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Braveheart Investment Group: THE INVESTMENT CASE

Braveheart Investment gets more hands-on as portfolio grows

There’s a good chance one (or all) might end up being the future for Braveheart.
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INVESTMENT OVERVIEW: BRH The Big Picture
Spotting when an engine is going wrong is Paraytec's skill

A change of strategy over the past year has seen Braveheart Investment Group PLC (LON:BRH) increase its holdings in its three key portfolio companies – Kirkstall, Paraytec and Gyrometric Systems.

The investment company now also works much more closely with the boards of all three companies.

Trevor Brown, chief executive, told Proactive there’s a good chance one (or all) might end up being the future for Braveheart.

Paraytec

Imaging detector specialist Paraytec – a spin–out from York University’s chemistry department – has developed a scientific grade electronic camera chip for pharmaceutical and biopharma companies to use as a research tool.  

Its accuracy means the camera can pick out particles in a fluid and even potentially spot bladder cancer cells in urine, an area of significant interest currently.

Potentially, this might save the NHS millions especially as the aim is to shrink the technology down to smartphone size so eventually people will be able to self-test before going to seek further treatment.

Alzeheimer’s is another possible area as the camera can spot a biomarker in the blood associated with the brain disease.

Braveheart recently invested further in Paraytec through a loan which, if converted, would increase its stake to 48%.

Gyrometric

Gyrometric – spun out of Nottingham University– is already generating revenues from its rotating shaft, vibration detection software.

Making this information digital enables it to be analysed faster and in much greater detail, which is critical when it come to protecting large items of capital equipment such as a ship engine..

Iicebreakers, for example, have very expensive drive mechanisms. The software developed by Gyrometrics identifies a potential problem very quickly and shuts down the drive enabling it to be remedied on the spot rather having to go to a shipyard.

Some 49 marine systems have already been delivered, with offshore wind ( a €27bn market) and nuclear power stations the next targets.

Braveheart owns more than 50% of Gyrometric.

Kirkstall

Kirkstall’s organ on a chip technology is used to improve the efficency of drugs pipelines and to spot the next potential blockbuster drugs.

Seventy universities already use it and interest is now growing from the pharma sector, with eight companies said to be evaluating the technology.

A distribution agreement was set up for the US with Lonza in 2016 and Kirkstall recently raised £2.5mln to support both this agreement and also to develop more applications.

Braveheart retains a significant holding in Kirkstall (38%),

Fund management

Steady income is provided by wholly-owned subsidiary, Viking Fund Managers.

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

In the half year to September, the company declared a profit of £191,000 on revenue of £397,000.

READ: Braveheart Investment says biotech firm Kirkstall has commenced an investor marketing exercise

In the same period of the previous year, the company made a profit of £475,000 on revenue of £562,000, but that period included a book profit of £303,000 on one disposal, so stripping out the effects of that disposal would result in a slight increase in profit.

Braveheart currently has a market value of £4.9mln at 18p compared to the book value of its portfolio of  £1.031mln.

With its interim statement, Braveheart added it expects to review the valuations of all three key investments when preparing the full-year accounts.

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There’s a good chance one (or all) might end up being the future for Braveheart.

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