TIDMSUPP
RNS Number : 5077A
Schroder UK Public Private Tst plc
30 September 2020
30 September 2020
Half Year Report
Schroder UK Public Private Trust plc hereby submits its Half
Year Report for the six months ended 30 June 2020 as required by
the Financial Conduct Authority's Disclosure Guidance and
Transparency Rule 4 .2.
The Half Year Report will shortly be available to download from
the Company's webpages. Please click on the following link to view
the document:
http://www.rns-pdf.londonstockexchange.com/rns/5077A_1-2020-9-29.pdf
The Company has submitted a copy of its Half Year Report to the
National Storage Mechanism and it will shortly be available for
inspection at
https://data.fca.org.uk/#/nsm/nationalstoragemechanism .
Enquiries:
Gareth Faith
Schroder Investment Management Limited Tel: 020 7658 3847
__________________________________________________________________________________________________________
Half Year Report and Accounts for the six months ended 30 June
2020
Chair's Statement
During the six month period to 30 June 2020 the net asset value
fell 8.1% from 49.46p per share to 45.44p per share. The share
price fell from 38.35p to 25.50p in the same period. However, it
has shown signs of recovery since the end of the period and the
current price is 27.68p (as at 28 September).
Since 31 March, downwards valuations have stabilised and whilst
the NAV is down 8.1% since the 31 December year end, since 1 April
the NAV has declined by 1.5%. There have also been some positive
developments in individual stocks. Detailed analysis of changes in
valuation, updates on holdings and the outlook may be found in the
Portfolio Managers Review.
Gearing
During the period, net debt decreased by GBP7.2 million, and as
at 30 June 2020, gearing stood at 25.1% of NAV (net debt of
GBP103.5 million). The board will continue to work with Schroders
to reduce this level of gearing.
Shareholder engagement
Although the Company's AGM was held behind closed doors due to
the government restrictions on public gatherings during the
pandemic, we arranged a webinar with the portfolio managers which
was well attended. The portfolio managers will present to
shareholders again by webinar at 10am on 8 October 2020. If you
would like to register for the event, please do so at the following
link https://www.schrodersevents.com/suppretail .
For regular news about the Company, shareholders are also
encouraged to sign up to the Portfolio Manager's investment trusts
update by visiting the Company's website
https://www.schroders.com/en/uk/private-investor/fund-centre/funds-in-focus/investment-trusts/schroders-investment-trusts/never-miss-an-update/
In the event that shareholders have a question for the board,
please email the Company Secretary (
amcompanysecretary@schroders.com ) or write to us at the Company's
new registered office address (1 London Wall Place, London EC2Y
5AU).
Outlook
Despite the challenges of the COVID-19 pandemic, the board is
pleased that the portfolio managers have developed engagement with
portfolio companies and are heavily focused on near-term
objectives, including adjusting position sizes towards a more
balanced portfolio, while reducing debt and supporting the
companies in the portfolio.
Susan Searle
Chair
29 September 2020
Portfolio Manager's Review
Summary
-- NAV of 45.44p per share, a reduction of 1.5% since 31 March
2020 (46.13p per share) and 8.1% since 31 December 2019 (49.46p per
share).
-- Portfolio continues to benefit from the significant weighting
in healthcare companies which have proved resilient over the full
half year period, including particularly strong performance in the
second quarter.
-- Schroders (the 'Portfolio Manager') continues to provide
support to the businesses in the portfolio to help them navigate
the COVID-19 crisis and is focused on adjusting position sizes
towards a more balanced portfolio whilst reducing the debt.
-- Net debt of GBP103.5 million, down GBP7.2 million from 31 December 2019.
Introduction
The first half of 2020 has seen significant volatility across
both public and private markets around the world. Public equity
markets initially sold off very heavily as a result of the COVID-19
pandemic and the unprecedented actions taken by governments to
mitigate the impact on human life by locking down entire economies.
This has had a devastating impact on many companies which rely on
footfall for trade. However, some business models have been less
exposed or been swift to adapt to this new environment. Those
businesses with the flexibility to operate digitally have taken
advantage of the rapid shift in consumer behaviour, whilst more
traditional operators have suffered severe disruption.
Following the initial lockdown, many economies have seen huge
levels of support from central banks and governments around the
world through the provision of enormous quantities of monetary and
fiscal stimulus designed to provide stability as the global economy
has battled to deal with the pandemic. This intervention has been
well received by the public equity markets around the world as
investors look to the future, with some markets now trading above
their pre-COVID levels.
However, the positive sentiment now being seen in the public
markets is not being felt across all sectors. As highlighted above,
those businesses that have the flexibility to adapt, or business
models that are less impacted by the pandemic are being rewarded
with strong performance and in many cases robust valuations.
More broadly, the impact of COVID-19 varied by region and
industry, the specific business model of a company and its
financing situation. As a result, it is important to look at the
idiosyncratic risks and opportunities associated with each
individual holding from a bottom-up perspective. As highlighted in
the first quarter announcement, the Company's portfolio has
benefited from having a high proportion of technology and
healthcare companies, including several companies that were
actively aiding in the fight to overcome the COVID-19 pandemic.
Over this reporting period, the impact of the pandemic on the
performance of the portfolio has been particularly evident in the
relative development of the public and private segments of the
portfolio. The Company's quoted holdings experienced a high level
of market volatility in the initial aftermath of the pandemic as
evidenced in the first quarter NAV announcement. However, these
sharp declines in prices have been followed by quick recoveries
giving rise to a much stronger performance in the second
quarter.
By comparison, the values of the Company's unquoted holdings
however have taken longer to fully reflect the impact of the
current crisis which remained shrouded in uncertainty at the end of
the first quarter. It is important to note that private asset
values are a product of far more than simply delayed public market
valuations. Fundamentally, private asset valuations are anchored on
capturing idiosyncratic risks and returns of individual assets over
longer investment periods. The nature of these valuation frameworks
means that they are designed to provide comparative stability
during times of market turbulence.
From the perspective of valuation, the Company's portfolio has
performed particularly resiliently due to the outsized weighting in
healthcare companies, that have only been moderately impacted by
the pandemic, and in fact many have achieved significant
operational progress during the period. This has resulted in
several upward adjustments to valuations which have counterbalanced
those sectors within the portfolio which have been most heavily
impacted, such as Financials. As a result, the Company reports
relatively stable performance in the second quarter with the NAV
reduced by 1.5%.
As Portfolio Manager, we have been actively adapting to the
impact of the economic downturn across the portfolio and working
intensely with each individual portfolio company management team to
ensure that each business is best placed to cope with the demands
of the current environment and seize opportunities where they may
arise.
Financial Performance
Value
movements
(GBPm)^ Quoted* Unquoted Net Debt Other NAV
Value at 31.12.19 134.3 426.8 (110.7) (1.0) 449.4
-------------------------------- -------- -------- --------- ------ -------
+ Investments 0.1 1.9 (2.0) - -
-------------------------------- -------- -------- --------- ------ -------
- Realisations (5.8) (6.2) 12.0 - -
-------------------------------- -------- -------- --------- ------ -------
+/- Fair value gains/ (losses) (3.7) (42.9) - - (46.6)
-------------------------------- -------- -------- --------- ------ -------
+/- FX gains/(losses) 2.5 10.0 - - 12.5
-------------------------------- -------- -------- --------- ------ -------
+/- Costs and other movements - - (2.8) 0.3 (2.4)
-------------------------------- -------- -------- --------- ------ -------
Value at 30.06.20 127.4 389.6 (103.5) (0.7) 412.9
-------------------------------- -------- -------- --------- ------ -------
^Source: Administrator, FX gains/(losses) provided by the
AIFM.
