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MavIncGroVCT4 (MAV4)

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Friday 14 September, 2018

MavIncGroVCT4

Half-year Report

RNS Number : 8704A
Maven Income & Growth VCT 4 PLC
14 September 2018
 

Maven Income and Growth VCT 4 PLC

 

Interim Results for the Six Months Ended 30 June 2018 (Unaudited)

 

The Directors announce the unaudited interim results for the six months ended 30 June 2018.

 

Highlights

 

•      NAV total return at 30 June 2018 of 145.91p per share

 

•      NAV at 30 June 2018 of 72.31p per share after payment of interim dividends of 13.70p per share during the period

 

•      Offer for Subscription fully subscribed with £20 million of new capital raised

 

•      Net asset value increased to £41.74 million at the period end

 

•      Three new VCT qualifying private company holdings added to the portfolio, with a further two completed post the period end

 

•      Follow-on funding provided to four portfolio companies

 

•      Profitable realisation of Endura for 1.55 times cost

 

•      Proposal to merge with Maven Income and Growth VCT 2 PLC

 

Overview

Your Company has achieved positive performance in the first half of the financial year, with one realisation of note, being the sale of Endura to Pentland Brands. Performance across the portfolio as a whole was generally encouraging, with no discernible impact from the current political uncertainty, and a number of portfolio companies making good progress against the commercial milestones set at the time of the original investment.

 

Whilst NAV total return per share has increased from 145.87p at 31 December 2017 to 145.91p at 30 June 2018, Shareholders will note that the absolute NAV per share has declined from 85.97p to 72.31p. This is primarily as a consequence of the payment of enhanced interim dividends totalling 13.70p during the period, which reflected a build-up of distributable reserves and were required in order to maintain your Company's ongoing compliance with the VCT regulations. These payments represent a highly tax-efficient means of making distributions to Shareholders.

 

The recent successful fundraising, which closed at full capacity in April 2018, has increased the size of your Company significantly and provides additional resources to build a diverse and broadly based portfolio of attractive VCT qualifying assets that are capable of supporting long term growth in Shareholder value.

 

Against an objective to continue to grow and diversify the investee company portfolio, it is encouraging to note that three new private company holdings were added during the period, with follow-on funding also provided to four existing portfolio companies to support their continued growth. Given the pipeline of live opportunities, and level of new business introductions currently being assessed across Maven's nationwide network of offices, it is anticipated that there will be a healthy rate of new investment activity during the second half of the financial year. In addition, there are likely to be further follow-on investments as earlier stage portfolio companies develop and require additional capital to deliver their business plans.

 

The strategy remains to invest in carefully selected fast growing UK smaller companies, operating across a diverse range of industries that offer either compelling proprietary technology or a disruptive business model capable of scalable growth. Maven also has a preference for supporting a proven management team with a successful track record in a previous business. The expansion of Maven's investment team to include a number of executives with specific sector expertise, particularly in early stage technology, is benefiting the initial asset screening and selection process.

 

Dividends

As a result of recent profitable realisations, and to ensure ongoing compliance with the VCT regulations, the Director's considered it necessary to distribute an enhanced level of interim dividends.

 

Accordingly, the first interim dividend in respect of the year ending 31 December 2018, of 8.90p per Ordinary Share, was paid on 13 April 2018 to Shareholders on the register at close of business on 16 March 2018. The second interim dividend, of 4.80p per Ordinary Share, was paid on 22 June 2018 to Shareholders on the register at close of business on 25 May 2018. The effect of paying these dividends was to reduce the NAV of the Company by the total cost of the distributions.

 

Since the Company's launch, and after receipt of the most recent dividend, Shareholders have received 73.60p per share in tax-free income. Decisions on future distributions will take into consideration the adequacy of reserves, the proceeds from any further realisations and the VCT qualifying levels of the portfolio, all of which are kept under close and regular review by the Board and the Manager.

 

Fund Raising

On 22 September 2017, the Directors of your Company launched an Offer for Subscription for new Ordinary Shares of up to £15 million, with an over-allotment facility of up to £5 million.

 

On 24 April 2018, your Board was pleased to announce that the Offer closed at full subscription, having raised £20 million in total, including the full utilisation of the over-allotment facility. During the period, the Company issued 16,714,707 new Ordinary Shares under the Offer for the 2017/2018 tax year, with a further 3,513,830 new Ordinary Shares issued for the 2018/2019 tax year. This additional liquidity will enable the Manager to continue to expand the portfolio by investing in dynamic, earlier stage VCT qualifying businesses that have the potential to deliver an uplift in Shareholder value.

 

Dividend Investment Scheme (DIS)

Your Company has in place a DIS, through which Shareholders may elect to have their dividend payments used to apply for new Ordinary Shares issued by the Company under the standing authority requested from Shareholders at Annual General Meetings. Shares issued under the DIS should qualify for VCT tax reliefs applicable for the tax year in which they are allotted.

 

Shareholders who have not previously applied to participate in the DIS and who wish to do so in respect of future dividends, should ensure that a mandate form, or CREST instruction if appropriate, is submitted to the Registrar (Link Asset Services). Terms & conditions and full details of the scheme are available from the Company's website, together with a mandate form for participation in the DIS. Alternatively a DIS election can be made through the Link Asset Services share portal at www.signalshares.com.

 

Portfolio Developments

During the period, the majority of the private companies in the investee portfolio have performed in line with expectations, despite the continued uncertainty within the UK economy surrounding the UK's intended exit from the European Union. Although there are, at present, no specific issues to highlight, the Manager will continue to monitor the situation closely.

 

It is encouraging to report on the continued improvement in trading within the oil & gas portfolio since the year end. After three years of exceptionally challenging market conditions, the companies with exposure to the sector are reporting an upturn in activity and profitability compared to the prior year, with forward order books projecting a continuation of this trend. 

 

The improvement in financial and operational performance reflects the cost cutting and restructuring measures implemented by portfolio companies, with close support from Maven executives, at the onset of the downturn. As a result, each investee company is operating with a lean cost structure and either modest or no external debt, which should provide stability assuming that the recovery continues to strengthen.

 

Elsewhere in the portfolio, a number of the established private company holdings have had their valuations increased to reflect improved performance.

 

Cursor Controls, a global leader in the design and manufacture of trackballs, trackpads and keyboards for use in specialist industrial applications, including health, defence and marine, continues to deliver good levels of organic growth. Performance was enhanced by the acquisition of Belgium distributor NSI in April 2016. The enlarged group continues to trade well, with further commercial and operational synergies identified to support future growth and profitability. The balance sheet remains strong and the business continues to pay down its term debt.

 

Diversified renewable energy services group GEV has experienced strong growth over the past year, particularly in the US through its largest division GEV Wind Power, which specialises in wind turbine blade maintenance. The US market opportunity is sizeable and the business is well positioned to capitalise on this over the coming year, having secured contracts with leading providers including MHI Vestas, Eon, Siemens and Invenergy. The management team is also forecasting strong performance in the UK and Europe in the year ahead.

 

In 2013, your Company participated in a syndicate, led by Penta Capital, to invest in Global Risk Partners, backing a highly experienced management team to pursue a buy & build strategy in the Lloyd's speciality insurance broking and managing general agent markets. Since the investment was made, significant progress has been achieved, including the addition of a commercial and private client division as well as the completion and integration of 28 separate acquisitions. The business is now understood to be one of the ten largest insurance brokers in the UK, and is continuing to grow. There is a strong pipeline of acquisition opportunities currently under review and further increases in profitability anticipated to feed through from margin improvement.

 

Since Maven clients' investment in Just Trays in 2014, the UK's leading designer and manufacturer of shower trays and related accessories has delivered steady performance. In line with a core business objective of new product development and innovation, the company has expanded its customer base and production volumes, as well as extending its product range, and was recently awarded a second 'Gold Award for Innovation in Design' at the prestigious Designer Kitchen and Bathroom Awards.

 

Vodat Communications supplies data networks, IP telephony, wi-fi solutions and fixed line connectivity to retail customers, with a solid blue chip customer base including Fat Face, Beaverbrooks and Welcome Break. Maven clients supported the management buy-out in 2012 and, since investment, the business has achieved positive growth and added a number of new customer contracts. In November 2017, Vodat completed the complementary acquisition of Axonex, a provider of specialist IT solutions, services and support specialising in unified communications, data centre, security and network infrastructure. The acquisition, which was funded through cash and bank debt, has created a number of cross selling opportunities to help deliver further growth for the enlarged group.

 

In addition, follow-on funding was provided to Growth Capital Ventures, ITS Technology, QikServe and The GP Service. Given their stage of development, the requirement to provide further capital to earlier stage qualifying companies was anticipated at the time of initial investment and was reflected in the reduced total commitment size by the Maven VCTs, and by the strategy of co-investing alongside other VCT houses. In terms of valuation, all new development capital investments will continue to be held at cost, or cost less provision, until there is clear evidence of measurable progress or a quantifiable event from which a new valuation level can be validated.

 

The investment trust portfolio has continued to trade well and generate income. This is particularly important in light of the restrictions introduced by the Finance Act 2016, which prevents non-qualifying investments in traditional instruments such as treasury bills or other government securities for liquidity management purposes. With increased cash resources now available following the fund raising, the Board and the Manager remain highly cognisant of the importance of maintaining an effective liquidity management policy and will continue to consider a range of permitted income generating investment options.

 

As well as reflecting the positive trading performance highlighted above, your Board has also fully provided against the value of the holding in Lambert Contracts prior to it being placed into administration. A full provision has also been taken against the value of the holding in Chic Lifestyle.

 

New Investments

During the period, your Company provided development capital to three VCT qualifying private companies operating in growth markets:

 

•      Lending Works has developed a peer-to-peer (P2P) platform that matches private and institutional lenders to individual borrowers, and has grown to become the third largest P2P consumer lender in the UK. The company is well regarded by customers and partners as a responsible and ethical market leader, being the first major P2P platform to be fully authorised by the FCA, and the first to be authorised to provide an ISA offering. The investment by the Maven VCTs will enable the company to accelerate future growth.

 

•      WaterBear Education has established a private music college specialising in offering university accredited undergraduate and post-graduate courses for the creative arts, primarily catering for musicians, singers, songwriters and those wishing to gain a well-rounded music industry education. The business is led by a high calibre management team with extensive experience of both the industry and music education, having previously founded the British and Irish Modern Music Institute, which has grown to be a market leader in its sector. The investment has been used to establish and launch the college, with Bachelor of Arts and Master of Arts university accredited courses available for student intake from September 2018.

 

•      BioAscent Discovery is a drug discovery services business that was found by former pharmaceutical executives with over 30 years' experience of delivering clinical drug candidates. The business operates from the former Merck Sharpe and Dohme R&D site in Newhouse, Scotland, which is a secure state-of-the-art facility, housing client compound libraries ranging in size from a few thousand to a few hundred thousand compounds. The funding will be used to add complementary chemistry and biology services to the existing compound management service to create a highly differentiated, high-value integrated drug discovery offering.

 

The following investments have been completed during the reporting period:

 

 

 

Date

 

 

Sector

Investment

cost

£'000

 

 

Website

Unlisted

 

 

 

 

WaterBear Education Limited

February 2018

Support Services

120

www.waterbear.org.uk

QikServe Limited

March 2018

 Software & computer services

105

www.qikserve.com

Lending Works Limited

April 2018

Software & computer services

299

www.lendingworks.co.uk

BioAscent Discovery Limited

June 2018

Pharmaceuticals and biotechnology

199

www.bioascent.com

Growth Capital Ventures Limited

June 2018

Investment Companies

92

www.growthcapitalventures.co.uk

ITS Technology Group Limited

June 2018

Telecommunication Services

221

www.itstechnologygroup.com

The GP Service (UK) Limited

June 2018

Health

160

www.thegpservice.co.uk

Total unlisted

 

 

1,196

 

 

 

 

 

 

Private equity investment trusts1

 

 

 

 

Apax Global Alpha Limited

June 2018

Investment Companies

103

www.apaxglobalalpha.com

F&C Private Equity Trust PLC

June 2018

Investment Companies

123

www.fandc.com

Princess Private Equity Holding Limited

June 2018

Investment Companies

119

www.princess-privateequity.net

Total private equity investment trusts

 

 

345

 

 

 

 

 

 

Real estate Investment trusts1

 

 

 

 

Custodian REIT PLC

May 2018

Investment Companies

71

www.custodianreit.com

Schroder REIT Limited

May 2018

Investment Companies

212

www.srei.co.uk

Target Healthcare REIT Limited

May 2018

Investment Companies

96

www.targethealthcarereit.co.uk

Regional REIT Limited

June 2018

Investment Companies

89

www.regionalreit.com

Total real estate investment trusts

 

 

468

 

 

 

 

 

 

Total investments

 

 

2,009

 

 

1 Part of liquidity management strategy

 

At the period end, the portfolio stood at 69 unlisted and quoted investments, at a total cost of £22.35 million.

Realisations

In February 2018, the holding in Endura was exited for a total return of 1.55 times cost over the holding period. Maven clients first invested in Endura, a leading designer and manufacturer of high performance cycling apparel and accessories, in 2014 as part of a syndicate. The company focusses on the mid to premium end of the market and sells its products in over thirty countries worldwide with the support of a number of world class sponsors. The sale to UK-based Pentland Brands, which has a stable of global sports, outdoor and fashion brands including Berghaus, Canterbury, Speedo and Ellesse, represents an excellent strategic fit for Endura and will enable it to continue to expand its global brand and market presence.

 

In January 2018, following the sale of Elite Insurance, its key trading subsidiary, Torridon (Gibraltar) repaid all of the outstanding Maven client loan notes.

 

As at the date of this report, the Manager is engaged with several investee companies and prospective acquirers at various stages of the negotiation process, although there can be no certainty that these discussions will result in profitable sales.

 

The table below gives details of all realisations achieved, and deferred considerations received, during the reporting period:

 

 

 

 

 

Year first invested

 

 

 

Complete/ partial exit

Cost of shares disposed

of

£'000

Value at

31

December

2017

£'000

 

 

Sales proceeds

£'000

 

 

Realised gain/(loss)

£'000

Gain/(loss) over 31 December 2017 value

£'000

Unlisted

 

 

 

 

 

 

 

CHS Engineering Services Limited

2010

Partial

2

-

2

-

2

Endura Limited

2014

Complete

229

343

355

126

12

SPS (EU) Holdings Limited

2014

Complete

-

-

18

18

18

Torridon (Gibraltar) Limited1

2010

Partial

335

359

326

(9)

(33)

Total unlisted

 

 

566

702

701

135

(1)

 

 

 

 

 

 

 

 

Private equity investment trusts2

 

 

 

 

 

 

 

Apax Global Alpha Limited

2016

Complete

99

113

103

4

(10)

British Land Company PLC

2016

Complete

99

114

107

8

(7)

F&C Private Equity Trust PLC

2016

Partial

103

119

122

19

3

Princess Private Equity Holding Limited

2016

Complete

98

129

119

21

(10)

Total private equity investment trusts

 

 

399

475

451

52

(24)

 

 

 

 

 

 

 

 

Real estate Investment trusts2

 

 

 

 

 

 

 

Custodian REIT PLC

2016

Partial

100

109

108

8

(1)

Regional REIT Limited

2016

Partial

99

94

88

(11)

(6)

Schroder REIT Limited

2018

Partial

204

207

212

8

5

Standard Life Investment Property Income Trust Limited

2016

Completed

99

105

101

2

(4)

Target Healthcare REIT Limited

2016

Partial

98

98

96

(2)

(2)

Total real estate investment trusts

 

 

600

613

605

5

(8)

 

 

 

 

 

 

 

 

Total disposals

 

 

1,565

1,790

1,757

192

(33)

 

1 Proceeds exclude yield and redemption premiums received, which are disclosed as revenue for financial reporting purposes.

2 Part of liquidity management strategy.

 

Material Developments Since the Period End

Since 30 June 2018, two new private company holdings have been added to the portfolio.

 

·      Bright Network is a developer and provider of a media technology platform that enables medium and large sized companies to identify, reach and recruit good quality university graduates and young professionals. The platform currently supports a network of over 150,000 high calibre candidates and has a customer base of over 250 leading employers, including Bloomberg, Marks and Spencer and Vodafone. The Maven client investment will support the development of the technology as well as providing funding to further business development and marketing activities.

 

·      Optoscribe has developed a suite of optical and photonic technologies that use high-power lasers to direct-write optical waveguides that are used to minimise energy dissipation in a wide range of applications in the telecom, datacom and mobile network markets. Optoscribe's innovative techniques are able to form these guides in precise 3D orientations, and simplify manufacturing processes by delivering highly efficient and scalable products. The barriers to entry into this market are significant and, therefore, the company's existing intellectual property (including patents) and technical know-how provides a defensible market position. The investment will enable the management team to scale manufacturing capacity and will support further business development activity.

 

In addition, follow-on development capital funding was provided to Whiterock to assist with its further growth.

 

Principal Risks and Uncertainties

The principal risks and uncertainties facing the Company were set out in full in the Strategic Report contained within the 2017 Annual Report, and are the risks associated with investment in small and medium sized unlisted and AIM/NEX quoted companies which, by their nature, carry a higher level of risk and are subject to lower liquidity than investments in large quoted companies. The valuation of investee companies may be affected by economic conditions, the credit environment and other risks including legislation, regulation, adherence to VCT qualifying rules and the effectiveness of the internal controls operated by the Company and the Manager. These risks and procedures are reviewed regularly by the Audit and Risk Committees and reported to your Board. The Board has confirmed that all tests, including the criteria for VCT qualifying status, continue to be monitored and met.

 

Share Buy-backs

Shareholders have given the Board authority to buy back shares for cancellation or to be held in treasury, subject always to such transactions being in the best interests of Shareholders. It is intended that, subject to market conditions, available liquidity and the maintenance of the Company's VCT status, shares will continue to be bought back at prices representing a discount of up to 15% of the prevailing NAV per share. During the period under review, 250,000 share were bought back at a total cost of £189,000.

 

Regulatory Developments

As previously outlined, VCT legislation continues to move towards supporting higher risk investments, with recent changes including the introduction of a 'risk to capital' based test, increased measures designed to assist the financing of knowledge-intensive companies and certain sector exclusions. The Finance Act 2018, which received Royal Assent in March 2018, introduced a new requirement that, for accounting dates from 6 April 2019 (from 31 December 2019 in the case of the Company) the percentage of funds a VCT must hold in qualifying investments will increase from 70% to 80%. In order to assist with this, the add-back period on sales will be increased from six to twelve months with effect from 6 April 2019. The Board and the Manager will continue to consider these developments when planning future strategy.

 

The General Data Protection Regulation came into force on 25 May 2018, replacing the Data Protection Act 1998. This regulation enforces the principle of 'privacy by design and by default' and enshrines new rights for individuals, including the right to be forgotten and to data portability. The Manager has worked with the third parties that process Shareholders' personal data to ensure that their rights under the new regulation are respected.

 

Proposed Merger

On 13 September 2018, the Company announced that it had entered formal negotiations on a proposed merger with Maven Income and Growth VCT 2 PLC. A circular relating to this is expected to be published in October 2018, prior to the convening of a general meeting at which Shareholders' approval will be sought on the proposal.

 

Outlook

Based on the current level of new transaction activity, it is expected that a meaningful number of new investments will be completed during the second half of the financial year, consistent with the Company's strategy of further expanding and diversifying the portfolio. The success of the recent Offer for Subscription has provided further funds to ensure the delivery of this strategy, and your Board and the Manager remain committed to building a large and broadly based portfolio of valuable private companies that are capable of delivering consistently positive Shareholder returns in the years ahead.

 

On behalf of the Board

Maven Capital Partners UK LLP

Secretary

 

14 September 2018

 

 

 

Summary of Investment Changes

For the Six Months Ended 30 June 2018

 

 

Valuation

31 December 2017

£'000           %

Net investment/ (disinvestment)

£'000

Appreciation/ (depreciation)

£'000

Valuation

30 June 2018

£'000           %

Unlisted investments

 

 

 

 

 

 

Equities

7,367

23.1

734

443

8,544

20.5

Loan stock

10,437

32.7

(239)

(210)

9,988

23.9

 

17,804

55.8

495

233

18,532

44.4

 

AIM/NEX investments

 

 

 

 

 

Equities

1,086

3.4

-

184

1,270

3.0

 

Listed investments

 

 

 

 

 

 

Equities

23

0.1

-

(3)

20

-

Investment trusts

1,168

3.7

(243)

(24)

901

2.2

Total investments

20,081

63.0

252

390

20,723

49.6

 

Other net assets

 

11,793

 

37.0

 

9,226

 

-

 

21,019

 

  50.4

Net assets

31,874

100.0

9,478

390

41,742

100.0

 

 

Investment Portfolio Summary

 

As at 30 June 2018

 

 

Investment

 

Valuation

£'000

 

Cost

£'000

 

% of total

assets

 

% of equity

held

% of equity held by other

clients¹

Unlisted

 

 

 

 

 

Ensco 969 Limited (trading as DPP)

1,202

1,060

2.8

4.6

29.9

Vodat Communications Group Limited

1,069

592

2.5

4.4

22.4

GEV Holdings Limited

986

672

2.4

4.3

31.7

Glacier Energy Services Holdings Limited

957

957

2.3

3.7

23.9

JT Holdings (UK) Limited (trading as Just Trays)

796

522

1.9

5.8

24.2

CatTech International Limited

779

498

1.9

4.8

25.3

CB Technology Group Limited

730

559

1.7

11.4

67.6

Maven Co-invest Endeavour Limited Partnership

720

360

1.7

7.0

93.0

(invested in Global Risk Partners)²

 

 

 

 

 

Fathom Systems Group Limited

681

681

1.6

7.7

52.3

Maven Capital (Marlow) Limited

650

650

1.6

-

100.0

Castlegate 737 Limited (trading as Cursor Controls)

645

299

1.5

3.0

44.5

Horizon Cremation Limited

626

626

1.5

3.4

18.8

ITS Technology Group Limited

619

619

1.5

4.9

30.8

HCS Control Systems Group Limited

603

836

1.4

6.8

29.7

Flow UK Holdings Limited

598

598

1.4

7.3

27.7

The GP Service (UK) Limited

584

558

1.4

7.7

41.8

R&M Engineering Group Limited

581

774

1.4

8.7

61.9

TC Communications Holdings Limited

554

777

1.3

8.1

21.9

RMEC Group Limited

463

463

1.1

2.9

47.2

QikServe Limited

453

453

1.1

3.1

15.8

Rockar 2016 Limited (trading as Rockar)

403

403

1.0

2.2

13.4

Attraction World Holdings Limited

400

98

1.0

6.2

32.2

ADC Biotechnology Limited

338

338

0.8

2.5

12.4

Contego Solutions Limited (trading as NorthRow)

323

323

0.8

2.8

12.8

Martel Instruments Holdings Limited

310

347

0.7

4.2

40.0

Lending Works Limited

299

299

0.7

2.8

16.8

Growth Capital Ventures Limited

252

241

0.6

5.8

32.7

eSafe Systems Limited

224

224

0.5

4.3

27.8

Torridon (Gibraltar) Limited

221

347

0.5

3.7

36.3

ISN Solutions Group Limited

207

327

0.5

4.6

50.4

BioAscent Discovery Limited

199

199

0.5

5.0

35.0

Cognitive Geology Limited

159

159

0.4

2.0

10.5

 

Investment Portfolio Summary (continued)

 

As at 30 June 2018

 

 

Investment

 

Valuation

£'000

 

Cost

£'000

 

% of total

assets

 

% of

equity

held

% of equity held by other

clients¹

Unlisted (continued)

 

 

 

 

 

Whiterock Group Limited

159

159

0.4

3.5

21.5

ebb3 Limited

150

150

0.4

3.5

21.0

Curo Compensation Limited

149

149

0.4

1.9

13.5

WaterBear Education Limited

120

120

0.3

4.5

39.2

Lawrence Recycling and

109

770

0.3

8.4

53.6

Waste Management Limited

 

 

 

 

 

D Mack Limited

80

504

0.2

4.8

25.2

Space Student Living Limited

67

-

0.2

10.6

69.4

FLXG Scotland Limited

65

298

0.2

1.9

12.4

(formerly Flexlife Group Limited)

 

 

 

 

 

Other unlisted investments

2

2,411

-

 

 

Total unlisted

18,532

20,420

44.4

 

 

 

Quoted

 

 

 

 

 

Ideagen PLC

687

184

1.7

0.3

1.5

Byotrol PLC

187

197

0.4

1.2

2.4

Oxford Metrics PLC (formerly OMG PLC)

177

80

0.4

0.2

-

Plastics Capital PLC

94

85

0.2

0.2

1.2

Vectura Group PLC

87

100

0.2

-

-

Angle PLC

25

27

0.1

-

0.2

esure Group PLC

20

-

-

-

-

Gordon Dadds Group PLC

10

151

-

-

0.1

(formerly Work Group PLC)

 

 

 

 

 

Deltex Medical Group PLC

2

33

-

0.1

-

Other quoted investments

1

221

-

 

 

Total quoted

1,290

1,078

3.0

 

 

 

Private equity investment trusts

 

 

 

 

 

HgCapital Trust PLC

137

100

0.4

-

0.1

Princess Private Equity Holding Limited

121

120

0.4

-

0.1

F&C Private Equity Investment Trust PLC

121

123

0.3

0.1

0.3

Apax Global Alpha Limited

104

103

0.1

-

0.1

Standard Life Private Equity Trust PLC

54

43

0.1

-

-

Total private equity investment trusts

537

489

1.3

 

 

 

Investment Portfolio Summary (continued)

 

As At 30 June 2018

 

 

Investment

 

Valuation

£'000

 

Cost

£'000

 

% of total

assets

 

% of

equity

held

% of equity held by other

clients¹

Real estate investment trusts

 

 

 

 

 

Schroder REIT Limited

106

107

0.2

-

0.2

Target Healthcare REIT Limited

97

96

0.2

-

0.2

Regional REIT Limited

88

89

0.2

-

0.2

Custodian REIT PLC

73

71

0.3

-

0.2

Total real estate investment trusts

364

363

0.9

 

 

 

 

 

 

 

 

Total investments

20,723

22,350

49.6

 

 

 

¹ Other clients of Maven Capital Partners UK LLP.

² Investments managed by Penta Capital LLP of which a Director of the Company, Steven Scott, is a partner.

 

 

Income Statement

 

For the Six Months Ended 30 June 2018

 

Six months ended

30 June 2018

(unaudited)

Six months ended

30 June 2017

(unaudited)

Year ended

31 December 2017

(audited)

 

Revenue

£'000

Capital

£'000

Total

£'000

Revenue

£'000

Capital

£'000

Total

£'000

Revenue

£'000

Capital

£'000

Total

£'000

Gains on investments

-

390

390

-

173

173

-

984

984

Income from investments

325

-

325

469

-

469

1,182

-

1,182

Other income

9

-

9

5

-

5

11

-

11

Investment  management

(92)

(367)

(459)

(85)

(339)

(424)

(201)

(806)

(1,007)

fees

 

 

 

 

 

 

 

 

 

Other expenses

(124)

-

(124)

(116)

-

(116)

(283)

-

(283)

Net return on ordinary

118

23

141

273

(166)

107

709

178

887

activities before taxation

 

 

 

 

 

 

 

 

 

 

Tax on ordinary activities

 

9

 

9

 

-

 

(23)

 

23

 

-

 

(128)

 

128

 

-

Return attributable to Equity  Shareholders

 

109

 

32

 

141

 

250

 

(143)

 

107

 

581

 

306

 

887

 

Earnings per share (pence)

 

0.23

 

 

0.07

 

0.30

 

0.76

 

(0.44)

 

0.32

 

1.75

 

0.92

 

2.67

                     

 

All gains and losses are recognised in the Income Statement.

 

All items in the above statement are derived from continuing operations. The Company has only one class of business and one reportable segment, the results of which are set out in the Income Statement and Balance Sheet. The Company derives its income from investments made in shares, securities and bank deposits.

 

There are no potentially dilutive capital instruments in issue and, therefore, no diluted earnings per share figures are relevant. The basic and diluted earnings per share are, therefore, identical.

 

The accompanying Notes are an integral part of the Financial Statements.

 

 

Statement of Changes in Equity

 

Six Months Ended 30 June 2018 (unaudited)

 

 

 

 

Share    

 capital

£'000

Share premium account

£'000

Capital reserve realised

£'000

Capital reserve unrealised

£'000

Special distributable

reserve

£'000

Capital redemption

reserve

£'000

 

 

Total

£'000

At 31 December 2017

3,708 

22,745

(2,111)

(1,825)

8,271

384

702

31,874

Net return

-

-

(166)

198

-

-

109

141

Dividends paid

-

-

(6,545)

-

-

-

-

(6,545)

Repurchase and

cancellation of shares

(25)

-

-

-

(189)

25

-

(189)

Net proceeds of share issue

2,023

13,947

-

-

-

-

-

15,970

Net proceeds of DIS issue

67

424

-

-

-

-

-

491

At 30 June 2018

5,773

37,116

(8,822)

(1,627)

8,082

409

811

41,742

 

 

Six Months Ended 30 June 2017 (unaudited)

 

 

 

 

 

Share capital

£'000

Share premium account

£'000

Capital reserve realised

£'000

Capital reserve unrealised

£'000

Special distributable

reserve

£'000

Capital redemption

reserve

£'000

 

Revenue reserve

£'000

 

 

Total

£'000

At 31 December 2016

3,290

19,449

(1,571)

1,874

8,528

354

644

32,568

Net return

-

-

(13)

(130)

-

-

250

107

Dividends paid

-

-

(934)

-

-

-

(66)

(1,000)

Repurchase and

cancellation of shares

(23)

-

-

-

(204)

23

-

(204)

At 30 June 2017

3,267

19,449

(2,518)

1,744

8,324

377

828

31,471

                   

 

 

Year Ended 31 December 2017 (audited)

 

 

 

 

Share capital

£'000

Share premium account

£'000

Capital reserve realised

£'000

Capital reserve unrealised

£'000

Special distributable

reserve

£'000

Capital redemption

reserve

£'000

 

Revenue reserve

£'000

 

 

Total

£'000

At 31 December 2016

3,290

19,449

(1,571)

1,874

8,528

354

644

32,568

Net return

-

-

4,005

(3,699)

-

-

581

887

Dividends paid

-

-

(4,545)

-

-

-

(523)

(5,068)

Repurchase and

cancellation of shares

(30)

-

-

-

(257)

30

-

(257)

Net proceeds of share issue

437

3,211

-

-

-

-

-

3,648

Net proceeds of DIS issue

11

85

-

-

-

-

-

96

At 31 December 2017

3,708

22,745

(2,111)

(1,825)

8,271

384

702

31,874

 

The accompanying Notes are an integral part of the Financial Statements.

 

 

Balance Sheet

 

As at 30 June 2018

 

30 June 2018 (unaudited)

£'000

30 June 2017 (unaudited)

£'000

31 December 2017

(audited)

£'000

Fixed assets

 

 

 

Investments at fair value through profit or loss

20,723

28,942

20,081

 

Current assets

 

 

 

Debtors

939

422

456

Cash

20,385

2,151

11,587

 

21,324

2,573

12,043

Creditors

 

 

 

Amounts falling due within one year

(305)

(44)

(250)

Net current assets

21,019

2,529

11,793

Net assets

41,742

31,471

31,874

 

Capital and reserves

 

 

 

Called up share capital

5,773

3,267

3,708

Share premium account

37,116

19,449

22,745

Capital reserve - realised

(8,822)

(2,518)

(2,111)

Capital reserve - unrealised

(1,627)

1,744

(1,825)

Special distributable reserve

8,082

8,324

8,271

Capital redemption reserve

409

377

384

Revenue reserve

811

828

702

Net assets attributable to Ordinary Shareholders

41,742

31,471

31,874

 

Net asset value per Ordinary Share (pence)

 

72.31

 

96.35

 

85.97

 

The Financial Statements were approved by the Board of Directors on 14 September 2018 and were signed on its behalf by:

 

 

 

Ian Cormack

Director

 

The accompanying Notes are an integral part of the Financial Statements.

