TIDMBLU
RNS Number : 7304Q
Blue Star Capital plc
30 June 2022
30 June 2022
Blue Star Capital plc
("Blue Star" or "the Company")
Half-Yearly Results
Half-yearly Results for the Six Months Ended 31 March 2022
Blue Star Capital (AIM: BLU), the investing company with a focus
on esports, technology and its applications within media and
gaming, announces its half-yearly results for the six months ended
31 March 2022.
Financial Highlights:
-- Decrease in the mark-to-market value of the portfolio, as of
31 March 2022, of GBP937,941 (1H21: GBP19,684 decrease) resulting
in Net Assets of GBP11,718,709 (FY21: GBP12,715,515)
-- Net Cash, as of 31 March 2022, of GBP113,416 (FY21: GBP296,106)
For further information, please contact:
Blue Star Capital plc Via Vox Markets
Derek Lew
Cairn Financial Advisers LLP (Nominated Adviser) +44 (0) 20 7213 0880
Jo Turner / Liam Murray
Stanford Capital Partners Limited (Broker) +44 (0) 20 3650 3650
Patrick Claridge / John Howes / Bob Pountney
Vox Markets
Kat Perez bluestarcapaital@voxmarkets.co.uk
www. Vox M arkets.co.uk/listings/LON/BLU
About Blue Start Capital
Blue Star Capital plc ("the Company" or "Blue Star") provides
investors with exposure to a global portfolio of quoted and
unquoted companies that operate at the leading edge of high-growth
and disruptive technology sectors.
Our portfolio focuses on new technologies particularly in the
areas of esports, decentralised finance and blockchain. Our current
portfolio consists of 11 innovative, disruptive, global businesses
where eight have a focus on the rapidly growing esports and mobile
gaming markets, two working across the fields of decentralised
finance and payments and one in the area of Non-Fungible
Tokens.
Chairman's Statement
It was a productive period for our portfolio of investee
companies and below I provide the following portfolio company
highlights, inclusive of updates, for the six-month period ended 31
March 2022 and any subsequent developments.
Esports and Mobile Gaming
Esports
According to Newzoo, the games market analytics company, there
are now more than 2.7 billion gamers globally, with gaming
overtaking social media as the largest consumption of screen time
in most developed markets.
By 2023, Newzoo predicts the games market will be worth $200.8
billion per annum, with the number of players worldwide surpassing
the three-billion mark.
Guild Esports plc ("Guild")
Since September 2021, Guild has achieved several operational
milestones attracting strategic partnerships with major brands such
as Selfridges London, Samsung Electronics UK, Sony's PlayStation
and Bitstamp, the world's longest-running crypto exchange.
In October 2021, Guild successfully launched Apex Legends Team
to compete in the Apex Legends Global Series and achieved success
wining two new trophies. In November 2021, Guild won its fourth
major esports trophy after one of its Fortnight players won first
place in the Fortnite Champion Series Grande Royale and a fifth
trophy at a later Fortnite series during the year.
In June 2022, Guild opened a new HQ in Shoreditch, located at
the heart of the capital's booming technology hub. It will also be
the home for its global esports Guild Academy. The academy will
provide state-of-the-art training facilities for gamers and is
expected to deliver additional commercial opportunities for Guild
including content sponsorship and naming rights for the building
itself.
Guild has several potentially significant sponsorship deals with
tier 1 brands at advanced stages of negotiations and, whilst there
is no certainty when these prospects may get signed, the board of
Guild remains confident of its overall new business plans for
2022.
To date, the Company has invested approximately GBP706,000 in
Guild for 5.95% of Guild's total issued share capital. During the
period the Guild share price decreased from 5.1p per share to
1.95p, resulting in a fair value decrease of the holding of
approximately GBP915,000 to GBP646,076 as of 31 March 2022.
Dynasty Gaming and Media ("Dynasty")
Dynasty, the leading mass-market, white label B2B gaming and
media platform ecosystem, secured three additional multi-year
partnership agreements during the period.
These partnership agreements, with large-scale organisations,
include Malaysia's leading telecoms operator, New Zealand's largest
telco and a market-leading Indian company, include both fixed
licence fees up front and ongoing managed services revenue share
terms over the term of the license.
Long-term investors will recall Dynasty's initial business model
was a typical 'SaaS' structure based on collecting monthly licence
fees over a minimum 24-month contract. However, going forward, the
business has adopted a hybrid 'SaaS plus revenue share' model with
Dynasty delivering what it describes as a genuine managed service
solution.
Under the new commercial model, Dynasty anticipates that the
revenue share component will contribute more than 85% of its total
revenue within the next 12 months. The company remains in dialogue
with all parties regarding a potential listing of the company's
shares on the Australian Stock Exchange ("ASX"). However, there are
several interesting discussions ongoing that could potentially that
may lead a different outcome to an IPO on the ASX. We remain
reassured that the board of Dynasty will continue to act on the
best interests of all its shareholders.
