Half Yearly Report

RNS Number : 9865W

Mobeus Income & Growth 2 VCT PLC

13 November 2014

 



Mobeus Income & Growth 2 VCT plc

Half-Yearly Report for the six months ended 30 September 2014

Mobeus Income & Growth 2 VCT plc, ("MIG2", the "Company" or the "Fund") is a Venture Capital Trust ("VCT") advised by Mobeus Equity Partners LLP ("Mobeus") investing primarily in established, profitable, unquoted companies.

Company Objective

The objective of the Company is to provide investors with a regular income stream, arising both from the income generated by the companies selected for the portfolio and from realising any growth in capital.

Financial Highlights

Results for the six months ended 30 September 2014

·	Net asset value (NAV) total return per share increased by 8.1% over the half-year.
·	An interim capital dividend of 14 pence per share was declared on 11 September 2014 following significant realisations in the period.  Following the payment of this dividend on 20 October 2014, cumulative dividends paid to shareholders since launch in 2005 total 37 pence per share.
·	£7.04 million of total net cash proceeds were received during the period including the partial sale of ATG Media and the sale of MachineWorks, Monsal, and DiGiCo.
·	A total of £1.57 million was invested in the period into Creative Graphics International and Tharstern.
·	Strong liquidity has been enhanced by a successful fundraising in 2014 raising net funds of £8.19 million.

Performance Summary

The net asset value per share of the Company at 30 September 2014 was 130.51 pence.

Cumulative total shareholder return per share (NAV basis)

Period	Net asset value (NAV) per share	Cumulative dividends paid per share	Cumulative NAV total shareholder return
			(NAV basis)
	(p)	(p)	(p)
As at 30 September 2014	130.51	23.00*	153.51
As at 31 March 2014	120.73	23.00	143.73
As at 30 April 2013	106.75	18.00	124.75
As at 30 April 2012	98.71	14.00	112.71
As at 30 April 2011	96.16	10.00	106.16
As at 30 April 2010	87.47	5.00	92.47
As at 30 April 2009	86.02	4.00	90.02
As at 30 April 2008	98.48	1.50	99.98
As at 30 April 2007	97.15	1.50	98.65
As at 30 April 2006	94.32	0.00	94.32

*This figure does not include the dividend of 14 pence paid on 20 October 2014. This will bring cumulative dividends paid to 37 pence per share, and reduce NAV per share of 130.51 pence above by the same amount.

Shareholder returns from fundraising rounds

The chart below shows the amount that shareholders who invested in the first allotment of each fundraising round have received to date, as dividends received plus the half-year, mid-market share price at 30 September 2014 (adjusted upwards as the period end share price was quoted excluding the 14 pence per share dividend paid on 20 October 2014"ex-div"), both compared with the amount invested (net of income tax relief also received).

Year of fundraising	Cash invested based upon first allotment in that year	Cumulative dividends paid per share	Share price	Total Shareholder Return (share price basis)
	(p)	(p)	(p)	(p)
2014	82.54	5.00	118.50	123.50
2008/09	64.67	19.00	118.50	137.50
2005/06	60.00	23.00	118.50	141.50
2000/011	80.00	40.86	98.00	138.86

¹  The 2000/01 fundraising relates to ordinary shares ("O" Fund Shares) issued under the original fundraising   by the Company.  These "O" Fund Shares were merged with the "C" Share class (first launched in 2005/06) on 10 September 2010.  The share price and dividends received have been adjusted to reflect that an investor in "O" Fund Shares received approximately 0.827 "C" Shares for each "O" Fund Share held.

The returns for shareholders are:

·	Initial income tax relief received, which is treated as a cash return at the time of the initial investment and deducted from the cash then invested.  The amount returned was 20% of the initial investment for the tax year 2000/01 and 30% for the tax year 2006/07 onwards;
·	Tax-free dividends received as further cash returns since that initial investment;
·	The closing share price which is an indication of what a shareholder may obtain if they elected to sell their shares.

Chairman's Statement

I am pleased to present the Half-Yearly Report for Mobeus Income & Growth 2 VCT plc for the six months ended 30 September 2014.

Performance for the six months ended 30 September 2014

The net asset value (NAV) return per share increased by 8.1% during the period from 120.73 pence at 31 March 2014 to 130.51 pence per share as at 30 September 2014.

This healthy rise in NAV return over the period was primarily due to realised profits and unrealised gains in the investment portfolio.  Firstly, there have been four substantial, profitable realisations of ATG Media (a partial sale), MachineWorks, Monsal, and DiGiCo Global.  Secondly, further unrealised gains from rises in portfolio valuations have occurred, notably in the valuations of EMaC, Focus Pharma and Youngman, the latter two of which have been subsequently realised.

A number of portfolio companies have continued to make good progress, which has been demonstrated by increasing profits and making loan stock repayments.

As a result of the returns for the half-year, the cumulative NAV total return per share (being the closing net asset value plus total dividends paid to date since launch in 2005) rose during the six month period by 6.8% from 143.73 pence to 153.51 pence.

Shareholders should note that the performance data in my statement relates to the one Ordinary share class now in existence.  Fundraising for this class (which was formerly called the C share class) was launched on 20 September 2005.  This single share class was created after a share class merger of the former Ordinary and C share classes on 10 September 2010.  To assist shareholders to monitor the performance of their original Ordinary or C share investment in a particular fundraising on a consistent basis, we have included separate performance data.

Investment portfolio

In addition to the substantial realisations and increased portfolio valuation, there was a healthy level of loan stock repayments and new investment activity continued at an encouraging pace.

The investment portfolio recorded realised and unrealised gains of £2.47 million for the six months to 30 September 2014.  The portfolio under management was valued at £21.53 million at the period end, representing 105.0% of cost and an increase of 10.9% in valuation during the period on a like for like basis.

A total of £1.57 million was invested during the period to finance two transactions.  In June, a new investment of £0.73 million was made to support the Management Buy-out ("MBO ") of Creative Graphics International Limited ("CGI"), a leading specialist provider of self-adhesive branding solutions to the automotive, recreational vehicle and airline markets; and in July, a further new investment of £0.84 million was made to support the MBO of Tharstern Limited, the UK's leading supplier of software-based management information systems to the print sector.

This has been a particularly active period for portfolio realisations with net cash proceeds receivable during the six month period amounting to £7.04 million, representing realised gains over original cost of £5.42 million.  I highlighted the main realisations during the period earlier in my Statement.  There were also partial loan stock repayments of £0.45 million from four companies, principally Fullfield (Motorclean) and Newquay Helicopters.

Following the partial disposal of ATG Media, the Company has £1.32 million of rolled over loan and equity investment in the acquirer, Turner Topco Limited.

After the period end, the Company has disposed of its investments in Focus Pharma and Youngman and has received further cash proceeds of £2.93 million from these two successful investments. These realised total gains over cost of £1.70 million.

