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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Mobeus Income & Growth Vct Plc | LSE:MIX | London | Ordinary Share | GB00B01WL239 | ORD 1P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 56.00 | 54.50 | 57.50 | 56.00 | 56.00 | 56.00 | 508,984 | 01:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| Investors, Nec | -15.97M | -18.79M | -0.1128 | -4.96 | 93.29M |
From Apr 2019 to Apr 2024
TIDMMIX
RNS Number : 0188B
Mobeus Income & Growth VCT PLC
30 March 2017
DRAFT : 27 MARCH 2017
MOBEUs Income & Growth VCT plc
Annual Financial Results of the Company for the Year ended 31 DECember 2016
Financial Highlights
Hot Features
Premium
- Net asset value total return per share of the Company for the
year was 1.5% while the share price total return per share
for the year was 4.3%.
- Shareholders received an interim dividend of 8.50 pence per
share in September 2016. A second interim dividend in respect
of 2016 of 6.00 pence per share has been declared, payable
on 31 March 2017. This dividend will bring total dividends
paid per share in respect of the year to 14.50 pence. Cumulative
dividends paid per share from inception of the Company will
increase to 95.80 pence.
- The Company invested a total of GBP3.95 million into four new
growth capital investments and one existing portfolio company.
PERFORMANCE SUMMARY
The net asset value per share of the Company at 31 December 2016 was 83.53 pence.
The table below shows the recent past performance of the original fundraising launched in October 2004.
Net NAV Share Cumulative Cumulative total Dividends
assets Per price1 dividends return per share paid and
share paid per to shareholders2 declared
share per share
in
respect
of each
year
(NAV basis) (Share
price basis)
Reporting
date
as at (GBPm) (p) (p) (p) (p) (p) (p)
---------- ---------- ------------ ---------- ----------------- -------------- ---------------- ---------------
31
December
2016 63.15 83.53 74.75 89.80 173.33 164.55 14.50(3)
31
December
2015 74.11 97.54 86.50 74.30 171.84 160.80 10.00
31
December
2014 60.41 99.44 86.00 64.30 163.74 150.30 24.00
31
December
2013 54.27 102.18 87.50 44.05 146.23 131.55 7.25
31
December
2012 43.29 94.22 80.50 38.05 132.27 118.55 7.00
---------- ---------- ------------ ---------- ----------------- -------------- ---------------- ---------------
(1) Source: Panmure Gordon & Co (mid-market price).
(2) Cumulative total return per share comprises either the NAV
per share (NAV basis) or the mid-market price per share (Share
Price basis), plus cumulative dividends paid since launch in October
2004.
(3) This figure of 14.50 pence includes the second interim dividend
of 6.00 pence per share referred to in the Financial Highlights
above, payment of which will reduce the net assets per share from
the 31 December 2016 figure of 83.53 pence by the amount of the
dividend.
Detailed performance data for all fundraising rounds and for former Matrix Income & Growth 3 VCT shareholders are shown in the Performance Data appendix which will be published in the Annual Report. The tables, which give information by allotment date on NAVs and dividends paid per share, are also available on the Company's website at www.migvct.co.uk where they can be downloaded by clicking on "table" under "Reviewing the performance of your investment" on the home page.
Discount of share price to NAV - The discount of the Company's shares to NAV at 31 December 2016 was 10.0%, as the share price at that date was based on the NAV per share at 30 September 2016 of 83.02 pence, which was the latest published figure at that time.
Chairman's Statement
I am pleased to present the annual results of Mobeus Income & Growth VCT plc for the year ended 31 December 2016.
This has been a stable year for the Company, due to steady portfolio performance overall and continued income returns. Six new investments have been made under the Company's new Investment Policy, which is an encouraging start.
Shareholders approved a new Investment Policy at last year's annual general meeting in May 2016, in response to the new VCT measures introduced by the Finance (No 2) Act 2015 ("New VCT Rules") in November 2015. I report upon the Company's progress in adapting to these changes under Investment portfolio below.
