TIDMMIX
RNS Number : 0344U
Mobeus Income & Growth VCT PLC
31 March 2021
MOBEUS INCOME & GROWTH VCT PLC
LEI: 213800HKOSEVWS7YPH79
ANNUAL FINANCIAL RESULTS OF THE COMPANY
FOR THE YEARED 31 DECEMBER 2020
Mobeus Income & Growth 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 30 March 2021.
You may, in due course, view the Annual Report & Financial Statements,
comprising the statutory accounts of the Company by visiting www.migvct.co.uk
.
FINANCIAL HIGHLIGHTS
As at 31 December 2020:
Net assets: GBP84.69 million
Net asset value ("NAV") per share: 67.03 pence
- Net asset value ("NAV") total return(1) per share was 19.3%(2) .
- Share price total return(1) per share was 13.7%.
- Dividends declared and paid in respect of the financial year totalled
11.00 pence per share. Cumulative dividends paid since inception in 2004
stand at 139.80 pence per share.
- GBP5.43 million was invested into three new growth capital investments
and four existing portfolio companies during the year.
- GBP10.47 million of unrealised gains were achieved in the year from
strong portfolio performance.
- The Company realised investments totalling GBP20.80 million of cash
proceeds and generated net realised gains in the year of GBP4.34 million.
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.
2 - Further details on the NAV total return are shown in the Performance
section of the Strategic Report within the Annual Report & Financial
Statements.
PERFORMANCE SUMMARY
Cumulative NAV Total return(1) performance over the last 3, 5 and 10
years is 37%, 36% and 92% respectively.
The table below shows the recent past performance of the Company's existing
class of shares for each of the last five years.
R Net NA V Share Cumulative total return
eporting assets per price per share to
date a s share (2) Shareholders
at
--------- -------------- -------------
(GBPm) p p (NAV Basis) (Share Price Dividends
Basis) paid and
proposed
in respect
of each year
(p) (p)
Cumulative
dividends
paid per share (p)
--------- ------ ----- -------- -------------- ----------- ------------ -------------
31
December
2020 84.69 67.03 57.50 139.80 206.83 197.30 11.00
--------- ------ ----- -------- -------------- ----------- ------------ -------------
31
December
2019 71.89 68.78 63.75(3) 124.80 193.58 188.55 10.00
--------- ------ ----- -------- -------------- ----------- ------------ -------------
31
December
2018 75.08 70.25 62.00 113.80 184.05 175.80 7.00
--------- ------ ----- -------- -------------- ----------- ------------ -------------
31
December
2017 69.90 71.75 63.00 108.80 180.55 171.80 16.00
--------- ------ ----- -------- -------------- ----------- ------------ -------------
31
December
2016 63.15 83.53 74.75 89.80 173.33 164.55 14.50
--------- ------ ----- -------- -------------- ----------- ------------ -------------
1 Definitions of key terms and alternative performance measures shown
above and throughout this report are shown in the Glossary of Terms in
the Annual Report.
2 Source: Source: Panmure Gordon & Co (mid-market price). The Share price
derives from the last published NAV at 30 September, adjusted for any
dividends paid in the following quarter, resulting in an adjusted NAV
of 60.69 pence per share at 31 December 2020. Applying a c.5% discount
to this figure, which is the basis on which the Company was willing to
repurchase shares at that date, gives the share price of 57.50 pence
per share.
3 The share price at 31 December 2019 has been adjusted for a 4.00 pence
dividend paid after the year-end on 8 January 2020 which was ex-div at
31 December 2019.
CHAIRMAN'S STATEMENT
I am pleased to present the annual results of Mobeus Income & Growth
VCT plc for the year ended 31 December 2020.
Overview
This year has been a very good one for Shareholder returns overall, despite
the unprecedented and significant challenges resulting from the COVID-19
outbreak. Your Company's NAV total return per share for the year was
19.3%, a very pleasing result.
Before the pandemic, the Company's year began with a successful fundraising
ensuring the Company continues to be well-funded. The good performance
achieved in 2019 initially continued with strong portfolio progress as
well as two well-timed and profitable realisations in February.
In March, substantial uncertainty and instability resulted from the COVID-19
pandemic and the UK Government's lockdown measures. A significant decline
in consumer and business confidence followed with public markets falling
sharply. The impact was an immediate reduction in portfolio values at
the March quarter end - the low point of the year. These adjustments
were only partly market related and mainly in response to the Investment
Adviser's assessment of COVID-19's potential impact on investee companies
and specific market segments.
However, greater clarity emerged as the year progressed and, for most
of the investee companies, the environment was less volatile and uncertain
than was initially assumed in March.
Over time, favourable trading conditions emerged for a number of the
technology-related companies in the portfolio, and also those companies
operating with direct to consumer business models. The valuation of the
portfolio subsequently recovered strongly and progressed further during
the latter half of the year.
Whilst the current lockdown and potential for further restrictions may
impact the portfolio going forward, 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.
Despite restrictions imposed on the ability of entrepreneurs to fund-raise
due to COVID-19, the Company has remained an active investor during the
year. Investments were made into three new portfolio companies, four
existing portfolio companies and profitable realisations were achieved
of five portfolio companies. One of these exits, Auction Technology Group,
generated the Company's highest absolute profit in its history.
Details on this investment activity and the portfolio valuation movements
are discussed in the Investment Portfolio section of my Statement as
well as in the Investment Adviser's Review below.
The Investment Adviser continues to report a healthy pipeline of investment
opportunities along with strong trading performance by most of the portfolio
companies.
Performance
The Company's NAV total return per share for the year was 19.3% (being
the closing NAV of 67.03 pence plus 15.00 pence of dividends paid in
the year, made up of 4.00 pence declared for 2019 and 11.00 pence declared
for 2020, divided by the opening NAV of 68.78 pence) (2019: 13.6%). The
share price total return for the year was 13.7% (2019: 20.5%), compared
to the NAV return of 19.3%. The difference arises because the share price
relates to the latest NAV at 30 September 2020. This is explained more
fully in the Strategic Report of 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 Board believes that the Company's performance has demonstrated both
strong resilience and further progress during this volatile year. The
valuations at the year-end reflect that many of the investee companies
have become beneficiaries of consumer behaviour changes as lockdown accelerated
the shift to online business. The Adviser believes many of these changes
have become structural.
The Company's revenue return increased to GBP3.47 million during the
year (2019: GBP1.74 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.
Dividends
A further interim dividend for the year to 31 December 2019 of 4.00 pence
per share was paid on 8 January 2020. Dividends declared and paid in
respect of the year ended 31 December 2020 total 11.00 pence (2019: 10.00
pence) per share, comprising 6.00 pence per share paid on 7 May 2020
and 5.00 pence per share paid on 17 December 2020.
The cumulative dividends paid since inception in 2004 are 139.80 pence
(2019: 128.80 pence) per share.
The Company's ongoing target of paying a dividend of at least 4.00 pence
per share in respect of each financial year has been achieved and often
exceeded. Whilst the Board still believes this dividend target is attainable,
it should be noted that the continued movement of the portfolio to a
larger share of younger growth capital investments could lead to increased
volatility, which may affect the return in any given year.
To the extent that dividends are paid other than out of income or from
gains on investments, for instance out of special distributable reserves,
Shareholders should note this may result in a reduction in NAV over the
period.
A full dividend history is contained in the Performance Data appendix
at the end of the Annual Report and on the Company's website: www. mobeus.co.uk/investor-area/
Investment portfolio
The portfolio was valued at GBP51.14 million (2019: GBP51.70 million)
at the year-end representing 124.1% of cost (2019: 116.9%). The overall
value has increased by GBP14.81 million (2019: GBP9.14 million), or 28.7%
(2019: 19.0%) on a like-for-like basis, compared to the start of the
year. This increase was comprised of a net unrealised uplift in portfolio
valuations of GBP10.47 million and GBP4.34 million in net realised gains
over the year.
COVID-19 and lockdown restrictions have been the dominant influence on
the portfolio and its valuations for most of the year. The Board liaised
closely with the Investment Adviser during this unprecedented time, to
ensure that pragmatic steps were taken to enable each portfolio company
to weather the crisis as best it could in the hope of subsequently resuming
a growth in value. All investee companies were alerted to, and some utilised,
the available government support packages. The Company initially provided
loan interest payment holidays to some portfolio companies, generating
vital cash headroom over the subsequent period.
Although some portfolio companies remain disadvantaged by the COVID-19
pandemic, it was evident in the second half of the year that a number
had actually been beneficiaries of the associated moved to online/digital
solutions.
The Company has now completed 22 new growth capital investments totalling
GBP27.58 million since the change in the VCT rules introduced in 2015.
At the year-end 65.3% (2019: 45.2%) of the portfolio was held in younger
growth capital investments, while 34.7% (2019: 54.8%) of the value of
the investment portfolio was held in more mature investments made before
the rules changed.
During the year, GBP5.43 million was invested in three new investments
and four existing portfolio companies
(analysed in the Investment Adviser's Review below and explained within
Note 8 to the Financial Statements).
The new investments, at a cost of GBP1.86 million, were:
* Andersen EV , Electric vehicle chargers: GBP0.27
million
* Northern Bloc , Vegan and plant-based ice cream
producer: GBP0.42 million
* Connect Childcare , Nursery management software
provider: GBP1.17 million
These businesses may present opportunities for further investment in
the future as they may require additional capital to achieve their plans
to expand.
