TIDMVELA
RNS Number : 0898C
Vela Technologies PLC
27 September 2018
27 September 2018
Vela Technologies plc
("Vela", the "Company" or the "Group")
Final Results for the year ended 31 March 2018
The Board of Vela (AIM: VELA), the investing company focused on
early-stage and pre-IPO disruptive technology investments, is
pleased to announce the Company's results for the year ended 31
March 2018.
chairman's statement
for the year ended 31 March 2018
The last financial year was one in which shareholders could be
forgiven for thinking that Vela Technologies' fortunes were tied
solely to the movement of cryptocurrencies. This perception brought
the benefit of Vela becoming better known among the investment
community. It also brought to Vela a significant number of new
opportunities as well as an expanded shareholder base.
Vela's investments, though, stretch much wider than Blockchain
and businesses related to cryptocurrency. Therefore, it is perhaps
an opportune time to explain in more detail our activities in these
areas and help shareholders understand our focus.
Vela's interest in Blockchain was initially via BTL Group, a
company run by a highly knowledgeable management team in the
Blockchain field. At that time, September 2015, the term Blockchain
was hardly known among the investment community. However the merits
of Blockchain in respect of cost savings, provenance and security
were profound. BTL has since evolved from the early stage
technology company that Vela invested in, to a highly regarded
participant in the world of Blockchain and recently launched the
Interbit platform.
Vela's recent investment in Argo Blockchain has provided Vela
with the opportunity of investing in, at an early stage, what
became the first crypto-mining company to be listed on the London
Stock Exchange. The share price performance of Argo Blockchain
since the listing in August 2018 has been disappointing, however,
Argo Blockchain has made a number of positive announcements which
give Vela cause for optimism.
The investment in BlockchainK2 was made with a similar approach
to that of BTL, namely that of a TSX quoted cash shell company that
had agreed to become a blockchain technology company. The shares
are currently priced at around the cash on the balance sheet and we
await news on management's plans for the future.
In summary, our focus is on Blockchain and Mining as a Service
(MaaS). Vela does not have any direct exposure to the volatility of
cryptocurrencies.
Outside of these three investments, our investee companies span
a wide range of sectors. We will continue to communicate to
shareholders as and when it is possible to do so.
Moving onto the financials, Vela's activities during the year
produced a net loss of GBP160k. However, the total overall
comprehensive income based on the latest accounting practices was a
loss of GBP1.014m. This includes unrealised movements of
GBP854k.
At 31 March 2018 gross assets were GBP3.621m (31 March 2017:
GBP3.85m) and investments were valued at GBP2.761m (31 March 2017:
GBP3.45m). Note 8 to the financial statements provides further
details on the valuation of the investment portfolio together with
additions and disposals made during year.
The Board of Vela considered a large number of new investment
opportunities in the period under review and continues to do so.
Several of these opportunities were very exciting and warranted
further assessment. However, following due diligence and, in many
cases, the valuation metrics that these companies were looking for,
it was felt that the highly inflated valuations of these businesses
could not be justified for a new investor. As a result, Vela is
also now expanding its efforts to include seeking opportunities
within UK publicly listed companies.
Nigel Brent Fitzpatrick MBE
Non-Executive Chairman
strategic report
for the year ended 31 March 2018
Business review
Further details and key points of the investments made and the
investee companies are detailed in the Chairman's statement and
note 8 to the financial statements.
At the period end the Company holds GBP847k of cash (31 March
2017: GBP383k) and continues to keep administration costs to a
minimum so that the Company has sufficient resources to cover the
Company's ongoing running costs and has maximum funds that can be
dedicated to further investments.
Additional funds were raised during the period through the issue
of shares. These funds have provided the Company with additional
capital in order to acquire additional investments. Further details
regarding the shares issued in the period are provided in note
12.
The Company's net loss for the year is GBP160k (12 months ended
31 March 2017: GBP72k). The overall total comprehensive income,
which also includes the unrealised gains and losses on investments
carried at fair value, was a loss of GBP1,014k (2017: GBP993k
gain).
The valuation of the investment portfolio at 31 March 2018 was
GBP2,761k (2017: GBP3,455k), a decrease of GBP694k on the prior
year. During the year Vela invested GBP786k in disruptive
technology businesses. Further details of these investment
additions are given in note 8. The Company also recorded an
unrealised gain of GBP580k through Other Comprehensive Income on
its estimate of the fair value of the investment portfolio at 31
March 2018. We update shareholders regularly on investee company
performance through the dissemination of regulatory announcements
as information becomes available, and further detailed information
can be found on our website.
