TIDMMIG4
RNS Number : 3449Z
Mobeus Income & Growth 4 VCT PLC
14 September 2022
MOBEUS INCOME & GROWTH 4 VCT PLC
LEI: 213800IFNJ65R8AQW943
UNAUDITED HALF-YEAR RESULTS FOR THE SIX MONTHS TO 30 JUNE 2022
Mobeus Income & Growth 4 VCT plc ("the Company") announces its Half-Year
results for the six months to 30 June 2022. These results were approved
by the Board of Directors on 13 September 2022.
You may, in due course, view the Half-Year Report, comprising the Unaudited
Condensed Financial Statements of the Company by visiting www.mig4vct.co.uk.
Financial Highlights
As at 30 June 2022:
Net assets: GBP86.13 million
Net asset value ("NAV") per share: 94.66 pence
Results for the six months to 30 June 2022:
There was a negative Net Asset Value ("NAV") total return(1) per share
of (11.3)%.
Share price total return (1) per share was 2.8%.
The Board declared an interim dividend in respect of the current year
of 4.00 pence per share, which was paid to Shareholders on 8 July 2022.
Payment of this dividend increased cumulative dividends paid (1) since
inception in 1998 to 147.20 pence per share.
A further interim dividend for the year of 6.00 pence per share has
been declared for payment on 7 November 2022.
The Company made two new investments totalling GBP1.09 million and
four follow-on investments totalling GBP0.80 million.
GBP11.05 million of unrealised losses were incurred in the period.
The Company realised investments totalling GBP4.34 million of cash
proceeds and a net realised gain of GBP0.78 million for the six months
to 30 June 2022.
(1) Definitions of key terms and alternative performance measures
("APMs") / Key performance indicators ("KPIs") shown above and throughout
this Report are shown in the Glossary of terms within the Half-Year
Report.
PERFORMANCE SUMMARY
The longer-term trend of performance based upon cumulative total return
per share (NAV basis) is shown in the chart below:-
Reporting date NAV per Cumulative Cumulative total return
Share dividends paid per share to shareholders
per share (NAV Basis)
As at (p) (p) (p)
30 June 2022 94.66(1) 143.20(1) 237.86
31 December 2021 111.27 139.20 250.47
31 December 2020 81.50 134.20 215.70
31 December 2019 74.90 124.20 199.10
31 December 2018 84.79 105.20 189.99
31 December 2017 86.57 101.20 187.77
(1) These figures exclude the impact of a dividend in respect of the
year ending 31 December 2022 of 4.00 pence per share paid after the
period-end on 8 July 2022. Payment of this dividend will reduce the
Company's NAV per share and increase cumulative dividends paid to date
by 4.00 pence per share.
The chart above shows the recent past performance of the original funds
raised in 1999. The original subscription price was 200p per share
before the benefit of income tax relief. Subscription prices from subsequent
fundraisings and historic performance data from 2008 are shown in the
Investor Performance Appendix at 30 June 2022 on the Company's website
at: www.mig4vct.co.uk where they can be accessed by clicking on the
word "table" under "Reviewing the performance of your investment" heading
on the home page.
On 1 August 2006, Mobeus became sole Investment Adviser to the Company.
The cumulative NAV total return at this date was 122.51 pence.
Chairman's Statement
I am pleased to present the Company's Half-Year Report for the six
months to 30 June 2022.
Overview
The first six months of the Company's financial year have been notable
for significant economic disruption both domestically and internationally.
December 2021 was a high watermark in many technology and growth markets,
and since then we have experienced a number of significant global events
such as the Russian invasion of Ukraine, the return of inflation to
40-year highs and heightened political uncertainty in the UK and across
Europe. All of this has led to marked volatility across markets and
a general de-rating of growth stocks.
Performance
As a consequence of the factors described above, the Company has experienced
a negative NAV total return of (11.3)% over the six months to 30 June
2022 (2021: positive 28.5%). Share price total return was in positive
territory at 2.8% (2021: 34.1%) but markets remain very volatile and
the results for the six months to 30 June 2022 necessarily provide
only a snapshot as at the reporting period end.
This value decline has been largely driven by market multiples rather
than underlying trading performance at this stage, as markets have
factored in the likely impact of inflation and higher interest rates
on consumer spending and business investment.
The negative NAV total return for the period was principally comprised
of unrealised falls in the value of investments still held, tempered
somewhat by the successful exit from Media Business Insight ("MBI"),
loan repayments and deferred proceeds received from the realisation
of Red Paddle in December 2021.
Investment portfolio
In the face of the current testing environment the portfolio has, thus
far, remained relatively resilient. Nevertheless, the Investment Adviser
has started to see indicators of customer retrenchment as consumer
confidence declines. There was a fall of GBP10.27 million, or 15.7%,
in the overall value of the portfolio across the six months to 30 June
2022 (2021: increase of GBP19.95 million, or 47.9%) on a like for like
basis compared to the opening value of the portfolio at 1 January 2022.
A significant proportion of this asset movement reflected a value decline
in the AIM-listed Virgin Wines investment which, in spite of positive
news flows and the relative outperformance of its peers, has suffered
from the de-rating of its sector.
The Company completed one successful exit during the period, generating
proceeds of GBP3.84 million from the sale of Media Business Insight.
Returns received over the life of this investment amounted to 2.2x
multiple of cost and an IRR of 13.7%. Further proceeds from loan repayments
and deferred consideration amounted to GBP0.49 million.
Global supply shortages remain a significant factor and are expected
to continue to cause disruption going forward. The economic backdrop
falls largely outside of the experience of this generation of management
teams and advisers. As such, the experience of seasoned investment
managers will be increasingly important in the coming months.
Investment activity during the period has been strong, with two new
and four follow-on investments completed during the period, totalling
GBP1.89 million. History suggests that, although the economic backdrop
is challenging, investing throughout the cycle is a fruitful strategy,
with investments made in previous downturns in many cases subsequently
yielding very strong returns.
During the six months under review, the Company invested a total of
GBP1.09 million into two new investments: a retail software provider
(Proximity Insight) and a marketing technology business (Bidnamic).
In addition, four follow-on investments totalling GBP0.80 million were
made into a provider of UK leisure and experience breaks (Caledonian
Leisure), a dairy and allergen-free ice cream brand (Northern Bloc),
a provider of premium electric vehicle chargers (Andersen EV) and a
workforce management software business (RotaGeek). Access to additional
resources following the move to Gresham House is very welcome in this
regard.
Since the period-end, the Company has also made two follow-on investments
and two new investments. GBP0.62 million into an AI and Urban Traffic
Control business (Vivacity) and GBP0.33 million into a hair colourants
brand (Bleach London), both existing businesses. GBP0.50 million was
newly invested into FocalPoint, a navigation and positioning technology
company and GBP0.44 million into Orri Limited, a specialist private
clinic, for those aged 16+, for expert treatment of Anorexia, Bulimia
and Binge Eating
Disorder.
During such turbulent times, doing everything in our power to support
the portfolio is an imperative. The Investment Adviser is making full
use of its Talent Management teams in helping to support management
teams across the portfolio. Such specialist skills are a key benefit
of the move to Gresham House.
Details of this investment activity and the performance of the portfolio
are contained in the Investment Review and the Investment Portfolio
Summary below.
Revenue account
The results for the period are set out in the Unaudited Condensed Income
Statement on pages 12 to 13 of the Half-Year Report and show a revenue
return (after tax) of 0.19 pence per share (2021: 0.11 pence per share).
The revenue return for the period of GBP0.17 million has increased
from last year's figure of GBP0.09 million. This is mainly due to a
significant loan interest receipt upon the sale of MBI.
