Final Results and Notice of GM PR Newswire

This announcement contains inside information for the purposes of the Market Abuse Regulation (EU No. 596/2014) (“MAR”). Upon the publication of this announcement, this inside information is now considered to be in the public domain and shall therefore cease to be inside information.

31 July 2020

First Sentinel Plc
(“First Sentinel” or the “Company”)

Final results for the year ended 31 December 2019 and Notice of General Meeting

First Sentinel announces that its audited Annual Report and Accounts for the year ended 31 December 2019 have been published and are being posted to Shareholders and are available on the Company’s website, https://first-sentinel.com.

As announced on 24 June 2020, Resolution no. 1 (to receive the annual report and accounts for the year ended 31 December 2019) and Resolution no. 2 (to approve the Directors’ remuneration report in the form set out in the Company’s annual report and accounts for the year ended 31 December 2019) of the Notice of the Annual General Meeting (“AGM”) were not submitted to vote at the AGM held on 30 June 2020. This was because, in light of delays caused by COVID-19, the Company had been granted extensions by Companies House and by AQUIS Stock Exchange to publish and file its annual accounts for the year ended 31 December 2019. It was accorded that First Sentinel would convene a further general meeting as soon as the respective accounts were available.

Accordingly, the Company also announces that the General Meeting ("GM") will be held on 24 August 2020. The Board has continued to monitor the impact of coronavirus (COVID-19). As a result of the extraordinary circumstances worldwide and in accordance with the new regulations set out in Schedule 14 of the Corporate Insolvency and Governance Act 2020, we will be conducting our GM virtually; there will therefore be no place of meeting. Please refer to the Notice of GM for further details.

Copies of the Annual Report and Accounts, Notice of General Meeting and Proxy Form are available to view on the Company's website at https://first-sentinel.com/financial-results-and-reports and at https://first-sentinel.com/circulars-and-notices/

Extracts of the Accounts are set out at the end of this announcement. The Company clarifies that warrants were granted to Colin Maltby (an Executive Director of the Company) at the time of his appointment in 2018. The terms are set out in the accounts.

First Sentinel is an alternative investment company, registered with the FCA as a small authorised UK AIFM, which provides growth capital for public and private company investments. First Sentinel invests in a range of debt and equity instruments in target portfolio companies.

The Company’s website is https://first-sentinel.com 

For further corporate information, please contact:

Mr. Brian Stockbridge
CEO
First Sentinel Plc
Tel: + 44 (0) 7876 888 011

AQSE Corporate Advisor

Beaumont Cornish Limited

James Biddle / Roland Cornish

Tel: +44(0)20 7628 3396

Extracts of the Accounts

Chairman’s Statement:

I present the results for First Sentinel plc, for the year ended 31 December 2019.

During 2019 the Company continued to focus on its invoice purchasing and supply chain finance activities.  The Company listed a bond of up to £7m on Euronext Dublin and set up the systems, controls and procedures necessary to operate its UK supply chain finance business.  During the year, the Company raised approximately £1.7m and deployed capital into its subsidiaries, Capable Finance Limited and Perennial Enterprise PTY Ltd.

We remain focused on creating long-term sustainable value for our shareholders through the provision of corporate[JB1]  lending, invoice purchasing and supply chain finance activities in Australia and in the UK, as well as equity investments.

OUTLOOK

The twelve months to 31 December 2019 have seen the establishment of the Company’s UK supply chain finance business via its subsidiary, Capable Finance Limited.  A bond of up to £7m was successfully listed on Euronext Dublin to finance this activity.  The challenge for the Company remains in achieving scale and the focus will be on increasing the supply chain finance customer base and on suitable corporate lending opportunities. 

COVID-19

Notwithstanding the current market developments in relation to the spread of COVID-19 and its impact on the global economy, the Group has confidence in its business continuity arrangements. Currently, staff are working remotely and where needed, all business meetings are held using video conferencing platforms . The Group sees that for the foreseeable future, this will now be standard operational practice.  The Group does not believe that the COVID-19 outbreak or will have a significant impact on its business and that it does not represent a material uncertainty about the entity's ability to continue as a going concern

Brian Stockbridge
30 July 2020

Key Performance Indicators


                            Year to 31 December 2019 Year to 31 December 2018

                                               £’000                    £’000

Revenue                                        1,440                    1,453

Loss for the period                              767                      700

Cash as at 31 December 2019                    1,255                      826



The board recognises the importance of KPIs in driving appropriate behaviour and enabling of Group performance.

