First Sentinel plc
(“First Sentinel” or the “Company”)
Interim Report for the nine months ended 30 June 2017
The Chairman’s Report
I am delighted to present the results for First Sentinel plc, for the nine months ended 30 June 2017. The Company has raised GBP0.7m during the period and additionally raised another GBP0.7m shortly after the period end. The proceeds of the placings will be used to assist the Company in the implementation of its investment strategy where the Company provides growth capital (equity, mezzanine debt and senior debt) for public and private company investments across a number of different market sectors. The Company has also admitted its shares to trading on NEX Exchange and has made two key director appointments as we move to the next stage of the Company’s development. The loss of GBP143,000 for the period represents two months of trade following the IPO and includes the costs of listing the Company on NEX Exchange.
The appointment of additional board members will be made to assist us in our investment strategy and we remain focused on creating long-term sustainable value for our shareholders.
Investments
The following investments have been made by First Sentinel plc during the period:
Red Rock Resources plc (AIM: RRR)
Red Rock Resources plc (“Red Rock”) is a natural resource development company with interests in gold, manganese and oil production. On 23 June 2017, it announced that it had entered into financing agreements to acquire an interest of between 16% to 30% in Steelmin Limited (“Steelmin”) and provide a loan of approximately EUR3.9million (the “Loan”) to fund Steelmin to complete the refurbishment and recommissioning of a ferrosilicon smelter in Jajce, Bosnia. Production from Steelmin is expected in Q1 2018 with target annual revenues on initial production levels of EUR36m and EBITDA of EUR7m.
Steelmin’s plant consists of two electric arc furnaces with a combined annual capacity of 48,720 tonnes ferrosilicon (FeSi 75) and 9,700 tonnes of microsilica and expected initial capacity from Furnace V of 29,000t of ferrosilicon p.a. and 5,800t of microsilica.
To fund the Loan, Red Rock has borrowed from YA 11 PN Ltd, on behalf of a group of institutional investors, $4,230,750 on a secured basis for a term of one year bearing interest at 13% p.a. with a renewal option for a further 8 months for a fee (the “Note”). First Sentinel participated $300,000 in this Note. The Note carries warrants in Red Rock with a two-year life and exercisable at a price of 2.2p per share. The Note is secured against Red Rock’s holding in Jupiter Mines and the loan to Steelmin.
Phoenix Global Mining plc (AIM: PGM)
Phoenix Global Mining plc (“Phoenix”) is a US focussed base metal explorer and developer focussed on advancing the Empire Mine in Idaho, into open pit copper oxide production with additional upside available from potential underground development. The shares of Phoenix were admitted to trading on AIM on 28 June 2017.
First Sentinel subscribed for 2,032,520 ordinary shares at the placing price on IPO of 4p per share (a subscription for approximately GBP81,000).
*Milamber Ventures plc (NEX: MLVP)
MilamberVentures plc is a growth accelerator focussed on Media, Technology and education. Milamber partners with entrepreneurs and ambitious management teams to develop high value, innovative, growing businesses.
First Sentinel subscribed for 500,000 new ordinary shares in Milamber at a price of 7p per share for a total of GBP35,000.
*Note: First Sentinel Corporate Finance, a FCA registered firm wholly owned by a director of First Sentinel, Brian Stockbridge, acted as broker/ introductory agent in connection with this fundraise.
Outlook
The nine months to 30 June 2017 has been a very successful period for First Sentinel. The success of the fund raising, investments made and the appointment of new experienced directors have positioned the Company very well for the next stage of its development. Our short-term strategy remains at increasing value by providing growth capital for public and private company investments. I am very optimistic about the Company’s growth potential and we look to the future with significant confidence.
