Oberon Investments - Final Results
RNS Number : 8180G
Oberon Investments Group PLC
29 July 2021
 

Oberon Investments Group plc

("Oberon" or the "Company")

 

Final Results for the year ended 31 March 2021

 

A transformational year, with continued strong growth post period end

 

Oberon, the boutique wealth management and corporate broking group, is pleased to announce its final results for the year ended 31 March 2021.

 

Highlights

·    237% revenue growth to £3.8m for the year (2020:  £1.1m on a 12-month comparable basis)

·    Over 340 % increase in Assets under Administration ("AUA") to over £550m (2020: £125m)

·    Strong launch of Oberon Capital, driven by new retained clients and fundraisings

·    Successful listing on the AQSE Growth Market

·    Acquisitions of Hanson Investment Management and Smythe House (completed post financial period end)

·    Strengthening of key teams across Fund Management, Compliance and Operations

·    Strong cash position £1.9m (2020: £0.8m) and balance sheet at year end

 

Current Trading and Outlook

·    Very strong start to 2021, with record Q1 revenues and maiden EBITDA profit in financial year 2021/22

·    AUA growth continues, with over £600m at the end of June 2021

·    Continued significant investment in technology and teams

·    Continued growth in Oberon Capital:

Over £30m raised for corporate clients since launch in June 2020

First IPO was a great success: £3m raised in oversubscribed pre-IPO round; £9.5m raised in oversubscribed IPO; shares began trading at a strong premium

Strong pipeline of business for the rest of 2021, with further IPOs and fundraisings expected

·    New wealth management system, launching in Q2 financial year 2021/22, will provide further improved services for clients, making the wealth management division ever more competitive

·    Ongoing talks with a number of new fund management teams which, if successful, would bring significant further AUA to Oberon

 

Simon McGivern, CEO of Oberon Investments Group, commented: "The results for last year, and in particular the start we have made to the current financial year, continue to exceed our own high expectations. The Oberon platform, with its complementary revenue streams and teams of talented professionals, keeps delivering outstanding returns for our clients.

 

"Future acquisition opportunities, some potentially transformational, continue to be analysed and negotiated. However, given the base we have now built, we will only consider future deals that complement Oberon's ambitions and integrate into what we are building.

 

"Year one of Oberon's journey has now been successfully completed; the future destination looks very bright indeed."

 

This announcement contains information which, prior to its disclosure, was inside information as stipulated under Regulation 11 of the Market Abuse (Amendment) (EU Exit) Regulations 2019/310 (as amended).

 

The directors of Oberon accept responsibility for this announcement.

 

For further information, please contact:

 

Oberon Investments Group plc

 

Simon McGivern / John Beaumont

 

via Walbrook PR

AQSE Corporate Adviser and Broker

 

Novum Securities Limited

 

Richard Potts / Daphne Zhang / Lucy Bowden

020 7399 9400

 

 

Walbrook PR Ltd

Tom Cooper / Nick Rome / Nicholas Johnson

Tel: 020 7933 8780 or Oberon@walbrookpr.com

 

Notes to Editors

Oberon Investments Ltd was established in April 2017. In November 2017, it made its first acquisition, a small stockbroking firm with AUA of c. £100m. This initial acquisition gave Oberon a suite of FCA permissions and a platform for future growth.

 

Oberon group's AUA have grown from c. £100 million in 2018 to in excess of £600 million in May 2021. This has been achieved organically by adding new clients and new fund managers, attracted by the emerging brand and by a number of small, selective and accretive acquisitions.

 

In May 2020, Oberon set up its corporate broking division, Oberon Capital, and announced its first client in July 2020. Oberon Capital takes advantage of the skill sets employed in its business in giving advice and providing access to capital. The business provides advice and raises capital for companies from seed and early-stage funding through to IPO and beyond.

 

Oberon will operate in the UK wealth and fund management sector and in the corporate broking and financial advisory sectors. The UK fund management industry is estimated to have c.£8.9 trillion in assets under management ('AUM') in 2020-21. The industry includes assets of independently managed funds, as well as those owned by banks, insurance companies and pension funds. Conservative estimates of AUM for the UK financial advisory and wealth management sectors stand at approximately £272 billion and £942 billion respectively. The corporate broking and fundraising sector is very fragmented, ranging from the large integrated investment banks to niche corporate advisory firms.

 

www.oberoninvestments.com

 

 

CHAIRMAN'S STATEMENT

                                                                         

FOR THE PERIOD ENDED 31 MARCH 2021

 

Introduction

Last year was a transformational year for the Company and, in February 2021, saw the Company acquire Oberon Securities Limited by way of a reverse takeover (RTO), raise £1.4m in an EIS/VCT funding round (pre-RTO) and appoint a new Board to the Company; comprising Simon McGivern, founder and CEO of Oberon Securities Limited (previously Oberon Investments Limited) and John Beaumont as CEO and FD of the Company, respectively and with Hon. Robert Hanson and Hon. Alex Hambro joining as non-executive directors.

 

On 26 February 2021 the Company changed its name from Baskerville Capital plc to Oberon Investments Group plc to reflect the transformation of the business from a cash shell to a boutique financial institution providing a personalised wealth management service for retail and professional clients, as well as a corporate broking arm for small and mid-cap companies.

 

Information about Oberon

Oberon Securities Limited was set up in April 2017 with the aim of acquiring a small stockbroking business, which it did in November 2017 when it acquired Oberon Investments Limited (previously called M.D. Barnard & Co. Limited). With Funds Under Management and Administration ("FUMA") of around £100m at that time and a suite of FCA permissions, this was the ideal platform for the business to grow from. From that time Oberon has invested significant resources to build a strong team, with improved systems to make Oberon a business capable of significant growth.

 

As evidence of this Oberon Group's FUMA has grown from £100m in November 2017 to over £600m at present. This has been achieved organically by adding new clients and new fund managers, attracted by the emerging brand. Growth in AUA has also been achieved by the acquisition of the UK wealth management business of Hanson Asset Management in June 2020. Since the year end the Group has also acquired 100% of Smythe House Limited. Established in 2009, Smythe House provides bespoke relationship-driven services and financial planning to high net-worth clients in the wealth management, capital markets and real estate sectors.

 

In May 2020, Oberon set up its corporate broking division, Oberon Capital, and announced its first client in July 2020. Oberon Capital takes advantage of the skill sets employed in its business in giving advice and providing access to capital. As the CEO explains in his review, this business has had an extremely successful start to its operations over the last year.

 

Market Overview

The Group operates in the UK wealth and fund management sector and in the corporate broking and financial advisory sectors. The UK fund management industry is estimated to have £8.9 trillion in FUMA in 2020-21. The industry includes assets of independently managed funds, as well as those owned by banks, insurance companies and pension funds. Conservative estimates of FUMA for the UK financial advisory and wealth management sectors stand at £272 billion and £942 billion respectively. The corporate broking and fundraising sector is very fragmented, ranging from large integrated investment banks to niche corporate advisory firms. It is in this space that your Board sees huge opportunities for an entrepreneurial based fund, wealth and advisory business giving clients a bespoke service tailored to their needs.

 

Opportunities

The recent polarisation of ever-larger groups has forced clients into pooled assets and away from stock and asset selection and the ability to take managed, and defined risk and reward positions. Teams of capable fund managers, at other firms, are attracted by Oberon's flexible approach and results-based outcomes for clients. This bespoke investment offering to numerous affluent clients is a key feature the directors believe is very scalable and differentiates the Group from many of its peers.

 

Reverse Takeover

The shareholders in Oberon Securities Limited, following the acquisition of their shares by Baskerville Capital plc, owned 79.4% of the enlarged share capital of Baskerville Capital plc (now renamed Oberon Investments Group plc) and therefore the transaction has been treated as a reverse takeover (RTO). Furthermore, because Baskerville Capital plc did not trade prior to the acquisition it could not be considered a 'business' and therefore the transaction was not a business combination. Consequently, the transaction has been accounted for as an acquisition by Oberon Securities Limited of Baskerville Capital plc and the accounting rules regarding 'reverse takeover accounting' applied. This is explained more fully in note 2.1.

