TIDMMIG4
RNS Number : 8538T
Mobeus Income & Growth 4 VCT PLC
29 March 2021
MOBEUS INCOME & GROWTH 4 VCT PLC
LEI: 213800IFNJ65R8AQW943
ANNUAL FINANCIAL RESULTS OF THE COMPANY
FOR THE YEARED 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: GBP68.46 million
Net asset value ("NAV") per share: 81.50 pence
- Net asset value ("NAV") total return(1) per share of 22.2% for the
year.
- Share price total return(1) per share was 12.9% for the year.
- Dividends paid in respect of the year of 6.00 pence per share. Cumulative
dividends paid(1) stand at 134.20 pence per share.
- GBP4.80 million was invested into four new growth capital investments
and four existing portfolio companies during the year.
- GBP8.87 million of unrealised gains achieved in the year from strong
portfolio performance.
- The Company realised investments totalling GBP14.97 million of cash
proceeds and generated net realised gains in the year of GBP4.44 million.
PERFORMANCE SUMMARY
Cumulative Total return(1) per share (NAV basis)
The longer term trend of performance on this measure is shown in the
table below:-
R eporting date a s NA V Cumulative dividends Cumulative total
at (pence per share) paid to date return(1)
(pence per share) to Shareholders (NAV
Basis)
(pence per share)
31 December 2020 81.50 134.20 215.70
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31 December 2019 74.90 124.20 199.10
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31 December 2018 84.79 105.20 189.99
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31 December 2017 86.57 101.20 187.77
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31 December 2016 107.57 73.20 180.77
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(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 GBP1.85 million during the
year (2019: GBP1.13 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 GBP13.31 million (2019: GBP5.68 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 GBP8.87
million and GBP4.44 million in net realised gains over the year.
As at the year-end, the portfolio was valued at GBP41.68 million after
taking account of investments purchased and sold in the year, together
with the net realised and unrealised gains referred to above (2019: GBP38.54
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, GBP4.80 million was invested by the Company (2019: GBP4.48
million), comprising GBP1.96 million in four new investments and GBP2.84
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 GBP14.97 million were generated. The six realised investments,
in aggregate, have generated total income and capital proceeds of GBP21.64
million and GBP13.99 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 GBP4.44 million. Within this, the principal gains were from full exits
by Access IS (GBP1.75 million), Auction Technology Group (GBP1.16 million),
Bourn Bioscience (GBP0.80 million) and Blaze Signs (GBP0.04 million)
offset by a decline of GBP(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 GBP0.57 million arose from the partial realisation of
Omega Diagnostics, as well as net gains of GBP0.16 million arising from
loan repayments and other capital proceeds.
The portfolio also achieved a net increase in unrealised valuations of
GBP8.87 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 GBP1.88
million comprising one new investment of GBP0.91 million and GBP0.97
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 GBP0.42 million. Over the life
of this investment total proceeds of GBP1.17 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 GBP4.64 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 GBP2.00 per share will increase the
year-end value of the Company's investment by GBP1.70 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 GBP0.73 million
(2019: GBP1.07 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 GBP4.80 million
(2019: GBP4.48 million), comprising GBP1.96 million (2019: GBP4.03 million)
into four new investments and GBP2.84 million (2019: GBP0.45 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 GBP1.96 million was invested into four new investments during
the year, as detailed below: Company Business Date of Investment Amount of new
investment
(GBPm)
Premium frozen
raw dog food
Bella & Duke provider February 2020 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.
Electric vehicle
Andersen EV chargers June 2020 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.
Vegan and dairy-free
Northern Bloc ice cream producer December 2020 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.
Nursery management
Connect Childcare software December 2020 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.
Further investments during the year
A total of GBP2.84 million was invested into four existing portfolio
companies during the year, as detailed below: Company Business Date of Amount of further
Investment investment (GBPm)
Workforce
management
RotaGeek software May 2020 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.
Digital marketplace
connecting school
pupils seeking
one-to-one online
MyTutor tutoring May 2020 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.
Lighting and
interiors
Bu s ter & P unch brand September 2020 1.12
-------------------- ----------------- ---------------------
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 GBP10 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.
Seller of
proprietary
digital archiving
Preservica software September 2020 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.