Dividends
The Board continues to be committed to providing an attractive dividend
stream to Shareholders and was pleased to declare an Interim dividend
of 4.00 pence per share for the year ending 31 December 2022.
This dividend was paid on 8 July 2022, to Shareholders on the Register
on 27 May 2022, and brought cumulative dividends paid per share since
inception to 147.20 pence.
An additional interim dividend of 6.00 pence per share is declared
for payment on 7 November 2022 for those shareholders on the Register
of Members at 16 September 2022.
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 in all 12 years since it was established. 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.
The Company's Dividend Investment Scheme ("DIS") provides Shareholders
with the opportunity to reinvest their cash dividends into new shares
in the Company at the latest published NAV per share (adjusted for
dividends paid). New VCT shares attract the same tax reliefs as shares
purchased through an Offer for Subscription.
There were 508,732 shares allotted through the DIS during the period
at an average price of 99.57 pence.
Shareholders can opt-in to the DIS by completing a mandate form available
on the Company's website at www.mig4vct.co.uk or can opt-out by contacting
Link Group, using the details provided under Shareholder Information
on pages 24-25 of the Half-Year Report. Please note that instructions
received take 15 days to become effective.
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.
Offer for Subscription
As announced recently, the Board intends to launch joint offers for
subscription for new ordinary shares in the 2022/23 tax year alongside
the other Mobeus VCTs. The Board expects to convene a general meeting
of shareholders to seek the necessary authority to allot shares and
disapply pre-emption rights in connection with the fundraising. Shareholders
will have received a Circular in September confirming the amount to
be raised and the purposes for which the funds will be used in advance
of the General meeting for consideration. We urge all Shareholders
to submit their proxy votes online in respect of the resolutions proposed
via the Link Group shareholder portal: www.signalshares.com .
If Shareholder approval is obtained, the Board expects to be in a position
to launch the offer for subscription later this month, full details
of which will be contained in the prospectus on the Company's website:
www.mig4vct.co.uk .
Liquidity
The Board continues to monitor credit risk in respect of its cash and
near cash resources and to prioritise the security and protection of
the Company's capital. Cash and liquidity fund balances as at 30 June
2022 amounted to GBP33.36 million representing 38.7% of net assets.
After the period-end, following the payment of a 4.00 pence per share
dividend, the pro-forma level of liquidity will be GBP30.29 million
(36.5% of net assets).
Share buy-backs
During the six months to 30 June 2022, the Company bought back and
cancelled 269,283 of its own shares, representing 0.3% (2021: 0.8%)
of the shares in issue at the beginning of the period, at a total cost
of GBP0.26 million (2021: GBP0.60 million), inclusive of expenses.
It is the Company's policy to cancel all shares bought back in this
way. The Board regularly reviews its buyback policy, where its priority
is to act prudently and in the interest of remaining Shareholders,
whilst considering other factors, such as levels of liquidity and reserves,
market conditions and applicable law and regulations. Under this policy,
the Company seeks to maintain the discount at which the Company's shares
trade at approximately 5% below the latest published NAV.
Shareholder communications
May I remind you that the Company has its own website which is available
at: www.mig4vct.co.uk .
The Investment Adviser held its most recent Shareholder Event on behalf
of all four Mobeus VCTs in early 2022. The event was well received
and the Investment Adviser plans to hold another event in 2023.Further
details will be circulated to Shareholders and shown on the Company's
website in due course.
Fraud Warning
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 requests
for them to disclose personal data. 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 on pages 24 and 25 of the Half-Year Report.
Succession Planning
I have stated my intention to retire as Chairman and a Director of
the Company following the conclusion of the Company's Annual General
Meeting in May 2023. The Board intends to appoint Graham Paterson as
Chairman of the Company to succeed me. It has therefore begun its recruitment
process for a Non-Executive Director to succeed Graham, who will step
down from his role as Chairman of the Audit Committee. In its recruitment
process, the Nomination & Remuneration Committee will give careful
consideration to the diversity of skills, experience, gender and background
of the wider Board, whilst also ensuring that the candidate selected
has the requisite skills and experience to discharge their duties effectively
as a Director and Chairman of the Audit Committee.
Outlook
The economic impacts for the next twelve months and perhaps beyond
can be expected to be challenging. However, such conditions can provide
a good opportunity to make high quality investments and build strategic
stakes in businesses with great potential for the future. The exit
environment is likely to dampen somewhat, although this is not foreseen
to be a significant issue given that the VCT fund is not time-limited.
On the whole, your Board is confident that, with continued and targeted
support, the portfolio remains on track to overcome its challenges
and achieve its growth ambitions.
Jonathan Cartwright
Chairman
13 September 2022
Investment Policy
The investment policy is designed to meet the Company's objective.
Investments
The Company invests primarily in a diverse portfolio of UK unquoted
companies. Investments are made selectively across a number of sectors,
principally in established companies. Investments are usually structured
as part loan stock and part equity in order to produce a regular income
stream and to generate capital gains from realisations.
There are a number of conditions within the VCT legislation which need
to be met by the Company and which may change from time to time. The
Company will seek to make investments in accordance with the requirements
of prevailing VCT legislation.
Asset allocation and risk diversification policies, including the size
and type of investments the Company makes, are determined in part by
the requirements of prevailing VCT legislation. No single investment
may represent more than 15% (by VCT tax value) of the Company's total
investments at the date of investment.
Liquidity
The Company's cash and liquid funds are held in a portfolio of readily
realisable interest-bearing investments, deposit and current accounts,
of varying maturities, subject to the overriding criterion that the
risk of loss of capital be minimised.
Borrowing
The Company's Articles of Association permit 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 Review
Portfolio review
Demand for growth capital investment remains strong and there continues
to be a healthy pipeline of investment opportunities. The current economic
climate, whilst challenging for businesses across the portfolio, also
presents great opportunities to develop potential through investment.
The portfolio movements in the period are summarised as follows:
2022 2021
GBPm GBPm
--------------------------------- -------- -------
Opening portfolio value 65.58 41.68
New and follow-on investments 1.89 3.83
Disposal proceeds (4.33) (5.42)
Net realised gains 0.78 1.14
Unrealised v aluation movements (11.05) 18.81
--------------------------------- -------- -------
Portfolio value at 30 June 52.87 60.04
--------------------------------- -------- -------
The six months to 30 June 2022 has seen volatility translate into a
decline in market ratings. The portfolio value has reduced as a result
of this, in spite of largely resilient underlying trading performances.
The Company made two new growth capital investments during the period:
GBP0.61 million into Proximity Insight and GBP0.48 million into Bidnamic.
Both these companies are retail technology businesses.
The Company also achieved a satisfying exit from Media Business Insight
("MBI") during the period, receiving a total of GBP3.84 million in
proceeds, contributing to total receipts of GBP4.23 million during
the period.
The investment and divestment activity during the period has further
increased the proportion of the portfolio comprised of growth substantially
made up of investments made since the 2015 VCT rule change. These investments
amount to 89.2% by value at the period-end (31 December 2021: 77.1%).
After the period-end, the Company invested a further GBP0.62 million
into Vivacity, an existing portfolio company. Vivacity is a developer
of artificial intelligence and Urban Traffic Control systems. Following
its initial series A funding in 2021, the business has doubled the
size of its team and partnered with leading firms in the automotive
and environmental measurement industries. Also, after the period end,
GBP0.33 million was further invested into Bleach (London). It also
made a new investment of GBP0.50 into FocalPoint, a next-generation
navigation and positioning technology company and GBP0.44 million was
invested into Orri Limited, a specialist private clinic, for those
aged 16+, for expert treatment of Anorexia, Bulimia and Binge Eating
Disorder.