 

A financial summary for the Group, after applying this accounting methodology, is shown in the table below.

 

Consolidated Financial Summary

 

 

Year ended 31 March'21 £'000

17m ended 31 March'20 £'000

 

 

 

Turnover

3.838

1,446

Other Income

23

-

Administrative Expenses

(4,782)

(3,208)

Gain on Value of Investments

75

-

Operating loss before acquisition related expenses

(846)

(1,762)

 

The results shown above for the year to 31 March 2021 reflect the consolidated results in the year for Oberon Securities Limited combined with, from  9 February 2021 to 31 March 2021, the results of  Oberon Investments Group plc (previously Baskerville Capital plc) - which was the remaining period in the financial year  following the completion of the RTO. The financial year end of Oberon Investments Group plc was changed from June to March in order to bring it in line with the financial year end of the rest of the Oberon group. The figures shown for the comparative period reflect the consolidated results of Oberon Securities Limited (as previously published) for the 17 month period to 31 March 2020.

 

The results reflect the significant improvement in the financial performance of the Group on both the fund management and the newly established corporate broking division. As the CEO explains in his review, the directors anticipate further improvement in the current year.

 

Outlook and Prospects

We are very excited about Oberon's future.

 

We now have the people in place who can execute our strategy and who together bring extensive experience in both fund management and corporate broking - and also very ably backed by a strong compliance, finance and back-office functions, with improved IT and MI systems.

 

In order to exploit the opportunities available to the Group, the directors intend to look closely at good quality fund management teams as and when they arise together with raising the marketing profile of the existing business over the coming year.

 

We believe that this strategy will result in the business being well placed to meet our growth expectations for the current financial year.

 

Finally, I would like to take the opportunity to thank our shareholders for their continued support.

 

 

Hon Robert Hanson

Chairman

 

28 July 2021

 

 

CHIEF EXECUTIVE OFFICER'S REPORT

                                                                         

FOR THE PERIOD ENDED 31 MARCH 2021

 

Chief Executive's Report

I am pleased to make this, my first, report as Chief Executive of Oberon Investments Group plc. I would like to start by thanking all my other directors and members of staff of Oberon for all of their hard work and achievements both before and since the RTO. Without them, and the shareholders of Oberon who have supported us throughout this process (and continue to do so) the business would not be in the position it is today.

 

A Transformational year

The period under review in this annual report was transformational for Oberon. We acquired about £100m of the fund management assets previously managed by Hanson Asset Management, in June 2020 and we also established a second strong arm to the business, namely our new corporate broking division. Both have been very beneficial for the improvement in the financial performance and 'visibility' of the overall group. Finally, the RTO in February 2021 has given the group a listing which, although not capitalised yet, is expected to enhance our ability to attract new fund management teams to the business. It has also significantly enhanced the group's profile.

 

Fair review of the business

The RTO transformed the structure of the group following the takeover of Oberon Securities Limited ("OSL") by Oberon Investments Group plc ("OIG") on the 9 February 2021. From an accounting perspective this was treated as a reverse takeover of OIG by OSL. However, the RTO did not change anything from an operational perspective, and indeed the directors are happy to report that the performance of the business remained unaffected by the changes in the group structure.

 

Within the group, the main operating company, Oberon Investments Limited ("OIL"), has continued to restructure many elements of the business which was acquired in 2017. This includes areas to support future growth, including infrastructure, new IT systems, new personnel and staff training. This consistent investment approach has helped generate revenue growth for the group increasing on a comparable basis by over 200% during the 12 month period to 31 March 2021 to £3,861k (compared to 12 months to 31 March 2020: £1,145k).

 

On a reported basis, as per the Consolidated Statement of Comprehensive Income, revenue grew by 167% from £1,446k (which was a 17 month period) to £3,861k. This increase in revenues has been generated both through the development of our new corporate finance division (Oberon Capital) as well as strong growth in our fund management business which has seen AUA grow from circa £126m at 31 March 2020 to over £550m at the 31 March 2021. Although a lot of this work has been completed, there are still further opportunities to invest to grow the business both organically and through acquisition.

 

Because of the increase in costs associated with the investments mentioned above, the business made an operating loss before acquisition related expenses of £846,057 in the year to 31 March 2021 compared to a loss of £1,762,492 in the 17 month period to 31 March 2020.  

 

The COVID-19 pandemic unsurprisingly had some negative implications for the business, with the decline in the markets in the first half of last year leading to a decrease in some of its fee revenue. However, our business continuity plans worked well and the natural growth in the company, together with measures taken by the management team, mitigated the impact from the pandemic. During the year we furloughed 3 members of staff, out of our total headcount of 33 employees at the end of the year (compared with 26 at 31 March 2020). Although we are mindful that there could be further market volatility associated with further spikes in the spread of the disease, our experience so far suggests that this should be manageable. The company is in a strong position for growth in 2021/22.

 

Growth Strategy

The Board is firmly committed to grow the business by adding the right businesses and teams that will thrive under the Group's ownership and entrepreneurial culture. Additionally, it is the intention of the directors that the Group will launch new funds and wealth management solutions to enhance organic growth rates and by adding services where we can take advantage of experienced practitioners, as evidence by the setting-up of Oberon Capital. We are also talking to a number of fund management and wealth management teams with a view to them joining the business over the coming year. In addition the recent acquisition of Smythe House, a well-regarded independent financial advisor, will lead to further opportunities to grow its existing business and to be able to offer Smythe House's advisory services to some of Oberon's existing clients.

 

Development and performance

We anticipate the company will continue to grow in the coming year, both because of its encouraging first quarter's performance, but also because we have a good pipeline of potential deals in the Oberon Capital division for the rest of this year. In addition the directors believe that the company is in a strong position to attract new clients and teams to the fund management business.

 

The Group has made an encouraging start to the year and I look forward to updating you on further developments as they arise.

 

Simon McGivern

Chief Executive

28 July 2021

 

 

OBERON INVESTMENTS GROUP PLC (formerly Baskerville Capital plc)

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

FOR THE PERIOD ENDED 31 MARCH 2021

 

 

 

Period to

31 March

2021

17m to

31 March

2020

 

Notes

£

£

 

 

 

 

Turnover

3

3,838,032

1,445,613

 

 

 

 

Other income

4

22,623

-

 

 

 

 

Administrative expenses

 

(4,782,166)

(3,208,105)

 

 

 

 

Gain on value of investments

5

75,454

-

 

 

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

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

Operating loss before acquisition related expenses

5

(846,057)

(1,762,492)

 

 

 

 

Transaction costs

 

(9,000)

-

 

 

 

 

Share based payment on reverse acquisition

14

(35,618)

-

 

 

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

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

Operating loss

 

(890,675)

(1,762,492)

 

 

 

 

Interest income & similar income

8

11,896

20,997

 

 

 

 

Interest payable

9

(15,399)

(32,218)

 

 

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

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

Loss before tax

 

 

(894,178)

(1,773,713)

Tax on loss on ordinary activities

10

-

-

 

Loss for the financial period

 

 

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

(894,178)

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

(1,773,713)

 

 

============

============

 

Total comprehensive loss for the financial year

 

 

 

(894,178)

 

(1,773,713)

 

 

============

============

 

 

 

 

 

 

 

 

Loss per share - basic and diluted (pence)

 

11

(0.23)

(0.72)

 

 

 

 

Turnover and operating loss for the period were derived from continuing operations.

The Group has no recognised gains or losses other than the loss for the current year.

There was no other comprehensive income in the period (2020: £nil).

The notes below form part of these financial statements.

