TIDMADVT
RNS Number : 1350N
Advancedadvt Limited
28 September 2021
LEI: 254900WYO35S1T334A28
AdvancedAdvT Limited
(the "Company")
Audited Results for the period ended 30 June 2021
In compliance with Listing Rule 14.3.6, a copy of the Annual
Financial Report will also shortly be submitted to the National
Storage Mechanism. It will be available on both the 'Shareholder
Documents' page of the Company's
website at www.advancedadvt.com and https://data.fca.org.uk/#/nsm/nationalstoragemechanism
Enquiries:
Company Secretary
Antoinette Vanderpuije 020 7004 2700
Singer Capital Markets - Broker 020 7496 3000
Phil Davies
George Tzimas
Chairman's Report
Fellow Shareholders, 2021 was a productive initial period for
AdvancedAdvT. In March 2021 the Group raised GBP130m of new capital
through a placing of 130m shares at 100p each and we are delighted
with the quality of the investors which have backed our strategy.
Over the period, we remained focused on executing our objective to
complete a business combination and generate attractive long term
returns for shareholders.
COVID-19 has accelerated the adoption of technology and removed
perceived barriers. We believe the trend to increased
digitalisation of business processes and operations will continue
as we return to a new normal and businesses seek to maintain
competitiveness and ensure productivity. Businesses providing
software and tools enabling digitalisation will be expected to
maintain an increased demand for their products.
We therefore believe investment opportunities will continue to
present themselves in the software sector and continue to evaluate
high-quality businesses against a common set of characteristics
which we believe are essential to our strategy and which we believe
best position a business to consistently generate long-term
value:
-- highly predictable revenue streams;
-- high customer retention;
-- products or services with high barriers to entry;
-- extensive growth opportunities;
-- significant free cash flow generation; and
-- well run businesses in fragmented industries with potential for consolidation.
The high availability of capital has created a very competitive
environment for high quality businesses, increasing their
enterprise value. Our ability to identify opportunities early and
our flexible share structure, which can facilitate a broad range of
future transactions, is an essential element of our proposition. We
have been, and will continue to be, engaged in both early stage and
more mature stage opportunities. The size and stage of the
opportunity will naturally affect the timing of a successful
investment.
Several potential opportunities proved sufficiently compelling
to merit careful consideration and evaluation. These were
businesses which we believed could have potentially met our
objectives, however, we also note the importance of being highly
selective of those opportunities and investing at the right
valuation. We actively pursued one opportunity in the software
sector prior to the fundraising undertaken in March 2021, however,
this did not lead to a successful transaction.
We have been proactively engaging with both previously known and
many new exceptional businesses and as we head towards 2022, we
have a robust and growing pipeline of what we believe are
businesses that closely match our target characteristics.
Finally, I would like to sincerely thank all my fellow
shareholders. We will remain patient, disciplined, and hard at work
to reward your faith in us.
Vin Murria OBE
Chairman
27 September 2021
Management Report
Herewith are the condensed consolidated Financial Statements of
AdvancedAdvT Limited (formerly Marwyn Acquisition Company I
Limited) (the "Company") for the period from incorporation on 31
July 2020 to 30 June 2021 (the "Financial Statements"),
consolidating the results of AdvancedAdvT Limited and MAC I (BVI)
Limited (collectively, the "Group" or "AdvT") .
Strategy
The Company was incorporated with limited liability under the
laws of the British Virgin Islands under the BVI Companies Act on
31 July 2020 and subsequently listed on the Main Market of the
London Stock Exchange on 4 December 2020. The Company has been
formed for the purpose of effecting a merger, share exchange, asset
acquisition, share or debt purchase, reorganisation, or similar
business combination with one or more businesses. The Company's
objective is to generate attractive long term returns for
shareholders and to enhance value by supporting sustainable growth,
acquisitions and performance improvements within the acquired
companies.