During the year to 31 December 2019 the company has achieved a number of key objectives which continue to build shareholder value.  These include:-

·    Listing bond of up to £7m on Euronext Dublin

·    Raising approximately £1.7m and deploying this capital into the business activities of Perennial Enterprise PTY Ltd and Capable Finance Ltd.

·    Increasing focus on invoice purchasing and supply chain finance activities

Consolidated Statement of Comprehensive Income - For the period ended 31 December 2019


                                                    Period ended Period ended

                                                    31 December  31 December
                                                            2019         2018

                                                           £’000        £’000

Revenue                                                    1,440        1,453

Cost of sales                                               (89)        (503)

                                                         -------      -------

Gross profit                                               1,351          950

Administrative expenses                                  (1,534)      (1,381)

Other operating income                                        33          134

                                                         -------      -------

Operating loss                                             (150)        (297)

Finance costs                                              (587)        (611)

Finance income                                                33          298

                                                         -------      -------

Loss before tax                                            (704)        (610)

Tax                                                         (63)         (90)

                                                         -------      -------

Loss for the period                                        (767)        (700)

Other comprehensive income                                     -            -

                                                         -------      -------

Total comprehensive loss for the period                    (767)        (700)

                                                         -------      -------

Loss and total comprehensive loss attributable to:

- Owners of the company                                    (855)        (793)

- Non-controlling interests                                   88           93

                                                         -------      -------

                                                           (767)        (700)

                                                         -------      -------

Loss per share attributable to the owners of the company:

Basic & Diluted loss per share - pence                   (4.24)p      (4.71)p

                                                         -------      -------



Consolidated Statement of Financial Position - For the period ended 31 December 2019


                                         As at            As at
                              31 December 2019 31 December 2018

ASSETS                                   £’000            £’000

Non-current assets

Intangibles                                 48               51

Goodwill                                    88               88

Property, plant & equipment                 54               24

Right of use Asset                         131                -

                                       -------          -------

                                           321              163

                                       -------          -------

CURRENT ASSETS

Trade and other receivables              5,730            4,279

Other financial assets                     242              584

Cash and cash equivalents                1,255              826

                                       -------          -------

                                         7,228            5,689

                                       -------          -------

TOTAL ASSETS                             7,549            5,852

                                       -------          -------

EQUITY

Shareholders’ Equity

Called up share capital                    213              152

Share premium                            2,097            1,449

Share based payment reserve                131               26

Foreign exchange reserve                 (245)            (111)

Accumulated deficit                    (1,809)            (954)

Non-controlling interest                   245              109

                                       -------          -------

Total Equity                               632              671

                                       -------          -------

LIABILITIES

Current liabilities

Trade and other payables                 2,259              459

                                       -------          -------

                                         2,259              459

                                       -------          -------

Non - current liabilities

Financial liabilities                    4,530            4,722

Other Payables                             128                -

                                       -------          -------

TOTAL LIABILITIES                        4,658            4,722

                                       -------          -------

TOTAL EQUITY AND LIABILITIES             7,549            5,852

                                       -------          -------



Consolidated Statement of Changes in Equity - For the period ended 31 December 2019


                                              Share                  Non
              Called up                       based  Foreign Controlling
                  Share Accumulated   Share payment Exchange    interest  Total
                capital     deficit Premium Reserve  Reserve             equity

                  £’000       £’000   £’000   £’000    £’000       £’000  £’000

Balance at 31       142       (161)   1,310      13        -          16  1,320
December 2017

                  -----      ------  ------  ------    -----       -----  -----

Loss for the          -       (793)       -       -        -          93  (700)
period

Other                 -           -       -       -    (111)           -  (111)
comprehensive
income

