Capital allocation policy

Literacy Capital PLC

26 October 2026

 

The information contained in this announcement is restricted and is not for publication, release or distribution in the United States of America, any member state of the European Economic Area, Canada, Australia, Japan or the Republic of South Africa.

26 October 2026

Literacy Capital plc

Capital allocation policy

Literacy Capital plc ("Literacy", "BOOK", the "fund" or the "Company"), a listed investment trust primarily focused on investing directly into private businesses based in the UK, today announces an update on its capital allocation policy.

The Board and Investment Manager of Literacy Capital plc have the primary objective to grow net asset value ("NAV") per share and generate positive returns for shareholders over the long term. The Board also recognises that capital needs to be allocated taking into account the Company's share price, particularly if there is an excessive discount to reported net asset value, as is currently considered to be the case.

The Board remains conscious that the fund holds illiquid assets, impacting the level of liquidity the Company has available in the immediate-to-short term. Material cash inflows tend to be lumpy and infrequent. Literacy also has potential obligations to its portfolio holdings, to protect or enhance these existing investments, and other costs that it needs to reserve capital for and be able to fund as required. Ensuring BOOK has sufficient cash resources to meet these needs is the Board's overriding priority.

Currently, BOOK has net borrowings of approximately £18m and 19 investments (including two fund interests). The consistent message to shareholders since last year has been that there is a preference to reduce the number of holdings that BOOK has to focus on a smaller number of assets that have the potential to contribute most materially to NAV growth. Since Literacy completed its most recent platform investment (Red Sky in April 2025), BOOK has fully disposed of four investments and sold the majority of its holding in a fifth portfolio company (Velociti). This focus to generate cash from the portfolio and to reduce borrowings is expected to continue for the remainder of 2026 and into 2027.

Beyond undertaking opportunistic share buybacks and subject to Literacy having appropriate levels of available cash, the Board intends to take the necessary steps to manage the discount and to return capital to shareholders (without drawing on the RCF). These steps may include:

●	Ongoing share buybacks
●	Tender offers, with pricing linked to NAV
●	B share scheme (as used by BOOK to return £6 million in November 2025)

Literacy Capital plc's Board is committed to acting in the best interests of shareholders, to narrow the share price discount to NAV, whilst managing the Company's financial position prudently. If the fund is successful in selling further assets and moving its balance sheet into a net cash position, then further returns of capital beyond opportunistic share buybacks are considered likely in 2027. The Board will consider the most appropriate ways to do this based on the prevailing share price and discount / premium to NAV at the time and discussion with shareholders.

-ENDS-

For further information, please contact:

Literacy Capital plc / Book Asset Management LLP

Richard Pindar / Aasha Tailor

[phone]

MHP Group

Reg Hoare / Ollie Hoare / Matthew Taylor

[e-mail]

[phone]

Deutsche Numis

Hugh Jonathan / George Shiel

[phone]

About Literacy Capital plc

Literacy Capital (BOOK.L) is a closed-end investment company that was co-founded by Paul Pindar and Richard Pindar in 2017 with £54m of capital. Literacy listed on the London Stock Exchange in June 2021, before gaining Investment Trust status on 1 April 2022. The Company focuses on opportunities to invest for the long-term in growing private businesses where a clear route to creating additional value can be seen with its support.

It also has a unique charitable objective, to donate 0.5% of annual NAV to charities focused on improving UK literacy in children. £13.8m has been donated or reserved for donation to charities since the trust's creation in 2017. For more information, please visit our website: www.literacycapital.com.

A copy of this announcement will be available on the Company's website at www.literacycapital.com.

This announcement is for information purposes only and is not an offer to invest. All investments are subject to risk.  Past performance is no guarantee of future returns.  Prospective investors are advised to seek expert legal, financial, tax and other professional advice before making any investment decision.  The value of investments may fluctuate.  Results achieved in the past are no guarantee of future results. Neither the content of the Company's website, nor the content on any website accessible from hyperlinks on its website for any other website, is incorporated into, or forms part of, this announcement nor, unless previously published by means of a recognised information service, should any such content be relied upon in reaching a decision as to whether or not to acquire, continue to hold, or dispose of, securities in the Company.

LEI: 2549006P3DFN5HLFGR54

 

END