TIDMPRIM
RNS Number : 0505F
Primorus Investments PLC
12 November 2020
Primorus Investments plc
("Primorus" or the "Company")
Quarterly Investor Update
Primorus Investments plc (AIM: PRIM, AQSE: PRIM) is pleased to
provide the quarter ending 30 September 2020 ("Q3" or the
"Quarter") investor update regarding its current holdings and
activities acquired and managed as per its investing policy.
Executive Director's Quarterly Comment - Alastair Clayton
It is with a great deal of pleasure that I write to shareholders
to report on the Company's Q3 progress in what will be my, and
Jeremy Taylor-Firth's, last Quarterly Investment Update before
leaving the Company later this month. A further announcement will
be made in due course. Our investee companies, on the whole, have
made pleasing progress in what have clearly been challenging times,
and most are currently well positioned to execute their business
models. As Jeremy and I step away to pursue other interests, we
would like to thank shareholders for their continuing patience and
belief in the Company. Jeremy and I believe that further gains
remain to be realised across the Company's portfolio. I would like
to wish Rupert Labrum and his team a warm welcome to the Company
and have no doubt that under their stewardship the future prospects
for all shareholders in Primorus is very bright indeed. The Company
has unallocated cash reserves of approximately GBP4.8m and a world
of opportunity in front of it.
Highlights
-- Fully exited its investment in Greatland Gold PLC ("Greatland"), as announced on 4 November 2020, via a recently
completed programme of sales of the remaining 20m Greatland shares for gross proceeds of approximately GBP4.6m
to compliment the 6m Greatland share sale announced on 1 October 2020 which grossed GBP0.888m. Total gross
proceeds have been received in the Quarter of circa GBP5.5m.
-- Total Greatland investment was approximately GBP633k giving a gross return over investment of approximately
GBP5.9m or a 933% ROI over the life of the investment.
-- Invested A$1.86m (approximately GBP1.1m) in 2m Zuuse shares as part of a now complete circa A$50m capital raise
alongside IFM Investors Pty Ltd ("IFM"), a leading Australian fund manager with over A$150bn under management,
and Leigh Jasper, co-founder of Aconex construction software which was bought by Oracle in 2018 for A$1.6bn.
-- Jeremy Larkin and Adrian Kerley, both of IFM, have joined the Board of Zuuse as non-executive directors alongside
Leigh Jasper who has also become a non-executive director.
-- Fresho annualised Gross Order Volumes have rebounded to over A$500m which is approaching pre-COVID levels. B2C
gains over 75k sign-ups and Fresho retains a significant cash balance.
-- The Company finishes the Quarter debt-free with significant cash reserves.
Update on Investments
Greatland Gold Plc ("Greatland") (AIM: GGP)
Greatland's shares began the Quarter at 12p and closed on 30
September at 20.1p representing a quarterly increase of some 68%.
Post-period, we sold our remaining stake of 20m Greatland shares
for gross proceeds of approximately GBP4.6m at an average price of
23.09p per share.
Our full exit from Greatland in no way reflects a pessimistic
view towards Greatland and its prospects. Having invested in
Greatland in late 2018 and early 2019 at an average price of 1.71p
per share, the Company is simply realising substantial profits.
This has been an outstanding investment for Primorus.
Zuuse Limited ("Zuuse")
Zuuse is a Melbourne-based construction software vendor with
significant operations in the UK, USA, Australia and New Zealand.
In 2018 , Primorus invested A$500k in a Series B loan note which
was subsequently repaid in full with interest taken as 57,205 Zuuse
shares. The Company also received 1m options to convert into Zuuse
shares (on a 1:1 basis) at a conversion price of A$0.50 per
option.
Following discussions with Zuuse, an opportunity was identified
to invest alongside IFM as part of a funding package to accelerate
growth. Following the recent capital raise, Primorus now holds
2,057,205 fully paid shares in Zuuse and 1m options, representing
circa 1.7% per cent. of Zuuse's fully diluted enlarged share
capital.
Zuuse's underlying construction payments software businesses
continue to perform extremely well despite the challenges
associated with the COVID-19 pandemic, with only a small dip in
revenues in the Quarter to 30 June and has seen a renewed upward
trajectory since. Revenues and EBITDA are on track to surpass those
of FY 2019 whilst the platform itself processes in excess of US$2bn
per month of construction invoices with that figure growing at a
significant compound rate.
By investing now as part of a substantial growth accelerator
financing, the Company gains significant exposure to a potentially
high-growth, highly profitable business that is already scaling
aggressively across the US, UK and Australasia. The deal also
brings to the board of Zuuse an impressive group of finance and
technology experts, notably Leigh Jasper. Zuuse exhibits many
attributes that are desirous for technology investors and we
believe our participation represents an outstanding opportunity on
a risk-weighted basis for Primorus.
Fresho Pty Ltd ("Fresho")
Fresho reports that it is in many ways returning to business as
usual with B2B annualised Gross Order Volumes picking up
significantly as the hospitality sector re-opened across much of
Australia and New Zealand. The B2C business continues to grow with
over 75k consumers onboard. The two businesses complement each
other well and open up a database of over 100k users. Fresho is
re-starting its push into the UK market with a UK general manager
appointed and commencing work in February 2021. Fresho is well
funded with A$4.3m cash on hand as well as an additional A$1m
R&D rebate grant expected soon. With this operational and
financial strength, further market opportunities may start to
present themselves. Fresho continues to build out its technology
stack and enhanced product suite to service new and existing
customers. Whilst focussing on growth, Fresho believes its current
cash reserves are adequate to drive the company to positive
cashflow as well. This is a highly encouraging update from Fresho
and in light of recent global events demonstrates a significant
robustness in the underlying business model.
