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RNS Number : 8723L
Pires Investments PLC
30 April 2015
 



Pires Investments PLC

("Pires" or the "Company")

 

Final Results

 

The Board is pleased to announce the audited consolidated results of Pires for the year ended 31 October 2014.

 

Copies of the accounts are being sent to shareholders and will shortly be available on the Company's website at www.piresinvesments.com.

 

 

Enquiries:

 

Pires Investments plc

Peter Redmond, Chairman

 

Tel: +44 (0) 20 7917 1817

 

Nominated Adviser

Cairn Financial Advisers LLP

Liam Murray / Avi Robinson

 

Tel: +44 (0) 20 7148 7900

 

Broker

Peterhouse Corporate Finance

Duncan Vasey / Lucy Williams

Tel: +44 (0) 20 7469 0935

 

 

 

 

Chairman's Statement

During the period under review, the Company set about implementing its investment strategy which is to invest substantially in companies in the resources and energy sectors, either at the pre-IPO stage or as quoted companies.

From previous announcements, investors will be aware that we have made significant investments in Rame Energy plc ("Rame"), a renewable energy business which is now quoted on AIM but in which we invested at the pre-IPO stage, and in two AIM-quoted investing companies, Armstrong Ventures plc ("Armstrong") and 3 Legs Resources plc ("3 Legs"), both of which are seeking a reverse takeover. We also have a modest investment in Kennedy Ventures plc ("Kennedy"), which at the time of making the investment was a shell company but which has since acquired a majority interest in a tantalite deposit in Namibia. Demand for tantalite is driven by the increased use of electronic devices. The deposit is expected to be back in production in the near future and is hoped to be the first of a number of tantalite asset acquisitions.

Our investment in Rame was made principally at the pre-IPO stage, investing £410,000 in February 2014. We invested a further £55,000 at IPO and made a further modest investment to maintain our stake in a later fundraising round. Since IPO, Rame has successfully completed a 15 MW wind project at Raki in Chile and this is expected to be operational imminently; Rame has a 20% continuing equity interest in the project. Rame has announced the expansion of its pipeline of wind projects in partnership with Santander from 118MW to 133MW and it plans to commence work on two sites from this pipeline with a combined size of 54MW during Q4 2015. Having acquired an UK-based solar energy specialist, Rame has now commenced its first significant solar project in Chile. It has also commenced its first off-grid wind project,  and sold one of its smaller Chilean wind projects on a basis that could earn it up to $2 million in consideration and fees, while retaining an option to take a 20% equity stake in that site. While Rame's share trading performance has been disappointing since IPO, we remain confident of their business model and we hope to see significant progress over the next twelve months.

While the Rame investment has not borne immediate positive results in stock market terms, we continue to regard investment in renewable energy to be a potentially fruitful area, though it needs to be approached selectively, particularly bearing in mind conditions in the local markets where the projects are situated. With regard to Chile, we took into account what we considered to be its relatively stable and growing economy, its structural energy deficit and its transparent and user-friendly renewable energy regime.

We have established a subsidiary, Ventec Renewable Energy Limited, to assist the Company in identifying, analysing, assessing and structuring renewable energy projects, particularly in wind, in specific European markets with a view to acquiring or earning an equity position in such projects, working in partnership with a significant European wind consultancy/developer.

Our investment in Kennedy, although modest, has performed well in overall terms, sitting at a 150% premium to our investment price and demonstrates what can be achieved through taking stakes in shell companies and seeking reverse acquisitions.

Close to the end of the financial period, we invested a larger sum - £100,000 - in a placing of shares in Armstrong in the hope of achieving a similar result. Since then, Armstrong has reviewed a number of potential reverse takeovers and we are hopeful that it will complete such a transaction in the coming months. Since the year end, we have also participated with an investment of £80,000 in the refinancing of 3 Legs, an Isle of Man domiciled AIM-quoted company, for a similar purpose.

We now hold a range of investments in line with our investing strategy and we hope to show positive returns from these investments in the current trading period. Meanwhile we continue to review the Company's expenditure base and options for expanding its capital base.

 

Peter Redmond

Chairman

29 April 2015

 

Investments

During the period under review Pires Investments plc and its subsidiaries ("the Group") made the following investments:

 

The Company converted a loan note into 3,037,037 new ordinary shares in Rame Energy plc ("Rame"). The Company also subscribed for 308,233 ordinary shares at a price of 18 pence per share and in total holds 3,345,270 ordinary shares presenting approximately 3.5 per cent of Rame's issued share capital. As at year end the market value of the Company's holding in Rame was £487,938, representing an unrealised loss of £39,407.

