Interim Report for the six months ended 31 December 2016

17 March 2017

Dissemination of a Regulatory Announcement that contains inside information according to REGULATION (EU) No 596/2014 (MAR).

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Over the course of the last few days there have been a number of developments at Ve Interactive Limited ("Ve"), a business which represents Concha's principal investment in which it invested £4m at a £930m valuation (representing 0.43% of the issued share capital) during March 2016 and so the timing of the release of this interim statement provides an expedient opportunity to provide an update as to the status and performance of this key investment.

As I stated in my previous Chairman's Statement in December 2016, we had been encouraged by the November announcement of the appointment of Stuart Chambers as Chairman designate of Ve and the governance changes which immediately followed provided comfort that the business was being prepared for the next stage of its strategic development, including an anticipated round of institutional funding. We had, as I have previously stated made a number of introductions to global investment banking institutions which by its nature had afforded us closer ties with the company's executive management team and a greater insight in to the company's trading performance.

Over the course of the last six months, the disconnect between Ve's aggressive programme to extend its geographical reach and the required access to working capital has widened. This, coupled with revenue growth which has fallen behind Ve management's near term expectation, has placed significant strain on both Ve's operations and heightened frustrations amongst shareholders and other stakeholders alike. Earlier this month, a consortium of experienced long-term shareholders of Ve, advanced a number of funding proposals which will not only provide Ve with the access to capital required to fund its near-term operations but also to fund its longer-term growth aspirations. Consideration for the initial tranche of funding has largely been satisfied by the transfer of existing Ve equity from management, the effect of which has minimised the dilutive effect on the equity interests of the existing shareholder base. It is anticipated that further funds will be secured by way of a rights issue and that this process is expected to conclude in the near future.

In addition to the provision of funding, the consortium has also sought to introduce a number of experienced executives to steward the business through this period of transition. The introduction of a new CEO and interim Chairman, together with a professional multi-disciplined team will supplement the existing talent present within the business. Over the course of the next three months, this new team intends to commence and conclude a process of re-organisation, rationalisation and revenue growth, the latter resulting from a number of identified revenue opportunities which will allow Ve's portfolio of offerings, including the optimisation of its mobile browsing services to improve both market share and yield. Significant reductions to its operating cost base will see the business exit from smaller markets, centralise its global finance function and drive growth from three core geographical hubs (EMEA, Americas and Asia) which in combination will support the new management team's plans to secure a position of being cash break-even by the end of 2017.

Our initial view of Ve and its potential remain the same. The technology that underpins its business is proven and its vision to use technology to overcome the common challenge faced by all online businesses in respect of expanding and converting customers without flaw. However, in order to scale effectively it must now shed its "start-up" culture, rationalise its operating base and focus on the introduction of a number of identified revenue enhancing "martech" and advertising product initiatives that are intended to drive the business to break even during 2017. Whilst recent events will no doubt impact the perception of the investment opportunity Ve represents, the Board believes that this decisive action will accelerate Ve's timetable to profitability and in turn provide an earlier exit opportunity than would otherwise have been possible. However, the vision proposed is not without its challenges. The business will need to restructure both its short and long-term liability base as well as secure the support of the shareholders, many of whom will have invested at valuations significantly higher than the implied valuation now placed upon the business.

The current funding proposals are still being negotiated and may therefore be subject to change. We will however, ensure that our shareholders are kept abreast of developments at Ve as it begins a new phase in the development of its business and make further announcements as appropriate.

Unaudited Interim Results

Whilst your Board has closely monitored the developments of Ve outlined above, it has also continued to evaluate the merits of other investment opportunities. Whilst we have not supplemented our investment portfolio during the period, the reported loss before exceptional items of £0.28m for the period (2015: Loss £0.39m) reflects the costs associated with pursuing discussions with target investee opportunities and preserving Concha's status as an AIM quoted entity. In addition, and in the light of recent events at Ve, your Board has also sought to impair the carrying value of its investment in Ve to more fairly reflect the valuation of recent transactions at Ve, which indicates a current valuation of Ve of £300m, the impact of which has been to further increase the loss for the year by £2.71m as a result of impairing the investment via the inter-company loan, resulting in a retained loss of the period of £2.99m (2015: Loss £0.38m).

Your Board will continue its process of review and will update the market further as and when it is appropriate to do so.



18 Buckingham Gate, London, SW1E 6LB

Concha plc
Chris Akers, Chairman
SPARK Advisory Partners Limited (Nominated Adviser)
Sean Wyndham-Quin
Mark Brady
+44 (0) 203 368 3550


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