Further details of the investment activity during the six months to 30 September 2014 and a summary of the performance highlights can be found in the Investment Reviewin the Half-Yearly Report.

Interim capital dividend

The Board declared an interim capital dividend of 14 pence per share on 11 September 2014, which was paid on 20 October 2014 to shareholders on the Register on 19 September 2014. This payment increased the cumulative dividends paid to shareholders from 23 pence to 37 pence per share since launch in 2005.  The size of the interim dividend is a consequence of the recent successful investment realisations referred to above.

In respect of future dividends, shareholders are reminded that capital payments can vary significantly, depending on realisations achieved in the relevant financial period.

Revenue account

The results for the period are set out in the Unaudited Income Statement and show a revenue gain (after tax) of 2.70 pence per share (31 October 2013: gain of 3.47 pence).

The revenue return for the period of £0.81 million is broadly similar to last year's income for the first six months (of an 11 month financial period that ended on 31 March 2014) of £0.84 million. 

Income did benefit from an increase in dividend income of £0.17 million (being an increase of 285%, over the comparative six months period last year).  The main contributor was a large preference dividend from Focus Pharma.

Against this, loan stock interest fell by £0.19 million to £0.88 million (down 18%) as a large arrears receipt in 2013 from Newquay Helicopters boosted such income in 2013.  Excluding the effect of this, loan stock income has risen, as a result of a number of new investments made in Virgin Wines, Entanet, Bourn and CGI, as well as interest arrears received from Monsal and Youngman.

Fund management fees charged to the revenue account rose by £27,392, as the amount charged to the Income Statement in total increased by 33.7%, in line with the higher net assets compared with the equivalent period in 2013.  Other expenses have fallen by £7,308 in the period to £144,485 (2013: £151,793).  This decrease was due to lower trail commission costs as a result of a cap being reached in the year to 31 March 2014, partly offset by higher printing charges.

VCT fundraising

The Company participated with the other three Mobeus advised VCTs in a successful linked fundraising Offer which closed on 30 May 2014.  A total of £33.7 million (in excess of the original target of £24 million which was subsequently increased to £34 million) was subscribed for under the Offer across the four VCTs, of which £8.4 million (£8.19 million after costs) was raised by the Company.

As a result, the Company has grown its assets and benefits from spreading its fixed costs across a larger asset base.  The fundraising also enabled the Company to maintain a satisfactory level of cash not only for new investments but also to help meet running costs, fund dividend payments and support the Company's share buyback policy, which provides some liquidity in the Company's shares, in what is otherwise usually an illiquid market.

The Board has announced its intention to raise up to £8 million, alongside the three other Mobeus advised VCTs, as part of an aggregate amount of £39 million. This year, each of the VCTs will make a separate Offer which will provide investors with the choice of either dividing their subscription equally between each of the Mobeus advised VCTs, or to invest amounts of their choice in one or more of the Mobeus advised VCTs, subject to the offers of their choice remaining open.

Shareholders will therefore have the opportunity to increase their investment in the Company and will be sent details of the Offer planned to be at the end of this month.  The Offer document will also be available from the Mobeus website: www.mobeusequity.co.uk.

Liquidity

The 2013/14 fundraising and recent successful disposals increased the level of liquidity to approximately £17.43 million at 30 September 2014 although the interim dividend paid on 20 October reduced this by £4.2 million. While the Board recognises that liquidity remains at a high level, which impacts on total returns, it is encouraged by the investment opportunities in the pipeline.

The Company continues to seek opportunities to increase returns on the liquid assets of the Company without compromising the overriding requirement that risk to the liquid assets portfolio is minimised.  It continues to hold £3.7 million in a selection of money market funds with AAA credit ratings at 30 September 2014. The balance of cash is held in deposit accounts with two UK banks.

Investment in qualifying holdings

The Company is required to meet the target set by HM Revenue & Customs ("HMRC") of investing 70% of the funds raised in qualifying unquoted and or AIM quoted companies.  The Company exceeded this limit (based on VCT cost as defined in tax legislation which differs from the actual cost given in the Investment Portfolio Summary) throughout the period.  The balance of the portfolio was invested in non-qualifying investments and cash.

Share buybacks

During the six months ended 30 September 2014, the Company bought back a further 500,793 of its own shares, representing 1.8% of the issued share capital at the beginning of the period, at an average price, including costs, of £1.05 per share.

All of the shares bought back in the period were subsequently cancelled by the Company.  Continuing shareholders benefit from the difference between NAV per share and the price per share at which the shares are bought back and cancelled.

Industry Developments

The Finance Act 2014, has introduced two measures that affect VCTs.  Firstly, shareholders who sell their existing shares within six months before or after the date of subscribing for shares in the same VCT will not retain income tax relief on their new investment, a measure designed to prevent "enhanced buybacks".

Secondly, VCTs will not be able to make payments or distributions to shareholders from share capital or reserves created from converted share premium accounts within a time limit.  The limit is three years from the end of the accounting period in which the VCT had raised new funds, from which the converted share premium account originated.  This is intended to prevent the return of capital to shareholders, prior to any profits being earned from investments.  This restriction only applies to shares issued after 6 April 2014, and your Board does not expect these return of capital measures to affect the Company's dividend policy.

As of 22 July 2014 the Board has appointed itself as its own Alternative Investment Fund Manager ("AIFM") to comply with the European Commission's Alternative Investment Fund Manager's Directive.  The Company is registered as a small AIFM, and is therefore exempt from the principal requirements of the Directive. Mobeus will continue to provide investment advisory and administrative services to the Company under the current agreement, subject to one change.  This involves named individuals, who carry out company secretarial work for the company. They are now directly responsible to the Board, under its instruction, for accessing and dealing with the documents of title to the Company's investments.  These new arrangements will enable the Company to discharge its safekeeping responsibilities for these documents.

Recent changes to the European Commission's Transparency Directive will mean that the Company is no longer required to publish Interim Management Statements.   However, the Board intends to continue to make such announcements.

Industry award for the Investment Adviser

I am pleased to report that the Investment Adviser was awarded VCT Manager of the Year 2014 for the third consecutive year at the unquote" British Private Equity Awards 2014.  The award recognised the high level of consistency achieved by the Investment Adviser during the year in maintaining high standards in all areas of its activity including deals, exits, portfolio management and fundraising.  The Investment Adviser was also named Private Equity Team of the Year at the Central & East of England Insider Dealmakers Awards 2014.  The Board is pleased that the good work of the Adviser has been recognised by these awards.

Shareholder Communications

The Adviser holds an annual VCT event for shareholders in central London. Each event includes a presentation on the Mobeus VCTs' investment activity and performance.  The Board and the Adviser welcome feedback from shareholders and we have been pleased to receive positive comments from those attending in previous years.  The Adviser has taken many of the comments received on board as part of a process of continuous improvement.  The next event will be held on Tuesday, 27 January 2015 at the Royal Institute of British Architects in central London.  There will be a day-time and a separate evening session. Shareholders will be sent an invitation to this event and further details nearer to the date.  The Board looks forward to meeting those shareholders who are able to attend.