 

The Company subscribed for 476,190,476 shares in Armstrong Ventures plc ("Armstrong") at a price of 0.021 pence per share for a consideration of £100,000, representing approximately 13 per cent of Armstrong's issued share capital. As at the year end the market value of the Company's holding in Armstrong was £130,952, representing an unrealised gain of £30,952.

 

The Company subscribed for 2,000,000 shares in Kennedy Ventures plc ("Kennedy") at a price of £0.0125 pence per share for a consideration of £25,000. As at year end the market value of Kennedy was £57,500, representing an unrealised gain of £32,500.

 

Subsequent to 31 October 2014 the Company has subscribed for 34,482,760 ordinary shares in 3Legs Resources plc for a consideration of £80,000.

 

Investing Policy

The Group's investing policy, as disclosed on the website (www.piresinvestments.com) is as follows:

 

"The Group's Investing Policy is to invest principally, but not exclusively in the resources and energy sectors. The Group will initially focus on projects located in Asia but will also consider investments in other geographical regions. The Group may be either an active investor and acquire control of a single company or it may acquire non-controlling shareholdings. Once a target has been identified, additional funds may need to be raised by the Group to complete a transaction.

 

The proposed investments to be made by the Group may be in either quoted or unquoted securities made by direct acquisition and may be in companies, partnerships or joint ventures; or direct interests in projects and can be at any stage of development. The Group's equity interest in a proposed investment may range from a minority position to 100 per cent ownership.

 

The Group will identify and assess potential investment targets and where it believes further investigation is required, intends to appoint appropriately qualified advisers to assist.

 

The Group proposes to carry out a comprehensive and thorough project review process in which all material aspects of any potential investment will be subject to rigorous due diligences, as appropriate. It is likely that the Group's financial resources will be invested in a small number of projects or investments or potentially in just one investment which may be deemed to be a reverse takeover under the AIM Rules. Where this is the case, it is intended to mitigate risk by undertaking an appropriate due diligence process. Any transaction constituting a reverse takeover under the AIM Rules will require shareholder approval. The possibility of building a broader portfolio of investment assets has not, however, been excluded.

 

The Group intends to deliver shareholder returns principally through capital growth rather than capital distribution via dividends. Given the nature of the Group's Investing Policy, the Group does not intend to make regular periodic disclosures or calculations of net asset value.

 

The Directors believe that their broad collective experience together with their extensive network of contacts will assist them in the identification, evaluation and funding of suitable investment opportunities. When necessary, other external professionals will be engaged to assist in the due diligence of prospective opportunities. The Directors will also consider appointing additional directors with relevant experience if the need arises.

 

The objective of the Directors is to generate capital appreciation and any income generated by the Group will be applied to cover costs or will be added to the funds available to further implement the Investment Policy. In view of this, it is unlikely that the Directors will recommend a dividend in the early years. However, they may recommend or declare dividends at some future date depending on the financial position of the Group.

 

The Directors confirm that, as required by the AIM Rules, they will at each annual general meeting of the Group seek shareholder approval of its Investing Policy."

 

Events after the Reporting Period

Since 31 October 2014, the Company has subscribed for 34,482,760 new ordinary shares in a placing by 3Legs Resources plc for a consideration of £80,000. The new shares represent approximately 8.0 per cent of 3Legs total voting rights.

 

Statement of Comprehensive Income

 

 


Notes

2014

£

2013

£

CONTINUING ACTIVITIES




Revenue




Investment income


1,833

4,327

Other income


5,000

25,050

Total revenue


6,833

29,377





Gains/losses on investments held at fair value through profit or loss

3

(15,981)

(45,939)

Operating expenses


(317,761)

(336,072)

Operating (loss) / profit from continuing activities


(326,909)

(352,634)

(Loss) / profit before taxation from continuing activities


(326,909)

(352,634)

Tax

2

-

-

(Loss)/profit for the period and total comprehensive income attributable to equity holders of the Company


(326,909)

(352,634)





Basic (loss) / earnings per share




Equity holders




Basic and diluted


(0.01)p

(0.02)p





 

 

 

Statement of Changes in Equity

 

 


Share Capital

 £

Share Premium

£

 

Shares to be issued

£

Capital Redemption Reserve

 £

Retained Earnings

£

Total

 £

Balance at 1 November 2012

11,287,103

2,932,818

82,611

164,667

(13,264,430)

1,202,769

Total comprehensive income for the year ended 31 October 2013

 