Portfolio valuation movements
The portfolio generated net unrealised gains of GBP8.87 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 GBP12.94 million. The main valuation increases
were: Virgin Wines GBP3.84 million
MPB Group GBP1.43 million
Wetsuit Outlet GBP1.32 million
Parsley Box GBP1.23 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 GBP(4.07) million. The main reductions
were:
Tapas Revolution GBP(1.13) million
CGI Creative Graphics International GBP(0.95) million
Media Business Insight ("MBI") GBP(0.88) million
RotaGeek GBP(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 GBP13.71 million in proceeds, contributing
to total proceeds of GBP14.97 million during the year, as detailed below.
In summary, aggregate proceeds generated over the life of these investments
were GBP21.64 million representing a gain over original cost of GBP13.99
million.
Company Business Period of investment Total cash proceeds
over the life
of the investment
/ Multiple over
cost
Biosite Workforce management November 2016 GBP2.07 million
and secu rit y to 1.5 x cost
ser v i ces February 2020
------------------------ --------------------- --------------------
The Company sold its investment in Pattern Analytics Limited (trading
as Biosite) to ASSA ABLOY AB for GBP1.98 million. Since investment
in 2016, the investment has generated proceeds of GBP2.07 million
compared to an original investment cost of GBP1.34 million, which
is a multiple on cost of 1.5x and an IRR of 21.0%.
Auction Techno SaaS based online October 2008 to GBP9.04 million
l ogy Group auction ma rk February 2020 4.5 x cost
e t place platform
------------------------ --------------------- --------------------
The Company sold its investment in Turner Topco Limited (trading
as Auction Technology Group) to TA Associates for GBP5.28 million
(including GBP1.08 million loan interest due on completion) (realised
gain in the year: GBP1.16 million). This investment generated proceeds
of GBP9.04 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 GBP2.00 million.
Over the 11 1/2 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 October 2015 to GBP6.24 million
scanning hardware August 2020 2.5 x cost
------------------------ --------------------- --------------------
The Company sold its investment in Tovey Management Limited (trading
as Access IS) to ASSA ABLOY AB for proceeds of GBP5.32 million
(realised gain in the year: GBP1.75 million). Since investment
in 2015, the investment has generated cash proceeds of GBP6.24
million compared to an original investment cost of GBP2.47 million,
which is a multiple on cost of 2.5x and an IRR of 23.4%.
Blaze Signs Manufacturer and April 2006 to GBP1.61 million
installer of signs September 2020 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 GBP0.61 million (including GBP0.22 million
of dividends and GBP0.06 million proceeds received after the year-end)
(realised gain in the year: GBP0.04 million). Over the 14 years
this investment was held, cash proceeds of GBP1.55 million have
been received compared to original cost of GBP0.61 million, which
is a multiple of cost of 2.6x and an IRR of 13.4%.
Vectair Systems Designer and January 2006 to GBP0.83 million
distributor November 2020 8.3 x cost
of washroom products
------------------------ --------------------- --------------------
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 GBP0.48 million (realised
loss in the year: GBP(0.04) million). This investment generated
proceeds over the life of the investment of GBP0.83 million compared
to original cost of GBP0.10 million, which is a multiple of cost
is 8.3x and an IRR of 22.2%.
Bourn Bioscience In vitro fertilisation January 2014 to GBP1.85 million
clinics December 2020 1.6 x cost
------------------------ --------------------- --------------------
The Company sold its investment in Bourn Bioscience Limited to
Canadian acquirer Triangle Capital, and has received cash proceeds
of GBP1.40 million (realised gain in the year: GBP0.80 million).
This investment generated proceeds over the life of the investment
of GBP1.85 million compared to original cost of GBP1.13 million,
which is a multiple 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 GBP0.75 million from the partial realisations of
its holding in AIM listed Omega Diagnostics Group plc, generating realised
gains of GBP0.57 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 GBP0.37 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 GBP0.06 million.
