Blue Star Capital plc (LON:BLU) has today announced its final results for the year ended 30 September 2017.
Highlights:
· Net assets of £3,513,262 (2016: £1,757,165)
· Loss for the period of £188,713 (2016: loss of £165,005)
· Acquired a 31% shareholding in SatoshiPay Ltd, a blockchain business focused on nanopayments
· Cash position at 30 September 2017 of £37,970 (2016: 51,184)
· The Company raised £500,000 before expenses through a further issue of equity shortly after the year end
The Annual Report and notice of Annual General Meeting (“AGM”) will be posted to shareholders shortly and will be available to view on the Company’s website http://www.bluestarcapital.co.uk.
The AGM will be held at the offices of Cairn Financial Advisers LLP, Cheyne House, Crown Court, 62-63 Cheapside, London, EC2V 6AX on 26 March 2018 at 12.00 p.m.
Tony Fabrizi Chief Executive Officer of Blue Star Capital plc, commented: “The last year has seen the Company make considerable progress with the acquisition of a sizeable shareholding in SatoshiPay. The Board is confident that SatoshiPay has the potential to deliver significant value for Blue Star shareholders and it looks forward to working with SatoshiPay’s management in unlocking that value.”
Chairman’s Statement
The last financial year has been one of considerable progress for the Company. A substantial shareholding has been accumulated in a blockchain business called SatoshiPay. In addition, the Company has seen solid progress with Sthaler, which has successfully raised money at a higher valuation and some of DTL’s investments are also making progress, most notably VNU and Freeformers. Unfortunately, we have also had the sad news of Graham Parr’s sudden death last year; he is greatly missed.
Financials
The Company reported a loss for the period of £188,713 compared to a loss of £165,005 in the corresponding period. We posted an unrealised a gain on Sthaler but incurred much higher transaction fees during the year, arising from several investments in SatoshiPay and a number of fund raising exercises.
Net assets have increased to £3,513,262 at 30 September 2017, changing from £1,757,165 at
30 September 2016. Blue Star’s cash position at 30 September 2017 was £37,970 compared to a balance of £51,184 at 30 September 2016. The Company raised £500,000 before expenses through a further issue of equity shortly after the year end.
Portfolio Review
Disruptive Tech Limited (‘DTL’)
Company description
DTL is a Gibraltar based investing company. DTL has five current investments, the most important of which are its 14% shareholding, on a fully diluted basis, in VNU Group LLC, a speciality online direct retailer of premium goods paid for through an instant credit facility a 10.20% interest in Freeformers which helps companies fulfil the employee aspects of their digital strategies and an 8.4% stake in Nektan plc, a leading international B2B mobile gaming company.
In 2016, DTL informed investors that it would seek to exit all the shareholdings in the five portfolio companies during the course of the next 3 years and would disperse the proceeds back to DTL’s shareholders. Disbursement of proceeds is expected to be either through the distribution of shares if a company is listed on a public market (post any lock in period and stability in the share price) or cash from the sale of DTL’s positions. At this stage DTL has not commenced its strategy of disbursing its investments but the Board of Blue Star is hopeful of progress this year.
Blue Star’s shareholding in DTL
Blue Star’s £300,000 investment in DTL was made in 2007. Since its original investment, DTL has raised money at significantly higher valuations and while the Company’s percentage shareholding has fallen to 2.1%, the value of the investment has increased to its current carrying value of £1.597 million.
Sthaler Limited (“Sthaler”)
Company description
In June 2015 the Company invested £50,000 in Sthaler Limited, an early stage identity and payments technology business which enables a consumer to identify themselves and pay using just their finger at retail points of sale. In May 2017, Sthaler announced that it had raised £3 million of new equity on a pre-money valuation of approximately £19 million.
Sthaler jointly developed Fingopay in conjunction with Hitachi. Fingopay uses a unique finger vein ID process that is considered by Sthaler to be more secure than finger print readers and faster than chip and pin operations. The technology is widely adopted in Japan and it is Sthaler’s aim to commercialise the technology in the area of payments globally.
It is the Directors’ understanding that Sthaler is having ongoing discussions with a large number of organisations regarding the commercialisation of its technology. Whilst there is no guarantee that these discussions will result in commercial sales in the short term or at all, the Directors remain optimistic of an exciting future for Sthaler. Further details regarding Sthaler are available at its website www.sthaler.com.
Blue Star’s shareholding in Sthaler
The Company’s shareholding in Sthaler is currently 1%, valuing the Company’s stake at £227,000.
SatoshiPay Ltd (“SatoshiPay”)
Company description
SatoshiPay is developing a two-way payment platform, which enables online content providers to monetise their digital content through the acceptance of nanopayments. Using the SatoshiPay platform, online media companies are able to process nanopayments with minimal transaction fees.
SatoshiPay believe its technology, which is based on blockchain, will provide a direct alternative to paywalls and subscriptions, currently adopted by some media companies, and should instead enable users to pay for consumption on a per article, per song or per download basis; or for content to be consumed and paid for on an incremental basis (payment per paragraph or minute of audio or video content). SatoshiPay works without software download or sign-up for the user (save for creation/top up of an online wallet). Payments are instant and the user’s wallet balance is available on each website that integrates the SatoshiPay software.
In July 2016, SatoshiPay announced collaboration with Visa Europe’s innovation department relating to a proof of concept project to develop the capability to deliver a trusted top-up service to a digital wallet, using just a Visa card. Following the successful conclusion of that project, SatoshiPay’s primary focus moved on to making its website “widget” more appealing and compatible to the mass markets by adding payment methods like credit cards for topping up credit without the need for website users to hold Bitcoins. In May 2017, SatoshiPay announced that it had launched PayPal support allowing top-ups of its SatoshiPay online wallet via PayPal. In December 2017 SatoshiPay announced that consumers would be able to top up their SatoshiPay account using credit cards. In December 2017 SatoshiPay also switched from using the Bitcoin blockchain for settlements to the Stellar distributed ledger network and entered into a strategic partnership with the Stellar Development Foundation.
The Directors believe the sizeable investment in SatoshiPay has the potential to generate significant returns for the Company’s shareholders and are excited by this opportunity. Further details regarding SatoshiPay are available at its website www.satoshipay.io
Blue Star’s shareholding in SatoshiPay
The Company’s shareholding in SatoshiPay is currently 31% and is valued at cost of £1.672 million.
Outlook
The Board believes the Company’s portfolio has been significantly improved as a result of the significant shareholding in SatoshiPay. At the same time, the running costs have remained low and are kept under strict control. Overall, the Directors believe the Company is now far better positioned to examine opportunities to enhance shareholder value and the Board views the future outlook with confidence.