The portfolio's valuation changes in the six-month period to 30 June
are summarised as follows:
Investment Portfolio Capital Movement 2022 2021
GBPm GBPm
------------------------------------------------- -------- -------
Increase in the value of unrealised investments 0.81 19.12
Decrease in the value of unrealised investments (11.86) (0.31)
------------------------------------------------- -------- -------
Net (decrease)/increase in the value of
unrealised investments (11.05) 18.81
------------------------------------------------- -------- -------
Realised gains 0.78 1.20
Realised losses - (0.06)
------------------------------------------------- -------- -------
Net realised gains in the period 0.78 1.14
------------------------------------------------- -------- -------
Net investment portfolio movement in the
period (10.27) 19.95
------------------------------------------------- -------- -------
Valuation changes of portfolio investments still held
From the total value increases of GBP0.81 million within the portfolio,
the principal movements were in Bella and Duke: GBP0.40 million and
Tharstern: GBP0.36 million.
Bella and Duke has relatively maintained its existing customer base
despite the slowdown in securing new customers due to the current economic
environment. Improved trading for Tharstern through new business wins
and cost controls have enhanced its valuation.
The main reductions within total valuation decreases of (GBP11.86)
million, were in Virgin Wines GBP(6.02) million; MyTutor GBP(1.51)
million and MPB Group GBP(1.24) million. The portfolio's largest asset
by value at the start of the year, Virgin Wines, has consistently delivered
robust trading performance relative to its peers and continued to release
positive news flow. Nevertheless, the value of the AIM-listed stock
has been impacted by the general de-rating of its sector. MyTutor has
generated strong revenues in the year to date. However, a significant
reduction in comparator multiples has reduced the value of this investment.
Finally, MPB has seen a reduction in benchmark multiples and accelerated
its cash spend for growth but is yet to see this translate into revenues
for valuation purposes.
Realised gains and deferred consideration receipts
The Company realised its investment in MBI during the period under
review, generating gains in the period of GBP0.38 million. These contributed
to a multiple of cost of 2.2x over the life of the investment. The
Company also received deferred proceeds of GBP0.40 million from the
realisation of Red Paddle in a previous period.
Investment portfolio yield and capital repayments
In the period under review, the Company received the following amounts
in loan interest and dividend income:
Portfolio income and yield 2022 2021
GBPm GBPm
-------------------------------------------------- -------- --------
Interest received in the period 0.55 0.42
Dividends received in the period 0.07 0.07
Total portfolio income in the period(1) 0.62 0.49
Portfolio Value at 30 June 52.87 60.04
Portfolio Income Yield (Income as a % of
Portfolio Value at 30 June) 1.2% 0.8%
-------------------------------------------------- -------- --------
(1) Total portfolio income in the period is generated solely
from investee companies within the portfolio. See Note 4 of the
Financial Statements for all income receivable by the Company.
In addition to realisation proceeds and deferred consideration
receipts outlined earlier, the Company also received loan stock
repayments of GBP0.09 million from MBI earlier in the period.
New investments during the period
The Company made two new investments totalling GBP1.09 million during
the period, as detailed below:
Company Business Date of Investment Amount of new
investment (GBPm)
Proximity Insight Retail Software February 2022 0.61
Proximity Insight (proximityinsight.com) is a retail technology
business that offers a "Super-App" that is used by the customer-facing
teams of brands and retailers to engage, inspire and transact
with customers. Headquartered in London with offices in New York
and Sydney, Proximity Insight has a global client base that includes
over 20 brands, boutiques and department stores in fashion, beauty,
jewellery, electronics and homewares. These clients use Proximity
Insight's platform to blur the lines between physical and digital
retail, enhancing the customer experience and improving the lifetime
value of their customers by upwards of 35%. The business grew
annual recurring revenue by 117% to GBP2.2 million in 2021, and
the investment will support Proximity Insight's continued product
development and international growth. The investment was made
across all six VCTs advised and managed by Gresham House, including
the two Baronsmead VCTs.
Marketing technology
Bidnamic business May 2022 0.48
---------------------------- ------------------- ------
Lads Store Limited, trading as "Bidnamic" ( www.bidnamic.com )
is a marketing technology business that offers a SaaS platform
for online retailers to optimise their search engine marketing
spend. The technology was all developed internally and uses bespoke
machine learning algorithms to automate the management and optimisation
of online retailers' Google shopping spend. The ARR of the business
has grown substantially over the last two years and this is projected
to continue. The investment round will be used to further enhance
the product's capabilities and drive continued ARR growth through
expanding the sales & marketing team and building a presence in
North America. The investment was made across all six VCTs advised
and managed by Gresham House, including the two Baronsmead VCTs.
Follow-on investments during the period
The Company made four further investments into existing portfolio companies,
totalling GBP0.80 million,
as detailed below: Company Business Date of Investment Amount of further
investment (GBPm)
UK Leisure and January/February
Caledonian Leisure experience breaks 2022 0.22
--------------------- --------------------- -------------------
Caledonian Leisure works with accommodation providers, coach businesses
and other experienced providers (such as entertainment destinations
and theme parks) to deliver UK-based leisure and experience breaks
to its customers. It comprises two brands, Caledonian Travel (caledoniantravel.com)
and UK Breakaways (ukbreakaways.com). The domestic leisure and
experience travel market had been devastated by the COVID-19 pandemic,
but the company was well-placed to expand as lockdown and travel
restrictions eased. A series of planned investment tranches has
helped the company prepare for and capitalise on the strong demand
for UK staycation holidays.
Dairy and
allergen-free
Northern Bloc ice cream producer April 2022 0.12
--------------------- --------------------- -------------------
Northern Bloc Ice Cream (northern-bloc.com) is an 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 dairy and allergen-free
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. Following
the initial investment in December 2020, Northern Bloc has grown
rapidly and strengthened its prospects. This further investment
provides additional working capital and funds a new production
facility to increase its resilience, flexibility and margins in
the future.
Provider of premium
electric vehicle
Andersen EV (EV) chargers May 2022 0.24
--------------------- --------------------- -------------------
Muller EV Limited (trading as Andersen EV) (andersen-ev.com) is
a design-led manufacturer of premium electric vehicle (EV) chargers.
Incorporated in 2016, this business has secured high profile partnerships
with household brands, establishing an attractive niche position
in charging points for the high-end EV market. This follow-on
funding is to further support its premium brand and product positioning
whilst ensuring all new and existing products meet the most recent
and highest safety and compliance standards. Andersen EV has continued
its strong trading performance with revenue up over 300% year
on year.
Workforce
management
RotaGeek software June 2022 0.22
--------------------- --------------------- -------------------
RotaGeek (rotageek.com) is a provider of cloud-based enterprise
software to help larger retail, leisure and healthcare organisations
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.
Realisations during the period
The Company realised its investment in MBI, as detailed below: Company Business Date of Investment Amount of further
investment (GBPm)
Media Business January 2015 to GBP6.07 million
Insight Publishing and June 2022 2.2x cost
events business
------------------ -------------------- --------------------
The Company realised its investment in MBI for GBP3.84 million
(realised gain in the period: GBP0.38 million). Total proceeds
received over the life of the investment were GBP6.07 million
compared to an original investment cost of GBP2.72 million, representing
a multiple on cost of 2.2x and an IRR of 13.7%.
New investments made after the period-end
The Company made two further investments totalling GBP0.94 million,
as detailed below: Company Business Date of Investment Amount of further
investment (GBPm)
Navigation
and positioning
FocalPoint technology company September 2022 0.50
---------------------- ----------------------- ----------------------
FocalPoint Positioning Limited (trading as FocalPoint) (www.focalpointpositioning.com)
is a DeepTech business with a growing IP and software portfolio.
FocalPoint's proprietary technology applies advanced physics and
machine learning to reduce costs and dramatically improve the
satellite-based location sensitivity, accuracy, and security of
devices such as smartphones, wearables, and vehicles. Across both
the Mobeus VCTs and the Baronsmead VCTs, this GBP4m investment
is part of a larger investment round alongside existing investor
Molten Ventures. The investment will be used to grow and develop
its business, hire additional staff and continue the development
and roll out of its offerings.
Company Business Date of Investment Amount of further
investment (GBPm)
A specialist private
Orri clinic September 2022 0.44
------------------------- --------------------- --------------------
Orri Limited (www.orri-uk.com/) is a specialist service provider
for patients over 16 suffering from eating disorders. Orri's intensive
day care model addresses a gap in service provision between residential
in-patient services and infrequent outpatient sessions. Across
both the Mobeus VCTs and the Baronsmead VCTs, the GBP4.5m investment
will be used to open a second Orri site as well as to accelerate
growth in online services, provide a step-down outpatient service,
and build out the business' head office team.
Further investments made after the period-end
The Company made two further investments into existing portfolio companies,
totalling GBP0.95 million, as detailed below: Company Business Date of Investment Amount of further
investment (GBPm)
Artificial Intelligence
and Urban Traffic
Control (UTC)
Vivacity system June 2022 0.62
----------------------------- --------------------- --------------------
Vivacity (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.
In April 2021, Vivacity won the Queen's Award for Enterprise:
Innovation 2021.
Hair Colourants
Bleach Brand August 2022 0.33
----------------------------- --------------------- --------------------
Bleach London Holdings ("Bleach") is an established branded, fast-growing
business which manufactures a range of haircare and colouring
products. Bleach is regarded as a leading authority in the hair
colourant market having opened one of the world's first salons
focused on colouring and subsequently launched its first range
of products in 2013. This further investment was part of a wider
GBP5.5 million investment round alongside existing shareholders
and a strategic partner. The funds will be used to consolidate
the brands position in the UK market as well as drive further
expansion and strategic penetration of the North American market.
Environmental, Social, Governance considerations
Following the novation of the investment advisory agreement to Gresham
House, who have a dedicated team which is focused on sustainability,
this provides an opportunity to enhance the Company's existing protocols
and procedures through the adoption of the highest industry standards.
Under the new enlarged investment team, each investment executive is
responsible for their own individual ESG objectives in support of the
wider overarching ESG goals of the Investment Adviser. For further
details, Gresham House published its second Sustainable Investment
Report in April 2022, which can be found on its website at: www.greshamhouse.com
.
Gresham House Asset Management Limited
Investment Adviser
13 September 2022
INVESTMENT PORTFOLIO SUMMARY as at 30 June 2022
% %
Total Total Total of of
cost valuation valuation equity portfolio
at 31 at 30
at 30 June December June by
2022 2021 2022 held value
Gresham House Asset
Management
Portfolio GBP GBP GBP
Preservica Limited 3,397,745 11,056,628 10,693,622 13.3% 20.2%
Seller of proprietary
digital archiving
software
MPB Group Limited 1,095,252 5,764,694 4,526,932 3.2% 8.6%
Online marketplace for
photographic
and video equipment
EOTH Limited (trading as
Equip
Outdoor Technologies) 951,471 4,847,187 4,043,046 1.7% 7.6%
Branded outdoor equipment
and clothing
(including the RAB and Lowe
Alpine
brands)
My TutorWeb Limited
(trading as
MyTutor) 2,464,757 5,015,751 3,511,020 5.3% 6.6%
Digital marketplace
connecting
school pupils seeking one
to one
online tutoring
Virgin Wines UK plc 45,915 9,486,219 3,470,568 8.3% 6.6%
Online wine retailer
Master Removers Group 2019
Limited
(trading as Anthony Ward
Thomas,
Bishopsgate and Aussie Man
& Van) 348,641 3,001,004 3,006,136 6.6% 5.7%
A specialist logistics,
storage
and removals business
End Ordinary Group Limited
(trading
as Buster and Punch) 1,496,785 3,305,392 2,987,455 7.8% 5.7%
Industrial inspired
lighting and
interiors retailer
Data Discovery Solutions
Limited
(trading as Active
Navigation) 1,408,640 2,624,447 2,503,729 7.1% 4.7%
Provider of global market
leading
file analysis software for
information
governance, security and
compliance
Bella & Duke Limited 877,381 2,050,122 2,452,629 4.4% 4.6%
A premium frozen raw dog
food provider
Manufacturing Services
Investment
Limited (trading as
Wetsuit Outlet) 2,333,102 2,331,133 1,967,122 6.4% 3.7%
Online retailer in the
water sports
market
Arkk Consulting Limited
(trading
as Arkk Solutions) 1,599,445 1,680,942 1,712,786 6.7% 3.2%
Provider of services and
software
to enable organisations to
remain
compliant with regulatory
reporting
requirements
Tharstern Group Limited 1,091,886 1,204,783 1,560,890 12.7% 3.0%
Software based management
information
systems to the print sector
Rota Geek Limited 1,092,500 765,890 992,446 4.1% 1.9%
Workforce management
software
Connect Childcare Group
Limited 846,007 994,110 937,439 3.0% 1.8%
Nursery management software
provider
Vivacity Labs Limited 914,754 914,754 914,754 4.4% 1.7%
Provider of artificial
intelligence
& urban traffic control
systems
Spanish Restaurant Group
Limited
(trading as Tapas
Revolution) 1,219,096 739,557 734,928 6.7% 1.4%
Spanish restaurant chain
Caledonian Leisure Limited 547,502 695,000 663,343 6.6% 1.3%
Provider of UK leisure and
experience
breaks
Legatics Limited 663,011 663,011 663,011 6.0% 1.2%
SaaS LegalTech software
provider
Pets' Kitchen Limited
(trading
as Vet's Klinic) 631,120 631,120 631,120 4.5% 1.2%
Veterinary clinics
IPV Limited 619,487 619,487 619,487 5.5% 1.2%
Provider of media asset
software
Bleach London Holdings
Limited 629,772 791,477 613,118 3.1% 1.2%
Hair colourants brand
Proximity Insight Holdings
Limited 608,000 - 608,000 2.5% 1.2%
Super-App used by
customer-facing
teams of brands and
retailers to
engage, inspire and
transact with
customers
Northern Bloc Ice Cream
Limited 425,670 498,768 555,832 6.3% 1.0%
Supplier of premium vegan
ice cream
Lads Store Limited (trading
as
Bidnamic) 480,538 - 480,538 1.1% 0.9%
SaaS platform for
optimisation
of search engine marketing
spend
CGI Creative Graphics
International
Limited 1,449,746 397,434 378,906 6.3% 0.7%
Vinyl graphics to global
automotive,
recreation vehicle and
aerospace
markets
Muller EV Limited (trading
as
Andersen EV) 585,598 195,200 329,398 8.8% 0.6%
Provider of premium
electrical
vehicle (EV) changers
Parsley Box Group plc 631,003 417,536 221,816 1.8% 0.4%
Home delivered ambient
ready meals
targeting the over 60s
RDL Corporation Limited 1,000,000 317,413 199,932 8.9% 0.4%
Recruitment consultants
within
the pharmaceutical,
business intelligence
and IT industries
Kudos Innovations Limited 328,950 81,979 72,883 3.0% 0.1%
Online platform that
provides and
promotes academic research
dissemination
Jablite Holdings Limited
(in members'
voluntary liquidation) 376,083 49,597 49,597 9.1% 0.1%
Manufacturer of expanded
polystyrene
products
Veritek Global Holdings
Limited 1,620,086 - - 15.4% 0.0%
Maintenance of imaging
equipment
BookingTek Limited 582,300 - - 3.5% 0.0%
Direct booking software for
hotels
Racoon International Group
Limited 484,347 - - 0.0% 0.0%
Supplier of hair
extensions, hair
care products and training
Importer and distributor of
artificial
flowers, floral sundries
and home
decor products
Disposals in period
Media Business Insight
Holdings
Limited 3,560,047 15.7% 0.0%
A publishing and events
business
focused on the creative
production
industries
Total 32,846,590 64,700,682 52,102,483 98.5%
Former Elderstreet Private
Equity
Limited Portfolio
Cashfac Limited 260,101 851,035 725,731 2.9% 1.4%
Provider of virtual banking
application
software solutions to
corporate
customers
Sift Group Limited 135,391 32,750 39,722 1.3% 0.1%
Developer of
business-to-business
internet communities
Total 395,492 883,785 765,453 1.5%
Total Investment Portfolio 33,242,082 65,584,467 52,867,936 100.0%
============================ =========== =========== =========== ======= ==========
Total Investment Portfolio
by
type
Growth focused portfolio(1) 27,174,019 50,568,974 47,208,043 89.2%
MBO focused portfolio(1) 6,068,063 15,015,493 5,659,893 10.8%
Investment Adviser's Total 33,242,082 65,584,467 52,867,936 100.0%
Notes
(1) - The growth focused portfolio contains all investments made after
the change in the VCT regulations in 2015 plus some investments that
are growth in nature made before this date. The MBO focused portfolio
contains investments made prior to 2015 as part of the previous MBO
strategy.
