Final Results

RNS Number : 8862O

Pires Investments PLC

15 June 2022

 

Pires Investments plc

("Pires" or the "Company")

Final Results for the year ended 31 December 2021

The Board of Pires Investments plc (AIM: PIRI), the investment company focused on next generation technology, announces its audited results for the 12-month period ended 31 December 2021.

Financial highlights

· Profit achieved of £1.49 million during the period (14 months ended 31 December 2020: loss before taxation of £687,000)

· Net asset value ("NAV") of £7,223,000 as at the period end (31 December 2020: £2,926,000), an increase of 147% compared to the prior year figure, equating to an increase of circa 100% in NAV per share to 4.57 pence since 31 December 2020

· NAV at the end of the period does not include the impact of the recent significant increase in valuation of Getvisibility which took place in 2022 and from which the Company benefits through both its direct and indirect holdings in this company

Portfolio highlights

· Effective interest in Sure Valley Ventures ("SVV") increased to circa 20% through the purchase of a shareholding in Sure Ventures plc ("SV plc")

· New investments made by SVV include Virtex, PreCog and Smarttech247

· Further successful funding rounds for portfolio companies include:

o  Getvisibility - raised €1.1 million during 2021 and a further €10 million post period end

o  VividQ - raised £11 million

o  Ambisense - raised €3 million

o  Admix - raised US$25 million

o  CameraMatics raised €4 million and then a further €3.9 million

· Significant increase in the valuation of a number of portfolio companies based on new funding rounds involving third party investors

· Portfolio companies, both direct or via SVV, continue to attract international investors such as EQT, University of Tokyo, Foresight Williams Technology (a joint collaboration between Foresight Group and Williams Advanced Engineering), Business Growth Fund, Puma Investments, Japanese Miyako Capital, Austrian APEX Ventures, Silicon Valley's R42 Group, Northwell Holdings & Ventures and Alpha Intelligence Capital

· Balance of proceeds received from the sale of Artomatix

· Smarttech247, a recent portfolio investment, is actively pursuing an IPO

· New direct investment made in PreCog and follow - on investments in Getvisibility, combined with a significant increase in the valuation of Getvisibility

· Investment made in the digital assets technology sector and ultimately Pluto Digital plc

Post‐period end highlights

· Commitment to invest £5 million in the New SVV Fund alongside £50 million from the British Business Bank with scope to achieve enhanced returns compared to industry standard

· Further significant €10 million fund raise and revaluation for Getvisibility

Review of activities

The Company has had a very busy and successful 2021 with multiple new investments being made and excellent results from a number of the Company's investments resulting in a significant profit for the year and an uplift in the Company's NAV which, as previously discussed, always lags the value of the Company's investment portfolio.

Investment Overview

The Company's principal investment portfolio categories are summarised below:

	Cost or valuation at 31 December 2021 £000's	Cost or valuation at 31 December 2021 £000's
Category
Sure Valley Ventures/SV plc	4,146	1,507
Direct investments	884	419
Digital assets sector	1,951	-
Cash/other listed securities	409	1,122
Total	7,390	3,048

Investment in SVV and SV plc

In February 2021, the Company increased its exposure to SVV through the purchase of 1.5 million shares in SV plc, a listed specialist fund, from existing SV plc shareholders using new Pires shares priced at 13.6 pence as consideration. SV plc's principal investments include a 25.9% interest in SVV and a direct investment in Vivid Q , one of the SVV portfolio companies. As a result of this transaction, Pires achieved an aggregate (direct and indirect) interest in SVV of around 20%, which comprises its original direct 13% interest in SVV and an indirect interest of 6.5%, through its 25% shareholding in SV plc.

Within the SVV portfolio, new investments have been made in:

· Virtex, a company building a platform for the next - generation of live, immersive entertainment within the virtual reality gaming and e sports industries;

· PreCog, a security solution platform company that provides data intelligence to combat crime, terrorism and protect vulnerable people; and

· Smarttech247, a global artificial intelligence based cyber security cloud business that protects enterprises as they migrate to cloud - based IT operations. Smarttech247 is profitable with high forecast revenue growth and has over 100 technology partners, including Tanium and CrowdStrike, and 50 clients based in Europe and the US. Smarttech247 is currently pursuing a stock market listing by way of a reverse takeover transaction which is expected to complete later in the year.