On 30 April 2018 TheVibe Ltd was placed into administration
following a failure to reach a decision on a further fundraise. The
business and assets of TheVibe Ltd were purchased by the former
Chairman via his holding company Vibe Group Holdings Limited. As at
31 March 2018, the Company had invested GBP400,000 in TheVibe Ltd
and this amount has been fully impaired in the financial statements
presented for the year ended 31 March 2018.
The Company has no employees and has a Board of one male
executive Director and one male non-executive Director.
Key performance indicators (KPIs)
Measuring performance is integral to the next phase of our
strategic growth. The Directors have selected KPIs to benchmark to
the Company's progress. The Directors consider investment income,
profit before tax and investment growth as KPIs in measuring
Company performance.
Investment income is detailed in the statement of comprehensive
income.
Management is satisfied with the level of costs and that these
have been maintained to a minimum level and the loss is as expected
for the Company.
Investment movements are detailed above and in note 8.
Principal risks and uncertainties
The preservation of its cash balances and management of the
capital remain key risks for the Company, ensuring that investments
are commensurate with the level of risk.
The Company is committed to maintaining its minimal operational
costs.
Further information about the Company's principal risks are
detailed in note 14, specifically in the currency risk, credit
risk, liquidity risk and capital risk management sections.
Approved by the Board of directors and signed on behalf of the
Board on 26 September 2018.
Nigel Brent Fitzpatrick MBE
Non-Executive Chairman
The annual report and accounts and notice of annual general
meeting will be posted to shareholders on 28 September 2018 and
will be made available on the Company's website,
www.velatechplc.com. The Company's Annual General Meeting will be
held at 10.00 a.m. on 23 October 2018 at the offices of Allenby
Capital Limited, 5 St Helen's Place, London, EC3A 6AB.
For further information, please contact:
Vela Technologies plc
Brent Fitzpatrick, Non-Executive
Chairman Tel: +44 (0) 7802 262
Antony Laiker, Director 443
Allenby Capital Limited
(Nominated Adviser)
Nick Athanas/Asha Chotai Tel: +44 (0) 20 3328
5656
Smaller Company Capital Limited
(Broker)
Rupert Williams/Jeremy Woodgate Tel: +44 (0) 20 3651
2910
statement of comprehensive income
for the year ended 31 March 2018
31 March 31 March
2018 2017
Notes GBP'000 GBP'000
-------------------------------------------- ------ --------- ---------
Revenue 1 - 7
Administrative expenses
- share-based payments - -
- other administrative expenses (214) (212)
- profit on disposal of available-for-sale
assets 731 186
- impairment of available-for-sale
assets (551) (25)
-------------------------------------------- ------ --------- ---------
Total administrative expenses (34) (51)
-------------------------------------------- ------ --------- ---------
Operating loss 2 (34) (44)
Finance expense 4 (126) (28)
-------------------------------------------- ------ --------- ---------
Loss before tax (160) (72)
Income tax 6 - -
-------------------------------------------- ------ --------- ---------
Loss (160) (72)
-------------------------------------------- ------ --------- ---------
Other comprehensive income:
Items that will or may be reclassified to profit or loss:
Fair value movement on available-for-sale
investments 580 1,127
Reclassification of changes in
fair value of available-for-sale
investments to profit or loss (1,434) (62)
-------------------------------------------- ------ --------- ---------
Other comprehensive income for
the year (854) 1,065
-------------------------------------------- ------ --------- ---------
Total comprehensive income (1,014) 993
-------------------------------------------- ------ --------- ---------
Attributable to:
Equity holders of the Company (1,014) 993
Earnings per share
Basic and diluted loss per share
(pence) 7 (0.02) (0.01)
-------------------------------------------- ------ --------- ---------
balance sheet
as at 31 March 2018
31 March 31 March
2018 2017
Notes GBP'000 GBP'000
------------------------------- ------ --------- ---------
Non-current assets
Investments 8 2,761 3,455
Current assets
Trade and other receivables 9 13 13
Cash and cash equivalents 13 847 383
------------------------------- ------ --------- ---------
Total current assets 860 396
------------------------------- ------ --------- ---------
Total assets 3,621 3,851
------------------------------- ------ --------- ---------
Equity and liabilities
Equity
Called up share capital 12 837 722
Share premium account 1,715 1,117
Available-for-sale reserve 1,019 1,873
Share option reserve 130 130
Retained earnings (1,033) (873)
------------------------------- ------ --------- ---------
Total equity 2,668 2,969
------------------------------- ------ --------- ---------
Current liabilities
Trade and other payables 10 28 22
Loans and borrowings 11 445 -
Total current liabilities 473 22
------------------------------- ------ --------- ---------
Non current liabilities
Loans and borrowings 11 480 860
------------------------------- ------ --------- ---------
Total non current liabilities 480 860
------------------------------- ------ --------- ---------
Total equity and liabilities 3,621 3,851
------------------------------- ------ --------- ---------
These financial statements were approved by the Board,
authorised for issue and signed on their behalf on 26 September
2018 by:
Nigel Brent Fitzpatrick MBE
Non-Executive Chairman
Company registration number: 03904195
cash flow statement
for the year ended 31 March 2018
31 March 31 March
2018 2017
Notes GBP'000 GBP'000
------------------------------------------ ------ --------- ---------
Operating activities
Loss before tax (160) (72)
Profit on disposal of available-for-sale
assets (731) (186)
Impairment of available-for-sale
assets 551 25
Finance expenses 126 28
Decrease in payables - (5)
Total cash flow from operating
activities (214) (210)
------------------------------------------ ------ --------- ---------
Investing activities
Consideration for disposal of
investments 806 247
Consideration for purchase of
investments (786) (726)
Total cash flow from investing
activities 20 (479)
------------------------------------------ ------ --------- ---------
Financing activities
Proceeds from issue of loans
(net of issue costs) - 872
Interest paid (55) -
Proceeds from the issue of ordinary 713 -
share capital
Total cash flow from financing
activities 658 872
------------------------------------------ ------ --------- ---------
Net increase in cash and cash
equivalents 464 183
Cash and cash equivalents at
start of year 383 200
------------------------------------------ ------ --------- ---------
Cash and cash equivalents at
the end of the year 13 847 383
------------------------------------------ ------ --------- ---------
Cash and cash equivalents comprise:
Cash and cash in bank 847 383
------------------------------------------ ------ --------- ---------
Cash and cash equivalents at
end of year 13 847 383
------------------------------------------ ------ --------- ---------
statement of changes in equity
for the year ended 31 March 2018
Share Share Retained Available-for-sale Share Total
Option
Capital Premium Earnings reserve Reserve Equity
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
---------------------------- -------- -------- ---------- ------------------- -------- --------
Balance at 1 April 2017 722 1,117 (873) 1,873 130 2,969
Transactions with owners
Issue of share capital 115 598 - - - 713
---------------------------- -------- -------- ---------- ------------------- -------- --------
Transactions with owners 115 598 - - - 713
---------------------------- -------- -------- ---------- ------------------- -------- --------
Loss for the year - - (160) - - (160)
Other comprehensive income - - - (854) - (854)
---------------------------- -------- -------- ---------- ------------------- -------- --------
Total comprehensive income - - (160) (854) - (1,014)
---------------------------- -------- -------- ---------- ------------------- -------- --------
Balance at 31 March 2018 837 1,715 (1,033) 1,019 130 2,668
---------------------------- -------- -------- ---------- ------------------- -------- --------
Balance at 1 April 2016 722 1,117 (801) 808 130 1,976
---------------------------- -------- -------- ---------- ------------------- -------- --------
Loss for the year - - (72) - - (72)
Other comprehensive income - - - 1,065 - 1,065
Total comprehensive income - - (72) 1,065 - 993
---------------------------- -------- -------- ---------- ------------------- -------- --------
Balance at 31 March 2017 722 1,117 (873) 1,873 130 2,969
---------------------------- -------- -------- ---------- ------------------- -------- --------
notes to the financial statements
for the year ended 31 March 2018
1 Revenue and segmental information
The Company is an investing company and as such there is only
one identifiable operating segment, being the holding and support
of investments. Furthermore, the Company operates in a single
geographic segment being the United Kingdom. The results and
balances and cash flows of the segment are as presented in the
primary statements. Revenue received in the prior period
represented the accrued value for interest receivable from loan
notes held in investee company Stream TV Networks.
2 Loss from operations
Loss from operations is stated after charging/(crediting):
31 March 31 March
2018 2017
GBP'000 GBP'000
------------------------------------------ --------- ---------
Auditors' remuneration for auditing
of accounts 10 10
Auditors' remuneration for non-audit
services 1 1
Foreign exchange losses - 4
Profit on disposal of available-for-sale
assets (731) (186)
Impairment of available-for-sale assets 551 25
------------------------------------------ --------- ---------
3 Staff costs
The average number of persons engaged by the Company (including
Directors) during the period was as follows:
31 March 31 March
2018 2017
--------------------------------- --------- ---------
Directors and senior management 2 2
Total 2 2
--------------------------------- --------- ---------
The aggregate amounts charged by these persons were as
follows:
31 March 31 March
2018 2017
GBP'000 GBP'000
------------------------------ --------- ---------
Aggregate wages and salaries 110 95
110 95
------------------------------ --------- ---------
The amounts noted above relate to amounts invoiced by the
Company's directors. Further details of directors' remuneration is
provided in note 5.
