Legendary Invest PLC (AIM:LEG) Audited results for the year ended 31st March 2018

Executive Chairman’s Statement: Some seven years ago, Legendary set out its mission to seek out private opportunities, not typically available to public equity investors, that had the potential to generate substantial oversized returns.

 

Having identified those opportunities, Legendary would use its skills, experience and network to nurture such opportunities. The expectation was that successful opportunities would generate returns of many multiples making up for the less successful opportunities. This strategy was balanced by Legendary’s approach to fair value being conservative being based on historic transactions value of its investments.

 

Legendary’s strategy has worked. In 2010, the year before current management took control of Legendary, it had no investments or capital with which to make them and negative net assets. Since that time, Legendary has raised approximately £3m after costs with which it has run the Company for seven years and made investments of approximately £1.5m.

 

Of the 12 investments made to date: five have been successful and are currently valued from approximately 1.3xto 35x the value at which Legendary initially invested; three have listed; one has a VC invested in it and its CEO has stated its objective to list, possibly on NASDAQ;  Legendary has exited two at 4.3x and 1.6x  entry price; two have been exited at a loss; and two have been written off.

 

Progress during the year under review continues this success. In July 2017, Virtualstock, attracted VC investment at a valuation of £66m, or 33x the valuation at which Legendary originally invested in 2012. Subsequent to the year end, that has increased to approximately £70m or 35x. Legendary was the first outside investor in Virtualstock and remains its largest outside investor.

 

In August 2017, Legendary negotiated a stake in IBS for nominal value at its establishment. Subsequently, seed funding debt was converted to equity and further equity investment was made at a valuation of NZ$14.4m.

 

In December 2017, Legendary exchanged a stake in a company holding a gold asset in Kyrgyzstan for a far more promising stake in a company holding an oil asset. Also, in December 2017, Legendary took a stake in a top five crowd funding platform. Both investments have already progressed.

 

Operating profit for the year under review was £678,000 (2017: loss of £281,000), and net profit was £664,000 (2017: net loss £281,000). As at the year end, Legendary’s investments (fixed asset investments and current asset investments) were £6,150,000 (2017: £4,293,000), an increase of 43%. Overall, net and total assets at the year end were £5,990,000 (2017: £4,729,000) an increase of 27%, and £6,277,000 (2017: £4,867,000), an increase of 29%, respectively.

 

As at 17 August 2018, investments, net assets and total assets were higher at £6,178,000, £6,496,000 and £6,531,000 respectively.

 

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HIGHLIGHTS

·      Value of investments increases to £6.2m (2017: £4.3m), a rise of 44%

·      Net assets increase to £6.0m (2017: £4.7m), a rise of 28%

·      Net gain on fair value of investments of £1.2m (2017: £45k)

·      Net profit at £664k (2017: loss of £281k)

·      Post year end net assets higher at £6.5m

·      Proposed change of name to Eight Peaks Group plc

·      Proposed consolidation of the Company’s shares in the ratio of approximately 377.19 to 1

 

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