In addition, four follow-on investments totalling GBP3.57 million were
made into:
* Rota Geek , Workforce management software: GBP0.57
million
* MyTutor , Digital education marketplace: GBP0.84
million
* Buster & Punch , Lighting and interiors brand:
GBP1.41 million
* Preservica , Digital archiving software: GBP0.75
million
We expect follow-on investments to continue to be a feature of the growth
capital investments as they seek to achieve scale.
Cash proceeds totalling GBP20.80 million for the year were received from
portfolio companies that were either sold, repaid loans or settled other
capital proceeds. Of this total, GBP20.15 million was received as cash
proceeds from the sales of Biosite, Auction Technology Group, Access
IS, Blaze Signs and Vectair Holdings.
Proceeds of GBP0.65 million were also received from loan repayments and
other capital proceeds.
The portfolio achieved a net increase in unrealised valuations of GBP10.47
million for the year on investments still held, with substantial increases
from Virgin Wines, MPB Group and Parsley Box partially offset by modest
valuation falls at Tapas Revolution, CGI Creative Graphics and Media
Business Insight.
After the year-end, new and further investments were made into the following
companies:
New investments:
* Vivacity , Artificial intelligence & urban traffic
control system: GBP1.16 million
* Caledonian Leisure, UK leisure and experience breaks:
GBP0.18 million
Further investments:
* Parsley Box , Ambient ready meals for the over 60s:
GBP0.33 million
* Arkk Consulting, Regulatory reporting software:
GBP0.62 million
* Bleach, Branded hair treatments: GBP0.14 million
* Tapas Revolution, Spanish restaurant chain in the
casual dining sector: GBP0.14 million
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 GBP5.86 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 4.64 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 GBP2.11 million. Again,
in isolation, this will result in a further 1.67 pence uplift in NAV
per share compared to the 31 December 2020 NAV per share contained within
this Annual Report.
Further details on these portfolio movements are contained in the Investment
Adviser's Review in the Annual Report.
Review of longer-term performance
The Board also regularly reviews the Company's total (income and capital)
return performance on both a NAV and Share Price basis compared to its
peer group. Based on the statistics prepared by Morningstar at 31 December
2020 over the last five years, the Company was ranked 2nd on a NAV total
return basis and 1st on a Share Price total return basis out of 41 generalist
VCTs, both assuming dividends are reinvested (source: AIC). Additionally,
the Company was ranked 1st on a NAV total return basis and 4th on a Share
Price total return basis, out of 30 generalist VCTs, assuming dividends
are reinvested, over the last ten years. Shareholders should note that
these figures are based on the last available published data at 30 September
2020 and do not therefore reflect the increased NAV per share in the
fourth quarter, disclosed in this Report.
Shareholders who invested in 2004 at the launch of the Company have seen
a NAV cumulative total return of 206.83 pence per share compared with
their initial investment cost of 100 pence per share, or a net cost of
60 pence per share (after initial income tax relief of 40 pence of their
investment). As part of this return, 139.80 pence per share has been
paid to Shareholders in dividends up to the year-end. This represents
an average annual yield on the initial 100 pence investment of 8.6% and
14.3% on the adjusted investment cost after income tax relief of 60.00
pence. The balance of the total return is the December 2020 NAV of 67.03
pence per share.
Share buybacks
During the year, the Company bought back and cancelled 1,423,180 shares,
allowing Shareholders who wanted to sell their shares to do so. The buybacks
represented 1.4% (2019: 2.2%) of the issued share capital of the Company
at the beginning of the year. Further details are included in the Report
of the Directors in the Annual Report.
The Company's policy is 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.
Shareholder communications
May I remind you that the Company has its own website containing useful
information for Shareholders:
www.migvct.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, the Investment Adviser is planning 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 takes ESG considerations into
account when investing and 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 it is taking these
issues seriously. 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, it will
be kept under review in light of any recommended changes.
Fraud Warnings - Boiler Room Fraud
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 of the Annual Report.
Annual General Meeting
The Annual General Meeting ("AGM") of the Company will be held at 2:00
pm on Monday, 10 May 2021. Shareholders should note that physical meetings
will still not be permitted due to the UK Government's COVID-19 restrictions
and therefore Shareholders will not be allowed to attend the AGM in person
as a precaution. In planning our AGM we have sought to prioritise the
safety and wellbeing of our Shareholders and all attendees. The AGM will
be held as a closed meeting with Shareholders able to join the meeting
as attendees by electronic means. You will be able to see the Board members
and Investment Adviser on your screen. A link to attend the meeting can
be found in the Notice of Meeting at the rear of the Annual & Financial
Statements. This link is also available on the Company's website at www.migvct.co.uk
under the red AGM bubble on the front page. You do not need to download
or have an electronic account to access the event. The meeting will also
be accessible by telephone conference call for those without a suitable
device and/or Wi-Fi connection. 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. Voting will be
conducted by way of a poll, by the quorum of members present, of all
the valid proxy votes lodged. The Board encourages Shareholders to submit
their vote by proxy either by completing and returning the form enclosed
or otherwise proxy votes may also be submitted electronically via Computershare's
Investor Centre at: www.investorcentre.co.uk/eproxy
Shareholders are also strongly advised to appoint the Chairman of the
Meeting as their proxy as any other nominated proxy may not be able to
attend the meeting and the vote would not then count.
Shareholders can also submit any questions by 4 May 2021 about the resolutions
to be passed at the AGM before the meeting, using the agm@mobeus.co.uk
email address and a response will be provided prior to the deadline for
lodging proxy votes of 6 May 2021. You can also register a question 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 widespread although
your Board considers that the Company is well positioned to continue
to adapt and respond to the most likely scenarios as can be foreseen
at present. The five successful realisations and the fundraising completed
earlier in the year gave the Company strong liquidity to support the
existing portfolio, but also to take advantage of opportunities as they
arise for new investment, like those we have seen during the year. The
year-end valuations reflect the strong performance by many of our investee
companies and a robust, adequately-funded and resilient portfolio, that
is well equipped to meet the ever-changing environment.
The results achieved for the year include valuation increases across
the portfolio, underpinned by the five successful realisations. The Investment
Adviser is seeing a good pipeline of new and interesting investment opportunities
and also of opportunities to realise investments. The COVID-19 uncertainties
and economic instability may still cause global markets and economies
to be more volatile in the short-term.
As a result of teething problems in the application of the new EU trade
agreement post Brexit, UK and European businesses in particular, will
continue to operate in a slightly uncertain trading environment for the
near future (although no material issues have been experienced by the
investee companies to date). The companies in the portfolio have been
well prepared for the impact of Brexit for some time and this seems to
be working well.
Whilst the degree of any future lockdowns or other restrictions to the
UK economy remains unclear, both the Investment Adviser and the portfolio
companies are well equipped to respond appropriately. Consequently, your
Board is cautiously optimistic about the future of the Company.
I would like to take this opportunity, once again, to thank all Shareholders
for their continued support and I hope you and your families remain healthy
and well.
Clive Boothman
Chairman
30 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 wide variety of sectors, principally
in established companies.
Investments are generally structured as part loan and part equity in
order to receive regular income and to generate capital gain 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 borrowing of 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
This has been an unprecedented year in terms of initial value decline
and the subsequent recovery and further progress. The Company's year
started well with a strong portfolio performance and two highly successful
realisations. The UK Government introduced lockdown and social distancing
measures in response to the COVID-19 pandemic in March. These measures
had an immediate and adverse impact on UK businesses, resulting in many
companies experiencing a substantial reduction in demand, restrictions
on their working practices and disruption to their supply chains. Global
markets also fell significantly at the same time. The valuations of the
portfolio companies reflected all of this, with a majority experiencing
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 in particular,
became far clearer. The 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 major disruption during this time but
a significant proportion have benefited from the structural change in
consumer purchasing habits and are now trading at or above the level
pre COVID-19. The FTSE General Retail sector now comprises over 50% of
the portfolio and all these companies have significant direct to consumer
channels, a business model that has performed very well. Most of the
portfolio has demonstrated a high degree of resilience with nearly 90%
of companies showing revenue and/or earnings progression over the previous
year. Software and other technology enabled businesses have also in the
main performed strongly and the portfolio has benefited from 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 capacity in response to demand. Several further growth capital
investments were therefore made into the existing portfolio over the
year. Mobeus continues to review the opportunities for follow-on investments
and, due to the Company's strong liquidity, is in a good position to
capitalise on these. 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 somewhat since March, the principal
driver of the rise in valuations over the recent months was strong underlying
trading performance. Although a small number of companies have clearly
struggled, they are in the minority and their impact on overall shareholder
returns has been minimal. Increase in revenues and earnings achieved
across most of the portfolio have driven the significant overall uplift
in the value of the portfolio at 31 December 2020. In two cases, this
increase in portfolio valuations at the year-end has been further validated
by post balance sheet events: 1) 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 since the December
year-end valuation, and; 2) The flotation on the AIM market of Parsley
Box, which is expected to take place on 31 March 2021, again at a price
per share that will increase the value of the Company's investment since
the 31 December year-end valuation.
The social and economic consequences of COVID-19 will be experienced
for some time to come and the practical impact of Brexit is as yet still
emerging. However, the majority of the portfolio is well prepared, in
robust shape and is comfortably placed to respond to the challenges and
opportunities that will arise.
