Braveheart plans further expansion out of Scotland

Published on Monday 5 July 2010 14:31

BRAVEHEART, the Perth-based investment firm, is actively looking at acquisitions to further expand its reach outside Scotland.

The company originally focused on investing in commercialising intellectual property from Scottish universities but is now looking to build a broader UK-wide group that invests directly in early stage technology firms, manages the investment of funds and matches entrepreneurs with business angels.

The company acquired Yorkshire-based Viking Fund Managers last year as part of the strategy and chief executive Geoffrey Thomson told The Scotsman that he was now looking at further opportunities outside Scotland including continental Europe.

"We're looking for a bit more scale and hopeful of announcing something in the next few months," he said.

In the longer term, the company plans to split its operations into three distinct brands covering private client investment management, fund management and management advisory services and said it saw "significant potential for growth" in each.

The Aim-listed company saw income rise to 918,000 during the year to 31 March from 287,000 thanks to a maiden contribution from Viking Fund Managers. It also benefited from a portfolio revaluation, which led to unrealised gains of 316,000. Losses before tax reduced to 767,000 from 1.26m.

Cash balances at the year end stood at 1.47m, down from 3.22m in 2009 and net assets were 5.6m compared to 6.17m, equivalent to 40.25p per share, down from 46.03p. Operating costs rose to 1.68m from 1.54m.

During the year, further funding of 1.7m was made by the group and its clients in 14 companies. The first investments were also made under the Strathclyde Innovation Fund, which targets intellectual property commercialisation at Strathclyde University. Braveheart also has an exclusive relationship with Aberdeen. University.

Thompson said a number of the companies that Braveheart had backed were approaching the stage where its investments could be realised.

He said: "We deal principally with early stage technology companies and these types of businesses take time to mature and generate returns for shareholders. Inevitably, the lemons ripen before the pears and this means that losses are shown before gains materialise.

"After three years, our portfolio is maturing in line with expectation and we expect that, subject to the market being receptive, we will be realising a number of investments over the next two years and that shareholders will be pleased with the results."

There are currently around 30 companies in Braveheart's portfolio and spin-out companies it has recently invested in include mLED, a photonics company based at Strathclyde University.

Braveheart chairman Garry Watson said he expected recovery in investment markets generally to be fragile.

He said: "In the final quarter of the year we welcomed early signs of recovery as some confidence returned to the equity markets and investors recognised that capitalism had survived the near melt-down of the financial markets.

"But we anticipate that recovery will be fragile, particularly as the sovereign debt problems of the European market are played out."

Shares in the company closed down 1p at 24.5p.