 13
"Fair Value
Measurement".
This is
a key audit
matter due
to the
material
nature
of the
balance, the
lack of
observable
inputs
to the level
3 fair
values and
the
significant
estimates and
judgements
required in
their
valuation.
-------------- ----------------------------------------------------------------------
Investment Our audit work included
ownership but was not restricted
and to:
existence There is a
risk that * Shareholder registers were reviewed to confirm the
The the company shares were held by the company;
ownership does not
and own the
existence rights to the
of investments * Shareholder and purchase agreements were reviewed to
investments or that establish ownership; and
are the
considered investments
a key audit do not
matter as exist at the * Confirmations from independent third parties were
investments year ended reviewed where relevant and available.
represent 31 May 2019.
97% of
total
assets
on the
statement
of
financial
position.
-------------- ----------------------------------------------------------------------
This is not a complete list of all risks identified by our audit.
INDEPENT AUDITOR'S REPORT TO THE MEMBERS OF
CRAVEN HOUSE CAPITAL PLC - continued
Our application of materiality
In planning and performing our audit we applied the concept of materiality.
An item is considered material if it could reasonably be expected
to change the economic decisions of a user of the financial statements.
We used the concept of materiality to both focus our testing and evaluate
the impact of misstatements identified.
Based on our professional judgement, we determined overall materiality
for the company's financial statements as a whole to be $273,700.
In determining this, we considered a range of benchmarks with specific
focus on the financial assets at the statement of financial position
date. This materiality level represents 1% of financial assets.
We report to the Audit Committee all identified unadjusted errors
in excess of $13,700 which is set at 5% of planning materiality. Errors
below that threshold would also be reported if, in our opinion as
auditor, disclosure was required on qualitative grounds.
An overview of the scope of our audit
Our audit was scoped by obtaining an understanding of the company
and its environment, including controls and assessing the risks of
material misstatements.
We carried out a full scope audit of the company's financial statements.
This included specific audit procedures where the extent of our audit
work was based on our assessment of the risks of material misstatement.
All audit work to respond to the risks of material misstatement were
performed directly by the audit engagement team. We set out the key
audit matters that had the greatest impact on our audit strategy and
scope within the key audit matters section below.
Other information
The other information comprises the information included in the Chairman's
Statement, the Investment Manager's Report, the Strategic Report and
the Report of the Directors. The directors are responsible for the
other information. Our opinion on the financial statements does not
cover the other information and, except to the extent otherwise explicitly
stated in our report, we do not express any form of assurance conclusion
thereon. In connection with our audit of the financial statements,
our responsibility is to read the other information and, in doing
so, consider whether the other information is materially inconsistent
with the financial statements or our knowledge obtained in the audit
or otherwise appears to be materially misstated. If we identify such
material inconsistencies or apparent material misstatements, we are
required to determine whether there is a material misstatement in
the financial statements or a material misstatement of the other information.
If, based on the work we have performed, we conclude that there is
a material misstatement of this other information, we are required
to report that fact.
We have nothing to report in this regard.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of the
audit:
* the information given in the Strategic Report and the
Report of the Directors for the financial year for
which the financial statements are prepared is
consistent with the financial statements; and
* the Strategic Report and the Report of the Directors
have been prepared in accordance with applicable
legal requirements.
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the company and
its environment obtained in the course of the audit, we have not identified
material misstatements in the Strategic Report or the Report of the
Directors.
We have nothing to report in respect of the following matters in relation
to which the Companies Act 2006 requires us to report to you if, in
our opinion:
* adequate accounting records have not been kept, or
returns adequate for our audit have not been received
from branches not visited by us; or
* the financial statements are not in agreement with
the accounting records and returns; or
* certain disclosures of directors' remuneration
specified by law are not made; or
* we have not received all the information and
explanations we require for our audit.
INDEPENT AUDITOR'S REPORT TO THE MEMBERS OF
CRAVEN HOUSE CAPITAL PLC - continued
Responsibilities of directors
As explained more fully in the Statement of Directors' Responsibilities
set out on page 14, the directors are responsible for the preparation
of the financial statements and for being satisfied that they give
a true and fair view, and for such internal control as the directors
determine is necessary to enable the preparation of financial statements
that are free from material misstatement, whether due to fraud or
error.
In preparing the financial statements, the directors are responsible
for assessing the company's ability to continue as a going concern,
disclosing, as applicable, matters related to going concern and using
the going concern basis of accounting unless the directors either
intend to liquidate the company or to cease operations, or have no
realistic alternative but to do so.
Auditor's responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the
financial statements as a whole are free from material misstatement,
whether due to fraud or error, and to issue an auditor's report that
includes our opinion. Reasonable assurance is a high level of assurance,
but is not a guarantee that an audit conducted in accordance with
ISAs (UK) will always detect a material misstatement when it exists.
Misstatements can arise from fraud or error and are considered material
if, individually or in the aggregate, they could reasonably be expected
to influence the economic decisions of users taken on the basis of
these financial statements.
A further description of our responsibilities for the audit of the
financial statements is located on the Financial Reporting Council's
website at: https://www.frc.org.uk/auditorsresponsibilities. This
description forms part of our auditor's report.
Use of our report
This report is made solely to the company's members, as a body, in
accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our
audit work has been undertaken so that we might state to the company's
members those matters we are required to state to them in an auditor's
report and for no other purpose. To the fullest extent permitted by
law, we do not accept or assume responsibility to anyone other than
the company and the company's members as a body, for our audit work,
for this report, or for the opinions we have formed.
Brendan Mullally
Senior Statutory Auditor
for and on behalf of RBK Business Advisers
Chartered Accountants & Statutory Audit Firm
Boole House
Beech Hill Road
Clonskeagh
Dublin 4
D04 A563
Ireland
Date:
CRAVEN HOUSE CAPITAL PLC
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEARED 31 MAY 2019
2019 2018
$'000 $'000
CONTINUING OPERATIONS
Changes in fair value 376 590
Other income 4 99 3
Administrative expenses (2,284) (988)
OPERATING LOSS AND LOSS BEFORE
INCOME TAX (1,809) (395)
Income tax 6 - -
-------------- --------
LOSS FOR THE YEAR AND TOTAL
COMPREHENSIVE INCOME (1,809) (395)
============== ========
Loss per share expressed
in cents per share:
Basic and diluted 7 (72.39) (15.80)
The notes on pages 23 to 42 form part of the financial
statements.
CRAVEN HOUSE CAPITAL PLC Company Number 05123368
STATEMENT OF FINANCIAL POSITION
AS AT 31 MAY 2019
2019 2018
Notes $'000 $'000
ASSETS
NON-CURRENT ASSETS
Investments at fair
value through
profit or loss 8 27,369 26,993
--------- ---------
27,369 26,993
--------- ---------
CURRENT ASSETS
Trade and other receivables 9 933 924
Cash and cash equivalents 10 46 213
--------- ---------
979 1,137
--------- ---------
TOTAL ASSETS 28,348 28,130
========= =========
EQUITY
SHAREHOLDERS' EQUITY
Called up share capital 11 12,594 12,594
Share premium 25,128 25,128
Accumulated deficit (14,666) (12,857)
--------- ---------
TOTAL EQUITY 23,056 24,865
--------- ---------
LIABILITIES
CURRENT LIABILITIES
Trade and other payables 12 4,492 2,465
NON-CURRENT LIABILITIES
Loans and borrowings 13 800 800
TOTAL LIABILITIES 5,292 3,265
--------- ---------
TOTAL EQUITY AND LIABILITIES 28,348 28,130
========= =========
Approved and authorised for issue by the Board on
......................2019 and signed on its behalf by:
.................................................................