Finally, consideration and a realised gain of GBP0.14 million was received
in respect of Redline Worldwide, an investment realised in a previous
year and a realised loss of GBP(0.04) million from Jablite Holdings was
recognised as this company entered liquidation, with some recovery still
anticipated. Investment Portfolio Yield 2020 2019
GBPm GBPm
Interest received in the year 2.13 1.72
Dividends received in the year 0.66 0.24
---------------------------------------------------- ------ ------
Total portfolio income in the year(1) 2.79 1.96
---------------------------------------------------- ------ ------
Portfolio value at 31 December 41.68 38.54
---------------------------------------------------- ------ ------
Portfolio Income Yield (Income as a % of Portfolio
value at
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 GBP1.08 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 2019
GBPm GBPm
------------------------------- ------- -------
Opening portfolio value 38.54 36.53
38.54 36.53
New and further investments 4.80 4.48
Disposal proceeds (14.97) (8. 14)
Net realised gains 4.44 2.31
Valuation movements 8.87 3.36
------------------------------- ------- -------
Portfolio value at 31 December 41. 68 38.54
------------------------------- ------- -------
Investment Portfolio Capital Movement 2020 2019
GBPm GBPm
------------------------------------------- -------- -------
Increase in the value of 12.94 5.30
unrealised investments
------------------------------------------- -------- -------
Decrease in the (4.07) (1.94)
value of unrealised
investments
Net increase in the value of unrealised
investments 8.87 3.36
------------------------------------------- -------- -------
Realised gains 4.52 2.31
Realised losses (0 .08) -
------------------------------------------- -------- -------
Net realised gains in the year 4.44 2.31
------------------------------------------- -------- -------
Net investment portfolio capital movement
in the year 13.31 5.67
------------------------------------------- -------- -------
New investments after the year-end
GBP0.91 million was invested into one new investment after the year-end,
as detailed below:-
Company Business Date of investment Amount of new
investment (GBPm)
Artificial intelligence
& urban traffic
Vivacity 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 GBP0.97 million was invested into four existing portfolio
companies after the year-end, as detailed below:
Company Business Date of investment Amount of further
investment (GBPm)
Ambient ready meals
targeting the over
Parsley Box 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.
Regulatory and
reporting
requirement service
Arkk Consulting 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.
Spanish restaurant
Tapas Revolution 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 December 2010 GBP1.17 million
for to
food intolerance, February 2021 5.9 x cost
auto-immune diseases
and infectious
diseases
----------------------- --------------------- --------------------
Following a further significant increase in the share price, the Company
sold its remaining investment in Omega Diagnostics Group plc for GBP0.42
million. Combined with partial realisations during the year under
review, total proceeds received over the eleven-year life of the investment
were GBP1.17 million compared to an original investment cost of GBP0.20
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 GBP1.97 per share, valuing Virgin Wines at
a market capitalisation of GBP110m. 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 GBP1.97
per share, the Company's beneficial equity investment in Virgin Wines
was valued at GBP9.12 million. This represented a significant uplift
in valuation of GBP4.64 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 GBP1.86 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
GBP26.69 million at the year-end. Of this amount, GBP4.05 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
valuation
Total cost at
at 31 Unrealised
31 December December gains/(losses) % of
2020 2020 in year % of equity portfolio
GBP GBP GBP held by value
--------------------- --------------- ---------- ----------------- ------------- -------------
Virgin Wines Holding
Company
Limited 1
Online wine 6 , 3 1
retailer 1,930,813 2,889 3,837,158 9 . 7 % 15 . 1%
--------------------- --------------- ---------- ----------------- ------------- -------------
MPB Group Limited
Online marketplace
for used
photographic e
quipm e nt 1,480,993 4,126,952 1,425,620 5 . 3 % 1 0.2 %
--------------------- --------------- ---------- ----------------- ------------- -------------
P r ese rvic a Li
mited
Seller of pr o pri
e tar
y digital ar c hi v
in g
