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Braveheart Investment Group

  • BY: Andrew Hore |
  • POSTED: 26/07/2011 |

Investment manager and adviser Braveheart Investment Group is well placed to take advantage of any upturn in investment for small companies although the current market conditions remain tough.

Enhancements to the Enterprise Investment Scheme (EIS) and other government measures are good news for Braveheart but it may take time for the benefits to come through.

Fee revenue grew from £568,000 to £926,000 in the year to March 2011 with most of the growth coming from the initial six month contribution from investor network Envestors, which was bought last October. There was a £464,000 unrealised loss on the value of the company’s portfolio, compared with a £611,000 gain the previous year. That was partly offset by a £168,000 gain on the disposal of a stake in photographic enhancement software developer Im-Sense. The loss increased from £767,000 to £1.31m.

Braveheart is working with North East Access to Finance to increase business angel activity in the North East England. Braveheart already has a strong regional presence in Scotland, Yorkshire and London. It also has corporate finance operations following the acquisition of Envestors in 2010. Braveheart subsidiary Viking Fund Managers has already developed an angel network in Yorkshire and it will try and develop a similar network in the North East. Braveheart is also one of five participants in a £50 million Business Angel Co-Investment Fund.

Net cash was £595,000 at the end of March 2011, although there is also potential contingent consideration of up to £1.17m most of which is due in cash. Since the year end Braveheart has raised £950,000 at 23p a share as part of a wider placing that included existing shares owned by two institutions. The existing shares were placed at 15p each. Former Hargreaves Lansdown executive Adam Norris took a 29.8% stake. Publisher DC Thomson took a 6.99% stake.

At 22.5p a share, Braveheart is valued at £4.25m. That is well below house broker Seymour Pierce’s March 2012 net asset value forecast of 29.3p a share. This year Braveheart will have a full contribution from Envestors. Seymour Pierce expects Braveheart to make a small profit this year.

If there are more disposals of existing investments as the portfolio matures then shareholders could get a dividend. Seymour Pierce believes a dividend of 1p a share is possible, which would mean the yield would be more than 4%.

Download the June 2011 edition of AIM Journal at http://www.hubinvest.com/AIMPDFJuly2011_22.pdf

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