                  -----      ------  ------  ------    -----       -----  -----

                      -       (793)       -       -    (111)          93  (811)

                  -----      ------  ------  ------    -----       -----  -----

Issue of             10           -     139       -        -           -    149
shares

Credit                -           -       -      13        -           -     13
relating to
equity for
equity
settled

                  -----      ------  ------  ------    -----       -----  -----

Balance at 31       152       (954)   1,449      26    (111)         109    671
December 2018

                  -----      ------  ------  ------    -----       -----  -----

Loss for the          -       (855)       -       -        -          88  (767)
period

Other                 -           -       -       -    (134)           -  (134)
comprehensive
income

                  -----      ------  ------  ------   ------       -----  -----

Total                 -       (855)       -       -        -          88  (901)
comprehensive
income for
the period

                  -----      ------  ------  ------    -----       -----  -----

Issues of            61           -     648       -        -           -    709
shares during
the year

Non                   -           -       -       -        -          48     48
controlling
Interest
share of net
assets on
acquisition

Share based           -           -       -     105        -           -    105
payments
charge for
the year

                  -----      ------  ------  ------   ------       -----  -----

Balance at 31       213     (1,809)   2,097     131    (245)         245    632
December 2019

                  -----      ------    ----    ----     ----       -----   ----



Notes to the Consolidated Statement of Cash Flows - For the period ended 31 December 2019


                                                  Period ended     Period ended
                                              31 December 2019 31 December 2018

                                                         £’000            £’000

Cash flows from operating activities

Cash (utilised) / generated by operations              (1,433)          (3,445)

Interest paid                                            (577)            (611)

Interest elements of lease payments                       (10)

Interest Received                                           33              298

                                                        ------           ------

Net cash outflow from operating activities             (1,987)          (3,758)

Cash flows from investing activities

Net proceeds from transactions of financial                239              304
assets at fair value through profit or loss

Purchases of property, plant and equipment                (41)              (2)

Acquisition of subsidiary                                 (50)                -

                                                        ------           ------

Net cash inflow from investing activities                  148              302

                                                        ------           ------

Cash flows from financing activities

Proceeds from issues of shares                             709               64

Net proceeds from issue of financial                        10            1,223
liabilities at amortised cost - loans

Net proceeds from issue of financial                     1,742            2,788
liabilities at amortised cost - bonds

Principal elements of lease payments                      (97)                -

                                                        ------           ------

Net cash inflow from financing activities                2,364            4,075

                                                        ------           ------

Taxation                                                  (96)             (90)

Increase/(decrease) in cash and equivalents                429              529

Cash and cash equivalents at beginning of                  826              297
period

                                                        ------           ------

Cash and cash equivalents at end of period               1,255              826

                                                        ------           ------



Notes to the Consolidated Statement of Cash Flows - For the period ended 31 December 2019

1.    Reconciliation of loss before income tax to cash outflow from operations


                                                  Period ended Period ended

                                                   31 December 31 December
                                                          2019         2018

                                                         £’000        £’000

Operating loss                                           (150)        (297)

Increase in trade and other receivables                (1,514)      (3,591)

Decrease / (Increase) in trade and other payables        (143)           58

Other adjustments:

Depreciation Charge                                        113            5

Share based payments expense                               105           88

Fair value gains and losses                                156          292

                                                        ------       ------

Net cash outflow from operations                         1,433      (3,445)

                                                        ------       ------



2.    Cash and Cash Equivalents


                          Period ended
                                       Period ended
                          31 December
                                  2019 31 December
                                               2018

                                 £’000        £’000

Cash and cash equivalents        1,255          826

                               -------     --------



SELECTED NOTES TO THE ACCOUNTS FOR THE YEAR ENDED 31 DECEMBER 2019

1.  The financial information set out here does not constitute statutory accounts for the purpose of Section 434 of the Companies Act 2006. The financial information has been extracted from the statutory accounts of First Sentinel Plc and is presented using the same accounting policies, which have not yet been filed with the Registrar of companies, but on which the auditors gave an unqualified report on 30 July 2019. The Accounts have been prepared under International Accounting Standards.