Outlook

Itis pleasing to report on a period of good performance and the completion of a significant number of transactions.    The challenge for the Company will be to maintain this performance over the longer term and to sustain current investment levels.  We aim to invest in well-run profitable companies, operating mainly in niche markets that we believe have the potential to grow and which can thrive across a range of economic conditions.  Currently, the rate of dealflow continues to be encouraging. Many of our investee companies should continue to trade profitably and grow.  This should produce further good returns for shareholders over the medium term.    

Finally, I would like to take this opportunity to thank shareholdersfor their continuedsupport.

Nigel Melville

Chairman

13 November 2014                                                                 

Investment Policy

The Company's policy is to invest primarily in a diverse portfolio of UK unquoted companies. Investments are structured as part loan and part equity in order to receive regular income and to generate capital gains from trade sales and flotations of investee companies.

Investments are made selectively across a number of sectors, primarily in management buyout transactions (MBOs) i.e. to support incumbent management teams in acquiring the business they manage but do not yet own. Investments are primarily made in companies that are established and profitable.

The Company's cash and liquid resources may be invested to maximise income returns, subject to the overriding criterion that the risk of loss of capital be minimised.

UK companies

The companies in which investments are made must have no more than £15 million of gross assets at the time of investment and £16 million immediately following the investment to be classed as a Venture Capital Trust ("VCT") qualifying holding.

VCT regulation

The investment policy is designed to ensure that the Company continues to qualify and is approved as a VCT by HM Revenue & Customs ("HMRC").

Amongst other conditions, the VCT may not invest more than 15 per cent. of its investments in a single company or group of companies and must have at least 70 per cent. by value of its investments throughout the period in shares or securities comprising VCT qualifying holdings, of which a minimum overall of 30 per cent. by value (70 per cent. for funds raised from 6 April 2011) must be in ordinary shares which carry no preferential rights (save as may be permitted under VCT rules).  The VCT can invest less than 30 per cent. by value (70 per cent. for funds raised from 6 April 2011) of an investment in a specific company in ordinary shares.  It must, however, have at least 10 per cent. by value of its total investments in each VCT qualifying company in ordinary shares which carry no preferential rights (save as may be permitted under VCT rules).

Asset mix

The Investment Adviser aims to hold approximately 80 per cent. of the Company's net assets by value in qualifying investments.  The balance is held in readily realisable interest bearing investments and deposits and in some non-qualifying holdings in the same investee companies in which qualifying investments have been made.

Risk diversification and maximum exposures

Risk is spread by investing in a number of different businesses across different industry sectors. To reduce the risk of high exposure to equities, each qualifying investment is structured using a significant proportion of loan stock (up to 70 per cent. of the total investment in each VCT qualifying company).  Initial investments in VCT qualifying companies are generally made in amounts ranging from £200,000 to £2 million at cost, or such amounts as VCT legislation permits.  Normally, no holding in any one company will be greater than 10 per cent. (but in any event will not be greater than 15 per cent.) of the value of the Company's investments, based on cost, at the time of investment.  Ongoing monitoring of each investment is carried out by the Investment Adviser, generally through taking a seat on the board of each VCT qualifying company.

Co-investment

The Company aims to invest alongside the three other VCTs advised by the Investment Adviser which all have a similar investment policy. This enables the Company to participate in larger combined investments advised on by the Investment Adviser.

Borrowing

The Company's articles of association permit borrowing of amounts up to 10 per cent. of the adjusted capital and reserves (as defined therein), although the Company has never borrowed and the Board has no current plans to undertake any borrowing.

Management

The Board has overall responsibility for the Company's affairs, including the determination of its investment policy. Investment and divestment proposals are originated, negotiated and recommended by the Investment Adviser, Mobeus Equity Partners LLP, and are then subject to formal approval by the Board of Directors.  Mobeus Equity Partners LLP also provides Company Secretarial and Accountancy services to the Company.

Investment Review

New investments

£1.57 million was invested during the six months under review, in two investments.  These were to support the MBOs of Creative Graphics International ("CGI") and Tharstern.

Principal new investments in the half-year

Company	Business	Month	Amount of new investment (£m)
CGI	Producer of adhesive decorative graphics for vehicles	June 2014	£0.73
Creative Graphics International is a leading specialist provider of adhesive decorative graphics to the automotive, recreational vehicle and airline markets.  It operates from two centres, in Bedford and South Africa.  The Company's latest audited accounts for the year ended 30 November 2012 show annual sales of £12.64 million and profit before interest, tax and goodwill of £2.49 million.
Tharstern	Software-based MIS systems	July 2014	£0.84
Tharstern is the UK's leading supplier of software-based management information systems (MIS) to the print sector.  The Company's latest audited accounts for the year ended 31 January 2014 show annual sales of £3.87 million and profit before interest, tax and goodwill of £0.80 million.

Realisations in the half-year

The period has been marked by a number of sizeable, profitable realisations which have all generated attractive returns for theCompany.  The VCT completed the partial sale of ATG Media and the full sales of each of MachineWorks, Monsal, and DiGiCo Global for total net cash proceeds of £6.59 million. As part of the ATG Media transaction, the Company also received non-cash consideration of £1.32 million by way of loan stock and equity investments in Turner TopcoLimited, the acquirer of ATG Media, retaining a 44% of its equity interest in the business.

Other realisations were loan repayments of £0.45 million, as explained further below. Total net proceeds therefore amounted to £8.36 million.

Company	Business	Period of investment	Total cash proceeds over the life of the investment / Multiple over cost
MachineWorks	Software for CAM and machine tool vendors	April 2006 -	£1.55 million
		April 2014	4.15 times cost
MachineWorks' core software products are used by manufacturers of machine tools and machine tool controllers to simulate real life manufacturing situations.  The company was de-merged from the Company's original investment in VSI in March 2011 and was sold to Westec Holding Company Limited in April 2014, generating an excellent return on original investment cost.
ATG Media	Publisher and online auction platform	October 2008 -	£3.24 million
		present	1.87 times cost to date
ATG Media has grown revenues and profits materially since initial investment in 2008.  A partial sale of the company under a secondary MBO to a larger private equity house, ECI Partners, has realised net proceeds of £4.00 million, being cash of £2.68 million, with the balance represented by new loan stock and a minority equity stake.  The cash returns received to date, including interest received, have crystallised an annual return of 20% on the initial original investment cost, making this a particularly successful investment.
Monsal	Supplier of engineering services to the water and waste sectors	December 2007 -	£1.74 million
		June 2014	1.87 times cost
The sale of Monsal, a renewable energy consultancy, to the US conglomerate General Electric, brought total cash proceeds to £1.74 million for the Company.  This represents a highly satisfactory return on an investment originally made in 2007 but which required support from further funding rounds in 2009 and 2011.
DiGiCo	Audio mixing desks	July 2007	£5.49 million
		July 2014	5.49 times cost
The VCT realised this investment through a sale to a new professional audio group backed by Electra Partners. The business has demonstrated strong and consistent growth since investment. Turnover has grown threefold from £8 million to £24 million over the period of the VCT's investment. This final sale follows a partial realisation in December 2011 through a secondary buyout by ISIS Equity Partners.