 

OBERON INVESTMENTS GROUP PLC (formerly Baskerville Capital plc)

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

AS AT 31 MARCH 2021

 

 

 

31 March

2021

31 March

2020

 

Notes

£

£

FIXED ASSETS

 

 

 

Intangible fixed assets

12

1,575,039

847,505

Tangible fixed assets

13

62,669

54,249

 

 

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

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

 

 

1,637,708

901,754

CURRENT ASSETS

 

 

 

Investments

16

75,454

-

Debtors

17

3,625,491

1,699,254

Cash at bank

18

1,856,568

839,114

 

 

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

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

 

 

5,557,513

2,538,368

 

 

 

 

CREDITORS: amounts falling due within one year

19

(3,749,839)

(1,961,774)

 

 

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

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

NET CURRENT ASSETS

 

1,807,674

576,594

 

 

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

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

TOTAL ASSETS LESS CURRENT LIABILITIES

 

3,445,382

1,478,348

 

 

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

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

CREDITORS: amounts falling due after one year

 

NET ASSETS

20

(43,688)

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

3,401,694

(2,694)

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

1,475,654

 

 

============

============

 

 

 

 

REPRESENTED BY:

 

 

 

 

 

 

 

CAPITAL AND RESERVES

 

 

 

Share capital

23

2,038,949

455

Share premium

23

2,724,103

3,749,349

Share option reserve

25

-

25,789

Warrant reserve

25

53,252

-

Merger relief reserve

25

11,337,183

-

Reverse acquisition reserve

25

(9,557,676)

-

Retained earnings

25

(3,194,117)

(2,299,939)

 

 

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

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

TOTAL

 

3,401,694

1,475,654

 

 

============

============

 

 

 

 

 

The notes below form part of these financial statements.

 

 

OBERON INVESTMENTS GROUP PLC (formerly Baskerville Capital plc)

COMPANY STATEMENT OF FINANCIAL POSITION

AS AT 31 MARCH 2021

 

 

 

31 March

2021

30 June

2020

 

Notes

£

£

FIXED ASSETS

 

 

 

Investments

 

14

 

14,411,988

 

1,146,030

 

 

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

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

 

 

 

14,411,988

 

1,146,030

CURRENT ASSETS

 

 

 

Debtors

 

17

 

3,202

 

12,882

Cash at bank

 

18

 

1,275,936

 

160,474

 

 

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

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

 

 

1,279,138

173,356

 

 

 

 

CREDITORS: amounts falling due within one year

 

19

 

(123,592)

 

(65,981)

 

 

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

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

NET CURRENT ASSETS

 

 

1,155,546

 

107,375

 

 

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

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

NET ASSETS

 

 

15,567,534

 

1,253,405

 

 

============

============

 

 

 

 

CAPITAL AND RESERVES

 

 

 

Share capital

 

23

 

2,038,949

 

239,000

Share premium

 

23

 

2,724,103

 

1,467,894

Merger relief reserve

 

25

 

11,337,183

 

-

Warrant reserve

 

25

 

53,252

 

53,252

Retained earnings

 

25

 

(585,953)

 

(506,741)

 

 

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

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

TOTAL

 

 

15,567,534

 

1,253,405

 

 

============

============

 

 

 

 

 

The parent company, Oberon Investments Group plc, generated a loss of £79,212 in the 9 month period to 31 March 2021 (year to 30 June 2020: £237,555).

 

The notes below form part of these financial statements. The financial statements were approved and authorised for issue by the Directors on 28 July 2021.

 

 

OBERON INVESTMENTS GROUP PLC (formerly Baskerville Capital plc)

CONSOLIDATED STATEMENT OF CASH FLOWS

AS AT 31 MARCH 2021

 

 

Note

Year to

31 March

2021

£

17m to

31 March

2020

£

Cash flows from operating activities

 

 

 

Cash used in operations

28

(501,259)

(1,734,087)

 

 

 

 

Net cash outflow from operating activities

 

(501,259)

(1,734,087)

 

 

 

 

Cash flows from investing activities

 

 

 

Purchase of tangible fixed assets

13

(44,491)

(38,359)

Acquisition of subsidiary

 

(309,173)

 

Cash in subsidiary acquired

 

1,438,984

-

Purchase of intangible assets

12

(650,000)

(112,000)

Increase in investments

12

(254,763)

(195,778)

Issue of loans

 

(50,000)

(167,000)

Proceeds on disposal of tangible fixed assets

 

-

28

Interest paid

 

(15,399)

(32,218)

Interest received

 

11,896

20,997

 

 

 

 

Net cash generated from/(used in) investing activities

 

127,054

(524,330)

 

 

 

 

Net cash from financing activities

 

 

 

Issue of equity by subsidiary

 

1,566,147

2,334,562

Repayment of borrowings

 

(220,783)

-

Proceeds of new loan

 

50,000

169,649

(Sources)/repayment of capital from finance leases

 

(3,705)

6,400

 

 

 

 

Net cash generated from financing activities

 

1,391,659

2,510,611

 

 

 

 

Net increase in cash and cash equivalents

 

1,017,454

252,193

Cash and cash equivalents at the beginning of year

 

839,114

586,921

 

 

 

 

Cash and cash equivalents at end of period

 

1,856,568

839,114

 

 

============

==========

 

 

 

 

 

The notes below form part of these financial statements.

 

 

 

OBERON INVESTMENTS GROUP PLC (formerly Baskerville Capital plc)

CONSOLIDATED STATEMENT OF ANALYSIS OF NET FUNDS

AS AT 31 MARCH 2021

 

 

GROUP

 

 

 

 

As at

Change

As at

 

31 Mar'20

in period

31 Mar'21

 

£

£

£

Loans

(220,783)

170,783

50,000

Finance lease liabilities

(6,400)

3,705

2,695

Cash at bank and in hand

839,114

1,017,454

1,856,568

 

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

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

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

Net funds

611,931

1,191,942

1,803,873

 

==========

==========

==========

         

 

 

 

 

 

 

As at

Change

As at

 

31 Oct'18

in period

31 Mar'20

 

£

£

£

Loans

(51,134)

(169,649)

(220,783)

Finance lease liabilities

-

(6,400)

(6,400)

Cash at bank and in hand

586,921

252,193

839,114

 

       -------------------

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

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

Net funds

535,787

76,144

611,931

 

==========

==========

==========

         

 

 

The notes below form part of these financial statements.

OBERON INVESTMENTS GROUP PLC (formerly Baskerville Capital plc)

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

AS AT 31 MARCH 2021 AND 31 MARCH 2020

 

 

Share

Share

Merger relief

Reverse acquisition

Warrant

Option

Retained

Total

 

capital

premium

reserve

reserve

reserve

reserve

losses

equity

 

£

£

£

£

£

£

£

£

 

 

 

 

 

 

 

 

 

Balance as at 31 October 2018

327

1,414,916

-

-

-

-

(526,226)

889,017

Issue of shares

128

2,334,433

-

-

-

-

-

2,334,561

Share option charge

-

-

-

-

-

25,789

-

25,789

Loss in the period

-

-

-

-

-

-

(1,773,713)

(1,773,713)

Balance as at 31 March 2020

455

3,749,349

-

-

-

25,789

(2,299,939)

1,475,654

 

 

 

 

 

 

 

 

 

Parent company reflected on reverse acquisition

239,000

1,467,894

-

-

53,252

-

-

1,760,146

Issue of shares by OSL to OIG prior to acquisition

11

295,379

-

(295,390)

-

-

-

-

Issue of shares by OSL prior to RTO

59

1,270,698

-

-

-

-

-

1,270,757

Reverse acquisition adjustment

(525)

(5,315,426)

-

3,694,495

-

(25,789)

-

(1,647,245)

Issue of shares (by OIG)

180,351

1,262,459

-

-

-

-

-

1,442,810

Issue of consideration shares

1,619,598

-

11,337,183

(12,956,781)

-

-

-

-

Costs of raising funds

-

(6,250)

-

-

-

-

-

(6,250)

Loss for the year

-

-

-

-

-

-

(894,178)

(894,178)

Balance as at 31 March 2021

2,038,949

2,724,103

11,337,183

(9,557,676)

53,252

-

(3,194,117)

3,401,694

 

 

 

OBERON INVESTMENTS GROUP PLC (formerly Baskerville Capital plc)

COMPANY STATEMENT OF CHANGES IN EQUITY

AS AT 31 MARCH 2021 AND 30 JUNE 2020

 

 

Share

Share

Merger relief

Warrant

Retained

Total

 

capital

premium

reserve

reserve

losses

equity

 

£

£

£

£

£

£

 

 

 

 

 

 

 

Balance as at 30 June 2019

239,000

1,467,894

-

53,252

(269,186)

1,490,960

Loss for the year

-

-

-

-

(237,555)

(237,555)

Balance as at 30 June 2020

239,000

1,467,894

-

53,252

(506,741)

1,253,405

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Issue of shares

180,351

1,262,459

-

-

-

1,442,810

Issue of consideration shares

1,619,598

-

11,337,183

-

-

12,956,781

Costs of raising funds 

-

(6,250)

-

-

-

(6,250)

Share based payments

-

-

-

-

-

-

Loss for the 9m period to 31 March 2021

-

-

-

-

(79,213)

(79,213)

Balance as at 31 March 2021

2,038,949

2,724,103

11,337,183

53,252

(585,954)

15,567,533

 

 

OBERON INVESTMENTS GROUP PLC (formerly Baskerville Capital plc)

NOTES TO THE FINANCUAL STATEMENTS

FOR THE PERIOD ENDING 31 MARCH 2021

 

1.    GENERAL INFORMATION

The company is a public listed company incorporated and domiciled in England and Wales and listed on the AQSE. The address of its registered office, and its principal trading address, is Nightingale House, 65 Curzon Street, London, W1J 8PE. Its principal activity is arranging deals in investments and financial planning.

 

2.      ACCOUNTING POLICIES

2.1    Basis of preparation

 

The financial statements have been prepared in accordance with applicable United Kingdom accounting standards, including Financial Reporting Standard 102 - 'The Financial Reporting Standard applicable in the United Kingdom and Republic of Ireland' ('FRS 102'), Companies Act 2006. The financial statements of the Parent company (previously Baskerville Capital plc) were prepared under IFRS in accordance with the requirements of the London Stock Exchange. Oberon Securities Limited was deemed to be the accounting acquirer in the RTO of Baskerville Capital plc, on 9 February 2021 and prepares its financial statements under UK GAAP. As the Group is now listed on the Aquis Growth Market, the Parent company transitioned to FRS 102 on 9 February 2021, for the period ended 31 March 2021 in line with the Group, and the consolidated financial statements of the Group are prepared using UK GAAP. The only significant difference between the two different sets of accounting standards relates to the amortisation of intangible assets. These financial statements reflect an amortisation cost of £177,229 through the Statement of Comprehensive Income, which otherwise would not be charged under IFRS.

 

The financial statements have been prepared using reverse takeover accounting rules because the acquisition by Baskerville Capital plc of Oberon Securities Limited was not deemed to be a business combination, and so consequently Section 19 of FRS102 does not apply. Instead because of the share exchange between the two entities Section 26 of FRS 102 (Share based payments) has been used to account for the extra consideration deemed to have been paid by Oberon Securities Limited over and above the fair value of the assets acquired in Baskerville Capital plc.

 

The Company changed its accounting reference date from 30 June to 31 March on 15 February 2021, to bring it in-line with its new legal subsidiary undertakings. Ordinarily this would mean that these financial statements would be for a 9 month period ended 31 March 2021. However, because the RTO has to be accounted for using reverse takeover accounting rules, these accounts are deemed to be a continuation of the legal subsidiary's financial statements and therefore the Consolidated Statement of Comprehensive Income is for the year ended 31 March 2021. The comparative period was a 17 month period to 31 March 2020. The extended period arose as Oberon Securities Limited brought its accounting reference date in line with its subsidiary undertaking in the year of acquisition.

 

The results of the Company are consolidated from the date of the RTO and therefore just under 2 months of the Company's trade is included within the Group Statement of Comprehensive Income.

 

The financial statements have been prepared on the historical cost basis except for the modification to a fair value basis for certain financial instruments as specified in the accounting policies below.

 

The financial statements are prepared in sterling, which is the functional currency of the Parent company and the Group. Monetary amounts in these financial statements are rounded to the nearest £.

 

2.2    Going concern

 

The Group has prepared the financial statements on a going concern basis.  The Directors believe the going concern basis is appropriate because (i) the company has a strong net asset position, (ii) it had high levels of cash at the period end of £1.85m, and (iii) the Group has continued to operate profitably since the year end and has generated significant cash flow such that the group's cash balances at 22 July 2021 have increased to £2.2m. The directors have also reviewed the detailed profit and loss and cash flow budgets for all the companies in the group for the next 12 months and allied with this strong starting position, believe the 'going concern' status of the business is justified. In particular the directors believe that the business will generate positive cash flow and will be profitable in the current year. In addition, subsequent to the year end, on the 27 April 2021, Oberon Investments Group plc benefitted from the exercise 2,000,000 warrants which raised £50,000 for the company.

 

Consequently, the directors believe that the company will meet all of its obligations and liabilities as they fall due for at least the next 12 months from the date of approving these financial statements.

 

2.3    Turnover

Turnover represents amounts earned from stockbroking commissions receivable on executed transactions, account administration charges and fees receivable for the management of investment funds net of VAT.  Turnover from stockbroking is recognised upon settlement of transactions; all other turnover is recognised when the company is contractually entitled to do so.

 

2.4     Other Income

Grant income is recognised when it is received and is included in Other Income.

 

2.5    Interest income

 

Interest income is recognised in the Statement of Comprehensive Income using the effective interest method.

 

2.6    Business combinations

 

Acquisitions of subsidiaries and businesses are accounted for using the purchase method. The cost of the business combination is measured at the aggregate of the fair values (at the date of exchange) of assets given, liabilities incurred or assumed, and equity instruments issued by the group in exchange for control of the acquire plus costs directly attributable to the business combination.

Any excess of the cost of the business combination over the acquirer's interest in the net fair value of the identifiable assets and liabilities is recognised as goodwill. If the net fair value of the identifiable assets and liabilities exceeds the cost of the business combination the excess is recognised separately on the face of the consolidated statement of financial position immediately below goodwill.

 

2.7    Intangible fixed assets other than goodwill

Intangible assets acquired separately from a business are recognised at cost and are subsequently measured at cost less accumulated amortisation and accumulated impairment losses. 

Intangible assets acquired on business combinations are recognised separately from goodwill at the acquisition date where it is probable that the expected future economic benefits that are attributable to the asset will flow to the entity and the fair value of the asset can be measured reliably.

 

Amortisation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:

The useful economic life of the intangible asset is based over a period of ten years.  On 26 June 2020 the 'Contracts' acquired with the HIM assets were ascribed a fair value of £650,000.

 

2.8    Goodwill

 

Goodwill represents the excess of the cost of an acquisition over the interest in the fair value of identifiable assets, liabilities and contingent liabilities acquired. Goodwill is capitalised as an intangible asset. The goodwill is amortised over a period of 10 years on a straight line basis with the expense being recognised in the profit and loss account on an annual basis. The directors believe this is a reasonable period over which to amortise the goodwill associated with the acquisition of the Oberon group of companies - all underpinned by the continuing success of Oberon Investments Limited, given the business has been in existence since 1987 and the value of the business has increased significantly since being acquired in 2017.

 

2.9   Tangible fixed assets

Tangible fixed assets are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.