Statement of the Directors' Responsibilities
Responsibility statements
In accordance with Disclosure and Transparency Rule (DTR) 4.2.10, Jonathan
Cartwright (Chairman), Graham Paterson (Chairman of the Audit Committee
and Nomination and Remuneration Committee) and Chris Burke (Chairman
of the Investment Committee), being the Directors of the Company confirm
that to the best of their knowledge:
a) the condensed set of financial statements, which has been prepared
in accordance with Financial Reporting Standard 104 "Interim Financial
Reporting" gives a true and fair view of the assets, liabilities, financial
position and profit of the Company, as required by DTR 4.2.10;
b) the Half-Year Management Report which comprises the Chairman's Statement,
Investment Policy, Investment Review and the Investment Portfolio Summary
includes a fair review of the information required by DTR 4.2.7, being
an indication of the important events that have occurred during the
first six months of the financial year and their impact on the condensed
set of financial statements;
c) a description of the principal risks and uncertainties facing the
Company for the remaining six months is set out below, in accordance
with DTR 4.2.7; and
d) there were no related party transactions in the first six months
of the current financial year that are required to be disclosed, in
accordance with DTR 4.2.8.
Principal risks and uncertainties
In accordance with DTR 4.2.7, the Board confirms that the principal
risks and uncertainties facing the Company have not materially changed
from those identified in the Annual Report and Financial Statements
for the year ended 31 December 2021 ("the Annual Report") and are not
expected to change ahead of the year-end.
The principal risks faced by the Company are:
* Loss of approval as a Venture Capital Trust;
* economic and political risk;
* investment risk;
* regulatory risk;
* financial and operating risk;
* market risk;
* asset liquidity risk; and
* environmental, social and governance emerging risk.
A detailed explanation of the principal risks can be found in the Annual
Report on pages 34 and 35 and in Note 15 on pages 72 to 79 of the Annual
Report and Financial Statements for the year ended 31 December 2021,
copies of which are available on the Investment Adviser's website,
www.greshamhouse.com or by going directly to the VCT's website, www.mig4vct.co.uk
.
Going concern
The Board has assessed the Company's operation as a going concern.
The Company's business activities, together with the factors likely
to affect its future development, performance and position are set
out in the Half-Year Management Report. The Directors have satisfied
themselves that Company's cash position, bolstered by the fundraising
completed at the beginning of 2022 is adequate for the Company to continue
as a going concern under any plausible stress scenario. The majority
of companies in the portfolio continue to trade well and the portfolio
taken as a whole remains resilient and well-diversified, although supply
chain constraints and inflationary pressures are beginning to impact.
The major cash outflows of the Company (namely investments, buybacks
and dividends) are within the Company's control.
The Board's assessment of liquidity risk and details of the Company's
policies for managing its financial risks and capital are shown in
Note 15 on pages 72 to 79 of the Annual Report and Financial Statements
for the year ended 31 December 2021. Accordingly, the Directors continue
to adopt the going concern basis of accounting in preparing the Half-Year
report and annual financial statements.
Cautionary statement
This report may contain forward looking statements with regards to
the financial condition and results of the Company, which are made
in the light of current economic and business circumstances. Nothing
in this report should be construed as a profit forecast.
For and on behalf of the Board:
Jonathan Cartwright
Chairman
13 September 2022
UNAUDITED CONDENSED FINANCIAL STATEMENTS
Unaudited Condensed Income Statement for the six months to 30 June
2022
Six months ended Six months ended Year ended 31
30 June 2022 30 June 2021 December 2021
(unaudited) (unaudited) (audited)
Notes Revenue Capital Total Revenue Capital Total Revenue Capital Total
GBP GBP GBP GBP GBP GBP GBP GBP GBP
---------------- ------ ---------- ------------- ------------- ---------- ----------- ----------- ---------- ------------ ------------
Net investment
portfolio
(losses)/gains 10 - (10,266,686) (10,266,686) - 19,952,419 19,952,419 - 29,904,336 29,904,336
Income 4 699,999 - 699,999 496,873 - 496,873 1,354,209 - 1,354,209
Investment
Adviser's
fees 5 (247,680) (743,037) (990,717) (194,595) (583,787) (778,382) (428,601) (1,285,804) (1,714,405)
Other expenses (261,117) - (261,117) (208,965) - (208,965) (460,888) - (460,888)
Profit/(loss)
on ordinary
activities
before
taxation 191,202 (11,009,723) (10,818,521) 93,313 19,368,632 19,461,945 464,720 28,618,532 29,083,252
Tax on
profit/(loss)
on ordinary
activities 6 (22,224) 22,224 - (4,371) 4,371 - (22,097) 22,097 -
Profit/(loss)
and total
comprehensive
income 168,978 (10,987,499) (10,818,521) 88,942 19,373,003 19,461,945 442,623 28,640,629 29,083,252
================ ====== ========== ============= ============= ========== =========== =========== ========== ============ ============
Basic and
diluted
earnings per
ordinary
share 7 0.19p (12.43)p (12.24)p 0.11p 23.08p 23.19p 0.53p 34.16p 34.69p
The revenue column of the Income Statement includes all income and
expenses. The capital column accounts for the net investment portfolio
(losses)/gains (unrealised (losses)/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 to better reflect the activities of a VCT and in
accordance with the 2014 Statement of Recommended Practice ("SORP")
(updated in April 2021) issued by the Association of Investment Companies
("AIC"), 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 period/year.
The notes to the unaudited financial statements below form
part of these Half-Year Financial Statements.