*As in the FY2019 annual report, Rutherford Health is reported
as a quoted holding despite being fair value priced by the
AIFM.
The half yearly NAV as at 30 June 2020 was GBP412.9 million or
45.44p per share. This reflects a like-for-like decrease of -1.5%
compared with the NAV as at 31 March 2020 and a decrease of -8.1%
since 31 December 2019.
The half year NAV return of -8.1% comprised:
-- Quoted holdings* -0.8%
-- Unquoted holdings -9.5%
-- FX impact +2.8%
-- Costs and other movements -0.5%
During the half year period, and despite the COVID-19 global
market sell-off during the first quarter, the Company's quoted
holdings saw a moderate decline in value of 3%, reversing part of
the near 16% fall in the first quarter. In comparison, the FTSE AIM
All-Share Index declined by 7.8% during the same period (Source:
LSE website). The largest single contributor to performance in the
quoted holdings was Autolus Therapeutics whose listed share price
increased 20%, a recovery of 171% during the second quarter. In
June 2020, the Company presented new data highlighting encouraging
progress with its AUTO1 programme, a CAR-T cell therapy programme
for relapsed / refractory adult Acute Lymphoblastic Leukaemia. The
portfolio also benefited from similar share price reversals from
other quoted holdings in the second quarter including Idex
Biometrics +133%, Reneuron Group +45% and Mereo Biopharma +150%.
The largest detractor from performance in the quoted holdings was
Evofem Biosciences which declined 54%, predominantly due to its
listed share price falling 47% in the second quarter. Following the
receipt of FDA approval for the company's primary asset, a
non-hormonal contraceptive, the market was disappointed by the
scale of fund raising, at a significant discount to the share
price, in order to meet the costs of a planned marketing
campaign.
Despite the relative strength of the unquoted holdings in the
first quarter, this segment of the portfolio experienced a further
decline in the second quarter as the full impact of COVID-19 became
reflected in portfolio valuations (as provided by the AIFM). As a
result, the value of the Company's unquoted holdings declined 10%
over the half year. The largest single positive contributor to
performance in the unquoted holdings was Inivata which achieved a
major milestone with the announcement of its strategic
collaboration and investment from NeoGenomics, a leading US-based
cancer diagnostics and services company. The most notable negative
contributor to performance continued to be the downward valuation
adjustments in the Financials sector, which has been most heavily
impacted by COVID-19. In this regard, the largest change in
valuation implemented by the Company's AIFM was the downwards
adjustment to the holding in Atom Bank to reflect a contraction in
the valuation metrics of its private and public market comparables
- this peer group declining by greater than 35% since the Company's
last investment date. The valuation changes in Financials also
includes a downwards valuation adjustment to the holding in
Ratesetter which experienced marketplace and funding headwinds due
to the economic uncertainty caused by COVID-19, culminating in an
acquisition offer from Metro Bank in the third quarter (See the
Company Updates section for further details).
As mentioned earlier, more positively, the portfolio continued
to benefit from the significant weighting in Health Care,
representing of 58% gross asset value as at 31 Dec 2019, which
delivered a positive net contribution in the second quarter. As did
the portfolio's weighting in Technology, albeit from a lower
base.
During the period, the portfolio also benefited from the decline
in the value of sterling relative to the US dollar by 7.2% which
resulted in an appreciation of the value of the Company's
dollar-denominated assets.
Investment Activity
As part of our previously stated intention to move the portfolio
toward a greater balance of sectors, stages and position sizes, the
Company completed several realisations over the first half of the
year. Within the private equity holdings, this included the partial
realisation of the Company's holding in Oxford Nanopore as part of
a strongly supported fundraise at an attractive valuation, and the
full realisation of the holding in Yoyo Wallet in a previously
agreed transaction.
Within the public equity holdings, we also moderately reduced
various positions which had rebounded strongly in the second
quarter or were otherwise considered oversized relative to our
conviction levels. These limited realisations have mainly been used
to meet more compelling opportunities to provide funding to some of
the private companies held, whilst also ensuring that net debt
levels are gradually reduced.
During the second quarter, the Company also completed the first
tranche of a follow-on investment into a private healthcare holding
alongside other existing shareholders. The transaction related to
an existing commitment of the Company, agreed by the previous
portfolio manager, which we supported to protect long-term value
which otherwise would have been significantly diluted. The second
tranche is expected to complete before the year end. This is the
Company's penultimate such financial commitment related to
follow-on funding agreed by the previous portfolio manager with the
final transaction due to be reported in the third quarter. While
the specific company remains unnamed due to commercial sensitivity,
it is important to highlight that we intend to move towards
increasing the level of disclosure as we progress with our
repositioning.
In line with the board's commitment to reducing gearing over
time, surplus funds were used to pay down the Company's gearing
facility. As at 30th June 2020, net debt stood at GBP103.5 million
or 25.1% of NAV.
Outlook
Clearly the first half of 2020 has presented challenges, however
we are pleased with the dialogue and relationships that we have
developed with the portfolio companies since taking on portfolio
management of the Company in December 2019.
As highlighted in the first quarter update, we have been heavily
focused on achieving our near-term objectives. Firstly, we have
been working closely with the companies within the portfolio to
support operational decision-making in navigating the current
economic turbulence and helping to identify opportunities that may
arise from the COVID-19 crisis. In addition, the focus on adjusting
position sizes towards a more balanced portfolio, whilst reducing
debt, also remains front of mind and we hope to be able to provide
further colour on the progress being made here soon.
We recognise that economic uncertainty persists as governments
around the world continue to grapple with the most appropriate
policy responses to the ongoing coronavirus pandemic. Case numbers
have clearly risen again in numerous regions in the second half of
2020, including in the UK, which to some extent is itself likely to
reflect a degree of recovery in social movement and working
practices compared to the first half of the year. We are monitoring
the situation closely with regard to any impact on portfolio
companies from these continuing events, noting that the substantive
adjustments already made to company structures will be equally
relevant in a second wave of this pandemic.
Whilst repositioning the portfolio and reducing debt is a clear
priority, it is also important to continue to support the companies
in the portfolio as they continue to develop and grow. We expect to
announce several significant operational milestones from companies
in the portfolio in the second half of 2020 and we are excited
about being able to communicate these developments if they
materialise as expected.
We intend to continue to support the portfolio both financially
and operationally, within the constraints of the Company's
available liquidity, whilst also seeking other like-minded
co-investors who we believe can add value to the portfolio
companies over the longer term. We have built a good working
relationship with our debt provider and maintain a regular
dialogue. As such we anticipate being able to make targeted
follow-on investments into some portfolio companies over the next
six months and we will communicate these to the market as
appropriate.