Loan stock repayments

Loan stock repayments totalled £1.94 million for the period, which amount contains £1.49 million from the disposals above.  Cash generation at four other companies contributed to the balance of £0.45 million as summarised below:-

Company	Business	Month	Amount (£'000s)
Motorclean	Vehicle cleaning and valeting services	June 2014	193
Newquay Helicopters	Helicopter services	April 2014	168
Virgin Wines	Online wine retailer	July 2014	46
Tessella	Consultancy services	Quarterly	45
Total			452

Realisations post period-end (both in October)

Company	Business	Period of investment	Total proceeds over the life of the investment / Multiple over cost
Focus	Licensor and distributor of generic pharmaceuticals	October 2007-	£2.47 million
		October 2014	3.74 times cost
Focus is engaged in the distribution of generic pharmaceuticals both on its own account and for third parties, where it develops and licenses the drug for its own benefit. The investment of £0.66 million has returned £2.47 million in cash over its life.
Youngman	Access towers and ladders	October 2006-	£2.42 million
		October 2014	2.42 times cost
The VCT realised this investment through a sale to Werner Co (US).  Based in Essex, Youngman was established in the 1920s and today produces access equipment including specialist step and loft ladders, access and work platforms, and extension and combination ladders. The investment of £1.00 million has returned £2.42 million in cash over its life.

Adviser's investment outlook

We have been particularly pleased with the realisation results over the first half of the year and in October, which have generated good returns for the Company.  Two new investments, CGI and Tharstern, were completed during the period.

We are pursuing a number of opportunities which we hope will materialise over the coming months into both new investments and further realisations for the Company.  Dealflow remains healthy, reflecting our perception that the level of M&A activity in the small company sector continues to be buoyant.  Our intention is to maximise the opportunities presented by these current favourable market conditions to guide new investment deals and realisations through to completion, to meet our aims of sustaining current investment levels and securing continued good returns to shareholders.

Investment Portfolio Summary

As at 30 September 2014

	Date of first	Total Book	Valuation	Additions	Disposals	Change in	Valuation at	% of net
	investment	Cost at 30 Sept 2014	at 31 March 2014	at Cost	at valuation	valuation for period	30 Sept 2014	by value Assets
Qualifying investments	Sector	£	£	£	£	£	£
Unquoted Investments
Ingleby (1879) Limited (trading as EMaC Limited)	October 2008	867,447	1,489,972	-	-	763,903	2,253,875	5.8%
Service plans for the motor trade	Support services
ASL Technology Holdings Limited	December 2010	1,360,130	1,356,148	-	-	115,654	1,471,802	3.8%
Printer and photocopier services	Support services
Fullfield Limited (trading as Motorclean)	July 2011	1,431,344	1,879,839	-	193,425	(219,325)	1,467,089	3.7%
Vehicle cleaning and valet services	Support services
Turner Topco Limited (trading as ATG Media Holdings Ltd) 1	October 2008	1,320,963	-	1,320,963	-	28,962	1,349,925	3.4%
Publisher and online auction platform operator	Media
Focus Pharma Holdings Limited	October 2007	232,114	740,093	-	-	567,900	1,307,993	3.3%
Licensor and distributor of generic pharmaceuticals	Support services
Virgin Wines Holding Company Limited	November 2013	1,284,333	1,330,202	-	45,869	-	1,284,333	3.3%
Online wine retailer	General retailer
Blaze Signs Holdings Limited	April 2006	437,030	2,052,255	-	-	(792,755)	1,259,500	3.2%
Manufacturer and installer of signs	Support services
Tessella Holdings Limited	July 2012	783,181	1,149,818	-	45,468	(3,092)	1,101,258	2.8%
Provider of science powered technology and consultancy services	Support services
Youngman Group Limited	October 2005	1,000,052	699,966	-	-	393,206	1,093,172	2.8%
Manufacturer of ladders and access towers	Support services
Gro-Group Holdings Limited	March 2013	1,096,102	1,027,009	-	-	34,106	1,061,115	2.7%
Baby sleep products	General retailers
Entanet Holdings Limited	February 2014	912,057	912,057	-	-	-	912,057	2.3%
Wholesale voice and data communications provider	Fixed line telecoms
EOTH Limited (trading as Equip Outdoor Technologies Ltd)	October 2011	817,185	922,695	-	-	(20,425)	902,270	2.3%
Branded outdoor equipment and clothing	General retailer
Veritek Global Limited	July 2013	967,780	967,780	-	-	(102,466)	865,314	2.2%
Maintenance of imaging equipment	Support services
Hansard 3331 (trading as Tharstern)	July 2014	838,000	-	838,000	-	-	838,000	2.1%
Software for the printing industry	Software and Computer Services
Bourn Bioscience Limited	January 2014	757,101	757,101	-	-	-	757,101	1.9%
In-vitro fertilisation clinics	Healthcare Equipment & Services
CGI Creative Graphics International Limited	June 2014	731,032	-	731,032	-	-	731,032	1.9%
Self-adhesive branding solutions	General Industrials
RDL Corporation Limited	October 2010	1,000,000	588,078	-	-	81,956	670,034	1.7%
Recruitment consultants for the pharmaceutical, business intelligence and IT industries	Support services
Manufacturing Services Investment Limited	February 2014	608,000	608,000	-	-	-	608,000	1.6%
Company seeking to acquire businesses in the manufacturing sector	Support services
South West Services Investment Limited	January 2014	606,000	606,000	-	-	-	606,000	1.5%
Company seeking to acquire businesses in the South West of England	Support services
The Plastic Surgeon Holdings Limited	April 2008	392,264	376,825	-	-	13,022	389,847	1.0%
Snagging and finishing of domestic and commercial properties	Support services
Vectair Holdings Limited	January 2006	60,293	312,238	-	-	(38,550)	273,688	0.7%
Designer and sale of washroom products	Support services
Newquay Helicopters (2013) Limited	June 2006	226,000	226,000	-	-	-	226,000	0.6%
Helicopter service operators	Support services
PXP Holdings Limited (Pinewood Structures)	December 2006	1,220,579	57,143	-	-	-	57,143	0.1%
Design, manufacturer and supply of timber frames for buildings	Construction
Lightworks Software Limited	April 2006	25,727	67,873	-	-	(28,126)	39,747	0.1%
Software for CAD vendors	Software and Computer Services
Racoon International Holdings Limited	December 2006	878,527	1,000	-	-	-	1,000	0.0%
Supplier of hair extensions, hair care products and training	Personal goods
ATG Media Holdings Limited1	October 2008	-	3,732,310	-	3,732,310	-	-	0.0%
Publisher and online auction platform operator	Media
Machineworks Software Limited	April 2006	-	902,986	-	902,986	-	-	0.0%
Software for CAM and machine tool vendors	Software and Computer Services
Monsal Holdings Limited	December 2007	-	51,265	-	51,265	-	-	0.0%
Supplier of engineering services to water and waste sectors	Engineering
Legion Group plc - in administration	August 2005	150,000	-			-	-	0.0%
Provision of manned guarding, mobile patrolling and alarm response services	Support services
Total unquoted investments		20,003,241	22,814,653	2,889,995	4,971,323	793,970	21,527,295	54.8%
AIM quoted investments
Iafyds plc (formerly Vphase plc)	March 2001	254,586	-	-	-	3,802	3,802	0.0%
Development of energy saving devices for domestic use	Electronic and electrical
Total AIM quoted investments		254,586	-	-	-	3,802	3,802	0.0%
Total qualifying investments		20,257,827	22,814,653	2,889,995	4,971,323	797,772	21,531,097	54.8%2
Non-qualifying investments
DiGiCo Global Limited	December 2011	-	1,549,846	-	1,549,846	-	-	0.0%
Design and manufacture of audio mixing desks	Technology hardware
Newquay Helicopters (2013) Limited (previously British International Holdings Limited)	As above	-	167,647	-	167,647	-	-	0.0%
ATG Media Holdings Limited1	As above	-	779	-	779	-	-	0.0%
Century 3370 plc (formerly Fuse 8 plc)	March 2004	250,000	-	-	-	-	-	0.0%
Promotional goods and services agency	Support services
Legion Group plc	As above	106	-	-	-	-	-	0.0%
Total non-qualifying investments		250,106	1,718,272	-	1,718,272	-	-	0.0%
Total investments per note 9		20,507,933	24,532,925	2,889,995	6,689,595	797,772	21,531,097	54.8%
Cash		13,703,859	3,158,216	-	-	-	13,703,859	35.0%
Money market funds3		3,727,300	3,727,300	-	-	-	3,727,300	9.5%
Total investments including money market funds and cash		37,939,092	31,418,441	2,889,995	6,689,595	797,772	38,962,256	99.3%
Debtors		372,812	2,596,972	-	-	-	372,812	1.1%
Creditors		(185,377)	(137,034)	-	-	-	(185,377)	(0.4)%
Totals		38,126,527		2,889,995	6,689,595	797,772
Net assets at the period-end			33,878,379				39,149,691	100.0%