-

 

-

-

 

-

 

(352,634)

(352,634)

Issue of shares

566,089

16,522

(82,611)

-

-

500,000

Share issuance costs

-

(44,500)

-

-

-

(44,500)

As at 31 October 2013

11,853,192

2,904,840

-

164,667

(13,617,064)

1,305,635

Total comprehensive income for the year ended 31 October 2014

-

-

-

-

(326,909)

(326,909)

As at 31 October 2014

11,853,192

2,904,840

-

164,667

(13,943,973)

978,726








 

 

 

 

 

Statement of Financial Position

 


 

 

Note

2014

£

2013

£

Non-current assets




Property, plant and equipment


2,163

1,812

Investment in subsidiaries


-

-

Total non-current assets


2,163

1,812





Current assets




Investments

3

698,612

84,966

Trade and other receivables


122,396

128,588

Cash and cash equivalents


295,198

1,195,379

Total current assets


1,116,206

1,408,933

Total assets


1,118,369

1,410,745

 

Equity




Issued share capital

4

11,853,192

11,853,192

Share premium

4

2,904,840

2,904,840

Retained earnings


(13,943,973)

(13,617,064)

Capital redemption reserve


164,667

164,667

Total equity


978,726

1,305,635





Liabilities




Current liabilities




Trade and other payables


139,643

105,110

Total liabilities and current liabilities


139,643

105,110

Total equity and liabilities


1,118,369

1,410,745

 

 

 

Statement of Cash Flows

 


 

 

Note

2014

£

2013

£

Cash flows from operating activities




Net cash absorbed by operating activities

5

(271,131)

(372,045)





Cash flows from investing activities




Payments to acquire tangible fixed assets


(1,256)

(2,109)

Payments to acquire investments


(674,349)

(863,206)

Proceeds of disposal of investments


44,722

732,302

Finance income received net


1,833

4,327

Net cash used in investing activities


(629,050)

(128,686)





Cash flows from financing activities




Net (repayments)/advances on borrowings


-

-

Cash from subscriptions for new shares


-

500,000

Expenses of share issue


-

(44,500)

Finance cost paid



-

Net cash from financing activities


-

455,500





Net (decrease)/increase in cash and cash equivalents during the year


(900,181)

(45,231)





Cash and cash equivalents at beginning of year


1,195,379

1,240,610





Cash and cash equivalents at end of year


295,198

1,195,379





 

 

1.      ACCOUNTING POLICIES

General Information

Pires Investments plc ("the Company") was throughout the year an investing company with an investing policy adopted on 16 April 2012 and re-adopted on 21 March 2013.

The Company is a limited liability company incorporated and domiciled in England.

The address of the registered office is c/o Morrison & Foerster, CityPoint, One Ropemaker Street, London EC2Y 9AW.

These financial statements are prepared in Pounds Sterling, because that is the currency of the primary economic environment in which the Company operates.

Basis of preparation

The financial statements have been prepared in accordance with International Financial Reporting Standards (IFRSs) and IFRIC interpretations as adopted by the European Union applicable to companies reporting under IFRSs.  The financial statements have also been prepared under the historical cost convention.

The preparation of financial statements in conformity with IFRSs requires the use of certain critical accounting estimates.  It also requires management to exercise its judgement in the process of applying the Company's accounting policies.  The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the financial statements are disclosed later in these accounting policies.

Going Concern

Any consideration of the foreseeable future involved making a judgement, at a particular point in time, about future events which are inherently uncertain. The ability of the Group to carry out its planned business objectives is dependent on its continuing ability to raise adequate capital from equity investors and/or the realisation of quoted investments.

Nevertheless, at the time of approving these financial statements and after making due enquiries, the Directors have a reasonable expectation that the Company has adequate resources to continue operating for the foreseeable future.  For this reason they continue to adopt the going concern basis in preparing the Company's financial statements.

 

2.      (LOSS)/EARNINGS PER SHARE


2014

£

2013

£

(Loss)/profit attributable to the owners of the Company



Continuing Operations

(326,909)

(352,634)





2014

No. of

shares

2013

No. of

shares

Weighted average number of shares for calculating basic loss per share

2,321,659,864

1,945,616,874


2014

pence

2013

pence

Basic and diluted loss per share



Continuing Operations

(0.01)

(0.02)

There were no dilutive instruments which would give rise to diluted earnings per share.

3.