Company Updates
Rutherford Health: Announced Development Framework Agreement
with Equitix, Diagnostics Services Agreement with Somerset NHS
Foundation Trust and the commencement of patient treatment at the
new Rutherford Cancer Centre North West
In June 2020, Rutherford Health announced that it has entered
into a Development Framework Agreement with Equitix, an investor,
developer and long-term fund manager of core infrastructure assets
in the UK and Europe. Under the terms of the Agreement, Rutherford
and Equitix will establish up to five new diagnostic facilities in
the UK with an estimated value of approximately GBP55 million.
Equitix will have the exclusive right to provide funding to
establish special purpose vehicles to construct and own the
diagnostic centres which will be operated by Rutherford
Infrastructures (a wholly owned subsidiary). Rutherford
Diagnostics, also a wholly-owned subsidiary, will provide
diagnostic services. Each centre will provide a variety of
diagnostics services to NHS and private patients including Positron
Emission Tomography-Computed Tomography, Magnetic Resonance
Imaging, Computed Tomography, Ultrasound, Endoscopy, X-Ray and
other relevant diagnostic services.
In July 2020, Rutherford announced the first partnership under
the Equitix Agreement with Somerset NHS Foundation Trust whereby
the Company will provide a dedicated facility in Taunton. The
Service Agreement is expected to commence in the second half of
2021 for a 5-year minimum term, extendable to 10 years, subject to
the achievement of certain service levels, and carries minimum
revenue of approximately GBP 1.9m per annum.
At the very end of the same month, the company also announced
that it has commenced treating patients at the new Rutherford
Cancer Centre North West, in Liverpool. This is the fourth centre
in the Rutherford Health network. The centre has been approved by
the Care Quality Commission to initially offer patients Systemic
Anti-Cancer Therapy (SACT) services which includes chemotherapy,
immunotherapy, targeted therapies, symptom control as well as blood
tests, oncology nurse consultation and supportive therapies. The
centre will also offer MRI diagnostic services. The facility will
eventually offer comprehensive cancer services with plans to expand
services later this year to include radiotherapy, mammography and
ultrasound with high energy proton beam therapy coming online early
next year. The Liverpool centre will also be the first in the UK to
use an MR Linac machine, which combines an MRI scanner and a linear
accelerator, manufactured by Elekta. This delivers targeted
radiotherapy that can treat hard to reach tumours.
Atom Bank: Released its 2019/2020 Annual Report
In September 2020, Atom Bank released its 2020 Annual Report
detailing progress against its key operational, financial and
strategic objectives over the year to March 2020. In particular,
the company disclosed the substantial progress achieved in
redeveloping its banking stack and transitioning to the cloud. A
key long-term investment which is intended to accelerate the speed,
agility, data management and insight delivery in support of new
product launches, such as the Instant Access Saver (IAS) account
currently in production. One indication of the success of this
project has been the consistently high customer ratings, including
recognition as Trustpilot's most trusted UK bank, Net Promoter
Scores in excess of +75 and at the time of writing, an App store
rating of 4.7 across both Android and iOS.
During the financial year, Atom took steps to improve asset
yields by increasing its lending to SMEs and refocusing its offer
to residential mortgage customers. The company now has a larger and
more granular balance sheet which affords more efficient liquidity
management with consequent benefits to net interest income. The
result is an underlying net interest income improvement over the
year with momentum that is expected to continue.
In July 2020, Atom also completed its third residential
mortgage-backed securitisation in order to support continued
growth. The transaction was backed by GBP770m of mortgage loans and
generated a substantial regulatory capital release. Atom is in a
strong position and poised to accelerate its growth, leading to an
expectation that it will be looking to add new capital in due
course to continue scaling its capabilities.
Looking ahead to 2021, Atom intends to continue building out its
inventory of products, widening its distribution and enhancing its
automation capabilities in order to further enhance its customer
experience and cost efficiency credentials. The actions taken by
the business in the wake of the COVID-19 pandemic are intended to
ensure that Atom is well placed to scale and to grow profitably,
even in the face of present economic uncertainty.
Oxford Nanopore: Announced co-development of a highly scalable
solution for COVID-19 detection and engagement at London Calling
2020
In June 2020, Oxford Nanopore announced its partnership with
Group 42, an AI and cloud computing company based in the United
Arab Emirates, to develop a population-scale technology to rapidly
and accurately detect SARS-CoV-2, the virus that causes COVID-19.
The end-to-end solution developed by G42 and Oxford Nanopore is
expected to dramatically reduce the complexity of mass screening.
The technology uses the LamPORE assay and Oxford Nanopore's rapid
sequencing platform, in combination with the high-throughput
automation, sample processing and reporting workflows developed by
G42. The solution is now being incorporated into the UAE national
testing strategy. Over a ramp-up period in the G42 sequencing
facility in Abu Dhabi, the program is expected to scale to hundreds
of thousands of samples daily. G42 and Oxford Nanopore are working
on the production capacity for the global deployment of this
technology.
In June 2020, Oxford Nanopore also hosted its London Calling
conference dedicated to scientific research using nanopore DNA/RNA
sequencing. Since 2015, this event has been a forum for people
across numerous fields of research to meet and share how they're
using nanopore sequencing in their work, encompassing everything
from clinical research to plant genomics to bioinformatics. This
year it took a very different format, going online for the first
time ever. The event attracted 5,500 people tuning in to see the
action, either live or on-demand, over two-and-a-half days of
presentations, discussion and networking.
BenevolentAI: Highlighted further clinical data in support of
its AI-derived hypothesis for Baricitinib as a potential treatment
for COVID-19
In July 2020, BenevolentAI highlighted further clinical data in
support of its AI-derived hypothesis for baricitinib as a potential
treatment for COVID-19. The research, conducted in partnership with
Eli Lilly, who own baricitinib, includes data studying the dual
basis of baricitinib's effect on patients with bilateral COVID-19
pneumonia who presented with severe disease. The Company believes
this research provides further validation of its AI-derived
hypothesis of the previously unknown anti-viral activity effect of
baricitinib, in addition to its predicted effects on reducing the
cytokine storm. When treated with baricitinib, hospitalised
COVID-19 patients showed improvement in cough, fever, and a
reduction in inflammatory markers and SARS-CoV-2 viral load, data
that has been replicated elsewhere in single-arm studies. The
results of randomised trials, including the recently initiated
global placebo-controlled study, are expected in the next few
months.
In early February, the BenevolentAI team published its research
finding that an oral, once daily medicine, baricitinib, normally
used to treat adult rheumatoid arthritis, may be useful in both
reducing viral propagation in cells, and to mitigate the cytokine
signalling seen in the hyper inflammatory stage of the disease.
Since these findings were first published in The Lancet and The
Lancet Infectious Diseases, baricitinib has been administered to
patients in more than 12 clinical trials worldwide, including large
global trials by the NIAID and Eli Lilly. Following the initiation
of clinical testing in April, baricitinib has been used in
investigator-led trials as a therapy in more than 800 patients with
positive preliminary results.
Inivata: Announced US commercial launch of
InVisionFirst(R)-Lung
In June 2020, following its earlier strategic collaboration
announced with NeoGenomics, Inivata announced the commercial launch
of its InVisionFirst(R)-Lung liquid biopsy test in the US.
