AIM-listed investment company RiverFort today announced audited results for the year ended 31 December 2021 (FY21).
Performance Summary
While operating income for the fiscal year was roughly the same YoY at £2.4m, operating profit decreased to £1m, principally due to the impact of a non-cash accounting charge relating to share-based payments. Still, this leaves the company a substantial cash balance for further investment. Additionally, YoY investment income climbed 38% to £1.8m, NAV increased 27% to £11.7m, and the company's investment portfolio grew 17% to £13.1m.
Notably, RiverFort will now pay a dividend of 0.038p/share, representing a current gross yield of 4% for investors. This continues the track record of the Company paying dividends.
Investors welcomed the solid results and high dividend, with shares up 5.8% this morning.
Investments Summary
RiverFort invests in listed junior companies through equity-linked products and debt, a strategy which allows it to control volatility and risk. At the end of the refenced period, RiverFort held £5.8m in these types of structured investments with interest in over 20 companies. This hedged strategy generates returns through a combination of fees, interest, and other equity-linked or performance-based instruments. RiverFort hopes to attract more investors by offering direct exposure to this category of hedged assets.
RiverFort also held £2.7m in pre-IPO investments, a new focus for the company to further capitalise on undervalued assets. Notable new pre-IPO investments are Pluto Digital (decentralised finance), Metaverse (blockchain gaming), and Smarttech247 (cyber security). Others include Jubilee Metals plc, Challenger Exploration Limited, Deepverge plc, and Troy Resources Ltd.
Additionally, RiverFort held £2.5m in direct equity investments, £2.2m of which is in Pires Investments, a 19.5% interest. Pires is itself a technology holding company. We recently covered Pires's FY21 update, which showed exciting new investments and a solid performance in 2021, including a £1.5m profit rebound and a 147% increase in NAV. Pires is in the process of being acquired by Tern for £14.9m, representing a 53.6% premium to Pires' share price prior to the announcement. This makes RiverFort's earlier investment in Pires a notable success.
Conclusion
Overall, RiverFort's strategy of diversification away from direct equity investment appears to be paying off. Philip Haydn-Slater, Chairman, further commented:
"The Company has continued to generate attractive returns through investing by way of structured financings in order to provide funding for junior companies. This strategy continues to have the benefit of providing both cash returns and downside protection. Furthermore, given the recent developments in global equity markets, the demand for the Company's investment capital has been growing strongly. This strategy is now complemented with the pre-IPO investments that have been made, with Smarttech247 actively progressing towards a listing.
In summary, we are pleased that the results for 2021 demonstrate a continuing trend of progress for the Company. The current year has also started well and we look forward to some exciting results for 2022."
Follow News & Updates from RiverFort: and Pires: