CHP Delivers Strong FY 2016 Results - Poised for Growth
- Revenues for 12 months to 31 December 2016 $4.2 million
- Advisory fees earned $2.74 million - 218.6% increase on previous year
- Net Profit After Tax $1.858 million
- Net Tangible Asset value $11.006 million - 105.14% increase on previous year
- Net Tangible Asset backing per share 3.67c per share - 2.8 times current share price
- Investment portfolio Fair Market Value $14.807m - 82.24% increase on capital invested
Chapmans reported revenues of $4.2 million and a net profit after tax of $1.858 million for the Company's financial year 2016.
It should be noted that these two results were impacted by a reduction in the Fair Market Value of the Company's Digital4ge investment from $5.778 million to $0.896 million (due to the market capitalisation of Reffind Limited (ASX:RFN), of which Digital4ge has a 48% interest, declining from $62 million to $4.8 million).
The Company's portfolio of investments performed strongly and delivered excellent growth. The total independent after tax fair market value of the portfolio increased by $6.682 million, from $8.125 million to $14.807 million - an increase of 82.24% on the investment cost - the amount invested in each investment. (See Table 1 in the link below: Asset Portfolio Performance as at 31 December 2016).
Advisory fees earned in the financial year 2016 were $2.74 million, an increase of more than three times on the previous year.
Net tangible assets more than doubled during the year, to $11.006 million - more than 2.5 times Chapmans current market capitalisation. Net tangible asset backing per share was 3.67c per share, which is more than 2.5 times the Company's current share price.
Chapmans strong full year 2016 results have been delivered by its commitment to its hands-on, high conviction investment approach to high growth investment opportunities across a diversified class of industry sectors.
The Company's adherence to its investment philosophy sees it well placed to deliver substantial capital upside for the half year to 30 June 2017, and beyond.
This will be supported by significant developments with its 20FOUR Media Holdings and Syn Dynamics investments, including positioning these investments for ASX listing, and a discontinuance of indirect (or 'look through') holdings in line with the Company's focus on 'active', direct investments.
INVESTMENT PORTFOLIO OVERVIEW
20FOUR Media Holdings Pty Ltd - Chapmans 39%
20FOUR Media Holdings (20FOUR) is a mobile digital media business. Its business model is highly scalable and is designed to capitalise on the global market opportunity in sports media content generated by a burgeoning mobile sports fan audience market.
20FOUR has a mobile App and online platform which allows fans to keep up with their favourite sport stars and access exclusive content free of charge, including personal stories and insights, master classes and one-on-one interaction.
The business caters to the rapidly evolving market in which the personal profiles of athletes have significant commercial value, and delivers this asset to market in a way that encourages big brands and media agencies to allocate marketing spend. The model also directly solves issues for players around monetising their values outside of salary cap restrictions and hazardous social media platforms.
The business is preparing to launch in May 2017, and post-launch will focus on athlete recruitment, platform development and wide scale commercial roll-out with major media agencies and brands ahead of a proposed ASX listing.
Digital4ge - Chapmans 15%
Digital4ge is a specialist early stage mobile technology business which identifies and secures majority equity interests in compelling early stage opportunities with scalable global market potential. It seeks to develop qualified opportunities to achieve liquidity and significant returns to investors, via ASX listings or trade sale.
Underlying investments include REFFIND Limited (ASX:RFN), which offers an innovative mobile employee rewards and engagement communication solution for companies and other organisations. Digital4ge listed RFN on the ASX in July 2015 and has a ~44% equity holding in RFN.
Digital4ge's other key asset is a 60.61% equity holding in Visual Amplifiers Limited (VAMP), a social media-driven product placement platform connecting influencers and advertisers. VAMP provides mass demographic product placement for brands on Instagram. It has successfully represented brands including Samsung (KRX:005930), Ebay (NASDAQ:EBAY), Smirnoff, Vittoria, General Pants and UniQlo.
Syn Dynamics Australia Pty Ltd - 80% Chapmans Opportunities
Syn Dynamics Australia Pty Ltd (SDA) has developed and patented a breakthrough, next generation plasma gasification technology with significant application in the global hazardous waste remediation and renewable energy industries.
It converts a wide range of carbon-based waste material into synthetic gas - 'syngas'. Syngas is a global commodity with a wide range of uses including various forms of renewable energy and as a fuel or feedstock for chemical manufacturers.
The technology has been developed over a 10 year period and solves the issues of chronic storage and insurance costs for hazardous and toxic waste generating heavy industries, while addressing large balance sheet liabilities associated with environmental and public health risks for large waste producers such as oil refineries, petrochemical manufacturers, mining, metals and pharmaceutical companies.
Compared to other clean tech or brown-to-green technologies, SDA's technology has breakthrough cost, performance and implementation advantages presenting mass scale adoption opportunities in huge addressable global markets.
SDA is currently conducting a 12 month R&D and Commercialisation Project with CSIRO, and has also entered into a term sheet for its first commercial scale transaction, a 50:50 joint venture with a leading Asia Pacific based corporate with significant operations in the resources, energy and environmental services sectors. SDA and its JV partner plan to install and operate the first commercial plant within the next 12 months before expanding activities throughout the Asia Pacific region.
Fantasy Sports Global Limited - 12% Chapmans Opportunities
Fantasy Sports Global (FSG) is a sports gaming product innovation and technology company focused on the development and operation of state-of-the-art fantasy sports platforms in Australia and key international markets. Fantasy sports are online games where participants assemble imaginary or virtual teams of real players of a professional sport. It is as rapidly growing, multi-billion dollar global industry.
FSG has accumulated a suite of fantasy sports platforms and sports wagering assets via in-house development and acquisition. It is able to offer daily and weekly free-of-charge fantasy sports games in T20 and One Day International Cricket, EPL and NBA, and has also struck successful sports code and media affiliate deals with the KFC Big Bash, Telstra (ASX:TLS) and others, and conducted successful pilot campaigns in India.
All FSG offerings include its sophisticated actuarial-based player performance and metrics system, called OneSport, which provides a complete turnkey database of player statistics to help users to better select and manage teams based on OneSport's dynamic player value updates.
FSG has signed its first wholesale supply agreement with the Australian arm of a large global sports betting company, under which its OneSport database and fantasy sports platform will be supplied on a white label basis, under a revenue share model. FSG aims to replicate this type of agreement with a number of high profile sports betting companies in Australia and key international markets including Asia, India and the UK. FSG plans to list on the ASX in 2017.
Chapmans Opportunities Limited (COL) is a subsidiary of ASX-listed diversified investment company Chapmans Limited (ASX:CHP). It is an investment entity focused on making non-controlling investments in small to medium Australian companies, predominantly providing active expansion capital in the technology sector. COL plans to seek an ASX-listing in due course.
To view the full release and the financial results for the full year ended 31 December 2016, please visit:
About Chapmans Limited
Chapmans Limited (ASX:CHP) is an ASX-listed diversified investment company engaged in special situation investments across a diverse range of industries, with a focus and expertise in the mobile and advanced industrial technology sectors. The Company seeks to be an active strategic investor in high growth areas of the market and to identify and work with emerging high growth companies. Chapmans' investment philosophy and approach are based on a unique mix of high conviction and special situation features, characterised by advisory and equity investments structured around specific events and assets for both public and large private corporates.
The Company made its first strategic investment into blockchain in 2017 and established the Blockchain Industry Advisory Board to identify and assess compelling blockchain investment opportunities. Chapmans' investment in blockchain technology aligns with its growth plans and commitment to investing in early stage technologies with reach into key international markets.
To learn more please visit: http://www.chapmansltd.com
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