Cauta Capital files accounts; £7 million of creditors, £70 million of investments parachuted in?

Cauta Capital issues unregulated bonds paying 7-11% interest with a 10 year term.

The company has recently filed its accounts for the year ending April 2018. Due to Cauta’s small size, they were unaudited and did not include a profit and loss account.

The accounts show net assets of £70 million, consisting predominantly of £70 million of investments under “Fixed assets” (described later as “a portfolio of listed shares”), a further £7 million of current assets, minus £7 million of creditors (i.e. bondholders). Which seems like a pretty healthy financial position.

The accounts however immediately raise the question; where did this £70 million in investments come from?

This item in the accounts can be traced back to Cauta’s first accounts for April 2016. In this period, the company raised £1.7 million from investors, and according to the director’s report, “The company has invested £1,472,388 and acquired a further £40,032,988 in listed investments”. How exactly it acquired this £40-million-odd in listed shares is not elaborated on; clearly it had little to do with the £1.4 million net invested by bondholders.

In April 2017 this £40 million share portfolio increased to £65 million in value, and then in the latest accounts it increased again to £70 million.

After the April 2016 accounts, the company significantly cut down the level of information provided in its annual accounts; the 2017 and 2018 accounts did not include a director’s report or profit and loss account.

The 2016 accounts disclosed that of £1.7 million raised from investors, £435,000 was paid out as commission (i.e. around a quarter). Subsequent accounts have not disclosed how commission was paid for further fundraising.

The £70 million listed share portfolio is clearly of paramount importance to Cauta Capital’s financial health. In fact it rather raises the question: if Cauta Capital was able to get c. £40 million of capital injected into it from outside in its first year of trading, why bother raising £1.7 million from the investing public at all?

Cauta Capital is currently being promoted in the French market. According to analytics from similarweb.com, Cauta receives 85% of its search traffic from a total of 24 paid keyword searches, of which the top 5 are French terms which translate as “property investment”, “invest without money”, “stockmarket trading opportunity”, “investment in graphene” and “investment in forestry”.

Advertisements

One thought on “Cauta Capital files accounts; £7 million of creditors, £70 million of investments parachuted in?

  1. I looked at these bonds when they were first offered. Having spoke with the insurers that covered the coupon default I was not convinced. Further investigations led me to this statement by the company. Enough said !!!

    3.5. There is no certainty that the Company will generate sufficient profits to be able to pay the Coupon, although the director envisages that with the availability of additional funds, they will be able to expand their invoice discounting activities and thereby conduct sufficient business to meet the Coupon commitments and more.

    Like

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s