AQRU plc - Annual results

The information contained within this announcement is deemed by the Company to constitute inside information stipulated under the Market Abuse Regulation (EU) No. 596/2014, as retained as part of the law of England and Wales. Upon the publication of this announcement via the Regulatory Information Service, this inside information is now considered to be in the public domain.

Press Release

1 April 2022 

AQRU PLC

("AQRU" or "the Company") 

 Annual results

AQRU plc (AQSE: AQRU), an incubator specialising in decentralised finance ("DeFi") and formerly called Dispersion Holdings plc, announces its audited results for the 12 months ended 31 October 2021.

Highlights:

Post-period highlights:

Outlook: 

Commenting on the results, Philip Blows, Chief Executive of AQRU said: "AQRU has established a strong platform for long-term growth and value creation by investing in innovative companies developing new DeFi solutions for investors worldwide.

"Our online platform for cryptocurrency investors looking to generate high yields has got off to a flying start and is growing strongly. We look to the future with great confidence as demand for our platform increases and we continue working with regulators to ensure our products are available to investors across the world in a regulatory compliant way."

The Directors of AQRU plc accept responsibility for this announcement.

For further information please contact:

About AQRU plc:

AQRU is an incubator specialising in opportunities in decentralised finance (DeFi), a disruptive technology using blockchain and cryptocurrencies to remove financial intermediaries from transactions, creating a cheaper, more efficient and more secure way of providing financial services. Listed on the Aquis Exchange in London, we apply our expertise to the business operations and strategic plans of FinTech companies in the UK, USA and Canada, and act as an accelerator for start-ups and early-stage companies. www.aqru.io 

Chairman's statement

Introduction 

I am delighted to report the Company's first full year results since its admission to the Aquis Stock Exchange Growth Market (AQSE) on 30 April 2021.

Approximately £9m before expenses was raised at the time of IPO, which together with about £2m raised in an earlier pre-IPO round, gave the Company total proceeds of approximately £11.2m before expenses to implement its investment strategy.

Despite volatile conditions in the cryptocurrency and digital assets markets, the Company moved quickly to make two acquisitions and to invest in seven exciting and potentially disruptive businesses. The acquisitions included Accru Finance and DeFi Yield, both of which became fully owned subsidiaries of the Company in October 2021, thereby enabling the Company to consolidate and benefit from their expected growth in the coming years.

AQRU made a £0.31m pre and post-tax profit in its maiden year of operations (2020: £nil). There was no revenue during the period as AQRU was in start-up phase. The results partly reflect investment gains less administrative expenses of £1.1m.

Cash and cash equivalents as at 31 October 2021 amounted to £10.38m (2020: £nil) even as AQRU pursued an active investment programme. The strong cash balance sheet reflects our policy to restrict investments made in cash and fund two major acquisitions through issuance of shares. As a result, AQRU has considerable financial liquidity and flexibility to support the long-term growth of its current investee companies as well as to consider new opportunities at favourable valuations. 

The DeFi revolution is still at an early stage of development and growth and is set to spawn many new financial products and applications. With a strong balance sheet and highly experienced management team, AQRU is well positioned to take advantage of the new opportunities ahead and create value for shareholders.

Our two operating subsidiaries, namely Accru Finance and DeFi Yield, are now entering an exciting stage in their development. The former launched its online retail trading platform on 1 December 2021 under the AQRU brand in multiple overseas jurisdictions. The platform provides investors with a simple way to convert fiat currencies into cryptocurrencies and earn high yields by lending cryptocurrencies through AQRU.io's secure and fully insured peer-to-peer technology.

We are delighted with the progress made by this business having seen it sign up over 10,000 customers in its first few months of operation, and it is currently registering over two hundred new users every day. This traction has led to £16.5 million being placed on the platform by both retail and institutional customers.

We are also delighted with the progress made by AQRU's Yield-as-a-Service offering that allows existing fintech firms and crypto exchanges to plug directly into AQRU's yield offering via a simple API. AQRU's new international sales team is promoting this service and building a significant pipeline of opportunities.