¹Shares and loan stock in Turner Topco arose as non-cash proceeds from the part realisation of ATG Media Holdings Limited.

² As at 30 September 2014 the Company held more than 70% of its total investments in qualifying holdings and therefore complied with the VCT Qualifying Investment test.

³Disclosed within current assets as current investments in the Balance Sheet.

Statement of Directors' Responsibility

In accordance with Disclosure and Transparency Rule (DTR) 4.2.10, Nigel Melville (Chairman and Chairman of the Nominations Committee), Adam Kingdon (Chairman of the Audit Committee), Sally Duckworth (Chairman of the Investment Committee) and Kenneth Vere Nicoll (Chairman of the Remuneration Committee), being the Directors of the Company confirm that to the best of their knowledge:

(a)	the condensed set of financial statements, which has been prepared in accordance with the statement, "Half-Yearly Reports", issued by the Accounting Standards Board, gives a true and fair view of the assets, liabilities, financial position and profit of the Company, as required by DTR 4.2.4;
(b)	the interim management report, included within the Chairman's Statement, Investment Policy, Investment Review and Investment Portfolio Summary includes a fair review of the information required by DTR 4.2.7, being an indication of the important events that have occurred during the first six months of the financial year and their impact on the condensed set of financial statements;
(c)	a description of the principal risks and uncertainties facing the Company for the remaining six months is set out below, in accordance with DTR 4.2.7; and
(d)	there were no related party transactions in the first six months of the current financial year that are required to be reported, in accordance with DTR 4.2.8.

Principal risks and uncertainties

In accordance with DTR 4.2.7, the Board confirms that the principal risks and uncertainties facing the Company have not materially changed since the publication of the Annual Report and Accounts for the 11 month ended 31 March 2014. The Board acknowledges that there is regulatory risk and continues to manage the Company's affairs in such a manner as to comply with section 274 Income Tax Act 2007.

The principal risks faced by the Company are:

-	loss of approval as a Venture Capital Trust;
-	investment and strategic;
-	economic;
-	regulatory;
-	financial and operating;
-	market;
-	asset liquidity;
-	market liquidity;
-	credit/counterparty; and
-	fraud and dishonesty.

A detailed explanation of the principal risks facing the Company can be found on page 21 and 22 and in Note 19 on pages 54 to 61 of the Annual Report and Accounts for the 11 months ended 31 March 2014.  Copies are available on the Investment Adviser's website, www.mobeusequity.co.uk or by going directly to the VCT's website, www.mig2vct.co.uk.

Going concern

The Board has assessed the Company's operation as a going concern.  The Company's business activities, together with the factors likely to affect its future development, performance and position are set out in the interim management report which is included within the Chairman's Statement, Investment Policy, Investment Review and Investment Portfolio Summary. The Directors have satisfied themselves that the Company continues to maintain a significant cash position, the majority of companies in the portfolio continue to trade profitably and the portfolio taken as a whole remains resilient and well-diversified.  The major cash outflows of the Company (namely investments, buybacks and dividends) are within the Company's control.

The Board's assessment of liquidity risk and details of the Company's policies for managing its capital and financial risks are shown in Note 19 on pages 54 to 61 of the Annual Report and Accounts for the 11 months ended 31 March 2014.   Accordingly, the Directors continue to adopt the going concern basis of accounting in preparing the half-yearly report and annual financial statements.

Related Party Transactions

There were no related party transactions in the first six months of the current financial year that are required to be reported.

Cautionary Statement

This report may contain forward looking statements with regards to the financial condition and results of the Company, which are made in the light of current economic and business circumstances.  Nothing in this report should be construed as a profit forecast.

