Greencare Capital - 2021 Final Results

26 April 2022                                                      

Greencare Capital plc

("Greencare" or the "Company")

Final Results for the Year Ended 31 October 2021

Greencare (AQUIS: GRE), the investment company focused on investing in medicinal cannabis, CBD and related wellness areas, announces its final results for the year ended 31 October 2021.

Extracts of the Company's audited report and accounts can be found below. A full copy of the final results, which should be read in full, will shortly be available from the Company's website and will be sent to all shareholders.

This announcement contains inside information for the purposes of the UK Market Abuse Regulation and the Directors of the Company are responsible for the release of this announcement.

For further information, please contact:

Enquiries:

Greencare Capital plc

CEO's Statement

for the year ended 31 October 2021

Introduction

Greencare Capital plc (the "Company" or "Greencare") is an enterprise company quoted on the Aquis Stock Exchange Growth Market ("AQSE"). The Company was incorporated on 1 October 2019 and its shares were admitted to trading on 30 December 2019.

The Company's investment strategy is to focus on the changing regulatory environment surrounding legal medicinal cannabis within countries that have well-developed and reputable laws and regulations for its production, research and distribution as well as investment opportunities within the hemp and CBD wellness sectors and other plant-based medicines. The law and regulation surrounding the cannabis sector, however, is constantly evolving.  The Company's investments, where applicable, will only focus on companies and businesses with activities that are lawful in the jurisdiction in which they take place and are either already lawful or are capable of being lawful in the UK. The Directors therefore believe that such activities should not amount to any offences under the POCA 2002 in the UK.

The Company invests directly or indirectly in public or private companies, in supply and distribution chains, or other businesses associated with the sector. Investments may take the form of debt or equity and it is expected that investment will ordinarily seek capital growth in the medium term in preference to income generating opportunities.

The Company identifies investment opportunities in the cannabis sector predominantly in Europe. The Directors believe that there are numerous investment opportunities within the wellness industry as well as fast-growing production, distribution and other associated businesses that will be of interest to the Company. The Directors will not invest in the recreational cannabis sector, or in entities or activities supported by the recreational sector, or any other related activities which would be deemed illegal under UK legislation.

Investments during the year

During the period under review, the Company has continued to review various investment opportunities and, on 31 March 2021 it announced that it had agreed to invest £100,000 in Clearly Supplements Limited ("Clearly"), as part of a £500,000 fund raising.  The investment is by way of a convertible loan note ("CLN") with a 5 per cent. coupon and a 12-month duration. The CLN is expected to convert at the time of a public listing at a 30 per cent. discount to the placing price at that time, subject to a maximum price of £157.50.

Clearly has developed a full range of products under the Clearly CBD brand. It is also establishing a number of distribution channels which include direct sales channels, and the Board is pleased to note that Clearly now has approximately 80 direct sellers, who are being trained and supported.  Clearly intends to increase this number significantly during 2022. It is also focused on certain other key market segments such as the fitness sector and, at the same time, will be looking to build a retail presence and to operate online. Clearly has also entered into a supply agreement with Hempflax International, Europe's largest independent hemp grower and processor.

Clearly is planning its own stock market listing in the short term.

On 23 April 2021, the Company agreed to make another equity investment of £100,000 in Voyager Life Limited ("Voyager"), as part of a £671,000 fund raising by Voyager.

Voyager, a health and wellness business focused on CBD and hemp seed oil, has developed a range of products under the Voyager and Voyager Life brands, including oils, gummies, bath and skincare products and is already generating revenues. It is currently developing a number of distribution channels which include direct sales, drop shipping, specialist retailers and online marketplaces.

On 30 June 2021, Voyager announced that it had completed its own IPO and admission to trading on The AQSE Growth Market, with Greencare holding approximately 2.8 per cent. of the enlarged issued share capital of Voyager at the time of flotation. Voyager now has approximately 32 formulated products, approximately 90 total stock keeping units available across its website and three retail stores in Scotland. With sales increasing, a strong product portfolio, broad distribution strategy and the company well capitalised, we look forward to further positive trading updates from Voyager.