s o ft w ar e 2,152,042 3,611,144 1, 001,002 10.9 % 8.7 %
--------------------- --------------- ---------- ----------------- ------------- -------------
End O rdin a ry
Group Limit
ed (trading as
Buster and
Punch)
I ndus tri al in
spired lig 2 , 6 4
h ti ng and 6 , 2 7
interiors retailer 1,4 96,785 2 754,240 7.8 % 6 . 3 %
--------------------- --------------- ---------- ----------------- ------------- -------------
My Tutorweb Limited
D i g it a l m
arketplace
co n nec tin g
school pupils
seeking one- t
o-one online
tutoring 2,023,042 2,476,581 453 , 5 39 8 . 2% 5.9%
--------------------- --------------- ---------- ----------------- ------------- -------------
EOTH Limited
(trading as
Equip Outdoor
Technologies)
D istributor of
branded outdoor
e quipm e nt and c
l o thing
(Rab a nd Lowe
Alpine) 951,471 2,400,632 251,840 1 . 7 % 5.8 %
--------------------- --------------- ---------- ----------------- ------------- -------------
Ma nuf a cturing
Servic
e s Inv estment
Limited (trading
as Wetsuit Outlet)
Online retailer in
t he water 2, 33 1 1 , 3 1 5
sp o rts market 2,333,102 , 110 , 232 6.4% 5.6%
--------------------- --------------- ---------- ----------------- ------------- -------------
Data Discovery
Solutions
Limited (trading as
Active
Navigation)
Provider of global
market leading file
anal
y sis s o ft w ar e
for inf
ormation
governance, secu
rit y and 2 , 20 1
compliance 1 ,100, 500 , 000 1 ,100, 500 6 . 3 % 5 . 3 %
--------------------- --------------- ---------- ----------------- ------------- -------------
Parsl ey Box Limited
Sup pli er of home
delivered,
ambient ready meals
targeting 1 , 23 3
th e ov er 60s 668,400 1,937,571 , 2 12 4.9 % 4.6%
--------------------- --------------- ---------- ----------------- ------------- -------------
Proactiv e Group
Holdings
Inc
Provider of media s
erv i
ces and investor
conferences
for companies
primaril y
listed on s eco
ndar y public
markets 755,340 1, 900,421 - 2.6% 4.6%
--------------------- --------------- ---------- ----------------- ------------- -------------
Vian Marketing
Limited (trading
as Red Paddle Co)
Design, manuf ac
tur e and
sale of stand - up
paddleboards
and w indsurfi ng s 1 , 465
a ils 789,006 , 304 285,370 10.9 % 3.5%
--------------------- --------------- ---------- ----------------- ------------- -------------
Arkk Consulting
Limited
Provider of s erv i
ces and
s o ft w ar e to
enable
organisations
to rem ain
compliant w ith
regulatory r epo
rtin g requirements 1,118,490 1,1 78,143 35,792 7.5 % 2.8 %
--------------------- --------------- ---------- ----------------- ------------- ---------------
Master Removers
Group 2019
Limited (trading as
Anthony
Ward Thomas,
Bishopsgate
and Aussie Man & Va
n)
A sp ec i a list l
o gisti
c s, stor age and
removals 1 , 044
business 348,64 1 , 97 1 259,625 6.6% 2.5%
--------------------- --------------- ---------- ----------------- ------------- ---------------
Tharst ern Group
Limited
M I S & Commercial
print
s o ft wa r e s o
luti o
ns 1,091,886 1,037,390 (69,039) 12.2 % 2.5%
--------------------- --------------- ---------- ----------------- ------------- ---------------
Media Business
Insight Holdings
Limited
A publishing and
eve nts
business focused on
t he
creative 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 e
Group
Limited
N urs ery man
agement s o
ft w ar e pr ov id
er 846,007 846,007 - 3.0 % 2.0%
--------------------- --------------- ---------- ----------------- ------------- ---------------
B ella & Duke
Limited
A premium frozen
raw dog
food provider 617,400 836,042 218,642 4.3 % 2.0%
--------------------- --------------- ---------- ----------------- ------------- ---------------
Bleach London
Holdings Limited
Hair co lourants
brand 519,672 832,878 3 1 3, 206 3.1 % 2.0%
--------------------- --------------- ---------- ----------------- ------------- ---------------
Rota G eek Limited
Workforce
management s o
ft w ar e 874,000 7 26,667 (526,952) 4.4% 1 . 7 %
--------------------- --------------- ---------- ----------------- ------------- ---------------
IP V Limited
Provider of media
asset s
o ft w ar e 619,487 619,487 - 5.5% 1 . 5%
--------------------- --------------- ---------- ----------------- ------------- ---------------
CGI Cr eative
Graphics
International
Limited
V in y l g r a phi
c s to
global a ut o m o
ti ve ,
recreation vehicle
and aerospace
markets 1,449,746 39 0 ,849 (954,059) 6 . 3 % 0.9 %
--------------------- --------------- ---------- ----------------- ------------- -------------
N orth e rn Bloc Ic
e Cream
Limited
Da ir y- fr ee ice
cream 3 0 4, 0
producer 304,050 50 - 0 . 7 % 0 . 7 %
--------------------- --------------- ---------- ----------------- ------------- -------------
Omega Diagnostics
Group plc
2
In -v itr o di ag
nosti c
