Perth investment group Braveheart expects to make “big” sales from its directly-held portfolio as it continues to target opportunities in the management of loan and growth funds for small and medium-sized businesses.
The firm revealed it was back in the black for the year to the end of March, booking pre-tax profits of £68,000 for the period after recovering from a £1.7 million loss during the previous 12 months.
Braveheart’s preliminary results also hailed the impact of increased fee income, which blossomed from £1.26m during FY12 to £3.0m a rise of 139% for the most-recent year.
Total income reached £3.3m in the period, helped by a £306,000 revaluation of investments.
And chief executive Geoffrey Thomson revealed the group’s maturing portfolio of direct investments in the technology sector was now on the road to fruition.
He expects a pipeline of profitable exit prospects in the short and medium term.
“We put a portfolio together since we launched in 2007 and it is now a relatively mature portfolio of technology companies,” Mr Thomson said.
“We would expect that we would be able to start to realise value.
“There will be some big numbers coming through from these realisations shortly, and when we make these realisations we will be in a position either return funds to shareholders or to reinvest.”
He said Braveheart was also looking at fresh opportunities in fund management, which would deliver a reliable revenue stream, as opposed to “lumpier” direct investments with unpredictable results.
“What we have tried to do over the last couple of years is build the fund management side of the business, which has contracted revenues for us over the next 10 years, so we can build a scalable business based on that,” Mr Thomson said.
“The increase in turnover is primarily because of this and we want to do more.
“There are a lot of government initiatives designed to support SMEs and banks are clear still not lending, so we are looking at opportunities.”
He said there were signs the economy was improving but that the pattern remained ambiguous following a quiet first quarter and “strong” second quarter.
Early in the year, Braveheart acquired Neon Capital Partners, the manager of the £48m Finance Yorkshire Equity Fund, and established Belfast-based WhiteRock Capital Partners to manage the £50m Growth Loan Fund in Northern Ireland.
Meanwhile, Strathtay Ventures was awarded a management deal for the £10m Lachesis seed fund for universities in the East Midlands.
The Braveheart-owned Envestors network also led £17.6m of fresh financing for companies, while growing its increasingly international presence with a new office in Monaco.
Funds under management rose to £121m during the year, while Envestors led a further £2.7m fundraising effort for clients and WhiteRock won a major industry award for its operations in Northern Ireland.
Amisha Chohan, at house broker Sanlam Sunrise, said the results “exceeded expectations” and upgraded revenue forecasts to £4.0m for FY14.
She forecast profits of around £600,000 from the sale of two investments, with up to three deals possible during the year.