Performance
The NAV total return per share for the year ended 31 December 2016 was 1.5% (2015: 8.1%) (being the closing NAV plus dividends paid in the year, divided by opening NAV) while the share price total return was 4.3% (2015: 12.2%). As a result of this performance, the NAV cumulative total return per share (being the closing NAV plus total dividends paid to date since launch) rose during the year by 0.9% from 171.84 pence to 173.33 pence.
The small rise in NAV return over the year was principally due to continued revenue returns maintained from the previous year supported by stable capital returns on the investment portfolio.
Dividends
Your Company paid an interim dividend of 8.50 pence per share to shareholders on 20 September 2016, being 2.00 pence from income and 6.50 pence from capital of which 5.00 pence was paid from the Company's Special Distributable Reserve. The Directors have also declared a second interim capital dividend in respect of 2016 of 6.00 pence per share, also payable from the Company's Special Distributable Reserve. This dividend will be paid on 31 March 2017 to shareholders on the Register on 3 March 2017.
Once this payment has been made, total dividends in respect of the year will be 14.50 pence (2015: 10.00 pence) per share, bringing cumulative dividends paid since inception in 2004 to 95.80 pence (2015:
81.30 pence) per share.
The Company's target of paying a dividend of at least 4.00 pence per share in respect of each financial year has been exceeded in each of the last seven years. While the Board still believes in the attainment of the target dividend, the gradual move of the portfolio to growth capital investments may make it harder to achieve in a given year without recourse to the Company's reserves. A full dividend history is contained in the Performance Data appendix which will be published in the Annual Report and on the Company's website.
Investment portfolio
Partly as a consequence of the move towards investing in younger and smaller growth capital companies to comply with the New VCT Rules, the amount of new investment completed by the Company was lower in 2016 than 2015. These New VCT Rules contain more restrictive investment criteria, which caused a pause in new investment by the Company in the first half of the year (and across the whole of the VCT generalist sector), whilst the Board and the Investment Adviser assimilated the changes.
It was thus pleasing that the last quarter of the year saw a significant pick up in the pace of new investment such that a total of GBP3.95 million (2015: GBP10.72 million) was invested in five (2015: six) companies during the year, plus GBP0.69 million in another company just after the year-end. While this level of investment is lower than in previous years, it compares favourably to levels achieved elsewhere, as the Mobeus advised VCTs invested around a sixth of the total invested by the VCT generalist sector in the year. These investments were made into Redline, MPB, BookingTek, Pattern Analytics (Biosite), Preservica (an existing portfolio company) and finally, into Tapas Revolution just after the year end. The average transaction size of these new investments is less than half that of last year, reflecting the change in focus to younger, smaller companies required by the New VCT Rules. Further details of all of these transactions are included in the Investment Adviser's Review below.
In addition to these new investments, the Investment Adviser is reporting a growing pipeline of opportunities, from which we expect the rate of new investment to increase. The Board remains of the view that the changes in the VCT legislation clearly restrict the universe of companies that the Company can invest in, but has been encouraged by the number and quality of the opportunities identified by the Investment Adviser so far. As these are smaller, younger businesses, the Board believes that such investments carry higher risk alongside potentially higher, but more variable, returns and are less likely to yield income returns. Transactions to date have been structured to seek to mitigate these factors.
Shareholders should note that, at the year-end, 92.3% of the value of the investment portfolio (excluding companies preparing to trade) is still held in investments made under the previous MBO focused strategy. Overall, performance of this principal portion of the portfolio remained solid, and should continue to yield annual income returns to shareholders, supplemented by capital returns as investments are realised over time. The Company received cash proceeds in the year of GBP2.97 million, mostly as partial loan repayments, from nine companies held in this portion of the portfolio. Unless a compelling case for an exit opportunity is presented, the Board and the Investment Adviser would prefer to develop this portfolio to further maturity.
On a like-for-like basis, the value of the total portfolio increased by 0.8% over the year. Including companies preparing to trade, it is valued at GBP51.68 million (2015: GBP51.36 million) at the year-end, representing 104.2% (2015: 102.6%) of cost.