InVisionFirst-Lung is a ctDNA next-generation sequencing liquid
biopsy assay testing 37 genes relevant to the care of advanced
non-small cell lung cancer (NSCLC). The test covers all National
Comprehensive Cancer Network (NCCN) guideline-recommended genomic
drivers with FDA-approved targeted therapies for NSCLC.
InVisionFirst-Lung results are delivered within seven calendar days
and the test is covered by Medicare and various private insurance
payers for patients with advanced NSCLC meeting certain clinical
criteria.
Mission Therapeutics: Announced $15m fundraise and expanded
relationship with Pfizer
In July 2020, Mission Therapeutics announced that it has raised
$15m (GBP12m) of equity investment in a funding round led by
existing investor Pfizer Ventures, the venture capital arm of
Pfizer. The new capital will support development of Mission's
leading DUB platform, as well as growth of its pipeline of DUB
inhibitor programmes. Mission and Pfizer Inc. also announced the
expansion of their relationship by entering into an evaluation and
option agreement for DUB target validation.
Mafic: Announced the start of operations at world's largest
basalt fiber production facility
In July 2020, Mafic USA announced the commencement of operations
at its new basalt fiber production facility in Shelby, North
Carolina. The facility is the world's largest and the first such in
North America. During the month, the team completed the highly
calibrated process of starting-up the plant's furnace and began
melting basalt rock and pulling the first fiber. The company
expects to begin producing products for sale in early August.
This operational milestone marks a major step forward in the
company's goal to bring basalt fiber to North American markets and
produce on a commercially viable scale. Mafic began construction of
its $20 million facility, located 45 miles from Charlotte, North
Carolina, in 2016. The new facility is expected to be capable of
producing 6,000 metric tons of basalt fiber annually, nearly 30
percent of the current global output of basalt fiber. Mafic is
looking to commercialise basalt fibers for a wide array of
industrial applications because of their strength and ability to
replace materials susceptible to corrosion. The material has been
used for decades, but until now, it has been produced in limited
quantities. Mafic's goal is to bring the large-scale production of
basalt fiber to several markets, including the construction,
automotive, and thermal markets among others.
Autolus Therapeutics: Presented data at the 2020 EHA25 Virtual
Congress and American Society of Clinical Oncology Annual Meeting
2020
Autolus Therapeutics has provided updates on its two most
advanced programmes. In June 2020, the company presented new data
highlighting progress on its AUTO1 programme at the European
Hematology Association EHA25 Virtual Congress. AUTO1 is the
company's CAR-T cell therapy programme for relapsed / refractory
adult Acute Lymphoblastic Leukaemia. The company also provided an
update on its AUTO3 CAR-T cell therapy programme for DLBCL (Diffuse
Large B-Cell Lymphoma) at the 2020 Annual Meeting of the American
Society of Clinical Oncology.
With regards to AUTO1, the company reported interim data from
its ongoing study in the US and UK for treatment of adult Acute
Lymphoblastic Leukaemia. The data showed good tolerance, with no
patients experiencing Cytokine Release Syndrome of grade three or
higher, and only low (and resolved) incidences of neurotoxicity. An
encouraging 84% of patients experienced MRD-negative CR (Minimum
Residual Disease Negative Complete Remission) after one month, and
Event Free Survival rates at six months stand at 62%. These data
overall demonstrate encouraging clinical efficacy and durability as
well as limited safety concerns. From an operational perspective,
product manufacturing was 100% successful for all patients for whom
this was attempted. The company announced that enrolment of
patients had been affected by COVID-19 in selected sites in the US
and the UK but confirmed that the AUTO1 programme is on track, with
further data expected later in 2020, and full data from the pivotal
study expected by the end of 2021.
With regards to AUTO3, for adult DLBCL (Diffuse Large B-Cell
Lymphoma), following encouraging tolerance and safety data, the
company announced an expansion cohort to assess the feasibility of
AUTO3 in the outpatient setting as part of a current study.
Successful treatment in an outpatient setting would significantly
increase the addressable market for this therapy. The next results
from this programme are to be announced at the European Society for
Medical Oncology Virtual Congress in September 2020, at the time of
this report going to press, with a go/no-go decision on progressing
to a Phase 2 pivotal study expected in the second half of 2020.
The company management continues to guide that cash of $212m
will take it into 2022.
Kymab: Announced Positive Phase 2a Results for KY1005 in
Moderate to Severe Atopic Dermatitis
In August 2020, Kymab, a clinical-stage biopharmaceutical
company developing fully human monoclonal antibodies with a focus
on immune-mediated diseases and immuno-oncology therapeutics,
announced that the primary endpoints in its Phase 2a (NCT03754309),
randomized, double-blinded, placebo-controlled study have been
met.
The proof of concept study, conducted across 20 European sites,
evaluated the efficacy, safety and tolerability of KY1005 in 88
adults with moderate to severe atopic dermatitis whose disease
could not be adequately controlled with topical corticosteroids.
Patients were randomised into one of two dose groups of KY1005 or
placebo and treated for 12 weeks. The primary endpoint was assessed
4 weeks later. Data from the study will be published in the fourth
quarter of this year.
"The data from this atopic dermatitis study is extremely
promising," said Simon Sturge, Chief Executive Officer. "Moderate
to severe atopic dermatitis is a severe, debilitating disease. We
are very encouraged by what we have seen and look forward to the
long-term results from an assessment out to 6 months after the last
dose to evaluate the persistence of response. Not only do these
data validate KY1005 as a potential novel therapeutic for the
treatment of atopic dermatitis, they also provide a platform to
explore its effect in multiple other immune-mediated diseases."
Seedrs: Announced partnership with Capdesk to facilitate
secondary liquidity in private companies
In June 2020, Seedrs announced its partnership with equity
management platform, Capdesk. Thus, creating a unique secondary
liquidity offering, serving the needs of the wider market with the
ability to trade shares in private companies.
The Seedrs Secondary Market has been enhanced significantly and
grown quickly since its launch in 2017. In May, the market
surpassed GBP1m of shares traded in a month for the first time,
with Revolut share sales topping the list for the most shares
listed and sold. Now, companies outside the Seedrs portfolio who
use Capdesk for their cap table and equity management systems will
be able to access the Seedrs Secondary Market.
Reaction Engines: Announced new Strategic Partnership Agreement
with Rolls-Royce
In August, Reaction Engines and Rolls-Royce plc announced a new
strategic partnership agreement to develop high-speed aircraft
propulsion systems and explore applications for Reaction Engines'
thermal management technology within civil and defence aerospace
gas turbine engines and hybrid-electric systems.
Additionally, Rolls-Royce disclosed a further investment in
Reaction Engines as part of a wider funding round. The two
companies have been working together since 2018, including on the
first phase of a UK Ministry of Defence contract to undertake
design studies, research, development, analysis and experimentation
related to high-Mach advanced propulsion systems.