s for food
intolerance, a
ut o- immu ne
diseases and
inf ec ti o us 2 0 8 , 3
diseases 50,011 266,680 55 0.2% 0.6%
--------------------- --------------- ---------- ----------------- ------------- -------------
Muller E V Limited
(trading
as Anders en E V )
Provider of premium
elec
tri c vehicle ( EV
) chargers 195,200 217,904 22,704 0 . 5% 0 . 5%
--------------------- --------------- ---------- ----------------- ------------- -------------
K udos Innovations
Limited
Online pl a tf o rm
that
provides and
promotes academic
research di s semi
n a t
io n 328,950 1 52,488 (362,884) 3 . 2% 0.4%
--------------------- --------------- ---------- ----------------- ------------- -------------
R D L Corporation
Limited
Rec ruitment co
nsultants
for th e pharm ace
uti c
al and IT industri (1 4 2, 4
es 1,000,000 151,247 6 1) 9.1% 0.4%
--------------------- --------------- ---------- ----------------- ------------- -------------
Spanish R estaurant
Group
Limited (formerly
Ibericos
Etc. Limit ed)
(trading as
Tapa s Revolution)
Spanish r e st a ur
a nt 1 39,3 1 ( 1,1 3 4,
chain 1,044,869 7 989 ) 5.8 % 0.3 %
--------------------- --------------- ---------- ----------------- ------------- -------------
Jablit e Holdings
Limited
M anuf ac tur er of
expanded
p o l y st y r ene
pr o du
c ts 376,083 49,597 - 9.1% 0.1%
--------------------- --------------- ---------- ----------------- ------------- -------------
BG Training Limited
C it y- b ase d pr
ovider
of sp e ci a list
technical
trainin g 10,625 7,969 2,656 0 .0% 0 .0%
--------------------- --------------- ---------- ----------------- ------------- -------------
Veritek Glob a l
Holdings
Limited
Maint enance of
imaging e
quipm e nt 1,620,086 - - 1 5 .4% 0 .0%
--------------------- --------------- ---------- ----------------- ------------- -------------
Book i ngTek Limited
So ft wa r e for
hotel groups 582,300 - - 3.5% 0 .0%
--------------------- --------------- ---------- ----------------- ------------- -------------
Oakheath Limited
(formerly
Super Carers) (in
members'
v o l unta ry l
iquidation)
Online pl a tf o rm
that
co nn ec ts p eo pl
e seeking
care home from
experienced
independent carers 485,730 - - 4.3 % 0 .0%
--------------------- --------------- ---------- ----------------- ------------- -------------
Racoon Int
ernational Group
Limited
S uppli e r of hair
e xt
e nsi o ns, hair
care pr
o du c ts and
trainin g 484,347 - - 8.0 % 0 .0%
--------------------- --------------- ---------- ----------------- ------------- -------------
CB Imports Group
Limit ed
(trading as Country
Baskets)
Import e r and
distributor
of a rtifi c ial
flowers,
floral sundries a
nd hom
e décor pr o d
uc ts 175,000 - - 5.8 % 0 .0%
--------------------- --------------- ---------- ----------------- ------------- -------------
4 1,2 25 98 .9
Total 32,546,834 ,31 0 8, 648,150 %
--------------------- --------------- ---------- ----------------- ------------- -------------
Former Elderstr eet -
Privat
e Equity Portfolio
--------------------- --------------- ---------- ----------------- ------------- -------------
Cashfac Li mited
Provider of v
irtual banking
ap pli ca ti o n s
o ft w
ar e s o luti o ns
to corporate 2 6 0, 1 45 1 , 3
c ustom e rs 01 86 218,661 2. 9% 1.1 %
--------------------- --------------- ---------- ----------------- ------------- -------------
Sift Group Limit ed
Developer of
business - t
o- business
internet co mmuniti 1 35 , 39
e s 1 - - 1 . 3% 0 .0%
--------------------- --------------- ---------- ----------------- ------------- -------------
Total 395,492 45 1 , 386 218,661 1.1%
--------------------- --------------- ---------- ----------------- ------------- -------------
Tota l Inv estment 4 1 ,6 8 ,8 66
Portfolio 32,942,326 7 6,6 96 ,811 1 00.0%
--------------------- --------------- ---------- ----------------- ------------- -------------
Tota l Inv estment
Portfolio
split by typ e
--------------------- --------------- ---------- ----------------- ------------- -------------
Gro w th focus ed
portfolio 32,713, 7, 0 72,71
3 22,080,980 007 5 78. 5%
--------------------- --------------- ---------- ----------------- ------------- -------------
M B O focus ed
portfolio 8, 96 3,68
3 10,861,346 9 1,7 94,096 2 1 . 5%
--------------------- --------------- ---------- ----------------- ------------- -------------
Inv estment
Adviser's Tota 4 1 ,6 8 ,8 66
l 32,942,326 7 6,6 96 ,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 How the Board manages risk
consequence
--------------- ----------------- --------------------------------------------------------------
Loss of The Company must
approval comply with * The Company's VCT qualifying status is continually
as a Venture section 274 of reviewed by the Investment Adviser.