Review of longer term performance
Shareholders who invested in 2004 at the launch of the Company have seen a NAV cumulative total return of 173.33 pence per share compared with their initial investment cost of 100 pence per share, or a net cost (after initial income tax relief of 40 pence of their investment) of 60 pence per share. As part of this return 89.80 pence per share in dividends has been paid to shareholders. This represents an average annual dividend yield on the initial 100 pence investment, of 7.3% and 12.2% on the adjusted investment cost of 60 pence (net of 40 pence of initial income tax relief). The balance of the total return is the closing NAV of 83.53 pence per share.
The Board also regularly reviews the Company's total (income and capital) return performance on both an NAV and Share Price basis compared to its peer group. Based on statistics prepared by
Morningstar at 31 December 2016, the Company was ranked 6th on a NAV total return basis and 8th on a Share Price total return basis out of 29 generalist (including planned exit) VCTs monitored by the Association of Investment Companies ("AIC") over the last ten years. The Board believes this to be a satisfactory performance.
Buybacks of the Company's own shares
During the year ended 31 December 2016, the Company made three purchases of its shares, buying back a total of 375,480 shares, allowing shareholders who wanted to sell their shares to do so. The buyback represented 0.5% of the issued share capital of the Company at the beginning of the year. Further details are included in the Strategic Report in the Annual Report. The shares bought back were subsequently cancelled by the Company.
Industry and regulatory developments
HMRC published its guidance on the New VCT Rules in May 2016 which has provided further information on the new requirements at a detailed level. There remain several areas where further clarity is still required and the Company, the Investment Adviser and the VCT industry as a whole, are continuing to work constructively with Government departments, through its industry bodies, to develop an improved practical approach. Notwithstanding the EU Referendum result, the Board is working on the assumption that there will be no further changes to the existing VCT legislation in the near future.
A summary of the current VCT regulations is included in the Strategic Report which is part of the Annual Report.
Fundraising and Liquidity
The Company held cash or near cash resources of GBP21.66 million, including the liquidity held in companies preparing to trade ("CPTs"), at 31 December 2016, representing 34.3% of net assets. This results partly from the impact of the unexpected changes to the VCT Rules which led to a lower than anticipated amount of new investment in the short term. However, the increasing pipeline of prospective deals since the introduction of the New VCT Rules should reduce this liquidity over time. The second interim dividend of 6.00 pence per share, to be paid to shareholders on 31 March 2017, will have a similar effect.
The Board considers that the Company's liquidity is currently at an adequate level, but it is considering a further fundraising in the 2017/18 tax year.
Audit tender
New legislation has been introduced in the UK on audit firm rotation, resulting from the new European Audit Regulation Directive, making it mandatory for listed companies to undergo a tender process for the audit of their company at least every ten years. An audit firm can, however be appointed for up to twenty years provided a public tender process has been carried out after ten years. The Company, therefore, held an audit tender process in August-September 2016. As a result of this, the Board, on the recommendation of the Audit Committee, has decided to recommend the reappointment of BDO LLP as the Company's external auditor. For further information on the audit tender, please see the Audit Committee section of the Directors' Report in the Annual Report.
Shareholder Event
This year's annual shareholder event was held on Tuesday, 24 January 2017 at the Royal Institute of British Architects in Central London. Separate day time and evening sessions included presentations on the Mobeus advised VCTs' investment activity and performance. We have received positive feedback from many of those who attended the event and were pleased to hear that the overall impression of attendees was that they found the day informative and very worthwhile. If shareholders were unable to attend, some short portfolio company videos shown on the day, as well as those shown in previous years, are available on the Mobeus website (www.mobeusequity.co.uk /portfolio).
Annual General Meeting
The next Annual General Meeting of the Company will be held at 2.00 pm on Wednesday, 10 May 2017 at a new venue, The Clubhouse, 8 St James's Square, London SW1Y 4JU. Both the Board and the Investment Adviser look forward to welcoming shareholders to the meeting which will include a presentation from the Investment Adviser on the investment portfolio. Shareholders are encouraged to attend and to ask questions of the Board and the Investment Adviser. The Notice of the meeting is included on the Company's website and in the Annual Report and an explanation of the resolutions to be proposed can be found in the Directors' Report in the Annual Report.