Additionally, during the period, a number of the portfolio companies have been revalued upwards based on new funding rounds which have taken place at higher valuations compared to the valuation at the time of the initial investment. These companies include:

· CameraMatics raised €4 million in January 2021 in additional funding at a valuation that represents over 300% of the CameraMatics' valuation as at the time of SVV's initial investment in November 2017. The round was led by Puma Investments, a leading provider of growth capital. CameraMatics also announced a major partnership with UK transport and logistics operator Maritime Transport Ltd. The company then raised a further €3.9 million in December 2021, again on the basis of an increased valuation thereby demonstrating this company's rapid growth in value.

· Getvisibility completed a €1.1 million funding round in June 2021 at a significant premium to its previous round. This was led by Herb Hribar who was formerly CEO of Eircom, the largest telecoms group in Ireland and is currently a director of ScienceLogic, Inc, a leading provider of AI - based operations technology. Then post period end in March 2022, the company raised €10 million from new investors including Alpha Intelligence Capital, a global venture capital firm which invests in deep artificial intelligence/machine learning technology - based companies and Fortino Capital Partners, a leading B2B software venture capital and growth equity firm.

· Vivid Q. raised new funds of £11 million in July 2021 at a significant premium to previous valuations. This funding was led by a consortium of new international investors including the University of Tokyo, Foresight Williams Technology (a joint collaboration between Foresight Group and Williams Advanced Engineering), Japanese Miyako Capital, Austrian APEX Ventures and Silicon Valley's R42 Group, with follow - on investments from SVV, University of Tokyo Edge Capital (UTEC) and Essex Innovation. SV plc has a significant direct investment in VividQ. thereby providing Pires with an increased interest in VividQ. through its shareholding in SV plc.

· Engage XR (previously VR Education Holdings before its name change in October 2021), one of the portfolio companies which is already listed on AIM, and from which funds have already been returned to Pires, has also made significant progress during the period with increasing revenues. In addition, it raised £7.7 million before expenses at a price of £0.16 per share by way of an oversubscribed placing, announced in June 2021.

· Ambisense successfully raised €3 million in August 2021 from the Business Growth Fund and existing investors, including SVV.

· In October 2021, Admix raised US$25 million in a series B round to scale up its In-Play solution worldwide and establish it as the content monetisation layer for gaming worlds and the formative metaverse. SVV participated in the Series B round alongside renowned VCs Elefund, Force Over Mass, DIP Capital, Notion Capital, Speedinvest, Rocket Capital, Colopl Next and Sidedoor Ventures, as well as growth investor Kuvi Capital and angels from the gaming industry. This new funding was raised at a valuation that represents around 1,500% of the company's valuation at which SVV initially invested in the business in 2018. This clearly reflects the significant progress that Admix has made.

· In December 2021, Nova Leah announced the closing of its seed investment round led by Northwell Holdings & Ventures, the for - profit venture investment arm of Northwell Health, New York State's largest healthcare provider. The investment includes additional funding from existing investors Kernel Capital and SVV. Nova Leah plans to use the funds to significantly expand its market opportunity and global reach.

As at the period end, SVV had a portfolio of 14 investee companies at different stages of development spanning a range of sectors. The portfolio provides Pires with exposure to a number of key, cutting - edge and rapidly growing technology sectors. Further details of the portfolio companies and recent developments are set out below:

Artificial intelligence
Ambisense (Ambisense Limited)	Provides an Artificial Intelligence platform to deliver environmental risk assessment to allow real - time gas and environmental monitoring using both IoT and sensor solutions. The company has already been awarded a number of major contracts and has a substantial pipeline of opportunities.
Buymie (Buymie Technologies)	An artificial intelligence - based same day grocery delivery company operating in both the UK and Ireland working with companies such as Tesco, Lidl, Asda and the Co - op. Also recently announced a partnership with Asda in Leeds and Bristol.
Security
Nova Leah (Nova Leah Limited)	An artificial intelligence cyber-security assessment and protection platform for connected medical devices.
Getvisibility (Visibility Blockchain Limited)	An artificial intelligence security company addressing the substantial problem faced by corporations in storing, sorting, accessing and protecting data. Recently raised additional funds at a significant premium and has been voted as one of Ireland's top 18 start - ups.
PreCog (Polence Limited)	A security solution platform company that provides data intelligence to combat crime, terrorism and protect vulnerable people. The company completed a £1 million fundraising round in March 2021. Customers include leading law enforcement and security agencies, and transport infrastructure groups.
Smarttech247 (Zefone Limited)	A global artificial intelligence based cyber security cloud business that protects enterprises as they migrate to cloud - based IT operations. The company has recently won a major new contract with a Fortune Global - 1000 company employing over 100,000 staff and already has a purchase order under this contract for €6 million. It is also currently pursuing a listing via an RTO process.
Immersive Technologies
Engage XR (Engage XR Holdings plc)	A developer of virtual reality and immersive experiences with a specific focus on education and enterprise learning and development. The company is listed on AIM, has over 100 commercial customers and is rapidly growing revenue and margins. It recently raised €9 million in new funds.
Admix (WAM Group Limited)	A platform enabling the monetisation of interactive programmatic brand placements in, for example, video games and other AR/VR applications. The company is rapidly growing revenues and numbers of active users.
Warducks (Warducks Limited)	A game development studio known for the production of leading games and is soon to launch an AR game that could be the next Pokémon Go.
VividQ (VividQ Limited)	A deep tech software company which has developed a framework for real - time 3D holographic displays for use in heads - up displays and AR headsets and glasses. The company recently completed an £11 million funding round at a significant premium.
Volograms (Volograms Limited)	A deep learning company that uses AI to create 3D Augmented Reality from 2D photos and videos. The company has launched a consumer AR Camera app called Volu and has pro - user and enterprise versions in development.
Virtex (Virtex Limited)	A company building a platform for the next - generation of live, immersive entertainment within the virtual reality ("VR") gaming and e - sports industries. It is actively developing its new Stadium app.
Internet of things
CameraMatics (MySafe Drive Limited)	Platform enabling transport fleet managers to reduce risk, increase driver safety and comply with growing industry governance and compliance. It recently raised €4 million at a 300% uplift in valuation. The company is growing revenues considerably and building its presence in the very significant US market where it has already won a number of new contracts.
Wia (WIA Technologies Limited)	Provides a platform solution for smart buildings. Its platform provides full device and application management, security, data capture and storage, analysis and control.

The investment in SVV has already proven successful for Pires with a realisation and a cash distribution being achieved soon after the investment, as a result of the sale of one of the portfolio companies, Artomatix. In 2019, Artomatix was sold at a valuation some 500% of the price of the original investment in the company. Following the progress made by Engage XR, which is listed on AIM, in 2020, SVV also realised the value of its original investment through the partial disposal of its holding. This was the second cash realisation to be made from the Company's investment in SVV.

The success of the direct SVV investment provided the rationale to increase the Company's exposure to this portfolio by acquiring a shareholding in SV plc in February 2021, particularly when it was possible to do so on attractive terms.

The first SVV fund has now substantially completed its deployment phase and is moving more towards a realisation phase which should lead to further returns to the Company and its shareholders.

Furthermore, post the period end, the Company invested in a second SVV fund, the Sure Valley Ventures UK Software Technology Fund (the "New SVV Fund"). The principal investor in the New SVV Fund is the British Business Bank ("BBB"), an investment arm of the UK Government. The first close of this fund amounted to £85 million, with the BBB investing up to £50 million and other investors ("Private Investors"), including Pires, investing up to £35 million over the 10-year life of the fund.

Pires has initially invested circa £90,000, in the New SVV Fund and expects to invest up to £5 million in total over the life of the New SVV Fund which would provide it with a circa 5.9% interest. The New SVV Fund will invest in a range of private UK software companies with a focus on companies in the Metaverse, Artificial Intelligence and Cybersecurity sectors.

