NEWS & MEDIA

Paternoster Resources Plc - Unaudited Interim Results for the 6 Months Ended 30 June 2018

19 September, 2018

Paternoster Resources plc is pleased to announce its unaudited interim results for the six months ended 30 June 2018.

 

 

Highlights

·      Partnership announced with RiverFort Global Capital

·      £5.4 million of new capital raised to support RiverFort-arranged opportunities

·      New shareholders including institutional investors

·      Over £600,000 invested in RiverFort-arranged opportunities by the period end, increasing to over £1 million to date

·      Cash and income already being generated

·      Significantly improved financial performance with a profit achieved in Q2

·      Majority of investment portfolio expected to be in debt and equity linked debt investments in Q4

·      Substantial cash balance available for further investment

 

Chairman’s review

During the first half of 2018, the Company has made very significant progress in terms of its development as an investment company.  In early 2018, it entered into a partnership with RiverFort Global Capital Limited (“RiverFort”), the specialist arranger of funding solutions, primarily to the natural resources sector. A substantial amount of new capital has been raised, from both new and institutional investors and good progress has been made in deploying this new capital in investments that provide both income and downside protection.   The Board of the Company has also been added to and the Company is now well-positioned to become a leading investor in junior listed companies.

This evolution in the Company’s strategy is clearly beginning to make a positive impact on its financial performance.  As a result, the Company has been able to significantly reduce its loss after tax for the six months ended 30 June 2018 to £97,482 compared to a loss after tax of £793,959 for the same period in 2017. As at 30 June 2018, the Company’s net assets amounted to £7,416,437 compared to £2,448,769 as at 31 December 2017.

 

The Company’s net income now comprises both unrealised and realised gains/losses from its equity portfolio, along with income from the RiverFort-arranged investments that principally comprise fees and interest. The analysis of income for the period is set out below and clearly demonstrates the success of the Company’s new partnership with RiverFort: 

                                                     

                              

£

Existing equity portfolio

(121,601)

RiverFort-arranged investments

181,241

Total net income

59,640

 

Whilst the first half of 2018, does not fully reflect all of the various initiatives that have recently been undertaken, good progress is clearly being made, such that, during the second quarter of 2018, the Company recorded a profit after tax.

 

 

 

 

The key unaudited performance indicators are set out below: 

Performance indicator

30 June 2018

Change

Net investment income/(loss)

£59,640

£(799,533)

Net asset value

£7,416,437

£2,448,769

+202.9%

Net asset value – fully diluted per share

0.118p

0.242p

-51.2%

Closing share price

0.100p

0.130p

-23.1%

Net asset value premium to the share price

18.0%

86.2%

Market capitalisation

£6,289,335

£1,321,590

+475.9%

 

 

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

Category

Description

Cost or valuation at 30 June 2018

Listed equity investments

Equity portfolio

1,696,793

Debt and equity- linked debt investments

Arranged by RiverFort

620,930

Cash resources

Includes cash proceeds from the placing completed prior to the period end and received in July

5,171,602

Unlisted equity investments

177,235

Total

7,666,560

 

 

The Company is now generating significant investment income from its new RiverFort arranged investments, principally from interest and fees.  At the same time, gains have been realised from certain of its existing equity investments such as I3 Energy plc and Arc Minerals plc; these companies have performed very strongly during this period.  These gains, however, have been offset, by the weakness in the share price of one of the Company’s largest equity investments, Plutus PowerGen plc.

 

Given the evolution in the Company’s investment strategy, the Company’s equity portfolio is now less than 25% of the overall portfolio and so developments during the period are set out below just for the larger holdings in that portfolio.

 

I3 Energy plc (“I3 Energy”)

 

During the period, the company raised additional funds and also announced that it was in advanced discussions with various possible partners regarding a potential joint venture relating to its 100% owned Liberator Oil Field and its licence award in the 30th Offshore Licencing Round. The I3 Energy’s share price has increased significantly during this interim period and Paternoster has realised some significant gains from this investment.

 

Pires Investments plc (“Pires”)

 

When Pires announced its results for the year to 31 October 2017, it indicated that its year end net assets had increased by around 30% from £628,000 to approximately £820,000.  Since then, the share price of two of its investments, ECO (Atlantic) Oil and Gas Limited and SalvaRx Group plc have continued to perform strongly.