Over the last 25 years companies across all sectors have
increasingly adopted new digital technologies to optimise business
processes and operations. Implementing these new technologies has
become central to driving cost efficiencies and gaining a
competitive advantage in a digital world, where sectors and
businesses with the highest level of digitalisation display the
largest productivity growth.
Despite the opportunities presented by digitalisation, pre
Covid-19 adoption of new technologies by businesses and consumers
was in part restricted by the willingness of companies to invest in
and adopt new systems and technologies.
The global restrictions caused by Covid-19 have helped to break
down these barriers and forced businesses to become more agile
which has considerably accelerated digitalisation. Despite
businesses cutting costs because of the Covid-19 pandemic, spending
on digital transformation has increased as organisations rapidly
adapt their business models. A McKinsey study [1] found that the
pandemic had sped up the adoption of digital technologies by
several years, and that most companies will need to build new
digital businesses to stay economically viable.
We therefore believe there is significant opportunity to invest
in companies that are positioned to take advantage of the
structural change arising from an unprecedented acceleration of
digitalisation brought about by the current macroeconomic
environment, affecting the way people live, work and consume, and
the way businesses operate, engage and sell to customers.
The Company may either consider acquiring total voting control
of any target company or business or acquiring a non-controlling
interest constituting less than total voting control or less than
the entire equity interest of that target company or business if
such opportunity is considered attractive or where the Company
expects to acquire sufficient influence to implement its strategy.
In such circumstances, the remaining ownership interest will be
held by third parties and the Company's decision-making authority
may be limited. Any third party's interests may be contrary to the
Company's interests.
The management team have significant experience in the software
sector having invested in and/or operated a range of high
performing software businesses. Management has successfully driven
operational excellence within these businesses to deliver organic
growth and has a track record of carrying out targeted accretive
M&A in the software sector, having completed more than 40
bolt-on acquisitions.
The GBP130 million fundraise [2] confirms our belief that
leading investors are now embracing the use of public markets to
deploy significant amounts of capital through listed acquisition
companies, and that blue-chip institutional investors are
supporting listed acquisition companies both pre and
post-acquisition. Likewise, vendors are increasingly pursuing
transactions with listed acquisition companies to access public
markets. This alongside the Company's management team and
investment strategy mean the Directors are confident in the
Company's ability to execute its investment strategy.
Activity & Share Capital
The Company was incorporated on 31 July 2020 and subsequently
listed on the Main Market of the London Stock Exchange on 4
December 2020.
On 31 December 2020, Vin Murria was appointed as Chairman of the
Company, with experience in the software, technology and support
services sectors, having executed a number of highly successful
growth strategies over her career to date.
On 4 February 2021, the Company announced the issue of 2,500,000
A Ordinary Shares for GBP1 per share, with matching warrants, to
provide additional working capital to the support the Company in
the execution of its stated investment strategy. This amount was
drawn down under the forward purchase agreement entered into by the
Company on IPO. The Company actively pursued an investment
opportunity in the software sector during the first few months of
2021, however, this did not lead to a successful transaction,
resulting in abort costs of GBP1.85 million.
With strong investor support for the Company's management team
and strategy, on 18 March 2021 the Company announced that it had
raised a total of GBP130 million by way of a placing of, and
subscription for, new ordinary shares at 100p per share. The new
ordinary shares were admitted to the standard segment of the
Official List and to trading on the London Stock Exchange's Main
Market on 23 March 2021 ("Admission"). It was further announced
that the A Ordinary Shares would be converted into Ordinary shares
and the matching A warrants would be waived effective on 23 March
2021, as disclosed in more detail in note 13. On the same date, the
Company also announced the appointment of Gavin Hugill as Chief
Operating Officer with effect from 12 April 2021 as well as the
appointment of Karen Chandler as Non-Executive Director and the
resignation of Mark Brangstrup Watts, both of which were effective
from Admission.