Brian Stockbridge
About First Sentinel
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 www.first-sentinel.com
For further corporate information, please contact:
Mr. Kris Kottmeier
VP Corporate Development
UK/Euro Tel: +44 (0) 20 3637 6522
North America Tel: +1 (604) 506-2502
Email: Kris@first-sentinel.com
Mr. Brian Stockbridge
CEO
First Sentinel Plc
Tel: + 44 (0) 7876 888 011
NEX Corporate Advisor
Beaumont Cornish Limited
James Biddle / Roland Cornish
Tel: +44(0)20 7628 3396
Financial PR Advisor
Felicity Winkles / Joe Burgess
Tel: +44(0) 776 932 5254
____________________________________________
Interim Condensed Statement of Comprehensive Income
From 17
9 months May 2016
Ended to
Notes 30 June 30 September
2017 2016
Unaudited Audited
-------- ----------- --------------
GBP'000 GBP'000
Continuing operations - -
Administrative expenses 4 (143) (12)
----------- --------------
Operating loss (143) (12)
Loss on ordinary activities
before taxation (143) (12)
Tax on loss on ordinary
activities - -
----------- --------------
Loss after taxation (143) (12)
Total comprehensive
loss for the period
attributable to the
owners of the company (143) (12)
----------- --------------
Basic and diluted
loss per share (expressed
in pence per share) 5 (5.32p) (GBP120)
Interim Condensed Statement of Changes in Equity
Share Share Accumulated Total
Capital Premium Deficit Equity
--------- --------- ------------ --------
GBP'000 GBP'000 GBP'000 GBP'000
Incorporation - - - -
Issue of shares - - - -
Loss and total comprehensive
loss for the period - - (12) (12)
Balance at 30 September
2016 - - (12) (12)
Issue of shares 71 645 - 716
Share issue costs - (117) - (117)
Loss and total comprehensive
loss for the period - - (143) (143)
--------- --------- ------------ --------
Balance at 30 June
2017 71 528 (155) 444
--------- --------- ------------ --------
Share capital is the amount subscribed for shares at nominal value.
Share premium is the amount subscribed for shares in excess of nominal value.
Accumulated deficit represents the cumulative loss of the Company attributable to equity shareholders.
Interim Condensed Statement of the Financial Position
At 30 At 30
Notes June September
2017 2016
Unaudited Audited
-------- ----------- -----------
GBP'000 GBP'000
Assets
Current assets
Other Receivables 6 229 3
Financial assets at
fair value through profit
or loss 6 112 -
Cash and Cash Equivalents 147 3
Total Current Assets 488 6
----------- -----------
Total Assets 488 6
----------- -----------
Equity and Liabilities
Share Capital 7 71 -
Share Premium 7 528 -
Accumulated deficit (155) (12)
Total Equity 444 (12)
----------- -----------
Current Liabilities
Other Payables 44 18
Total Liabilities 44 18
----------- -----------
Total Equity and Liabilities 488 6
----------- -----------
Interim Condensed Cash Flow Statement
From 17
9 Months May 2016
Ended to 30
Notes 30 June September
2017 2016
Unaudited Audited
--------- ----------- -----------
GBP'000 GBP'000
Cash flows from
operating activities
Operating loss (143) (12)
Changes in working
capital
(Increase) / decrease
in receivables 3 (3)
Increase / (decrease)
in payables 27 18
Net cash flow from
operating activities (113) 3
----------- -----------
Investing Activities
Decrease / (Increase)
in financial assets 6 (112) -
Decrease / (Increase)
in Loans 6 (229) -
Net cash flow from investing
activities (341) -
----------- -----------
Cash flows from financing
activities:
Net proceeds from issue
of shares 7 598 -
Net cash flow from financing
activities 598 -
----------- -----------
Net cash flow for the
period 144 3
Opening Cash and cash
equivalents 3 -
----------- -----------
Closing Cash and cash
equivalents 147 3
=========== ===========
Notes to the Interim Condensed Financial Statements
1. General Information
First Sentinel plc (‘the Company’) is an investment company incorporated in the United Kingdom with company number 10183367 and quoted on the NEX Exchange Growth Market.