Mr M J Pajak - Director
The notes on pages 23 to 42 form part of the financial
statements.
CRAVEN HOUSE CAPITAL PLC
STATEMENT OF CHANGES IN EQUITY
FOR THE YEARED 31 MAY 2019
Called
up share Share Accumulated
capital premium deficit Total
$'000 $'000 $'000 $'000
Balance at 1 June
2017 12,594 25,128 (12,462) 25,260
Changes in equity
Issue of share capital - - - -
---------- ---------- ------------------ --------
Transactions with
owners 12,594 25,128 (12,462) 25,260
---------- ---------- ------------------ --------
Loss for the year - - (395) (395)
Balance at 31 May
2018 12,594 25,128 (12,857) 24,865
Changes in equity
Issue of share capital - - - -
---------- ---------- ------------------ --------
Transactions with
owners 12,594 25,128 (12,857) 24,865
---------- ---------- ------------------ --------
Loss for the year - - (1,809) (1,809)
Balance at 31 May
2019 12,594 25,128 (14,666) 23,056
---------- ---------- ------------------ --------
CRAVEN HOUSE CAPITAL PLC
STATEMENT OF CASH FLOWS
FOR THE YEARED 31 MAY 2019
2019 2018
Notes $'000 $'000
Cash flows from operating activities
Loss before income tax (1,809) (395)
Adjustments for non-cash items
Fair value movement arising on investments (376) (590)
Increase in trade and other receivables (9) (849)
Increase in trade and other payables 2,027 1,236
Increase in loans and borrowings - 800
Dividend income classed as investing (98) -
cash flows
Net cash (used in)/generated by
operating activities (265) 202
Cash flows from investing activities
Acquisition of investments - (2,500)
Proceeds from loan advances repaid - 2,500
Dividends received from joint ventures 98 -
and associates
--------- ---------
Net cash generated by investing 98 -
activities
Net (decrease)/increase in cash
and cash equivalents (167) 202
Cash and cash equivalents at the
beginning
of the year 10 213 11
Cash and cash equivalents at the
end of the year 10 46 213
========= =========
The notes on pages 23 to 42 form part of the financial statements.
CRAVEN HOUSE CAPITAL PLC
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEARED 31 MAY 2019
1. ACCOUNTING POLICIES
Basis of preparation
These financial statements have been prepared in accordance with International
Financial Reporting Standards and IFRIC interpretations and with those
parts of the Companies Act 2006 applicable to companies reporting under
IFRS as adopted by the EU.
Craven House Capital plc is a public company incorporated in the United
Kingdom under the Companies Act 2006. The address of the registered office
is given on the company information page. The Company is listed on the
AIM Market of the London Stock Exchange (ticker: CRV).
The directors have considered the definition of an investment entity in
IFRS 10 as well as the associated application guidance. The directors
consider that the Company has met the definition of an investment entity.
The significant judgments and assumptions made by the directors in determining
that the Company is an investment entity are that; it has obtained funds
from investors (its shareholders) and is providing those investors with
investment management services; it commits to its investors that its business
purpose is to invest funds solely for returns from capital appreciation,
investment income, or both; and it measures and evaluates the performance
of substantially all of its investments on a fair value basis.
The main accounting implications for the preparation of the accounts as
an investment entity are that the accounts are not prepared on a consolidated
basis. Instead the Company's investments in its subsidiaries are accounted
for at fair value through its profit and loss account.
The financial statements have been prepared under the historical cost
convention, except to the extent varied below for fair value adjustments
required by accounting standards, and in accordance with applicable International
Financial Reporting Standards (IFRS) as adopted for use by the European
Union. The principal accounting policies are set out below.
The financial statements are presented in US dollars which is the Company's
functional currency. Amounts are rounded to the nearest thousand, unless
otherwise stated.
Going concern
The Company's business activities, together with the factors likely to
affect its future development, performance and position are set out in
the Investment Manager's Report. The financial statements include the
Company's objectives, policies and processes for managing its capital;
its financial risk management objectives; details of its financial instruments;
and its exposures to credit risk and liquidity risk. The Company has considerable
financial resources. As a consequence, the directors believe that the
Company is well placed to manage its business risks successfully. The
directors have a reasonable expectation that the Company has adequate
resources to continue in operational existence for the foreseeable future.
Thus they continue to adopt the going concern basis of accounting in preparing
the annual financial statements.
The Company maintains minimal cash reserves as excess cash is deployed
for investment at the subsidiary level. There are some restrictions on
the ability of certain subsidiaries to freely transfer funds to the Company.
Capital controls in the respective jurisdictions mean that transfers to
the Company from Craven House Angola LDA and the subsidiaries of Kwikbuild
Corporation Ltd in South Africa mean that transfers must be authorised
by the respective central banks in these locations. However, in addition
to the cash on the Company's statement of financial position, sufficient
cash is freely available to the Company from its subsidiaries (in the
form of inter-company loans or dividends) to ensure it is able to meet
its liabilities as they fall due and the restrictions described do not
ultimately place any risks to the operations / going concern status of
the Company.
There are currently no commitments to provide support to any subsidiary,
however the Company may elect to provide capital to its subsidiaries at
any time to further its stated Investing Policy.
CRAVEN HOUSE CAPITAL PLC
NOTES TO THE FINANCIAL STATEMENTS - continued
FOR THE YEARED 31 MAY 2019
1. ACCOUNTING POLICIES - continued
The Company has applied for the first time certain amendments to
the standards
IFRS 15 Revenue from Contracts with Customers (effective for
annual periods beginning on or after 1 January 2018, endorsed by
the European Union on 22 September 2016).
IFRS 9 Financial Instruments and subsequent amendments
(effective for annual periods beginning on or after 1 January 2018,
endorsed by the European Union on 22 November 2016).
Amendments to IFRS 2 Classification and Measurement of
Share-Based Payment Transactions (effective for annual periods
beginning on or after 1 January 2018, endorsed by the European
Union on 26 February 2018).
Annual improvements to IFRS Standards 2014-2016 Cycle (effective
for annual periods beginning on or after 1 January 2018, endorsed
by the European Union on 7 February 2018).
IFRIC 22 Foreign Currency Transactions and Advance Consideration
(effective for annual periods beginning on or after 1 January 2018,
endorsed by the European Union on 28 March 2018).
None of these amendments have had an effect on the Company's
financial position and performance.
The following new and revised standards and interpretations have
not been adopted by the Company, whether endorsed by the European
Union or not
Amendments to IAS 28 Long Term Interests in Associates and Joint
Ventures (effective for annual periods beginning on or after 1
January 2019, endorsed by the European Union on 8 February
2019).
Amendments to IFRS 9 Prepayment Features with Negative
Compensation (effective for annual periods beginning on or after 1
January 2019, endorsed by the European Union 22 March 2018).
IFRIC 23 Uncertainty Over Income Tax Treatments (effective for
annual periods beginning on or after 1 January 2019, endorsed by
the European Union on 23 October 2018).
Annual improvements to IFRS Standards 2015-2017 Cycle (effective
for annual periods beginning on or after 1 January 2019, not yet
endorsed by the European Union).
The Company has assessed the impact of the adoption of these
standards and interpretations on its financial statements on
initial adoption and do not expect these standards to have a
material impact.
Accounting standards adopted during the year
IFRS 15 Revenue from Contracts with Customers
IFRS 15 requires an expected qualitative impact of the
application of IFRS 15 to be included in the financial statements.
Dividend income recognition is not considered to change as a result
of the transition as it is not contractual and does not fall within
the scope.
IFRS 9 Financial Instruments
This standard of classification and measurement of financial
assets and financial liabilities has replaced IAS 39 financial
instruments: Recognition and measurement ("IAS 39"). IFRS 9 has two
measurement categories: amortised cost and fair value. All equity
instruments are measured at fair value. A debt instrument is
measured at amortised cost only if the entity is holding it to
collect contractual cash flows and the cash flows represent solely
principal and interest. For liabilities, the standard retains most
of the IAS 39 requirements.
This includes amortised-cost accounting for most financial
labilities, with bifurcation of embedded derivatives. The main
change is that, in cases where the fair value option is taken for
financial liabilities, the part of a fair value change due to an
entity's own credit risk is recorded in other comprehensive income
rather than the income statement, unless this creates an accounting
mismatch.
CRAVEN HOUSE CAPITAL PLC
NOTES TO THE FINANCIAL STATEMENTS - continued
FOR THE YEARED 31 MAY 2019
1. ACCOUNTING POLICIES - continued
IFRS 9 Financial Instruments - continued
IFRS 9 further introduced new requirements for hedge accounting
that align hedge accounting more closely with risk managements.
IFRS 9 replaces the "incurred loss" model in IAS 39 with an
"expected credit loss" (ECL) model.
The new impairment model applies to financial assets measured at
amortised cost, contract assets and debt investments at FVOCI, but
not to investments in equity instruments.
The following table explains the original measurement categories
under IAS 39 and the new measurement categories under IFRS 9 for
each class of the company's financial assets at 31 May 2019. The
application of IFRS 9 has not had a material effect on the
financial statements. Under IFRS 9 trade and other payables and
loans and borrowings continue to be measured at amortised cost
using the effective interest method.
Assets Original classification New classification Original carrying New carrying
under IAS 39 under IFRS amount under amount under
9 IAS 39 IFRS 9
Investments Designated Financial assets
at fair value at fair value at fair value
through profit through profit through profit
or loss or loss or loss $27.369m $27.369m
------------------------- -------------------- ------------------ --------------
Amounts owed
by connected
parties Loans and receivables Amortised cost $0.89m $0.89m
------------------------- -------------------- ------------------ --------------
Financial assets
Purchases or sales of financial assets are recognised at the
date of the transaction. Where appropriate criteria are met, the
Company makes use of the option of measuring non current
investments upon initial recognition as financial assets at fair
value through profit or loss. These criteria include that the fixed
asset investment should meet the Company's published Investing
Policy and form part of the Company's managed portfolio or similar
investments. Such financial assets are carried at fair value and
movements in fair value are recognised through profit and loss. For
quoted securities, fair value is either the bid price or the last
traded price, depending on the convention of the exchange on which
the investment is quoted.
Impairment of financial assets
A financial asset not classified at fair value through profit or
loss is assessed at each reporting date to determine whether there
is objective evidence that it is impaired. A financial asset is
impaired if objective evidence indicates that a loss event has
occurred after the initial recognition of the asset, and that the
loss event had a negative effect on the estimated future cash flows
of that asset that can be estimated reliably.
The new impairment model requires forward looking information,
which is based on assumptions for the future movement of different
economic drivers and how these drivers will affect each other. It
also requires management to assign probability to various
categories of receivables. Probability of default constitutes a key
input in measuring an ECL and entails considerable judgment; it is
an estimate of the likelihood of default over a given time horizon,
the calculation of which includes historical data, assumptions and
expectation of future conditions.
The directors have determined that the application of IFRS 9's
impairment requirements does not have a material impact on the
financial statements.
CRAVEN HOUSE CAPITAL PLC
NOTES TO THE FINANCIAL STATEMENTS - continued
FOR THE YEARED 31 MAY 2019
1. ACCOUNTING POLICIES - continued
Measurement
Financial assets at fair value through profit or loss are
initially recognised at fair value. Transaction costs are expensed
through profit and loss. Subsequent to initial recognition, all
financial assets at fair value through profit or loss are measured
at fair value in accordance with International Private Equity and
Venture Capital Valuation ("IPEVCV") guidelines, as the Company's
business is to invest in financial assets with a view to profiting
from their total return in the form of capital growth and income.
Gains and losses arising from changes in the fair value of the
financial assets at fair value through profit or loss are presented
in the year in which they arise.
Valuation of investments
A number of the Company's assets are measured at fair value for
financial reporting purposes. The Investment Manager determines the
appropriate valuation techniques and inputs for fair value
measurements.
In estimating the fair value of an asset, the Investment Manager
uses market-observable data to the extent it is available. The
Investment Manager reports its findings to the Board of Directors
of the Company every quarter to explain the cause of fluctuations
in the fair value of the assets.
Information about the valuation techniques and inputs used in
determining the fair value of various assets and liabilities are
disclosed in notes 8 and 14.
Financial instruments that are measured subsequent to initial
recognition at fair value are grouped into Levels 1 to 3 based on
the degree to which the fair value is observable:
Level 1 fair value measurements are those derived from quoted
prices (unadjusted) in active markets for identical assets or
liabilities;
Level 2 fair value measurements for those derived from inputs
other than quoted prices included within Level 1 that are
observable for the assets or liability, either directly or
indirectly; and Level 3 fair value measurements are those derived
from inputs that are not based on observable market data.
a) Quoted investments
Where investments are quoted on recognised stock markets and an
active market in the shares exists, the company values those
investments at closing mid-market price on the reporting date.
Where an active market does not exist those quoted investments are
valued by the application of an appropriate valuation methodology
as if the relevant investment was unquoted.
b) Unquoted investments
In estimating the fair value for an unquoted investment, the
Company applies a methodology that is appropriate in light of the
nature, facts and circumstances of the investment and its
materiality in the context of the total investment portfolio using
reasonable data, market inputs, assumptions and estimates. Any
changes in the above data, market inputs, assumptions and estimates
will affect the fair value of an investment.
Financial liabilities and equity
Financial liabilities are recognised when the Company becomes
party to the contractual provisions of the financial instrument and
are measured initially at fair value adjusted for transaction
costs. Financial liabilities are measured subsequently at amortised
cost using the effective interest method.
An equity instrument is any contract that evidences a residual
interest in the assets of the Company after deducting all its
liabilities.
In accordance with IFRIC 19, when a financial liability is
extinguished by the issue of equity, the equity instrument issued
is measured at fair value and any difference between the financial
liability extinguished and the measurement of the equity instrument
is recognised in profit and loss.