The Board continues to believe the CBD sector has significant potential, with the UK being one of the world's largest and fastest growing markets for CBD products. The Board, however, is also cognisant that the CBD sector has not performed well recently and the latest developments with novel foods legislation in the UK, whilst providing clarity, is likely to cause short to medium term turbulence as companies are required to adapt.  Within Europe, novel foods legislation is still to be agreed and has been much slower than initially anticipated.  This makes cannabis and CBD investments within Europe very difficult. 

As such, the Board considers it will continue to explore further investments in CBD and cannabis cautiously, as well as looking at related health, wellness and plant based medicine investments.

Board Changes

Since publication of the Company's 2020 Final Results in April 2021, Fabio Carretta and Nicholas Lee have both stepped down from the board to focus on their other business interests. Both departed the Company with the Board's thanks and best wishes. I was appointed to the board in May 2021 as CEO, and Monica Formenti was appointed as a non-executive director in September 2021.

The Board intends to align itself with the activities of the Company and its chosen investment areas and therefore may look to make further directorate changes as opportunities present themselves.

Outlook

Greencare continues to actively pursue additional investment and acquisition opportunities of varying sizes in the cannabis and CBD space, however, it does so cautiously. It also anticipates it will take a broader view in the medium term, or until such time as the sector shows stability, than it has been doing to include related health, wellness and plant based medicine investments as per its strategy.

The Directors believe that Greencare is well placed to deploy funds in line with the Company's stated investment strategy and looks forward to updating the market further in the near future.

Richard Tonthat

Chief Executive Officer

25 April 2022

Statement of Comprehensive Income

For the period ended 31 October 2021

Statement of Financial Position

As at 31 October 2021

Statement of Changes in Equity

For the year ended 31 October 2021

Statement of Cash Flows

For the year ended 31 October 2021

Notes to the financial statements

For the year ended 31 October 2021

1. General information

Greencare Capital plc is a public limited company limited by shares and was incorporated in England on 1 October 2019 with company number 12237710. Its registered office is 5 Fleet Place, London, EC4M 7RD.

The Company's shares are traded on the Aquis Stock Exchange Growth Market under ticker ECP and ISIN number GB00BJBYK814. 

The Company's investment strategy is to focus on investments in Cannabis sectors within countries that have well-developed and reputable laws and regulations for its production, research and distribution; and the CBD and Hemp sectors.

The financial statements present the year to 31 October 2021. The comparatives present the 13 month period from 1 October 2019 to 31 October 2020.

2. Basis of Preparation

The financial statements of Greencare Capital plc have been prepared in accordance with U.K. Adopted International Financial Reporting Standards in conformity with the Companies Act 2006 ('Adopted IFRS').

These financial statements are prepared on a going concern basis, under the historical cost convention, as modified by the recognition of listed investments at fair value.

The financial statements are presented in Pounds Sterling, which is the Company's presentation and functional currency, and are presented in £'000 unless otherwise stated.

The preparation of the financial statements requires the use of certain critical accounting estimates. It also requires management to exercise its judgment in the process of applying the Company's accounting policies. The areas involving a higher degree of judgment and complexity, or areas where assumptions and estimates are significant to the financial statements are disclosed in Note 3 to the financial statements.

3. Going Concern

As at 31 October 2021, the Company had cash of £0.88 million. As an investment business, the Company has limited operating cash flow and is dependent on the performance of its investments and its cash balances for its working capital requirements. Annualised normal running costs of the Company are circa £0.3 million. As at the date of this report, the Company had approximately £0.74 million of cash at bank.

The Directors are therefore of the opinion that the Company has adequate financial resources to enable it to continue in operation for the foreseeable future. For this reason, it continues to adopt the going concern basis in preparing the financial statements.

The Company's employees can carry out their duties remotely, via the network infrastructure in place. As a result, there was no disruption to the operational activities of the Company during the COVID-19 social distancing and working from home restrictions. All key business functions continue to operate at normal capacity. 

4. Earnings per share

5.   Dividends

The Directors do not recommend payment of a dividend for the period ended 31 October 2021.

6.   Annual General Meeting (AGM)

The Directors will inform shareholders of the arrangements for the AGM in a separate announcement.