Overall, the portfolio has demonstrated great resilience and potential
in trying times. 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 experienced
by 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 GBP5.43 million
(2019: GBP5.85 million), comprising GBP1.86 million (2019: GBP5.27 million)
into three new investments and GBP3.57 million (2019: GBP0.58 million)
into four existing investments. This level of new and follow-on investment
is pleasing given that there was effectively a 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.
Overall, the level of follow on investment has increased over the previous
year and the Investment Adviser is confident that opportunities to back
growing portfolio companies will continue.
New investments during the year
A total of GBP1.86 million was invested into three new investments during
the year, as detailed below: Company Business Date of Investment Amount of new
investment
(GBPm)
Electric vehicle
Andersen EV chargers June 2020 0.27
---------------------- -------------------- ---------------------
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 Original Equipment
Manufacturers such as Porsche, establishing an attractive niche position
in charging points for the high end EV market. The manufacturer'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 by over 350% for
its most recent financial year.
Vegan and dairy-free
Northern Bloc ice cream producer December 2020 0.42
---------------------- -------------------- ---------------------
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 presence in 2020 and saw a 60% increase in
retail sales over the year.
Nursery management
Connect Childcare software provider December 2020 1.17
---------------------- -------------------- ---------------------
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 GBP3.57 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 0.57
--------------------- ----------------- ---------------------
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 0.84
--------------------- ----------------- ---------------------
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 . 41
--------------------- ----------------- ---------------------
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 more than
65% and reaching nearly GBP10 million in 2020. Buster & Punch's products
are now sold in 99 countries via both its highly developed ecommerce
platform and direct services to consumers, trade and retailers across
the world. Buster & Punch also operates flagship showrooms in London,
Stockholm and Los Angeles. The new funding will be used for further
international expansion into the US and Asia Pacific markets.
Seller of
proprietary
digital archiving
Preservica software September 2020 0.75
----------------------- --------------------- ---------------------
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 growth in contract bookings of 68% and many key customer
wins.
Portfolio valuation movements
The portfolio generated net unrealised gains of GBP10.47 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 under 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. Details of the principal valuation increases
and reductions are explained below.
Total valuation increases were GBP15.54 million. The main valuation increases
were: Virgin Wines GBP4.85 million
MPB Group GBP1.83 million
Parsley Box GBP1.58 million
Wetsuit Outlet GBP1.55 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(5.07) million. The main reductions
were: Tapas Revolution GBP(1.35) million
CGI Creative Graphics International GBP(1.19) million
Media Business Insight GBP(1.06) million
RotaGeek GBP(0.69) million
These companies saw the most significant impact of a sudden decline in
demand for their products or services because of COVID-19. However, as
restrictions are eventually eased, a recovery is anticipated in due course.
Most 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 eight of these are from the younger growth
portfolio made since the rule change in 2015.
The year also saw portfolio companies Jablite, Oakheath (formerly Super
Carers) and CB (Country Baskets) entering voluntary liquidation and recognised
as a realised loss. These companies were struggling before the impact
of COVID-19 and valuation reductions for these companies had already
been made. As a result, there has been little impact on shareholder value
from these administration processes.
Growth capital investing involves companies which often have not achieved
profitability, and as a result, have to be measured on other metrics.
The table below shows the proportion of the portfolio that is represented
by high growth but yet to be profitable companies (often valued by reference
to revenue or gross profit multiple), compared with more mature, established
companies with a history of profitability and which can therefore be
valued on an earnings multiple:
Valuation methodology 2020 2019
GBPm GBPm
----------------------------------------------------------- --------- ------
Revenue multiple 25.55 14.14
Earnings multiple 23.50 30.94
Recent investment price 1.59 2.98
Other 0.50 -
Gross profit multiple - 3.51
Recent investment price (reviewed for impairment) - 0.13
----------------------------------------------------------- --------- ------
Total 51.14 51.70
----------------------------------------------------------- --------- ------
Note - See Glossary of terms at the end of the Annual Report & Financial
Statements for definitions of the financial performance terms in the
table above.
Portfolio Realisations
The Company realised its investments in Biosite, Auction Technology Group,
Access IS, Blaze Signs and Vectair Holdings during the year, receiving
a total of GBP20.15 million in sale proceeds, contributing to total proceeds
of GBP20.80 million received during the year, as detailed below. In summary,
aggregate proceeds and income generated over the life of these investments
were GBP35.64 million representing gains over original cost of GBP25.02
million. Company Business Period of investment Total cash proceeds
over the life
of the investment
/ Multiple over
cost
Workforce management November 2016
Biosite and secu rit y ser to GBP2.45 million
v i ces February 2020 1.5 x cost
--------------------------- --------------------- --------------------
The Company sold its investment in Pattern Analytics Limited (trading
as Biosite) to ASSA ABLOY AB for GBP2.34 million. Since investment
in 2016, the investment has generated proceeds of GBP2.45 million
compared to an original investment cost of GBP1.58 million, which
is a multiple on cost of 1.5x and an IRR of 21.0%.
Auction Techno SaaS based online October 2008 to GBP14.79 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 GBP8.64 million
(including GBP1.78 million loan interest due on completion) (total
realised gain in the year: GBP1.90 million). This investment generated
proceeds of GBP14.79 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 GBP3.27
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 GBP8.25 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 GBP7.04 million
(realised gain in the year: GBP2.32 million). Since investment
in 2015, the investment has generated cash proceeds of GBP8.25
million compared to an original investment cost of GBP3.26 million,
which is a multiple on cost of 2.5x and an IRR of 23.4%.
Blaze Signs Manufacturer and April 2006 to GBP5.50 million
installer of signs September 2020 2.8 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 GBP2.21 million (including GBP0.77 million
of dividends and GBP0.23 million proceeds received after the year-end)
(realised gain in the year: GBP0.16 million). Over the 14 years
this investment was held, cash proceeds of GBP5.50 million have
been received compared to original cost of GBP1.95 million, which
is a multiple of cost of 2.8x and an IRR of 13.9%.
Vectair Systems Designer and January 2006 to GBP4.65 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 GBP2.70 million (realised
loss in the year: GBP(0.23) million). This investment generated
proceeds over the life of the investment of GBP4.65 million compared
to original cost of GBP0.56 million, which is a multiple of cost
is 8.3x and an IRR of 22.2%.
Loan stock repayments and other gains/(losses)
During the year, proceeds of GBP0.47 million were received via loan repayments
from BookingTek, Vian Marketing (trading as Red Paddle) and Buster &
Punch, generating realised gains of GBP0.07 million.
Finally, consideration and a realised gain of GBP0.18 million was received
in respect of Redline Worldwide, an investment realised in a previous
year and a realised loss of GBP(0.06) million from Jablite Holdings was
recognised as this company entered liquidation, with some further recovery
of monies still anticipated. Investment Portfolio Yield 2020 2019
GBPm GBPm
Interest received in the year 3.03 2.17
Dividends received in the year 1.63 0.51
---------------------------------------------------- ------ ------
Total portfolio income in the year(1) 4.66 2.68
---------------------------------------------------- ------ ------
Portfolio value at 31 December 51.14 51.70
---------------------------------------------------- ------ ------
Portfolio Income Yield (Income as a % of Portfolio
value at
31 December) 9.1% 5.2%
1 Total portfolio income in the year is generated solely from investee
companies within the portfolio. See Note 3 of the Financial Statements
for all income receivable by the Company.
The increase in income was mainly due to interest of GBP1.78 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 51. 70 48.48
New and further investments 5.43 5.85
Disposal proceeds (20 .80) (11. 77)
Net realised gains 4.34 3.35
Valuation movements 10.47 5.79
---------------------------- -------- --------
Portfolio value
at 31 December 51.14 51. 70
---------------------------- -------- --------
Investment Portfolio Capital Movement 2020 2019
GBPm GBPm
------------------------------------------- -------- -------
Increase in the value of 15.54 8.07
unrealised investments
------------------------------------------- -------- -------
Decrease in the (5.07) (2.28)
value of unrealised
investments
------------------------------------------- -------- -------
Net increase in the value of unrealised
investments 10.47 5.79
Realised gains 4.63 3.35
Realised losses (0 .29) -
------------------------------------------- -------- -------
Net realised gains in the year 4.34 3.35
------------------------------------------- -------- -------
Net investment portfolio capital movement
in the year 14.81 9.14
------------------------------------------- -------- -------
New investments after the year-end
GBP1.34 million was invested into two new investments after the year-end,
as detailed below:
Company Business Date of investment Amount of new
investment
(GBPm)
Artificial
intelligence
& urban traffic
control
Vivacity system February 2021 1.16
--------------------- -------------------- --------------------
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.
UK Leisure and
experience
Caledonian Leisure breaks March 2021 0.18
--------------------- -------------------- --------------------
Caledonian Leisure works with accommodation providers, coach businesses
and other experienced break providers (such as entertainment destinations
and theme parks) to deliver to its customers UK-based leisure and
experience breaks. It comprises two brands, Caledonian Travel
(www.caledoniantravel.com)
and UK Breakaways (www.ukbreakaways.com). The domestic leisure and
experience travel market has been devastated by the COVID-19 pandemic,
but the company is well-placed to expand as lockdown and travel restrictions
are eased. This investment, as part of a series of planned investment
tranches, will help the company prepare for and capitalise on what
is expected to be strong demand for UK staycation holidays.
