Braveheart is buying, despite £1.26m loss

Published on Thursday 18 June 2009 22:00

BRAVEHEART, the angel investor, is to push ahead with its acquisition-led expansion plan, despite revealing it fell to a loss of £1.26 million last year.

The Perth-based company, which manages investment in early-stage firms on behalf of wealthy investors, sold none of the companies in its portfolio in the year to 31 March.

Yesterday it warned that there may be no sales in the current year either.

Despite the loss – which compared with a profit of 106,000 in the previous year – Braveheart said it would continue to acquire rivals at a time when asset values are low. This month it bought Yorkshire-based technology investment company Inkopo.

Yesterday, chief executive Geoffrey Thomson said Braveheart was in advanced takeover talks with "three or four" other companies. He predicted that at least one more deal would be completed in the current financial year.

He commented: "These things can take some time to complete, but I would expect to announce something, certainly before the end of March."

Thomson added that it was "a cheap time to be in the market" for acquisitions, with good-quality companies which are struggling to fund their business, open to offers.

While he would not discuss possible targets, he said Braveheart "would like to do something in London", where it opened an office last year.

Thomson maintained that the results for the year to 31 March were "a reflection of the state of the market".

Braveheart's revenue fell 47 per cent to 350,335 during the year, mainly due of a fall in fees related to transactions, after completing no sales of portfolio businesses.

It also wrote down the value of its stakes in its portfolio companies by 377,815, and gives its assets a book value of 3.26m.

Thomson insisted that its portfolio contained companies which would "make a lot of money when the economy recovers" and that the fall in book value did not affect this.

He added: "The fact that we've written down the portfolio is a reflection of market conditions, rather than what we believe to be the estimated value at exit."

Appetite for its high-risk investments had "fallen off a cliff" last year, and while equity markets had recovered since then, Braveheart had not yet seen "tangible signs" that investors were wanting to come back to the sector.

Thomson said: "People are beginning to say they're feeling a little more comfortable (about investing], but saying and doing are not the same thing.

"I think it's going to be a fair bit longer before confidence comes back to the market in a big way."

Shares in Braveheart rose 2p, or 6.8 per cent, to 31.5p.