Tangible fixed assets are stated at cost less depreciation. Depreciation is provided at rates calculated to write off the cost less estimated residual value of each asset over its expected useful life, as follows:

 

Land and buildings Freehold

4% per annum

Fixtures, fittings & equipment

25% per annum

Computer equipment

16.6% per annum

 

The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is credited or charged to profit or loss. 

 

Additions are depreciated as if they were acquired at the beginning of the period at a full year's rate

 

2.10   Impairment of fixed assets

At each reporting period end date, the company reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash generating unit to which the asset belongs.

Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.

If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.

Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase

 

2.11  Fixed asset investments

 

Investments in subsidiaries are accounted for at cost less impairment in the individual financial statements. The directors have assessed the value of the investment in the subsidiary and based on the value of the business as per the recent investments into the parent company (whose only asset is the subsidiary), no impairment charge is required to be made.

Deferred consideration is usually recognised at the time of acquisition, where its value is known with reasonable certainty, and is included in the cost of the fixed asset investment. Where deferred consideration is not initially recognised at the time of acquisition, but subsequently becomes recognised, the cost of the fixed asset investment is increased at that subsequent occasion. In the period to 31 March 2021, the final deferred consideration payment of £213,680 was made relating to the acquisition of Oberon Investments Limited.

2.12 Debtors

 

Short term debtors are measured at transaction price, less any impairment. Loans receivable are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method, less any impairment.

 

2.13 Cash and cash equivalents

 

Cash is represented by cash in hand and deposits with financial institutions repayable without penalty on notice of not more than 24 hours.

 

2.14 Creditors

 

Short term creditors are measured at the transaction price. Other financial liabilities are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method. 

 

2.15 Operating leases

 

Rentals under operating leases are charged to the profit and loss account on a straight line basis over the lease term. Benefits received and receivable as an incentive to sign an operating lease are recognised on a straight line basis over the period until the date the rent is expected to be adjusted to the prevailing market rate

 

2.16 Finance leases

 

Assets obtained under finance leases are capitalised as tangible fixed assets. Assets are depreciated over the shorter of the lease term and their useful lives.

 

Finance leases are those where substantially all of the benefits and risks of ownership are assumed by the group. Obligations under such agreements are included in creditors net of the finance charge allocated to future periods. The finance elements of the rental payment is charged to the Statement of Comprehensive Income so as to produce a constant periodic rate of charge on the net obligation outstanding in each period.

 

2.17  Pension

 

The Group operates a defined contribution pension scheme. All contributions are charged to the Statement of Comprehensive Income in the period to which they relate.  The units of the plan are held separately from the Group in independently administered funds.

2.18  Taxation

 

The tax expense represents the sum of the tax currently payable and deferred tax.

Current tax

The tax currently payable is based on taxable profit for the period. Taxable profit differs from net profit as reported in the profit and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The company's liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.

Deferred tax

In accordance with FRS102, deferred tax is provided in full in respect of taxation deferred by timing differences between the treatment of certain items for taxation and accounting purposes. The deferred tax balance has not been discounted.

 

2.19 Foreign currency

 

Assets and liabilities in foreign currencies are translated into sterling at the rates of exchange ruling at the report date.  Transactions in foreign currencies are translated into sterling at the rate of exchange ruling at the date of the transaction.  Exchange differences are taken to the profit and loss account.

 

 

2.20 Financial Instruments

 

The company has elected to apply the provisions of Section 11 'Basic Financial Instruments' and Section 12 'Other Financial Instruments Issues' of FRS 102 to all of its financial instruments. 

Financial instruments are recognised in the company's balance sheet when the company becomes party to the contractual provisions of the instrument.

Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.

Basic financial assets

Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.

Other financial assets

Other financial assets, including investments in equity instruments which are not subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in profit or loss, except that investments in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment.

Impairment of financial assets

Financial assets, other than those held at fair value through profit and loss, are assessed for indicators of impairment at each reporting end date.

Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset's original effective interest rate. The impairment loss is recognised in profit or loss.

If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.

Derecognition of financial assets

Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the company transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.

Classification of financial liabilities

Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities.

Basic financial liabilities

Basic financial liabilities, including creditors, bank loans, loans from fellow group companies and preference shares that are classified as debt, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.

Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.

Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.

Derecognition of financial liabilities

Financial liabilities are derecognised when the company's contractual obligations expire or are discharged or cancelled.

2.19 Equity instruments

Equity instruments issued by the company are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.

 

 2.20   Share-based payments

Where share options are awarded to employees, the fair value of the options at the date of grant is charged to the income statement over the vesting period. Non-market vesting conditions are taken into account by adjusting the number of equity instruments expected to vest at each balance sheet date so that, ultimately, the cumulative amount recognised over the vesting period is based on the number of options that eventually vest. Market vesting conditions are factored into the fair value of the options granted.

 

Additionally, under the requirements of Section 26 of FRS 102, when an acquisition is required to be accounted for as a reverse takeover, the legal subsidiary is required to account for the difference between the fair value of the assets acquired and the fair value of the shares used as consideration for those assets, as a share-based payment. Consequently, in the RTO on 9 February 2021, the fair value of the net assets of the legal parent (Baskerville Capital plc) were £2,629,207 and the fair value of the shares transferred by the legal subsidiary (Oberon Securities Limited) to the original shareholders of the legal parent was £2,664,825. As the fair value of the shares paid as consideration was greater than the fair value of the net assets acquired, the difference of £35,618, has been charged to the Consolidated Statement of Comprehensive Income as a share-based payment.

 

2.21 Significant judgements and estimates

In applying the Company's accounting policies, the directors are required to make judgements, estimates and assumptions in determining the carrying amounts of assets and liabilities and the inputs for the share based payment calculations (as required by Section 26 of FRS102) included in its option pricing model. The option pricing model requires assumptions and estimates over inputs such as the expected volatility of the shares, the expected life of the options, and the risk-free interest rate. The directors' judgements, estimates and assumptions are based on the best and most reliable evidence available at the time when the decisions are made, and are based on historical experience and other factors that are considered to be applicable. Due to the inherent subjectivity involved in making such judgements, estimates and assumptions, the actual results and outcomes may differ.

 

The estimates and underlying assumptions are reviewed on an on-going basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised, if the revision affects only that period, or in the period of the revision and future years, if the revision affects both current and future year.

 

Intangible assets

Contracts and Goodwill

As described in note 2.7 and note 2.8, contracts and goodwill are recognised at the point of acquisition and have been stated as intangible assets on the balance sheet and are amortised to the income statement over a period of 10 years from the date of acquisition.

 

Both the value of contracts and goodwill is subject to review for impairment in accordance with FRS 102. The carrying values are written down by the amount of any impairment and the loss is recognised in the profit and loss account in the period in which this occurs. Having considered the increasing value of the business acquired, as demonstrated by the higher valuations attributed to new issues of equity over the intervening years, in the case of goodwill associated with the acquisition of MD Barnard, and the growth in revenues derived from the acquired contracts in HIM, the directors are confident that no impairment charge is required to either the contracts nor the goodwill recognised in the consolidated balance sheet.

 

3.    Turnover AND SEGMENTAL REPORTING

The directors consider that there is one main operating segment within the business, based on the way the Group is organised and the way the internal management system operates and reports are produced. All of the Group's revenues are generated from activities within the UK.