Further investments after the year-end
A total of GBP1.23 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 0.33
------------------------ -------------------- -------------------
Parsley Box is a UK direct to consumer supplier of home delivered,
ambient ready meals targeting 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 company has seen
a strong benefit from the COVID-19 pandemic with revenues nearly eight
times greater than at the time of the original 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.
Regulatory and
reporting
requirement service
Arkk Consulting provider February 2021 0.62
------------------------ -------------------- -------------------
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.
Bleach Hair colourants brand February 2021 0.14
------------------------ -------------------- -------------------
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.
Spanish restaurant
Tapas Revolution chain March 2021 0.14
------------------------ -------------------- -------------------
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, after 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 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 so as to capitalise on new site
acquisition opportunities once the lockdown period has ended.
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 Equity Partners LLP 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 GBP11.52 million. This represented a significant uplift
in valuation of GBP5.86 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. This increase reflects a premium generated by the strong support
received from investors in the public offer. As part of this transaction,
the Company received net proceeds of GBP2.35 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.
Environmental, Social, Governance considerations
The Investment Adviser and the Board are considering an appropriate framework
within which to assess progress on these matters within the existing
portfolio. The Investment Adviser is encouraging this matter to be a
standing agenda item at investee company board meetings. It will continue
to be an important consideration in 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 most recent imposition
and subsequent lifting of 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
30 March 2021
Investment Portfolio Summary
as at 31 December 2020
Lik e
for lik
e valuation % of equity
Total increase/ held by
book (decrease) % value funds
Date of cost V aluation over year of net advised
Market sector investment GBP'000 GBP'000 (1) assets by Mobeus(2)
---------------------- -------------------- ------------ ------- ------------- ------------------ ------------- ------------
Virgin Wines Holding
Company Limited(3)
Online wine retailer General retailers Nov-13 2,439 7 ,976 155.0% 9 .4% 42. 0%
---------------------- -------------------- ------------ ------- ------------- ------------------ ------------- ------------
MPB Group Limited
Online marketplace
for used
photographic
and video equipment General retailers Jun-16 1,900 5,294 52.8% 6.2% 23. 6%
---------------------- -------------------- ------------ ------- ------------- ------------------ ------------- ------------
Preservica Limited
Seller of
proprietary Software and
digital archiving computer
software services Dec-15 2,849 4, 780 49.0 % 5. 6% 47.9%
---------------------- -------------------- ------------ ------- ------------- ------------------ ------------- ------------
End Ordinary Group
Limited (trading as
Buster and Punch)
Industrial inspired
lighting and
interiors
retailer General retailers Mar-17 1,885 3,333 81.5% 3.9% 34.6%
---------------------- -------------------- ------------ ------- ------------- ------------------ ------------- ------------
EO TH Limited
(trading
as Equip Outdoor
Technologies)
Branded outdoor
equipment
and clothing General retailers Oct-11 1, 000 2,951 13.2% 3.5% 8.0%
---------------------- -------------------- ------------ ------- ------------- ------------------ ------------- ------------
My TutorW eb Limited
Digital marketplace
connecting school
pupils seeking
one-to-one
online tutoring Support services May-17 2,374 2,906 34.7% 3.4% 35. 1%
---------------------- -------------------- ------------ ------- ------------- ------------------ ------------- ------------
Data Discovery
Solutions
Limited (trading as
Active Navigation)
Provider of global
market leading file
analysis software
for information
governance , Software and
security computer
and compliance services Nov-19 1,413 2,826 100.0% 3.3% 28.5%
---------------------- -------------------- ------------ ------- ------------- ------------------ ------------- ------------
Parsley Bo x Limited
Supplier of home
delivered,
ambient ready meals
targeting the over
60s General retailers May-19 854 2,477 175.1% 2.9% 22. 0%
---------------------- -------------------- ------------ ------- ------------- ------------------ ------------- ------------
Proactive Group
Holdings
Inc Provider of
media
services and
investor
conferences for
companies
primarily listed on
secondary public
markets General financial Jan-18 927 2,331 0% 2.8% 11.4%
---------------------- -------------------- ------------ ------- ------------- ------------------ ------------- ------------
Manufacturing
Services
Investment Limited
(trading as W etsuit
Outlet) Online
retailer
in the water sports
market General retailers Jul-17 2, 174 2, 171 247 .9% 2. 6% 27 .5%
---------------------- -------------------- ------------ ------- ------------- ------------------ ------------- ------------
Vian Marketing
Limited
(trading as R ed P
addle Co)
Design, manufacture
and sale of stand-up
paddleboards and
windsurfing
sails L eisure goods Jul-15 1, 043 1,938 21.3% 2.3% 48.5%
---------------------- -------------------- ------------ ------- ------------- ------------------ ------------- ------------
Arkk Consulting
Limited
(trading as Arkk
Solutions)
Provider of services
and software to
enable
organisations to
remain
compliant with
regulatory Software and
reporting computer
requirements services May-19 1,446 1,524 3. 1% 1.8% 33.6%
---------------------- -------------------- ------------ ------- ------------- ------------------ ------------- ------------
Tharstern Group
Limited
Software based Software and
management computer
information systems services Jul-14 1,377 1,308 (6.2)% 1.5% 52.5%
---------------------- -------------------- ------------ ------- ------------- ------------------ ------------- ------------
Master Removers Group
2019 Limited
(trading
as Anthony Ward
Thomas,
Bishopsgate and
Aussie
Man & V an)
A specialist
logistics,
storage and removals
business Support services Dec-14 418 1,254 33.1% 1.5% 28. 1%
---------------------- -------------------- ------------ ------- ------------- ------------------ ------------- ------------
Connect Childcare
Group Limited
Provider of
childcare New
services Support services Dec-20 1, 168 1, 168 investment 1.4% 14.4%
---------------------- -------------------- ------------ ------- ------------- ------------------ ------------- ------------
Bleach L ondon
Holdings
Limited
Hair colourants
brand General retailers Dec-19 674 1, 080 60 .3% 1.3% 14.1%
---------------------- -------------------- ------------ ------- ------------- ------------------ ------------- ------------
Rota Geek Limited
W orkforce
management
software Support services A ug-18 1, 142 949 (64.5)% 1.1% 20 .3%
---------------------- -------------------- ------------ ------- ------------- ------------------ ------------- ------------
IPV Limited Software and
Provider of media computer
asset software services Nov-19 890 890 0% 1.1% 26. 6%
---------------------- -------------------- ------------ ------- ------------- ------------------ ------------- ------------
Media Business
Insight
Holdings Limited
A publishing and
events
business focused on
the creative
production
industries Media Jan-15 2,518 747 (46.9)% 0 .9% 67 .5%
---------------------- -------------------- ------------ ------- ------------- ------------------ ------------- ------------
CGI Creative Graphics
International
Limited
Vinyl graphics to
global automotive
, recreational
vehicle
and aerospace
markets General industrials Jun-14 1,808 487 (70.9)% 0.6 % 26.9%
---------------------- -------------------- ------------ ------- ------------- ------------------ ------------- ------------
Northern Bloc Ice
Cream Limited
Supplier of premium New
vegan ice cream Food and drink Dec-20 420 420 investment 0 .5% 3.6%
---------------------- -------------------- ------------ ------- ------------- ------------------ ------------- ------------
Muller EV Limited
(trading as Andersen
EV)
Provider of premium
electric vehicle Electronic
(EV) & electrical New
chargers equipment Jun-20 270 301 investment 0 .4% 2.4%
---------------------- -------------------- ------------ ------- ------------- ------------------ ------------- ------------
RDL Corporation
Limited
R ecruitment
consultant
for the
pharmaceutical
and IT industries Support services Oct-10 1,558 236 (48.5)% 0 .3% 45.2%
---------------------- -------------------- ------------ ------- ------------- ------------------ ------------- ------------
K udos Innovations
Limited Online
platform
that provides and
promotes academic
research
dissemination Support services Nov-18 421 195 (70.4)% 0 .2% 14.6%
---------------------- -------------------- ------------ ------- ------------- ------------------ ------------- ------------
Spanish R estaurant
Group Limited
(formerly
Ibericos Etc.