CRAVEN HOUSE CAPITAL PLC
NOTES TO THE FINANCIAL STATEMENTS - continued
FOR THE YEARED 31 MAY 2019
1. ACCOUNTING POLICIES - continued
Current and deferred tax
The tax currently payable is based on taxable profit for the
year. Taxable profit differs from net profit as reported in the
income statement because it excludes items of income or expense
that are taxable or deductible in other years and it further
excludes items that are never taxable or deductible. The Company's
liability for current tax is calculated using tax rates that have
enacted by the statement of financial position date.
Deferred tax is recognised in respect of all timing differences
that have originated but not reversed at the statement of financial
position date where transactions or events that result in an
obligation to pay more tax in the future or a right to pay less tax
in the future have occurred at the statement of financial position
date. Timing differences between the Company's taxable profits and
its results as stated in the financial information that arises from
the inclusion of gains and losses in tax assessments in periods
different from those in which they are recognised in the financial
information.
A deferred tax asset is only recognised for an unused tax loss
carried forward if it is considered probable that there will be
sufficient future taxable profits against which the loss can be
utilised.
Foreign currencies
In preparing the financial statements of the Company,
transactions in currencies other than the entity's functional
currency are recorded at the rates of exchange prevailing at the
dates of the transactions. At each statement of financial position
date, monetary items denominated in foreign currencies are
retranslated at the rates prevailing at the date when the fair
value was determined. Non-monetary items that are measured in terms
of historical cost in a foreign currency are not retranslated.
Exchange differences are recognised in profit or loss in the
period in which they arise except for exchange differences on
monetary items receivable from or payable to a foreign operation
for which settlement is neither planned nor likely to occur; which
form part of the net investment in a foreign operation and which
are recognised in the foreign currency translation reserve.
For the purposes of presenting US dollar financial statements,
the assets and liabilities of the Company's foreign operations are
expressed using exchange rates prevailing at the statement of
financial position date. Income and expense items are translated at
the average exchange rate for the period, unless exchange rates
fluctuated significantly during that period, in which case the
exchange rates at the dates of the transactions are used. Exchange
differences arising, if any, are classified as equity and
recognised in a foreign currency translation reserve.
Segment reporting
Operating segments are reported in a manner consistent with the
internal reporting provided to the directors. The directors, who
are responsible for allocating resources and assessing performance
of the operating segments, have been identified as the senior
management that make strategic decisions.
Critical accounting estimates and judgements
Preparation of financial statements in conformity with IFRS
requires management to make judgements, estimates and assumptions
that affect the application of accounting policies and the reported
amounts of assets, liabilities, income and expenses. The estimates
and associated assumptions are based on historical experience and
various other factors that are believed to be reasonable under the
circumstances, the results of which form the basis of making
judgements about carrying values of assets and liabilities that are
not readily apparent from other sources. Further information
regarding the assumptions relied upon and sensitivity analysis
around these assumptions is provided in note 14 below.
In particular, significant areas of estimation, uncertainty and
critical judgements in applying accounting policies that have the
most significant effect on the amount recognised in the financial
statements relate to the valuation of investments.
CRAVEN HOUSE CAPITAL PLC
NOTES TO THE FINANCIAL STATEMENTS - continued
FOR THE YEARED 31 MAY 2019
1. ACCOUNTING POLICIES - continued
Critical accounting estimates and judgements - continued
The Company has made a number of investments in the form of
equity instruments in private companies operating in emerging
markets. The investee companies are generally at a key stage in
their development and operating in an environment of uncertainty in
capital markets. Should planned development prove successful, the
value of the Company's investment is likely to increase, although
there can be no guarantee that this will be the case. Should
planned development prove unsuccessful, there is a material risk
that the Company's investments may be impaired. The carrying
amounts of investments are therefore highly sensitive to the
assumption that the strategies of these investee companies will be
successfully executed.
The directors have also determined that the Company meets IFRS
10's definition of an investment company and that the functional
currency is appropriate given that underlying transactions, events
and conditions that are most likely to impact on the Company's
performance are more closely linked to the US dollar than GB
sterling.
Share capital and share premium
Share capital represents the nominal (par) value of shares that
have been issued.
Share premium includes any premium received on issue of share
capital. Any transaction costs associated with the issuing of
shares are deducted from share premium.
2. SEGMENTAL REPORTING
The operating segment has been determined and reviewed by the
directors to be used to make strategic decisions. The directors
consider there to be a single business segment being that of
investing activities, therefore there is only one reportable
segment.
3. EMPLOYEES AND DIRECTORS
2019 2018
$'000 $'000
Wages and salaries - directors' remuneration 83 114
====== ======
The average monthly number of employees (including directors)
during the year was as follows:
2019 2018
Directors 3 4
===== =====
The Company has no employees other than the directors.
Directors' remuneration is analysed as follows;
2019 2018
$'000 $'000
Fees:
Mr R Burrows 17 50
Mr M J Pajak 56 58
------ ------
73 108
------ ------
Share based payments:
Mr B S Bindra 5 3
Mr C P Morrison 5 3
10 6
------ ------
Total 83 114
====== ======
CRAVEN HOUSE CAPITAL PLC
NOTES TO THE FINANCIAL STATEMENTS - continued
FOR THE YEARED 31 MAY 2019
3. EMPLOYEES AND DIRECTORS - continued
The service contracts of the directors who served during the
year are as follows:
Basic annual fee
Mr R Burrows $50,000
Mr M J Pajak GBP43,000
Mr B S Bindra $5,000**
Mr C P Morrison $5,000**
** Payable in new ordinary shares of the company at $1.00 per
share
Desmond Holdings Ltd is the Company's Investment Manager. The
directors are the key management of the Company. There were no
directors (2018: none) to whom retirement benefits were accruing
under money purchase schemes.
4. OTHER INCOME
Other income includes dividends received from joint venture,
Qeton Ltd, of $97,514 (2018: $Nil).
5. LOSS BEFORE INCOME TAX
The loss before income tax is stated after charging:
2019 2018
$'000 $'000
Rental charges 35 48
Fees payable to the Company's auditor
for the audit of the Company's annual
accounts 29 29
Foreign exchange losses 2 61
CRAVEN HOUSE CAPITAL PLC
NOTES TO THE FINANCIAL STATEMENTS - continued
FOR THE YEARED 31 MAY 2019
6. INCOME TAX
Analysis of charge in the year
2019 2018
$'000 $'000
Current tax: - -
Deferred tax - -
Tax on loss on ordinary activities - -
====== ======
2019 2018
$'000 $'000
Loss on ordinary activities before
tax (1,809) (395)
======== ======
Analysis of charge in the year
2019 2018
$'000 $'000
Loss on ordinary activities multiplied
by the Company's rate of corporation
tax in the UK of 19% (2018: 19%) (344) (75)
Effects of:
Losses carried forward 344 75
-------- -------
Current tax charge for the year - -
as above
======== =======
At 31 May 2019, the Company had UK tax losses of $5,378,098
(2018: $3,258,487) available to be carried forward and utilised
against future taxable profits. A deferred tax asset of $1,021,839
(2018: $619,113) has not been recognised due to uncertainties over
the timing of when taxable profits will arise.
7. EARNINGS PER SHARE
Basic earnings per share is calculated by dividing the earnings
attributable to ordinary shareholders by the weighted average
number of ordinary shares outstanding during the period.