4 Finance expense
31 March 31 March
2018 2017
GBP'000 GBP'000
----------------------- --------- ---------
Loan note interest 37 18
Bond interest 89 10
----------------------- --------- ---------
Total finance expense 126 28
----------------------- --------- ---------
Included in finance expenses is GBP41k (2017 - GBP6k) in respect
of the amortisation of loan issue costs.
5 Directors and senior management
Directors' remuneration
31 March 2018
-------------------------------------------------
Salary Fees Pension Equity Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
N B Fitzpatrick - 46 - - 46
A Laiker - 64 - - 64
----------------- --------- -------- -------- -------- --------
- 110 - - 110
--------------------------- -------- -------- -------- --------
31 March 2017
-------------------------------------------------
Salary Fees Pension Equity Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
N B Fitzpatrick - 40 - - 40
A Laiker - 55 - - 55
----------------- --------- -------- -------- -------- --------
- 95 - - 95
--------------------------- -------- -------- -------- --------
Directors' and senior management's interests in shares
The Directors who held office at 31 March 2018 held the
following shares:
31 March 31 March
2018 2017
----------------- ----------- -----------
N B Fitzpatrick 1,500,000 1,500,000
A Laiker 35,191,724 35,191,724
------------------ ----------- -----------
The total share-based payment costs in respect of options
granted are:
31 March 31 March
2018 2017
GBP'000 GBP'000
Directors - -
---------- --------- ---------
As at 31 March 2018, the total number of outstanding options
held by the Directors over ordinary shares is 29,124,854,
representing 3.5 per cent of the Company's issued share capital.
Each Director holds 14,562,427 options.
Further details regarding the options issued are provided in
note 16.
6 Tax
There was no charge to current or deferred taxation in the
current or prior period.
A deferred tax asset relating to losses carried forward has not
been recognised due to uncertainty over the existence of future
taxable profits against which the losses can be used. The Company
has unused tax losses of approximately GBP4.7m (2017: GBP4.5m). In
addition, a deferred tax liability on the cumulative fair value
gain of GBP1,019k on available-for-sale assets has not been
recognised on the basis that it would be offset by available
taxable losses.
Tax reconciliation
31 March 31 March
2018 2017
GBP'000 GBP'000
--------------------------------------- --------- ---------
Loss before tax (160) (72)
Tax at 19% (2017: 20%) on loss before
tax (30) (14)
Effects of:
Unrelieved losses carried forward 30 14
--------------------------------------- --------- ---------
Total tax (credit)/expense - -
--------------------------------------- --------- ---------
The standard full rate of UK corporation tax applicable for the
year ended 31 March 2018 was 19%. This is lower than the standard
full rate of 20% applicable for the year ended 31 March 2017 due to
changes implemented in the Finance (No2) Act 2015, which resulted
in the rate of corporation tax reducing to 19% with effect from
April 2017.
Legislation was announced in the Finance Act 2016 to reduce the
rate of corporation tax to 17% with effect from 1 April 2020.
7 Loss per share
Loss per share has been calculated on a loss after tax of
GBP160,000 (2017: GBP72,000) and the weighted number of average
shares in issue for the year of 756,045,343 (2017:
721,588,020).
The loss and weighted average number of shares used in the
calculations is set out below:
31 March 31 March
2018 2017
------------------------ --------- ---------
Loss (GBP'000) (160) (72)
Loss per share (pence) (0.02) (0.01)
------------------------ --------- ---------
8 Investments
31 March 31 March
2018 2017
GBP'000 GBP'000
--------------------------------------------- --------- ---------
Opening balance 3,455 1,918
Additions during the year 786 602
Disposals during the year (806) (163)
Exchange rate differences - (4)
Gain included in Other Comprehensive Income 580 1,127
Current year impairment charged to profit
or loss (1,254) (25)
--------------------------------------------- --------- ---------
Closing balance 2,761 3,455
--------------------------------------------- --------- ---------
Additions during the year:
Investment in Rosslyn Technologies plc
On 12 May 2017, the Company subscribed for 1,111,111 ordinary
shares for a consideration of GBP50,375. Following the investment
the Company has an interest in approx. 0.75% of the total share
capital.