Limited)
(trading as Tapas
R evolution) Spanish
restaurant chain T ravel & leisure Jan-17 1,245 166 (89 .1)% 0 .2% 25. 0%
---------------------- -------------------- ------------ ------- ------------- ------------------ ------------- ------------
Jablite Holdings
Limited (in members
' voluntary
liquidation)
Manufacturer of Construction
expanded and
polystyrene products materials Apr-15 502 66 (47.2)% 0 .1 % 40 . 1%
---------------------- -------------------- ------------ ------- ------------- ------------------ ------------- ------------
V eritek Global
Holdings
Limited
Maintenance of
imaging
equipment Support services Jul-13 2, 045 - 0% 0.0 % 65. 6%
---------------------- -------------------- ------------ ------- ------------- ------------------ ------------- ------------
R acoon International
Group Limited
Supplier
of hair extensions,
hair care products
and training P ersonal goods Dec-06 1,213 - 0% 0.0 % 0.0 %
---------------------- -------------------- ------------ ------- ------------- ------------------ ------------- ------------
BookingTek Limited
Direct booking
software Software and
for hotels computer services Oct-16 688 - 0% 0.0 % 14.9%
---------------------- -------------------- ------------ ------- ------------- ------------------ ------------- ------------
Oakheath Limited
(formerly Super
Carers
Limited)(in members
' voluntary
liquidation)
Online platform that
connects people
seeking
care at home from
experienced
independent
carers Support services Mar-18 580 - 0% 0.0 % 18.7%
---------------------- -------------------- ------------ ------- ------------- ------------------ ------------- ------------
CB Imports Group
Limited
(trading as Country
Baskets)
Importer and
distributor
of artificial
flowers
and floral sundries General retailers Dec-09 350 - 0% 0.0 % 23.2%
---------------------- -------------------- ------------ ------- ------------- ------------------ ------------- ------------
Total qualifying
investments 39,591 49 ,774 58.8% (4)
---------------------- ------------------------------------------- ------------- ------------------ ------------- ------------
Non-qualifying
investments
---------------------- ------------------------------------------- ------------- -----------------------------------------------
Media Business
Insight
Limited
A publishing and
events
business focused on
the creative
production
industries Media Jan-15 764 475 (45.8)% 0.6 % 67 .5%
---------------------- -------------------- ------------ ------- ------------- ------------------ ------------- ------------
Manufacturing
Services
Investment Limited
(trading as W etsuit
Outlet) Online
retailer
in the water sports
market General retailers Jul-17 571 571 0% 0 .7% 27 .5%
---------------------- -------------------- ------------ ------- ------------- ------------------ ------------- ------------
EO TH Limited
(trading
as Equip Outdoor
Technologies)
Branded outdoor
equipment
and clothing (R ab
and L owe Alpine) General retailers Oct-11 298 324 0% 0 .4% 8.0%
---------------------- -------------------- ------------ ------- ------------- ------------------ ------------- ------------
Total non-qualifying
investments 1,633 1,370 1.7%
Total investment
portfolio 41,224 51,144 60.5%
Current asset
investments
and cash at bank(5) 33,492 33,492 39.4%
---------------------- -------------------- ------------ ------- ------------- ------------------ ------------- ------------
Total investments 74,716 84,636 99.9%
Other assets 517 0.6%
Current liabilities (465) (0.5)%
---------------------- -------------------- ------------ ------- ------------- ------------------ ------------- ------------
Net assets 84,688 100.0%
Portfolio Split by
type
Investments made prior to 2015
rule change 17,333 17,762 34.7%
Investments made after 2015 rule
change 23,891 33,382 65.3%
-------------------------------------------- ------------ ------- ------------- ------------------ ------------- ------------
41,224 51,144 100.0%
1 This percentage change in 'like for like' valuations is a comparison
of the 31 December 2020 valuations with the 31 December 2019 valuations
(or where a new investment has been made in the year, the investment
amount), having adjusted for any partial disposals, loan stock repayments
or new investments in the year.
2 The other funds advised by Mobeus include Mobeus Income & Growth 2
VCT plc, Mobeus Income & Growth 4 VCT plc and The Income & Growth VCT
plc. Details are contained in Note 9 to the accounts of the Annual Report.
3 After the year-end, this company was admitted to AIM. For further
details see Post Balance Sheet Events.
4 At 31 December 2020, the Company held more than 80% of its total investments
in qualifying holdings, and therefore complied with the VCT qualifying
investment test. For the purposes of the VCT qualifying investment test,
the Company is permitted to disregard disposals of investments for twelve
months from the date of disposal. It also has up to three years to bring
in new funds raised, before these need to be included in the qualifying
investment test.
5 Disclosed as Current asset investments and Cash at bank within Current
assets in the Balance sheet.
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
--------------- ----------------- ---------------------------------------------------------------
Economic Events such as
the impact * The Board monitors (1) the portfolio as a whole to
of leaving the ensure that the Company invests in a diversified
EU during portfolio of companies; and (2) developments in the
2020, an macro-economic environment such as movements in
economic interest rates and availability of labour under new
recession, immigration plans; and (3) the Company's cash
a movement in position ensuring it can be flexible in light of
sterling economic impacts.
or in interest
rates and
the impact of
COVID-19,
could affect
trading
conditions
for smaller
companies and
consequently the
value
of the Company's
qualifying
investments.
--------------- ----------------- ---------------------------------------------------------------
Loss of A breach of the
approval VCT Rules, * The Company's VCT qualifying status is continually
as a Venture which change on reviewed by the Board and the Investment Adviser.
Capital Trust a frequent
basis, may lead
to the * The Board receives regular reports from its VCT
Company losing Status Adviser who has been retained by the Board to
its approval monitor the VCT's compliance with the VCT Rules.
as a VCT, which
would inter
alia result in:
(1) qualifying
shareholders who
have not
held their
shares for the
designated
period having
to repay the
income tax
relief they
obtained; (2)
future dividends
paid by
the Company
being subject
to tax; and (3)
the Company
losing its
exemption from
corporation tax
on capital
gains.
--------------- ----------------- ---------------------------------------------------------------
Investment Investment in
and strategic unquoted * The Board regularly reviews the Company's Objective
small companies and Investment Policy.
involves
a higher degree
of risk * Investments are made across a number of diverse
than investment sectors to mitigate risk. Investee companies are
in fully carefully selected by the Investment Adviser for
listed recommendation to the Board. The investment portfolio
companies. is reviewed by the Board on a regular basis.
Smaller
companies often
have limited * A member of the Investment Adviser normally sits on
product lines, the investee company board.
markets
or financial
resources
and may be
dependent for
their management
on a smaller
number of key
individuals.
--------------- ----------------- ---------------------------------------------------------------
Regulatory The Company is
required * Regulatory and legislative developments are kept
to meet its under review by the Company's solicitors, its VCT
legal and Status Adviser and the Board.
regulatory
obligations as a
VCT, a
listed company
and its
own AIFM.
Failure to
comply
might result in
suspension
of the Company's
Stock
Exchange
listing,
financial
penalties, a
qualified
audit report or
loss of
its VCT status.
--------------- ----------------- ---------------------------------------------------------------
Financial Failure of the
and operating systems * The Board carries out an annual review of the
at any of the internal controls in place and reviews the risks
third-party facing the Company at each quarterly Board meeting
service and receives control reports by exception.
providers that
the Company has
contracted * It reviews the performance of the service providers
with could lead annually and has obtained assurance that such
to inaccurate providers have controls in place to reduce the risk
reporting or of breaches of their cyber security.
monitoring.
Inadequate
controls could
lead to the
misappropriation
or insecurity of
assets.
--------------- ----------------- ---------------------------------------------------------------
Valuations The majority of
and stock the Company's * The Board receives quarterly valuation reports from
market assets are the Investment Adviser.
minority
holdings
in unquoted * The Investment Adviser alerts the Board about any
companies, adverse movements.
which are
inherently
difficult
to value.
Changes in
valuations
are taken to
Profit and
Loss account, so
any inaccuracy
in valuations
will affect
both the Income
Statement
and the Balance
Sheet.
--------------- ----------------- ---------------------------------------------------------------
Asset The Company's
liquidity unquoted * The Board receives reports from the Investment
investments Adviser and reviews the portfolio at each quarterly
cannot be board meeting. It carefully monitors investments
realised where a particular risk has been identified.
in a short
timescale.
Under-performing
unquoted
investments may
be difficult to
realise
on any
timescale.
--------------- ----------------- ---------------------------------------------------------------
Market As a result of
liquidity the limited * The Board has a share buyback policy which seeks to
secondary market mitigate market liquidity risk. This policy is
in VCT reviewed at each quarterly Board meeting.
shares,
shareholders may
find it
difficult to
sell
their shares at
a price
which is close
to the net
asset value.
Whilst demand
has always been
met to
date, it may not
be possible
for the Company
to buy
back large
percentages
of the share
capital, other
than over
several years.
--------------- ----------------- ---------------------------------------------------------------
Counterparty A counterparty
may fail * The Board regularly reviews and agrees policies for
to discharge an managing these risks. Further details can be found
obligation under 'credit risk' in Note 15 to the Financial
or commitment Statements in the Annual Report.
that it has
entered into
with the
Company.
--------------- ----------------- ---------------------------------------------------------------
Key staff A partner or key
member * The Board maintains regular dialogue with the
of staff at the Investment Adviser to ensure that the team is
Investment adequately resourced.
Adviser may
leave the
organisation
or the
Investment
Adviser
may fail to
maintain
adequate
levels of
experience and
expertise in its
team.
This may have an
adverse
effect on the
standard
of service that
the Company
receives from
the Investment
Adviser and
therefore the
performance of
the Company.
--------------- ----------------- ---------------------------------------------------------------
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 reporting the potential impact on investee companies of any
Risk requirements proposed new legislation regarding environmental,
could lead to a social and governance matters and advises and adapts
fall in accordingly.
demand from
investors.
That may affect
the level * The Board recognises that climate change is an
of 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 reduce the cost and environmental impact of
objectives. providing paper copies of Shareholder correspondence.
