Tekcapital plc (AIM: TEK ) FY19 Results showed that its portfolio valuation increased 48% to US$20.3m (2018: US$13.70m) with Net Assets jumping 40% to a record level of US$22.25m(2018: US$16.13m).

Furthermore, revenue from the services business increased 15% to US$1.20m (2018: US$1.04m) bringing total revenue, including recognition of the increase in fair value of the portfolio companies of US$6.52m, to US$7.72m (2018: US$6.83m).

Careful management of operating expenses, which were reduced by 7% to US$1.59m (2018: US$1.72m) during the period, resulted in an audited profit before tax of US$5.52m (2018: US$4.55m).

Importantly for cashflow, the Company continued to see growth of technology transfer services following the release of a new version of the Invention Evaluator tri-lingual website throughout Latin America. Consulting revenue also increased 15% over the previous year to collectively cover approximately 55% of the total cost of sales and operating expenses of the Company.

The Company also strengthened the board during the period with the appointment of Lord David Willets and Mr. Louis Castro as independent non-executive directors: 
Rt Hon Lord Willetts FRS is President of the Resolution Foundation and former U.K. Minister for Universities and Science. He served as the Member of Parliament for Havant (1992-2015), and previously worked at HM Treasury and the No. 10 Policy Unit. Lord Willetts is a visiting Professor at King’s College London, former Chair of the British Science Association and a member of the Council of the Institute for Fiscal Studies. 
 
Louis Castro is a highly experienced and well qualified Director and Cartered Accountant with some thirty years spent in industry and in financial services, including positions as Chief Executive, Finance Director and Non-Executive Director of several AIM listed companies. He was previously the CFO at Eland Oil & Gas plc where he had full executive responsibility for finance, legal, corporate finance and a budget of over US$150m. Louis is a Fellow of the Institute of Chartered Accountants of England & Wales.

Post Period End Equity Fundraisings

In February 2020, the Company completed a fundraising of $0.96 million gross through the placing of 14,800,000 new ordinary shares with new and existing investors at a price of 5 pence per share. The issue of the new shares and receipt of the proceeds from the fundraising were received during February 2020.

In May 2020, the Company announced that it had raised US$1.15 million (before expenses) by means of a conditional fundraise through the issue of, in aggregate 9,250,000 placing shares at 10 pence per share. The placing will be subject to Tekcapital’s shareholders approval at a general meeting on 19 May 2020. 
 
Outlook

The Board is confident that continued investment in our portfolio companies remains the right approach for long-term value creation for TEK Shareholders and is currently exploring early stage venture funding for a number of the portfolio companies.

Whilst there has been no profitable exit on portfolio companies to date, the Company states it is executing on its strategy, which should result in further increases in returns on invested capital as its portfolio companies continue to mature towards exits.

Shares in TEK have opened 9% following the results

Dr. Clifford Gross, Executive Chairman said: “I’m glad to report that through the collective efforts of our dedicated and capable team we have achieved record results in 2019.

The continued development of our portfolio companies combined with improved service revenues has resulted in solid financial performance, whilst we simultaneously reduced our operating expenses by 7%.”