Diluted earnings per share has not been disclosed as the
inclusion of the unexercised warrants described in note 11 would be
non-dilutive.
CRAVEN HOUSE CAPITAL PLC
NOTES TO THE FINANCIAL STATEMENTS - continued
FOR THE YEARED 31 MAY 2019
7. EARNINGS PER SHARE - continued
Reconciliations are set out below.
2019
Earnings Weighted average Per-share amount
$'000 number of shares cents
Basic EPS
Earning attributable
to ordinary shareholders (1,809) 2,499,039 (72.39)
2018
Earnings Weighted average Per-share amount
$'000 number of shares cents
Basic EPS
Earning attributable
to ordinary shareholders (395) 2,499,039 (15.80)
8. INVESTMENTS
Investments at fair value through profit or loss
The Company adopted the valuation methodology prescribed in the
IPEVCV guidelines to value its investments at fair value through
profit and loss.
The Company had the following holdings at 31 May 2019:
Principal Place Ownership
Subsidiary Name Holding of Business Interest
Craven Industrial Holdings
Plc Direct Ireland 100%
DLC Holdings Corp. Indirect Canada 68%
Qeton Ltd Indirect Ireland 50%
Craven House Angola
LDA Indirect Angola 100%
Craven House Capital
North America LLC Indirect USA 100%
Kwikbuild Corporation
Ltd Indirect Isle of Man 97%
CRAVEN HOUSE CAPITAL PLC
NOTES TO THE FINANCIAL STATEMENTS - continued
FOR THE YEARED 31 MAY 2019
8. INVESTMENTS -continued
Investments at fair value through profit or loss
Quoted equity Unquoted
investments equity investments
$'000 $'000 Total
$'000
At 1 June 2017 - 26,403 26,403
Additions 9,033 2,500 11,533
Disposals - (11,533) (11,533)
Fair value movement 2,050 (1,460) 590
-------------- -------------------- ---------
At 31 May 2018 11,083 15,910 26,993
-------------- -------------------- ---------
Fair value movement (2,326) 2,702 376
-------------- -------------------- ---------
At 31 May 2019 8,757 18,612 27,369
-------------- -------------------- ---------
The revaluation outlined above represents the valuation applied
to the investments held by Craven Industrial Holdings Plc, the
Company's principal wholly owned subsidiary holding company, and
its subsidiaries as at 31 May 2019 and are described in further
detail below.
Unquoted investments at 31 May 2019 have been measured on a
Level 3 basis as no observable market data was available.
CRAVEN HOUSE CAPITAL PLC
NOTES TO THE FINANCIAL STATEMENTS - continued
FOR THE YEARED 31 MAY 2019
8. INVESTMENTS - continued
Shares in Craven Industrial Holdings Plc are valued at
$27,368,571 representing a 100% holding. These have been valued
based on the underlying investments within Craven Industrial
Holdings Plc as at 31 May 2019. The value of Craven Industrial
Holdings Plc is segmented across its principal investments as
follows:
Shares in DLC Holdings Corp. are valued at $8,757,041
representing 43,785,206 preferred shares, which are freely
convertible into common shares. Shares in DLC Holdings Corp. are
quoted on the Toronto Stock Exchange and were valued at $CAD 0.27
per share as at 31 May 2019. During the year, Craven Industrial
Holdings Plc transferred a total of 13,676,700 shares in DLC to its
subsidiary Craven House Capital North America LLC.
Shares in Qeton Ltd are valued at $413,617 representing a 50%
holding. This shareholding has been valued on an earnings multiple
basis which the directors consider represents the best indication
of the fair value at the year end. Qeton Ltd generated adjusted
EBITDA earnings of EUR148,075 during the year to 31 May 2019
(adjusted to strip out non-continuing costs therefore reflecting
the underlying profitability of the Qeton business). Shares in
Qeton Ltd have been valued at 5x adjusted EBITDA earnings. This is
judged to be a conservative and reasonable multiple, which
appropriately reflects the relationship existing between Qeton Ltd
and its largest customer, 7Mobile Lda. There is no long-term
contract in place with 7Mobile Lda., however it is anticipated that
the relationship between the companies will continue for the
foreseeable future. Qeton Ltd has no debt and no material
liabilities.
Shares in Craven House Angola LDA are valued at $7,921,212
representing a 100% holding. This shareholding has been valued on
the net assets of Craven House Angola LDA, which the directors
consider represents the best indication of the fair value at the
year end. The vast majority of the net assets of Craven House
Angola LDA comprise principal and accrued interest on loan
facilities made to companies operating in Angola. As of 31 May 2019
all of these loans are performing according to their contractual
terms (c.$280k in interest and principal repayments were received
during the year) and have therefore been valued at face value.
Interest accrued on loans has been deducted from the valuation of
Craven House Angola as it is anticipated that early repayment of
these loans might be negotiated in return for a reduction in the
interest payable..Craven House Angola LDA has no debt and no
material liabilities.
Shares in Craven House Capital North America LLC are valued at
$7,907,782 representing a 100% holding. This shareholding has been
valued on a net assets basis which the directors consider
represents the best indication of the fair value at the year end. A
proportion of Craven House Capital North America's assets comprise
a convertible loan note, under the terms of which Craven House
Capital North America is owed $3,581,982 by the Nasdaq listed
company, LM Funding America, Inc. The loan note matures on the
10(th) January 2020 and, subject to approval by LM Funding
America's shareholders, is convertible into shares in LM Funding
America. In the event that the entire principal of the loan note is
converted into shares in LM Funding America, Craven House Capital
North America will become the majority shareholder of LM Funding
America. The majority of the remaining assets of Craven House
Capital North America LLC comprise a portfolio of liquid securities
valued on a mark-to-market basis.
Shares in Kwikbuild Corporation Ltd are valued at $2,368,919
representing a 97% shareholding. This valuation is based on the
value of the net assets of KwikBuild Corporation Ltd, which the
directors believe represent the best indication of the fair value
at the year-end. The vast majority of the net assets of Kwikbuild
Corporation Ltd comprise shares in its wholly owned South African
subsidiary, which are valued on a net asset basis. The South
African subsidiary's assets comprise loan facilities, which are
performing according to their contractual terms and real-estate
holdings whose value is supported by a professional third-party
valuation. Kwikbuild Corporation Ltd has no debt and no material
liabilities.
CRAVEN HOUSE CAPITAL PLC
NOTES TO THE FINANCIAL STATEMENTS - continued
FOR THE YEARED 31 MAY 2019
9. TRADE AND OTHER RECEIVABLES
2019 2018
$'000 $'000
Current:
Amounts owed by connected parties 890 900
Prepayments and accrued income 43 24
------ ------
933 924
====== ======
Amounts owed by connected parties accrue interest at a rate of 5% as
of 1 June 2019 (prior to this date no interest was charged) and are repayable
on demand.