For and on behalf of the Board

Nigel Melville

Chairman

13 November 2014

Unaudited Income Statement

for the six months ended 30 September 2014

Six months ended					Eleven  months ended			Six months ended
30 September 2014					31 March 2014			31 October 2013
(unaudited)					(audited)			(unaudited)
	Notes	Revenue	Capital	Total	Revenue	Capital	Total	Revenue	Capital	Total
		£	£	£	£	£	£	£	£	£
Unrealised gains on investments held at fair value	9	-	797,772	797,772	-	3,625,328	3,625,328	-	1,041,227	1,041,227
Realised gains on investments held at fair value	9	-	1,667,567	1,667,567	-	24,286	24,286	-	6,283	6,283
Income	3	1,129,116	-	1,129,116	2,047,564	-	2,047,564	1,140,835	-	1,140,835
Investment adviser fees	4	(108,609)	(325,828)	(434,437)	(152,635)	(457,906)	(610,541)	(81,217)	(243,650)	(324,867)
Other expenses		(144,485)	-	(144,485)	(255,016)	-	(255,016)	(151,793)	-	(151,793)
Profit on ordinary activities before taxation		876,022	2,139,511	3,015,533	1,639,913	3,191,708	4,831,621	907,825	803,860	1,711,685
Tax on profit on ordinary activities	5	(70,525)	70,525	-	(106,850)	106,850	-	(73,076)	73,076	-
Profit on ordinary activities after taxation		805,497	2,210,036	3,015,533	1,533,063	3,298,558	4,831,621	834,749	876,936	1,711,685
Basic and diluted earnings per Ordinary share	6	2.70p	7.40p	10.10p	6.28p	13.52p	19.80p	3.47p	3.64p	7.11p

The total column of this statement is the Profit and Loss account of the Company.

All revenue and capital items in the above statement derive from continuing operations.

There were no other recognised gains or losses in the period.

Other than revaluation movements arising on investments held at fair value through profit and loss there were no differences between the profit as stated above and at historical cost.

Unaudited Balance Sheet

as at 30 September 2014

		30 September 2014	31 March 2014	31 October 2013
		(unaudited)	(audited)	(unaudited)
	Notes	£	£	£
Fixed assets
Investments at fair value	9	21,531,097	24,532,925	20,368,588
Current assets
Debtors		372,812	2,596,972	275,459
Current Investments	10	3,727,300	3,727,300	3,727,300
Cash at bank		13,703,859	3,158,216	3,212,949
		17,803,971	9,482,488	7,215,708
Creditors: amounts falling due within one year		(185,377)	(137,034)	(314,421)
Net current assets		17,618,594	9,345,454	6,901,287
Net assets		39,149,691	33,878,379	27,269,875
Capital and reserves	11
Called up share capital		299,963	280,621	239,207
Capital redemption reserve		78,421	73,413	67,440
Share premium account		8,122,178	5,363,551	-
Revaluation reserve		2,972,764	5,930,144	3,526,815
Special distributable reserve		10,782,998	11,565,499	12,349,142
Profit and loss account		16,893,367	10,665,151	11,087,271
Equity shareholders' funds		39,149,691	33,878,379	27,269,875
Net asset value per Ordinary share	7	130.51p	120.73p	114.00p

Unaudited Reconciliation of Movements in Shareholders' Funds

for the six months ended 30 September 2014

		Six months ended 30 September 2014	Eleven months ended 31 March 2014	Six months ended 31 October 2013
		(unaudited)	(audited)	(unaudited)
	Notes	£	£	£
Opening shareholders' funds		33,878,379	25,695,376	25,695,376
Net share capital issued in the period (net of expenses)		2,782,977	5,410,938	-
Net share capital bought back		(527,198)	(740,347)	(137,186)
Profit for the period		3,015,533	4,831,621	1,711,685
Dividends paid	8	-	(1,319,209)	-
Closing shareholders' funds		39,149,691	33,878,379	27,269,875

Unaudited Cash Flow Statement  

for the six months ended 30 September 2014

		Six months ended	Eleven months ended 31 March 2014	Six months ended 31 October 2013
		30 September 2014
		(unaudited)	(audited)	(unaudited)
	Notes	£	£	£
Operating activities
Interest income received		1,204,293	1,510,256	1,085,470
Dividend income		2,418	298,109	537
Investment adviser fees paid		(434,437)	(610,541)	(324,867)
Other cash payments for other expenses		(132,606)	(286,518)	(129,078)
Net cash inflow from operating activities		639,668	911,306	632,062
Investing activities
Purchase of investments	9	(1,569,032)	(2,341,072)	(39,685)
Disposal of investments	9	6,993,445	3,246,670	2,457,996
Net cash inflow from investing activities		5,424,413	905,598	2,418,311
Dividends
Equity dividends paid		-	(1,319,209)	-
Net cash inflow before liquid resource management and financing
		6,064,081	497,695	3,050,373
Financing
Shares issued as part of Linked fundraising offer for subscription	11a	4,983,297	3,210,619	-
Purchase of own shares	11b	(501,735)	(761,518)	(48,844)
Net cash inflow/(outflow) from financing		4,481,562	2,449,101	(48,844)
Management of liquid resources
Change in monies held in current investments		-	-	-
Increase in cash for the period		10,545,643	2,946,796	3,001,529

Reconciliation of profit on ordinary activities before taxation to net cash inflow from operating activities

for the six months ended 30 September 2014

	Six months ended 30 September 2014	Eleven months ended 31 March 2014	Six months ended 31 October 2013
	(unaudited)	(audited)	(unaudited)
	£	£	£
Profit on ordinary activities before taxation	3,015,533	4,831,621	1,711,685
Net unrealised gains on investments	(797,772)	(3,625,328)	(1,041,227)
Net gains on realisations on investments	(1,667,567)	(24,286)	(6,283)
Decrease/(increase) in debtors	66,594	(238,846)	(68,133)
Increase/(decrease) in creditors and accruals	22,880	(31,855)	36,020
Net cash inflow from operating activities	639,668	911,306	632,062

Notes to the Unaudited Financial Statements

1. Principal accounting policies

The following accounting policies have been applied consistently throughout the period.  Full details of principal accounting policies will be disclosed in the Annual Report.