To date, the Company has invested approximately GBP968,000 in
Dynasty based on Dynasty's valuation of US$50 million in the last
fundraising round. As of 31 March 2022, the Company's holding in
Dynasty is valued at approximately US$6.5 million (approximately
GBP4.8 million).
Mobile Gaming
East Sides Games ("ESG")
ESG has achieved several major milestones, including the global
launch of RuPaul's Drag Race Superstar mobile game, which occurred
on 25 October 2021, surpassing 1 million downloads and over 150,000
active average daily users, which is the highest daily active users
for any of its active games.
By November 2021, RuPaul's Drag Race Superstar had become the
number one ranking role playing or simulation game in the iOS App
Store across 44 countries and ranked in the top 10 in 67 countries.
In addition, the game reached the top 100 grossing games in 40
countries on iOS.
In January 2022, ESG announced a multi-year partnership with BBC
Studios, the commercial subsidiary of the global British
Broadcasting Corporation ("BBC"), for the worldwide release of a
free-to-play mobile title based on the Doctor Who franchise.
In April 2020, Blue Star invested approximately GBP57,000 into
East Side Games Group Inc, formerly known as LEAF, at a price of
CAD$1.60 per consolidated share (following a 10:1 share
consolidation which occurred in July 2021), prior to listing the
shares on the TSX Venture Exchange. East Side Games Group Inc.,
shares traded at CAD$2.90 as of 31 March 2022, valuing Blue Star's
holding at approximately GBP110,399.
DeFi, Payments and NFT
SatoshiPay
In the period under review, SatoshiPay saw the positive momentum
with Pendulum raising $5.0 million, via the private sale of PEN
tokens, to fund further development. The new funding allows for
SatoshiPay to be contractually retained to continue to develop
Pendulum blockchain.
Pendulum is an open source blockchain built on the stable and
existing Substrate framework that aims to establish the missing
link between fiat and the DeFi ecosystems through a sophisticated
smart contract network.
In November 2021, SatoshiPay presented a demonstration of
Pendulum at the "Meridian 2021", a forum that gathers experts in
finance, policy, and technology.
With funding for Pendulum in place, SatoshiPay took the timely
decision in January 2022 to appoint Meinhard Benn as Chairman and
Alexander Wilke as CEO. After co-founding SatoshiPay in 2014 and
leading the company as CEO for seven years, Meinhard's new role
will focus on the long-term vision of SatoshiPay and strategic
networking, while Alex, who joined SatoshiPay as Chief Operations
Officer in 2016, will take over the CEO duties. In addition to
other internal promotions and strategic hires, we believe
SatoshiPay is now structured for rapid scale-up and well-placed to
deliver further Pendulum milestones.
Post period end, Pendulum received a grant from the Web3
Foundation for developing Spacewalk. Spacewalk is the first bridge
between the Stellar network and the Polkadot/Kusama ecosystems. It
is implemented as a Substrate pallet and allows any Substrate-based
blockchain to implement a direct Stellar bridge.
Pendulum will implement Spacewalk as a Substrate pallet, a
component that can be plugged into any Substrate based blockchain.
Stellar is not smart contract capable, therefore the Spacewalk
bridge design is based on XCLAIM. XCLAIM is a framework for
achieving decentralised, trustless and efficient cross-chain
transfers.
XCLAIM has been further improved by Interlay for the open-source
Bitcoin bridge "interBTC". Spacewalk is based on the interBTC
implementation with the term interBTC being used for both the
bridge and for Bitcoin that is available on a Substrate-based
chain.
The fast progress of Pendulum and the Polkadot ecosystem may
accelerate the mission at SatoshiPay to offer instant cross-border
payments on blockchain sooner than expected with further news
expected in the near future while Solar Wallet continues to be in
maintenance mode with a recent update patch released to the market.
This release includes a minor change for adding funds with Moonpay,
which was required from March 2022.
As of 31 March 2021, total equity funding to date for SatoshiPay
was EUR4.6m with Blue Star currently holding 27.9% of SatoshiPay's
issued share capital, worth GBP4.5m, based on the last external
fund raise in 2019.
It is the Board's view that the valuation of SatoshiPay may have
increased significantly since the last fund raise given the
operational progress of Pendulum. However, no revaluation work on
SatoshiPay has been undertaken since 2019.
Sthaler
Earlier in the year, Sthaler's biometric technology platform,
FinGo, partnered with the RBC Group, a pioneer in automated retail
design and manufacturing of vending machines.