"This strategic partnership is about developing market ready
applications for Reaction Engines' technology in next generation
engines and is a significant step forward for our technology
commercialisation plans," said Mark Thomas, Chief Executive of
Reaction Engines. "Our proprietary heat exchanger technology
delivers incredible heat transfer capabilities at extremely low
weight and a compact size. We look forward to expanding our
international collaboration with Rolls-Royce, a global leader in
power systems, to bring to market a range of applications that will
transform the performance and efficiency of aircraft engines,
enable high speed - supersonic and hypersonic - flight and support
the drive towards more sustainable aviation through innovative new
technologies."
Spin Memory: Announced an extension of its Series B funding
round
In July 2020, Spin Memory announced an extension of its Series B
funding round, having received additional investment of $8.25m from
its major investors including Arm, Applied Ventures, LLC (the
venture capital arm of Applied Materials, Inc.) and Abies Ventures
(Abies), as well as the company's founding investor, Allied
Minds.
As the industry demand for high-speed, low-leakage, non-volatile
memory continues to grow, Spin Memory is a pioneer in bringing MRAM
closer and closer to SRAM-like performance as a new mainstream
memory solution for applications such as autonomous driving,
artificial intelligence and edge computing. The company is
bolstered by over 250 patents, a commercial agreement with Applied
Materials, and a licensing agreement with Arm.
ReNeuron Group: Released positive data in retinal clinical trial
and announced expanded regulatory approvals
In June 2020, ReNeuron Group announced further positive data
from its Phase 2a clinical trial of stem cell treatment for
Retinitis Pigmentosa (RP), a group of hereditary diseases of the
eye that cause progressive loss of sight leading to eventual
blindness.
The latest available data indicates ongoing clinically
meaningful benefit to eyesight observed at all time-points up to
longest-available eighteen months since initial treatment, as
measured by the number of letters read on an ETDRS chart (the
standardised eye chart used to measure visual acuity in clinical
trials).
Also in June 2020, the Company announced that it had received
regulatory approval from both the U.S. Food and Drug Administration
(FDA) and UK Medicine and Healthcare Products Regulatory Agency
(MHRA) to expand its ongoing Phase 2a clinical study to treat
patients with RP at a higher dose level. These approvals will
enable the treatment of up to a further nine patients in the Phase
2a extension segment of the study (beyond the ten Phase 2a patients
already treated), almost doubling the patient cohort. The company
announced that it intends to commence treating patients shortly in
both the US and the UK under the revised approved study protocol,
subject to a continued easing of COVID-19 related restrictions at
the relevant clinical sites.
The company expects to have sufficient data from this expanded
Phase 2a clinical trial to enable it to seek approval in the second
half of 2021 to commence a single pivotal clinical study with its
stem cell therapy candidate in RP.
LIGNIA Wood Company: LIGNIA Yacht selected as Boating Industry
Top Product 2020
In May 2020, LIGNIA Wood Company's high-performance, sustainable
timber for yacht decking, LIGNIA Yacht, was selected by the editors
of Boating Industry magazine as a Top Product for 2020. This award
follows LIGNIA Yacht's award wins in 2019 at IBEX and
METSTRADE.
Ratesetter: Metro Bank announced agreement to acquire
Ratesetter
In August 2020, Metro Bank PLC announced that it had agreed to
acquire Retail Money Market LTD ("RateSetter") for an initial
consideration of GBP2.5 million, with additional consideration of
up to GBP0.5 million payable 12 months after completion subject to
the satisfaction of certain criteria and further consideration of
up to GBP9 million payable on the third anniversary of the
completion of the transaction, subject to the satisfaction of
certain key performance criteria. The acquisition does not include
RateSetter's holding in RateSetter Australia which is being
retained by RateSetter shareholders. The acquisition is conditional
upon approval from the Financial Conduct Authority and shareholders
holding at least 60 percent of RateSetter's shares acceding to the
relevant transaction documents and is expected to close by the
fourth quarter this year. The board of directors of RateSetter
unanimously recommended the transaction.
On 14 September 2020, Metro Bank announced the acquisition of
RateSetter, following receipt of shareholders' and regulatory
approval.
Schroder Investment Management Limited
29 September 2020
Securities named are for illustrative purposes only and should
not be viewed as a recommendation to buy or sell.
Investment Portfolio as at 30 June 2020
The 20 largest investments account for 90.8% of total
investments by value (30 June 2019: 83.0% and 31 December 2019:
88.7%).
Total
Quoted/ Industry Fair value investments
Holding unquoted Sector GBP'000 %
------------------------------- ---------- ------------- ----------- -----------
Rutherford Health Quoted Health Care 80,811 15.6
------------------------------- ---------- ------------- ----------- -----------
Oxford Nanopore Unquoted Health Care 68,707 13.3
------------------------------- ---------- ------------- ----------- -----------
Atom Bank Unquoted Financials 56,772 11.0
------------------------------- ---------- ------------- ----------- -----------
Benevolent Al Unquoted Technology 33,507 6.5
------------------------------- ---------- ------------- ----------- -----------
Immunocore Unquoted Health Care 26,980 5.2
------------------------------- ---------- ------------- ----------- -----------
Inivata Unquoted Health Care 24,963 4.8
------------------------------- ---------- ------------- ----------- -----------
Autolus Therapeutics Quoted Health Care 22,981 4.4
------------------------------- ---------- ------------- ----------- -----------
Carrick Therapeutics Unquoted Health Care 18,533 3.6
------------------------------- ---------- ------------- ----------- -----------
Kymab Unquoted Health Care 16,971 3.3
------------------------------- ---------- ------------- ----------- -----------
Mafic Unquoted Industrials 16,196 3.1
------------------------------- ---------- ------------- ----------- -----------
Industrial Heat Unquoted Industrials 14,326 2.8
------------------------------- ---------- ------------- ----------- -----------
Ombu Unquoted Industrials 14,024 2.7
------------------------------- ---------- ------------- ----------- -----------
Reaction Engines Unquoted Industrials 12,500 2.4
------------------------------- ---------- ------------- ----------- -----------
Mission Therapeutics Unquoted Health Care 10,117 2.0
------------------------------- ---------- ------------- ----------- -----------
Federated Wireless Unquoted Technology 9,774 1.9
------------------------------- ---------- ------------- ----------- -----------
Spin Memory Unquoted Technology 9,429 1.8
------------------------------- ---------- ------------- ----------- -----------
Genomics Unquoted Health Care 9,045 1.7
------------------------------- ---------- ------------- ----------- -----------
Seedrs Unquoted Financials 8,749 1.7
------------------------------- ---------- ------------- ----------- -----------
AMO Pharma Unquoted Health Care 8,526 1.6
------------------------------- ---------- ------------- ----------- -----------
ReNeuron Group Quoted Health Care 7,284 1.4
------------------------------- ---------- ------------- ----------- -----------
Evofem Biosciences Quoted Health Care 6,064 1.2
------------------------------- ---------- ------------- ----------- -----------
IDEX Biometrics Quoted Technology 5,553 1.1
------------------------------- ---------- ------------- ----------- -----------
Cequr Unquoted Health Care 5,020 1.0
------------------------------- ---------- ------------- ----------- -----------
Consumer
Kind Consumer Unquoted Staples 4,802 0.9