a)	Basis of accounting
	The unaudited results cover the six months to 30 September 2014 and have been prepared under UK Generally Accepted Accounting Practice (UK GAAP), consistent with the accounting policies set out in the statutory accounts for the eleven months ended 31 March 2014 and the 2009 Statement of Recommended Practice, 'Financial Statements of Investment Trust Companies and Venture Capital Trusts' ('the SORP') issued by the Association of Investment Companies.  The financial statements are prepared under the historic cost convention for the revaluation of certain investments. The Half-Year Report has not been audited, nor has it been reviewed by the auditor pursuant to the Financial Reporting Council (FCA) guidance on Review of Internal Financial Information.
b)	Comparatives
	In the previous accounting period, the Company changed its financial year end to 31 March, and therefore the comparatives to these financial statements and notes to the accounts relate to the eleven month period to 31 March 2014.  The comparatives for the six months ended 31 October 2013 have not been re-stated.
c)	Presentation of the Income Statement
	In order to better reflect the activities of a VCT and in accordance with the SORP, supplementary information which analyses the Income Statement between items of a revenue and capital nature has been presented alongside the Income Statement. The revenue column of profit attributable to equity shareholders is the measure the Directors believe appropriate in assessing the Company's compliance with certain requirements set out in Section 274 Income Tax Act 2007.
d)	Investments
	All investments held by the Company are classified as "fair value through profit and loss", and measured in accordance with the International Private Equity and Venture Capital Valuation ("IPEVCV") guidelines, as updated in September 2009. This classification is followed as the Company's business is to invest in financial assets with a view to profiting from their total return in the form of capital growth and income.
	For investments actively traded in organised financial markets, fair value is generally determined by reference to Stock Exchange market quoted bid prices at the close of business on the balance sheet date.  Purchases and sales of quoted investments are recognised on the trade date where a contract of sale exists whose terms require delivery within a time frame determined by the relevant market.  Purchase and sales of unlisted investments are recognised when the contract for acquisition or sale becomes unconditional.
	Unquoted investments are stated at fair value by the Directors in accordance with the following rules, which are consistent with the IPEVCV guidelines:
	All investments are held at the price of a recent investment for an appropriate period where there is considered to have been no change in fair value. Where such a basis is no longer considered appropriate, the following factors will be considered:

        (i) Where a value is indicated by a material arms-length transaction by an independent third party in the Shares of a company, this value will be used.                                        

        (ii) In the absence of i), and depending upon both the subsequent trading performance and investment structure of an investee company, the valuation basis will usually move to either:-

a)         an earnings multiple basis. The shares may be valued by applying a suitable price-earnings ratio to that company's historic, current or forecast post-tax earnings before interest and amortisation (the ratio used being based on a comparable sector but the resulting value being adjusted to reflect points of difference identified by the Investment Adviser compared to the sector including, inter alia, a lack of marketability).

or:-

b)         where a company's underperformance against plan indicates a diminution in the value of the investment, provision against cost is made, as appropriate. Where the value of an investment has fallen permanently below cost, the loss is treated as a permanent impairment and as a realised loss, even though the investment is still held.  The Board assesses the portfolio for such investments and, after agreement with the Investment Adviser, will agree the values that represent the extent to which an investment loss has become realised. This is based upon an assessment of objective evidence of that investment's future prospects, to determine whether there is potential for the investment to recover in value.                     

(iii)       Premiums on loan stock investments are accrued at fair value when the Company receives the right to the premium and when considered recoverable.

(iv)       Where an earnings multiple or cost less impairment basis is not appropriate and overriding factors apply, discounted cash flow or net asset valuation bases may be applied.

e)         Capital gains and losses

Capital gains and losses on investments, whether realised or unrealised, are dealt with in the profit and loss and revaluation reserves and movements in the period are shown in the Income Statement.

2. The Company revoked its status as an investment company on 7 September 2005, so that it can regard realised capital profits as part of the profits available for distribution.

3. Income

		Six months ended 30 September 2014		Eleven months ended 31 March 2014		Six months ended
						31 October 2013
		(unaudited)		(audited)		(unaudited)
		£		£		£
Dividends		228,712		492,984		59,416
Money-market funds		7,527		13,384		7,319
Loan stock interest		882,080		1,519,044		1,072,501
Bank deposit interest		7,473		3,344		1,599
Interest on preference dividends		906		18,808		-
Other Income		2,418		-		-
Total Income		1,129,116		2,047,564		1,140,835

4. Investment adviser fees

Under the terms of a revised investment management agreement dated 10 September 2010, Mobeus (formerly MPEP) provides investment advisory, administrative and company secretarial services to the Company, for a fee of 2.0% per annum calculated on a quarterly basis by reference to the net assets at the end of the preceding quarter, plus a fee of £104,432 per annum, the latter being subject to change in the retail price index each year.  In 2013, the Board and the adviser have agreed that further RPI increases will not occur until both parties agree.  This agreement replaced the previous agreements with MPEP dated 10 May 2000 and 20 September 2005, both novated to MPEP on 20 October 2006, and the accounting services agreement and the secretarial services agreement with Matrix-Securities Limited both dated 20 September 2005, all of which were terminated on 10 September 2010.  In accordance with the policy statement published under "Management and Administration" in the Company's prospectus dated 10 May 2000 the Directors have charged 75% of the investment adviser fees to the capital account. This is in line with the Board's expectation of the long-term split of returns from the investment portfolio of the Company.

5. Taxation

There is no tax charge for the period as the Company has utilised tax losses from previous years.

6. Basic and diluted earnings per share

	Six months ended	Eleven months ended 31 March 2014	Six months ended 31 October 2013
	30 September 2014
	(unaudited)	(audited)	(unaudited)
	Ordinary Shares	Ordinary Shares	Ordinary Shares
	£	£	£
Total earnings after taxation	3,015,533	4,831,621	1,711,685
Basic and diluted earnings per share (note a)	10.10p	19.80p	7.11p
Net revenue from ordinary activities after taxation	805,497	1,533,063	834,749
Basic and diluted revenue earnings per share (note b)	2.70p	6.28p	3.47p
Net unrealised capital gains	797,772	3,625,328	1,041,227
Net realised capital gains	1,667,567	24,286	6,283
Capital expenses (net of taxation)	(255,303)	(351,056)	(170,574)
Total capital return	2,210,036	3,298,558	876,936
Basic and diluted capital earnings per share (note c)	7.40p	13.52p	3.64p
Weighted average number of shares in issue in the period	29,847,901	24,404,368	24,069,103

Notes

a)   Basic and diluted earnings per share is total earnings after taxation divided by the weighted average number of shares in issue.

b)   Basic and diluted revenue earnings per share is revenue earnings after taxation divided by the weighted average number of shares in issue.

c)    Basic and diluted capital earnings per share is total capital earnings divided by the weighted average number of shares in issue.

7. Net asset value per share

	As at	As at 31 March 2014	As at 31 October 2013
	30 September 2014
	(unaudited)	(audited)	(unaudited)
	£	£	£
Net assets	39,149,691	33,878,379	27,269,875
Number of shares in issue	29,996,317	28,062,140	23,920,716
Net asset value per share (pence)	130.51p	120.73p	114.00p

8. Dividends

	Six months to	Eleven months to 31 March 2014	Six months to 31 October 2013
	30 September 2014
	(unaudited)	(audited)	(unaudited)
	£	£	£
Ordinary shares
Second interim income dividend for the year ended 30 April 2013 of 0.1p per share	-	26,384	-
Interim income dividend for the eleven months ended 31 March 2014 of 4.7 pence per share	-	1,240,056	-
Interim capital dividend paid for the eleven months ended 31 March 2014 of 0.2 p per share	-	52,769	-
	-	1,319,209	-

An interim capital dividend of 14p per share for the current year has been paid on 20 October 2014.