--------------- ----------------- ---------------------------------------------------------------
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
Clive Boothman
Chairman
30 March 2021
FINANCIAL STATEMENTS
Income Statement for the year ended 31 December 2020
-------------------------------------------------------------------------------------------------------------
Year ended 31 December Year ended 31 December
2020 R evenue Capital 2019 R evenue Capital
Total Total
Notes GBP GBP GBP GBP GBP GBP
Net
investment
portfolio 14,811, 14,811,
gains 8 - 634 634 - 9 ,144,246 9 ,144,246
4,754, 4,754,
Income 3 700 - 700 2,854,837 - 2,854,837
Investment
Adviser's
fees 4a (423,839) (1,271,516) (1, 695,355) (406,306) (1,218,918) (1, 625,224)
Other (411, (411,
expenses 4c (424,396) - (424,396) 005) - 005)
------------ ----- ------------ ------------- ------------- ------------- -------------- -------------
Profit on
ordinary
activities
before 13,540
taxation 3,906,465 ,118 17 ,446,583 2, 037,526 7 ,925,328 9,962,854
Taxation on
profit on
ordinary (191,
activities 5 (432,618) 241,588 030) (293,485) 231,594 (61,891)
------------ ----- ------------ ------------- ------------- ------------- -------------- -------------
Profit for the
year and total
comprehensive 13,781, 1, 744, 9,900
income 3,473,847 706 17 ,255,553 041 8,156,922 ,963
------------------- ------------ ------------- ------------- ------------- -------------- -------------
Basic and
diluted
earnings
per
ordinary
share 7 2.76p 10.97p 13.73p 1. 65p 7 .71p 9.36p
------------ ----- ------------ ------------- ------------- ------------- -------------- -------------
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 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 better to 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. 5153931
-------------------------------------------------------------------------------
31 December 31 December
Notes 2020 2019
GBP GBP
Fixed assets
Investments at fair value 8 51,144,184 51, 703, 161
Current assets
Debtors and prepayments 517,277 225,562
Current asset investments 9 30 ,371,198 12,914,124
Cash at bank and in hand 9 3,120 ,539 7,261,618
----------------------------------- -------------- ------------ ------------
34, 009 ,014 20 ,401,304
--------------------------------------------------- ------------ ------------
Creditors: amounts falling
due within one year (464, 682) (216, 090)
----------------------------------- -------------- ------------ ------------
Net current assets 33,544,332 20 ,185,214
--------------------------------------------------- ------------ ------------
Net assets 84,688,516 71,888,375
--------------------------------------------------- ------------ ------------
Capital and reserves
Called up share capital 10 1,263,366 1, 045,265
Capital redemption reserve 25,536 11,304
Share premium reserve 14,397 ,509 -
R evaluation reserve 12,498, 006 8,719, 606
Special distributable reserve 27,415,880 45, 731,919
R ealised capital reserve 26,927 ,746 14,528,747
R evenue reserve 2,160,473 1,851,534
----------------------------------- -------------- ------------ ------------
Equity Shareholders' funds 84,688,516 71,888,375
--------------------------------------------------- ------------ ------------
Basic and diluted net
asset value per ordinary
share 11 67 . 03p 68.78p
--------------------------- ---------------------- ------------ ------------
The Notes below form part of these Financial Statements.
The Financial Statements were approved and authorised for issue by the
Board of Directors on 30 March 2021 and were signed on its behalf by
Clive Boothman, Chairman.
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 (Note (Note
2020 a) b) b)
Notes GBP GBP GBP GBP GBP GBP GBP GBP
-------------------- ---------- ----------- ------------- ------------ -------------- ----------- ------------ -------------
At 1 January
2020 1,045,265 11,304 - 8,719,606 45,731,919 14,528,747 1,851,534 71,888,375
Comprehensive
income for
the year
Profit for
the year - - - 10,471,413 - 3,310,293 3,473,847 17,255,553
Total
comprehensive
income for
the year - - - 10,471,413 - 3,310,293 3,473,847 17,255,553
--- ----------- ------------- -------------- -----------
Contributions
by and
distributions
to owners
Shares issued
via Offer
for
Subscription
(Note c) 10 232,333 - 14,767,667 - - - 15,000,000
Issue costs
and
facilitation
fees on Offer
for
Subscription
(Note c) 10 - - (370,158) - (152,153) - (522,311)
Shares bought
back (Note
d) 10 (14,232) 14,232 - - (756,637) - (756,637)
Dividends
paid 6 - - - - (15,011,556) - (3,164,908) (18,176,464)
Total
contributions
by and
distributions
to owners 218,101 14,232 14,397,509 - (15,920,346) - (3,164,908) (4,455,412)
--- ----------- ------------- -------------- -----------
Other
movements
Realised
losses
transferred
to special
reserve (Note
a) - - - - (2,395,693) 2,395,693 -
Realisation
of previously
unrealised
gains - - - (6,693,013) - 6,693,013 -
Total other
movements - - - (6,693,013) (2,395,693) 9,088,706 - -
--- ----------- ------------- -------------- -----------
At 31 December
2020 1,263,366 25,536 14,397,509 12,498,006 27,415,880 26,927,746 2,160,473 84,688,516
--- ----------- ------------- -------------- -----------
Notes
a) The purpose of this reserve is to fund market purchases of the Company's
own shares, to write off existing and future losses and for any other
corporate purpose. The transfer of GBP2,395,693 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 GBP27,415,880, GBP3,210,394 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 shown on the Balance Sheet.
c) Under the Company's Offer for Subscription launched on 25 October
2019, 23,233,293 Ordinary Shares were allotted between 8 January 2020
and 2 April 2020, raising net funds of GBP14,477,689 for the Company.
This figure is net of issue costs of GBP370,158 and facilitation fees
of GBP152,153.
d) During the year, the Company purchased 1,423,180 of its own shares
at the prevailing market price for a total cost of GBP756,637, which
were subsequently cancelled. This differs to the figure shown in the
cash flow statement by GBP44,114 which was a creditor at the year-end.
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 1,068,659 32,191 43,644,698 5,285,632 12,681,614 8,818,475 3,546,713 75,077,982
Comprehensive
income for
the year
Profit for
the year - - - 5,793,216 - 2,363,706 1,744,041 9,900,963
Total
comprehensive
income for
the year - - - 5,793,216 - 2,363,706 1,744,041 9,900,963
--- ----------- ------------- -------------- -----------
Contributions
by and
distributions
to owners
Shares issued
under Offer
for
Subscription 363 - 24,637 - - - - 25,000
Shares bought
back (23,757) 23,757 - - (1,492,825) - - (1,492,825)
Dividends
paid - - - - (8,183,525) - (3,439,220) (11,622,745)
Total
contributions
by and
distributions
to owners (23,394) 23,757 24,637 - (9,676,350) - (3,439,220) (13,090,570)
--- ----------- ------------- -------------- -----------
Other
movements
Cancellation
of Share
Premium
account - (44,644) (43,669,335) - 43,713,979 - - -
Realised
losses
transferred
to special
reserve - - - - (987,324) 987,324 - -
Realisation
of previously
unrealised
appreciation - - - (2,359,242) - 2,359,242 - -
Total other
movements - (44,644) (43,669,335) (2,359,242) 42,726,655 3,346,566 - -
--- ----------- ------------- -------------- -----------
At 31
December
2019 1,045,265 11,304 - 8,719,606 45,731,919 14,528,747 1,851,534 71,888,375
=============== === ========== =========== ============= ============ ============== =========== ============ =============
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 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.
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
8), 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 and 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.
This reserve will also be charged any facilitation payments to financial
advisers, which arose as part of the Offer for Subscription.
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;
-- 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, as well as 25% of the Investment Adviser fee together
with the related tax effect, as well as income dividends paid that
are classified as revenue in nature.
The Notes below form part of these Financial Statements.
Statement of Cash Flows for the year ended 31 December 2020
------------------------------------------------------------------------------------
Year ended Year ended
31 December 2020 31 December 2019
Notes GBP GBP
Cash flows from operating activities
Profit for the financial year 17,255,553 9,900,963
Adjustments for:
Net investment portfolio gains (14,811,634) (9,144,246)
Tax charge for current year 5 (191,030) 61,891
(Increase)/decrease in debtors (291,749) 285,660
Increase/(decrease) in creditors
and accruals 75,198 (17,589)
-------------------------------------- ------ ----------------- -----------------
Net cash inflow from operations 2,418,398 1,086,679
Corporation tax paid (61,716) (108,482)
-------------------------------------- ------ ----------------- -----------------
Net cash inflow from operating
activities 2,356,682 978,197
Cash flows from investing activities
Acquisitions of investments 8 (5,433,357) (5,853,554)
Disposals of investments 8 20,803,968 11,772,421
Decrease/no change in bank deposits
with a maturity over three months 384
-------------------------------------- ------
Net cash inflow from investing
activities 15,370,995 5,918,867
Cash flows from financing activities
Shares issued as part of Offer
for subscription 10 15,000,000 25,000
Issue costs and facilitation fees
as part of Offer for subscription 10 (522,311) -
Equity dividends paid 6 (18,176,464) (11,622,745)
Share capital bought back 10 (712,523) (1,615,367)
-------------------------------------- ------ -----------------
Net cash outflow from financing
activities (4,411,298) (13,213,112)
Net increase/(decrease) in cash
and cash equivalents 13,316,379 (6,316,048)
Cash and cash equivalents at start
of year 19,170,060 25,486,108
-------------------------------------- ------ ----------------- -----------------
Cash and cash equivalents at end
of year 32,486,439 19,170,060
Cash and cash equivalents comprise:
Cash at bank and in hand 9 29,365,900 11,908,442
Cash equivalents 9 3,120,539 7,261,618
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 and Growth VCT plc is a public limited company incorporated
in England, registration number 5153931. 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 at the
start of 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 Annual
Report.