------------------------------- ---------- ------------- ----------- -----------
Kuur Therapeutics (previously
Cell Medica) Unquoted Health Care 4,247 0.8
------------------------------- ---------- ------------- ----------- -----------
Mereo BioPharma Group Quoted Health Care 3,531 0.7
------------------------------- ---------- ------------- ----------- -----------
American Financial Exchange Unquoted Financials 3,062 0.6
------------------------------- ---------- ------------- ----------- -----------
Lignia Wood Unquoted Industrials 2,981 0.6
------------------------------- ---------- ------------- ----------- -----------
Psioxus Unquoted Health Care 1,779 0.3
------------------------------- ---------- ------------- ----------- -----------
Econic Unquoted Industrials 1,440 0.3
------------------------------- ---------- ------------- ----------- -----------
Ratesetter Unquoted Financials 1,327 0.3
------------------------------- ---------- ------------- ----------- -----------
Scifluor Unquoted Health Care 1,230 0.2
------------------------------- ---------- ------------- ----------- -----------
Nexeon Unquoted Industrials 1,182 0.2
------------------------------- ---------- ------------- ----------- -----------
Origin Unquoted Health Care 968 0.2
------------------------------- ---------- ------------- ----------- -----------
Novabiotics Unquoted Industrials 847 0.2
------------------------------- ---------- ------------- ----------- -----------
Bodle Technologies Unquoted Technology 766 0.2
------------------------------- ---------- ------------- ----------- -----------
Metaboards Unquoted Technology 762 0.2
------------------------------- ---------- ------------- ----------- -----------
NetScientific Quoted Health Care 756 0.1
------------------------------- ---------- ------------- ----------- -----------
Xeros Technology Quoted Industrials 339 0.1
------------------------------- ---------- ------------- ----------- -----------
Tissue Regenix Group Quoted Health Care 84 -
------------------------------- ---------- ------------- ----------- -----------
RM2 International Unquoted Industrials 60 -
------------------------------- ---------- ------------- ----------- -----------
Midatech Pharma Quoted Health Care 2 -
------------------------------- ---------- ------------- ----------- -----------
Drayson Unquoted Technology - -
------------------------------- ---------- ------------- ----------- -----------
Halosource Unquoted Industrials - -
------------------------------- ---------- ------------- ----------- -----------
Metalysis Unquoted Industrials - -
------------------------------- ---------- ------------- ----------- -----------
Oxsybio Unquoted Health Care - -
------------------------------- ---------- ------------- ----------- -----------
Precision Biopsy Unquoted Health Care - -
------------------------------- ---------- ------------- ----------- -----------
Sphere Medical Unquoted Health Care - -
------------------------------- ---------- ------------- ----------- -----------
Wath Investments Unquoted Industrials - -
------------------------------- ---------- ------------- ----------- -----------
Total investments:(1) 516,997 100.0
---------------------------------------------------------- ----------- -----------
(1) Total investments comprise:
GBP'000 %
--------------------------------- --------- -------
Quoted on AIM 11,996 2.3
----------------------------------- --------- -------
Listed on a recognised stock
exchange overseas 34,598 6.7
----------------------------------- --------- -------
Quoted on Acquis Stock Exchange 80,811 15.6
----------------------------------- --------- -------
Unquoted 389,592 75.4
----------------------------------- --------- -------
Total 516,997 100.0
----------------------------------- --------- -------
Principal Risks and Uncertainties
The board has determined that the key risks for the Company are
COVID-19 risk, gearing risk, performance risk, general valuation
risk, portfolio specific valuation risk; investee company specific
risk; portfolio concentration risk; Portfolio Manager and key man
risk; outsourced service provider model risk; currency risk and
cyber risk. These risks, as well as the emerging risks and
uncertainties determined by the board, are set out on pages 21 to
25 of the annual report and accounts for the year ended 31 December
2019. These risks and uncertainties have not materially changed
during the six months ended 30 June 2020 or since the annual report
was published on 1 May 2020.
Going concern
Having assessed the principal risks and uncertainties, and the
other matters discussed in connection with the viability statement
as set out on page 26 of the published annual report and accounts
for the year ended 31 December 2019, as well as considering the
additional risks related to COVID-19, and where appropriate, action
taken by the Portfolio Manager and Company's service providers in
relation to those risks, the directors consider it appropriate to
adopt the going concern basis in preparing the accounts.
Related party transactions
There have been no transactions with related parties that have
materially affected the financial position or the performance of
the Company during the six months ended 30 June 2020.
Directors' responsibility statement
The directors confirm that, to the best of their knowledge, this
set of condensed financial statements has been prepared in
accordance with United Kingdom Generally Accepted Accounting
Practice and with the Statement of Recommended Practice, "Financial
Statements of Investment Companies and Venture Capital Trusts"
issued in October 2019 and that this Interim Management Report
includes a fair review of the information required by 4.2.7R and
4.2.8R of the Financial Conduct Authority's Disclosure Guidance and
Transparency Rules.
Income Statement
for the six months ended 30 June 2020 (unaudited)
(Unaudited) (Unaudited) (Audited)
For the six months For the six months For the year
ended 30 June 2020 ended 30 June 2019 ended 30 December 2019
Revenue Capital Total Revenue Capital Total Revenue Capital Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Losses on
investments
held at fair
value through
profit or
loss - (34,134) (34,134) - (226,207) (226,207) - (421,175) (421,175)
Losses on
derivative
contracts - - - - (2,827) (2,827) - (9,373) (9,373)
Gains/(losses)
on foreign
exchange - 18 18 - - - - (1) (1)
Income from
investments - - - - - - - - -
---------------- ------- -------- -------- -------- --------- ---------- -------- --------- ----------
Gross loss - (34,116) (34,116) - (229,034) (229,034) - (430,549) (430,549)
Portfolio
management
fees (669) - (669) - - - - - -
Administrative
expenses (703) - (703) (1,193) - (1,193) (3,115) - (3,115)
---------------- ------- -------- -------- -------- --------- ---------- -------- --------- ----------
Net loss
before finance
costs and
taxation (1,372) (34,116) (35,488) (1,193) (229,034) (230,227) (3,115) (430,549) (433,664)
Finance costs (1,076) - (1,076) (1,480) - (1,480) (2,841) - (2,841)
---------------- ------- -------- -------- -------- --------- ---------- -------- --------- ----------
Loss before
taxation (2,448) (34,116) (36,564) (2,673) (229,034) (231,707) (5,956) (430,549) (436,505)
Taxation - - - - - - - - -
---------------- ------- -------- -------- -------- --------- ---------- -------- --------- ----------
Net loss
after taxation (2,448) (34,116) (36,564) (2,673) (229,034) (231,707) (5,956) (430,549) (436,505)
---------------- ------- -------- -------- -------- --------- ---------- -------- --------- ----------
Loss per
share (note
3) (0.27)p (3.75)p (4.02)p (0.30)p (25.97)p (26.27)p (0.67)p (48.08)p (48.75)p
---------------- ------- -------- -------- -------- --------- ---------- -------- --------- ----------
The "Total" column of this statement is the profit and loss
account of the Company. The "Revenue" and "Capital" columns
represent supplementary information prepared under guidance issued
by The Association of Investment Companies. The Company has no
other items of other comprehensive income, and therefore the net
loss on ordinary activities after taxation is also the total
comprehensive loss for the period.
