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MOBEUS INCOME & GROWTH 4 VCT PLC
LEI: 213800IFNJ65R8AQW943
ANNUAL FINANCIAL RESULTS OF THE COMPANY
FOR THE YEAR ENDED 31 DECEMBER 2020
Mobeus Income & Growth 4 VCT plc (the "Company") announces the final results for the year ended 31 December 2020. These results were approved by the Board of Directors on 29 March 2021.
You may, in due course, view the Annual Report & Financial Statements, comprising the statutory accounts of the Company by visiting www.mig4vct.co.uk.
FINANCIAL HIGHLIGHTS
As at 31 December 2020:
Net assets: £68.46 million
Net asset value ("NAV") per share: 81.50 pence
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Net asset value ("NAV") total return1 per share of 22.2% for the year.
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Share price total return1 per share was 12.9% for the year.
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Dividends paid in respect of the year of 6.00 pence per share. Cumulative dividends paid1 stand at 134.20 pence per share.
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£4.80 million was invested into four new growth capital investments and four existing portfolio companies during the year.
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£8.87 million of unrealised gains achieved in the year from strong portfolio performance.
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The Company realised investments totalling £14.97 million of cash proceeds and generated net realised gains in the year of £4.44 million.
PERFORMANCE SUMMARY
Cumulative Total return1 per share (NAV basis)
The longer term trend of performance on this measure is shown in the table below:-
|
R
eporting
date
a
s at
|
NA
V
(pence per share)
|
Cumulative
dividends
paid to date
(pence per share)
|
Cumulative total return1
to Shareholders
(NAV Basis)
(pence per share)
|
|
31 December 2020
|
81.50
|
134.20
|
215.70
|
|
31 December 2019
|
74.90
|
124.20
|
199.10
|
|
31 December 2018
|
84.79
|
105.20
|
189.99
|
|
31 December 2017
|
86.57
|
101.20
|
187.77
|
|
31 December 2016
|
107.57
|
73.20
|
180.77
|
1
- Definitions of key terms and alternative performance measures shown above and throughout this report are provided in the Glossary of Terms within the Annual Report & Financial Statements.
CHAIRMAN'S STATEMENT
I am pleased to present the annual results of Mobeus Income & Growth 4 VCT plc for the year ended 31 December 2020.
Introduction
This is my first Statement since succeeding Christopher Moore as Chairman on 1 October 2020 following my appointment as a Director of the Company in September 2020. On your behalf, I would like to thank Christopher for the excellent service he provided to Shareholders throughout a period of significant change and development in the VCT sector.
Overview
Overall, this year has been a very good one for Shareholder returns, despite the significant and unprecedented challenges resulting from the outbreak of COVID-19. Your Company's NAV total return per share for the year was a very pleasing 22.2%.
At the start of the year, before the pandemic took hold, the Company completed a timely and successful fundraising ensuring that the Company remained well funded. The very solid performance achieved in 2019 initially continued with strong portfolio progress as well as two well timed and profitable realisations achieved in February.
Shortly before the March quarter end, the COVID-19 pandemic and the UK Government's lockdown measures created substantial uncertainty and instability. There was a significant decline in consumer and business confidence and public markets saw a sharp fall. The immediate impact for Shareholders was a fall in portfolio valuations at the end of March, the low point of the year. These adjustments were partly general market related, but mainly reflected the Investment Adviser's assessment of COVID-19's potential impact on specific market segments and investee companies.
As the year progressed, the environment for most of our investee companies proved less volatile and uncertain than initially assumed in March.
In addition, favourable trading conditions emerged for a number of technology- related companies in the portfolio including those companies operating with direct to consumer business models. The valuation of the portfolio not only recovered strongly during the second quarter but also showed further improvement as the year progressed. Whilst the UK Government's roadmap to ease restrictions leaves a number of hurdles to be overcome, your Board is pleased with how well so many portfolio companies have been able to take advantage of the opportunities that have arisen and with the overall performance achieved.
The Company remained an active investor during the year despite the COVID-19 related restrictions adversely impacting previously planned timelines. Throughout the year, the Company made investments into four new portfolio companies and four existing portfolio companies. The Company also profitably realised its investments in six portfolio companies including the disposal of a residual interest in Auction Technology Group, an investment which, taken as a whole, has yielded one of the Company's most successful investment returns in its history.
Further information on investment activity, portfolio valuation movements as well as investment activity after the year-end is presented in the Investment Portfolio section of this Statement and detailed in the Investment Adviser's Review below.
Looking forward, the Investment Adviser continues to report a healthy pipeline of investment opportunities and strong trading performance in the majority of the portfolio companies.
Performance
The Company's NAV total return per share for the year was 22.2% (2019: 10.7%) being the closing NAV of
81.50 pence plus 10.00 pence of dividends paid in the year, divided by the opening NAV of 74.90 pence. The share price total return for the year was 12.9% (2019: 17.9%), compared to the NAV return of 22.2%. This difference arises principally due to the timing of NAV announcements which are usually made on a date following the date to which they relate. This is explained more fully in the Strategic Report within the Annual Report, under Performance.
The positive NAV total return for the year was primarily due to:
I. Substantial net unrealised gains in portfolio valuations;
II. Significant realised gains on disposals; and
III. A strong revenue return.
The Company's performance has demonstrated strong resilience during a volatile year. The valuations at the year-end reflect that many of our investee companies became beneficiaries of accelerated changes in UK consumer and business behaviour, brought on by the pandemic and lockdown restrictions. Despite the continued uncertainty in respect of the pandemic's ultimate effect, both the Board and the Investment Adviser believe that many of these changes have become structural and will not reverse.
The Company's revenue return increased to £1.85 million during the year (2019: £1.13 million). This was mainly due to significant investment income received on the disposal of Auction Technology Group as well as higher dividend income, but partially offset by deferral of loan interest payments to support portfolio companies impacted by COVID-19.
At the year-end, your Company was ranked 14th out of 30 Generalist VCTs over ten years and 15th out of 41 Generalist VCTs over five years, in the Association of Investment Companies' analysis of NAV Cumulative Total Return Performance. Shareholders should note that these figures do not reflect the increased NAV per share in the fourth quarter, disclosed in this Report.
Investment portfolio
The portfolio performed strongly in the year. The overall value increased by £13.31 million (2019: £5.68 million), or 34.5% (2019: 16.3%) on a like-for-like basis, compared to the start of the year. This increase comprised a net unrealised uplift in portfolio valuations of £8.87 million and £4.44 million in net realised gains over the year.
As at the year-end, the portfolio was valued at £41.68 million after taking account of investments purchased and sold in the year, together with the net realised and unrealised gains referred to above (2019: £38.54 million).
COVID-19 has been the dominant influence on the portfolio and its valuations for the majority of the year. During this unprecedented time, the Board liaised closely with the Investment Adviser, to ensure that all practical steps were taken to enable each portfolio company to trade through the crisis and return to growth in value. All investee companies were alerted to, and most utilised, the available government support packages.
The Company initially provided loan interest payment holidays to some portfolio companies, generating vital cash headroom during the period. During the year, £4.80 million was invested by the Company (2019: £4.48 million), comprising £1.96 million in four new investments and £2.84 million in four existing portfolio companies (analysed in the Investment Adviser's Review below and explained within the Notes to the Financial Statements).
These businesses may present opportunities for further investment in the future as they may require additional capital to realise their plans to expand.
The Company realised investments in Biosite, Auction Technology Group, Access IS, Blaze Signs, Vectair Holdings and Bourn Bioscience during the year. Combined with loan repayment and other capital receipts, including the partial realisation of Omega Diagnostics in several phases, total proceeds of £14.97 million were generated. The six realised investments, in aggregate, have generated total income and capital proceeds of £21.64 million and £13.99 million in realised gains over original cost which is equivalent to a combined 2.8x return over the life of these investments.
For the year under review, the portfolio generated a net realised gain of £4.44 million. Within this, the principal gains were from full exits by Access IS (£1.75 million), Auction Technology Group (£1.16 million), Bourn Bioscience (£0.80 million) and Blaze Signs (£0.04 million) offset by a decline of £(0.04) million on the realisation of Vectair, a strong profit over cost, but slightly below its holding value at the start of the year pre-COVID-19.
Further gains of £0.57 million arose from the partial realisation of Omega Diagnostics, as well as net gains of £0.16 million arising from loan repayments and other capital proceeds.
The portfolio also achieved a net increase in unrealised valuations of £8.87 million for the year on investments still held, with substantial increases from Virgin Wines, MPB Group and Wetsuit Outlet partially offset by modest valuation falls at Tapas Revolution, CGI Creative Graphics and Media Business Insight.
Further details on these portfolio movements are contained in the Investment Adviser's Review.
I am also pleased to report that transactional activity remains strong after the year-end, and up to the date of this report. Since the year-end, the Company has made new and follow-on Investments totalling £1.88 million comprising one new investment of £0.91 million and £0.97 million in four follow-on investments.
There have also been two events resulting in additional positive returns for Shareholders. Firstly, on 11 February 2021, the remaining holding in Omega Diagnostics was realised for £0.42 million. Over the life of this investment total proceeds of £1.17 million were received, which is a 5.9x multiple on original cost.
Secondly, as Shareholders may have seen in the financial press, the flotation of Virgin Wines on the AIM market took place on 2 March 2021, at a Placing Price per share that increased the value of the Company's investment in Virgin Wines by £4.64 million. This increase reflects a premium generated by the strong support received from investors in the public offer. In isolation, this has resulted in a 5.53 pence uplift in NAV per share compared to the 31 December 2020 NAV per share contained within this Annual Report. As part of this transaction, the Company received repayment of its remaining loan stock, leaving Virgin Wines ungeared. The Board and Investment Adviser remain strong supporters of Virgin Wines and the Company has retained its entire equity holding.
The flotation on the AIM market of another portfolio company, Parsley Box, is expected to take place on 31 March 2021. Subject to Admission to trading, the Placement Price of £2.00 per share will increase the year-end value of the Company's investment by £1.70 million. In isolation, this will result in a further 2.02 pence uplift in NAV per share compared to the 31 December 2020 NAV per share contained within this Annual Report.
Dividends
Your Board declared and paid an interim dividend in respect of the year ended 31 December 2020 of 6.00 pence on 7 May 2020. No further dividends are proposed in respect of the year.
The interim dividend paid in respect of the year ended 31 December 2020 of 6.00 pence per share (2019: 19.00 pence) has increased cumulative dividends paid since inception to 134.20 pence (2019: 128.20 pence) per share.
The Company's target of paying a dividend of at least 4.00 pence per share in respect of each financial year has been achieved in each of the last ten years, and often exceeded. However, it should be noted that the continued move of the portfolio to an increased proportion of younger growth capital investments may lead to increased volatility, which could affect the return in any one year.
A chart showing the dividends paid in respect of each of the last five years and cumulative dividends on the same basis is included in the Strategic Report in the Annual Report. A full dividend history is contained in the Fund Performance section of the Company's website: www.mig4vct.co.uk.
Dividend Investment Scheme
The Company's Dividend Investment Scheme ("DIS") was re-activated following the Annual General Meeting ("AGM") held in June 2020.
Shareholders wishing to take advantage of this method of increasing their investment in the Company can elect to join the DIS at any time by instructing the Registrar, Link Group, whose details are contained at the end of the Annual Report & Financial Statements or by completing the mandate form available on the Company's website: www.mig4vct.co.uk. Shareholders should note that an election must be registered at least 15 days prior to a dividend payment, for inclusion in the DIS. As no dividend payment has been made since the DIS was reinstated, no shares were allotted under the DIS scheme during the year.
Share Buybacks
During the year, the Company bought back and cancelled 1,245,646 (2019: 1,483,865) of its own shares, representing 1.9% (2019: 2.2%) of the shares in issue at the beginning of the year, at a total cost of £0.73 million (2019: £1.07 million) inclusive of expenses. It is the Company's policy to cancel all shares bought back in this way. The Board regularly reviews its buyback policy and currently seeks to maintain the discount at which the Company's shares trade at no more than 5% below the latest published NAV. Further details are included in the Strategic Report within the Annual Report.
Shareholder Communications
May I remind you that the Company has its own website containing useful information for Shareholders: www.mig4vct.co.uk.
The annual Shareholder event was held on Tuesday, 4 February 2020 at the National Gallery in central London.
Feedback from attendees was that this was a successful and informative event. Due to the uncertainty of when it may be possible to meet in a physical location again and for the safety of all concerned, it is planned to hold a virtual Shareholder event later in 2021. Details will be notified to Shareholders once finalised and will be shown on the Company's website.
Environmental, Social and Governance (ESG)
Whilst the requirements under company law to detail ESG matters are not directly applicable to the Company, the Board is conscious of its potential impact on the environment as well as its social and corporate governance responsibilities. The Investment Adviser has presented its ESG strategy to the Board and has started to provide regular updates regarding the ESG responsibilities of its portfolio of investee companies.
Your Board would like to assure Shareholders that ESG matters form a key consideration in investment decisions. The future FCA reporting requirements consistent with the Task Force on Climate-related Financial Disclosures commencing from 1 January 2021 do not currently apply to the Company however will be kept under review in light of any recommended changes.