After performing the necessary enquiries, the Directors have undertaken
an assessment of the Company's ability to meet its liabilities as
they fall due. The Company has significant cash and liquid resources
and no external debt or capital commitments. The Company's cash flow
forecasts, which consider levels of anticipated new and follow on
investment, as well as investment income and annual running cost
projections, are discussed at each quarterly Board meeting and, in
particular, have been considered in light of the ongoing impact of
the COVID-19 pandemic. The Directors have also received assurances
that the Company's key suppliers' ability to continue to service
the Company has not been materially impacted by the COVID-19 pandemic.
Following this assessment, the Directors have a reasonable expectation
that the Company will have adequate resources to continue to meet
its liabilities for at least 12 months from the date of these Financial
Statements. The Directors therefore consider the preparation of these
financial statements on a going concern basis to be appropriate.
3 Income
Dividends receivable on quoted equity shares are brought into account
on the ex-dividend date. Dividends receivable on unquoted equity
shares are brought into account when the Company's right to receive
payment is established and there is no reasonable doubt that payment
will be received.
Interest income on loan stock is accrued on a daily basis. Provision
is made against this income where recovery is doubtful or where it
will not be received in the foreseeable future. Where the loan stocks
only require interest or a redemption premium to be paid on redemption,
the interest and redemption premium is recognised as income or capital
as appropriate once redemption is reasonably certain. When a redemption
premium is designed to protect the value of the instrument holder's
investment rather than reflect a commercial rate of revenue return
the redemption premium is recognised as capital. The treatment of
redemption premiums is analysed to consider if they are revenue or
capital in nature on a company by company basis. Accordingly, the
redemption premium recognised in the year ended 31 December 2020
has been classified as capital and has been included within gains
on investments.
2020 2019
GBP GBP
Income from bank deposits 14,334 29,674
------------------------------------------------------ ---------- ----------
Income from investments
- from equities 1,628,784 505,401
- from OEIC funds 70,175 151,532
- from loan stock 2,967,870 2,161,352
- from interest on preference share dividend arrears 64,840 6,878
------------------------------------------------------ ---------- ----------
4,731,669 2,825,163
Other income 8,697 -
------------------------------------------------------ ---------- ----------
Total income 4,754,700 2,854,837
------------------------------------------------------ ---------- ----------
Total income comprises
Dividends 1,698,959 656,933
Interest 3,047,044 2,197,904
Other income 8,697 -
4,754,700 2,854,837
------------------------------------------------------ ---------- ----------
Total loan stock interest due but not recognised in the year was
GBP979,270 (2019: GBP580,811), 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 realisation of one investee
company whose interest was only recognised upon exit.
4 Investment Adviser's fees and performance fees
All expenses are accounted for on an accruals basis.
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.
a) Investment Adviser's fees and performance fees
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 423,839 1,271,516 1,695,355 406,306 1,218,918 1,625,224
Under the terms of a revised investment management agreement dated
20 May 2010 (amended and restated on 9 November 2016), Mobeus Equity
Partners LLP ("Mobeus") provides investment advisory, administrative
and company secretarial services to the Company, for a fee of 2%
per annum of closing net assets, paid in advance, calculated on a
quarterly basis by reference to the net assets at the end of the
preceding quarter, plus a fixed fee of GBP134,168 per annum, the
latter inclusive of VAT and subject to annual increases in RPI. In
2013, Mobeus agreed to waive such further increases due to indexation,
until otherwise agreed with the Board.
The Investment Adviser's fee includes provision for a cap on expenses
excluding irrecoverable VAT and exceptional items set at 3.6% 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 the use of the overallotment facility
of GBP5 million under the 2019/20 Offer is reduced to 1% from 2%
per annum, for one year. Between 1 April 2018 and 31 March 2019,
the Investment Adviser's fee upon the net funds raised from the use
of the overallotment facility of GBP10 million under the 2017/18
Offer was reduced to 1% from 2% 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 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 GBP415,064 during the year ended 31 December
2020 (2019: GBP425,708), being GBP270,534 (2019: GBP146,336) for
arrangement fees and GBP144,530 (2019: GBP279,372) 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
applicable to the Company which applied at the time of each investment.
These figures are not part of these Financial Statements.
Incentive agreement
Under the Incentive Agreement dated 9 July 2004, and a variation
of this agreement dated 20 May 2010, the Investment Adviser is entitled
to receive an annual performance-related incentive fee of 20% of
the dividends paid in a year in excess of a "Target Rate" comprising
firstly, an annual dividend paid in a year target which started at
6.00 pence per share on launch (indexed each year for RPI) and secondly
a requirement that any shortfall of cumulative dividends paid in
each year beneath the cumulative annual dividend target is carried
forward and added to the Target Rate for the next accounting period.
Any excess of cumulative dividends paid above the cumulative annual
dividend target is not carried forward, whether an incentive fee
is payable for that year or not. Payment of a fee is also conditional
upon the daily weighted average Net Asset Value ("NAV") per share
throughout such year equalling or exceeding the daily weighted average
Base NAV per share throughout the same year. The performance fee
will be payable annually.
At 31 December 2020, the annual dividend target is 8.11 pence per
share and as cumulative dividends paid were 15.00 pence, this target
was met. However, the average NAV per share was 61.04 pence for the
year, which was less than the average base NAV per share for the
year of 87.85 pence. Accordingly, no performance incentive fee is
payable for the year (2019: nil).
b) Offer for Subscription fees
2020 2019
GBPm GBPm
Funds raised by MIG VCT 14.48 -
---------------------------------------------------------------------- ------ -----
Offer costs payable to Mobeus at 3.00% of funds raised by the Company 0.45 -
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.
c) 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 GBP6,852 (2019:
GBP7,916)) -
note a) 111,852 112,916
IFA trail commission 98,888 75,439
Broker's fees 3,600 14,400
Auditor's fees - Audit of Company (excluding VAT) 30,084 29,213
- audit related assurance services - note b) (excluding VAT) 6,868 6,663
- tax compliance services - note b) (excluding VAT) - 1,845
Registrar's fees 44,356 55,221
Printing 61,709 33,095
Legal & professional fees 6,654 24,501
VCT monitoring fees 9,000 9,000
Directors' insurance 6,225 6,644
Listing and regulatory fees 32,628 31,571
Sundry 9,200 10,497
Running costs 421,064 411,005
-------------------------------------------------------------------- -------- --------
Provision against loan interest receivable (note c) 3,332 -
Other expenses 424,396 411,005
-------------------------------------------------------------------- -------- --------
Notes:
a) Directors' remuneration is a related party transaction, see analysis
of Directors' fees payable and their interests in the shares of the
Company in the Directors' Remuneration Report within the Annual Report,
which excludes NIC above. The key management personnel are the three
non-executive Directors. The Company has no employees. There were
no amounts outstanding and due to the Directors at 31 December 2020
(2019: GBPnil).
b) The audit-related assurance services are in relation to certain
agreed procedures in respect 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 2019 only, BDO carried out iXBRL services on behalf
of the Company, and was therefore shown as part of tax compliance
services above. The preparation of the Company's Corporation tax
return (for both years) and iXBRL services (for the current year)
were carried out elsewhere, and by two separate firms.
c) Provision against loan interest receivable above relates to an
amount of GBP3,332 (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 realised capital reserve 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.
Tax relief relating to Investment Adviser fees is allocated between
revenue and capital where such relief can be utilised. The Company
is an Investment Trust and Investment Trust companies are exempt
from tax on capital gains if they meet the HMRC criteria set out
in section 274 of the ITA.
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 432,618 (241,588) 191,030 293,485 (231,594) 61,891
------------------ ---------- ------------ ------------ ---------- ------------ ------------
Total current tax
charge/(credit) 432,618 (241,588) 191,030 293,485 (231,594) 61,891
------------------ ---------- ------------ ------------ ---------- ------------ ------------
Corporation tax
is based on a
rate of 19.00%
(2019: 19.00%)
b) Profit on
ordinary
activities
before tax 3,906,465 13,540,118 17,446,583 2,037,526 7,925,328 9,962,854
Profit on
ordinary
activities
multiplied by
main company
rate of
corporation
tax in the UK of
19.00% (2019:
19.00%) 742,228 2,572,622 3,314,850 387,129 1,505,813 1,892,942
Effect of:
UK dividends (309,469) - (309,469) (96,026) - (96,026)
Net investment
portfolio gains
not taxable - (2,814,210) (2,814,210) - (1,737,407) (1,737,407)
Expenditure not
allowable for
tax purposes - - - 2,382 - 2,382
Overprovision in
prior period (141) - (141) - - -
Actual current
tax charge 432,618 (241,588) 191,030 293,485 (231,594) 61,891
------------------ ---------- ------------ ------------ ---------- ------------ ------------
Deferred taxation
No provision for deferred taxation has been made on potential capital
gains due to the Company's current status as a VCT under section
274 of the ITA and the Directors' intention to maintain that status.