Unaudited Condensed Balance Sheet as at 30 June 2022
---------------------------------------------------------------------------------
30 June 30 June 31 December
2022 2021 2021
(unaudited) (unaudited) (audited)
Notes GBP GBP GBP
------------------------------- ------ ------------ ------------ ------------
Fixed assets
Investments at fair value 10 52,867,936 60,040,228 65,584,467
Current assets
Debtors and prepayments 146,585 148,101 2,895,532
Current asset investments 9 30,938,168 24,529,923 20,475,179
Cash at bank 9 2,422,753 3,001,675 4,059,487
------------------------------- ------
33,507,506 27,679,699 27,430,198
Creditors: amounts falling
due within one year (241,463) (400,219) (227,411)
Net current assets 33,266,043 27,279,480 27,202,787
Net assets 86,133,979 87,319,708 92,787,254
------------------------------- ------ ------------ ------------ ------------
Capital and reserves
Called up share capital 909,903 833,540 833,897
Share premium reserve 20,869,200 12,495,262 13,129,427
Capital redemption reserve 36,299 27,012 33,606
Revaluation reserve 20,436,687 27,540,590 32,819,832
Special distributable reserve 15,945,431 25,380,699 20,109,912
Realised capital reserve 26,145,111 19,355,977 24,028,652
Revenue reserve 1,791,348 1,686,628 1,831,928
Equity shareholders' funds 86,133,979 87,319,708 92,787,254
=============================== ====== ============ ============ ============
Basic and diluted net
asset value:
Basic and diluted net asset
value per share 11 94.66p 104.76p 111.27p
The financial information for the six months ended 30 June 2022 and
the six months ended 30 June 2021 has not been audited.
The notes to the unaudited financial statements below form
part of these Half-Year Financial Statements.
Unaudited Condensed Statement of Changes in Equity
for the six months ended 30 June 2022
----------------------------------------------------------------------------------------------------------------------------------
Non-distributable
reserves Distributable reserves
Called
up Share Capital Special Realised
share premium redemption Revaluation distributable capital Revenue
capital reserve reserve reserve reserve reserve reserve Total
(Note (Note (Note
a) b) b)
For the six
months
ended 30 June
2022 Notes GBP GBP GBP GBP GBP GBP GBP GBP
--------------- ------ -------- ----------- ----------- ------------- -------------- ----------- ---------- -------------
At 1 January
2022 833,897 13,129,427 33,606 32,819,832 20,109,912 24,028,652 1,831,928 92,787,254
Comprehensive
income
for the period
(Loss)/profit
for
the period - - - (11,048,140) - 60,641 168,978 (10,818,521)
--------------- ------ -------- ----------- ----------- ------------- -------------- ----------- ---------- -------------
Total
comprehensive
income for
the period - - - (11,048,140) - 60,641 168,978 (10,818,521)
--------------- ------ -------- ----------- ----------- ------------- -------------- ----------- ---------- -------------
Contributions
by
and
distributions
to owners
Shares issued
via
Offer for
Subscription
(Note c) 73,612 7,426,388 - - - - - 7,500,000
Issue costs
and
facilitation
fees on Offer
for
Subscription
(Note
c) - (188,072) - - (40,749) - - (228,821)
Issue of
shares under
Dividend
Investment
Scheme 5,087 501,457 - - - - - 506,544
Shares bought
back
(Note d) (2,693) - 2,693 - (259,553) - - (259,553)
Dividends paid 8 - - - - (3,143,366) - (209,558) (3,352,924)
Total
contributions
by and
distributions
to owners 76,006 7,739,773 2,693 - (3,443,668) - (209,558) 4,165,246
--------------- ------ ----------- ----------- -------------- -----------
Other
movements
Realised
losses
transferred
to special
reserve
(Note a) - - - - (720,813) 720,813 - -
Realisation of
previously
unrealised
gains - - - (1,335,005) - 1,335,005 - -
Total other
movements - - - (1,335,005) (720,813) 2,055,818 - -
--------------- ------ ----------- ----------- -------------- -----------
At 30 June
2022 909,903 20,869,200 36,299 20,436,687 15,945,431 26,145,111 1,791,348 86,133,979
=============== ====== ======== =========== =========== ============= ============== =========== ========== =============
Notes:
a): The Special distributable reserve also provides the Company with
a reserve to absorb any existing and future realised losses and, when
considered by the Board to be in the interests of Shareholders, to
fund share buybacks and for other corporate purposes. The transfer
of GBP720,813 to the special reserve from the realised capital reserve
above is the total of realised losses incurred by the Company in the
period. As at 30 June 2022, the Company has a special reserve of GBP15,945,431,
all of which arises from shares issued more than three years after
the end of the financial year in which they were issued. Reserves
originating from share issues are not distributable under VCT rules
if they are within three years of the end of an accounting period
in which the shares were issued.
b): The Realised capital reserve and the Revenue reserve together
comprise the Profit and Loss Account of the Company.
c): Under the Company's Offer for subscription launched on 20
January 2022, 7,361,191 Ordinary Shares were allotted on 9 March
2022, raising net funds of GBP7,271,179 for the Company. This
figure is net of issue costs of GBP188,072 and facilitation
fees of GBP40,749.
d): During the period, the Company repurchased 269,283 of its own
shares at the prevailing market price for a total cost (including
stamp duty) of GBP259,553, which were subsequently cancelled.
The notes to the unaudited financial statements below form part of
these Half-Year Financial Statements.
Unaudited Condensed Statement of Changes in Equity
for the six months ended 30 June 2021
Non-distributable
reserves Distributable reserves
Called
up Share Capital Special Realised
share premium redemption Revaluation distributable capital Revenue
capital reserve reserve reserve reserve reserve reserve Total
For the six
months
ended 30 June
2021 Notes GBP GBP GBP GBP GBP GBP GBP GBP
--------------- ------ -------- ----------- ----------- ------------- -------------- ----------- ---------- -------------
At 1 January
2021 840,040 12,495,262 20,512 10,205,933 26,563,547 16,738,215 1,597,686 68,461,195
Comprehensive
income
for the period
Profit for the
period - - - 18,812,482 - 560,521 88,942 19,461,945
-------- ----------- ----------- ------------- -------------- ----------- ---------- -------------
Total
comprehensive
income for
the period - - - 18,812,482 - 560,521 88,942 19,461,945
--------------- ------ -------- ----------- ----------- ------------- -------------- ----------- ---------- -------------
Contributions
by
and
distributions
to owners
Shares bought
back (6,500) - 6,500 - (603,432) - - (603,432)
Dividends paid - - - - - - - -
-------------
Total
contributions
by and
distributions
to owners (6,500) - 6,500 - (603,432) - - (603,432)
--------------- ------ ----------- ----------- -------------- ----------- -------------
Other
movements
Realised
losses
transferred
to special
reserve - - - - (579,416) 579,416 - -
Realisation of
previously
unrealised
gains - - - (1,477,825) - 1,477,825 - -
Total other
movements - - - (1,477,825) (579,416) 2,057,241 - -
--------------- ------ ----------- ----------- -------------- -----------
At 30 June
2021 833,540 12,495,262 27,012 27,540,590 25,380,699 19,355,977 1,686,628 87,319,708
=============== ====== ======== =========== =========== ============= ============== =========== ========== =============
The composition of each of these reserves is explained below:
Called up share capital - The nominal value of shares originally
issued, increased for subsequent share issues either via an
Offer for Subscription or Dividend Investment Scheme or reduced
due to shares bought back by the Company.
Capital redemption reserve - The nominal value of shares bought
back and cancelled is held in this reserve, so that the Company's
capital is maintained.
Share premium reserve - This reserve contains the excess of
gross proceeds less issue costs over the nominal value of shares
allotted under recent Offers for Subscription and the Company's
Dividend Investment Scheme.
Revaluation reserve - Increases and decreases in the valuation
of investments held at the period-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, all such movements through both revaluation
and realised capital reserves are shown within the Income Statement
for the period.