9. Summary of fixed asset investments at fair value during the period

	Traded on AIM	Unquoted Ordinary	Preference	Qualifying loans	Total
		shares	shares
	£	£	£	£	£
Cost at 31 March 2014	254,586	6,258,157	41,271	14,825,743	21,379,757
Unrealised gains/(losses) at 31 March 2014	-	4,478,353	(15,997)	640,411	5,102,767
Permanent impairment at 31 March 2014	(254,586)	(883,876)	(739)	(810,398)	(1,949,599)
Value at 31 March 2014	-	9,852,634	24,535	14,655,756	24,532,925
Purchases at cost	-	583,876	968	2,305,151	2,889,995
Sale Proceeds	-	(5,304,217)	(960)	(3,254,512)	(8,559,689)
Increase/(decrease) in unrealised gains	3,802	470,612	(699)	324,057	797,772
Realised gains	-	1,361,289	-	508,805	1,870,094
Cost/valuation at 30 September 2014	3,802	6,964,194	23,844	14,539,257	21,531,097
Book cost at 30 September 2014	254,586	6,243,729	41,279	13,968,339	20,507,933
Unrealised gains/(losses) at 30 September 2014	3,802	1,604,341	(16,696)	1,381,317	2,972,764
Permanent impairment at 30 September 2014	(254,586)	(883,876)	(739)	(810,399)	(1,949,600)
Valuation at 30 September 2014	3,802	6,964,194	23,844	14,539,257	21,531,097
Unrealised (losses)/gains at 1 April 2014	(254,586)	3,594,477	(16,736)	(169,987)	3,153,168
Net movement in unrealised appreciation/(depreciation) in the period	3,802	470,612	(699)	324,057	797,772
Realisation of previously unrealised (losses)/gains	-	(3,344,624)	-	416,848	(2,927,776)
(Losses)/gains on investments at 30 September 2014	(250,784)	720,465	(17,435)	570,918	1,023,164

Investment disposals shown in the Cash Flow Statement of £6,993,445 is less than sale proceeds shown above by £1,566,244.  This difference has three components.  Firstly, sale proceeds above are shown before transaction costs of £202,527.  Secondly, the Company received non-cash consideration of £1,320,963 by way of loan and equity instruments in Turner Topco Limited, the acquirer of the investment in ATG Media Holdings Limited.  Finally, a retention debtor amount of £42,754 from the sale of ATG was included in proceeds above and received after the period-end.  The non-cash proceeds of £1,320,963 also explain why investment additions above of £2,889,995 differ to that shown in the Cash Flow Statement of £1,569,032.

Transaction costs of £202,527, referred to above, also account for the difference between realised gains above of £1,870,094 and that shown in the Income Statement of £1,667,567.

10. Current investments at fair value

Current asset investments comprise investments in four OEIC money market fund (three Dublin based and one London based) managed by Blackrock Investment Management (UK) Ltd, Goldman Sachs, Federated Prime Rate Capital Management and Aberdeen Asset Management.  All of this sum, £3,727,300 (31 March 2014: £3,727,300; 31 October 2013: £3,727,300), is subject to same day access.

11. Movement in share capital and reserves

	Called up	Capital	Share	Revaluation	Special	Profit and	Total
	share	redemption	premium	reserve	distributable	loss
	capital	reserve	account		reserve	account
	£	£	£	£	£	£	£
At 31 March 2014	280,621	73,413	5,363,551	5,930,144	11,565,499	10,665,151	33,878,379
Shares issued under Linked Offer for Subscription (note a)	24,350	-	2,758,627	-	-	-	2,782,977
Shares bought back (note b)	(5,008)	5,008	-	-	(527,198)	-	(527,198)
Transfer of realised capital losses to Special distributable reserve (see note c)	-	-	-	-	(255,303)	255,303	-
Realised gain on investments	-	-	-	-	-	1,667,567	1,667,567
Realisation of previously unrealised gains	-	-	-	(3,755,152)	-	3,755,152	-
Profit for the period	-	-	-	797,772	-	550,194	1,347,966
At 30 September 2014	299,963	78,421	8,122,178	2,972,764	10,782,998	16,893,367	39,149,691

Note a) As part of the 2014 Linked Offer for Subscription, a total of 2,434,970 ordinary shares were allotted at average offer prices ranging from 118.66 pence to 119.82 pence per share, raising net funds of £2,782,977.  Shares issued as part of the Linked Offer for Subscription per the cash flow statement of £4,983,297 differs to that shown as shares issued above of £2,782,977 by £2,200,320, being net funds due to the Company arising from shares issued on 31 March 2014, which was a debtor at the previous period-end, since received.

Note b) The cost of shares bought back shown in the Cash Flow Statement of £501,735 differs to that disclosed above by £25,463.  This is due to an opening share buyback creditor of £27,673 settled during the year and a closing share buyback creditor of £53,136.  The Special distributable reserve provides the Company with a reserve out of which it can fund buybacks of the Company's shares as and when it is considered by the Board to be in the interests of the shareholders.

Note c) The Special distributable reserve also provides the Company with a reserve to absorb any existing and future realised losses.

12. Post balance sheet events    

On 1 October 2014, the entire holding of Focus Pharma Holdings Limited was realised for net capital proceeds of £1,307,993.  This amount has been reflected in the period-end valuation of this investment.

On 3 October 2014, Fullfield Limited (trading as Motorclean) repaid loan stock of £38,685.

On 27 October 2014, the Company completed the sale of its investment in Youngman Group Limited to Werner Co (US) for net cash proceeds on completion of £1,623,782. This represents an increase over the valuation of Youngman in these accounts of £530,700.

13. Financial statements for the six months ended 30 September 2014

The financial information set out in this half-yearly financial report does not constitutes statutory accounts as defined in section 434 of the Companies Act 2006.  This information for the eleven months ended 31 March 2014 has been extracted from the latest published audited financial statements, which have been filed with the Registrar of Companies.  The auditors have reported on these financial statements and that report was unqualified and did not contain a statement under section 498 (2) or (3) of the Companies Act 2006.

14. Half-Yearly Report

This Half-Yearly Report is available on, and can be downloaded from, our website: www.mig2vct.co.uk and is circulated by post to those Shareholders who have requested copies of the Report. Further copies are also available free of charge from the Company's registered office, 30 Haymarket, London SW1Y 4EX.

Contact details for further enquiries:

Rob Brittain or Jonathan McGuire at Mobeus Equity Partners LLP (the Company Secretary) on 020 7024 7600 or by e-mail on [e-mail] 

Mobeus Equity Partners LLP (the Investment Adviser), on 020 7024 7600 or by e-mail on [e-mail].

DISCLAIMER

Neither the contents of the Company's website nor the contents of any website accessible from hyperlinks on the Company's website (or any other website) is incorporated into, or forms part of, this announcement.

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Director

 

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