The New SVV Fund will be managed by the same SVV team which, to date, has been highly successful in achieving a number of cash realisations from, and upward revaluations of, companies in the SVV portfolio. The profit share arrangements within the New SVV Fund are designed to encourage the involvement of the Private Investors alongside the BBB, meaning that Pires and the other Private Investors would expect to receive a significantly enhanced share of the total return generated by the fund compared to industry standard

Direct investments

During the period, Low6 has continued to grow and develop its business raising additional funding both during the period and post the period end. Low6 is a leader in sports gaming technology that powers franchises with their own branded gaming experiences to engage and monetise their digital fanbases. In February 2022, the company announced that is planning to achieve a list by way of a reverse takeover of a company listed on the TSX Venture Exchange.

The Company made a new investment of £250,000 in PreCog, a security solution platform company that provides data intelligence to combat crime, terrorism and protect vulnerable people, as part of its £1 million fundraising round. Its customers include leading law enforcement and security agencies, and transport infrastructure groups.

Getvisibility, is a leader in data visibility and control, using state-of-the-art artificial intelligence ("AI") to classify and secure unstructured information. Getvisibility also provides risk and compliance assessments as well as enforcing protection on sensitive data. The company operates across the US, Europe, the Middle East and North Africa with a presence in several industry sectors including banking, healthcare and the public sector. Getvisibility's clients include a leading global producer of energy and chemicals, a major airport group, one of the largest financial institutions in the Middle East as well as US government entities in the pharmaceutical and manufacturing sectors.

Pires made a follow-on investment in Getvisibility in June 2021, as part of a €1.1 million funding round led by a new lead investor Herb Hribar, who has also become Chairman of the company. This new funding took place at a significant premium to the valuation at which Pires made its original investment in March 2020.

In March 2022, Getvisibility then raised a further €10 million. Pires made its original investment of €250,000 in March 2020, with a follow-on investment of €62,000 in June 2021. Since then, Getvisibility has made significant progress such that, based on the post funding round valuation, Pires' direct stake in Getvisibility (including its additional investment) is now valued at circa €1,500,000 or over 4 times its total investment cost to date since it made its first investment two years ago. In addition, Pires has a further interest in Getvisibility via its 13% interest in SVV and an indirect interest through its holding in Sure Ventures plc, which together are now valued at circa €1,330,000. Pires' effective interest in Getvisibility, in aggregate, is therefore now valued at circa €2,830,000.

Digital assets sector

The Company completed its first investment in the digital assets sector through an investment in De Tech Studio Limited, which was developing a decentralised finance technology platform ("YOP"), and YOP tokens. Certain YOP tokens were sold to realise a cash profit and the balance of the investment was used to subscribe for shares in Pluto Digital plc ("Pluto").

Pluto is a crypto technology and operations company with a focus on Decentralised Finance (DeFi) and the Metaverse (blockchain gaming and NFTs).

During the period, Pluto has invested in Maze Theory Limited ("Maze Theory"), a London-based digital entertainment studio, with a view to developing high quality games that incorporate token economics. As part of this arrangement, Pluto and Maze Theory formed a new gaming blockchain and metaverse studio joint venture, called Emergent Games. Given the experience of the team at Maze Theory and the work that they have done, Pluto is planning to extend its relationship with Maze Theory as it believes that this is a sector that provides an exciting growth opportunity. 

Also, during 2021 Pluto fully acquired the YOP platform and has been actively developing this platform to help enable users to operate in and navigate the DeFi space, which has been growing rapidly.

As at 31 December 2021, the Company's equity holding in Pluto was valued at almost £2 million based on a price of 6 pence per share, which is the price at which the company's most recent funding raising took place. This represents a very significant uplift on the Company's initial investment in this sector.

Financial

For the year under review, the Company reported a profit before taxation of £1,491,000 (for the 14‐month period ended 31 December 2020: loss of £687,000). The profit or loss for the Company includes unrealised gains/losses in the portfolio of quoted equity investments which are marked to market, plus any return from and adjustment to the carrying value of our unlisted investments in the technology sector.

NAV as at the end of the period amounted to £7,223,000 (31 December 2020: £2,926,000). Whilst the Company's net assets have increased by 147% over the period and NAV per share is up circa 100%, we continue to believe that absolute NAV does not fairly represent the Company's financial potential, given the scope for significant valuation uplift of the companies within the portfolio. This is clearly demonstrated by the gains, both realised and unrealised, that are regularly being achieved to date from the investment portfolio. Furthermore, it is worth reiterating that realisations that are achieved within the SVV portfolio result in cash distributions to the Company and are not retained within the fund. Furthermore, the period end NAV figures do not take into account the significant increase in value of the Company's holding in Getvisibility which occurred post period end.

During the period, the holders of warrants over 21,656,579 ordinary shares in the Company exercised their warrants at 4 pence per share with total net proceeds to the Company of £866,000. As at the period end there were unexercised warrants over 28,618,403 new ordinary shares in the Company, although this figure has now reduced to 25,468,421. These warrants will expire at the end of June 2022.

Other

In February 2021, the Company was delighted to welcome a new director, David Palumbo, to the Board. David is currently CEO of EQTEC plc and brings a wealth of experience in the venture capital and technology sectors. Also, at the AGM, Peter Redmond retired from the Board. We would therefore like to thank Peter for his time at Pires and his valuable contribution to the progress that the Company has made over recent years. We all wish Peter the very best in his future endeavours.

Post the period end

In March 2022, the Company agreed to invest in a second SVV fund, the New SVV Fund, alongside the British Business Bank which is investing up to £50 million. This fund has already made its first investment in RETìníZE Limited ("RETìníZE"), a technology company based in Belfast, Northern Ireland which is developing an innovative software product called Animotive that is harnessing the latest VR technologies to transform the 3D animation production process.

As previously mentioned, Getvisibility, which the Company holds directly, and through SVV and its holding in SV plc completed a €10 million fund raise in March 2022, generating a significant uplift in the value of Getvisibility and therefore the Company's investment portfolio both from its direct shareholdings and indirect interests from its holdings in SVV and SV plc.

Since 1 January 2022, the holders of 3,149,982 warrants over ordinary shares in the Company have exercised their warrants at 4 pence per share for a total consideration of £126,000. The total number of ordinary shares of the Company in issue are following recent allotments will be 161,395,191. Unexercised warrants currently total 25,468,421 and these warrants expire at the end of June 2022.

On 1 June 2022, Tern plc ("Tern") announced a recommended share offer for the issued and to be issued share capital of the Company on the basis of 0.51613 Tern shares for each share in the Company. This valued each share in the Company at 8 pence based on the closing price of Tern shares on 31 May 2022 and represented a premium of 53.8% to the closing price of the Company's shares on 31 May 2022.

Outlook

As set out at the beginning of this statement, 2021 has been extremely busy for Pires and this has continued into 2022. A number of exciting new investments have been made, both directly and through the Company's investment in SVV, and the investment portfolio has achieved significant growth in value. In particular, this has continued into 2022 with Getvisibility.

Our investment strategy is focused on next generation technology businesses with significant potential for accelerated growth across sectors such as AI, IoT and Immersive Technologies, as well as the digital assets sector. We remain encouraged by the progress made to date by our investments and the outlook for the respective sectors in which they operate.

We expect that in the coming months we will see some additional realisations or liquidity events from the investment portfolio. Furthermore, it is important to note that, as previously mentioned, the first SVV fund has now substantially completed its deployment phase with potentially one more new investment and some small follow‐on investments to come and so is moving towards a realisation phase which is expected to generate further cash inflows for the Company.

In summary, we believe that our investment strategy in the technology sector has already proven to have been successful. Going forward, the Company is very well positioned to become a leading next generation technology investment company with an exciting portfolio of technology companies held either directly or indirectly through its interests in SVV that have the potential for significant growth and the ability to deliver real returns for shareholders.

Nicholas Lee

Director

14 June 2022

STATEMENT OF COMPREHENSIVE INCOME

	Year Ended December 2021 £000's	14 month period ended 31 December 2020 £000's
CONTINUING ACTIVITIES Income Other Income	-	1
Total income	-	1
Gain/(loss) on investments held at fair value through pro fi t or loss	2,081	(149)
Opera ti ng expenses	(590)	(539)
Opera ti ng pro fi t/(loss) from con ti nuing ac ti vi ti es	1,491	(687)
Pro fi t/(loss) before taxa ti on from con ti nuing ac ti vi ti es	1,491	(687)
Taxa ti on	-	‐
Pro fi t/(loss) for the year from con ti nuing ac ti vi ti es	1,491	(687)
Other Comprehensive Income	-	‐
Total Comprehensive Income a tt ributable to equity holders of the Company	1,491	(687)
Basic pro fi t/(loss) per share
Equity holders
Basic	1.00p	(0.64p)
Fully diluted	0.8p	(0.64p)