All revenue and capital items in the above statement derive from
continuing operations. No operations were acquired or discontinued
in the period.
Statement of Changes in Equity
For the six months ended 30 June 2020 (unaudited)
Called-up
share Share Capital Revenue
capital premium reserves reserve Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
At 31 December 2019 9,086 891,017 (436,934) (13,740) 449,429
Net loss - - (34,116) (2,448) (36,564)
-------------------- --------- -------- ---------- --------- --------
At 30 June 2020 9,086 891,017 (471,050) (16,188) 412,865
-------------------- --------- -------- ---------- --------- --------
For the six months ended 30 June 2019 (unaudited)
Called-up
share Share Capital Revenue
capital premium reserves reserve Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
At 31 December 2018 8,270 813,099 (6,385) (7,784) 807,200
Issue of shares 816 78,105 - - 78,921
Share issue costs - (186) - - (186)
Net loss - - (229,034) (2,673) (231,707)
-------------------- --------- -------- ---------- --------- ---------
At 30 June 2019 9,086 891,018 (235,419) (10,457) 654,228
-------------------- --------- -------- ---------- --------- ---------
For the year ended 31 December 2019 (audited)
Called-up
share Share Capital Revenue
capital premium reserves reserve Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
At 31 December 2018 8,270 813,099 (6,385) (7,784) 807,200
Issue of shares 816 78,105 - - 78,921
Share issue costs - (187) - - (187)
Net loss - - (430,549) (5,956) (436,505)
-------------------- --------- -------- ---------- --------- ----------
At 31 December 2019 9,086 891,017 (436,934) (13,740) 449,429
-------------------- --------- -------- ---------- --------- ----------
Statement of Financial Position
at 30 June 2020 (unaudited)
(Unaudited) (Unaudited) (Audited)
30 June 30 June 31 December
2020 2019 2019
GBP'000 GBP'000 GBP'000
Fixed assets
Investments held at fair value through
profit or loss (note 4) 516,997 777,866 561,115
--------------------------------------- ----------- ----------- -----------
Current assets
Debtors 606 37 30
Cash at bank and in hand 3,577 - 2,234
Derivative financial instruments held
at fair value through profit or loss - 725 -
--------------------------------------- ----------- ----------- -----------
4,183 762 2,264
--------------------------------------- ----------- ----------- -----------
Current liabilities
Creditors: amounts falling due within
one year (note 5) (108,315) (116,921) (1,050)
Derivative financial instruments held
at fair value through profit or loss - (7,479) -
--------------------------------------- ----------- ----------- -----------
(108,315) (124,400) (1,050)
--------------------------------------- ----------- ----------- -----------
Net current (liabilities)/assets (104,132) (123,638) 1,214
--------------------------------------- ----------- ----------- -----------
Total assets less current liabilities 412,865 654,228 562,329
Creditors: amounts falling due after
more than one year (note 6) - - (112,900)
--------------------------------------- ----------- ----------- -----------
Net assets 412,865 654,228 449,429
--------------------------------------- ----------- ----------- -----------
Capital and reserves
Called-up share capital (note 7) 9,086 9,086 9,086
Share premium 891,017 891,018 891,017
Capital reserves (471,050) (235,419) (436,934)
Revenue reserve (16,188) (10,457) (13,740)
--------------------------------------- ----------- ----------- -----------
Total equity shareholders' funds 412,865 654,228 449,429
--------------------------------------- ----------- ----------- -----------
Net asset value per share (note 8) 45.44p 72.00p 49.46p
Registered in England and Wales as a public company limited by
shares
Company registration number: 09405653
Cash Flow Statement
for the six months ended 30 June 2020 (unaudited)
(Unaudited) (Unaudited) (Audited)
For the six For the six For the
months ended months ended year ended
30 June 30 June 31 December
2020 2019 2019
GBP'000 GBP'000 GBP'000
Cash flows from operating activities
Loss before finance costs and
taxation (35,488) (230,227) (433,664)
Adjustments for:
Losses on investment held at
fair value through profit or
loss 34,134 226,207 421,175
Net movement in forward currency
contracts - 2,827 9,373
Net movement in foreign exchange (18) - 1
Increase in debtors (20) (22) (19)
Increase in creditors 263 312 578
-------------------------------------- ------------ ------------ -----------
Net cash flow from operating
activities (1,129) (903) (2,556)
-------------------------------------- ------------ ------------ -----------
Cash flows from investment activities
Purchases of investments (2,012) (99,008) (137,143)
Proceeds from sales of investments 11,440 131,117 191,387
Settlement of foreign forward
currency contracts - (1,701) (15,349)
-------------------------------------- ------------ ------------ -----------
Net cash flow from investment
activities 9,428 30,408 38,895
-------------------------------------- ------------ ------------ -----------
Cash flows from financing activities
Issue of shares - 6,000 6,000
Share issue costs - (185) (187)
Finance costs (1,106) (1,480) (2,852)
Repayment of loan (5,868) - -
-------------------------------------- ------------ ------------ -----------
Net cash flow from financing
activities (6,974) 4,335 2,961
-------------------------------------- ------------ ------------ -----------
Net increase in cash and cash
equivalents 1,325 33,840 39,300
Effect of foreign exchange 18 - -
-------------------------------------- ------------ ------------ -----------
Change in cash and cash equivalents 1,343 33,840 39,300
Cash and cash equivalents at
the beginning of the period 2,234 (149,966) (149,966)
Reclassification of overdraft
liability(1) - - 112,900
-------------------------------------- ------------ ------------ -----------
Cash and cash equivalents at
the end of the period 3,577 (116,126) 2,234
-------------------------------------- ------------ ------------ -----------
(1) Following the amendments to the term facility agreement, the
overdraft was reclassified as a loan.
Notes to the Accounts
1. Financial Statements
The information contained within the accounts in this half year
report has not been audited or reviewed by the Company's
independent auditor.
The figures and financial information for the year ended 31
December 2019 are extracted from the latest published accounts of
the Company and do not constitute statutory accounts for that year.
Those accounts have been delivered to the Registrar of Companies
and included the report of the auditor which was unqualified and
did not contain a statement under either section 498(2) or 498(3)
of the Companies Act 2006.
2. Accounting policies
Basis of accounting
The accounts have been prepared in accordance with United
Kingdom Generally Accepted Accounting Practice and with the
Statement of Recommend Practice "Financial Statements of Investment
Trust Companies and Venture Capital Trusts" issued by the
Association of Investment Companies in October 2019.
All of the Company's operations are of a continuing nature.
The accounting policies applied to these accounts are consistent
with those applied in the accounts for the year ended 31 December
2019. In particular the policy on valuation of investments is
consistent with that detailed in note 1(b) to the accounts for the
year ended 31 December 2019, presented on pages 54 and 55 of the
annual report.