Outlook
We believe that the significant market disruption is likely to
result in accelerated structural change in certain sectors and the
associated emergence of investment opportunities. However, we also
note the importance of being highly selective of those
opportunities and will seek out situations whereby target
businesses meet our criteria characteristics and deliver against
our objective. We continue to progress discussions in relation to
potential target businesses.
Results
The Group's loss after taxation for the period to 30 June 2021
was GBP2,546,025. The Group incurred GBP2,552,079 of administrative
expenses during the period, received interest of GBP6,054 and at 30
June 2021 held a cash balance of GBP129,224,447. After deducting
costs accrued in respect of operating and transaction-related
expenses, the net asset position was GBP129,277,358.
Dividend Policy
It is the Board's policy that prior to the acquisition or
investment in a trading entity, no dividends will be paid. The
Company has not yet acquired a trading operation and we therefore
consider it inappropriate to make a forecast of the likelihood of
any future dividends. Following an acquisition or investment, and
subject to the availability of distributable reserves, dividends
will be paid to shareholders when the Directors believe it is
appropriate and commercially prudent to do so.
Statement of Going Concern
The Financial Statements have been prepared on a going concern
basis, which assumes that the Group will continue to be able to
meet its liabilities as they fall due for the foreseeable future.
The Group had cash resources of GBP129,224,447 at 30 June 2021 and
net assets of GBP129,277,358. We have considered the financial
position of the Group and have reviewed forecasts and budgets for a
period of at least 12 months following the approval of the
Financial Statements.
Ongoing costs and expenses incurred in connection with seeking
to identify acquisition opportunities (excluding any project
specific costs incurred in pursuit of an acquisition opportunity)
are estimated to be no more than GBP500,000 per annum. Subject to
the structure of any potential transaction, the Company may need to
raise additional funds for the acquisition in the form of equity
and/or debt, which has not been factored into our going concern
assessment as this will be dependent on the size and nature of the
platform acquisition.
Furthermore, we have considered the expected impact of the
Covid-19 pandemic on the Group's forecast cashflows and
liabilities, concluding that prior to completing a transaction, the
pandemic has no material impact on the Group due to the nature of
its operations. As a result, we have concluded that, at the date of
approval of the Financial Statements, the Company and the Group
have sufficient resources for the foreseeable future and can
continue to execute its stated strategy. Accordingly, it is
appropriate to adopt the going concern basis in the preparation of
the Financial Statements.
Corporate Governance
As a company with a Standard Listing, the Company is not
required to comply with the provisions of the UK Corporate
Governance Code. Nevertheless, the Board is committed to
maintaining high standards of corporate governance and will
consider whether to voluntarily adopt and comply with the UK
Corporate Governance Code as part of any acquisition, taking into
account the Company's size and status at that time.
The Company currently complies with the following principles of
the UK Corporate Governance Code:
-- The Company is led by an effective and entrepreneurial Board,
whose role is to promote the long-term sustainable success of the
Company, generating value for shareholders and contributing to
wider society.
-- The Board ensures that it has the policies, processes,
internal control framework, information, time and resources it
needs to function effectively and efficiently.
-- The Board ensures that the necessary resources are in place
for the company to meet its objectives and measure performance
against them.
Given the size and nature of the Company, the Board has not
established any committees and intends to make decisions as a
whole. If the need should arise in the future, for example
following any acquisition, the Board may set up committees as
appropriate.
The Directors of the Company who have served during the period
and at the date of this report are:
Vin Murria (Chairman) Appointed 31 December 2020
Gavin Hugill (Chief Operating Officer) Appointed 12 April 2021
James Corsellis (Non-Executive Director) Appointed 31 July 2020
Mark Watts (Non-Executive Director) Appointed 31 July 2020, resigned 23 March 2021
Karen Chandler (Non-Executive Director) Appointed 23 March 2021
On 5 February 2021, the Company entered into a service agreement
with Gavin Hugill, under which Gavin Hugill was appointed as Chief
Operating Officer of the Company with effect from 12 April
2021.