DeFi Yield is in the advanced stages of building the next generation of its own platform providing decentralised yield solutions for the crypto institutional market, with expected launch in Q2 2022. These investments, together with the progress being made by the remainder of our portfolio companies, provide the Board with confidence about our prospects. 

On behalf of the Board, I would like to thank all our shareholders and staff for their support and hard work during the year and look to the future with great optimism.

Mike Edwards, Non-Executive Chairman

A rapidly growing market 

DeFi is a disruptive technology that uses the blockchain and cryptocurrencies to remove financial intermediaries from transactions, creating a quicker, cheaper, more efficient, and more secure way of providing financial services. Most DeFi applications are built on top of Ethereum, the world's second-largest cryptocurrency platform.

Decentralised applications utilise smart contracts, digital programmes which autonomously facilitate contracts and transactions, which are used within the Ethereum network to safeguard from tampering and hacking. The Ethereum network executes the smart contract's code on the blockchain, ensuring tamper proof, verifiable transactions.

Blockchain organises this data into blocks which are then chained together in an append-only mode. This is the building block of "internet value" and facilitates recording of interactions and transfer of the record of ownership peer-to-peer, without requiring a centrally coordinating entity.

DeFi applications include:

It is estimated that the total value locked, the overall value of assets deposited in transactions, on the Ethereum blockchain alone has grown from US$12.6bn in November 2020 to US$96.2bn in November 2021. (Source: Statista, TVL (total value locked) in decentralized finance (DeFi) on the Ethereum blockchain from August 2017 to January 12, 2022 (in million U.S. dollars)).

Operational review

The Company's strategy is to identify investment opportunities in the FinTech sector within the UK, US, and Canada. The Company plans to add value by applying capital and expertise to the business operations and strategic plans of investee companies. The experience and operational skills of the Board are intended to act as an accelerator to start-ups and early-stage companies that have technological know-how but lack the skills, contacts, and capital to maximise their profit opportunity.

During the year, the Company made seven investments including four initially made prior to admission to the Aquis Exchange in London, being NFT Investments plc, a UK investment company specialising in non-fungible tokens; ePIC Blockchain Technologies, Inc., a Toronto based leader in crypto mining infrastructure and supplier of ASIC mining machines; Defy1 SAS, a company specialising in decentralised technology development and creating industry-specific social token ecosystems; and Sporting Icon Ltd, a sports-focused NFT platform.

Following the IPO, the Company made further investments:

In October 2021, the Company also announced the acquisitions of Accru Finance and DeFi Yield. We are already seeing significant growth in the AQRU.io retail trading app.

Outlook

The Company considers that there is a sizable, and rapidly growing, potential market for the DeFi industry, with applications that include decentralised currency exchanges, lending platforms which use smart contracts to replace banks, and prediction markets which remove bookkeepers.

We firmly believe that the growth in DeFi will continue as evidenced by the increased presence of large institutional investors in the space. We are in an excellent position to take advantage of this move:

With a strong balance sheet and experienced management team, the Company is well positioned to take advantage of the recent correction in the blockchain and digital assets sectors by investing at attractive valuations. As a result, the Board looks forward to the future with great confidence.

Phil Blows

Chief Executive

Consolidated Statement of Profit or Loss and Other Comprehensive Income
For the year ended 31 October 2021

The notes contained in the Group's Annual Report form part of these financial statements.

Consolidated Statement of Financial Position
For the year ended 31 October 2021

The notes contained in the Group's Annual Report form part of these financial statements.

The financial statements were approved by the Board of Directors on 31 March 2022 and were signed on its behalf by:

Nicholas Lyth
Director      

The financial information set out in this announcement does not constitute statutory accounts. This financial information has been extracted from the audited full accounts of the Group for the year ended 31 October 2021. The financial statements are prepared in accordance with Financial Reporting Standard 102. A copy of the Company's financial statements for the year ended 31 October 2021 will be posted to shareholders and will be delivered to the Registrar of Companies.

The Group does not declare a dividend for the period.

The full Annual Report of the Group will be available on the Company's website: www.aqru.io.

The Directors of the Group accept responsibility for the contents of this announcement.