10. CASH AND CASH EQUIVALENTS 2019 2018
$'000 $'000
Cash at bank 46 213
====== ======
The amounts disclosed in the statement of cash flows in respect of cash
and cash equivalents are in respect of the following statement of financial
position amounts:
Year ended 31 May 2019
31.5.19 1.6.18
$'000 $'000
Cash and cash equivalents 46 213
Year ended 31 May 2018
31.5.18 1.6.17
$'000 $'000
Cash and cash equivalents 213 11
======== =======
11. CALLED UP SHARE CAPITAL
Allotted, called up
and fully paid
Equity shares Nominal 2019 2018
Number: Class: Value: $'000 $'000
2,499,039 Ordinary $1.00 2,437 2,437
77,979,412 Deferred GBP0.09 9,234 9,234
77,979,412 Deferred GBP0.009 923 923
----------- --------
12,594 12,594
=========== ========
CRAVEN HOUSE CAPITAL PLC
NOTES TO THE FINANCIAL STATEMENTS - continued
FOR THE YEARED 31 MAY 2019
11. CALLED UP SHARE CAPITAL - continued
The aggregate nominal values of the ordinary and deferred shares
include exchange differences arising from the translation of shares
at historic rates and the translation at the rate prevailing at the
date of the change in functional currency.
The deferred shares carry no entitlement to receive notice of
any general meeting, to attend, speak or vote at such general
meeting. Holders are not entitled to receive dividends and, on a
winding up of the Company, holders of deferred shares are entitled
to a return of capital only after the holder of each Ordinary share
has received a return of capital together with a payment of GBP1
million per share. The deferred shares may be cancelled at any time
for no consideration by way of a reduction in capital.
During the year ended 31 May 2018, the Company extended the time
scale of 78,632 fully transferable exercisable warrants which were
originally issued in the year ended 31 May 2012. At the date of
issue, the warrants could be exercised on or before 30 June 2014,
this period has now been extended to 30 June 2020. The warrants are
exercisable at a price of $15.00 per share.
12. TRADE AND OTHER PAYABLES
2019 2018
$'000 $'000
Current:
Trade payables 698 445
Amounts owed to connected parties 2,039 1,688
Accruals and deferred income 1,755 332
4,492 2,465
====== ======
Amounts owed to connected parties accrue interest at a rate of
5% as of 1 June 2019 (prior to this date no interest was charged)
and are repayable on demand.
13. LOANS AND BORROWINGS
2019 2018
$'000 $'000
Non-current:
Other loans 800 800
========== ==========
During the year ended 31 May 2018 the Company entered into a
$800,000 convertible loan note by way of settlement of a supplier's
outstanding fees in the sum of GBP600,000.
The loan note bears no interest and has a five year term.
CRAVEN HOUSE CAPITAL PLC
NOTES TO THE FINANCIAL STATEMENTS - continued
FOR THE YEARED 31 MAY 2019
14. FINANCIAL INSTRUMENTS
Financial risk management objectives and policies
Management has adopted certain policies on financial risk management
with the objective of:
i. ensuring that appropriate funding strategies are adopted to meet
the Company's short-term and long-term funding requirements taking
into consideration the cost of funding, gearing levels and cash
flow projections;
ii. ensuring that appropriate strategies are also adopted to manage
related interest and currency risk funding; and
iii. ensuring that credit risks on receivables are properly managed.
Financial instrument by category
The accounting policies for financial instruments have been applied
to the line items below:
Financial assets at fair value through profit or loss
Financial instruments that are measured subsequent to initial recognition
at fair value are grouped into Levels 1 to 3 based on the degree
to which the fair value is observable:
Level 1 fair value measurements are those derived from quoted prices
(unadjusted) in active markets for identical assets or liabilities;
Level 2 fair value measurements for those derived from inputs other
than quoted prices included within Level 1 that are observable for
the assets or liability, either directly or indirectly; and
Level 3 fair value measurements are those derived from inputs that
are not based on observable market data.
Unquoted equity investments held at fair value through profit or
loss are valued in accordance with the IPEVCV guidelines as follows;
2019 2018
Investment valuation methodology $'000 $'000
Quoted prices (unadjusted)
(level 1) 8,757 11,083
Earnings multiple basis
(level 3) 414 1,787
Net Assets (level 3) 18,198 14,123
27,369 26,993
======= =======
CRAVEN HOUSE CAPITAL PLC
NOTES TO THE FINANCIAL STATEMENTS - continued
FOR THE YEARED 31 MAY 2019
14. FINANCIAL INSTRUMENTS - continued
IFRS 13 and IFRS 7 requires the directors to consider the impact
of changing one or more of the inputs used as part of the valuation
process to reasonable possible alternative assumptions.
In relation to the Level 1 investment listed above, a 10% change
in the share price of DLC Holdings Corp. would result in a decrease
or increase in the valuation of this investment of $875,704. Shares
in DLC Holdings Corp. are quoted in Canadian Dollars; a 10% fluctuation
in the exchange rate between the US Dollar and the Canadian Dollar
would result in a decrease or increase in the valuation of this
investment of $603,934.
The Level 3 valuations listed above include inputs based on non-observable
market data as outlined in note 8 above. The Investment Manager
has derived a fair value for these investments based on the value
of the underlying net assets of the respective investments and
/ or has considered prospective enterprise values for these investments
from the perspective of a market participant.
The directors have considered a number of reasonable possible alternative
assumptions regarding the value of the Level 3 investments. IFRS
13 requires an entity to disclose quantitative information about
the significant unobservable inputs used.
A summary of the unobservable inputs, judgements and estimates
made in relation to the Level 3 investments is as follows:
The valuation the Company's shareholding in Qeton Ltd is estimated
on an adjusted earnings multiple basis. The Investment Manager
has applied a 5x multiple of adjusted EBITDA earnings (adjusted
to strip put non-continuing costs therefore reflecting underlying
profitability of the Qeton business). This is judged to be a conservative
and reasonable multiple; in the experience of the Investment Manager
valuations for businesses of this nature vary significantly but
are often in the range of a multiple of 2x to 9x of income. A 10%
change in EBITDA earnings would result in a decrease or increase
in the valuation of this investment of $41,362. Whilst foreign
exchange fluctuations might impact Qeton Ltd's sales volumes, its
sales and cost of sales are tied to US Dollars.
The valuation of Craven House Angola LDA is based on its net asset
value as of 31 May 2019. These net assets almost exclusively comprise
a portfolio of loan facilities. These loans have performed in accordance
with their agreed, contractual terms and the respective borrowers'
creditworthiness continues to be satisfactory. Therefore, the Investment
Manager has judged that outstanding principal of these loans is
a reasonable basis for valuation of the net assets of Craven House
Angola LDA. The Investment Manager has excluded interest accrued
under these loans from the valuation of Craven House Angola as
it is anticipated that early repayment of these loans might be
negotiated in return for a reduction in the interest payable. The
loans are either in US Dollars or are at pre-determined exchange
rates tied to the US Dollar. It has been assumed that these loans
continue to perform in accordance with their contractual terms
and that potential losses associated with any unforeseen event
of default would be recovered from the security associated with
the respective loans.
The valuation of Craven House North America LLC is based on its
net asset value as of 31 May 2019. A proportion of Craven House
Capital North America's assets comprise a convertible loan note,
under the terms of which Craven House Capital North America is
owed $3,581,982 by the Nasdaq listed company, LM Funding America,
Inc. The loan note is held on Craven House Capital North America's
balance sheet at face value (which is judged to be a reasonable
basis for the valuation of the loan note) and matures on the 10
January 2020 and, subject to approval by LM Funding America's shareholders,
is convertible into shares in LM Funding America. In the event
that the entire principal of the loan note is converted into shares
in LM Funding America, Craven House Capital North America will
become the 49.9% shareholder of LM Funding America. The vast majority
of the remaining assets of Craven House Capital North America LLC
comprise cash and a portfolio of liquid securities valued on a
mark-to-market basis.