In February 2022, FinGo entered into a strategic partnership
with the leading security access service provider, Croma Security
Solutions. The new alliance will strengthen each company's
world-leading solutions in the provision of non-invasive biometric
technology, expanding access to FinGo's Vein ID platform to Croma's
global customer base.
Post period end, FinGo unveiled the World's first vein iD
enabled vending machine where users can pay and prove their age
through a simple scan of their finger. The Company remains
confident the age verification service, "FinGoVend" is expected to
lead the way in 'unattended retail' for age-restricted products
such as alcoholic drinks, e-cigarettes and vapes.
Blue Star invested GBP50,000 in exchange for approximately 0.8%
Sthaler's issued share capital. As of 31 March 2022, the company's
holding in Stahler is currently valued at approximately GBP387,000,
based on Sthaler's last completed fundraise.
NFT Investments ("NFT")
NFT Investments raised GBP35m (Gross) and listed on the AQSE
Stock Exchange in London in April 2021. Since admission, the
Company made seven investments and one exit in early-stage growth
technology and media businesses engaged in NFTs and digital assets
totalling approximately GBP5.8m. NFT also established significant
positions in cryptocurrencies BNB, Bitcoin, Ether, XBD, FLOW and
DOT.
As at 31 December 2021, NFT had a Net Asset Value of GBP34.38m,
equivalent to 3.43p per share, comprising cash and cash equivalents
of GBP21.9m and net book value of investments, including
cryptocurrencies, of GBP12.5m.
The Company had previously made an investment of GBP50,000 in an
earlier funding round of NFT Investments and, as a result of
further investment, currently holds 9,000,000 ordinary shares
representing approximately 0.9 per cent of NFT's issued share
capital. The Company's holding in NFT was valued at GBP223,000 at
the period end.
Outlook
The Board believes that the Company's portfolio has continued to
achieve significant operational and financial milestones during the
period. Importantly, the Board maintains its confidence in the
strong underlying trends across the sectors within which it is
invested in and believes in the benefit of the portfolio approach
when investing in early-stage companies out ways the inherent
risks.
Given the increase in NAV of the overall portfolio since
inception, plus sufficient cash reserves, improving liquidity
provided by our listed investments and the increasing investor
interest in the activities of our portfolio companies, the Board is
confident that it is both well-funded and well-positioned to
perform strongly in the second half of 2022 and beyond.
Derek Lew
Chairman
29 June 2022
Statement of Comprehensive Income
for the six months ended 31 March 2022
Unaudited Audited
Year ended
Six months ended 31 March 30 September
2022 2021 2021
GBP GBP GBP
Revenue - - -
Fair valuation movements in financial instruments designated at fair
value through profit
or loss: (937, 941) (19,684) 2,772,447
(937, 941) (19,684) 2,772,447
Foreign exchange movements 37,904 (318,991) (325,554)
Administrative expenses (100,642) (159,379) (324,785)
-------------- ----------- -------------
Operating (loss)/profit (1,000,679) (498,054) 2,122,108
Finance income 3,873 3,511 7,207
(Loss)/profit before and after taxation and total comprehensive
income for
the period (996,806) (494,543) 2,129,315
-------------- ----------- -------------
Loss per ordinary share:
Basic (loss)/earnings per share (0.02p) (0.01p) 0.05p
Diluted (loss)/earnings per share (0.02p) (0.01p) 0.05p
-------------- ----------- -------------
The loss for the period was derived from continuing operations
and is attributable to equity shareholders.