 

 

 

 

Arc Minerals Limited (“Arc Minerals”)

 

During the period, Arc Minerals increased its holding in both Casa Mining Limited (“Casa”) and Zamsort Limited (“Zamsort”).  It has also disposed of its shareholding in Andiamo Exploration Limited and extinguished a significant liability in connection with the original purchase of its Slovakian asset. This is all very much in line with its strategy to focus on its core assets.    Further work has now been carried out on both the Casa and Zamsort licences. In particular, the company has reported an increase in Akyanga’s JORC mineral resource, part of its Casa project, from 1.6 million ozs to 3 million ozs.  During the period, the company’s share price has performed strongly.

 

Plutus PowerGen plc (“Plutus”)

 

During the period, Plutus commissioned two new 20MW flexible energy generation sites in Stowmarket, Suffolk and energised two sites in Ipswich.  The company now has 120MW of flexible energy generation sites in operation with a further three 20MW sites expected to come into operation in 2018.  More generally, the company is currently focused on moving into gas powered energy generation, energy storage and hybrid generation sites.  Gas powered sites offer significantly more attractive returns compared to diesel powered sites and hybrid sites allow power generation sites of various types to partner with storage technologies giving the company access to additional revenue streams.  During the period, the performance of Plutus share price has, however, been disappointing, which, given that it is one of the Company’s larger investments, has negatively impacted the valuation of the Company’s equity portfolio.

 

 

Since the period end, the deployment of capital has been accelerated and, to date, a total of over £1million has now been deployed in RiverFort-arranged investments.  At the same time, the Company’s equity exposure has been reduced and the majority of the Company’s investment portfolio is expected to comprise debt and equity-linked debt investments by Q4 2018. The liquidity in the Company’s shares has improved significantly with the majority of the Company’s shares now being held by investors that are supportive of the Company’s investment strategy.

 

The Company has a substantial cash balance left to invest which continues to grow as cash is regularly received back from the RiverFort-arranged investments made earlier in the year. The Company is therefore focused on deploying this cash during the remainder of 2018.  During this phase of building its investment portfolio, it has been agreed with RiverFort that they will waive their investment adviser fees for 2018.  In consideration for this, the Company has agreed to extend the current term of the investment adviser agreement with RiverFort by an additional year.  Under the AIM Rules, RiverFort, as the Company’s investment adviser, is regarded as a Related Party so the variation of the investment agreement is a Related Party Transaction under the AIM Rules. To that end, the Independent Directors (being all the Directors with the exception of Mr Andrew Nesbitt who is a consultant to RiverFort) who have consulted with the Company’s nomad, believe that this variation of the investment agreement is fair and reasonable in so far as the shareholders are concerned.

 

The Company is currently reviewing a number of attractive investment opportunities so that, going forward, I am confident that we will be able to continue to deploy our cash and continue to improve the financial performance of the Company.

 

 

N Lee

Chairman

19 September 2018

 

For more information, please contact:

 

Paternoster Resources plc:                                                        

Nicholas Lee, Chairman                                                              +44 (0) 20 7580 7576

                                                                                               

Nominated Adviser:

Beaumont Cornish                                                                     +44 (0) 20 7628 3396

Roland Cornish/Felicity Geidt

 

Joint Broker:                                                                              +44 (0) 20 7601 6100

Shard Partners LLP

Damon Heath/Erik Woolgar

 

Joint Broker:                                                                              +44 (0) 20 7562 3351

Peterhouse Capital Limited

Lucy Williams

 

 

UNAUDITED STATEMENT OF COMPREHENSIVE INCOME

FOR THE SIX MONTHS ENDED 30 JUNE 2018

6 months ended 30 June 2018 £ 6 months ended 30 June 2017 £ Audited Year ended 31 December 2017 £
Net (losses)/gains on investments

 

(110,119) (627,081) (811,467)
Fees and investment income

 

169,759 1,871 11,934
Total income

 

59,640 (625,210) (799,533)
Administration expenses

 

(157,122) (168,749) (336,152)
(Loss)/profit before taxation

 

(97,482) (793,959) (1,135,685)
Taxation

 

(Loss)/profit for the period and total comprehensive income

 

(97,482) (793,959) (1,135,685)
Basic (loss)/earnings per share

 

Continuing and total operations

 

(0.005)p (0.078)p (0.112)p
Fully diluted (loss)/earnings per share

 

Continuing and total operations (0.005)p (0.078)p (0.112)p

 

 

 

UNAUDITED STATEMENT OF CHANGES IN EQUITY

FOR THE SIX MONTHS ENDED 30 JUNE 2018

 

Called up

share

capital

Share premium

account

Other reserves  

Retained

deficit

 

Total

equity

£ £ £ £ £
Balance at

1 January 2017

4,269,546 3,191,257 100,150 (3,976,499) 3,584,454
Loss for the year and total comprehensive expense (1,135,685) (1,135,685)
Balance at