CRAVEN HOUSE CAPITAL PLC
NOTES TO THE FINANCIAL STATEMENTS - continued
FOR THE YEARED 31 MAY 2019
14. FINANCIAL INSTRUMENTS - continued
Shares in KwikBuild Corporation Ltd are valued based on its net
asset value as of 31 May 2019. Over 96% of these net assets comprise
the value of its shares in its wholly-owned South African subsidiary
which are also valued on a net asset basis. 26% of the subsidiary's
net assets comprise real-estate assets, which have been valued utilising
a professional valuation provided by an independent third-party;
A 10% fluctuation on the value of these real estate assets would
result in a decrease or increase in the valuation of Kwikbuild Corporation
of $60,216. The remaining assets of the subsidiary comprise a loan
facility. The loan (denominated in US Dollars) has performed in
accordance with its agreed, contractual terms and the borrowers'
creditworthiness continues to be satisfactory. Therefore the Investment
Manager has judged that the outstanding principal of this loan and
accrued interest is a reasonable basis for its valuation. It has
been assumed that this loan continues to perform in accordance with
its contractual terms and that losses associated with any unforeseen
event of default are recovered from the security associated with
the loan.
The valuation method applied to each equity investment is that which
is considered most appropriate with regard to the stage of development
of the investee business and the IPEVCV guidelines.
All other financial instruments, including cash and cash equivalents,
trade and other receivables, trade and other payables and loans
and borrowings, are measured at amortised cost.
Due to their short-term nature, the carrying values of cash and
cash equivalents, trade and other receivables, trade and other payables
and loans and borrowings approximates their fair value.
Credit risk
The Company's credit risk is primarily attributable to other receivables.
Management has a credit policy in place and the exposure to credit
risks is monitored on an ongoing basis. In respect of other receivables,
individual credit evaluations are performed whenever necessary.
The Company's maximum exposure to credit risk is represented by
loans, both those held as unquoted investments and included in other
receivables, and cash balances. The Company monitors the financial
position of borrowing entities on an ongoing basis and is satisfied
with the quality of the debt. Investment of surplus cash balances
are reviewed on an annual basis by the Company and it is satisfied
with the choice of institution. The directors have assessed the
amounts owed to connected parties for impairment in accordance with
IFRS 9 and concluded that there is no material impact.
Interest rate risk
The Company currently operates with positive cash and cash equivalents
as a result of issuing share capital in anticipation of future funding
requirements. As the Company has no borrowings from the bank and
the amount of deposits in the bank are not significant, the exposure
to interest rate risk is not significant to the Company.
Liquidity risk
The Company manages its liquidity requirements by the use of both
short-term and long-term cash flow forecasts. The Company's policy
to ensure facilities are available as required is to issue equity
share capital in accordance with agreed settlement terms with vendors
or professional firms, and are typically due within one year unless
otherwise stated.
The Company maintains minimal cash reserves as excess cash is deployed
for investment at the subsidiary level. Sufficient cash is available
to the Company from its subsidiaries to ensure it is able to meets
its liabilities as they fall due.
CRAVEN HOUSE CAPITAL PLC
NOTES TO THE FINANCIAL STATEMENTS - continued
FOR THE YEARED 31 MAY 2019
14. FINANCIAL INSTRUMENTS - continued
The table below summarises the maturity profile of the Company's
financial liabilities based on contractual discounted payments.
3 to
On Less than 12 More than
demand 3 months months 12 Months Total
Year ended 31 May
2019 $'000 $'000 $'000 $'000 $'000
Trade payables 698 - - - 698
Other payables 2,039 - 2,039
Accruals and deferred
income 1,755 - - - 1,755
Loans and borrowings - - - 800 800
----------
4,492 - - 800 5.292
------- ---------- ------- ---------- ------
Year ended 31 May
2018
Trade payables 445 - - - 445
Other payables 1,688 - - - 1,688
Accruals and deferred
income 332 - - - 332
Loans and borrowings - 800 800
2,465 - - 800 3,265
------- ---------- ------- ---------- ------
Price risks
The Company's securities are susceptible to price risk arising
from uncertainties about future value of its investments. This
price risk is the risk that the fair value of future cash flows
will fluctuate because of changes in market prices, whether those
changes are caused by factors specific to the individual investment
or financial instrument or its holder or factors affecting all
similar financial instruments or investments traded in the
market.
During the year under review, the Company did not hedge against
movements in the value of its investments. A 10% increase/decrease
in the fair value of investments would result in a $2,736,857
(2018: $2,699,347 increase/decrease in the net asset value).
While investments in companies whose business operations are
based in emerging markets may offer the opportunity for significant
capital gains, such investments also involve a degree of business
and financial risk, in particular for unquoted investments.
Generally, the Company is prepared to hold unquoted investments
for a medium to long time frame, in particular if an admission to
trading on a stock exchange has not yet been planned. Sale of
securities in unquoted investments may result in a discount to the
book value.
Currency risks
The Company is exposed to foreign currency risk on its
investments held at fair value and adverse movements in foreign
exchange rates will reduce the values of these investments. There
is no systematic hedging in foreign currencies against such
possible losses on translation/realisation.
Foreign exchange volatility is significantly reduced following
the transition to US Dollar as the Company's currency exposures are
now more closely matched to its functional and reporting currency.
The Company's exposure to other foreign currency changes is not
deemed to be material as the vast majority of the Company's
underlying investments are US Dollar based.
CRAVEN HOUSE CAPITAL PLC
NOTES TO THE FINANCIAL STATEMENTS - continued
FOR THE YEARED 31 MAY 2019
14. FINANCIAL INSTRUMENTS - continued
Capital management
The Company's financial strategy is to utilise its resources to
further grow its portfolio. The Company keeps investors and the
market informed of its progress with its portfolio through periodic
announcements and raises additional equity finance at appropriate
times. The Company regularly reviews and manages its capital
structure for the portfolio companies to maintain a balance between
the higher shareholder returns that might be possible with certain
levels of borrowing for the portfolio and the advantages and
security afforded by a sound capital position, and makes
adjustments to the capital structure of the portfolio in the light
of changes in economic conditions. Although the Company has
utilised loans from shareholders to acquire investments, it is the
Company's policy as far as possible to finance its investing
activities with equity and not to have gearing in its
portfolio.
At the statement of financial position date the capital
structure of the Company consisted of borrowings disclosed in note
13, cash and cash equivalents and equity comprising issued capital
and reserves.