Vin Murria OBE
Chairman
27 September 2021
Consolidated Statement of Comprehensive Income
Period ended
30 June 2021
GBP
Administrative expenses (2,552,079)
--------------
Operating loss (2,552,079)
Finance Income 6,054
--------------
Loss before income taxes (2,546,025)
Income tax -
--------------
Loss for the period (2,546,025)
--------------
Total comprehensive loss for the period attributable to owners of the parent (2,546,025)
--------------
Loss per ordinary share (GBP)
Basic (0.06)
Diluted (0.06)
The Group's activities derive from continuing operations.
Consolidated Statement of Financial Position
As at
30 June 2021
GBP
Current assets
Trade and other receivables 229,746
Cash and cash equivalents 129,224,447
Total current assets 129,454,193
Total assets 129,454,193
=============
Equity and liabilities
Equity
Sponsor share 2
Ordinary shares 131,166,131
Warrant reserve 98,000
Warrant cancellation reserve 350,000
Share-based payment reserve 209,250
Accumulated losses (2,546,025)
-------------
Total equity 129,277,358
Current liabilities
Trade and other payables 176,835
-------------
Total liabilities 176,835
Total equity and liabilities 129,454,193
=============
Consolidated Ordinary Class Sponsor Warrant Warrant Share Accumulated Total
Statement shares A shares share reserves Cancellation based losses equity
of GBP GBP GBP GBP Reserve payment GBP GBP
Changes in GBP reserve
Equity GBP
Balance as at 31 July - - - - - - - -
2020
Issuance of 1 ordinary
share 1 - - - - - - 1
Redesignation of 1
ordinary
share (1) - 1 - - - - -
Issuance of 700,000
ordinary
shares and matching
warrants 602,000 - - 98,000 - - - 700,000
Share issue costs (275,300) - (275,300)
Issuance of 2,500,000
Class
A shares and matching
warrants - 2,150,000 - 350,000 - - - 2,500,000
Conversion of 2,500,000
Class A shares 2,150,000 (2,150,000) - (350,000) 350,000 - - -
Issuance of 130,000,000
ordinary shares 130,000,000 - - - - - - 130,000,000
Share issue costs (1,310,569) - - - - - - (1,310,569)
Issuance of 1 sponsor
share - - 1 - - - - 1
Total comprehensive loss
for the period - - - - - - (2,546,025) (2,546,025)
Share-based payment
expense - - - - - 209,250 - 209,250
------------ ------------ -------- ----------- ------------- --------- ----------------- ------------
Balance as at 30 June
2021 131,166,131 - 2 98,000 350,000 209,250 (2,546,025) 129,277,358
------------ ------------ -------- ----------- ------------- --------- ----------------- ------------
Consolidated Statement of Cash Flows
For the period ended
30 June 2021
---------------------
GBP
Operating activities
Loss for the period (2,546,025)
Adjustments to reconcile total operating loss to net cash flows:
Deduct interest income (6,054)
Add back share based payment expense 194,250
Working capital adjustments:
Increase in trade and other receivables (229,746)
Increase in trade and other payables 60,991
Net cash flows from operating activities (2,526,584)
---------------------
Financing activities
Proceeds from issue of ordinary share capital and matching warrants 133,200,002
Proceeds from issue of A share capital in MAC I (BVI) Limited 130,844
Cost of share issuance (1,585,869)
Interest income 6,054
---------------------
Net cash flows from financing activities 131,751,031
---------------------
Net increase in cash and cash equivalents 129,224,447
Cash and cash equivalents at the beginning of the period -
---------------------
Cash and cash equivalents at the end of the period 129,224,447
=====================
Notes to the Consolidated Financial Statements
1. SEGMENT INFORMATION
The Board of Directors is the Group's chief operating
decision-maker. As the Group has not yet commenced trading, the
Board of Directors considers the Group as a whole for the purposes
of assessing performance and allocating resources, and therefore
the Group has one reportable operating segment.
