TIDMBOOK
RNS Number : 6106X
Literacy Capital PLC
27 April 2023
The information contained in this announcement is restricted and
is not for publication, release or distribution in the United
States of America, any member state of the European Economic Area,
Canada, Australia, Japan or the Republic of South Africa.
This announcement contains inside information.
27 April 2023
Literacy Capital plc
Quarterly trading update and NAV announcement for Q1 2023
"Further growth across portfolio companies drives Q1 NAV return
of +11.1%
and twelve month return of +46.1%"
Literacy Capital plc ("Literacy", "BOOK" or the "Company"), a
listed investment trust primarily focused on investing directly
into private businesses based in the UK, today announces its
quarterly trading update and NAV update for the three months ending
31 March 2023.
Q1 Highlights:
-- Net asset value ("NAV") per share of 467.3p (Q4'22: 420.6
pence) and NAV of GBP280.4m (Q4'22: GBP252.4m)
-- Total NAV return (after all fees and charitable donation
provisions) of +11.1% in the last three months, a net
uplift of GBP28.0m (46.7p per share)
-- Portfolio companies continue to trade well with RCI (+GBP18.6m)
again the most significant contributor in the quarter,
driven by strong organic growth. Kernel Global (+GBP8.4m)
also performed strongly as it was marked up in line with
the transaction that completed in March
-- Literacy Capital received GBP21.1m of cash in Q1, the
largest inflow for BOOK in any quarter. The sale of Kernel
at a 48.9% premium to its previous carrying value generated
GBP19.0m, with a dividend from Grayce also contributing
-- The discount to NAV that the shares trade on is reducing
and is something which The Board of the Company continues
to monitor closely
Commenting on the Q1 performance, CEO of BOOK's investment
manager, Richard Pindar, said:
"Literacy Capital entered 2023 with the portfolio in excellent
condition. We are optimistic that this will continue as the year
progresses.
"RCI was again the outstanding performer. It contributed an
uplift of GBP18.6m in Q1, following strong growth in the previous
quarter too (+GBP17.8m in Q4 2022). The sale of Kernel was also
pleasing, particularly given the challenging market conditions.
This exit generated substantial cash for BOOK (thereby allowing
debt to be repaid), released capital for new investments and
provided evidence of prudence in BOOK's valuations.
"We have a strong pipeline of opportunities to invest in both
new businesses and our existing portfolio. We anticipate that
future cash inflows will be healthy as the portfolio matures.
"Share price performance in 2023 has been encouraging thus far
and we are pleased that the discount which appeared in H2 2022 is
now reducing. We will continue to monitor this on behalf of
shareholders."
Net Asset Value
The Company announces that as at 31 March 2023, the NAV per
ordinary share was 467.3 pence. This represents an 11.1%, or 46.7p
per share, uplift since 31 December 2022 when NAV per ordinary
share was 420.6p.
At 31 Mar 23 At 31 Dec 22 At 31 Mar 22
Net asset value GBP280.4m GBP252.4m GBP192.0m
================== ============= ============= =============
NAV per ordinary
share 467.3p 420.6p 320.0p
================== ============= ============= =============
The above NAV calculation is based on the Company's issued
ordinary share capital as at 31 March 2023 of 60,000,000 ordinary
shares of GBP0.001 each. This NAV calculation includes the cost to
ordinary shareholders of the 550,000 warrants in issue. This cost
has been accrued on a straight-line basis over the vesting period
of the warrants.
Portfolio company performance
Despite continued macro uncertainty during the quarter, the
financial performance and KPIs reported by our portfolio remained
consistent and strong in Q1. The majority of the top ten
investments contributed positively to our NAV uplift.
Sales momentum across some portfolio companies was more subdued
than expected at the start of the year but this improved later in
the quarter. Growth in Q2 looks encouraging, which would have a
direct and positive impact on NAV growth in the next quarterly
report. RCI was the strongest performer in Q1 and now comprises
30.6% of net assets. We have very regular contact (often daily)
with the management team and we are confident that this momentum
will continue.
We are now also receiving increasingly frequent inbound interest
in BOOK's portfolio companies from credible acquirors, as many of
them have increased in scale, are well-led and continue to grow
strongly. This was the case with Kernel Global, which moves from
our fourth largest asset to eighth, following the receipt of
GBP19.0m after BOOK sold most of its stake to a EUR1bn private
equity fund.
Transactions and investments
No new investments were completed in the quarter but a further
GBP4.3m was invested into the portfolio during Q1.
Follow-on funding was provided to Oxygen again to help it
refurbish and acquire more sites. Smaller amounts of capital were
invested into several other existing portfolio companies. No
capital calls from PE funds were funded by BOOK in Q1.
Cash & liquidity
GBP21.1m of cash was received in Q1, the largest inflow for BOOK
in any quarter. The sale of Kernel generated GBP19.0m, with a
dividend from Grayce also contributing. Distributions from third
party funds amounted to GBP0.2m in Q1.
Balances drawn under the RCF were repaid in Q1, resulting in
GBP2.9m being drawn on 31 March 2023 (vs. GBP15.9m on 31 December
2022).
Post-balance sheet events
No events occurred between the end of Q1 and the publication of
this factsheet requiring reported NAV to be revised.
Factsheet
The Company's factsheet for the three months to 31 March 2023 is
now available on the Company's website:
www.literacycapital.com/investors
-ENDS-
For further information, please contact:
Literacy Capital plc / Literacy Capital Asset Management LLP
Tom Vernon / Richard Pindar
+44 (0) 20 3960 0280
MHP Group
Reg Hoare / Ollie Hoare / Matthew Taylor
book@mhpgroup.com
+44 (0) 20 3128 8404
Singer Capital Markets Securities Limited
Robert Peel
+44 (0) 20 7496 3000
About Literacy Capital plc
Literacy Capital (BOOK.L) is a closed-end investment company
that was co-founded by Paul Pindar and Richard Pindar in 2017 with
GBP54m of capital. Literacy listed on the London Stock Exchange's
Main Market in June 2021, before gaining Investment Trust status on
1 April 2022. The Company focuses on opportunities to invest for
the long-term in growing private businesses where a clear route to
creating additional value can be seen with its support.
It also has a unique charitable objective, to donate 0.9% of
annual NAV to charities focused on improving UK literacy in
children. Almost GBP6.5 million has been donated or reserved for
donation to charities since the trust's creation in 2017, meaning
12% of the capital originally raised from investors has been given
away. For more information, please visit our website:
www.literacycapital.com.
A copy of this announcement will be available on the Company's
website at www.literacycapital.com.
The information contained in this announcement regarding the
Company's investments has been provided by the relevant underlying
portfolio company and has not been independently verified by the
Company. The information contained herein is unaudited.
This announcement is for information purposes only and is not an
offer to invest. All investments are subject to risk. Past
performance is no guarantee of future returns. Prospective
investors are advised to seek expert legal, financial, tax and
other professional advice before making any investment decision.
The value of investments may fluctuate. Results achieved in the
past are no guarantee of future results. Neither the content of the
Company's website, nor the content on any website accessible from
hyperlinks on its website for any other website, is incorporated
into, or forms part of, this announcement nor, unless previously
published by means of a recognised information service, should any
such content be relied upon in reaching a decision as to whether or
not to acquire, continue to hold, or dispose of, securities in the
Company.
LEI: 2549006P3DFN5HLFGR54
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