INVESTMENTS

 


Investments held at fair value through profit or loss

 

 


Investments at fair value brought forward



84,966

 


Purchase of investments



674,349

 


Investment disposals



(44,723)

 


Provision for impairment of unquoted investments



(27,777)

 


Movement in investment holding gains



11,797

 


Balance



698,612

 


Categorised as




 


Level 1 - quoted prices



676,389

 


Level 3 - Unquoted investments



22,223

 


The valuation techniques used by the Group are explained in the accounting policy note, "financial assets designated at fair value through profit or loss".

 






 


Gains / (losses) on investments held at fair value through profit or loss




 


Movement in investment holding gains



85,409

 


Realised loss on disposal of investments



(73,613)

 


Impairment of Level 3 investments



(27,777)

 


Net loss on investments held at fair value through profit or loss



(15,981)

 


Unquoted investments (Level 3)

The value of the unquoted investments as at 31 October 2014 was £22,223 and the amount comprised a holding in Shale Energy plc.

Shale Energy plc is an unquoted public company whose focus is the acquisition or development of oil, gas or shale gas assets principally in the UK. The holding is valued on the basis of evaluation of subsequent pre-IPO fundraising. The latest fundraising price and liquidity of private investors are reflected in determining the fair value of the investment holding. The Directors consider this value to be supported by information they have received over the course of the financial year.

 

4.

ISSUED SHARE CAPITAL

 


Number of shares

Nominal value

£

Share premium

£

 

 

Issued and fully paid:




 

 

At 1 November 2012




 

 

Ordinary shares of 0.1p each

1,755,570,856

1,755,571

2,932,818

 

 

Deferred shares of 5p each

136,171,197

6,808,560

-

 

 

Deferred shares of 4.9p each

55,570,856

2,722,972

-

 

 



11,287,103

2,932,818

 

 

Ordinary shares issued

566,089,008

566,089

16,522

 

 

Share issuance costs

-

-

(44,500)

 

 





 

 

At 31 October 2013




 

 

Ordinary shares of 0.1p each

2,321,659,864

2,321,660

2,904,840

 

 

Deferred shares of 5p each

136,171,197

6,808,560

-

 

 

Deferred shares of 4.9p each

55,570,856

2,722,972

-

 

 



11,853,192

2,904,840

 

 

Ordinary shares issued

-

-

-

 

 

Share issuance costs

-

-

-

 

 

At 31 October 2014




 

 

Ordinary shares of 0.1p each

2,321,659,864

2,321,660

2,904,840

 

 

Deferred shares of 5p each

136,171,197

6,808,560

-

 

 

Deferred shares of 4.9p each

55,570,856

2,722,972

-

 

 



11,853,192

2,904,840

 

 







 

 



 

The holders of the ordinary shares are entitled to one vote for each share held on a poll.  They are also entitled to receive dividends declared in proportion to the number of shares held (subject to any right of another class, and none currently exists, to receive a preferred dividend) and, on a return of capital and subject to the limited participation rights of the holders of the two classes of deferred shares detailed below and any subsequently created class of shares with preferential rights, to participate in such return in proportion to the number of shares held.

 

 

Neither class of deferred shares have any voting or dividend rights and only have rights to a repayment of the nominal value of the shares and then only after a £100,000 per ordinary share has been returned to each holder of ordinary shares.  The Company has the right to acquire for cancellation each entire class of deferred share for an aggregate consideration of 1p and the Company intends to exercise such right in due course.

 

 

5.

CASH ABSORBED BY OPERATIONS

 

 




 


2014

£

2013

£

 

(Loss)

(343,909)

(352,634)

 

Depreciation

904

296

 

Realised (loss)/gain on disposal of investments

73,612

(15,424)

 

Fair value movements in investments

(85,409)

61,363

 

Finance income

(1,833)

(4,327)

 

Finance costs

-

-

 

Decrease/(increase) in receivables

32,971

(64,565)

 

(Decrease)/increase in payables

52,533

3,246

 

Cash absorbed by operations

(271,131)

(372,045)

 

 

6.

CONTINGENT LIABILITES

 

At 31 October 2014 and 2013, the Company had no material contingent liabilities.

 

7.

CAPITAL COMMITMENTS

 

At 31 October 2014 and 2013, the Company had no capital commitments authorised or contracted by the Directors.

 

 

8.      POST BALANCE SHEET EVENTS

 

 

Since 31 October 2014, the Company has subscribed for 34,482,760 new ordinary shares in a placing by 3Legs Resources plc for a consideration of £80,000. The new shares represent approximately 8.0 per cent of 3Legs total voting rights.

 


This information is provided by RNS
The company news service from the London Stock Exchange
 
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