Statement of Financial Position
as at 31 March 2022
Unaudited Audited
Year ended
Six months ended 31 March 30 September
-------------------------------------- -------------
2022 2021 2021
GBP GBP GBP
Non-current assets
Investments 11,463,552 8,740,719 12,367,204
Convertible loan note 158,323 143,725 150,846
11,621,875 8,884,444 12,518,050
------------------------- ----------- -------------
Current assets
Trade and other receivables 28,243 18,813 135,501
Cash and cash equivalents 113,416 59,491 296,106
141,659 78,304 431,607
------------------------- ----------- -------------
Total assets 11,763,534 8,962,748 12,949,657
------------------------- ----------- -------------
Current liabilities
Trade and other payables 44,825 35,729 234,142
Total current liabilities 44,825 35,729 234,142
------------------------- ----------- -------------
Net assets 11,718,709 8,927,019 12,715,515
------------------------- ----------- -------------
Shareholders' equity
Share capital 4,892,774 4,228,251 4,892,774
Share premium account 9,575,072 9,074,957 9,575,072
Other reserves - 96,290 -
Retained earnings (2,749,137) (4,472,479) (1,752,331)
11,718,709 8,927,019 12,715,515
------------------------- ----------- -------------
Statement of changes in equity
as at 31 March 2022
Share capital Share premium Other reserves Retained earnings Total
-------------- ---------------- ------------------ ------------------ ----------
GBP GBP GBP GBP GBP
Six months ended
31 March 2021
At 1 October 2020 4,892,774 9,575,072 - (1,752,331) 12,715,515
Loss for the period and
total comprehensive
income - - - (996,806) (996,806)
At 31 March 2022 4,892,774 9,575,072 - (2,749,137) 11,718,709
-------------- ---------------- ------------------ ------------------ ----------
Six months ended
31 March 2020
At 1 October 2020 4,133,251 9,074,957 143,210 (4,024,856) 9,326,562
Loss for the period and
total comprehensive
income - - - (494,543) (494,543)
Shares issued in period 95,000 - - - 95,000
Exercise of warrants - - (29,716) 29,716 -
Lapse of warrants - - (17,204) 17,204 -
At 31 March 2021 4,228,251 9,074,957 96,290 (4,472,479) 8,927,019
-------------- ---------------- ------------------ ------------------ ----------
Year ended
30 September 2021
At 1 October 2020 4,133,251 9,074,957 143,210 (4,024,856) 9,326,562
Profit for the year and
total comprehensive
income - - - 2,129,315 2,129,315
Shares issued in year 759,523 500,115 - - 1,259,638
Exercise of warrants - - (54,704) 54,704 -
Lapse of warrants - - (88,506) 88,506
At 30 September 2021 4,892,774 9,575,072 - (1,752,331) 12,715,515
-------------- ---------------- ------------------ ------------------ ----------
Statement of cash flows
for the six months ended 31 March 2022
Unaudited Audited
Six months ended Year ended
31 March 30 September
--------------------- -------------
2022 2021 2021
GBP GBP GBP
Operating activities
(Loss)/profit for the period (996,806) (494,543) 2,129,315
Adjustments for:
Finance income (3,873) (3,511) (7,207)
Fair value losses/(gains) 937,941 19,684 (2,772,447)
Foreign exchange (37,904) 315,486 318,394
Working capital adjustments
Decrease/(Increase) in trade and
other receivables 107,258 (16,145) (132,833)
(Decrease)/Increase in trade and
other payables (189,317) 7,842 206,256
---------- --------- -------------
Net cash used in operating activities (182,701) (171,187) (258,522)
---------- --------- -------------
Investing activities
Increase in investments - - (844,360)
Interest received 11 3,511 7,183
---------- --------- -------------
Net cash generated from/(used in)
investing activities 11 3,511 (837,177)
---------- --------- -------------
Financing activities
Proceeds from issue of equity shares - 95,000 1,259,638
Net cash generated by financing activities - 95,000 1,259,638
---------- --------- -------------
Net (decrease)/ increase in
cash and cash equivalents (182,690) (72,676) 163,939
Cash and cash equivalents at
beginning of the period 296,106 132,167 132,167
---------- --------- -------------
Cash and cash equivalents at
end of the period 113,416 59,491 296,106
---------- --------- -------------
Notes to the Interim Financial Statements
for the six months ended 31 March 2022
1. Basis of preparation
The principal accounting policies used for preparing the
half-yearly accounts are those the Company expects to apply in its
nancial statements for the year ending 30 September 2021 and are
unchanged from those disclosed in the Company's Report and
Financial Statements for the year ending 30 September 2021.
The nancial information for the six months ended 31 March 2022
and for the six months ended 31 March 2021 have neither been
audited nor reviewed by the Company's auditors.
2. Critical accounting estimates and judgements
The Company makes certain estimates and assumptions regarding
the future. Estimates and judgements are continually evaluated
based on historical experience and other factors, including
expectations of future events that are believed to be reasonable
under the circumstances. In the future, actual experience may di er
from these estimates and assumptions. The estimates and assumptions
that have a signi cant risk of causing a material adjustment to the
carrying amounts of assets and liabilities within the next
financial year are discussed below:
Fair value of financial instruments:
The Company holds investments that have been designated at fair
value through pro t or loss on initial recognition. The Company
determines the fair value of these nancial instruments that are not
quoted, using valuation techniques, contained in the IPEVC
guidelines. These techniques are signi cantly a ected by certain
key assumptions. Other valuation methodologies such as discounted
cash ow analysis assess estimates of future cash ows and it is
important to recognise that in that regard, the derived fair value
estimates cannot always be substantiated by comparison with
independent markets and, in many cases, may not be capable of being
realised immediately.
In certain circumstances, where fair value cannot be readily
established, the Company is required to make judgements over
carrying value impairment, and evaluate the size of any impairment
required.
3. Loss per ordinary share
The calculation of a basic loss per share is based on the loss
for the period attributable to equity holders of the Company and on
the weighted average number of shares in issue during the
period.
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END
IR SEAEFUEESEIM
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