2. ADMINISTRATIVE EXPENSES BY NATURE
For the period ended
30 June 2021
GBP
Group administrative expenses by nature
Directors' fees 65,609
Professional fees 115,402
Non-recurring project costs 2,144,971
Listing fees 23,910
Share based payment expense 194,250
Branding and website cost 4,352
Bank charges 3,585
---------------------
2,552,079
=====================
The Group's independent auditors, Baker Tilly Channel Islands
Limited, have fees amounting to GBP14,000 for the interim and final
audit.
3. TAXATION
For the period ended 30 June 2021
GBP
Analysis of tax in period
Current tax on profits for the period -
----------------------------------
Total current tax -
==================================
The central management and control of the Group is exercised in
the UK and accordingly the Group is treated as tax resident in the
UK.
Reconciliation of effective rate and tax charge:
For the period ended 30 June 2021
GBP
Loss on ordinary activities before tax (2,546,025)
Expenses not deductible for tax purposes 194,250
Loss on ordinary activities subject to corporation tax (2,351,775)
Loss on ordinary activities multiplied by the rate of corporation tax in the UK
of 19% (446,837)
Effects of:
Losses carried forward for which no deferred tax recognised 446,837
Total taxation charge -
==================================
As at 30 June 2021, cumulative tax losses available to carry
forward against future trading profits were GBP2,351,775 subject to
agreement with HM Revenue & Customs. Prior to an acquisition,
there is no certainty as to future profits and no deferred tax
asset is recognised in relation to these carried forward
losses.
4. LOSS PER ORDINARY SHARE
Basic EPS is calculated by dividing the profit or loss
attributable to equity holders of a company by the weighted average
number of ordinary shares in issue during the period. Diluted EPS
is calculated by adjusting the weighted average number of ordinary
shares outstanding to assume conversion of all dilutive potential
ordinary shares.
The Company has issued 700,000 warrants, each of which is
convertible into one ordinary share. The group made a loss in the
current period, which would result in the warrants being
anti-dilutive. Therefore, the warrants have not been included in
the calculation of diluted earnings per share.
For the period ended 30 June 2021
Loss attributable to owners of the parent (2,546,025)
Weighted average number of ordinary shares in issue 39,709,880
Weighted average number of ordinary shares for diluted EPS 39,709,880
Basic and diluted loss per ordinary share (GBP) (0.064)
5. CASH AND CASH EQUIVALENTS
As at 30 June 2021
GBP
Cash and cash equivalents
Cash at bank 129,224,447
-------------------
129,224,447
===================
Credit risk is managed on a group basis. Credit risk arises from
cash and cash equivalents and deposits with banks and financial
institutions. For banks and financial institutions, only
independently rated parties with a minimum short-term credit rating
of P-1, as issued by Moody's, are accepted.
6. FINANCIAL INSTRUMENTS AND ASSOCIATED RISKS
The Group has the following categories of financial instruments
at the period end:
As at
30 June 2021
GBP
Financial assets measured at amortised cost
Cash and cash equivalents 129,224,447
Other receivables 2
--------------
129,224,449
--------------
Financial liabilities measured at amortised cost
Trade and other payables 176,835
--------------
176,835
==============
The Group has exposure to the following risks from its use of
financial instruments:
-- Market risk;
-- Liquidity risk; and
-- Credit risk
This note presents information about the Group's exposure to
each of the above risks and the Group's objectives, policies and
processes for measuring and managing these risks.
The Group's risk management policies are established to identify
and analyse the risks faced by the Group, to set appropriate risk
limits and controls and to monitor risks and adherence limits. Risk
management policies and systems are reviewed regularly to reflect
changes in market conditions and the Group's activities.
Treasury activities are managed on a Group basis under policies
and procedures approved and monitored by the Board. These are
designed to reduce the financial risks faced by the Group which
primarily relate to movements in interest rates.