 

An analysis of the group's turnover is as follows:

Year to

31 Mar

2021

 

17m to

31 Mar

2020

 

 

£

 

£

 

Commissions

1,724,170

 

843,435

 

Investment management fees

1,220,060

 

528,178

 

Corporate finance income

893,802

 

74,000

 

 

3,838,032

 

1,445,613

 

 

 

 

 

4.    OTHER INCOME

 

 

Year to

31 Mar

2021

 

17m to

31 Mar

2020

 

 

£

 

£

 

Grant income from UK Government (CJRS)

22,623

 

-

 

 

5.    OPERATING LOSS

 

 

Year to

31 Mar

2021

 

17m to

31 Mar

2020

 

 

£

 

£

 

The operating loss is stated after charging:

 

 

 

 

 

 

 

 

 

Depreciation of tangible assets

32,918

 

48,943

 

Amortisation of intangible assets

177,229

 

120,428

 

Impairment of intangible assets

-

 

112,000

 

Revaluation gain on current asset investments

75,454

 

-

 

Loss on disposal of fixed assets

3,153

 

1,771

 

Operating lease rentals and service charge

142,402

 

122,534

 

 

 

 

 

 

Auditors' remuneration

£

 

£

 

 

 

 

 

 

Fees payable to the Group's auditor for the audit of the Group's annual financial statements

48,300

 

39,500

 

All other services

-

 

4,500

 

 

 

 

 

6.      DIRECTORS REMUNERATION

The average number of Directors during the period was 2 (2020: 2).

 

The Directors and senior managers are considered to be the key management personnel. The total remuneration paid to key management personnel is disclosed in note 23. There is 1 director of the Company for whom pension contributions are being paid and on a Group basis there are a further 2 directors for whom pension contributions are being paid.

 

7.    STAFF COSTS

 

 

Year to

31 Mar

2021

 

17m to

31 Mar

2020

 

 

 

£

 

£

 

 

 

 

 

 

 

 

Wages and salaries

2,450,386

 

1,151,110

 

 

Social security costs

253,924

 

120,230

 

 

Pension costs

44,778

 

27,542

 

 

 

 

 

 

 

 

 

2,749,088

 

1,298,882

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

No.

 

No.

 

 

 

 

 

 

 

 

The average monthly number of group employees during the period was:

26

 

18

 

 

 

 

 

 

 

 

 

 

 

 

 

 

8.    INTEREST RECEIVABLE AND SIMILAR INCOME

 

 

 

 

 

 

 

Year to

31 Mar

2021

 

17m to

31 Mar

2020

 

 

 

£

 

£

 

 

 

 

 

 

 

 

Interest income

11,896

 

20,997

 

 

 

 

 

 

 

9.    INTEREST PAYABLE AND SIMILAR EXPENSES

 

 

 

 

 

 

Year to

31 Mar

2021

 

17m to

31 Mar

2020

 

£

 

£

 

 

 

 

Interest payable

15,399

 

32,218

 

 

 

 

                       

 

10.  TAXATION

 

 

Year to

 

17m to

 

 

31 Mar

 

31 Mar

 

 

2021

 

2020

 

 

£

 

£

 

Corporation tax - Group income statement

 

 

 

 

UK corporation tax at 19% (2020: 19%)

-

 

-

 

 

 

 

 

 

 

Deferred tax

 

 

 

 

Origination and reversal of timing differences

-

 

-

 

Taxation on loss on ordinary activities

 

Nil

 

Nil

 

 

 

 

 

           

 

 

 

 

 

 

 

 

Factors affecting the group tax credit for the period

 

 

 

 

 

 

 

 

 

 

The actual tax (credit)/charge for the period can be reconciled to the expected (credit)/charge for the period based on the profit or loss and the standard rate of tax as follows:

 

 

 

 

 

Year to

 

17m to

 

 

 

31 Mar

 

31 Mar

 

 

 

2021

 

2020

 

 

 

£

 

£

 

 

Group loss on ordinary activities before tax

(894,178)

 

(1,773,713)

 

 

 

 

 

 

 

 

Expected tax credit based on the standard rate of corporation tax in the UK of 19% (2018: 19%)

(169,893)

 

(337,005)

 

 

 

 

 

 

 

 

Effects of:

 

 

 

 

 

Expenses not deductible for tax purposes

15,290

 

32,726

 

 

Depreciation on assets not qualifying for tax allowances

11,116

 

18,892

 

 

Other adjustments

(14,336)

 

(2,375)

 

 

Deferred tax not recognised

157,823

 

287,762

 

 

 

 

 

 

 

 

Total tax for the period

Nil

 

Nil

 

 

 

 

 

 

 

 

 

The group has cumulative trading losses carried forward of £2,698,433 (2020: £2,061,604), which potentially can be utilised against future profits generated by the group. However, no deferred tax asset has been recognised in respect of these losses in view of the group's history of losses and consequently recoverability is not sufficiently certain.

 

 

 

 

 

 

Factors that may affect future tax charges

 

 

 

 

 

Losses carried forward to use against future profits. In addition the Finance Act 2021 announced that the main UK Corporation Tax rate will increase from 19% to 25% on 1 April 2023.

 

 

 

                           

 

11. 

LOSS PER SHARE

The loss per share is based upon the loss of £894,178 (2020: loss of £1,773,713) and the weighted average number of ordinary shares is issue for the year of 381,859,613 (2020: 247,952,787).

 

The loss incurred by the Group means that the effect of any outstanding warrants and options would be considered anti-dilutive and is ignored for the purposes of the loss per share calculation.

 

 

 

 

 

 

 

12. 

INTANGIBLE ASSETS

Group

 

 

 

 

 

 

 

 

 

 

Goodwill

 

Contracts

 

Totals

 

 

 

 

£

 

£

 

£

 

 

Cost

 

 

 

 

 

 

 

 

At 1 April 2020

 

1,045,857

 

112,000

 

1,157,857

 

 

Additions

 

254,763

 

650,000

 

904,763

 

 

Disposals

 

-

 

-

 

-

 

 

At 31 March 2021

 

1,300,620

 

762,000

 

2,062,620

 

 

 

 

 

 

 

 

 

 

 

Amortisation

 

 

 

 

 

 

 

 

At 1 April 2020

 

198,352

 

112,000

 

310,352

 

 

Amortisation

 

123,062

 

54,167

 

177,229

 

 

Eliminated on disposals

 

-

 

-

 

-

 

 

At 31 March 2021

 

321,414

 

166,167

 

487,581

 

 

 

 

 

 

 

 

 

 

 

Net Book Value

 

 

 

 

 

 

 

 

At 31 March 2020

 

847,505

 

-

 

847,505

 

 

At 31 March 2021

 

979,206

 

595,833

 

1,575,039

 

 

 

 

 

 

 

 

 

 

                                         

 

The addition to contracts shown above relates to the acquisition of the fund management assets which now constitutes Hanson Investment Management. The increase in goodwill shown above reflects the payment of the final deferred consideration payment relating to the acquisition of Oberon Investments Limited.

 

The Company has no intangible assets.

 

 

 

13.  

TANGIBLE FIXED ASSETS

 

 

Fixtures, fittings
& equipment

 

Computer
equipment

Total

 

Group

 

£

 

£

 

£

 

 

 

 

 

 

 

 

Cost

 

 

 

 

 

 

At 1 April 2020

 

60,254

 

74,599

 

134,853

 

Additions

 

7,701

 

36,790

 

44,491

 

Disposals

 

(12,747)

 

(100)

 

(12,847)

At 31 March 2021

 

55,208

 

111,289

 

166,497

 

 

 

 

 

 

 

Depreciation

 

 

 

 

 

 

At 1 April 2020

 

38,154

 

42,450

 

80,604

Charge for period

 

15,184

 

17,734

 

32,918

Eliminated on disposals

 

(9,647)

 

(47)

 

(9,694)

At 31 March 2021

 

43,691

 

60,137

 

103,828

 

 

 

 

 

 

 

Net Book Value

 

 

 

 

 

 

 

At 1 April 2020

 

22,100

 

32,149

 

54,249

At 31 March 2021

 

11,517

 

51,152

 

62,669

                 

 

 

 

 

 

The Company has no fixed assets.

 

 

 

 

 

 

 

 

14.     