Capital Trust the Income
Tax Act 2007
("ITA") which * The Board receives regular reports from its VCT
allows it to be Status Adviser who has been retained by the Board to
exempt from monitor the Company's ongoing compliance with the VCT
capital gains Rules.
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.
--------------- ----------------- --------------------------------------------------------------
Economic and Events such as
Political the COVID-19 * The Board monitors the portfolio as a whole to
pandemic and
resultant
restrictions (1) ensure that the Company
imposed by invests in a diversified portfolio
Government, the of companies;
impact of (2) ensure that developments
Brexit, an in the macro- economic environment
economic such as movements in interest
recession and rates are monitored and
movements in (3) With regard to COVID-19,
interest rates the Investment Adviser holds
could affect ongoing discussions with all
trading the portfolio companies to
conditions for ascertain where support is
smaller required. Cash comprises a
companies and significant proportion of
consequently the net assets of the Company,
the value of the further to the successful
Company's realisations and the fund-raise
qualifying earlier in the year giving
investments. 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 * The Board regularly reviews the Company's investment
earlier stage strategy.
unquoted small
companies
involves a * Careful selection and review of the investment
higher portfolio on a regular basis.
degree of risk
than investment
in fully listed * The Investment Adviser has provided a growing
companies. pipeline of compliant investment opportunities and
Smaller continues to strengthen its investment team.
companies often
have
limited product * The valuation of the investment portfolio and
lines, markets valuation methodologies are reviewed by the Board
or financial each quarter.
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.
--------------- ----------------- --------------------------------------------------------------
Regulatory The Company is
required to * Regulatory and legislative developments are kept
comply with the under review by the Company's solicitors and the
Companies Board.
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.
--------------- ----------------- --------------------------------------------------------------
Financial and Failure of the
operating systems * The Board carries out an annual review of the
(including internal controls in place and reviews the risks
breaches of facing the Company at each quarterly Board meeting,
cyber security) receiving control reports by exception.
at any of the
third-party
service * It reviews the performance of the service providers
providers that annually and has obtained assurance that such
the providers have controls in place to reduce the risk
Company has of breaches of their cyber security.
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.
--------------- ----------------- --------------------------------------------------------------
Market Movements in the
valuations * The Board receives quarterly valuation reports from
of the Company's the Investment Adviser.
investments
will, inter
alia, be * The Investment Adviser alerts the Board about any
connected adverse movements.
to movements in
UK Stock Market
indices as well
as affecting
the Company's
own share price
and its discount
to net asset
value.
--------------- ----------------- --------------------------------------------------------------
Asset The Company's
liquidity investments * The Board receives reports from the Investment
may be difficult Adviser and reviews the portfolio at each quarterly
to realise. Board meeting. It carefully monitors investments
where a particular risk has been identified.
--------------- ----------------- --------------------------------------------------------------
Environmental, Non-compliance
Social and with current * ESG is also taken into account when considering new
Governance and future investment proposals. The Investment Adviser monitors
Emerging Risk reporting the potential impact on investee companies of any
requirements proposed new legislation regarding environmental,
could lead to a social and governance matters and advises and adapts
fall in demand accordingly.
from investors.
