for the year ended 31 December 2020
RiverFort Global Opportunities plc, the investment company listed on AIM, is pleased to announce its audited final results for the year ended 31 December 2020 (extracts from which are set out below) and that the financial statements will shortly be posted to shareholders and made available on the website www.riverfortglobalopportunities.com
· Total income generated of £2,443,000
· Net profit generated of £1,497,000
· Net asset value of £9,240,000 – an increase of 17% since the beginning of the year
· Net asset value of 1.36 pence per share representing a 41% premium to the period end share price of 0.965 pence
· Substantial cash balance available for further investment
· Successful implementation of a capital reorganisation
· Increased investment in the technology sector, specifically providing exposure to the digital assets sector and cybersecurity
· Payment of a dividend
We are very pleased to report our results for the year to 31 December 2020. This period has been an extremely active period for the Company and the Board is delighted with the results that have been achieved. We have:
· recorded a second profitable year
· commenced the payment of a dividend; and
· the current share price is now significantly higher than the price at which new funds were raised in 2018.
We therefore believe that we have now successfully implemented the strategy that was announced by the Company in 2018.
REVIEW OF THE YEAR
For the year to 31 December 2020, the Company made a profit from continuing operations of £1,497,305 (2019: £623,690). The net asset value of the Company as at 31 December 2020 was £9,239,936 (2019: £7,878,417).
The Company has been actively deploying its investment capital by investing principally in listed junior companies through debt and equity linked products. These investment structures lower volatility and risk and enable the Company to drive profits and cash income. We believe that this is an attractive investment strategy and by investing in the Company, investors are able to gain access to this investment strategy via a publicly listed vehicle. As at the end of the year, the Company held around £5.1 million of its investment portfolio in this type of investment. During the year, the Company has invested in companies such as Westminster Group plc, Invinity Energy Systems plc and Tanzanian Gold Corporation such that, as at the period end, this part of the Company’s investment portfolio had investments in18 different companies.
The Company’s principal equity investment comprises a shareholding in Pires Investments plc. This company is an investment company listed on AIM focused on investing in next generation technology. This company has made significant progress over the period, with its share price increasing by some 135% during the year.
As previously mentioned, the Company generally receives warrants in the companies that it invests in and during the course of the year a number of these companies have increased in value. The potential value of this warrant portfolio is not fully reflected in the Company’s net asset value and a return is only crystallised when the respective warrants are exercised and sold.
The Company has also successfully implemented a capital reduction thereby enabling it to be in a position to pay a dividend and, on 2 November 2020, a gross interim dividend of 0.02 pence per share was declared and paid. The Company expects to pay a final dividend in line with the indication previously provided which is expected to amount to 0.04 pence per share.
The market has clearly recognised the improved performance and potential of the Company and this has been demonstrated by the Company’s share price increasing from 0.75 pence at the start of the period to 0.96 pence at the end and to 1.95 pence as at 7 June 2021.
OUTLOOK AND STRATEGY
The Company has continued to generate attractive returns through investing generally by way of structured financings which have the benefit of providing cash returns whilst providing downside protection. In recent months, we have also taken the opportunity to invest in pre-IPO situations which, we believe, complements our investment strategy, particularly given the current buoyant equity markets and enables us to maximise the returns to shareholders.
At the same time, the Board is seeing an increasing number of pre-IPO investment opportunities where there is the potential to achieve gains between the pre-IPO stage and a listing or exit. The Company has already deployed capital in this way as demonstrated by its recent investments in Pluto Digital Assets plc (“Pluto”) and Smarttech247. Pluto is a technology company operating in the digital assets sector. Smarttech247 is an established profitable business operating in the fast growing cyber security sector. Both companies are not only in exciting sectors but also have clear paths to listings.
Furthermore, at this stage of an investee company’s development, valuations can be attractive, notwithstanding the proximity to an exit or listing. The Board is therefore keen to be able to have additional funds to deploy in these opportunities as well as to continue to invest in structured products in order to provide a balanced portfolio hence the rationale for recently raising £1.6 million of new funds at a price in line with market from both new and existing shareholders.
In summary, we believe that the results for 2020 demonstrate that the Company is continuing to make significant progress. The current year has also started well and we look forward to a very positive 2021.
7 June 2021
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