In future, the Annual Report will address ESG matters in more detail. It is planned to provide additional reporting on these issues which are rightly viewed as integral to the investment process.
Shareholder Fraud Warnings
We are aware of a number of cases where Shareholders are being fraudulently contacted or are being subjected to attempts of identity fraud. Shareholders should remain vigilant of all potential financial scams or attempts for them to disclose personal data for fraudulent gains. The Board strongly recommends Shareholders take time to read the Company's Fraud Warning section, including details of who to contact, contained within the Information for Shareholders section at the end of the Annual Report & Financial Statements.
Annual General Meeting
The next Annual General Meeting of the Company will be held at 11.30 am on Tuesday, 18 May 2021. Shareholders should note that you will not be permitted to attend the AGM in person as it is likely the Government restrictions on physical meetings will still be in place at that time. The AGM will be held as a closed meeting with Shareholders able to join the meeting as attendees by electronic means.
A link to attend the meeting can be found in the Notice of Meeting at the end of the Annual Report & Financial Statements and on the Company's website at www.mig4vct.co.uk. Once the formal business of the meeting is concluded, a presentation by the Investment Adviser will commence followed by Shareholders' questions.
Shareholders will not be able to vote at the meeting and the Board encourages you to submit your vote by proxy by completing and returning the form enclosed or by electronic submission via the Link Shareholder portal at: www.signalshares.com. Shareholders are also strongly advised to appoint the Chairman of the Meeting as their proxy as attendance by proxies other than the Board and quorum, will not be permitted. Votes must arrive at the Registrar by 11.30am on Friday, 14 May 2021 to be valid.
The Notice of the meeting is included at the end of the Annual Report & Financial Statements. An explanation of the resolutions to be proposed can be found in the Directors' Report within the Annual Report.
Shareholders can also submit any questions about the resolutions to be passed at the AGM using the agm@mobeus.co.uk email address up to 12 May 2021 and a response will be provided prior to the deadline for lodging proxy votes. You can also register any questions for the AGM by using the same email address or alternatively, use the question facility available during the meeting.
Outlook
The impact of COVID-19 was and will continue to be wide reaching. Nevertheless, your Board considers that your Company is well positioned to continue to respond and adapt in most likely scenarios that can presently be foreseen. The successful realisations and earlier fundraising have given the Company strong liquidity not only to support the existing portfolio, but also to capitalise on opportunities which may arise for new investment.
The Investment Adviser is seeing a good pipeline of new and interesting investment opportunities. COVID-19 uncertainties and economic instability may cause global markets and economies to be more volatile in the short-term and UK and European businesses will continue to operate in an uncertain trading environment for the near future as the new UK/EU trade agreement beds in. The companies in the portfolio have been well prepared for a considerable time for the impact of Brexit and those preparations appear to be bearing fruit and working well. Although the degree and frequency of any future restrictions as a result of the pandemic are unclear, both the Investment Adviser and portfolio companies are well equipped to respond. Consequently, we have cause to be cautiously optimistic about the future.
I would like to take this opportunity once again to thank all Shareholders for your continued support and hope you and your families remain safe and well.
Jonathan Cartwright
Chairman
29 March 2021
INVESTMENT POLICY
The Company's policy is designed to meet the Company's Objective:
Investments
The Company invests primarily in a diverse portfolio of UK unquoted companies. Investments are made selectively across a number of sectors, principally in established companies. Investments are usually structured as part loan stock and part equity in order to produce a regular income stream and to generate capital gains from realisations.
There are a number of conditions within the VCT legislation which need to be met by the Company and which may change from time to time. The Company will seek to make investments in accordance with the requirements of prevailing VCT legislation.
Asset allocation and risk diversification policies, including the size and type of investments the Company makes, are determined in part by the requirements of prevailing VCT legislation. No single investment may represent more than 15% (by VCT tax value) of the Company's total investments at the date of investment.
Liquidity
The Company's cash and liquid funds are held in a portfolio of readily realisable interest-bearing investments, deposit and current accounts, of varying maturities, subject to the overriding criterion that the risk of loss of capital be minimised.
Borrowing
The Company's Articles of Association permit borrowings of amounts up to 10% of the adjusted capital and reserves (as defined therein).
However, the Company has never borrowed and the Board would only consider doing so in exceptional circumstances.
INVESTMENT ADVISER'S REVIEW
Overview
2020 has been an unprecedented year in terms of initial value decline and subsequent recovery. The Company's year started well with a strong portfolio performance and two highly successful realisations. In March, the UK Government then introduced lockdown and social distancing measures in response to the COVID-19 pandemic. These measures had an immediate adverse impact on UK businesses, with many companies experiencing a significant reduction in demand, restrictions on working practices and disruption to their supply chains. Global markets also fell significantly. The valuations of the portfolio companies reflected this and experienced a significant decline at the end of the March quarter.
Once the immediate impact of lockdown subsided, the pandemic's continuing influence on business generally and portfolio companies specifically, was far clearer. It is pleasing that this impact has been far less negative than was initially feared with markets recovering and business activity levels quickly returning to pre COVID-19 levels in most cases. There have been a few portfolio companies which have experienced significant disruption but a significant proportion have actually benefited from a structural change in consumer purchasing habits and are now trading at or above their pre COVID-19 levels. General Retail now comprises over 50% of the portfolio and all these companies have significant direct to consumer channels - a business model that has performed well. The majority of the portfolio has therefore demonstrated a high degree of resilience with over 85% of companies by number showing
revenue and/or earnings progression over the previous year. Software and other technology enabled businesses have also performed strongly and the portfolio has limited exposure to more challenging sectors such as hospitality and travel.
Strong trading activity levels created investment opportunities for the Company as portfolio companies sought to consolidate their positions by building capability in light of demand. A number of further growth capital investments were therefore made into the portfolio over the year. Mobeus continues to review the opportunities for follow-on investments and is in a good position to capitalise on opportunities due to the Company's strong liquidity. M&A sentiment also remained buoyant with a continuing stream of attractive realisations throughout the year. The outlook for both follow-on investment and realisations continues to be positive.
Although quoted markets have rallied since March, it is noteworthy that the principal driver of the rise in valuations over the recent months was strong underlying trading performance. A small number of companies have clearly struggled, but they are in the minority and their impact on overall shareholder return is minimal. Substantial value has arisen from the increase in revenues and earnings achieved across the majority of the portfolio. A significant example of this has been the flotation of Virgin Wines on the AIM market on 2 March 2021, at a price per share that further materially increases the value of the Company's investment. This increase reflects a premium generated by the strong support received from investors in the public offer.
The social and economic consequences of COVID-19 will be with us for some time to come and the practical impact of Brexit is still emerging. However, the portfolio is well prepared, in robust shape and well placed to respond to the challenges and opportunities that arise going forward.
Overall, the portfolio has demonstrated great resilience and potential. Nevertheless, we remain mindful of the macro-economic uncertainties and market volatility. We are cautiously optimistic, based upon the recent evidence of improved trading performance at many constituents of the portfolio. Mobeus believes much of this uplift will become permanent in many cases and should underpin further potential growth within the portfolio.
New and further investments
The Company made new and follow-on investments totalling £4.80 million (2019: £4.48 million), comprising £1.96 million (2019: £4.03 million) into four new investments and £2.84 million (2019: £0.45 million) into four existing investments. This level of new and follow-on investment is pleasing given that there was effectively a temporary pause in new investment going into the summer months as entrepreneurs temporarily deferred fundraising but a healthy pipeline of suitable opportunities has been seen more recently. The level of follow-on investment into the portfolio has increased as anticipated, which indicates there are opportunities to further back growing portfolio companies that are achieving a strong performance.
New investments during the year
A total of £1.96 million was invested into four new investments during the year, as detailed below:
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Company
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Business
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Date of Investment
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Amount of new investment (£m)
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Bella & Duke
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Premium frozen raw dog food provider
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February 2020
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0.62
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Bella & Duke is a direct to consumer subscription service, providing premium frozen raw dog food to pet owners in the UK. Founded in 2016, the business provides an alternative to standard meal options for dog owners by focusing on the well documented health benefits of a raw food diet. This area is a growing niche in the large and established pet food market and is being driven by the premiumisation of dog food. The investment will be used to optimise its production and supply facilities, expand and enhance its team and broaden its product range. The company has grown revenues over 700% between 2018 and 2020.
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Andersen EV
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Electric vehicle chargers
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June 2020
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0.19
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Muller EV Limited (trading as Andersen EV) is a design led manufacturer of premium electric vehicle (EV) chargers. Incorporated in 2016, this business has secured high profile partnerships with OEMs such as Porsche, establishing an attractive niche position in charging points for the high end EV market. The Company's funds will be used to scale the business through investment in further products and software, sales and marketing and electric vehicle manufacturer partnerships. Given the current strong political and social emphasis on decarbonisation and air quality, Andersen is well positioned and has already generated significant growth in sales over 350% for its most recent financial year.
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Northern Bloc
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Vegan and dairy-free ice cream producer
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December 2020
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0.30
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Northern Bloc Ice Cream is an established food brand in the emerging and rapidly growing vegan market. By focusing on chef quality and natural ingredients, Northern Bloc has carved out an early mover position in the vegan ice cream sector. The company's focus on plant-based alternatives has strong environmental credentials as well as it being the first ice cream brand to move wholly into sustainable packaging. The investment is aimed at capitalising on the company's market position and accelerating growth. It has obtained key listings across several large supermarkets and is well placed to benefit from the food service recovery as it continues to secure menu placings. Northern Bloc has doubled its retail store facings in 2020 and saw a 60% increase in retail sales over the year. Current facings now stand at 1,800 across the UK.
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Connect Childcare
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Nursery management software
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December 2020
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0.85
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Connect Childcare is a fully integrated nursery management system for childcare providers in the UK. Its market leading Core Connect product provides nurseries and preschools with an enterprise software solution enabling more efficient administrative processes. The investment will be used to drive product marketing and commercialise their new SaaS product (Foundations), as well as support the roll out of a payment facility to its underlying customer base. Supplying 14 of the top 25 largest nursery groups in the UK, the company has strong recurring revenues which have grown 20% for each of the last three years.
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Further investments during the year
A total of £2.84 million was invested into four existing portfolio companies during the year, as detailed below:
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Company
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Business
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Date of Investment
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Amount of further investment (£m)
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RotaGeek
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Workforce management software
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May 2020
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0.44
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RotaGeek is a provider of cloud-based enterprise software to help larger retail, leisure and healthcare organisations predict and meet demand to schedule staff effectively. This investment, alongside funds from a new investor and existing shareholders, will be used to capitalise on opportunities that will emerge as the retail sector recovers from lockdown restrictions. RotaGeek will also be expanding its presence in healthcare to help address the workforce management issues of a sector that is chronically overburdened at present. For the year ended 31 December 2019, revenues have grown over 45% on the prior year with 2020 revenues holding up well despite COVID-19 lockdowns.
|
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MyTutor
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Digital marketplace connecting school pupils seeking one-to-one online tutoring
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May 2020
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0.71
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MyTutorweb (trading as MyTutor) is a digital marketplace that connects school pupils who are seeking private one-to-one tutoring with university students. The business is satisfying a growing demand from both schools and parents to improve pupils' exam results. This further investment, alongside other existing shareholders, seeks to build and reinforce its position as a UK category leader in the online education market as well as to begin to develop a broader, personalised learning product offering. MyTutor has performed strongly over the last 18 months with 70% growth in 2019 and over 190% over the last 12 months. The company has been chosen as Tutoring Partner for the National Tuition Programme where they will directly support 30,000 students in catching up on lost learning because of the COVID-19 pandemic.
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|
Bu
s
ter & Punch
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Lighting and interiors brand
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September 2020
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1.12
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Buster & Punch is a premium branded, fast growing business which designs and manufactures a complete range of high-quality functional fittings (lighting, electrical and hardware and other accessories) for the home. The Company first invested in 2017 and since then, the business has delivered consistent high growth, with revenues growing in excess of 65%, and reaching nearly £10 million in 2020. Buster & Punch's products are now sold in 99 countries via both its highly invested ecommerce platform and direct services to consumers, trade and retailers across the world. Buster and Punch also operates flagship showrooms in London, Stockholm and Los Angeles. The new funding will be used to drive the global business plans of this fast-growing luxury interior fashion label with further international expansion into the US and Asia Pacific markets.
|
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Preservica
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Seller of proprietary digital archiving software
|
September 2020
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0.57
|
|
Preservica is a SaaS software business with blue chip customers and strong recurring revenues. It has developed market leading software for the long-term preservation of digital records, ensuring that digital content can remain accessible, irrespective of future changes in technology. This latest investment is to provide additional growth capital to finance the further development of the business. The year to 31 March 2020 saw record bookings growth of 68% and many key customer wins.
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|
|
|
|
|
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Portfolio valuation movements
The portfolio generated net unrealised gains of £8.87 million during the year. The scale of the valuation increases in the last nine months of the year was primarily driven by the Company's growth portfolio, many of which have direct to consumer business models that have been ideally suited to the more physically remote business environment necessitated by COVID-19. Mobeus believes that this has accelerated an existing trend and in many cases the shift in behaviour will prove permanent. Over this period, some older style MBO portfolio companies with similar business practices have also benefited. A few companies have struggled in this environment, and while there remains a possibility such businesses will fail, their value has already been reduced to modest levels, reducing their risk to future shareholder value.
Total valuation increases were £12.94 million. The main valuation increases were:
|
Virgin Wines
|
£3.84 million
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|
MPB Group
|
£1.43 million
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|
Wetsuit Outlet
|
£1.32 million
|
|
Parsley Box
|
£1.23 million
|
Virgin Wines, MPB and Parsley Box have generated record earnings and revenues over the lockdown periods and beyond. All have significantly increased their customer base and there is evidence that these new customers are continuing to be at least as active and profitable as their pre-COVID-19 counterparts. Wetsuit Outlet has seen a marked turnaround in the last year and its performance is likely to further benefit from stronger brand relationships and increased usage by customers of its online channel.
Within total valuation decreases of £(4.07) million. The main reductions were:
|
Tapas Revolution
|
£(1.13) million
|
|
CGI Creative Graphics International
|
£(0.95) million
|
|
Media Business Insight ("MBI")
|
£(0.88) million
|
|
RotaGeek
|
£(0.53) million
|
These companies saw the most significant impact of a sudden decline in demand for their products or services as a result of COVID-19. However, as restrictions are eventually eased, a recovery is anticipated in due course.
The majority of the increase in portfolio value lies in the top 10 companies which represent over 70% of the portfolio by value. Year-on-year growth by either revenues or earnings has been seen in all of the top ten companies and it is pleasing to note that nine of these are from the younger, growth portfolio.
The year also saw portfolio companies, Jablite, Oakheath (formerly Super Carers) and CB entering voluntary liquidation and recognised as a realised loss. These companies were struggling before the impact of COVID-19. Valuation reductions for these companies had already been made. As a result, there has been little impact on shareholder value from these administration processes.
Portfolio Realisations
The Company realised its investments in Biosite, Auction Technology Group, Access IS, Blaze Signs, Vectair Holdings and Bourn Bioscience during the year, receiving a total of £13.71 million in proceeds, contributing to total proceeds of £14.97 million during the year, as detailed below. In summary, aggregate proceeds generated over the life of these investments were £21.64 million representing a gain over original cost of £13.99 million.
|
Company
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Business
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Period of investment
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Total cash proceeds over the life of the investment / Multiple over cost
|
|
Biosite
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Workforcemanagement andsecurityservices
|
November 2016 to
February 2020
|
£2.07 million
1.5 x cost
|
|
The Company sold its investment in Pattern Analytics Limited (trading as Biosite) to ASSA ABLOY AB for £1.98 million. Since investment in 2016, the investment has generated proceeds of £2.07 million compared to an original investment cost of £1.34 million, which is a multiple on cost of 1.5x and an IRR of 21.0%.
|
|
AuctionTechnology Group
|
SaaS
basedonlineauction
ma
rk
e
t
place
platform
|
October 2008 to
February 2020
|
£9.04 million
4.5 x cost
|
|
The Company sold its investment in Turner Topco Limited (trading as Auction Technology Group) to TA Associates for £5.28 million (including £1.08 million loan interest due on completion) (realised gain in the year: £1.16 million). This investment generated proceeds of £9.04 million over the life of the investment (including proceeds received following a partial realisation from a sale to ECI Partners in June 2014), compared to an original cost of £2.00 million. Over the 11 ½ years this investment was held, these returns generated a multiple on cost of 4.5x and an IRR of 28.9%.
|
|
Access IS
|
Data capture and scanning hardware
|
October 2015 to August 2020
|
£6.24 million
2.5 x cost
|
|
The Company sold its investment in Tovey Management Limited (trading as Access IS) to ASSA ABLOY AB for proceeds of £5.32 million (realised gain in the year: £1.75 million). Since investment in 2015, the investment has generated cash proceeds of £6.24 million compared to an original investment cost of £2.47 million, which is a multiple on cost of 2.5x and an IRR of 23.4%.
|
|
Blaze Signs
|
Manufacturer and installer of signs
|
April 2006 to September 2020
|
£1.61 million
2.6 x cost
|
|
The Company sold its investment in Blaze Signs Holdings Limited via a secondary buy out backed by Elaghmore Advisor LLP and has received cash proceeds of £0.61 million (including £0.22 million of dividends and £0.06 million proceeds received after the year-end) (realised gain in the year: £0.04 million). Over the 14 years this investment was held, cash proceeds of £1.55 million have been received compared to original cost of £0.61 million, which is a multiple of cost of 2.6x and an IRR of 13.4%.
|
|
Vectair Systems
|
Designer and distributor of washroom products
|
January 2006 to November 2020
|
£0.83 million
8.3 x cost
|
|
The Company sold its investment in Vectair Holdings Limited to a consortium of US investment funds, including Oxbow Industries and Arcspring, and has received proceeds of £0.48 million (realised loss in the year: £(0.04) million). This investment generated proceeds over the life of the investment of £0.83 million compared to original cost of £0.10 million, which is a multiple of cost is 8.3x and an IRR of 22.2%.
|
|
Bourn Bioscience
|
In vitro fertilisation clinics
|
January 2014 to December 2020
|
£1.85 million
1.6 x cost
|
|
The Company sold its investment in Bourn Bioscience Limited to Canadian acquirer Triangle Capital, and has received cash proceeds of £1.40 million (realised gain in the year: £0.80 million). This investment generated proceeds over the life of the investment of £1.85 million compared to original cost of £1.13 million, which is amultiple of cost is 1.6x and an IRR of 8.5 %.
|
Loan stock repayments and other gains/(losses)
During the year and following a significant increase in the share price, the Company received £0.75 million from the partial realisations of its holding in AIM listed Omega Diagnostics Group plc, generating realised gains of £0.57 million. Based upon the valuation at the year-end, this holding has achieved an attractive return to date of 5.1x multiple on cost, an IRR of 18.2%. This investment was subsequently fully realised after the year-end (see realisations after the year-end for further details).
Proceeds of £0.37 million were received via loan repayments from BookingTek, Vian Marketing (trading as Red Paddle) and End Ordinary Group (trading as Buster & Punch), generating a realised gain of £0.06 million.
Finally, consideration and a realised gain of £0.14 million was received in respect of Redline Worldwide, an investment realised in a previous year and a realised loss of £(0.04) million from Jablite Holdings was recognised as this company entered liquidation, with some recovery still anticipated.
|
InvestmentPortfolio
Yield
|
2020
£m
|
2019
£m
|
|
Interestreceivedinthe year
|
2.13
|
1.72
|
|
Dividendsreceivedin the year
|
0.66
|
0.24
|
|
Total
portfolioincome
intheyear1
|
2.79
|
1.96
|
|
Portfolio
valueat31 December
|
41.68
|
38.54
|
|
Portfolio
IncomeYield
(Incomeasa%of Portfoliovalueat
31 December)
|
6.7%
|
5.1%
|
|
|
|
|
1 Total portfolio income in the year is generated solely from investee companies within the portfolio. See Note 3 to the Financial Statements for all income receivable by the Company. The increase in income was mainly due to interest of £1.08 million received on the loan instruments in Auction Technology Group being paid, as part of the sale transaction, which had not previously been recognised. Portfolio yield is expected to fall for the foreseeable future, as the growth portfolio's returns are likely to be more capital in nature.
Portfolio review
The portfolio's movements and valuation changes in the year are summarised below:
|
|
2020
£m
|
2019
£m
|
|
Openingportfoliovalue
|
38.54
38.54
|
36.53
36.53
|
|
Newandfurtherinvestments
|
4.80
|
4.48
|
|
Disposalproceeds
|
(14.97)
|
(8.
14)
|
|
Netrealisedgains
|
4.44
|
2.31
|
|
Valuation
movements
|
8.87
|
3.36
|
|
Portfolio
valueat31December
|
41.
68
|
38.54
|
|
InvestmentPortfolio
CapitalMovement
|
2020
£m
|
2019
£m
|
|
Increaseinthevalueof
|
12.94
|
5.30
|
|
unrealisedinvestments
|
|
|
|
Decreaseinthe
|
(4.07)
|
(1.94)
|
|
valueofunrealised
|
|
|
|
investments
|
|
|
|
Netincreaseinthe valueofunrealised investments
|
8.87
|
3.36
|
|
Realised
gains
|
4.52
|
2.31
|
|
Realised
losses
|
(0
.08)
|
-
|
|
Netrealisedgainsintheyear
|
4.44
|
2.31
|
|
Net investment portfolio capital movement in the year
|
13.31
|
5.67
|
New investments after the year-end
£0.91 million was invested into one new investment after the year-end, as detailed below:-
|
Company
|
Business
|
Date of investment
|
Amount of new investment (£m)
|
|
Vivacity
|
Artificial intelligence & urban traffic control system
|
February 2021
|
0.91
|
|
Vivacity (www.vivacitylabs.com) develops camera sensors with on-board video analytics software that enables real-time anonymised data gathering of road transport system usage. It offers city transport authorities the ability to manage their road infrastructure more effectively enabling more efficient monitoring of congestion and pollution levels as well as planning for other issues, such as the changing nature of road usage (e.g. the increasing number of cyclists). The technology and software represent a significant leap forward for local planning authorities which have traditionally relied upon manual data collection methods. The growth capital funding will allow the management team to achieve deeper penetration of the UK transport management sector, explore opportunities internationally and commercialise its new Smart Junction offering. Revenues have grown 350% over the last three years and it has exceeded its most recent year's budget despite the onset of the COVID-19 pandemic.
|
Further investments after the year-end
A total of £0.97 million was invested into four existing portfolio companies after the year-end, as detailed below:
|
Company
|
Business
|
Date of investment
|
Amount of further investment (£m)
|
|
Parsley Box
|
Ambient ready meals targeting the over 60s
|
January 2021
|
0.26
|
|
Parsley Box is a UK direct to consumer supplier of home delivered, ambient ready meals for the over 60s. Founded in 2017, Parsley Box has grown rapidly and has developed a unique meal delivery solution for its customers. The company supplies a diverse range of ambient meals via next day delivery which are easy to store and aim to contribute to a more independent and healthier lifestyle. The incidence of the COVID 19 pandemic has encouraged consumers to order ready meals online, and the company's revenues have grown to eight times that at the time of the original VCT investment. This further investment will scale the company's marketing strategy, enable it to process larger order volumes and continue to build out its team. This company has announced an intention to admit its shares to trading on AIM on 31 March 2021.
|
|
Bleach
|
Hair colourants brand
|
February 2021
|
0.11
|
|
Bleach London Holdings ("Bleach") is an established, branded, fast growing business which manufactures a range of haircare and colouring products. Bleach has made sound commercial progress since the VCTs invested in 2019 with its direct-to- consumer channels benefiting greatly from the COVID-19 pandemic. Revenues have grown over 90% ahead of the previous year. This further investment, along with strong support from existing investors, will be used to invest in marketing and infrastructure to enable the business to accelerate its direct-to-consumer channel.
|
|
Arkk Consulting
|
Regulatory and reporting requirement service provider
|
February 2021
|
0.48
|
|
Arkk Consulting (trading as Arkk Solutions) provides services and software to enable organisations to remain compliant with regulatory reporting requirements. Arkk was established in 2009 and currently has over 800 clients across 20 countries. These include more than 80 of the FTSE 350 and half of the largest 20 accountancy firms in the UK. This further investment is to enable continued development of its software to capitalise on HMRC's 'Making Tax Digital' campaign. Recurring revenues are now over 50% higher than at the point of the original investment in May 2019.
|
|
Tapas Revolution
|
Spanish restaurant chain
|
March 2021
|
0.12
|
|
Tapas Revolution is a leading Spanish restaurant chain in the casual dining sector. At initial investment in January 2017, it was operating five sites and, subsequent to a further investment round in March 2018, had grown to 12 sites. Tapas was trading well and had a strong outlook up until the onset of COVID-19 which mandated the closure of much of its estate during the course of 2020 in response to the varying patterns of government restrictions. Costs have been controlled well under the circumstances and this further investment is to provide financial headroom through the remaining lockdown period and to capitalise on new site acquisition opportunities once the lockdown period has ended.
|
Realisations after the year-end
|
Company
|
Business
|
Period of investment
|
Total cash proceeds over the life of the investment/ Multiple over cost
|
|
Omega Diagnostics
|
In Vitro diagnostics for
food intolerance, auto-immune diseases and infectious diseases
|
December 2010
to
February 2021
|
£1.17 million
5.9 x cost
|
|
Following a further significant increase in the share price, the Company sold its remaining investment in Omega Diagnostics Group plc for £0.42 million. Combined with partial realisations during the year under review, total proceeds received over the eleven-year life of the investment were £1.17 million compared to an original investment cost of £0.20 million, which is a multiple on cost of 5.9x and an IRR of 19.9%.
|
Admission to AIM of Virgin Wines
Mobeus is also pleased to report that on 2 March 2021, Virgin Wines UK plc ("Virgin Wines"), an existing portfolio company, was admitted to trading on the Alternative Investment Market ("AIM") of the London Stock Exchange, alongside a placing of new and existing shares. The Placing Price of these shares was £1.97 per share, valuing Virgin Wines at a market capitalisation of £110m. Mobeus has been proud to partner the management of Virgin Wines in growing this business. We continue to support Virgin Wines and its future development and are pleased to be retaining the Company's entire equity holding.
At the date of the admission, and based upon the Placing Price of £1.97 per share, the Company's beneficial equity investment in Virgin Wines was valued at £9.12 million. This represented a significant uplift in valuation of £4.64 million, compared to that included in the Company's audited Net Asset Value ("NAV") per share at 31 December 2020 as shown as part of this Annual Report. As part of this transaction, the Company received net proceeds of £1.86 million (net of transaction costs) to repay its loan stock and interest, leaving Virgin Wines ungeared at that point. At the date of this Report, Virgin's share price has remained above its Placing Price.
Funds available for investment
Cash and other liquid investments available for investment amounted to
£26.69 million at the year-end. Of this amount, £4.05 million is held as cash in bank accounts, and the balance is placed in AAA rated money market funds. The returns on these funds are low, but the Board retains its policy of seeking to minimise the loss of capital in respect of uninvested funds.
Environmental, Social, Governance considerations
The Investment Adviser and the Board have discussed an appropriate framework within which to assess progress on these matters within the existing portfolio, and it will continue to be an important consideration in both the Investment Adviser's and the
Board's assessment of new investment opportunities.
The statutory environmental disclosures are included in the Directors' Report within the Annual Report.
Outlook
The portfolio is in a healthy position with many companies trading well throughout the lockdowns, and several at record levels. It continues to evolve offering a balance of fast-growing and more stable investments at various stages of maturity and scale across a range of diverse market sectors. There is a significant exposure to the direct to consumer business model which has underpinned performance during the year. This also gives confidence about the future performance of the portfolio and its ability to cope with other uncertainties,
challenges and opportunities associated with Brexit, the macro-economic outlook and the latest and potentially ongoing national lockdowns. The new investment pipeline is recovering to levels seen pre-COVID-19 and capital deployment should continue at an encouraging rate in line with forecast. The Investment Adviser, although cautious in its approach, is confident that the portfolio is in a robust shape to be able to cope with whatever the short to medium-term holds.
Mobeus Equity Partners LLP
Investment Adviser
29 March 2021
Investment Portfolio Summary
as at 31 December 2020
|
|
Total
cost at
31 December 2020
£
|
Total valuation at
31 December 2020
£
|
Unrealised gains/(losses)
in year
£
|
% of equity held
|
% of portfolio by value
|
|
|
VirginWinesHoldingCompanyLimited1
Onlinewineretailer
|
1,930,813
|
6
,
3
1
2,889
|
3,837,158
|
9
.
7
%
|
15
.
1%
|
|
|
MPBGroupLimited
Onlinemarketplaceforusedphotographicequipment
|
1,480,993
|
4,126,952
|
1,425,620
|
5
.
3
%
|
1
0.2
%
|
|
|
P
r
ese
rvic
a
Li
mited
Sellerofproprietarydigitalarchivingsoftware
|
2,152,042
|
3,611,144
|
1,
001,002
|
10.9
%
|
8.7
%
|
|
|
End
O
rdin
a
ry
Group
Limit
ed(tradingasBusterandPunch)
I
ndus
tri
al
in
spiredlightingandinteriorsretailer
|
1,4
96,785
|
2
,
6
4
6
,
2
7
2
|
754,240
|
7.8
%
|
6
.
3
%
|
|
|
MyTutorwebLimited
D
i
g
it
a
l
m
arketplaceconnectingschoolpupilsseekingone-to-one
onlinetutoring
|
2,023,042
|
2,476,581
|
453,539
|
8
.
2%
|
5.9%
|
|
|
EOTHLimited(tradingasEquipOutdoorTechnologies)
D
istributor
ofbrandedoutdoorequipmentandclothing(Raband
LoweAlpine)
|
951,471
|
2,400,632
|
251,840
|
1
.
7
%
|
5.8
%
|
|
|
Ma
nuf
a
cturing
Servic
e
s
Inv
estmentLimited(tradingasWetsuit
Outlet)
Onlineretailerinthewatersportsmarket
|
2,333,102
|
2,331,110
|
1
,
3
1
5
,
232
|
6.4%
|
5.6%
|
|
|
DataDiscoverySolutionsLimited(tradingasActiveNavigation)
Providerofglobalmarketleadingfileanalysissoftwarefor
inf
ormationgovernance,securityandcompliance
|
1
,100,
500
|
2
,
20
1
,
000
|
1
,100,
500
|
6
.
3
%
|
5
.
3
%
|
|
|
Parsl
eyBoxLimited
Sup
pli
er
ofhomedelivered,ambientreadymealstargetingthe
ov
er60s
|
668,400
|
1,937,571
|
1
,
233,212
|
4.9
%
|
4.6%
|
|
|
Proactiv
eGroupHoldingsInc
Providerofmediaservicesandinvestorconferencesfor
companiesprimarilylistedonsecondarypublicmarkets
|
755,340
|
1,
900,421
|
-
|
2.6%
|
4.6%
|
|
|
VianMarketingLimited(tradingasRedPaddleCo)
Design,manufactureandsaleofstand-uppaddleboardsandwindsurfingsails
|
789,006
|
1
,
465
,
304
|
285,370
|
10.9
%
|
3.5%
|
|
|
ArkkConsultingLimited
Providerofservicesandsoftwaretoenableorganisationsto
rem
aincompliantwithregulatoryreportingrequirements
|
1,118,490
|
1,1
78,143
|
35,792
|
7.5
%
|
2.8
%
|
|
MasterRemoversGroup2019Limited(tradingasAnthonyWardThomas,BishopsgateandAussieMan&Van)
Aspecialistlogistics,storageandremovalsbusiness
|
348,64
1
|
1
,
044
,
97
1
|
259,625
|
6.6%
|
2.5%
|
|
Tharst
ernGroupLimited
M
I
S
&Commercialprintsoftwaresolutions
|
1,091,886
|
1,037,390
|
(69,039)
|
12.2
%
|
2.5%
|
|
MediaBusinessInsightHoldingsLimited
Apublishingandeventsbusinessfocusedonthecreative
p
r
oduc
ti
on
i
ndus
tri
es
|
2,722,760
|
1,
013,748
|
(88
0,159)
|
1
5.7%
|
2.4
%
|
|
Con
ne
ct
Childcar
eGroupLimited
N
urs
ery
man
agementsoftwareprovider
|
846,007
|
846,007
|
-
|
3.0
%
|
2.0%
|
|
B
ella&DukeLimited
Apremiumfrozenrawdogfoodprovider
|
617,400
|
836,042
|
218,642
|
4.3
%
|
2.0%
|
|
Bleach
London
HoldingsLimited
Haircolourantsbrand
|
519,672
|
832,878
|
3
1
3,
206
|
3.1
%
|
2.0%
|
|
Rota
G
eekLimited
Workforcemanagementsoftware
|
874,000
|
7
26,667
|
(526,952)
|
4.4%
|
1
.
7
%
|
|
IP
VLimited
Providerofmediaassetsoftware
|
619,487
|
619,487
|
-
|
5.5%
|
1
.
5%
|
|
CGI
Cr
eativeGraphicsInternationalLimited
V
in
y
l
g
r
a
phi
c
s
toglobalautomotive,recreationvehicleandaerospacemarkets
|
1,449,746
|
39
0
,849
|
(954,059)
|
6
.
3
%
|
0.9
%
|
|
|
N
orth
e
rn
Bloc
Ic
eCreamLimited
Da
ir
y-
fr
ee
icecreamproducer
|
304,050
|
3
0
4,
0
50
|
-
|
0
.
7
%
|
0
.
7
%
|
|
|
OmegaDiagnosticsGroupplc2
In
-v
itr
o
di
ag
nosti
c
s
forfoodintolerance,auto-immunediseasesandinfectiousdiseases
|
50,011
|
266,680
|
2
0
8
,
3
55
|
0.2%
|
0.6%
|
|
|
MullerEVLimited(tradingasAndersenEV)
Providerofpremiumelectricvehicle(EV)chargers
|
195,200
|
217,904
|
22,704
|
0
.
5%
|
0
.
5%
|
|
|
K
udosInnovationsLimited
Onlineplatformthatprovidesandpromotesacademicresearch
di
s
semi
n
a
t
io
n
|
328,950
|
1
52,488
|
(362,884)
|
3
.
2%
|
0.4%
|
|
|
R
D
L
CorporationLimited
Rec
ruitment
co
nsultants
forthepharmaceuticalandITindustries
|
1,000,000
|
151,247
|
(1
4
2,461)
|
9.1%
|
0.4%
|
|
|
Spanish
R
estaurantGroupLimited(formerlyIbericosEtc.
Limit
ed)(tradingasTapasRevolution)
Spanishrestaurantchain
|
1,044,869
|
1
39,3
1
7
|
(
1,1
3
4,
989
)
|
5.8
%
|
0.3
%
|
|
|
Jablit
eHoldingsLimited
M
anuf
ac
tur
er
ofexpandedpolystyreneproducts
|
376,083
|
49,597
|
-
|
9.1%
|
0.1%
|
|
|
BG
TrainingLimited
C
it
y-
b
ase
d
pr
oviderofspecialisttechnicaltraining
|
10,625
|
7,969
|
2,656
|
0
.0%
|
0
.0%
|
|
|
VeritekGlobalHoldingsLimited
Maint
enanceofimagingequipment
|
1,620,086
|
-
|
-
|
1
5
.4%
|
0
.0%
|
|
|
Book
i
ngTek
Limited
So
ft
wa
r
e
forhotelgroups
|
582,300
|
-
|
-
|
3.5%
|
0
.0%
|
|
|
OakheathLimited(formerlySuperCarers)(inmembers'
v
o
l
unta
ry
l
iquidation)
Onlineplatformthatconnectspeopleseekingcarehomefrom
experiencedindependentcarers
|
485,730
|
-
|
-
|
4.3
%
|
0
.0%
|
|
|
Racoon
Int
ernationalGroupLimited
S
uppli
e
r
ofhairextensions,haircareproductsandtraining
|
484,347
|
-
|
-
|
8.0
%
|
0
.0%
|
|
|
CB
Imports
Group
Limit
ed(tradingasCountryBaskets)
Import
e
r
anddistributorofartificialflowers,floralsundriesand
hom
edécorproducts
|
175,000
|
-
|
-
|
5.8
%
|
0
.0%
|
|
|
Total
|
32,546,834
|
4
1,2
25
,31
0
|
8,
648,150
|
|
98
.9
%
|
|
|
Former
Elderstr
eet
Privat
eEquityPortfolio
|
|
|
-
|
|
|
|
|
Cashfac
Li
mited
Providerofvirtualbankingapplicationsoftwaresolutionsto
corporatecustomers
|
2
6
0,101
|
451,386
|
218,661
|
2.9%
|
1.1
%
|
|
|
Sift
Group
Limit
ed
Developerofbusiness-to-businessinternetcommunities
|
1
35
,
39
1
|
-
|
-
|
1
.
3%
|
0
.0%
|
|
|
Total
|
395,492
|
451,386
|
218,661
|
|
1.1%
|
|
|
Tota
l
Inv
estmentPortfolio
|
32,942,326
|
4
1
,676,696
|
8
,8
66
,811
|
|
1
00.0%
|
|
|
Tota
l
Inv
estmentPortfoliosplitbytype
|
|
|
|
|
|
|
|
Gro
w
th
focus
edportfolio3
|
22,080,980
|
32,713,
007
|
7,
0
72,71
5
|
|
78.
5%
|
|
|
M
B
O
focus
edportfolio3
|
10,861,346
|
8,
96
3,68
9
|
1,7
94,096
|
|
2
1
.
5%
|
|
|
Inv
estmentAdviser'sTotal
|
32,942,326
|
4
1
,676,696
|
8
,8
66
,811
|
|
1
00.0%
|
|
|
|
|
|
Notes:
1
After the year-end, this company was admitted to AIM. For further details see Post Balance Sheet Events in the notes to the Financial Statements.
2
Quoted on AIM.
3
The growth focused portfolio contains all investments made after the change in the VCT regulations in 2015 plus some investments that are growth in nature made before this date. The MBO focused portfolio contains investments made prior to 2015 as part of the previous MBO strategy.
|
|
|
|
|
PRINCIPAL RISKS
The Directors acknowledge the Board's responsibilities for the Company's internal control systems and have instigated systems and procedures for identifying, evaluating and managing the significant and emerging risks faced by the Company. The Board's risk appetite is cognitive of the risks and rewards of investing in small unquoted companies. A key risk management review and robust assessment of the risks takes place at each quarterly Board meeting and the Board discusses emerging risks as and when they arise, such as the COVID-19 pandemic, and puts in place mitigating actions to manage the risk. The principal and emerging risks identified by the Board, a description of the possible consequences of each risk and how the Board manages each risk are set out below:
|
Risk
|
Possible consequence
|
How the Board manages risk
|
|
Loss of approval as a Venture Capital Trust
|
The Company must comply with section 274 of the Income Tax Act 2007 ("ITA") which allows it to be exempt from capital gains tax on investment gains. Any breach of these rules may lead to the Company losing its approval as a Venture Capital Trust, qualifying Shareholders who have not held their shares for the designated holding period having to repay the income tax relief they obtained and future dividends paid by the Company becoming subject to tax. The Company would also lose its exemption from corporation tax on capital gains.
|
·
The Company's VCT qualifying status is continually reviewed by the Investment Adviser.
·
The Board receives regular reports from its VCT Status Adviser who has been retained by the Board to monitor the Company's ongoing compliance with the VCT Rules.
|
|
Economic and Political
|
Events such as the COVID-19 pandemic and resultant restrictions imposed by Government, the impact of Brexit, an economic recession and movements in interest rates could affect trading conditions for smaller companies and consequently the value of the Company's qualifying investments.
|
·
The Board monitors the portfolio as a whole to
(1) ensure that the Company invests in a diversified portfolio of companies;
(2) ensure that developments in the macro- economic environment such as movements in interest rates are monitored and
(3) With regard to COVID-19, the Investment Adviser holds ongoing discussions with all the portfolio companies to ascertain where support is required. Cash comprises a significant proportion of the net assets of the Company, further to the successful realisations and the fund-raise earlier in the year giving the Company a strong liquidity position. The portfolio has minimal exposure to sectors such as leisure, hospitality, retail and travel which are currently more at risk.
|
|
Investment
|
Investment in VCT qualifying earlier stage unquoted small companies involves a higher degree of risk than investment in fully listed companies. Smaller companies often have limited product lines, markets or financial resources, may not be profitable at the point of investment and may be dependent for their management on a smaller number of key individuals. This may lead to variable investment returns and the use of more subjective valuation methodologies.
|
·
The Board regularly reviews the Company's investment strategy.
·
Careful selection and review of the investment portfolio on a regular basis.
·
The Investment Adviser has provided a growing pipeline of compliant investment opportunities and continues to strengthen its investment team.
·
The valuation of the investment portfolio and valuation methodologies are reviewed by the Board each quarter.
|
|
Regulatory
|
The Company is required to comply with the Companies Act, the Listing Rules of the UK Listing Authority and United Kingdom Accounting Standards. Changes to and breach of any of these might lead to suspension of the Company's Stock Exchange listing, financial penalties, a qualified audit report or the loss of the Company's status as a VCT. Furthermore, changes to the UK VCT legislation or the State-aid rules could have an adverse effect on the Company's ability to achieve satisfactory investment returns.
|
·
Regulatory and legislative developments are kept under review by the Company's solicitors and the Board.
|
|
Financial and operating
|
Failure of the systems (including breaches of cyber security) at any of the third-party service providers that the Company has contracted with, could lead to inaccurate reporting or monitoring. Inadequate controls could lead to the misappropriation or insecurity of assets. Outsourcing and the increase in remote working could give rise to cyber and data security risk and internal control risk.
|
·
The Board carries out an annual review of the internal controls in place and reviews the risks facing the Company at each quarterly Board meeting, receiving control reports by exception.
·
It reviews the performance of the service providers annually and has obtained assurance that such providers have controls in place to reduce the risk of breaches of their cyber security.
|
|
Market
|
Movements in the valuations of the Company's investments will, inter alia, be connected to movements in UK Stock Market indices as well as affecting the Company's own share price and its discount to net asset value.
|
·
The Board receives quarterly valuation reports from the Investment Adviser.
·
The Investment Adviser alerts the Board about any adverse movements.
|
|
Asset liquidity
|
The Company's investments may be difficult to realise.
|
·
The Board receives reports from the Investment Adviser and reviews the portfolio at each quarterly Board meeting. It carefully monitors investments where a particular risk has been identified.
|
|
Environmental, Social and Governance Emerging Risk
|
Non-compliance with current and future reporting requirements could lead to a fall in demand from investors. That may affect the level of capital the Company has available to meet its investment objectives.
|
·
ESG is also taken into account when considering new investment proposals. The Investment Adviser monitors the potential impact on investee companies of any proposed new legislation regarding environmental, social and governance matters and advises and adapts accordingly.
·
The Board recognises that climate change is an important emerging risk that the Company is taking into account in their strategic planning although the Company itself has little direct impact on environmental issues. Measures have been introduced to decrease the amount of travel undertaken and to reduce the cost and environmental impact of providing paper copies of Shareholder correspondence, as mentioned elsewhere in the Annual Report.
|
|
The risk profile of the Company changed as a result of changes to VCT legislation 2015. As the Company is required to focus its new investment activity on growth capital investments in younger companies it is anticipated that investment returns will be more volatile and have a higher risk profile. The Board also discusses emerging risks as and when they arise, such as the COVID-19 pandemic, and puts in place mitigating actions to manage the risk. In an environment of ultra-low interest rates, returns on liquidity may impact overall performance. This factor is monitored by the Board with the objective of optimising returns on liquid funds whilst minimising capital risk.
|
STATEMENT OF DIRECTORS' RESPONSIBILITIES
The Directors are responsible for preparing the Annual Report and the Financial Statements in accordance with applicable law and regulations.
Company law requires the Directors to prepare Financial Statements for each financial year and the Directors have elected to prepare the Financial Statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the Directors must not approve the Financial Statements unless they are satisfied that they give a true and fair view of the state of affairs of the Company and of the profit or loss of the Company for that period.
In preparing these Financial Statements, the Directors are required to:
●
select suitable accounting policies and then apply them consistently;
●
make judgements and accounting estimates that are reasonable and prudent;
●
state whether the Financial Statements have been prepared in accordance with United Kingdom accounting standards, subject to any material departures disclosed and explained in the Financial Statements;
●
prepare the Financial Statements on the going concern basis unless it is inappropriate to presume that the Company will continue in business;
●
prepare a Strategic Report, a Director
'
s Report and Directors
'
Remuneration Report which comply with the requirements of the Companies Act 2006.
The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company's transactions and disclose with reasonable accuracy at any time the financial position of the Company and enable them to ensure that the Financial Statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
Website publication
The Directors are responsible for ensuring the Annual Report and the Financial Statements are made available on a website. Financial Statements are published on the Company's website in accordance with legislation in the United Kingdom governing the preparation and dissemination of Financial Statements, which may vary from legislation in other jurisdictions. The maintenance and integrity of the Company's website is the responsibility of the Directors. The Directors' responsibility also extends to the ongoing integrity of the Financial Statements contained therein.
Directors' responsibilities pursuant to Disclosure and Transparency Rule 4 of the UK Listing Authority
The Directors confirm to the best of their knowledge that:
a) the Financial Statements, which have been prepared in accordance with United Kingdom Generally Accepted Accounting Practice give a true and fair view of the assets, liabilities, financial position and the profit of the Company; and
b) the Annual Report includes a fair review of the development and performance of the business and the position of the Company, together with a description of the principal risks and uncertainties that it faces.
Having taken advice from the Audit Committee, the Board considers the Annual Report and Financial Statements, taken as a whole, is fair, balanced and understandable and that it provides the information necessary for shareholders to assess the Company's performance, business model and strategy.
Neither the Company nor the Directors accept any liability to any person in relation to the Annual Report except to the extent that such liability could arise under English law.
For and on behalf of the Board
Jonathan Cartwright
Chairman
29 March 2021
FINANCIAL STATEMENTS
|
Income Statement
for the year ended 31 December 2020
|
|
|
|
Year
ended31December2020 Notes Revenue Capital Total
£ £
£
|
Year
ended31December2019 Revenue Capital Total £ £
|
|
Net investment portfolio gains
|
8
|
-
|
13,307,
684
|
13,307,
684
|
-
|
5,675,164
|
5,675,164
|
|
Income
|
3
|
2,868,
103
|
-
|
2,868,103
|
2,107,357
|
-
|
2,107,357
|
|
InvestmentAdviser'sfees
|
4a
|
(309
,827)
|
(929
,481)
|
(1,239,308)
|
(309
,641)
|
(928,923)
|
(1,238,564)
|
|
Otherexpenses
|
4d
|
(426,422)
|
-
|
(426,422)
|
(451,261)
|
-
|
(451,261)
|
|
Profitonordinaryactivitiesbeforetaxation
|
|
2,
131,854
|
12,378,203
|
14,510,
057
|
1,346,455
|
4,746,241
|
6,092,696
|
|
Taxation
on profit on ordinary activities
|
5
|
(280
,053)
|
176,
602
|
(103,451)
|
(211,879)
|
176,496
|
(35,383)
|
|
Profitfortheyearandtotalcomprehensive
income
|
1,851,801
|
12,554,805
|
14,406,
606
|
1,134,576
|
4,922,
737
|
6,057
,313
|
|
Basic
and
diluted
earnings
per
ordinary
share
|
6
|
2.22p
|
15.
05p
|
17.27p
|
1.
67p
|
7
.28p
|
8.95p
|
|
The revenue column of the Income Statement includes all income and expenses. The capital column accounts for the net investment portfolio gains (unrealised gains and realised gains on investments) and the proportion of the Investment Adviser's fee and performance fee charged to capital.
The total column is the Statement of Total Comprehensive Income of the Company prepared in accordance with Financial Reporting Standards ("FRS"). In order to better reflect the activities of a VCT and in accordance with the 2014 Statement of Recommended Practice ("SORP") (updated in October 2019) by the Association of Investment Companies, 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.
All the items in the above statement derive from continuing operations of the Company. No operations were acquired or discontinued in the year.
|
|
|
|
|
|
|
|
|
|
|
|
Balance Sheet
as at 31 December 2020
Company No. 03707697
|
|
Notes
|
31December2020
£
|
31December2019
£
|
|
Fixed
assets
|
|
41,
676,696
|
38,538,281
|
|
Investmentsatfairvalue
|
8
|
|
Currentassets
|
|
|
|
|
Debtorsandprepayments
|
|
403,568
|
183,175
|
|
Currentinvestments
|
9
|
22,634,956
|
8,928,456
|
|
Cashatbank
|
9
|
4,053,536
|
2,
627
,511
|
|
|
27
,
092,060
|
11,
739
,142
|
|
Creditors:amountsfallingduewithinoneyear
|
|
(307
,561)
|
(242,109)
|
|
Netcurrentassets
|
26,784,499
|
11,497,
033
|
|
Netassets
|
68,461,195
|
50
,
035,314
|
|
|
|
|
|
Capitalandreserves
|
|
840,040
|
667,991
|
|
Calledupsharecapital
|
10
|
|
Sharepremiumreserve
|
|
12,495,262
|
-
|
|
Capitalredemptionreserve
|
|
20
,512
|
8,
056
|
|
R
evaluation
reserve
|
|
10,205,933
|
3,713,586
|
|
Specialdistributablereserve
|
|
26,563,547
|
35,514,889
|
|
R
ealised
capitalreserve
|
|
16,738,215
|
8,935,662
|
|
R
evenue
reserve
|
|
1,597,
686
|
1,
195,130
|
|
EquityShareholders'funds
|
68,461,195
|
50
,
035,314
|
|
Basicanddilutednetassetvalueperordinaryshare
|
11
|
81.50p
|
74.90p
|
|
|
|
|
|
|
Statement of Changes in Equity
for the year ended 31 December 2020
|
|
|
|
Non-distributable reserves
|
Distributable reserves
|
|
|
|
|
Called up
|
Capital
|
Share
|
|
Special
|
Realised
|
|
|
|
|
|
share
|
redemption
|
premium
|
Revaluation
|
distributable
|
capital
|
Revenue
|
|
|
|
|
capital
|
reserve
|
reserve
|
reserve
|
reserve
|
reserve
|
reserve
|
Total
|
|
For the year ended 31 December 2020
|
|
|
|
|
(Note a)
|
(Note b)
|
(Note b)
|
|
|
Notes
|
£
|
£
|
£
|
£
|
£
|
£
|
£
|
£
|
|
|
|
|
|
|
|
|
|
|
|
|
At 1 January 2020
|
|
667,991
|
-
|
8,056
|
3,713,586
|
35,514,889
|
8,935,662
|
1,195,130
|
50,035,314
|
|
Comprehensive income for the year
|
|
|
|
|
|
|
|
|
|
|
Profit for the year
|
|
-
|
-
|
-
|
8,866,811
|
-
|
3,687,994
|
1,851,801
|
14,406,606
|
|
Total comprehensive income for the year
|
|
-
|
-
|
-
|
8,866,811
|
-
|
3,687,994
|
1,851,801
|
14,406,606
|
|
|
|
|
|
|
|
|
|
|
|
|
Contributions by and distributions to owners
|
|
|
|
|
|
|
|
|
|
|
Shares issued via Offer for Subscription (Note c)
|
10
|
184,505
|
12,815,495
|
-
|
-
|
-
|
|
-
|
13,000,000
|
|
Issue costs and facilitation fees on Offer for Subscription (Note c)
|
10
|
-
|
(320,233)
|
-
|
-
|
(145,330)
|
|
-
|
(465,563)
|
|
Shares bought back (Note d)
|
10
|
(12,456)
|
-
|
12,456
|
-
|
(728,216)
|
-
|
-
|
(728,216)
|
|
Dividends paid
|
7
|
-
|
-
|
-
|
-
|
(6,337,701)
|
-
|
(1,449,245)
|
(7,786,946)
|
|
Total contributions by and distributions to owners
|
|
172,049
|
12,495,262
|
12,456
|
-
|
(7,211,247)
|
-
|
(1,449,245)
|
4,019,275
|
|
|
|
|
|
|
|
|
|
|
|
|
Other movements
|
|
|
|
|
|
|
|
|
|
|
Realised losses transferred to special reserve (Note a)
|
|
-
|
-
|
-
|
-
|
(1,740,095)
|
1,740,095
|
-
|
-
|
|
Realisation of previously unrealised gains
|
|
-
|
-
|
-
|
(2,374,464)
|
-
|
2,374,464
|
-
|
-
|
|
Total other movements
|
|
-
|
-
|
-
|
(2,374,464)
|
(1,740,095)
|
4,114,559
|
-
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
At 31 December 2020
|
|
840,040
|
12,495,262
|
20,512
|
10,205,933
|
26,563,547
|
16,738,215
|
1,597,686
|
68,461,195
|
|
|
|
|
|
|
|
|
|
|
|
|
Notes
|
|
|
|
|
|
|
|
|
|
|
a) The Special distributable reserve also provides the Company with a reserve to absorb any existing and future realised losses and, when considered by the Board to be in the interests of shareholders, to fund share buybacks and for other corporate purposes. The transfer of £1,740,095 to the special reserve from the realised capital reserve above is the total of realised losses incurred by the Company in the year. As at 31 December 2020, the Company has a special reserve of £26,563,547, £8,396,941 of which arises from shares issued more than three years ago. Reserves originating from share issues are not distributable under VCT rules if they arise from share issues that are within three years of the end of an accounting period in which shares were issued.
|
|
|
|
|
|
|
|
|
|
|
|
|
b) The realised capital reserve and the revenue reserve together comprise the Profit and Loss Account of the Company.
|
|
|
|
|
|
|
|
|
|
|
|
|
c) Under the Company's Offer for Subscription launched on 25 October 2019, 18,450,535 Ordinary Shares were allotted between 8 January 2020 and 2 April 2020, raising net funds of £12,534,437 for the Company. This figure is net of issue costs of £320,233 and facilitation fees of £145,330.
|
|
|
|
|
|
|
|
|
|
|
|
|
d) During the year, the Company purchased 1,245,646 of its own shares at the prevailing market price for a total cost of £728,216, which were subsequently cancelled.
|
|
|
|
|
|
|
|
|
|
|
|
|
Statement of Changes in Equity
for the year ended 31 December 2019
|
|
|
|
Non-distributable reserves
|
Distributable reserves
|
|
|
|
|
Called up
|
Capital
|
Share
|
|
Special
|
Realised
|
|
|
|
|
|
share
|
redemption
|
premium
|
Revaluation
|
distributable
|
capital
|
Revenue
|
|
|
|
|
capital
|
reserve
|
account
|
reserve
|
reserve
|
reserve
|
reserve
|
Total
|
|
|
£
|
£
|
£
|
£
|
£
|
£
|
£
|
£
|
|
|
|
|
|
|
|
|
|
|
|
|
At 1 January 2019
|
|
682,830
|
31,474,977
|
26,257
|
1,848,472
|
14,784,518
|
6,815,730
|
2,263,000
|
57,895,784
|
|
Comprehensive income for the year
|
|
|
|
|
|
|
|
|
|
|
Profit for the year
|
|
-
|
-
|
-
|
3,362,520
|
-
|
1,560,217
|
1,134,576
|
6,057,313
|
|
Total comprehensive income for the year
|
|
-
|
-
|
-
|
3,362,520
|
-
|
1,560,217
|
1,134,576
|
6,057,313
|
|
|
|
|
|
|
|
|
|
|
|
|
Contributions by and distributions to owners
|
|
|
|
|
|
|
|
|
|
|
|
|
|
-
|
|
-
|
|
-
|
-
|
|
|
Shares bought back
|
|
(14,839)
|
-
|
14,839
|
-
|
(1,071,326)
|
|
|
(1,071,326)
|
|
Dividends paid
|
|
-
|
-
|
-
|
-
|
(8,953,893)
|
(1,690,118)
|
(2,202,446)
|
(12,846,457)
|
|
Total contributions by and distributions to owners
|
|
(14,839)
|
-
|
14,839
|
-
|
(10,025,219)
|
(1,690,118)
|
(2,202,446)
|
(13,917,783)
|
|
|
|
|
|
|
|
|
|
|
|
|
Other movements
|
|
|
|
|
|
|
|
|
|
|
Cancellation of Share Premium account
|
|
-
|
(31,474,977)
|
(33,040)
|
-
|
31,508,017
|
-
|
-
|
-
|
|
Realised losses transferred to special reserve
|
|
-
|
-
|
-
|
-
|
(752,427)
|
752,427
|
-
|
-
|
|
Realisation of previously unrealised appreciation
|
|
-
|
-
|
-
|
(1,497,406)
|
-
|
1,497,406
|
-
|
-
|
|
Total other movements
|
|
-
|
(31,474,977)
|
(33,040)
|
(1,497,406)
|
30,755,590
|
2,249,833
|
-
|
-
|
|
At 31 December 2019
|
|
667,991
|
-
|
8,056
|
3,713,586
|
35,514,889
|
8,935,662
|
1,195,130
|
50,035,314
|
|
|
|
|
|
|
|
|
|
|
|
|
The composition of each of these reserves is explained below:
|
|
Called up share capital
|
|
The nominal value of shares originally issued, increased for subsequent share issues either via an Offer for Subscription or Dividend Investment Scheme or reduced due to shares bought back by the Company.
|
|
Capital redemption reserve
|
|
The nominal value of shares bought back and cancelled is held in this reserve, so that the company's capital is maintained.
|
|
|
|
Share premium reserve
|
|
This reserve contains the excess of gross proceeds less issue costs over the nominal value of shares allotted under recent Offers for Subscription and the Company's Dividend Investment Scheme.
|
|
|
|
Revaluation reserve
|
|
Increases and decreases in the valuation of investments held at the year-end are accounted for in this reserve, except to the extent that the diminution is deemed permanent. In accordance with stating all investments at fair value through profit and loss (as recorded in Note 9), all such movements through both revaluation and realised capital reserves are shown within the Income Statement for the year.
|
|
|
|
Special distributable reserve
|
|
This reserve is created from cancellations of the balances upon the Share premium reserve, which are transferred to this reserve from time to time. The cost of share buybacks is charged to this reserve. In addition, any realised losses on the sale or impairment of investments (excluding transaction costs), and 75% of the Investment Adviser fee expense, and the related tax effect, are transferred from the realised capital reserve to this reserve. The cost of any IFA facilitation fee payable as part of the Offer for Subscription is also charged to this reserve.
|
|
|
|
Realised capital reserve
|
|
The following are accounted for in this reserve:
• Gains and losses on realisation of investments;
• Permanent diminution in value of investments;
• Transaction costs incurred in the acquisition and disposal of investments; and
• 75% of the Investment Adviser fee expense and 100% of any performance fee payable, together with the related tax effect to this reserve in accordance with the policies, and Capital dividends paid.
|
|
|
|
Revenue reserve
|
|
Income and expenses that are revenue in nature are accounted for in this reserve together with the related tax effect, as well as income dividends paid that are classified as revenue in nature.
|
|
|
|
|
|
Notes to the Financial Statements
for the year ended 31 December 2020
|
|
1
|
Company information
|
|
|
Mobeus Income & Growth 4 VCT plc is a public limited company incorporated in England, registration number 03707697. The registered office is 30 Haymarket, London, SW1Y 4EX.
|
|
2
|
Basis of preparation
|
|
|
A summary of the principal accounting policies, all of which have been applied consistently throughout the year are set out next to the related disclosure throughout the Notes to the Financial Statements. All accounting policies are included within an outlined box at the top of each relevant Note.
These Financial Statements have been prepared in accordance with applicable United Kingdom accounting standards, including Financial Reporting Standard 102 ("FRS102"), with the Companies Act 2006 and the 2014 Statement of Recommended practice, 'Financial Statements of Investment Trust Companies and Venture Capital Trusts' ('the SORP') (updated in October 2019) issued by the Association of Investment Companies. The Company has a number of financial instruments which are disclosed under FRS102 s11/12 as shown in Note 15 of the Company's Annual Report.
After performing the necessary enquiries, the Directors have undertaken an assessment of the Company's ability to meet its liabilities as they fall due. The Company has significant cash and liquid resources and no external debt or capital commitments. The Company's cash flow forecasts, which consider levels of anticipated new and follow on investment, as well as investment income and annual running cost projections, are discussed at each quarterly Board meeting and, in particular, have been considered in light of the ongoing impact of the COVID-19 pandemic. The Directors have also received assurances that the Company's key suppliers' ability to continue to service the Company has not been materially impacted by the COVID-19 pandemic. Following this assessment, the Directors have a reasonable expectation that the Company will have adequate resources to continue to meet its liabilities for at least 12 months from the date of these Financial Statements. The Directors therefore consider the preparation of these financial statements on a going concern basis, to be appropriate.
|
|
3
|
Income
|
|
|
Dividends receivable on quoted equity shares are brought into account on the ex-dividend date. Dividends receivable on unquoted equity shares are brought into account when the Company's right to receive payment is established and there is no reasonable doubt that payment will be received.
Interest income on loan stock is accrued on a daily basis. Provision is made against this income where recovery is doubtful or where it will not be received in the foreseeable future. Where the loan stocks only require interest or a redemption premium to be paid on redemption, the interest and redemption premium is recognised as income or capital as appropriate once redemption is reasonably certain.
When a redemption premium is designed to protect the value of the instrument holder's investment rather than reflect a commercial rate of revenue return, the redemption premium is recognised as capital. The treatment of redemption premiums is analysed to consider if they are revenue or capital in nature on a company by company basis. Accordingly, the redemption premium recognised in the year ended 31 December 2020 has been classified as capital and has been included within gains on investments.
|
|
2020
£
|
2019
£
|
|
|
|
Incomefrombankdeposits
|
29
,451
|
40,298
|
|
Incomefrominvestments
|
657,891
|
243,975
|
|
-fromequities
|
|
-fromoverseasbasedOEICs
|
42,612
|
106,151
|
|
-fromloanstock
|
2,
113,964
|
1,
714,938
|
|
-frominterestonpreferencesharedividendarrears
|
17,
770
|
1,995
|
|
Otherincome
|
2,832,237
|
2,067
,
059
|
|
6,415
|
-
|
|
Total
income
|
2,868,
103
|
2,
107
,357
|
|
Total
incomecomprises
|
700,503
|
350
,
126
|
|
Dividends
|
|
Interest
|
2,
161,185
|
1,
757,231
|
|
Otherincome
|
6,415
|
-
|
|
|
2,868,
103
|
2,
107
,357
|
Total loan stock interest due but not recognised in the year was £777,919 (2019: £422,063) due to uncertainty over its recoverability. This increase is due to a number of investee company provisions in light of COVID-19, partially offset by the realisations of two investee companies whose interest was only recognised on exit.
|
|
4
|
Investment Adviser's fees and performance fees
|
|
|
All expenses are accounted for on an accruals basis.
a)
Investment Adviser's fees
25% of the Investment Adviser's fees are charged to the revenue column of the Income Statement, while 75% is charged against the capital column of the Income Statement. This is in line with the Board's expected long-term split of returns from the investment portfolio of the Company.
100% of any performance incentive fee payable for the year is charged against the capital column of the Income Statement, as it is based upon the achievement of capital growth.
|
|
Revenue
|
Capital
|
Total
|
Revenue
|
Capital
|
Total
|
|
|
2020
|
2020
|
2020
|
2019
|
2019
|
2019
|
|
|
£
|
£
|
£
|
£
|
£
|
£
|
|
Mobeus Equity Partners LLP
|
|
|
|
|
|
|
|
Investment Adviser's fees
|
309,827
|
929
,481
|
1,239,308
|
309
,641
|
928,923
|
1,238,564
|
Under the terms of a revised investment management agreement dated 12 November 2010 (as amended and restated on 10 November 2016), Mobeus Equity Partners LLP provides investment advisory, administrative and company secretarial services to the Company, for a fee of 2% per annum of closing net assets, calculated on a quarterly basis by reference to the net assets at the end of the preceding quarter, plus a fixed fee of £115,440 per annum, the latter being subject to indexation, if applicable. In 2013, Mobeus agreed to waive such further increases due to indexation, until otherwise agreed with the Board.
The Investment Adviser fee includes provision for a cap on expenses excluding irrecoverable VAT and exceptional items set at 3.4% of closing net assets at the year-end. In accordance with the investment management agreement, any excess expenses are borne by the Investment Adviser. The excess expenses during the year amounted to £nil (2019: £nil).
With effect from 1 July 2020, the Investment Adviser's fee upon the net funds raised from use of the over-allotment facility of £5 million under the 2019/20 offer was reduced from 2% to 1% per annum for one year. Between 1 April 2018 and 31 March 2019, the Investment Adviser's fee upon the net funds raised from use of the over-allotment facility of £5 million under the 2017/18 offer was reduced from 2% to 1% per annum for one year.
The Company is responsible for external costs such as legal and accounting fees, incurred on transactions that do not proceed to completion ("abort expenses") subject to the cap on total annual expenses referred to above. No such costs have been incurred in the current or previous year.
In line with common practice, Mobeus Equity Partners LLP retains the right to charge arrangement and syndication fees and Directors' or monitoring fees to companies in which the Company invests. The Investment Adviser received fees totalling £341,947 (2019: £327,776) during the year ended 31 December 2020, being £126,542 (2019: £111,884) for arrangement fees, and £215,405 (2019: £215,892) for acting as non-executive directors on a number of investee company boards. These fees attributable to the Company are based upon the investment allocation to the Company which applied at the time of each investment. These figures are not part of these financial statements.
b)
Incentive fee agreement
Under the terms of a separate agreement dated 1 November 2006, from the end of the accounting period ending on 31 January 2009 and in each subsequent accounting period throughout the life of the Company, the Investment Adviser will be entitled to receive a performance related incentive fee of 20% of the dividends paid in excess of a "Target Rate" comprising firstly, an annual dividend target of 6% of the net asset value per share at 5 April 2007 (indexed each year for RPI) and secondly a requirement that any cumulative shortfalls below the 6% hurdle must be made up in later years, while any excess is not carried forward, whether a fee is payable for that year or not. Payment of a fee is also conditional upon the average Net Asset Value per share for each such year equalling or exceeding the average Base NAV per share for the same year. The performance fee will be payable annually. No incentive fee is payable to date.
c)
Offer for Subscription fees
|
|
2020
|
2019
|
|
|
£m
|
£m
|
|
Funds raised by the Company
|
12.53
|
-
|
|
Offer costs payable to Mobeus at 3.00% of funds raised by the Company
|
0.39
|
-
|
Under the terms of an Offer for Subscription, with the other Mobeus advised VCTs, launched on 25 October 2019, Mobeus was entitled to fees of 3.00% of the investment amount received from investors. This amount totalled £1.74 million across all four VCTs, out of which all the costs associated with the allotment were met, excluding any payments to advisers facilitated under the terms of the Offer.
|
|
|
d)
Other expenses
Expenses are charged wholly to revenue, with the exception of expenses incidental to the acquisition or disposal of an investment, which are written off to the capital column of the Income Statement or deducted from the disposal proceeds as appropriate.
|
|
2020
|
2019
|
|
|
£
|
£
|
|
Directors' remuneration (including NIC of £10,309 (2019: £9,733) - Note i)
|
141,524
|
114,
686
|
|
IFA trail commission
|
78,825
|
60
,201
|
|
Broker's fees
|
9,000
|
12,
000
|
|
Auditor's fees - Audit of Company (excluding VAT)
|
26,650
|
27,932
|
|
- audit related assurance services - note ii) (excluding VAT)
|
5,919
|
5,638
|
|
- tax compliance services - note ii) (excluding VAT)
|
-
|
1,845
|
|
Registrar's fees
|
54,145
|
47
,
668
|
|
Printing
|
42,
113
|
48,530
|
|
Legal & professional fees
|
11,544
|
24,831
|
|
VCT monitoring fees
|
9,600
|
9,600
|
|
Directors' insurance
|
7,573
|
7,921
|
|
Listing and regulatory fees
|
28,700
|
29,230
|
|
Sundry
|
8,333
|
61,179
|
|
Running costs
|
423,926
|
451,261
|
|
Provision against loan interest receivable (note iii)
|
2,496
|
-
|
|
Other expenses
|
426,422
|
451,261
|
|
|
|
|
|
|
Notes:
|
|
|
|
|
i) See analysis in Directors' Remuneration table in the Remuneration Report within the Annual Report & Financial Statements, which excludes the NIC above. The key management personnel are the four non-executive directors. The Company has no employees.
ii) The audit-related assurance services are in relation to the review of the Financial Statements within the Company's Half Year Report. The Audit Committee reviews the nature and extent of these services to ensure that auditor independence is maintained. In this regard, compliance tax services are carried out by another firm, so are included within legal and professional fees.
iii) Provision against loan interest receivable above relates to an amount of £2,496 (2019: £nil), being a provision made against loan stock interest regarded as collectable in previous years.
|
|
|
|
|
|
|
5
|
Taxation on ordinary activities
|
|
|
The tax expense for the year comprises current tax and is recognised in profit or loss. The current income tax charge is calculated on the basis of tax rates and laws that have been enacted or substantively enacted by the reporting date.
Any tax relief obtained in respect of adviser fees allocated to capital is reflected in the capital reserve - realised and a corresponding amount is charged against revenue. The tax relief is the amount by which corporation tax payable is reduced as a result of these capital expenses.
Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the balance sheet date where transactions or events that result in an obligation to pay more tax in the future or a right to pay less tax in the future have occurred at the balance sheet date. Timing differences are differences between the Company's taxable profits and its results as stated in the financial statements that arise from the inclusion of gains and losses in the tax assessments in periods different from those in which they are recognised in the financial statements.
Deferred tax is measured at the average tax rates that are expected to apply in the years in which the timing differences are expected to reverse based on tax rates and laws that have been enacted or substantively enacted at the balance sheet date. Deferred tax is measured on a non-discounted basis.
A deferred tax asset would be recognised only to the extent that it is more likely than not that future taxable profits will be available against which the asset can be utilised.
|
|
2020
|
2020
|
2020
|
2019
|
2019
|
2019
|
|
|
Revenue
|
Capital
|
Total
|
Revenue
|
Capital
|
Total
|
|
|
£
|
£
|
£
|
£
|
£
|
£
|
|
a) Analysis of tax charge:
|
|
|
|
|
|
|
|
UK Corporation tax on profits/(losses) for the year
|
280,053
|
(176,602)
|
103,451
|
211,879
|
(176,496)
|
35,383
|
|
Total current tax charge/(credit)
|
280,053
|
(176,602)
|
103,451
|
211,879
|
(176,496)
|
35,383
|
|
Corporation tax is based on a rate of 19.00% (2019: 19.00%)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
b) Profit on ordinary activities before tax
|
2,131,854
|
12,378,203
|
14,510,057
|
1,346,455
|
4,746,241
|
6,092,696
|
|
Profit on ordinary activities multiplied by main company rate of corporation tax in the UK of 19.00% (2019: 19.00%)
|
405,052
|
2,351,859
|
2,756,911
|
255,826
|
901,786
|
1,157,612
|
|
Effect of:
|
|
|
|
|
|
|
|
UK dividends
|
(124,999)
|
-
|
(124,999)
|
(46,355)
|
-
|
(46,355)
|
|
Net investment portfolio gains not taxable
|
-
|
(2,528,461)
|
(2,528,461)
|
-
|
(1,078,282)
|
(1,078,282)
|
|
Expenditure not allowable for tax purposes
|
-
|
-
|
-
|
2,408
|
-
|
2,408
|
|
Actual current tax charge
|
280,053
|
(176,602)
|
103,451
|
211,879
|
(176,496)
|
35,383
|
Tax relief relating to investment adviser fees is allocated between revenue and capital where such relief can be utilised.
No asset or liability has been recognised for deferred tax in relation to capital gains or losses on revaluing investments as the Company is exempt from corporation tax in relation to capital gains or losses as a result of qualifying as a Venture Capital Trust.
There is no potential liability to deferred tax (2019: £nil). There is no unrecognised deferred tax asset in 2020 (2019: £nil).
|
|
6
|
Basic and diluted earnings per share
|
|
|
|
|
2020
|
2019
|
|
|
£
|
£
|
|
Total earnings after taxation:
|
14,406,606
|
6,057,313
|
|
Basic and diluted earnings per share (note a)
|
17.27p
|
8.95p
|
|
Revenue earnings from ordinary activities after taxation
|
1,851,801
|
1,134,576
|
|
Basic and diluted revenue earnings per share (note b)
|
2.22p
|
1.67p
|
|
|
|
|
|
Net investment portfolio gains
|
13,307,684
|
5,675,164
|
|
Capital Investment Adviser fees less taxation
|
(752,879)
|
(752,427)
|
|
Total capital earnings
|
12,554,805
|
4,922,737
|
|
Basic and diluted capital earnings per share (note c)
|
15.05p
|
7.28p
|
|
Weighted average number of shares in issue in the year
|
83,426,755
|
67,649,790
|
Notes:
a) Basic earnings per share is total earnings after taxation divided by the weighted average number of shares in issue.
b) Basic revenue earnings per share is the revenue return after taxation divided by the weighted average number of shares in issue.
c) Basic capital earnings per share is the total capital return after taxation divided by the weighted average number of shares in issue.
d) There are no instruments that will increase the number of shares in issue in future. Accordingly, the above figures currently represent both basic and diluted earnings per share.
|
|
|
|
|
7
|
Dividends paid and payable
|
|
|
Dividends payable are recognised as distributions in the Financial Statements when the Company's liability to pay them has been established. This liability is established for interim dividends when they are paid, and for final dividends when they are approved by the Shareholders, usually at the Company's Annual General Meeting.
A key judgement in applying the above accounting policy is in determining the amount of minimum dividend to be paid in respect of a year. The Company's status as a VCT means it has to comply with Section 259 of the ITA, which requires that no more than 15% of the income from shares and securities in a year can be retained from the revenue available for distribution for the year.
|
Amounts recognised as distributions to equity shareholders in the year:
|
|
|
|
Dividend
|
Type
|
For year ended 31 December
|
Pence per share
|
Date Paid
|
2020 £
|
2019 £
|
|
Final
|
Income
|
2018
|
1.75p
|
28/05/2019
|
-
|
1,188,375
|
|
Final
|
Capital*
|
2018
|
2.25p
|
28/05/2019
|
-
|
1,527,911
|
|
Interim
|
Income
|
2019
|
1.50p
|
20/09/2019
|
-
|
1,014,071
|
|
Interim
|
Capital
|
2019
|
2.50p
|
20/09/2019
|
-
|
1,690,118
|
|
Interim
|
Capital*
|
2019
|
9.00p
|
20/09/2019
|
-
|
6,084,426
|
|
Interim
|
Capital*
|
2019
|
2.00p
|
30/12/2019
|
-
|
1,341,556
|
|
Interim
|
Capital*
|
2019
|
4.00p
|
10/01/2020
|
2,671,965
|
-
|
|
Interim
|
Income
|
2020
|
1.70p**
|
07/05/2020
|
1,449,245
|
-
|
|
Interim
|
Capital*
|
2020
|
4.30p**
|
07/05/2020
|
3,665,736
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
7,786,946
|
12,846,457
|
* - Paid out of the Company's special distributable reserve.
** - The split of the current year's dividend has increased the amounts allocated to income and reduced the amount to capital by 0.2p, from those provisionally allocated in the unaudited Half-Year Report.
|
Distributions to equity holders after the year end:
|
|
|
|
Distributions to equity holders after the year end:
|
Type
|
For year ended 31 December
|
Pence per share
|
Date paid/payable
|
2020 £
|
2019 £
|
|
Interim
|
Capital*
|
2019
|
4.00p
|
10/01/2020
|
-
|
2,671,965
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
-
|
2,671,965
|
|
|
|
|
|
|
|
|
* - Paid out of the Company's special distributable reserve.
Any proposed final dividend is subject to approval by Shareholders at the Annual General Meeting and has not been included as a liability in these financial statements.
Set out below are the total income dividends payable in respect of the financial year, which is the basis on which the requirements of section 274 of the Income Tax Act 2007 are considered.
|
Recognised income distributions in the financial statements for the year:
|
|
|
|
|
|
Dividend
|
Type
|
For year ended 31 December
|
Pence per share
|
Date paid/payable
|
2020 £
|
2019 £
|
|
Revenue available for distribution by way of dividends for the year
|
1,851,801
|
1,134,576
|
|
Interim
|
Income
|
2019
|
1.50p
|
20/09/2019
|
-
|
1,014,071
|
|
Interim
|
Income
|
2020
|
1.70p
|
07/05/2020
|
1,449,245
|
-
|
|
|
|
|
|
|
|
|
|
Total income dividends for the year
|
|
|
|
1,449,245
|
1,014,071
|
|
|
8
|
Investments at fair value
|
|
|
The most critical estimates, assumptions and judgements relate to the determination of the carrying value of investments at "fair value through profit and loss" (FVTPL). All investments held by the Company are classified as FVTPL and measured in accordance with the International Private Equity and Venture Capital Valuation ("IPEV") guidelines, as updated in December 2018 (as updated by Special Valuation guidance issued in March 2020). 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.
Purchases and sales of unlisted investments are recognised when the contract for acquisition or sale becomes unconditional. For investments actively traded on 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. Where the terms of a disposal state that consideration may be received at some future date and, subject to the conditionality and materiality of the amount of deferred consideration, an estimate of the fair value discounted for the time value of money may be recognised through the Income Statement. In other cases, the proceeds will only be recognised once the right to receive payment is established and there is no reasonable doubt that payment will be received.
Unquoted investments are stated at fair value by the Directors at each measurement date in accordance with appropriate valuation techniques, which are consistent with the IPEV guidelines:-
Each investment is considered as a whole on a 'unit of account' basis, i.e. that the value of each portfolio company is considered as a whole, alongside consideration of:-
The price of new or follow on investments made, if deemed to be made as part of an orderly transaction, are considered to be at fair value at the date of the transaction. The inputs that derived the investment price are calibrated within individual valuation models and at every subsequent quarterly measurement date, are reconsidered for any changes in light of more recent events or changes in the market performance of the investee company. The valuation bases used are the following:
·
a multiple basis. The enterprise value of the investment may be determined by applying a suitable price-earnings ratio, revenue or gross profit multiple to that company's historic, current or forecast post-tax earnings before interest and amortisation, or revenue, or gross profit (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, scale and liquidity).
or:-
·
where a company's underperformance against plan indicates a diminution in the value of the investment, provision against the price of a new investment is made, as appropriate.
i. Premiums, to the extent that they are considered capital in nature, and that they will be received upon repayment of loan stock investments are accrued at fair value when the Company receives the right to the premium and when considered recoverable.
ii. Where a multiple or the price of recent investment less impairment basis is not appropriate and overriding factors apply, a discounted cash flow, net asset valuation, realisation proceeds, or a weighted average of these bases may be applied.
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. All figures are shown net of any applicable transaction costs incurred by the Company.
All investments are initially recognised and subsequently measured at fair value. Changes in fair value are recognised in the Income Statement.
A key judgement made in applying the above accounting policy relates to investments that are permanently impaired. Where the value of an investment has fallen permanently below the price of recent investment, 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.
Accounting standards classify methods of fair value measurement as Levels 1, 2 and 3. This hierarchy is based upon the reliability of information used to determine the valuation. All of the unquoted investments are Level 3, i.e. fair value is measured using techniques using inputs that are not based on observable market data.
Movements in investments during the year are summarised as follows:
|
|
Traded on AIM
|
Unquoted equity shares
|
Unquoted preference shares
|
Unquoted loan stock
|
Total
|
|
|
£
|
£
|
£
|
£
|
£
|
|
Cost at 31 December 2019
|
200,028
|
18,299,196
|
12,871
|
16,820,197
|
35,332,292
|
|
Unrealised gains/(losses) at 31 December 2019
|
33,317
|
3,923,697
|
(2,142)
|
(241,286)
|
3,713,586
|
|
Permanent impairment in value of investments as at 31 December 2019
|
-
|
(419,959)
|
-
|
(87,638)
|
(507,597)
|
|
Valuation at 31 December 2019
|
233,345
|
21,802,934
|
10,729
|
16,491,273
|
38,538,281
|
|
|
|
|
|
|
|
|
Purchases at cost
|
-
|
3,366,442
|
453,000
|
985,594
|
4,805,036
|
|
Sale proceeds (Note a)
|
(748,520)
|
(8,357,183)
|
(8,156)
|
(5,860,446)
|
(14,974,305)
|
|
Reclassification at value
|
-
|
(471,261)
|
471,261
|
-
|
-
|
|
Net realised gains/(losses) in the year
|
573,500
|
3,593,483
|
(227)
|
274,117
|
4,440,873
|
|
Unrealised gains/(losses) in the year (Note b)
|
208,355
|
11,072,295
|
42,792
|
(2,456,631)
|
8,866,811
|
|
Valuation at 31 December 2020
|
266,680
|
31,006,710
|
969,399
|
9,433,907
|
41,676,696
|
|
|
|
|
|
|
|
|
Cost at 31 December 2020
|
50,011
|
19,150,794
|
905,332
|
12,836,189
|
32,942,326
|
|
Unrealised gains/(losses) at 31 December 2020
|
216,669
|
13,262,864
|
64,294
|
(3,337,894)
|
10,205,933
|
|
Permanent impairment in value of investments at 31 December 2020 (Note c)
|
-
|
(1,406 ,948)
|
(227)
|
(64,388)
|
(1,471,563)
|
|
Valuation at 31 December 2020
|
266,680
|
31,006,710
|
969,399
|
9,433,907
|
41,676,696
|
Details of investment transactions such as disposal proceeds, valuation movements, cost and carrying value at the end of previous year are contained in the Investment Portfolio Summary in the Annual Report.
Net realised gains/(losses) in the year of £4,440,873 and unrealised gains/(losses) in the year of £8,866,811 equal net investment portfolio gains of £13,307,684 as shown on the Income Statement.
Note a) Disposals of investment portfolio companies during the year were:
|
Company
|
Type
|
Investment Cost
|
Disposal Proceeds
|
Valuation at 31 December 2019
|
Realised gain/(loss) in year
|
|
|
|
£
|
£
|
£
|
£
|
|
Tovey Management Limited (trading as Access IS)
|
Realisation
|
2,469,013
|
5,323,917
|
3,571,056
|
1,752,861
|
|
Turner Topco Limited (trading as Auction Technology Group)
|
Realisation
|
1,529,075
|
4,190,494
|
3,029,777
|
1,160,717
|
|
Bourn Bioscience Limited
|
Realisation
|
1,132,521
|
1,402,829
|
606,708
|
796,121
|
|
Omega Diagnostics Group plc
|
Part Realisation
|
150,017
|
748,520
|
175,020
|
573,500
|
|
Redline Worldwide Limited
|
Contingent consideration
|
-
|
141,326
|
-
|
141,326
|
|
BookingTek Limited
|
Loan repayment
|
69,837
|
55,535
|
-
|
55,535
|
|
Blaze Signs Holdings Limited
|
Realisation
|
190,631
|
334,404
|
291,039
|
43,365
|
|
H Realisations (2018) Limited (formerly Hemmels)
|
Realisation
|
23,250
|
2,044
|
-
|
2,044
|
|
Pattern Analytics Limited (trading as Biosite)
|
Realisation
|
1,338,539
|
1,978,710
|
1,978,710
|
-
|
|
End Ordinary Group Limited (trading as Buster & Punch)
|
Loan repayment
|
157,319
|
157,319
|
157,319
|
-
|
|
Vian Marketing Limited (trading as Red Paddle Co)
|
Part loan repayment
|
110,068
|
157,240
|
157,240
|
-
|
|
Vectair Holdings Limited
|
Realisation
|
24,732
|
481,967
|
522,139
|
( 40,172)
|
|
Jablite Holdings Limited
|
Permanent impairment
|
-
|
-
|
|
( 44,424)
|
|
|
|
|
|
|
|
|
|
|
7,195,002
|
14,974,305
|
10,489,008
|
4,440,873
|
Note b) The major components of the net increase in unrealised valuations of £8,866,811 in the year were increases of £3,837,158 in Virgin Wines Holding Company Limited, £1,425,620 in MPB Group Limited, £1,315,232 in Manufacturing Services Investment Limited (trading as Wetsuit Outlet), £1,233,212 in Parsley Box Limited, and £1,100,500 in Data Discovery Solutions Limited (trading as Active Navigation). These increases were partly offset by the falls of £1,134,989 in Spanish Restaurant Group Limited (trading as Tapas Revolution), £954,059 in CGI Creative Graphics International Limited, £880,159 in Media Business Insight Holdings Limited, £526,952 in Rota Geek Limited, and £362,884 in Kudos Innovations Limited.
Note c) During the year, permanent impairments of the cost of investments have increased from £507,597 to £1,471,563 due to the impairment of three portfolio companies, partially offset by the disposal of one company.
|
|
|
|
|
9
|
Current asset investments and Cash at bank
|
|
|
Cash equivalents, for the purposes of the Statement of Cash Flows, comprises bank deposits repayable on up to three months' notice and funds held in OEIC money-market funds. Current asset investments are the same but also include bank deposits that mature after three months. Current asset investments are disposable without curtailing or disrupting the business and are readily convertible into known amounts of cash at their carrying values at immediate or up to three months' notice. Cash, for the purposes of the Statement of Cash Flows is cash held with banks in accounts subject to immediate access. Cash at bank in the Balance Sheet is the same.
|
|
|
|
2020
|
2019
|
|
|
|
|
£
|
£
|
|
OEIC Money market funds
|
20,634,956
|
6,928,456
|
|
Cash equivalents per Statement of Cash Flows
|
20,634,956
|
6,928,456
|
|
Bank deposits that mature after three months but are not immediately repayable
|
2,000,000
|
2,000,000
|
|
Current asset investments
|
22,634,956
|
8,928,456
|
|
Cash at bank
|
4,053,536
|
2,627,511
|
|
|
10
|
Called up share capital
|
|
|
|
|
2020
|
2019
|
|
|
£
|
£
|
|
|
|
|
|
Allotted, called-up and fully paid:
|
|
|
|
Ordinary Shares of 1p each: 84,004,018 (2019: 66,779,129)
|
840,040
|
667,991
|
Under the 2019/20 Offer, 18,450,535 (2019: Nil) new Ordinary shares were allotted at an average effective offer price of 70.46 pence per share, raising net funds of £12,534,437 (2019: £Nil) for the Company.
During the year, the Company purchased 1,245,646 (2019: 1,483,865) of its own Ordinary shares for cash (representing 1.9% (2019: 2.2%) of the ordinary shares in issue at the start of the year) at the prevailing market price for a total cost of £728,216 (2019: £1,071,326). These shares were subsequently cancelled by the Company.
|
|
11
|
Basic and diluted net asset value per share
|
|
|
Net asset value per Ordinary Share is based on net assets at the end of the year, and on 84,004,018 (2019: 66,799,129) Ordinary shares, being the number of Ordinary shares in issue on that date.
There are no instruments that will increase the number of shares in issue in future. Accordingly, the figures currently represent both basic and diluted net asset value per share.
|
|
12
|
Post balance sheet events
|
|
|
On 7 January 2021, a follow-on investment of £0.26 million was made into Parsley Box Limited, a supplier of home delivered ambient ready meals targeting the over 60s.
On 26 January 2021, the Company received a loan repayment of £0.01 million from BG Training Limited.
On 27 January 2021, further proceeds of £0.06 million were received by the Company in relation to the sale of Blaze Signs Holdings Limited which occurred in September 2020.
On 5 February 2021, a follow-on investment of £0.11 million was made into Bleach London Holdings Limited, a hair colourants brand.
On 11 February 2021, the entire remaining holding of Omega Diagnostics plc was realised for proceeds of £0.42 million.
On 12 February 2021, a follow-on investment of £0.48 million was made into Arkk Consulting Limited, a regulatory and reporting requirement service provider.
On 18 February 2021, a new investment of £0.91 million was made into Vivacity Labs Limited, an artificial intelligence & urban traffic control system.
Ahead of the Admission to AIM of Virgin Wines on 2 March 2021, the Company's equity investment in Virgin Wines Holding Company Ltd ("VWHCL") had been exchanged for an equity investment in Rapunzel Newco Limited ("RNL"), a company owned by the four Mobeus advised VCTs pro rata to each VCT's share of its investment in Virgin Wines. Immediately prior to Admission, RNL exchanged its equity investment in VWHCL for an equity investment in Virgin Wines UK plc ("VWUK"). The Company is beneficially interested in 4,627,424 shares in VWUK, through its holding in RNL. RNL is the legal owner of the shares in VWUK, but each VCT is the beneficial holder.
At the Placing Price of £1.97 per share upon Admission, the Company's beneficial holding in VWUK had a value of £9.12 million, an increase of £4.64 million over the value of the equity at the year-end, and represented 8.29% of the enlarged equity of VWUK.
Alongside the Admission, VWUK also raised new funds from other investors in a Placing of new shares. These funds have been applied partly to repay the Company's loan stock investment and accrued interest in Virgin Wines via RNL. The Company has received net proceeds to date of £1.86 million, after the deduction of transaction costs of £0.06 million.
On 12 March 2021, the Company made a £0.12 million follow-on investment into Spanish Restaurant Group Limited (trading as Tapas Revolution), a leading Spanish restaurant chain.
On 25 March 2021, a new investment of £0.14 million was made into Caledonian Leisure Limited, a travel & leisure company specialising in providing UK based, value short breaks and holidays.
On 26 March, the portfolio company, Parsley Box, announced an intention to float on the AIM market on 31 March 2021. Subject to Admission to trading on that date, the Placement Price of £2.00 per share will increase the year-end value of the Company's investment by £1.70 million.
|
|
|
Statutory information
|
|
|
The financial information set out in these statements does not constitute the Company's statutory accounts for the year ended 31 December 2020 but is derived from those accounts. Statutory accounts will be delivered to the Registrar of Companies after the Annual General Meeting. The auditors have reported on these accounts and their report was unqualified and did not contain a statement under section 498(2) of the Companies Act 2006.
|
|
|
Annual Report & Financial Statements
|
|
|
The Annual Report & Financial Statements will be published on the Company's website at
www.mig4vct.co.uk
shortly and, following the adoption of electronic communications by the Company, Shareholders will shortly receive notification from the Company on how to download a pdf of the Report from the website. Shareholders and members of the public who wish to receive a hard copy of the Annual Report, may request a copy by writing to the Company Secretary, Mobeus Equity Partners LLP by email at vcts@mobeus.co.uk.
|
|
|
Annual General Meeting
|
|
|
The Company's next Annual General Meeting will be held on Tuesday, 18 May 2021 as a closed meeting a
t
the f
ollowing address
:
mobeusvctAGM.co.uk
, the link is also available on the Company's website at: www.mig4vct.co.uk.
|
|
|
Contact details for further enquiries
|
|
|
Mobeus Equity Partners LLP (the Company Secretary) on 020 7024 7600 or by email to
info@mobeus.co.uk
.
|
|
|
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.
|
|
|
|
|
|
|