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) are
charged to this reserve. 75% of the Investment Adviser fee expense,
and the related tax effect, that are charged to the realised
capital reserve are transferred to this reserve. This reserve
will also be charged any facilitation payments to financial
advisers, which arose as part of an 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 incentive fee payable, together with the related
tax effect to this reserve in accordance with the policies;
and
-- Capital dividends paid.
Revenue reserve - Income and expenses that are revenue in nature
are accounted for in this reserve together with the related
tax effect, as well as income dividends paid that are classified
as revenue in nature.
The notes to the unaudited financial statements below form part of
these Half-Year Financial Statements.
Unaudited Condensed Statement of Cash Flows for the six months ended
30 June 2022
------------------------------------------------------------------------------------
Six months Six months Year ended
ended 30 ended 30 31 December
June 2022 June 2021 2021
Notes (unaudited) (unaudited) (audited)
GBP GBP GBP
Cash flows from operating
activities
(Loss)/Profit for the
financial
period (10,818,521) 19,461,945 29,083,252
Adjustments for:
Net investment portfolio
losses/(gains) 10,266,686 (19,952,419) (29,904,336)
Decrease in debtors 169,170 255,467 87,812
Increase in creditors and
accruals 14,052 45,409 23,302
-------------------------------
Net cash outflow from
operations (368,613) (189,598) (709,970)
Corporation tax paid - - (103,452)
Net cash outflow from
operating
activities (368,613) (189,598) (813,422)
Cash flows from investing
activities
Sale of investments 10 4,341,501 5,424,072 12,231,857
Purchase of investments 10 (1,891,656) (3,835,185) (6,235,292)
Net cash inflow from investing
activities 2,449,845 1,588,887 5,996,565
Cash flows from financing
activities
Share issued as part of Offer
for Subscription 7,500,000 - -
Issue costs and facilitation
fees as part of Offer for
Subscription (228,821) - -
Equity dividends paid 8 (266,603) - (6,106,267)
------------------------------- ------ ------------- ------------- -------------
Purchase of own shares (259,553) (556,183) (1,230,702)
------------------------------- ------ ------------- ------------- -------------
Net cash inflow/(outflow) from
financing activities 6,745,023 (556,183) (7,336,969)
Net increase/(decrease) in
cash
and cash equivalents 8,826,255 843,106 (2,153,826)
Cash and cash equivalents at
start of period 22,534,666 24,688,492 24,688,492
------------------------------- ------ ------------- ------------- -------------
Cash and cash equivalents at
end of period 31,360,921 25,531,598 22,534,666
Cash and cash equivalents
comprise:
Cash at bank and in hand 9 2,422,753 3,001,675 4,059,487
Cash equivalents 9 28,938,168 22,529,923 18,475,179
The notes to the unaudited financial statements below form
part of these Half-Year Financial Statements.
Notes to the Unaudited Condensed Financial Statements
Notes to the Unaudited Condensed Financial Statements
for the six months ended 30 June 2022
1. Company information
Mobeus Income and Growth 4 VCT plc is a public limited company
incorporated in England, registration number 3707697. The registered
office is 5 New Street Square, London EC4A 3TW.
2. Basis of preparation of the
financial statements
These Financial Statements have been prepared in accordance with
accounting policies consistent with Financial Reporting Standard
102 ("FRS102"), Financial Reporting Standard 104 ("FRS104") - Interim
Financial Reporting, 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
April 2021) issued by the Association of Investment Companies.
The Half-Year Report has not been audited, nor has it been reviewed
by the auditor pursuant to the Financial Reporting Council's (FRC)
guidance on Review of Interim Financial Information.
3. Principal accounting policies
The accounting policies have been applied consistently throughout
the period. Full details of principal accounting policies will
be disclosed in the Annual Report, while the policy in respect
of investments is included within an outlined box at the top of
note 10 on investments.
4. Income
Six months Six months Year
ended ended ended
31
30 June 30 June December
2022 2021 2021
(unaudited) (unaudited) (audited)
Income from investments GBP GBP GBP
--------------------------- ---- -------------- --- ------------ ---- ----------
Dividends 74,231 70,309 348,420
Loan stock interest 548,258 415,674 984,972
Money-market funds 59,788 758 2,258
Bank deposit interest 17,722 10,132 18,559
Total Income 699,999 496,873 1,354,209
--------------------------- --------- -------------- --- ------------ ---- ----------
5. Investment Adviser's fees and performance fees
25% of the Investment Adviser's fees are charged to the revenue column
of the Income Statement, while 75% is charged against the capital column
of the Income Statement. This is in line with the Board's expected
long-term
split of returns from the investment portfolio of the Company. 100% of
any performance incentive fee payable for the year would be charged against
the capital column of the Income Statement, as it is based upon the
achievement
of capital growth.
Six months
ended Six months ended Year ended
31 December
30 June 2022 30 June 2021 2021
(unaudited) (unaudited) (audited)
Total Total Total
GBP GBP GBP
Allocated to revenue
return: Investment
Adviser's fees 247,680 194,595 428,601
Allocated to capital
return: Investment
Adviser's fees 743,037 583,787 1,285,804
Total 990,717 778,382 1,714,405
---------------------------- --- ------------- ----------------- ------------
6. Taxation
Six months Six months
ended ended Year ended
30 June 31 December
30 June 2022 2021 2021
(unaudited) (unaudited) (audited)
Revenue Capital Total Revenue Capital Total Revenue Capital Total
GBP GBP GBP GBP GBP GBP GBP GBP GBP
a) Analysis of tax
charge:
UK Corporation tax on
profits/(losses) for the
period 22,224 (22,224) - 4,371 (4,371) - 22,097 (22,097) -
-------------------------- --------- ------------- ------------- --------- ------------ ------------ --------- ------------
Total current tax
charge/(credit) 22,224 (22,224) - 4,371 (4,371) - 22,097 (22,097) -
-------------------------- --------- ------------- ------------- --------- ------------ ------------ --------- ------------ ------------
Corporation tax is
based on a rate of
19.0% (2021: 19.0%)
b) Profit/(loss) on
ordinary activities
before tax 191,202 (11,009,723) (10,818,521) 93,313 19,368,632 19,461,945 464,720 28,618,532 29,083,252
Profit/(loss) on ordinary
activities multiplied by
rate of corporation
tax in the UK of 19.0%
(2021: 19.0%) 36,328 (2,091,848) (2,055,520) 17,729 3,680,041 3,697,770 88,297 5,437,521 5,525,818
Effect of:
UK dividends (14,104) - (14,104) (13,358) - (13,358) (66,200) - (66,200)
Net investment portfolio
losses/(gains) not
allowable/(taxable) - 1,950,670 1,950,670 - (3,790,961) (3,790,961) - (5,681,824) (5,681,824)
Losses not utilised - 118,954 118,954 - 106,549 106,549 - 222,206 222,206
Actual current tax charge 22,224 (22,224) - 4,371 (4,371) - 22,097 (22,097) -
-------------------------- --------- ------------- ------------- --------- ------------ ------------ --------- ------------ ------------
7. Basic and diluted earnings per share
The basic earnings, revenue return and capital return per share shown
below for each period are respectively based on numerators i)-iii), each
divided by the weighted average number of shares in issue in the period
- see iv) below
Six
months Six months Year
ended ended ended
30 June 30 June 31 December
2022 2021 2021
(unaudited) (unaudited) (audited)
GBP GBP GBP
------------- ------------ ------------
i) Total earnings after taxation (10,818,521) 19,461,945 29,083,252
Basic and diluted earnings per
share (Note a) (12.24)p 23.19p 34.69p
ii) Revenue earnings from
ordinary activities after
taxation 168,978 88,942 442,623
Basic and diluted revenue return
per share (Note b) 0.19p 0.11p 0.53p
Net investment portfolio
(losses)/gains (10,266,686) 19,952,419 29,904,336
Capital Investment Adviser's
fees less taxation (720,813) (579,416) (1,263,707)
--------------------------------- --- ------------- ------------ ------------
iii) Total capital return (10,987,499) 19,373,003 28,640,629
Basic and diluted capital return
per share (Note c) (12.43)p 23.08p 34.16p
iv) Weighted average number of
shares in issue in the period 88,388,162 83,932,807 83,840,235
Notes:
a) Basic earnings per share is total earnings
after taxation divided by the
weighted average number of shares in
issue.
b) Basic revenue return per share is the revenue return after
taxation divided
by the weighted average number of shares in issue.
c) Basic capital return per share is the capital return after
taxation divided
by the weighted average number of shares in issue.