Investment in Portr Ltd
On 10 October 2017, the Company acquired 2,198 ordinary shares
for a consideration of GBP10,990. Following the investment the
Company had an interest in approx. 3.7% of the total share
capital.
Investment in TheVIBE Ltd
On 16 October 2017, the Company acquired 245,822 ordinary shares
for a consideration of GBP199,998. Following the investment the
Company had an interest in approx. 5.17% of the total share
capital.
Exercise of BTL warrants
On 24 November 2017, the Company exercised warrants to acquire
41,666 ordinary shares for a consideration of GBP38,102. Following
the investment the Company had an interest in approx. 2.81% of the
total share capital.
Investment in BTL
On 22 December 2017, the Company acquired 15,000 ordinary shares
for a consideration of GBP89,877. Following the investment the
Company had an interest in approx. 2.9% of the total share
capital.
Exercise of BTL warrants
On 16 January 2018, the Company exercised warrants to acquire
25,000 ordinary shares for a consideration of GBP48,603. Following
the investment, the Company has an interest in approx. 2.91% of the
total share capital.
Investment in Argo
On 2 February 2018, the Company acquired 2,500,000 ordinary
shares for a consideration of GBP200,000. Following the investment
the Company has an interest in approx. 1.9% of the total share
capital.
Investment in Portr Ltd
On 29 March 2018, the Company acquired 37,117 ordinary shares
for a consideration of GBP148,466. Following the investment, and a
subsequent funding round completed by Argo Blockchain post period
end, which Vela did not participate in, the Company has an interest
in approx. 3.1% of the total share capital.
Disposals during the year:
Disposal of BTL shares
Between 6 April 2017 and 20 December 2017, the Company disposed
of 198,566 shares in BTL generating net proceeds of
CAN$1,375,000.
9 Trade and other receivables
31 March 31 March
2018 2017
GBP'000 GBP'000
------------------- --------- ---------
Other receivables 13 13
13 13
------------------- --------- ---------
10 Trade and other payables
31 March 31 March
2018 2017
GBP'000 GBP'000
------------------------------ --------- ---------
Trade payables 4 5
Accruals and deferred income 24 17
28 22
------------------------------ --------- ---------
11 Loans and borrowings
Loans due within one year 31 March 31 March
2018 2017
GBP'000 GBP'000
-------------------------- --------- ---------
Convertible loan notes 445 -
445 -
-------------------------- --------- ---------
Loans due after more than one year 31 March 31 March
2018 2017
GBP'000 GBP'000
------------------------------------ --------- ---------
Convertible loan notes - 408
Bonds 480 452
------------------------------------ --------- ---------
480 860
------------------------------------ --------- ---------
On 9 September 2016, the Company issued GBP400,000 of
convertible unsecured loan notes to certain Shareholders, including
Antony Laiker (a director of the Company). The loan notes are
repayable on 30 September 2018 and carry an annual interest rate of
8 per cent.
The Loan Notes and accrued interest are, at the election of the
loan-note holder and pursuant to the terms of the loan agreement,
capable of conversion into Ordinary Shares at 0.15p per share, a
discount of 6.25 per cent. to the closing bid price of 0.16p per
share on 8 September 2016. The Directors consider the convertible
loan notes to represent a compound financial instrument. The
Directors consider the equity element of the instrument to be
immaterial. Accordingly, the full balance is classified as a
financial liability.
On 1 February 2017, the Company launched the issue of secured
bonds, through UK Bond Network, to raise GBP550,000 for the
Company. The Bonds have a coupon of 10% and a term of 3 years with
full repayment in cash of the principal amount of the Bonds due at
maturity. The Bonds may be repaid at the option of Vela together
with all accrued (but unpaid) interest on the amount prepaid. The
Bonds will not be convertible into ordinary shares in the capital
of the Company. The Bonds are secured by way of fixed and floating
charges over all assets of the Company present and future.
Further protection for bondholders has been provided through a
personal guarantee being given by Scott Fletcher, an existing
shareholder in the Company and the Chairman of UK Bond Network. As
consideration for the provision of the personal guarantee, Scott
Fletcher received a fee of GBP40,000 from the Company which was
satisfied by the Company transferring 3,780 shares that it
previously held in Portr Limited to Scott Fletcher.
The loan balances above are stated net of debt issue costs and
rolled up interest amounting to GBP57,000 (2017 - GBP90,000).