That may affect
the level of * The Board recognises that climate change is an
capital the important emerging risk that the Company is taking
Company into account in their strategic planning although the
has available to Company itself has little direct impact on
meet its environmental issues. Measures have been introduced
investment to decrease the amount of travel undertaken and to
objectives. 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 ended 31 December
2020 Notes Revenue Capital Year ended 31 December
Total 2019 R evenue Capital Total
GBP GBP GBP GBP GBP GBP
Net investment portfolio 13,307, 13,307,
gains 8 - 684 684 - 5,675,164 5,675,164
2,868,
Income 3 103 - 2,868,103 2,107,357 - 2,107,357
Investment Adviser's fees 4a (309 ,827) (929 ,481) (1,239,308) (309 ,641) (928,923) (1,238,564)
Other expenses 4d (426,422) - (426,422) (451,261) - (451,261)
----------------------------- ---- ------------ ------------ --------------- ------------ ----------- -------------
Profit on ordinary
activities 14,510,
before taxation 2, 131,854 12,378,203 057 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)
----------------------------- ---- ------------ ------------ --------------- ------------ ----------- -------------
Profit for the year and total 14,406, 4,922,
comprehensive income 1,851,801 12,554,805 606 1,134,576 737 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
-------------------------------------------------------------------------------
31 December 31 December
Notes 2020 2019
GBP GBP
Fixed assets
Investments at fair value 8 41, 676,696 38,538,281
Current assets
Debtors and prepayments 403,568 183,175
Current investments 9 22,634,956 8,928,456
Cash at bank 9 4,053,536 2, 627 ,511
----------------------------------- -------------- ------------ ------------
27 , 092,060 11, 739 ,142
--------------------------------------------------- ------------ ------------
Creditors: amounts falling
due within one year (307 ,561) (242,109)
----------------------------------- -------------- ------------ ------------
Net current assets 26,784,499 11,497, 033
--------------------------------------------------- ------------ ------------
Net assets 68,461,195 50 , 035,314
--------------------------------------------------- ------------ ------------
Capital and reserves
Called up share capital 10 840,040 667,991
Share premium reserve 12,495,262 -
Capital redemption reserve 20 ,512 8, 056
R evaluation reserve 10,205,933 3,713,586
Special distributable reserve 26,563,547 35,514,889
R ealised capital reserve 16,738,215 8,935,662
R evenue reserve 1,597, 686 1, 195,130
----------------------------------- -------------- ------------ ------------
Equity Shareholders' funds 68,461,195 50 , 035,314
--------------------------------------------------- ------------ ------------
Basic and diluted net
asset value per ordinary
share 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 (Note
2020 (Note a) (Note b) b)
Notes GBP GBP GBP GBP GBP GBP GBP GBP
-------------------- --------- ------------- --------- ------------ -------------- ------------ ------------ -------------
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 GBP1,740,095 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
GBP26,563,547, GBP8,396,941 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 GBP12,534,437 for the Company.
This figure is net of issue costs of GBP320,233 and facilitation fees
of GBP145,330.
d) During the year, the Company purchased 1,245,646 of its own shares
at the prevailing market price for a total cost of GBP728,216, 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
GBP GBP GBP GBP GBP GBP GBP GBP
-------------------- --------- ------------- --------- ------------ -------------- ------------ ------------ -------------
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.
Statement of Cash Flows for the year ended 31 December 2020
--------------------------------------------------------------------------------------
Year ended
Year ended 31 December
31 December 2020 2019
Notes
GBP GBP
Cash flows from operating activities
Profit for the financial year 14,406,606 6,057,313
Adjustments for:
Net investment portfolio gains (13,307,684) (5,675,164)
Tax charge for the current year 103,451 35,383
(Increase)/decrease in debtors (220,393) 120,121
(Decrease)/increase in creditors (2,616) 33,245
-------------------------------------------
Net cash inflow from operations 979,364 570,898
Corporation tax paid (35,383) (66,529)
Net cash inflow from operating activities 943,981 504,369
Cash flows from investing activities
Sale of investments 8 14,974,305 8,136,792
Purchase of investments 8 (4,805,036) (4,475,355)
Net cash inflow from investing activities 10,169,269 3,661,437
Cash flows from financing activities
Share issued as part of Offer for
Subscription 10 13,000,000 -
Issue costs and facilitation fees
as part of Offer for subscription 10 (465,563) -
Equity dividends paid 7 (7,786,946) (12,846,457)
Purchase of own shares (728,216) (1,134,829)
------------------------------------------- ------ ------------------ -------------
Net cash inflow/(outflow) from financing
activities 4,019,275 (13,981,286)
Net increase/(decrease) in cash and
cash equivalents 15,132,525 (9,815,480)
Cash and cash equivalents at start
of year 9,555,967 19,371,447
------------------------------------------- ------ ------------------ -------------
Cash and cash equivalents at end of
year 24,688,492 9,555,967
Cash and cash equivalents comprise:
Cash at bank and in hand 9 4,053,536 2,627,511
Cash equivalents 9 20,634,956 6,928,456
------------------------------------------- ------ ------------------ -------------
The notes below form part of these Financial
Statements.
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
GBP
2019
GBP
Income from bank deposits 29 ,451 40,298
----------------------------------------------------- ---------- -----------
Income from investments
- from equities 657,891 243,975
- from overseas based OEICs 42,612 106,151
- from loan stock 2, 113,964 1, 714,938
- from interest on preference share dividend arrears 17, 770 1,995
----------------------------------------------------- ---------- -----------
2,832,237 2,067 , 059
-----------------------------------------------------
Other income 6,415 -
----------------------------------------------------- ---------- -----------
Total income 2,868, 103 2, 107 ,357
----------------------------------------------------- ---------- -----------
Total income comprises
Dividends 700,503 350 , 126
Interest 2, 161,185 1, 757,231
Other income 6,415 -
----------------------------------------------------- ---------- -----------
2,868, 103 2, 107 ,357
Total loan stock interest due but not recognised in the year was
GBP777,919 (2019: GBP422,063) 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
GBP GBP GBP GBP GBP GBP
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 GBP115,440 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 GBPnil
(2019: GBPnil).