6 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 17 May 2019 - 1,854,366
Final Capital 2018 3.25p* 17 May 2019 - 3,443,822
20 September
Interim Income 2019 1.50p 2019 - 1,584,854
20 September
Interim Capital 2019 2.50p* 2019 - 2,641,423
06 December
Interim Capital 2019 2.00p* 2019 - 2,098,280
08 January
Interim Capital 2019 4.00p* 2020 4,183,502 -
Interim Capital 2020 6.00p* 07 May 2020 7,665,588 -
17 December
Interim Income 2020 2.50p 2020 3,164,908 -
17 December
Interim Capital 2020 2.50p* 2020 3,164,908 -
Dividends refunded in
the year* (2,442) -
-----------
18,176,464 11,622,745
----------------------------------- ------- -------------- ----------- -----------
Proposed distributions to equity holders at
the year-end: Date payable
08 January
Interim Capital 2019 4.00p* 2020 - 4,183,502
- 4,183,502
* - This dividend was paid out of the Company's Special distributable
reserve.
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 259 of the ITA concerning the Company not retaining more
than 15% of its income from shares and securities, is 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 3,473,847 1,744,041
------------------------------------------------ -------------- ---------- ----------
20 September
Interim Income 2019 1.50p 2019 - 1,584,854
17 December
Interim Income 2020 2.50p 2020 3,164,908 -
----------
Total income dividends
for the year 3,164,908 1,584,854
7 Basic and diluted earnings per share
2020 2019
GBP GBP
Total earnings after taxation: 17,255,553 9,900,963
Basic and diluted earnings per share (Note a) 13.73p 9.36p
---------------------------------------------------------- ------------- ------------
Revenue earnings from ordinary activities after taxation 3,473,847 1,744,041
Basic and diluted revenue earnings per share (Note b) 2.76p 1.65p
---------------------------------------------------------- ------------- ------------
Net investment portfolio gains 14,811,634 9,144,246
Capital Investment Adviser fees less taxation ( 1,029,928) ( 987,324)
Total capital earnings 13,781,706 8,156,922
---------------------------------------------------------- ------------- ------------
Basic and diluted capital earnings per share (Note c) 10.97p 7.71p
---------------------------------------------------------- ------------- ------------
Weighted average number of shares in issue in the year 125,685,147 105,785,777
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.
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:-
i) 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.
ii. 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.
iii. 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:
Unquoted ordinary Unquoted Unquoted Total
shares preference Loan stock
shares
GBP GBP GBP GBP
Cost at 31 December
2019 23,351,076 27,108 20,845,314 44,223,498
Net unrealised
gains/(losses) at 31
December 2019 8,829,094 312 (109,800) 8,719,606
Permanent impairment
in value of
investments as at 31
December 2019 (1,213,033) - (26,910) (1,239,943)
---------------------- --------------------- ------------ ------------ -------------
Valuation at 31
December 2019 30,967,137 27,420 20,708,604 51,703,161
Purchases at cost 3,478,736 599,800 1,354,821 5,433,357
Sale proceeds (note
a) (13,738,711) (25,511) (7,039,746) (20,803,968)
Reclassification at
value (609,459) 609,459 - -
Net realised
gains/(losses) on
investments (note a) 4,255,538 (302) 84,985 4,340,221
Net unrealised
gains/(losses) on
investments (note b) 13,471,270 57,016 (3,056,873) 10,471,413
---------------------- --------------------- ------------ ------------ -------------
Valuation at 31
December 2020 37,824,511 1,267,882 12,051,791 51,144,184
Cost at 31 December
2020 23,685,698 1,185,039 16,354,239 41,224,976
Net unrealised
gains/(losses) at 31
December 2020 16,717,309 83,145 (4,302,448) 12,498,006
Permanent impairment
in cost of
investments as at 31
December 2020 (note
c) (2,578,496) (302) - (2,578,798)
---------------------- --------------------- ------------ ------------ -------------
Valuation at 31
December 2020 37,824,511 1,267,882 12,051,791 51,144,184
Net realised gains/(losses) on investments of GBP4,340,221 together
with net unrealised gains/(losses) on investments of GBP10,471,413
equal net investment portfolio gains of GBP14,811,634 as shown on
the Income Statement.
Note a) Disposals of investment portfolio companies during the year
were:
Valuation
at 31 Realised
Investment Disposal December gain/(loss)
Type cost proceeds 2019 in year
GBP GBP GBP GBP
Tovey Management
Limited
(trading as Access
IS) Realisation 3,263,682 7,037,568 4,720,481 2,317,087
Turner Topco Limited
(trading as Auction
Technology Group) Realisation 2,501,087 6,856,083 4,957,044 1,899,039
Redline Worldwide Contingent
Limited consideration - 183,343 - 183,343
Blaze Signs Holdings
Limited Realisation 491,797 1,212,192 1,054,473 157,719
BookingTek Limited Loan repayment 82,619 65,169 - 65,169
H Realisations (2018)
Limited (formerly
Hemmels Limited) Realisation 26,910 2,366 - 2,366
Vectair Holdings
Limited Realisation 138,574 2,700,319 2,925,531 (225,212)
Pattern Analytics
Limited
(trading as Biosite) Realisation 1,583,521 2,340,857 2,340,857 -
End Ordinary Group
Limited
(trading as Buster &
Punch) Loan repayment 198,133 198,133 198,133 -
Vian Marketing
Limited
(trading as Red
Paddle Co) Loan repayment 145,557 207,938 207,938 -
Jablite Holdings Permanent
Limited impairment - - 59,290 (59,290)
Vectair Holdings
Limited Realisation 138,574 2,700,319 2,925,531 (225,212)
---------------------- --------------- ----------- ----------- ----------- ------------
8,431,880 20,803,968 16,463,747 4,340,221
-------------------------------------- ----------- ----------- ----------- ------------
Note b: The major components of the net increase in unrealised valuations
of GBP10,471,413 in the year were increases of GBP4,847,782 in Virgin
Wines Holding Company Limited, GBP1,828,742 in MPB Group Limited,
GBP1,576,387 in Parsley Box Limited, GBP1,547,274 in Manufacturing
Services Investment Limited (trading as Wetsuit Outlet), and GBP1,413,000
in Data Discovery Solutions Limited (trading as Active Navigation).
These increases were partly offset by falls of GBP1,352,880 in Spanish
Restaurant Group Limited (trading as Tapas Revolution), GBP1,189,515
in CGI Creative Graphics International Limited, GBP1,061,023 in Media
Business Insight Holdings Limited, GBP688,531 in Rota Geek Limited
and GBP463,989 in Kudos Innovations Limited.
Note c: During the year, permanent impairments of the cost of investments
have increased from GBP1,239,943 to GBP2,578,798 due to the permanent
impairment of three investee companies, partially offset by the disposal
of one investee company which had been permanently impaired previously.
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 29,365,900 11,908,442
Cash equivalents per Statement of Cash Flows 29,365,900 11,908,442
Bank deposits that mature after three months but are not
immediately repayable 1,005,298 1,005,682
---------------------------------------------------------- ----------- -----------
Current asset investments 30,371,198 12,914,124
---------------------------------------------------------- ----------- -----------
Cash at bank 3,120,539 7,261,618
10 Called up share capital
2020 2019
GBP GBP
Allotted, called-up and fully paid:
Ordinary Shares of 1p each: 126,336,620 (2019: 104,526,507) 1,263,366 1,045,265
------------------------------------------------------------- ---------- ----------
Under the Offer for Subscription launched on 25 October 2019 a total
of 23,233,293 (2019: 36,295) ordinary shares were allotted at an
average effective offer price of 64.56 pence per share, raising net
funds of GBP14,477,689 (2019: GBP25,000).
During the year the Company purchased 1,423,180 (2019: 2,375,656)
of its own Ordinary shares for cash (representing 1.4% (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 GBP756,637 (2019: GBP1,492,825).
These shares were subsequently cancelled by the Company. This differs
to the figure shown in the Statement of Cash Flows of GBP712,523
by GBP44,114 which is included in creditors at the year-end.
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 126,336,620 (2019: 104,526,507) 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 GBP0.33 million was
made into Parsley Box Limited, a supplier of home delivered ambient
ready meals targeting the over 60s.
On 27 January 2021, further proceeds of GBP0.23 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 GBP0.14 million was
made into Bleach London Holdings Limited, a hair colourants brand.
On 12 February 2021, a follow-on investment of GBP0.62 million was
made into Arkk Consulting Limited, a regulatory and reporting requirement
service provider.
On 18 February 2021, a new investment of GBP1.16 million was made
into Vivacity Labs Limited, an artificial intelligence & urban traffic
control system.
Virgin Wines admission to AIM
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 5,846,197 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 GBP11.52 million, an increase
of GBP5.86 million over the value of the equity at the year-end,
and represented 10.47% 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 GBP2.35 million, after the deduction of transaction costs
of GBP0.07 million.
On 12 March 2021, the Company made a GBP0.14 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 GBP0.18 million was made into
Caledonian Leisure Limited, a travel & leisure company specialising
in providing UK based, value short breaks and holidays.
On 26 March 2021, 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 GBP2.11 million.
13 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.
14 Annual Report & Financial Statements
The Annual Report & Financial Statements will be published on the
Company's website at www.migvct.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.
15 Annual General Meeting
The Company's next Annual General Meeting will be held on Monday,
10 May 2021 as a virtual meeting a t the f ollowing address : mobeusvctAGM.co.uk
, the link if also available on the Company's website at: www.migvct.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 .
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END
FR JMMLTMTIJBFB
(END) Dow Jones Newswires
March 31, 2021 02:00 ET (06:00 GMT)
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