12 Share capital
31 March 31 March
2018 2017
GBP'000 GBP'000
-------------------------------------------- --------- ---------
Authorised capital
9,999,520,000 ordinary shares of 0.1 pence
each 10,000 10,000
10,000 10,000
-------------------------------------------- --------- ---------
Allotted, called up and fully paid capital
836,973,115 ordinary shares of 0.1 pence
each 837 722
837 722
-------------------------------------------- --------- ---------
Allotments during the period
The Company allotted the following ordinary shares during the
year:
31 March 2018
--------------------------------- --------------
Shares in issue at 1 April 2017 721,588,500
Shares issued during the year 115,384,615
--------------------------------- --------------
Shares in issue at 31 March
2018 836,973,115
--------------------------------- --------------
31 March 2017
--------------------------------- --------------
Shares in issue at 1 April
2016 721,588,020
Shares issued during the period 480
--------------------------------- --------------
Shares in issue at 31 March
2017 721,588,500
--------------------------------- --------------
On 13 December 2017 the company issued 115,384,615 new ordinary
0.1p shares for a total gross consideration of GBP750,000.
13 Cash and cash equivalents
Cash and cash equivalents comprise the following:
31 March 31 March
2018 2017
GBP'000 GBP'000
------------------------------------------ --------- ---------
Cash and cash in bank:
Pound sterling 847 383
Cash and cash equivalents at end of year 847 383
------------------------------------------ --------- ---------
Included within cash and cash equivalents is GBP201k that was
held in an escrow account and used to purchase an investment in
BlockchainK2 Corp, which completed on 30 May 2018.
14 Financial instruments
The Company uses various financial instruments which include
cash and cash equivalents, loans and borrowings and various items
such as trade receivables and trade payables that arise directly
from its operations. The main purpose of these financial
instruments is to raise finance for the Company's operations and
manage its working capital requirements.
The fair values of all financial instruments, other than certain
investments recorded at cost, are considered equal to their book
values. The existence of these financial instruments exposes the
Company to a number of financial risks which are described in more
detail overleaf.
The main risks arising from the Company's financial instruments
are currency risk, credit risk and liquidity risk. The Directors
review and agree the policies for managing each of these risks and
they are summarised below. The Company does not have any borrowings
on which interest is charged at a variable rate. The Directors,
therefore, do not consider the Company to be exposed to material
interest rate risk.
Currency risk
The Company's shareholdings in BTL and Stream TV are denominated
in Canadian Dollars and US Dollars respectively, which gives rise
to exposure to foreign currency risk. The Directors have considered
the risk and do not deem it necessary to enter into any specific
risk management arrangements at the present time. The Directors
will continue to review the position going forward to ensure this
remains appropriate in the context of the Company's risk
profile.
Credit risk
This section along with the liquidity risk and capital risk
management sections below also form part of the strategic
report.
The Company's exposure to credit risk is limited to the carrying
amount of financial assets recognised at the balance sheet date, as
summarised below:
31 March 31 March
2018 2017
Classes of financial assets - carrying GBP'000 GBP'000
amounts
---------------------------------------------- --------- ---------
Available-for-sale financial assets measured
at fair value through other comprehensive
income (*) 2,761 3,455
Loans and receivables 13 13
---------------------------------------------- --------- ---------
2,774 3,468
---------------------------------------------- --------- ---------
* where a reliable estimate of fair value cannot be determined,
the investment is measured at cost less impairment (see below).
The Company's management considers that all of the above
financial assets that are not impaired for each of the reporting
dates under review are of good credit quality.
The Company's financial assets are pledged as security, as
detailed in note 11.
The Company is required to report the category of fair value
measurements used in determining the value of its investments, to
be disclosed by the source of its inputs, using a three-level
hierarchy. There have been no transfers between Levels in the fair
value hierarchy.
Quoted market prices in active markets - "Level 1"
Inputs to Level 1 fair values are quoted prices in active
markets for identical assets. An active market is one in which
transactions occur with sufficient frequency and volume to provide
pricing information on an ongoing basis. The Company has two (2017:
two) investments classified in this category. The aggregate
historic cost of the two investments is GBP450,698 (2017:
GBP299,393) and the fair value as at 31 March 2018 was GBP1,470,044
(2017: GBP1,446,713).
Valued using models with significant observable market
parameters - "Level 2"
Inputs to Level 2 fair values are inputs other than quoted
prices included within Level 1 that are observable for the asset,
either directly or indirectly. The Company has one (2017: one)
unquoted investment classified in this category. The historic cost
of this investment is GBP745,479 (2017: GBP586,034) and the fair
value as at 31 March 2018 was GBP644,612 (2017: GBP1,289,058),
giving rise to an impairment charge of GBP100,867 recognised
directly in profit or loss in the period. The investment was valued
using the transaction price ascribed to the shares following a
placing by the investee Company in March 2018.