Board directors
As noted in the Half Year Report, Keith Niven retired as Chairman and director from the Board during the year, as did Tom Sooke, retiring as Chairman of the Audit Committee and director. On behalf of the Board, I would like to reiterate our thanks and appreciation for their substantial contribution and leadership since the inception of the Company in 2004. We wish them well for the future.
Future prospects
In the context of a global economy that is facing some uncertainty following the UK's Referendum vote and the US Presidential Election, the outlook for the UK economy in 2017 remains unclear and may remain so beyond 2017, until the outcome of the EU exit negotiations becomes evident. We will continue our measured and cautious approach to investment appraisal and with our active engagement with existing portfolio companies.
The portfolio has a solid foundation of investments made under the previous MBO strategy, the majority of which are mature and profitable companies providing attractive income returns. Over the coming years, the portfolio mix will change towards growth capital companies. In spite of the global political and economic uncertainties mentioned above, the Board and the Investment Adviser remain optimistic regarding the future prospects of the Company.
Finally, I would like to take this opportunity to thank all shareholders for their continued support.
Clive Boothman
Chairman
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 borrowings of amounts up to 10% of the adjusted capital and reserves (as defined therein). However, the Company has never borrowed and the Board would only consider doing so in exceptional circumstances.
INVESTMENT ADVISER'S REVIEW
This has been a year of continued progress within the portfolio. The exceptional level of disposals in 2014 and 2015 has reduced the age of the remaining portfolio such that 53% by value (48% by number) of the current portfolio comprises investments made since the start of 2014. The year has seen investment in five (plus one just after the year-end) new growth capital opportunities, which represent 11.3% of the portfolio. Many of the MBO portfolio companies are generating cash and have made repayments of their loan stock and are trading well.
Having experienced an unprecedented number of profitable realisations in 2014 and 2015, the Investment Adviser does not anticipate this level to be repeated in the near to medium term. Shareholders will note that the year-end valuation of the portfolio is only just above its cost. As the portfolio now has a younger profile, time is required for these more recent investments to grow in value. Unless a compelling offer is made for one of our investments, we plan to hold those that are performing, that are generating income and that show potential to grow in value further.
Investments by market sector at valuation
Investments remain spread across a number of sectors, primarily in support services, software and computer services and general retailers.
Impact of Changes in VCT Rules
The amendments to VCT legislation were a significant change for the VCT industry and required all VCTs to reconsider the type of investments that they can make in future. We have responded to this by adding experienced growth capital investment resource to our existing team. Along with other investment advisers in the industry, we have focused on gaining familiarity with the practical implications of the rules on the types of investment opportunities we can now consider for VCT investment. That process is continuing, including discussions with HMRC in response to their draft Guidance to the legislation. We are also gaining additional practical experience from assessing prospective opportunities at a detailed level and from continuing to seek HMRC Advance Assurance in respect of each new investment proposal.
There has been an inevitable initial slowdown in new deal activity, resulting from both the more restrictive criteria for VCT investment under the new VCT rules and delays at HMRC in processing applications for Advance Assurance.
Independent research shows that as at 31 December 2016 the amount of completed new investment across the generalist VCT Industry for 2016 had fallen by 31% and 49% compared to the same periods in 2015 and 2014 respectively.
Impact of Brexit
It is too early to comment on the eventual impact of the UK leaving the EU upon the portfolio, whatever form that departure takes. Whilst the SME sector will not be immune to any general downturn in the UK economy, the portfolio has historically proved to be resilient and we believe will continue to be so. Portfolio companies with foreign currency exposure routinely cover this exposure and any negative effects of a longer term adjustment in exchange rate will not emerge for some months. Some portfolio companies will be beneficiaries of a weaker pound.
New Investment
Against this background we are therefore pleased to have made six new investments under the New VCT Rules. A total of GBP3.95 million (including GBP1.09 million from a company preparing to trade) was invested during the year under review. This comprised new investments into Redline, MPB, BookingTek, Pattern Analytics (Biosite) and Preservica, an existing portfolio company. Just after the year-end, the Company made another new investment of GBP0.69 million into Tapas Revolution. Further details are set out below.