Market risk
The Group's activities primarily expose it to the risk of
changes in interest rates due to the significant cash balance held;
however, any change in interest rates will not have a material
effect on the Group. The Group's operations are predominately in
GBP, its functional currency, and accordingly minimal translation
exposures arise in receivables or payables.
Liquidity risk
Liquidity risk is the risk that the Group will not be able to
meet its financial obligations as they fall due. The Group's
approach to managing liquidity is to ensure, as far as possible,
that it will always have sufficient liquidity to meet its
liabilities when due, under both normal and stressed conditions,
without incurring unacceptable losses or risking damage to the
Group's reputation. The Group currently meets all liabilities from
cash reserves and the Directors believe this risk is adequately
mitigated.
Credit risk
Credit risk is the risk that one party to a financial instrument
will cause a financial loss for the other party by failing to
discharge an obligation. The main credit risk relates to the cash
held with financial institutions. The Company manages its exposure
to credit risk associated with its cash deposits by selecting
counterparties with a high credit rating with which to carry out
these transactions. The counterparty for these transactions is
Barclays Bank plc, which holds a short-term credit rating of [P-1],
as issued by Moody's. The Group's maximum exposure to credit risk
is the carrying value of the cash on the Consolidated Statement of
Financial Position reserves and the Directors believe this risk is
adequately mitigated.
Capital management
The Board's policy is to maintain a strong capital base so as to
maintain creditor and market confidence and to sustain future
development of the business. Capital includes stated capital and
all other equity reserves attributable to the equity holders of the
Company and totals GBP129 million as at 30 June 2021. The Directors
actively monitor this. There were no changes in the Group's
approach to capital management during the period and the Company's
capital management policy will be revisited once an Acquisition has
been identified.
7. RELATED PARTY TRANSACTIONS
James Corsellis and Mark Brangstrup Watts are the managing
partners Marwyn Investment Management LLP ("MIMLLP") and Antoinette
Vanderpuije, the Company Secretary is a partner of MIMLLP. MIMLLP
manages MVI II Holdings I LP which is beneficially owned by MVI II.
MVI II Holdings I LP holds 15.41% of the Company's Ordinary Shares
and 1 Sponsor Share.
MIMLLP incurred costs on behalf of the Group which were
recharged. During the period MIMLLP recharged GBP11,737 in respect
of costs and fees of which GBPnil was outstanding at period
end.
James Corsellis, Mark Brangstrup Watts and Antoinette
Vanderpuije have a beneficial interest in the Incentive Shares as
described in note 14 through their indirect interest in MLTI which
owns 2,000 A2 ordinary shares in the capital of MAC I (BVI)
Limited.
James Corsellis and Mark Brangstrup Watts are the managing
partners of Marwyn Capital LLP ("MCLLP"), and Antoinette
Vanderpuije is also a partner. MCLLP provides corporate finance,
company secretarial and managed service support to the Company. The
Company has incurred fees of GBP150,740 in respect of company
secretarial and managed service support, of which GBP740 was
outstanding at the balance sheet date. MCLLP was also engaged to
provide corporate finance advice to the Company. On 18 March 2021,
MCLLP and the Company entered into a side letter under which
corporate finance services would be suspended, resulting in the
fees being reduced from GBP10,000 per month to GBPnil effective on
Admission. During the year the Company paid GBP187,096 for
corporate finance services to MCLLP and GBPnil was outstanding at
the balance sheet date. MCLLP incurred costs of GBP4,285, which it
recharged the Company during the year.
8. POST BALANCE SHEET EVENTS
No other matter or circumstance has arisen since 30 June 2021
that has significantly affected, or may significantly affect the
consolidated entity's operations, the results of those operations,
or the consolidated entity's state of affairs in future financial
years.
(1)
https://www.mckinsey.com/business-functions/mckinsey-digital/our-insights/the-new-digital-edge-rethinking-strategy-for-the-postpandemic-era
[2]
https://s26.q4cdn.com/993376269/files/doc_downloads/2021/08/18/AdvT-Prospectus-PDF-v0.372-(2).pdf
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