Braveheart Investment Group enjoys ‘exceptional’ year as profits return

The firm’s annual results show it has booked a full-year profit of £780,000 as it continues to overhaul its portfolio.

The pre-tax profit compared with a loss of almost £1.7m lodged the year before.

While staff costs fell to £441,000 in the year to March, from £1,001,000 in the preceding period on the back of cutting average number of employees by five, the turnaround was also attributed to the sale of a stake in one of its investee companies, mLED, a developer of ultra-high brightness technology.

This disposal alone brought in £399,000 versus a book value of less than £100,000 and contributed towards a change in the fair value of the company’s assets of £450,000 for the year to March 31.

Braveheart meanwhile retains significant holdings in Kirkstall (38 per cent), which is developing an ‘organ on chip’ platform used by drug developers, and scientific instruments group Paraytec (46 per cent).

It has also added to the portfolio by taking a 40 per cent stake in Gyrometric Systems, which has developed software that accurately monitors vibrations around a rotating shaft. Warnings generated by this system help prevent expensive and untimely breakdowns in industry and transport.

The large stake taken by Braveheart represents a continuation of the change of strategy, with the company gaining in confidence and backing its judgement more heavily.

Braveheart said it already has established sales partners in Germany and Asia on which it will now build and expects to break-even this year.

The firm also continues to book a steady income from its wholly-owned subsidiary, Viking Fund Managers, which runs £54m of funds providing backing for small and medium sized enterprises in Yorkshire and Humberside.

Viking’s main fund management income comes from the Finance Yorkshire Equity Fund contract, but it also provides specialist fund management services to other funds that are in ‘run-out’ mode.

This specialised management work tends to generate enhanced fees in excess of standard fund management fees due to the intensive nature of this work.

The emphasis for the FYEF is now on portfolio management rather than in seeking new investments and the unit is seeking to win management contracts for further funds.

However, the main focus for chief executive Trevor Brown and the team will be on on Kirkstall, Paraytec and new addition Gyrometric Systems.

“All enterprises are now entering exciting periods of expansion and we look forward to updating shareholders as events unfold,” he told investors.

“It is likely that headline revenue will decline in the first half of next year on a relative basis due to the exceptional nature of some of the revenue and realisation gains made this year, but we expect to report a continuing improvement in overall shareholder value.”

Mr Brown added: “We will continue to manage the Portfolio with a view to seeking exits wherever possible and appropriate.”

Asked if Braveheart was now focused on England, he said: “It isn’t the case that we are focused on England,” adding: “We are well aware our roots are in Scotland.”

The group currently employs 10 people. Most based in Yorkshire.

Shares, which have more than doubled in the last year, rose 6 per cent to 15.9p on the latest results.