Six
Dividends months Six months Year
8 . paid ended ended ended
30 31
June 30 June December
2022 2021 2021
(unaudited) (unaudited) (audited)
For
the
year
ended Pence
31 per Date
Dividend Type December share paid GBP GBP GBP
06
August
Interim Income 2021 0.25p 2021 - - 208,381
06
August
Interim Capital* 2021 4.75p 2021 - - 3,959,226
07
January
Interim Income 2021 0.25p 2022 209,558 - -
07
January
Interim Capital* 2021 3.75p 2022 3,143,366 - -
Total Dividends Paid 3,352,924 - 4,167,607
------------ ------------ ----------
* - These dividends were paid out of the Company's special distributable
reserve.
For the period ended 30 June 2022, GBP3,352,924 disclosed above differs
to that shown in the Condensed Statement of Cash Flows of GBP266,603 due
to GBP506,545 of new shares allotted subject to listing under the Company's
Dividend Investment scheme and GBP2,579,776 in dividends paid to the registrar
before the previous year end.
The Board declared an interim dividend in respect of the year ending 31
December 2022 of 4.00 pence per share which was paid to Shareholders on
8 July 2022.
9. Current asset investments and cash at bank
as at as at as at
30 June 30 June 31 December
2022 2021 2021
(unaudited) (unaudited) (audited)
GBP GBP GBP
OEIC Money market funds 28,938,168 22,529,923 18,475,179
Cash equivalents per Statement of
Cash Flows 28,938,168 22,529,923 18,475,179
Bank deposits that mature after
three months 2,000,000 2,000,000 2,000,000
---------------------------------- --- ------------ ------------ ------------
Current asset investments 30,938,168 24,529,923 20,475,179
---------------------------------- --- ------------ ------------ ------------
Cash at Bank 2,422,753 3,001,675 4,059,487
---------------------------------- --- ------------ ------------ ------------
10. Summary of movement on investments during the period
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. 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 subsequent quarterly
measurement dates 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 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.
The methods of fair value measurement are classified into hierarchy based
on the reliability of the information used to determine the valuation.
- Level 1 - Fair value is measured based on quoted prices in an active
market.
- Level 2 - Fair value is measured based on directly observable current
market prices or indirectly being derived from market prices.
- Level 3 - Fair value is measured using valuation techniques using inputs
that are not based on observable market data.
----------------------------------------------------------------------------------
Traded Unquoted Unquoted Unquoted Total
Loan
on AIM equity preference Stock
shares shares
Level Level Level
1 3 Level 3 3
GBP GBP GBP GBP GBP
---------------- ------------ ------------ ----------- ------------ -------------
Valuation at 31
December 2021 9,903,755 45,972,682 1,608,338 8,099,692 65,584,467
Purchases at
cost - 370,903 1,083,253 437,500 1,891,656
Sales - proceeds - (3,205,562) - (1,135,939) (4,341,501)
- realised gains
(Note a) - 781,454 - - 781,454
Unrealised
(losses)/gains
on investments
in the period
(Note a) (6,211,371) (4,770,421) 56,645 (122,993) (11,048,140)
Valuation at 30
June 2022 3,692,384 39,149,056 2,748,236 7,278,260 52,867,936
Book cost at 30
June 2022 676,918 20,209,052 2,554,667 9,801,445 33,242,082
Unrealised
gains/(losses)
at 30 June 2022 3,015,466 19,686,222 193,796 (2,458,797) 20,436,687
Permanent
impairment of
investments - (746,218) (227) (64,388) (810,833)
Valuation at 30
June 2022 3,692,384 39,149,056 2,748,236 7,278,260 52,867,936
Gains on
investments - 2,116,459 - - 2,116,459
Less amounts
recognised as
unrealised
gains in
previous years - (1,335,005) - - (1,335,005)
------------ ------------ ----------- ------------ -------------
Realised gains
based on
carrying value
at 31 December
2021 - 781,454 - - 781,454
Net movement in
unrealised
(losses)/gains
in the period (6,211,371) (4,770,421) 56,645 (122,993) (11,048,140)
(Losses)/gains
on investments
for the six
months ended 30
June 2022 (6,211,371) (3,988,967) 56,645 (122,993) (10,266,686)
================= ============ ============ =========== ============ =============
Note a) Net realised gains on investments of GBP781,454 together with
net unrealised losses of GBP11,048,140 equal net investment portfolio
losses of GBP10,266,686 as disclosed in the Income Statement.
Level 3 unquoted equity and loan investments are valued in accordance
with IPEV guidelines as follows:
as at as at as at
30 June 30 June 31 December
2022 2021 2021
(unaudited) (unaudited) (audited)
GBP GBP
-------------- ------------ --------------
Valuation methodology
Multiple of earnings, revenues or
gross margin, as appropriate 47,708,019 45,057,207 55,435,915
Recent investment price 1,088,538 1,622,633 195,200
Recent investment price (reviewed
for impairment) 329,398 48,800 -
Estimated and discounted realisation
proceeds 49,597 49,597 49,597
Net asset value - 309,420 -
49,175,552 47,087,657 55,680,712
11. Net asset value per share
As at As at As at
31 December
30 June 2022 30 June 2021 2021
(unaudited) (unaudited) (audited)
Net assets GBP86,133,979 GBP87,319,708 GBP92,787,254
Number of shares
in issue 90,990,361 83,354,074 83,389,721
Net asset value
per share
(pence) 94.66p 104.76p 111.27p
12. Post balance sheet events
On 5 July 2022, the Company made a further investment of GBP0.62 million
into Vivacity Labs Limited, an Artificial Intelligence and Urban
Traffic
Control ("UTC") system .
On 23 August 2022, the Company made a further investment of GBP0.33
million
into Bleach London Holdings Limited, a hair colourants brand.
On 9 September 2022, the Company made a new investment of GBP0.50
million
into Focal Point Positioning Limited, a navigation and positioning
technology
company.
On 12 September 2022, the Company made a new investment of GBP0.44
million
into Orri Limited, a specialist private clinic, for those aged 16+, for
expert treatment of Anorexia, Bulimia and Binge Eating Disorder.
13. The financial information for the six months ended 30 June 2022 does
not comprise statutory accounts within the meaning of Section 434 of
the
Companies Act 2006. The financial statements for the year ended 31
December
2021 have been filed with the Registrar of Companies. The auditor has
reported on the financial statements for the year ended 31 December
2021
and that report was unqualified and did not contain a statement under
section 498(2) or (3) of the Companies Act 2006.
14. This Half-Year Report will shortly be made available on our website:
www.mig4vct.co.uk and will be circulated by post to those shareholders
who have requested copies of the Report. Further copies are available
free of charge from the Company's registered office, 5 New Street
Square,
London, EC4A 3TW or can be downloaded via the website.
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END
IR SFSFWDEESESU
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