The table below sets out the Company's classification of each
class of financial assets/liabilities, their fair values (where
appropriate) and under which valuation method they are valued:
Total carrying
amount and
Level Level Level Fair
1 2 3
Note $'000 $'000 $'000 Value
$'000
31 May 2019
Loans and receivables
Trade and other receivables 9 - - 933 933
Cash and cash equivalents 10 46 - - 46
--------- -------- --------- ---------------
46 - 933 979
Liabilities at amortised
cost
--------- -------- --------- ---------------
Trade and other payables 12 - - (4,492) (4,492)
Loans and borrowings 13 - - (800) (800)
--------- -------- --------- ---------------
- - (5,292) (5,292)
--------- -------- --------- ---------------
Fair value through
profit and loss
Investments 8 8,757 - 18,612 27,369
8,803 - 14,253 23,056
--------- -------- --------- ---------------
31 May 2018
Loans and receivables
Trade and other receivables 9 - - 924 924
Cash and cash equivalents 10 213 - - 213
--------- -------- --------- ---------------
213 - 924 1,137
Liabilities at amortised
cost
--------- ------------- --------- ---------------
Trade and other payables 12 - - (2,465) (2,465)
Loans and borrowings 13 - - (800) (800)
--------- ------------- --------- ---------------
- - (3,265) (3,265)
--------- ------------- --------- ---------------
Fair value through
profit and loss
Investments 8 11,083 - 15,910 26,993
11,296 - 13,569 24,865
--------- ------------- --------- ---------------
CRAVEN HOUSE CAPITAL PLC
NOTES TO THE FINANCIAL STATEMENTS - continued
FOR THE YEARED 31 MAY 2019
15. RELATED PARTY DISCLOSURES
Loan to Craven Industrial Holdings Plc
During the year, the Company made a number of payments on behalf
of, and received a loan repayment from its subsidiary Craven
Industrial Holdings Plc. At the year end the outstanding balance
was $38,969 (2018: $38,969).
Loan to Craven House Capital North America LLC
During the year, the Company made a number of payments on behalf
of, advanced and received loans to/from its subsidiary Craven House
Capital North America LLC. At the year end the outstanding balance
was $777,645 (2018: $793,629).
Loan from Craven House Angola LDA
During the year, the Company received a number of loans from its
subsidiary Craven House Angola LDA. At the year end the outstanding
balance was $1,175,664 (2018: $896,781).
Loan from Kwikbuild Corporation Ltd
During the year, the Company paid a number of costs on behalf
of, advanced and received loans to/from its subsidiary Kwikbuild
Corporation Ltd. At the year end the outstanding balance was
$813,443 (2018: $785,294).
Loan from Desmond Holdings Limited
During the year, the Company received a loan of $75,000 from
Desmond Holdings Limited. At the year end the outstanding balance
was $50,000.
All loans are accrue interest at a rate of 5% as of 1 June 2019
(prior to this date no interest was charged) and are repayable on
demand.
Sales to 7Mobile LDA
During the year, the Company's joint venture, Qeton Ltd, made
sales totalling EUR934,832 (2018: EUR1,761,013) to 7Mobile LDA.
Craven House Angola Lda., a subsidiary of the Company, has
directors in common with 7Mobile Lda. and has provided a credit
facility of $5.1m to 7Mobile Lda. at an interest rate of 5%. As at
31 May 2019 this loan balance remained outstanding and the loan was
in good standing. At the year end, amounts receivable by Qeton Ltd.
from 7Mobile LDA arising out of the normal course of business were
EUR1,428,161 (2018: EUR1,485,747).
Management fees payable to Desmond Holdings Limited
Desmond Holdings Limited is the Investment Manager of the
Company. Mr M J Pajak is the sole shareholder and director of
Desmond Holdings Limited. During the year, the Company incurred
management fees of $219,860 (2018: $244,029) from Desmond Holdings
Limited. At the year end, an amount of $424,426 (2018: $402,400)
was due to Desmond Holdings Limited in relation to management fees.
A further $50,000 was owed to Desmond Holdings Limited as of 31 May
2019 in relation to a working capital loan provided by Desmond
Holdings Limited to the Company in October 2018. This loan accrues
interest at 5% and is repayable on demand. Simultaneous with the
finalisation of the preparation of the financial statements for the
year to 31 May 2019, a performance fee of $1,657,439 became payable
to Desmond Holdings Limited.
Directors and key management
All key management personnel are directors and appropriate
disclosure with respect to them is made in note 3 of the financial
statements. There are no other contracts of significance in which
any director has or had during the year a material interest.
CRAVEN HOUSE CAPITAL PLC
NOTES TO THE FINANCIAL STATEMENTS - continued
FOR THE YEAR ENDED 31 MAY 2019
16. ULTIMATE CONTROLLING PARTY
The directors consider that there is no ultimate controlling
party.
17. EVENTS AFTER THE REPORTING PERIOD
6 June 2019: The Company acquired 71,282 shares in LM Funding
America Inc ("LMFA") taking its holding to 711,282 shares
representing 22.7% of LMFA's issued share capital.
10 June 2019: The Company acquired 63,027 shares in LMFA taking
its holding to 774,309 shares representing 25% of LMFA's issued
share capital.
3 July 2019: The Company announced that the High Court has
approved the resolution passed by the Company on 24 August 2018 to
grant the Company the authority to purchase and cancel up to
$5,000,000 of its own ordinary common shares. This process is
subject to the completion of final formalities.
22 July 2019: The Company announced that it had issued 14,400
ordinary shares of $1.00 at a price of $12.50 per share to Mr.
Brian Winters as settlement for company secretarial services
provided by him.
30 August 2019: GEM Global Yield Fund LLC ("GEM") gave notice
that it wished to exercise its option to convert $50,000 worth of a
convertible loan note. Henceforth, the Company allotted 18,510
ordinary shares of $1.00 each at a conversion price of $2.70 per
share.
30 August 2019: The Company acquired a further 44,366 shares in
LMFA taking its holding to 818,675 shares representing 26% of
LMFA's issued share capital.
26 September 2019: The Company announced that its subsidiary DLC
Holdings Corp., had conditionally agreed to acquire the entire
share capital of Blacktail Mountain Ski Area LLC and Blacktail
Mountain Inc for a consideration of $3.5m which will be satisfied
by the issuance of shares in DLC Holdings Corp.
17 October 2019: GEM gave notice that it wished to exercise its
option to convert $100,000 worth of a convertible loan note.
Henceforth, the Company allotted 48,500 ordinary shares of $1.00
each at a conversion price of $2.06 per share.
15 November 2019: GEM gave notice that it wished to exercise its
option to convert $150,000 worth of a convertible loan note.
Henceforth, the Company allotted 83,333 ordinary shares of $1.00
each at a conversion price of $1.80 per share. At the date of
approval of the financial statements, $500,000 of the loan note
remains outstanding.
For further information please contact:
Craven House Capital Plc Tel: 0203 286 8130
Mark Pajak
www.Cravenhousecapital.com
SI Capital Tel: 01483 413500
Broker
Nick Emerson
www.sicapital.co.uk
SPARK Advisory Partners Limited Tel: 0203 368 3550
Nominated Adviser
Matt Davis/Mark Brady
www.Sparkadvisorypartners.com
About Craven House Capital:
The Company's Investing Policy is to invest in or acquire a
portfolio of companies, partnerships, joint ventures, businesses or
other assets globally in any geographic jurisdiction. The company
will invest in both developed and developing markets providing long
term patient capital and is often involved in special situations,
restructuring, expansion and turn around investments in crisis and
transitioning economies.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
FR CKFDQOBDDCDB
(END) Dow Jones Newswires
November 28, 2019 12:58 ET (17:58 GMT)
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