3. Loss per share
(Unaudited) (Unaudited) (Audited)
For the six For the six For the
months ended months ended year ended
30 June 30 June 31 December
2020 2019 2019
GBP'000 GBP'000 GBP'000
Revenue loss (2,448) (2,673) (5,956)
Capital loss (34,116) (229,034) (430,549)
------------------------------------- ------------ ------------ -----------
Total loss (36,564) (231,707) (436,505)
------------------------------------- ------------ ------------ -----------
Weighted average number of shares in
issue during the period 908,639,238 882,027,553 895,442,758
Revenue loss per share (0.27)p (0.30)p (0.67)p
Capital loss per share (3.75)p (25.97)p (48.08)p
------------------------------------- ------------ ------------ -----------
Total loss per share (4.02)p (26.27)p (48.75)p
------------------------------------- ------------ ------------ -----------
4. Investments held at fair value through profit or loss
(a) Movement in investments
(Unaudited) (Unaudited)
For the six For the six (Audited)
months ended months ended For the
year ended
30 June 30 June 31 December
2020 2019 2019
GBP'000 GBP'000 GBP'000
Opening book cost 820,226 912,049 912,049
Opening investment holding (losses)/gains (259,111) 51,564 51,564
------------------------------------------ ------------ ------------ -----------
Opening valuation 561,115 963,613 963,613
Purchases at cost 2,012 171,511 137,143
Investments received as consideration
for share issue - - 72,921
Sales proceeds (11,996) (131,051) (191,387)
Losses on investments held at fair
value through profit or loss (34,134) (226,207) (421,175)
------------------------------------------ ------------ ------------ -----------
Closing valuation 516,997 777,866 561,115
------------------------------------------ ------------ ------------ -----------
Closing book cost 809,139 961,509 820,226
Closing investment holding losses (292,142) (183,643) (259,111)
------------------------------------------ ------------ ------------ -----------
Total investments held at fair value
through profit or loss 516,997 777,866 561,115
------------------------------------------ ------------ ------------ -----------
(b) Material revaluations of unquoted investments, including
investments quoted in inactive markets, during the period
Opening Closing
valuation valuation
at at
31 December Valuation 30 June
2019 (1) adjustment 2020
Investment GBP'000 GBP'000 GBP'000
Inivata 18,006 6,957 24,963
Atom Bank 80,866 (24,094) 56,772
Mission Therapeutics 15,648 (5,531) 10,117
Ratesetter 6,709 (5,382) 1,327
--------------------- ----------- ---------- ---------
(1) Based on the closing holding at opening prices.
There were no material disposals of unquoted investments during
the period.
5. Creditors: amounts falling due within one year
(Unaudited) (Unaudited) (Audited)
30 June 30 June 31 December
2020 2019 2019
GBP'000 GBP'000 GBP'000
Bank loan 107,032 - -
Other creditors and accruals 1,283 795 1,050
Bank overdraft - 116,126 -
----------------------------- ----------- ----------- -----------
108,315 116,921 1,050
----------------------------- ----------- ----------- -----------
On 13 December 2019, the Company ended its term facility and
arranged a term loan to 15 January 2021. The loan is secured on all
the Company's assets. The agreement requires that, subject to an
allowance for operating expenses, the proceeds of Private Asset
sales must be used to make loan repayments, which cannot be
redrawn. Furthermore, the Company may not make further Private
Asset investments until certain prepayment hurdles have been met.
Interest payable will be calculated at LIBOR, for one month or
other agreed loan period, plus a margin of 1.5%.
6. Creditors: amounts falling due after more than one year
(Unaudited) (Unaudited) (Audited)
30 June 30 June 31 December
2020 2019 2019
GBP'000 GBP'000 GBP'000
Bank loan - - 112,900
---------- ----------- ----------- -----------
The bank loan is drawn under an agreement which expires on 15
January 2021. At 30 June 2020, the loan has been redesignated as a
loan falling due within one year, and further details are given in
note 5 above.
7. Called-up share capital
(Unaudited) (Unaudited) (Audited)
For the six For the six For the
year ended
months ended months ended 31 December
30 June 2020 30 June 2019 2019
GBP'000 GBP'000 GBP'000
Ordinary shares allotted, called up
and fully paid:
Ordinary shares of 1p each:
Opening balance of 908,639,238 (2019:
827,000,000) shares 9,086 8,270 8,270
Issue of nil (2019: 81,639,238) shares - 816 816
--------------------------------------- ------------ ------------ ------------
Closing balance of 908,639,238 (2019:
908,639,238) shares 9,086 9,086 9,086
--------------------------------------- ------------ ------------ ------------
8. Net asset value per share
(Unaudited) (Unaudited) (Audited)
30 June 30 June 31 December
2020 2019 2019
Net assets attributable to shareholders
(GBP'000) 412,865 654,228 449,429
---------------------------------------- ----------- ----------- -----------
Shares in issue at the period end 908,639,238 908,639,238 908,639,238
---------------------------------------- ----------- ----------- -----------
Net asset value per share 45.44p 72.00p 49.46p
---------------------------------------- ----------- ----------- -----------
9. Disclosures regarding financial instruments measured at fair value
The Company's financial instruments within the scope of FRS 102
that are held at fair value comprise its investment portfolio and
any derivative financial instruments.
FRS 102 requires that financial instruments held at fair value
are categorised into a hierarchy consisting of the three levels
below. A fair value measurement is categorised in its entirety on
the basis of the lowest level input that is significant to the fair
value measurement.
Level 1 - valued using unadjusted quoted prices in active
markets for identical assets.
Level 2 - valued using observable inputs other than quoted
prices included within Level 1.
Level 3 - valued using inputs that are unobservable.
The Company's investment portfolio and derivative financial
instruments were categorised as follows:
30 June 2020 (unaudited)
Level 1 Level 2 Level 3 Total
GBP'000 GBP'000 GBP'000 GBP'000
Investments in equities -
quoted 46,594 - 80,811 127,405
- unquoted - - 389,592 389,592
---------------------------------- -------- -------- -------- --------
Total 46,594 - 470,403 516,997
---------------------------------- -------- -------- -------- --------
30 June 2019 (unaudited)
Level 1 Level 2 Level 3 Total
GBP'000 GBP'000 GBP'000 GBP'000
Investments in equities -
quoted 103,462 - 156,960 260,422
- unquoted - - 517,444 517,444
Derivative financial instruments
-
forward currency contracts - (6,754) - (6,754)
---------------------------------- -------- -------- -------- --------
Total 103,462 (6,754) 674,404 771,112
---------------------------------- -------- -------- -------- --------
31 December 2019 (audited)
Level 1 Level 2 Level 3 Total
GBP'000 GBP'000 GBP'000 GBP'000
Investments in equities -
quoted 53,476 - 80,811 134,287
- unquoted - - 426,828 426,828
---------------------------------- -------- -------- -------- --------
Total 53,476 - 507,639 561,115
---------------------------------- -------- -------- -------- --------
There have been no transfers between Levels 1, 2 or 3 during the
period (period ended 30 June 2019 and year ended 31 December 2019:
nil).
10. Events after the interim date that have not been reflected
in the financial statements for the interim period
Acquisition of RateSetter
On 14 September 2020, Metro Bank PLC announced the acquisition
of RateSetter, following receipt of shareholders' and regulatory
approval. Under the terms of the acquisition, the Company expects
to receive a total consideration which is marginally above its
holding value of GBP1,327,000 as at 30 June 2020.
The directors have evaluated the period since the interim date
and have not noted any other events which have not been reflected
in the financial statements.
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