NetScientific plc poised for further growth, following turnaround, transformation and portfolio expansion
1st April 2021
Preliminary Results for the year ended 31 December 2020
Company poised for further growth, following turnaround, transformation and portfolio expansion
NetScientific plc (AIM: NSCI), the international life sciences and sustainability, technology investment and commercialisation group, announces its preliminary results for the year ended 31 December 2020.
2020 was a year of turnaround, transformation and significant progress for the Company. The year started with a strategic review, which identified the quality of the science in the portfolio companies and that the underlying asset value was significantly higher than the market capitalisation with significant growth potential. Hence, the company changed its strategy, moving to a proactive management approach to deliver shareholder value.
Trading for the year was in line with management expectations, as the Group stabilised its position and started to reap the benefits of the new growth strategy. This was further enhanced by the all-paper acquisition of EMV Capital Ltd broadening the portfolio and resources, together with the successful £2.3m placement in August 2020. This puts the Company on a strong footing for the year ahead.
• The share price has increased from the low point of 12.5p in early 2020 to the year’s average of c. 55p
• Loss after tax reduced to £2.3 million (2019: loss £4.9 million)
• Increase in Board estimate of “fair value” of direct holdings by c. 80% from £11.8m to £21.2m, with further growth anticipated
• Completed a £2.3m placing and a 10-1 share consolidation
• Consolidated cash and cash equivalents of £1.6 million (2019: £3.5 million)
• Acquisition and integration of EMV Capital, which:
- increased Capital Under Advisory from nil to £14.6m
- enlarged total Group portfolio from 8 to 17 companies
- enhanced deal execution capacity and revenues
• Acquisition of the minority interest in ProAxsis and now, as a 100% owned subsidiary, the business has been rejuvenated and is set for commercial expansion
• Maintaining NetScientific’s position in NASDAQ-listed PDS Biotech through a c.£1.0m investment in two placements, which are already showing healthy returns
• Restructured Board with Dr Ilian Iliev becoming CEO and John Clarkson becoming Executive Chairman
- Strong complementary skill sets
- Team in place to deliver value
With the fundamental change in strategy and management drive, the Group has acted to realise the underlying asset value in the portfolio companies and their potential to deliver shareholder value. This includes exploiting the established transatlantic business and expanding the international presence, to maximise the growth of its subsidiaries and portfolio.
As seen through the recent news flow, the upward trend has been established and there is significant opportunity for the portfolio to generate the requisite added value.
The Company’s management team is performance and results driven; and, with its proactive management approach, NSCI is confident in delivering increased value of the Group’s investments, identifying the right new investments and supporting portfolio companies through successful commercial development and value inflection points to timely liquidity events.
By focusing on attractive market sectors, with high growth opportunities and adding value through disciplined commercial management, the Company believes that there is significant upside for shareholder returns through judicious exits, liquidity returns and value inflection points.
Dr. Ilian Iliev, CEO of NetScientific commented:
“This was a transformational turnaround year for NetScientific. The new team’s pro-active management is already showing positive results; a cut in losses, increased fair value and capital under advisory, closed several transactions, and made further judicious investments in the portfolio. The acquisition and integration of EMV Capital has doubled the Group’s portfolio size, provided new sources of capital, and added a more comprehensive support infrastructure for the portfolio companies”.
“The Group has limited the negative impacts of COVID, while capturing emerging opportunities.
“Looking forward, NetScientific is focused on increasing shareholder value and profitable returns through the considered management of the portfolio, benefiting from increased activity in the Healthcare and Sustainability markets.”
John Clarkson, Executive Chairman of NetScientific added:
“The strategy review not only identified the Company’s underlying strengths and exciting prospects, but also determined and put in place the fundamental changes needed for the planned business success. The Board is confident that the extended portfolio holds great potential, with the right asset-base, in the right space and at the right time.
“The team is committed to delivering the agreed strategy, developing the portfolio companies and exploiting the opportunities to unlock and realise the requisite shareholder returns.”
Level39 member NetScientific plc (AIM: NSCI) is a holding company, that invests in, develops, commercialises and realises shareholder value in life sciences/healthcare, sustainability and technology companies, which offer significant growth potential predominately in the UK and USA, as well as globally.
With the acquisition of EMV Capital in August 2020, the Group doubled its portfolio from 8 to 17 companies, either through direct subsidiary, balance sheet investment or capital under advisory, varying from start-up private companies to publicly listed equities.
NetScientific delivers shareholder returns through a proactive and hands-on management approach to their portfolio companies; identifying, investing in, and helping to build game-changing companies. The Group targets value inflection points and the release of value through partial or full exits from trade sales, public listings, or equity sales. NetSicentific has a strong transatlantic and growing international presence, providing attractive expansion prospects.
NSCI can deploy a capital-light investment structure; utilising the power of the PLC Brand, and the NetScientific balance sheet to anchor future investments and achieve a multiplier effect by attracting 3rd party investment for the portfolio companies. NetScientific is headquartered in London, United Kingdom, and was admitted to trading on AIM, a market operated by the London Stock Exchange, in 2013.