 

 

Cash Flow Statement

 

For the Six Months Ended 30 June 2018

 

Six months ended

30 June 2018 (unaudited)

£'000

Six months ended

30 June 2017 (unaudited)

£'000

Year ended

31 December 2017

(audited)

£'000

Net cash flows from operating activities

(777)

(783)

(1,320)

 

Cash flows from investing activities

 

 

 

Investment income received

277

400

1,072

Deposit interest received

9

5

11

Purchase of investments

(1,766)

(964)

(2,615)

Sale of investments

1,413

303

11,626

Net cash flows from investing activities

(67)

(256)

10,094

 

Cash flows from financing activities

 

 

 

Equity dividends paid

(6,545)

(1,000)

(5,068)

Issue of Ordinary Shares

16,376

-

3,744

Repurchase of Ordinary Shares

(189)

(204)

(257)

Net cash flows from financing activities

9,642

(1,204)

(1,581)

 

 

 

 

Net increase/(decrease) in cash

8,798

(2,243)

7,193

 

Cash at beginning of period

 

11,587

 

4,394

 

4,394

Cash at end of period

20,385

2,151

11,587

 

The accompanying Notes are an integral part of the Financial Statements.

 

 

NOTES TO THE FINANCIAL STATEMENTS

 

1.    Accounting Policies

The financial information for the six months ended 30 June 2018 and the six months ended 30 June 2017 comprises non-statutory accounts within the meaning of S435 of the Companies Act 2006. The financial information contained in this report has been prepared on the basis of the accounting policies set out in the Annual Report and Financial Statements for the year ended 31 December 2017, which have been filed at Companies House and which contained an Auditor's Report that was not qualified and did not contain a statement under S498(2) or S498(3) of the Companies Act 2006.

 

2.    Reserves

 

Share premium account

The share premium account represents the premium above nominal value received by the Company on issuing shares, net of issue costs.

 

Capital reserves

Gains or losses on investments realised in the year that have been recognised in the Income Statement are transferred to the capital reserve realised account on disposal. Furthermore, any prior unrealised gains or losses on such investments are transferred from the capital reserve unrealised account to the capital reserve realised account on disposal.

 

Increases and decreases in the fair value of investments are recognised in the Income Statement and are then transferred to the capital reserve unrealised account. The capital reserve realised account also represents capital dividends, capital investment management fees and the tax effect of capital items

 

Special distributable reserve

The total cost to the Company of the repurchase and cancellation of shares is represented in the special distributable reserve account.

 

Capital redemption reserve

The nominal value of shares repurchased and cancelled is represented in the capital redemption reserve.

 

Revenue reserve

The revenue reserve represents accumulated profits retained by the Company that have not been distributed to Shareholders as a dividend.

 

3.    Return per Ordinary Share

 

Six months ended

30 June 2018

The returns per share have been based on the following figures:

 

Weighted average number of Ordinary Shares

48,156,412

 

Revenue return

 

£109,000

Capital return

£32,000

Total return

£141,000

 

 

Directors' Responsibility Statement

 

The Directors confirm that, to the best of their knowledge:

 

•      the Financial Statements for the six months ended 30 June 2018 have been prepared in accordance with FRS 102, the Financial Reporting Standard applicable in the UK and the Republic of Ireland;

 

•      the Interim Management Report includes a fair review of the information required by DTR 4.2.7R in relation to the indication of important events during the first six months, and of the principal risks and uncertainties facing the Company during the second six months, of the year ending 31 December 2018; and

 

•      the Interim Management Report includes adequate disclosure of the information required by DTR 4.2.8R in relation to material related party transactions and any changes therein.

 

Other information

 

A full copy of the Interim Report and Financial Statements will be printed and issued to Shareholders. Copies of this announcement will be available to the public at the registered office of the Company at Kintyre House, 205 West George Street, Glasgow G2 2LW; at the office of the Manager, Maven Capital Partners UK LLP, 5th Floor, 1-2 Royal Exchange Buildings, London EC3V 3LF; and, in due course, on the Company's website at www.mavencp.com/migvct4.

 

Neither the content 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.

 

By order of the Board

Maven Capital Partners UK LLP

Secretary

 

14 September 2018

 


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