Braveheart strategy to grow fees pays off

By Kristy Dorsey
Published on 30/12/2011 00:00

BRAVEHEART nearly doubled its fee-based revenues during the six months to the end of September, but the investment group’s chief executive said yesterday that a return to profits will depend on the portfolio of firms in which it holds equity.

The AIM-quoted Braveheart – which for the past two years has been expanding into investment management – generated £621,000 in fees from those activities during the half-year. The rise of 89 per cent is in line with its strategy of generating more regular income that is less dependent upon the sale of privately-owned companies in which it invests.

Including profits from one disposal and write-downs on the investments it holds, Braveheart’s total income was £550,000, up from £180,000 previously. However, increased expenses from the August 2010 acquisition of English investment network Envestors pushed pre-tax losses up from £581,000 to £842,000.

Braveheart posted a full-year profit in 2008, its maiden year as a listed company, but has since remained in the red as it has sought to build up operations amid difficult market conditions.

Geoffrey Thomson, chief executive of the Perth-based group, said the prospect of profits in the medium term would hinge upon striking deals on behalf of the most advanced firms in its portfolio of start-up companies. “When we get some realisations from our portfolio, which are coming, we are going to post some big figures on that side,” Thomson said.

Braveheart has direct equity stakes in more than 20 companies, “two or three” of which could come to fruition from anywhere between six months and two years. “These would likely be global licensing deals or trade sales,” Thomson added. “Listing is extremely difficult right now.”

Meanwhile, Braveheart remains on the look-out for further acquisitions to bolster its investment management and corporate finance activities. These would build upon the 2009 acquisition of Yorkshire-based Viking Fund Managers and the subsequent all-share deal for Envestors. “We have been in advanced discussions with quite a number of parties,” Thomson said.

The group sold its remaining shares in its last quoted investment, Capital Pub Company, leaving it with a wholly privately-owned portfolio. In addition to direct investments, it has options and warrants in 20 further companies that it has introduced to its network of private investors.

Colin Grant will step down as chief financial officer of Braveheart in January to be replaced by Aileen Brown, who was brought in after a four-month search by headhunters.