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Eight Peaks Group PLC: THE INVESTMENT CASE
INVESTMENT OVERVIEW

Legendary Investments to step up a level as portfolio matures

So far, the hit rate is a five out of 12 success rate for its investments
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INVESTMENT OVERVIEW: 8PG The Big Picture
A name change to Eight Peaks is planned

Zafar Karim, AIM-listed Legendary Investments PLC’s (LON:LEG) chief executive, is very upbeat when he talks about the appointment of Rene Schuster as chairman of VirtualStock.

Legendary holds 6.8% in the retail procurement software specialist, a stake worth around £4.8mln based on the latest funding round.

Watch: Legendary Investments 'unlocking private opportunities' for retail investors

Schuster is a big catch, says Karim.

He led Telefonica Deutschland when it floated in the largest IPO in Europe in 2012 and helped 02 become the leading brand in Germany.

That’s in addition to various other high-profile positions at global telecoms and private equity groups.

In short, a serious name in the market and a sign of how rapidly Virtualstock is growing.

Virtualstock’s software, The Edge, allows retailers and their suppliers to talk remotely and it has already picked up some the largest names in UK retail as customers including Tesco, John Lewis, Sainsbury’s.

The NHS, too, is using it to improve its procurements systems.

Sales have grown by 70% over the past year and it is currently the biggest success in AIM-listed Legendary’s portfolio.

Read: Legendary Investments swings to profit in full year as it proposes name change to Eight Peaks

But Karim is enthusiastic too about New Zealand-based fintech IBS, where it has an 11% stake, and he himself owns 35%.

IBS has just received a licence to do business in NZ, which is no small feat, says Karim.

In its last financial statements, the stake in IBS was valued at about US$1.1mln, but fintech is a hot property globally and New Zealand relatively untapped.

Legendary also has a 9.7% stake in fast growing corporate funder Crowd for Angels and a 2% stake in offshore Tunisia-focused oil group Dunraven, all of which are held in the books at very prudent valuations, says Karim.

That conservative approach is perhaps one reason why the shares currently trade at a discount to net assets, but Karim is upbeat.

Dunraven is set to list next year while Virtualstock is already eyeing a float on Nasdaq, where valuations are traditionally much higher than in London.

Selective approach

Karim says Legendary’s approach is very selective, something that is not going to change soon.

The aim is for a success rate of one in 25, itself much better than the average for early stage investors, but so far, the hit rate is five out of twelve.

Net assets at end March are worth £6mln, and are currently at £6.5mln compared to market cap of £3.65mln at 0.1p.

In May, the company raised £550,000 through a placing and subscription at 0.1p that was backed by Karim.

“We’ve kept our head down, he says, but we know what we are doing and now have a stable of investments coming to maturity at different times.

“We are looking to take the company to the next level, including by strengthening the board.”

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Eight Peaks Group PLC Timeline

CN Research
September 03 2018

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