FIXED ASSET INVESTMENTS

 

 

 

  

 

 

 

 

 

£

 

PARENT COMPANY

 

 

 

 

 

At 1 July 2020

 

 

 

1,146,030

 

Additions

 

 

 

13,265,598

 

At 31 March 2021

 

 

 

14,411,988

 

The additions relate to the acquisition of the remaining 91.13% of the shares (or 47,721 shares) in Oberon Securities Limited which the Company did not previously own. This was completed, as part of the RTO transaction, on 9 February 2021.

 

SUBSIDIARY UNDERTAKINGS

 

On 9 February 2021, the Company acquired the remaining 91.13% of the issued share capital of Oberon Securities Limited ('legal subsidiary') which it did not already own, for a consideration of £12,956,781 by the issue of 323,919,525 shares. As the Company acquired more than 90% of the shares in Oberon Securities Limited, Section 612 of the Companies Act 2006 applies, and accordingly the Company set up a Merger Relief Reserve on the issue of these shares. As the legal subsidiary is reversed into the Company ('legal parent'), which originally was a publicly listed cash shell company, this transaction cannot be considered a business combination, as the legal parent does not meet the definition of a business. As the transaction is capital in nature and completed through the issue of shares it falls within the scope of Section 26 of FRS 102 "Share Based Payments". Any difference in the fair value of shares deemed to be issued by the legal subsidiary and the fair value of the net assets in the legal parent will form part of the deemed cost of acquisition.

 

The Consolidated Statement of Comprehensive Income includes a loss before tax of £18,455 following the RTO of Oberon Investments Group plc for the period from 9 February 2021 to the end of the financial year.

 

The following were subsidiary undertakings of Oberon Investments Group plc:

Company Name

Registered Office

Interest

Country of Incorporation

Nature of Business

 

 

 

 

 

Oberon Securities Ltd
(OSL)

65 Curzon Street, London

100%
(direct)

UK

Corporate Advisory and parent of OIL (below)

 

Oberon Investments Ltd
(OIL)

First floor, 12 Hornsby Square

Southfields Business Park

Basildon, Essex

100%
(indirect)

UK

Broker &
wealth
manager

 

GMC EBT Ltd
 

65 Curzon Street, London

100%
(indirect)

UK

Dormant
 

 

Barnard Nominees Ltd
 

First floor, 12 Hornsby Square

Southfields Business Park

Basildon, Essex

100%
(indirect)

UK

Dormant
 

 

 

The share capital and reserves at 31 March 2021 and the profit and loss for the year ended on that date for the individual subsidiary undertakings were as follows:

 

 

Company Name

Aggregate of share capital and reserves
£

 

 

Profit/(Loss)
£

 

 

Oberon Securities Ltd

4,090,815

 

(606,157)

 

 

Oberon Investments Ltd

3,350,738

 

1,389,114

 

 

GMC EBT Ltd

100

 

-

 

 

Barnard Nominees Ltd

2

 

-

 

 

 

The consolidated share capital and reserves of Oberon Securities Limited at 31 March 2021 was £2,246,148 and the consolidated loss for the year ended on that date was £840,105.

 

15. BUSINESS COMBINATIONS

 

Effective on 26 June 2020 the Group acquired all of the assets under management previously managed by Hanson Asset Management for a total consideration of £650,000. These assets are now managed under the trading name Hanson Investment Management (HIM). The business combination has been accounted for using acquisition based accounting.

 

The following amounts of assets, liabilities and contingent liabilities were recognised at the acquisition date:

 

 

 

£

Intangible assets

 

-

Fixed assets

 

-

Creditors

 

-

Book value of acquisition

 

-

 

 

 

Fair value adjustment to contracts

 

650,000

Fair value of net assets acquired

 

650,000

 

 

 

Goodwill on acquisition

 

-

Consideration paid

 

635,000

Contingent consideration

 

15,000

 

 

650,000

       

The contingent consideration of £15,000 relates to a payment the Group will make to the vendor once it has received various documents relating to the acquisition.

The fair value adjustment relates to the directors' conservative estimate of the value of the contracts with the underlying clients whose assets are being managed by HIM, at the time of the acquisition.

These assets generated revenues of about £590k from the date of acquisition to 31 March 2021.

There were no business combinations in the previous year.

 

 

 

 

 

 

 

16. CURRENT ASSET INVESTMENTS

 

 

 

 

 

Group

 

 

 

 

 

 

 

 

 

 

 

 

£

 

 

At 1 April 2020

 

 

 

-

 

 

Additions at valuation

 

 

 

   75,454

 

 

At 31 March 2021

 

 

 

      75,454

 

                                             

 

The investments are warrants taken as part of the Group's fees. These were valued at the date the warrants were issued and then subsequently revalued through the income statement using the Black-Scholes methodology. A 20% liquidity discount was then applied to the resulting valuation, as a conservative estimate, to reflect the relatively illiquid nature of the underlying financial instruments.

 

 

 

 

 

 

17.

DEBTORS

 

2021

2020

 

 

 

Group

Company

Group

Company

 

 

 

£

£

£

£

 

 

 

 

 

 

 

 

 

Trade debtors

2,817,102

-

1,305,029

-

 

 

Rent and other deposits

63,911

-

116,747

-

 

 

Other debtors

262,438

-

200,265

-

 

 

Prepayments and accrued income

482,040

3,202

77,213

12,882

 

 

 

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

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

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

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

 

 

 

3,625,491

3,202

1,699,254

12,882

 

 

 

===========

===========

===========

===========

 

 

 

The balances for the Company in the two columns above are as at 31 March 2021 and 30 June 2020 respectively.

 

 

 

 

 

                           

18.   CASH AND CASH EQUIVALENTS

 

  2021

 2020

 

Group

Company

Group

Company

 

£

£

£

£

 

 

 

 

 

  Cash at bank and in hand

1,856,568

===========

1,275,936

===========

839,114

=========

 

160,474

===========

 

 

The balances for the Company in the two columns above are as at 31 March 2021 and 30 June 2020 respectively.

 

 

19.

CREDITORS: amounts falling due within one year

 

2021

  

2020

 

 

Group

Company

Group

Company

 

 

£

£

£

£

 

 

 

 

 

 

 

Trade creditors

2,843,660

23,401

1,350,486

36,071

 

Other taxes and social security

211,642

-

18,414

-

 

Other creditors

80,720

-

18,527

-

 

Borrowings

7,471

-

220,783

-

 

Deferred consideration

-

-

200,000

-

 

Finance lease creditor

2,694

-

3,705

-

 

Accruals and deferred income

603,652

55,047

149,859

29,910

 

Amounts due to subsidiary undertakings

-

45,145

-

-

 

 

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

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

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

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

 

 

3,749,839

123,593

1,961,774

65,981

 

 

===========

===========

==========

   ===========

 

 

 

 

 

 

The balances for the Company in the two columns above are as at 31 March 2021 and 30 June 2020 respectively.

 

 

 

 

20.

CREDITORS: amounts falling in more than one year

 

 

 

 

                   2021

 

                       2020

 

Group

Company

Group

Company

 

£

£

£

£

 

 

 

 

 

Borrowings

43,688

-

-

-

Finance lease creditor

-

-

2,694

-

 

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

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

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

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

 

43,688

-

2,694

-

 

===========

===========

==========

    ===========

                     

 

The balances for the Company in the two columns above are as at 31 March 2021 and 30 June 2020 respectively

 

21. COMMITMENTS UNDER OPERATING LEASES

At 31 March 2021 the Group and Company had future minimum commitments under non-cancellable operating leases as set out below:

 

 

Group

 


     2021


          2020

 

 

 

Land &
Buildings

 

Land & Buildings

 

 

 

 

£

 

£

 

 

 

 

 

 

 

 

 

Within one year

 

314,000

 

58,859

 

 

Between one and five years

 

222,125

 

28,125

 

 

 

 

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

 

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

 

 

 

 

536,125

=========

 

86,984

=========

 

Company

The Company had no commitments under non-cancellable operating leases at the end of either period.