Valued using models with significant unobservable market
parameters - "Level 3"
Inputs to Level 3 fair values are unobservable inputs for the
asset. Unobservable inputs may have been used to measure fair value
to the extent that observable inputs are not available, thereby
allowing for situations in which there is little, if any, market
activity for the asset at the measurement date (or market
information for the inputs to any valuation models). As such,
unobservable inputs reflect the assumptions the Company considers
that market participants would use in pricing the asset. None of
the Company's investments are valued using this technique. In the
prior year, the Company held 25,000 warrants, with an estimated
fair value of GBP22,750, in relation to shares in one of its
investee companies.
The Company has six (2017: six) investments that are held at
cost less impairment as a reliable estimate of fair value cannot be
determined. An impairment charge of GBP450,000 (2017: GBP25,000)
has been recognised directly in profit or loss in respect of two of
these investments. As at 31 March 2018 the historical cost of these
investments amounted to GBP1,171,504 (2017: GBP771,501) and their
aggregate carrying value was GBP646,504 (2017: GBP696,504).
Liquidity risk
The Company maintains sufficient cash to meet its liquidity
requirements. Management monitors rolling forecasts of the
Company's liquidity on the basis of expected cash flow in
accordance with practice and limits set by the Company. In
addition, the Company's liquidity management policy involves
projecting cash flows and considering the level of liquid assets
necessary to meet these.
Maturity analysis for financial liabilities
31 March 2018 31 March 2017
------------------ ------------------
Within Later Within Later
than than
1 year 1 year 1 year 1 year
GBP'000 GBP'000 GBP'000 GBP'000
-------------------------- -------- -------- -------- --------
At amortised cost:
Financial liabilities at
amortised cost 473 480 22 860
473 480 22 860
-------------------------- -------- -------- -------- --------
Capital risk management
The Company's objectives when managing capital are to safeguard
the Company's ability to continue as a going concern in order to
provide returns for shareholders and benefits for other
stakeholders and to maintain an optimal capital structure to reduce
the cost of capital. This is achieved by making investments
commensurate with the level of risk. The Company is performing in
line with the expectations of the Directors.
The Company monitors capital on the basis of the carrying amount
of equity. The Company policy is to set the amount of capital in
proportion to its overall financing structure, i.e. equity and
long-term loans. The Company manages the capital structure and
makes adjustments to it in the light of changes in economic
conditions and the risk characteristics of the underlying assets.
In order to maintain or adjust the capital structure, the Company
may adjust the amount of dividends paid to shareholders, issue new
shares or loan notes, or sell assets to reduce debt.
15 Reconciliation of net debt
As at Cash As at
1 April flow Non-cash 31 March
2017 movement 2018
GBP'000 GBP'000 GBP'000 GBP'000
--------------------------- --------- -------- ---------- ----------
Cash and cash equivalents 383 464 - 847
Convertible loan notes (408) - (37) (445)
Bonds (452) - (28) (480)
(477) 464 (65) (78)
--------------------------- --------- -------- ---------- ----------
Non-cash movements relate to the amortisation of loan issues
costs and rolled up unpaid interest.
16 Share-based payments
The Company rewards its Directors using equity settled
share-based payments.
No new share options have been issued in the current accounting
period and the total number of options outstanding at 31 March 2018
was 29,124,854 (2017: 29,124,854). None of the options issued have
either lapsed or been exercised in the period.
The options have historically been valued using the Black
Scholes option pricing model.
The amount of remuneration expense in respect of the share
options granted amounts to GBPNIL (2017: GBPNIL).
Details of the options outstanding at the year end and the
inputs to the option pricing model are as follows:
Options Options Options Options
granted granted granted granted
22 October 18 September 2 October 8 April
2015 2015 2014 2014
--------------------------- ----------- ------------- ---------- ----------
Share price at grant
date (pence) 0.21 0.19 0.33 1.50
Exercise price (pence) 0.21 0.15 0.33 0.85
Expected life (years) 7 7 7 7
Annualised volatility
(%) 79.47 70.98 95.16 74.23
Risk-free interest rate
(%) 2.0 2.0 2.0 2.0
Fair value determined
(pence) 0.15 0.13 0.26 1.17
Number of options granted 6,400,000 10,489,560 4,000,000 8,235,294
Options exercisable
at 31 March 2018 4,266,667 6,993,040 4,000,000 8,235,294
---------------------------- ----------- ------------- ---------- ----------
None of the options outstanding as at 31 March 2018 are subject
to any performance criteria
17 Related party transactions
During the period the Company entered into the following related
party transactions. All transactions were made on an arm's length
basis.