31 December 2017

4,269,546 3,191,257 100,150 (5,112,184) 2,448,769
Loss for the period and total comprehensive income (97,482) (97,482)
Share issue 5,272,727 77,273 5,350,000
Share issue expenses (77,273) (207,577) (284,850)
Transactions with owners 5,272,727 (207,577) 5,065,150
Balance at

30 June 2018

9,542,273 3,191,257 100,150 (5,417,243) 7,416,437

 

 

UNAUDITED STATEMENT OF FINANCIAL POSITION

AS AT 30 JUNE 2018

 

Unaudited 6 months ended 30 June 2018

 

Unaudited 6 months ended 30 June 2017 Audited Year ended 31 December 2017
£ £ £
ASSETS
Current assets
Investments held for trading

 

2,494,958 2,490,218 2,252,373
Trade and other

receivables (note 1)

 

4,424,824 37,009 37,863
Cash and cash equivalents

 

871,452 327,228 211,795
Total current assets 5,296,276 364,237 249,658
Total assets 7,791,234 2,854,455 2,502,031
Liabilities
Current liabilities
Trade and other payables 374,797 63,960 53,262
 

Total current liabilities

 

374,797

 

63,960

 

53,262

Net assets 7,416,437 2,790,495 2,448,769
EQUITY
Share Capital

 

9,542,273 4,269,546 4,269,546
Share premium account

 

3,191,257 3,191,257 3,1191,257
Capital redemption reserve

 

27,000 27,000 27,000
Retained losses (5,417,243) (4.770,458) (5,112,184)
Total equity 7,416,437 2,790,495 2,448,769

Note 1:

Trade and other receivables includes cash proceeds from the placing completed but not received prior to the period end.

 

 

UNAUDITED STATEMENT OF CASH FLOWS

FOR THE SIX MONTHS ENDED 30 JUNE 2018

 

 

Unaudited

6 months

ended

30 June

2018

Unaudited

6 months

ended

30 June

2017

Audited

Year ended

31 December

2017

£ £ £
Cash flows from operating activities
Loss before tax (97,482) (793,959) (1,135,685)
Net losses on investments 110,119 627,081 811,467
Investment income (169,759) (1,871) (11,934)
(157,122) (168,749) (336,152)
Increase in trade and other receivables (86,812) (7,868) (8,721)
Increase in trade and other payables 321,535 21,590 10,892
Net cash used by operating activities 77,601 (155,027) (333,981)
Cash flows from investing activities
Purchase of investments (609,199) (280,800) (321,167)
Proceeds from disposal of investments 256,496 113,019 206,844
Investment income received 169,759 1,871 11,934
Net cash used in investing activities (182,944) (165,910) (102,389)
Financing activities
Net proceeds of share issues 765,000
Net cash from financing activities 765,000
Net increase/(decrease) in cash and cash equivalents 659,657 (320,937) (436,370)
Cash and cash equivalents at beginning of period 211,795 648,165 648,165
Cash and cash equivalents at end of period 871,452 327,228 211,795

 

 

 

NOTES TO THE INTERIM REPORT

 

  1. The financial information set out in this interim report does not constitute statutory accounts as defined in section 434 of the Companies Act 2006.  The group’s statutory financial statements for the period ended 31 December 2017, prepared under International Financial Reporting Standards (IFRS), have been filed with the Registrar of Companies.  The auditor’s report on those financial statements was unqualified and did not contain a statement under section 498 (2) or (3) of the Companies Act 2006.

The interim financial information has been prepared in accordance with the recognition and measurement principles of International Financial Reporting Standards (IFRS) and on the same basis and using the same accounting policies as used in the financial statements for the year ended 31 December 2017. The interim financial statements have not been audited or reviewed in accordance with the International Standard on Review Engagement 2410 issued by the Auditing Practices Board.

The financial statements have been prepared on a going concern basis under the historical cost convention.

The Directors believe that the going concern basis is appropriate for the preparation of the financial statements as the Company is in a position to meet all its liabilities as they fall due.

  1. The calculation of basic and fully diluted earnings per share is based on the loss for the 6 months to 30 June 2018 of £97,482 (2017: Loss £793,959) and a weighted average number of ordinary shares of 1,811,936,934 (2017: 1,016,607,956).
  2. No interim dividend will be paid.
  3. Copies of the interim report can be obtained from: The Company Secretary, Paternoster Resources plc, 30, Percy Street, London W1T 2DB and are available to view and download from the Company’s website : www.paternosterresources.com

 

 

 

 

 

 

 

 

 

 

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.