 

22. PENSION COMMITMENTS

The Group contributes to a defined contribution scheme. The assets and liabilities of the scheme are held separately from those of the Group. Employer's contributions in respect of the scheme totalled £44,778 (2020: £23,602) during the year, and at 31 March 2021 £4,348 (2020: £2,617) remained payable.

23.  SHARE CAPITAL OF OBERON INVESTMENTS GROUP PLC

 

 

March 2021

June 2020

Share capital

 

 

Nominal value £0.005 per share: 407,789,775 shares

(2020: 47,800,000 shares)

2,038,949

239,000

Share premium

2,724,103

1,467,894

 

4,763,052

 

1,706,849

 

Movements in share capital and share premium reserves

 

 

 

No. of
shares

Share
capital

            Share
premium

 

 

              £

£

Total as at 1 July 2020

47,800,000

239,000

1,467,894

 

February 2021 - Fund raise shares issued

36,070,250

180,351

1,256,209

 

February 2021 - RTO shares issued

323,919,525

1,619,598

11,337,183

 

Transfer to merger relief reserve

-

-

(11,337,183)

 

Increase in period

359,989,775

1,799,949

1,259,209

 

Total as at 30 March 2021

407,789,775

2,038,949

2,724,103

 

 

 

 

 

 

                 

 

24. EQUITY SETTLED WARRANT RESESERVE

 

The Company operates share-based payment arrangements to remunerate directors and key employees in the form of options and warrants. Equity-settled share-based payments are measured at fair value (excluding the effect of non-market based vesting conditions) at the date of grant. The fair value determined at the grant date of the equity-settled share-based payments is expensed on a straight-line basis over the vesting period, based on the Company's estimate of shares that will eventually vest and adjusted for the effect of non-market based vesting conditions.

 

The following table sets out the details of the warrants granted on 12 July and 11 September 2017: 

 

 

30 Jun'20

31 Mar'21

 

 

 

J Kehoe (director up to 8/2/21)
 

 

1,000,000

1,000,000

2.5p

12/07/2017

22/09/2021

R Sargent (director up to 8/2/21)
 

 

1,000,000

1,000,000

2.5p

12/07/2017

22/09/2021

 

 

13,500,000

13,500,000

 

 

 

 

 

 

==========

==========

 

 

 

 

                 

 

The fair value of the warrants issued to directors was determined using the Black-Scholes option pricing model and the inputs to the model were as follows:

 

 

12 July 2017

 

 

 

Grant date share price

 

5p

Exercise share price

 

2.5p

No. of shares under warrant

 

2,000,000

Risk free rate

 

1%

Expected volatility

 

40%

Expected warrant life

 

2.5 years

Calculated fair value per share

 

2.7p

 

 

Warrants issued to shareholders were issued on the basis of one warrant share for every four ordinary shares purchased during the 2017 fund raise process. As they were part of a fund raise process they have not been valued under Section 26 of FRS 102.

 

The total share-based payment expense recognised in the parent company's statement of comprehensive income for the 9 month period to 31 March 2021in respect of these warrants granted was £nil (2020: £nil), because the total expense was charged in the period the warrants were issued.

 

On the 27 April 2021 the warrants owned by the two former directors shown above were exercised.

 

25. RESERVES

Retained earnings

The group's retained earnings reserve consists of accumulated profits and losses of the parent company since incorporation, less any dividends which have been paid, plus any accumulated profits and losses of its subsidiary companies generated from the date of their acquisition, less any dividends which they have paid.

Share premium

The share premium reserve represents the premium paid for share capital in excess of its nominal value.

Share warrant reserve

The share warrant reserve represents the cumulative fair value of warrants which have vested and have been charged through the income statement but have not yet been exercised.

Share option reserve

The share option reserve represents the cumulative fair value of warrants which have vested and have been charged through the income statement but have not yet been exercised.

Merger relief reserve

The merger relief reserve represents the premium for the consideration shares, issued as part of the RTO, over their nominal value.

Reverse acquisition reserve

This represents the impact on equity of the reverse acquisition of Oberon Securities Limited.

26. PROFIT FOR THE FINANCIAL PERIOD

The parent company has taken advantage of Section 408 of the Companies Act 2006 and has not included its own profit and loss account in these financial statements.  The Company's loss for the 9 month period to 31 March 2021 was £79,213 (12 month period to 30 June 2020: loss of £237,555) which is dealt with in the financial statements of the Company.

 

27. OFF BALANCE SHEET ARRANGEMENTS                                                                                                                                  

In line with the 'Balances with clients and counterparties' accounting policy (note 1.15), client free money balances have been recognised off balance sheet. 

At the year end the group held £17,859,983 (2020: £11,845,252) in the client free money balances off the balance sheet. 

 

28.   CASH GENERATED FROM OPERATIONS

 

Group

 

Year to
 31 March
2021

 

17m to
 31 March
2020

 

 

 

£

 

£

 

Loss for the period after tax

 

(894,178)

 

(1,773,713)

 

 

 

 

 

 

 

Adjustments for:

 

 

 

 

 

Tax charged

 

-

 

-

 

Finance costs

 

15,399

 

32,218

 

Investment income

 

(11,896)

 

(20,997)

 

Loss on disposal of tangible fixed assets

 

3,153

 

1,771

 

Revaluation gains on current asset investments

 

(75,454)

 

-

Depreciation

 

32,918

 

48,941

 

Amortisation

 

177,229

 

120,428

 

Impairment charge

 

-

 

112,000

 

Employment related share based charge

 

44,453

 

25,789

 

Reverse acquisition share based charge

 

35,618

 

-

 

Movement in working capital

 

 

 

 

 

Increase in debtors

 

(1,876,237)

 

(209,460)

 

Increase/(decrease) in creditors

 

2,047,736

 

(71,064)

 

Cash (used in) from operations

 

(501,259)

 

(1,734,087)

 

 

 

 

 

 

 

                     

 

29. RELATED PARTY TRANSACTIONS

Group

Remuneration of key management personnel

All directors and certain senior employees who have authority and responsibility for planning, directing and controlling the activities of the company are considered to be key management personnel. The remuneration of key management personnel is as follows.

 

 

Year to March
2021

 

17m to
March
2020

 

 

£

 

£

Key management personnel remuneration

 

975,959

 

694,664

 

In an agreement dated 1 September 2020, MC Peat & Co. LLP, a small corporate broking firm, engaged with the Company to help raise funds in the Company's pre-IPO fund raise process. As a result of this MC Peat & Co. LLP earned a fee of £14,014. The terms of the engagement were commercial and were in-line with the usual terms offered for this type of fund raise activity. All of the fee was paid by the end of the financial year.

 

The company has taken advantage of exemption, under the terms of Financial Reporting Standard 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland", not to disclose related party transactions with its wholly owned subsidiaries.

 

30. ULTIMATE CONTROLLING PARTY

The Directors consider that there is no one controlling party who controls the Group.

 

31. SUBSEQUENT EVENTS TO THE PERIOD END

The group has agreed a new lease for offices at 65 Curzon Street. The new lease commits the group to pay circa £620k in rent over the 2 year term of the lease (plus a deposit of £59k).

On 27 May 2021 the group acquired Smythe House. Established in 2009, Smythe House provides bespoke relationship-driven services and financial planning to high net-worth clients in the wealth management, capital markets and real estate sectors.

The initial consideration for Smythe House was satisfied by the payment of £217,000 in cash and the issue to the vendors of 2,454,710 new Ordinary shares which at that date had a value of £83,460. In addition, and dependent on the performance of the acquired business over the next two years, deferred consideration could be payable to the vendors. This could consist, as a maximum, of up to 4,909,420 shares which at the date of acquisition would have a value of £199,920) plus £33,000 in cash. The exact mix of cash and shares used to satisfy the payment of any deferred consideration will be agreed between the two parties, if and when it becomes due.

On 27 April 2021 warrants over 2.0m shares have been exercised, raising £50,000 for the Company.

 

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