STATEMENT OF CHANGES IN EQUITY

	Share Capital £000's	Share Premium £000's	Capital Redemption Reserve £000's	Retained Earnings £000's	Total £000's
Balance at 1 November 2019	11,996	4,249	165	(13,845)	2,565
Profit and total comprehensive profit for the period	‐	‐	‐	(687)	(687)
Issue of shares (net of costs)	139	909			1,048
As at 31 December 2020	12,135	5,158	165	(14,533)	2,926
Profit and total comprehensive profit for the period				1,491	1,491
Issue of shares (net of costs)	90	2,716			2,806
Cancellation of deferred shares	(11,830)		11,830		‐
As at 31 December 2021	396	7,874	11,995	(13,042)	7,223

STATEMENT OF FINANCIAL POSITION

	31 December 2021 £000's	31 December 2020 £000's
Current assets Investments Trade and other receivables Cash and cash equivalents	7,016 8 374	2,029 15 1,019
Total current assets	7,398	3,063
Total assets	7,398	3,063
Equity
Issued share capital	396	12,135
Share premium	7,874	5,158
Retained earnings	(13,042)	(14,532)
Capital redemption reserve	11,995	165
Total equity	7,223	2,926
Liabilities
Current liabilities
Trade and other payables	175	137
Total liabilities and current liabilities	175	137
Total equity and liabilities	7,398	3,063

EARNINGS PER SHARE

	2021 £000's	2020 £000's
Profit attributable to the owners of the Company
Continuing Operations	1,491	(687)
	2021 No. of Shares	2020 No. of shares
Weighted average number of shares for calculating basic profit per share	149,021,386	107,298,817
	177,639,789	107,298,817
	2021 Pence	2020 Pence
Basic and diluted profit per share
Continuing Operations  - basic	1.00	(0.64)
Continuing Operations  - diluted	0.80	(0.64)

Copies of the accounts will shortly be posted to shareholders and will be available on the Company's website at www.piresinvestments.com .

This announcement contains inside information for the purposes of the UK Market Abuse Regulation and the Directors of the Company are responsible for the release of this announcement.

Enquiries:

Pires Investments plc Nicholas Lee, Director	Tel: [phone]
Nominated Adviser Cairn Financial Advisers LLP Liam Murray/Ludovico Lazzaretti	Tel: [phone]
Joint Broker Peterhouse Capital Limited Duncan Vasey/Lucy Williams	Tel: [phone] Tel: [phone]
Joint Broker Tennyson Securities Peter Krens	Tel: [phone]
Financial media and PR Yellow Jersey Sarah Hollins Henry Wilkinson	Tel: [phone]

Notes to Editors

About Pires Investments plc

Pires Investments plc (AIM: PIRI) is an investment company providing investors with access to a portfolio of next-generation technology businesses with significant growth potential.

The Company is building an investment portfolio of high-tech businesses across areas such as Artificial Intelligence ("AI"), Internet of Things ("IoT"), Cyber Security, Machine Learning, Immersive Technologies and Big Data, which the Board believes demonstrate evidence of traction and the potential for exponential growth, due to increasing global demand for development in these sectors.

For further information, visit: https://piresinvestments.com/ .

Caution regarding forward looking statements

Certain statements in this announcement, are, or may be deemed to be, forward looking statements. Forward looking statements are identified by their use of terms and phrases such as ''believe'', ''could'', "should" ''envisage'', ''estimate'', ''intend'', ''may'', ''plan'', ''potentially'', "expect", ''will'' or the negative of those, variations or comparable expressions, including references to assumptions. These forward looking statements are not based on historical facts but rather on the Directors' current expectations and assumptions regarding the Company's future growth, results of operations, performance, future capital and other expenditures (including the amount, nature and sources of funding thereof), competitive advantages, business prospects and opportunities. Such forward looking statements reflect the Directors' current beliefs and assumptions and are based on information currently available to the Directors.

 

END

 

 

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