The announcement of the results for the period ended 31 December 2019 was approved by the board of directors on 30 July 2019.

Going concern

The financial statements have been prepared on the assumption that the company is a going concern. When assessing the foreseeable future, the directors have looked at the budget for the next 18 months from the date of this report, the cash at bank available as at the date of approval of this report and are satisfied that the group should be able to cover its operational costs, quoted maintenance costs and other administrative expenses.

The Directors note that the World Health Organisation declared a pandemic relating to COVID-19 on 11 March 2020, and social distancing measures were introduced in the UK during March 2020. The Directors have assessed the impact of incorporating additional COVID-19 risk factors in the Going Concern assessment over a period of 18 months after the signing of these financial statements.

Key assumptions considered by management when assessing going concern include adjusting managements best estimate of forecasted performance for factors including the length and extent of current lockdown restrictions, the resulting general business environment and the speed of recovery of trading after lockdown restrictions ease. These have been estimated for their respective impacts on the Group's revenues, fixed and variable costs and resultant expected cash flow requirements.

The Group's forecasts and projections, taking into account a reasonable estimate of a possible downturn in trading performance arising from the COVID-19 outbreak, show that the Company has sufficient financial resources for the going concern period. The Company does not believe that the COVID-19 outbreak represents a material uncertainty about the entity's ability to continue as a going concern. Accordingly, the Directors have adopted the going concern basis in preparing these consolidated financial statements.

2.    Earnings per Share

        Basic earnings per share is calculated by dividing the earnings attributable shareholders by the weighted average number of ordinary shares outstanding during the period.

        Reconciliations are set out below:


                                           Weighted average
                                  Earnings                  Loss per-share

                                     £’000 Number of shares          Pence

2019

Basic and diluted EPS

Earnings attributable to ordinary
shareholders                         (767)       18,073,929           4.24

                                    ------         --------         ------



          2018


Basic and diluted EPS

Earnings attributable to ordinary shareholders
                                                (700) 14,876,326   4.71

                                               ------   -------- ------



        Basic and diluted earnings per share are different, since where a loss is incurred the effect of outstanding share options and warrants is considered anti-dilutive and is ignored for the purpose of the loss per share calculation. As at 31 December 2019 there were 10,254,237 (2018: 12,205,327) outstanding share warrants, which are potentially dilutive.

3.    Company’s result for the period

        The Company has elected to take the exemption under section 408 of the Companies Act 2006 not to present the parent Company income statement account.

        The loss for the parent Company for the period was £972,000 (2018: £953,000).

4.    Post Balance Sheet Events

        After the year the Company raised ordinary share capital of approximately:

1)    24/01/2020: £220,000

2)    05/03/2020: £183,000

3)    19/03/2020: £389,000

4)    16/04/2020: £152,000

5)    29/05/2020: £117,000

        On 25 February 2020 the company raised £233,000 from the transfer of bonds held in treasury.

        After the year end the Company has raised £396,000 from the initial tranches of Green Finance Preference Shares issued.

        After the year end the Company has made the following investments:

1)    Vulcan Industries Plc: £234,000 invested in equity and a loan facility provided of upto £500,000 at 12% interest per annum.  They are a UK based company that consolidates traditional but historically profitable engineering, manufacturing and industrial SMEs for value and enhances this value through group scale synergies.

2)    Stabilitech Biopharma Limited: £270,000 invested in equity. They are a UK based biotechnology company developing next generation vaccines and biopharmaceuticals.

3)    Ridercam Systems Limited: loan facilities provided up to £660,000 at 12% interest per annum, with £315,000 advanced to them after the year end. They provide end-to-end video technology for the recording and distribution of experiences with a robust camera and seamless payment and distribution system.

4)    Direct Energy Holdings Pty Ltd: loan facility provided of up to AUD 5,000,000 at 12% interest per annum. They are a global energy producer for homes and businesses.

5)    Malaika Holdings Limited: £130,000 invested in equity. They are a private, sector agnostic investment company.

6)    Vox Markets Limited: loan facilities provided up to £300,000 at 8% interest per annum, with £240,000 advanced to them after the year end.