With effect from 1 July 2020, the Investment Adviser's fee upon
the net funds raised from use of the over-allotment facility of
GBP5 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 GBP5 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 GBP341,947 (2019: GBP327,776)
during the year ended 31 December 2020, being GBP126,542 (2019:
GBP111,884) for arrangement fees, and GBP215,405 (2019: GBP215,892)
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
GBPm GBPm
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 GBP1.74 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
GBP GBP
Directors' remuneration (including NIC of GBP10,309 (2019:
GBP9,733) - 114,
Note i) 141,524 686
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
47 ,
Registrar's fees 54,145 668
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 GBP2,496 (2019: GBPnil), 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
GBP GBP GBP GBP GBP GBP
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: GBPnil).
There is no unrecognised deferred tax asset in 2020 (2019: GBPnil).
6 Basic and diluted earnings per share
2020 2019
GBP GBP
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 Pence Date Paid 2020 GBP 2019 GBP
ended 31 per
December share
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 For year Pence
holders after ended 31 per Date
the year end: Type December share paid/payable 2020 GBP 2019 GBP
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 Pence Date 2020 GBP 2019 GBP
ended 31 per share paid/payable
December
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 Unquoted Unquoted Unquoted Total
AIM equity preference loan stock
shares shares
GBP GBP GBP GBP GBP
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 GBP4,440,873 and unrealised
gains/(losses) in the year of GBP8,866,811 equal net investment
portfolio gains of GBP13,307,684 as shown on the Income Statement.
Note a) Disposals of investment portfolio companies during the year
were:
Company Type Investment Disposal Valuation Realised
Cost Proceeds at 31 gain/(loss)
December in year
2019
GBP GBP GBP GBP
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 Part
Group plc Realisation 150,017 748,520 175,020 573,500
Redline Worldwide Contingent
Limited 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 Part loan
Red Paddle Co) repayment 110,068 157,240 157,240 -
Vectair Holdings
Limited Realisation 24,732 481,967 522,139 ( 40,172)
Jablite Holdings Permanent
Limited 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 GBP8,866,811 in the year were increases of GBP3,837,158 in Virgin
Wines Holding Company Limited, GBP1,425,620 in MPB Group Limited,
GBP1,315,232 in Manufacturing Services Investment Limited (trading
as Wetsuit Outlet), GBP1,233,212 in Parsley Box Limited, and GBP1,100,500
in Data Discovery Solutions Limited (trading as Active Navigation).
These increases were partly offset by the falls of GBP1,134,989
in Spanish Restaurant Group Limited (trading as Tapas Revolution),
GBP954,059 in CGI Creative Graphics International Limited, GBP880,159
in Media Business Insight Holdings Limited, GBP526,952 in Rota Geek
Limited, and GBP362,884 in Kudos Innovations Limited.
Note c) During the year, permanent impairments of the cost of investments
have increased from GBP507,597 to GBP1,471,563 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
GBP GBP
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
GBP GBP
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 GBP12,534,437 (2019: GBPNil) 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 GBP728,216 (2019: GBP1,071,326).
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 GBP0.26 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 GBP0.01
million from BG Training Limited.
On 27 January 2021, further proceeds of GBP0.06 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 GBP0.11 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 GBP0.42 million.
On 12 February 2021, a follow-on investment of GBP0.48 million was
made into Arkk Consulting Limited, a regulatory and reporting requirement
service provider.
On 18 February 2021, a new investment of GBP0.91 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 GBP1.97 per share upon Admission, the Company's
beneficial holding in VWUK had a value of GBP9.12 million, an increase
of GBP4.64 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 GBP1.86 million, after the deduction of transaction costs
of GBP0.06 million.
On 12 March 2021, the Company made a GBP0.12 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 GBP0.14 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 GBP2.00 per share
will increase the year-end value of the Company's investment by
GBP1.70 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
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(or any other website) is incorporated into, or forms part of, this
announcement.
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END
FR UKSSRASUOUAR
(END) Dow Jones Newswires
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