2. Basis of Preparation
The annual financial statements of the Company are prepared in accordance with International Financial Reporting Standards (IFRSs) as adopted by the European Union. The condensed set of financial statements included in this interim financial report has been prepared in accordance with IAS 34 ‘Interim Financial Reporting’, as adopted by the European Union. The accounting policies and methods of computation used are consistent with those used in the Company’s latest audited financial statements for the period ended 30 September 2016.
A copy of the statutory accounts for the period ended 30 September 2016 has been delivered to the Registrar of Companies. The auditor’s report on these accounts was unqualified, did not draw attention to any matters by way of emphasis and did not contain a statement under section 498(2) or (3) of the Companies Act 2006.
3. Segmental Reporting
In the opinion of the Directors, the Company has one class of business, being that of an investment company. The Company’s primary reporting format is determined by the geographical segment according to the location of its establishments. There is currently only one geographic reporting segment, which is the UK. All revenues and costs are derived from the single segment.
4. Company Result for the period
The current period operating loss incorporated the following main items:
From 17
9 Months May 2016
Ended to
30 June 30 September
2017 2016
Unaudited Audited
GBP'000 GBP'000
Accounting and administration
fees 3 2
Foreign Exchange debits 11 -
Directors' Remuneration and Fees 22 -
Legal and professional fees 97 10
Other expenses 10 -
----------- --------------
143 12
----------- --------------
5. Loss per Share
Loss per share data is based on the Company result for the nine months and the weighted average number of shares in issue.
Basic loss per share is calculated by dividing the loss attributable to equity shareholders by the weighted average number of ordinary shares in issue during the period:
From
17 May
9 Months 2016
Ended to
30 June 30 September
2017 2016
Unaudited Audited
GBP GBP
Loss after tax (143,000) (12,000)
Weighted average number of ordinary
shares in issue 2,695,464 100
----------- --------------
Basic and diluted loss per share (5.32p) (GBP120)
(pence)
----------- --------------
Basic and diluted earnings per share are the same, 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. There were 8,736,524 potential dilutive shares in issue during the period for share options and warrants.
6. Financial assets
During the period the Company had the following movements in investments:
At 30 At 30
June September
2017 2016
Unaudited Audited
GBP'000 GBP'000
Included within other receivables:
Secured loan notes 229 -
Financial assets through profit
and loss: 112 -
UK AIM listed equity securities
----------- ------------
Total financial assets 341 -
----------- ------------
The financial assets within other receivables relate to secured loan notes for a term of one year bearing interest at 13% per annum in Red Rock Resources plc.
7. Share Capital
Ordinary shares are classified as equity. Proceeds from issuance of ordinary shares are classified as equity. Incremental costs directly attributable to the issuance of new ordinary shares are deducted against share capital.
Allotted, called up and Number Share Share
fully paid ordinary shares of shares Capital Premium
of 0.01p each
GBP GBP
Balance at 17 May 2016 100 1 -
Balance at 30 June 2016 100 1 -
Share issue at GBP0.10
- 15 March 2017 6,309,794 63,098 567,882
Share issue at GBP0.10
- 24 March 2017 50,000 500 4,500
Share issue at GBP0.10
- 18 April 2017 727,273 7,273 72,727
----------- --------- ---------
Balance at 30 June 2017 7,087,167 70,872 645,109
8. Related Party Transactions
As at the period end the company owed GBP5,000 (2016: GBPnil) to First Sentinel Corporate Finance Limited, a company controlled by the director, Brian Stockbridge, for an interest free current account balance.
As at the period end the company owed GBP15,000 (2016: GBP15,000) to the director, Brian Stockbridge, for an interest free current account balance.
9. Events Subsequent to 30 June 2017
On the 5 July 2017 the company raised GBP700,000 by issuing 6,363,636 new shares.