Engage Technology Partners ("Engage")
Engage recently raised GBP4.2m in a combination of equity and
convertible loan notes, to which the UK Government's Future Fund
was a major contributor and in which Primorus also
participated.
Whist hiring and business operational freezes associated with
the first COVID-19 lockdowns impacted on Engage's monthly revenues
significantly, we are pleased to learn that, as with Fresho, the
business is rebounding strongly and approaching pre-COVID levels.
Interestingly, the number of live corporate customers has now
exceeded its previous peak.
Engage recently signed its largest ever client, G4S, to
initially provide services to management controls at their national
COVID-19 testing facilities. This also presents opportunities with
their other business units, with the potential of achieving
significant national and international scale. Despite the recent
challenges, Engage has remained steadfast in the execution of its
business plan which is to become a pure SaaS (software as a
service) offering, thereby delivering exceptional products and
service from a very low cost base. Further, Engage has now made
remote working permanent [in its own operations] to improve
productivity and reduce recurring costs.
With Engage now well-funded for the next 24-36 months and on a
path to break-even, Primorus looks forward to watching Engage's
business flourish. We believe the most likely exit scenario remains
a secondary or trade sale to a complimentary sector provider who
will acquire Engage to augment their own business model. Given the
scale and depth of the industry we believe there should be no
shortage of potential suitors.
WeShop Limited ("WeShop")
WeShop raised GBP9m to accelerate its business plan and Yoav
Keren, the founder and CEO of Israeli technology company
Brandshield, recently joined the Board. We see both of these events
as very positive because all plans are just plans in the absence of
funds to make them reality and management to execute. With global
E-commerce one of the huge beneficiaries of the global pandemic, we
see this now as a pivotal opportunity for WeShop to make real
inroads into the sector. We await news of progress now that these
key elements are in place.
TruSpine Technologies plc ("TruSpine")
TruSpine's shares were admitted to trading on the Aquis Exchange
(the AQSE Growth Market) on 20 August and whilst the price
performance has been poor on very tight liquidity, we view the next
few months as an exciting time for the company as it awaits its
fast-tracked FDA approval for its Faci-LOK device. If granted, we
would expect the share price to recover strongly as this should
provide the necessary impetus for TruSpine to be in a position to
market and sell its products.
Sport:80 Services Ltd ("Sport:80")
Prior to March, Sport :80 had said that 2020 was shaping up
nicely with a forecasted revenue increase on 2019 and a second
consecutive year of profit. However, with the challenges of the
COVID-19 pandemic taking hold from March, transactional revenues
fell dramatically as events planning and delivery ground to a halt.
Sport:80 adjusted its forecast revenue downward by 25% for the year
and advised that revenues are largely in line with this revised
forecast. Despite this, Sport:80 continues to add new clients and
expects revenue to recover well when clients' sales activity
increases through 2021 and 2022. Management indicates that despite
these downgrades, Sport:80 does not need to raise capital in the
short-term.
Seecubic Inc./StreamTV Networks, Inc. ("StreamTV")
StreamTV, now Seecubic Inc. has been the subject of a n ongoing
shareholder action to remove the previous management. This was
instigated by the largest shareholders and supported by us in the
form of joining a Shareholder Action Group. Given we are a very
small shareholder compared to the very large family offices and
hedge funds leading the group our financial contribution to bring
about change was minimal (GBP7,000). With an exciting technology
suite, the major shareholders became frustrated with a lack of
acceptable progress towards commercialisation and a perceived lack
of experience of the management group in negotiating and securing
large (>US$250m) investments and production contracts amongst
other shortcomings. We see the Shareholder Action Group as being
successful in its aims and this should only reflect well on the
prospects for our investment.
SOA Energy ("SOA")
SOA has already advised shareholders that drilling at the Ofek
oil discovery shall resume as soon as border restrictions are
lifted in Israel and that continues to remain the case.
Nomad Energy ("NOMAD")
Elsewhere in our energy investments, Nomad remains a concern.
Political gridlock in the Ivory Coast appears endless and we
declined to participate in a dilutionary capital raise recently and
as such the outlook for this investment remains poor unless
management can somehow recover value.
Corporate Update
We mentioned in our half year report that we would explore the
possibility of the Company buying back, where appropriate, up to
10% of its issued share capital via a share buy-back programme.
However, upon further review, the Board has concluded not to
proceed with a share buyback programme at present.
This announcement contains inside information for the purposes
of Article 7 of EU Regulation 596/2014.
Forward Looking Statements
This announcement contains forward-looking statements relating
to expected or anticipated future events and anticipated results
that are forward-looking in nature and, as a result, are subject to
certain risks and uncertainties, such as general economic, market
and business conditions, competition for qualified staff, the
regulatory process and actions, technical issues, new legislation,
uncertainties resulting from potential delays or changes in plans,
uncertainties resulting from working in a new political
jurisdiction, uncertainties regarding the results of exploration,
uncertainties regarding the timing and granting of prospecting
rights, uncertainties regarding the Company's ability to execute
and implement future plans, and the occurrence of unexpected
events. Actual results achieved may vary from the information
provided herein as a result of numerous known and unknown risks and
uncertainties and other factors.
For further information, please contact:
+44 (0) 20 7440
Primorus Investments plc: 0640
Alastair Clayton
+44 (0) 20 7213
Nominated Adviser: 0880
Cairn Financial Advisers LLP
James Caithie / Sandy Jamieson
+44 (0) 20 3657
Broker: 0050
Turner Pope Investments
Andy Thacker
Zoe Alexander
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END
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