Ocean Park Developments Limited
Nigel Brent Fitzpatrick, Non-Executive Director, is also a
Director of Ocean Park Developments Limited. During the year the
Company paid GBP46,000 (2017: GBP40,000) in respect of his
Directors fees to the Company. The balance due to Ocean Park
Developments Limited at the year end was GBPnil (2017: GBPnil).
Risk Alliance Insurance Brokers Limited
Nigel Brent Fitzpatrick, Non-Executive Director, is also a
Director of Risk Alliance Insurance Brokers Limited. During the
year the Company paid GBP5,700 (2017: GBP5,756) in respect of
insurance fees at arm's length. The balance due to Risk Alliance
Insurance Brokers Limited at the year end was GBPnil (2017:
GBPnil).
Widdington Limited
Antony Laiker, Director, is also a Director of Widdington
Limited. During the year the Company paid GBP64,000 (2017:
GBP55,000) in respect of his Directors fees to the Company. The
balance due to Widdington Limited at the year end was GBPnil (2017:
GBPnil).
Kevin Sinclair
Kevin Sinclair, a shareholder of the Company, holds GBP100,000
of the bonds under the Company's 10% bond issue in February 2017.
At 31 March 2018, Kevin Sinclair held 106,449,000 (12.72%) of the
issued share capital of the Company through JIM Nominees Ltd and is
classified as a substantial shareholder under the AIM Rules.
Scott Fletcher
Scott Fletcher, a shareholder of the Company, holds GBP200,000
of the 8% convertible loan notes issued by the company in September
2016.
Scott Fletcher held 63,944,656 Ordinary Shares at 31 March 2018
representing 7.64 per cent. of the issued share capital of the
Company in addition to the 8% convertible loan notes above. He is
also the chairman of UK Bond Network Limited, which acted on behalf
of the Company in relation to the bond issue.
18 Events after the balance sheet date
Investment in TheVibe Ltd trading as Vibe Tickets
On 30 April 2018 TheVibe Ltd was placed into administration
following a failure to reach a decision on a further fundraise. The
business and assets of TheVibe Ltd were purchased by the former
Chairman via his holding company Vibe Group Holdings Limited. As at
31 March 2018, the Company had invested GBP400,000 in TheVibe Ltd
and this amount has been fully impaired in the financial statements
presented for the year ended 31 March 2018.
On 18 June 2018 the Company entered into a subscription
agreement to invest GBP200,000 in Vibe Group Holdings Limited
("VGHL") as part of an overall fundraise by VGHL which has raised
GBP700,000 for the company. Vela's investment is unconditional and
irrevocable. Following completion of the investment, Vela owns
5,674 ordinary shares in VGHL equivalent to approximately 4 per
cent. of the issued share capital of VGHL.
Investment in BlockchainK2 Corp.
On 30 May 2018, the Company acquired 272,000 shares in
BlockchainK2 Corp. for a subscription price of C$1.25 per share,
equating to a total cost of GBP200,589.
19 Annual report and accounts
The annual report and accounts will be posted to shareholders on
28 September 2018 and will be made available on the Company's
website, www.velatechplc.com.
20 Annual General Meeting
The Company's Annual General Meeting will be held at 10.00 a.m.
on 23 October 2018 at the offices of Allenby Capital, 5 St Helen's
Place, London, EC3A 6AB. Notice of the Annual General Meeting will
be sent to shareholders with the annual report and accounts.
Extraction of information in this announcement
The financial information, which comprises the statement of
comprehensive income, balance sheet, cashflow statement, statement
of changes in equity, and related notes to the financial
statements, is derived from the full Company financial statements
for the year ended 31 March 2018, which have been prepared under
European Union endorsed International Financial Reporting Standards
(IFRS) and those parts of the Companies Act 2006 applicable to
companies reporting under IFRS. It does not constitute full
financial statements within the meaning of section 434 of the
Companies Act 2006. This financial information has been agreed with
the auditor for release.
The full annual report and financial statements for the year
ended 31 March 2018, on which the auditor has given an unqualified
report and which does not contain a statement under section 498 of
the Companies Act 2006, will be delivered to the Registrar of
Companies in due course.
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 LFMTTMBJTTFP
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