Principal new investments in the year
Company Business Date of Investment Amount of
new investment
(GBPm)
------------------ --------------------------------------------------- -------------------- ------------------
Provision of security products February
Redline and services 2016 1.09*
------------------ --------------------------------------------------- -------------------- ------------------
Redline is a market leader in the provision of security consultancy
and training services to airlines, governments, airports and
global distribution companies. Redline currently operates predominantly
in the aviation security market and is at the forefront of counter-terrorism
training and services. The investment is being applied to enable
the Company to grow in its core aviation market and in other
sectors. The company's latest accounts for the year ended 31
March 2016 show turnover of GBP5.01 million and underlying profit
before interest, tax and amortisation of goodwill of GBP1.04
million.
* GBP1.51 million previously held in Pound FM Consultants Limited,
a company preparing to trade, was used for this investment. This
resulted in a net repayment of GBP0.42 million. Pound FM Consultants
Limited has subsequently changed its name to Redline Worldwide
Limited.
--------------------------------------------------------------------------------------------- ------------------
Online marketplace for used
MPB Group photo and video equipment June 2016 0.60
------------------ --------------------------------------------------- -------------------- ------------------
MPB is Europe's leading online marketplace for used photo and video
equipment. Based in Brighton, their custom-designed pricing technology
enables MPB to offer both buy and sell services through the same
platform and offers a one-stop shop for all its customers. The investment
is to fund expansion of its platform globally, with launches into
both the US and German markets. The company's latest audited accounts
for the year ended 31 March 2016 show turnover of GBP8.37 million
and profit before interest, tax and amortisation of goodwill of
GBP0.001 million.
---------------------------------------------------------------------------------------------------------------
Direct booking software
BookingTek for hotels October 2016 0.60
------------------ --------------------------------------------------- -------------------- ------------------
Based in London, BookingTek has developed software that enables
hotels to reduce their reliance on third-party booking systems by
means of a real-time booking platform for meeting rooms and restaurant
reservations. The investment is to support further growth. The company's
latest audited accounts for the year ended 31 July 2015 show turnover
of GBP2.19 million and loss before interest, tax and amortisation
of goodwill of GBP0.33 million.
---------------------------------------------------------------------------------------------------------------
November
Biosite Workforce management 2016 0.76
------------------ --------------------------------------------------- -------------------- ----------------
Based in the Midlands, Pattern Analytics (Biosite) is a fast growing
provider of biometric access control and software-based workforce
management solutions for the construction sector. The investment
will support the expansion of the team to facilitate the development
of new site-management tools to enable managers to oversee all aspects
of a construction project. The company's latest accounts for the
year ended 31 July 2016 show turnover of GBP4.69 million and profit
before interest, tax and amortisation of goodwill of GBP0.49 million.
---------------------------------------------------------------------------------------------------------------
Further investment into existing portfolio companies in the year
Company Business Date of investment Amount of
new investment
(GBPm)
------------- ----------------------------- -------------------- ----------------
Sellers of proprietary December
Preservica digital archiving software 2016 0.90
------------- ----------------------------- -------------------- ----------------
Preservica has developed the world's leading software for the long-term
preservation of digital records ensuring that long-term digital
content remains accessible, irrespective of changes in future technology.
Previously a subsidiary of Tessella it was demerged prior to the
sale of Tessella in December 2015. The new investment provided additional
growth capital to finance the development of the business. The company's
latest accounts for the year ended 31 March 2016 show turnover of
GBP1.78 million and profit before interest, tax and amortisation
of goodwill of GBP0.16 million.
------------------------------------------------------------------------------------
New investment post year-end
Company Business Date of investment Amount of
new investment
(GBPm)
--------------------- -------------- ----------------------- -------------------
Tapa Revolution Restaurant January 2017 0.69
--------------------- -------------- ----------------------- -------------------
Based in London, Ibericos Etc. Limited (which trades as Tapas Revolution)
is a leading Spanish restaurant chain in the casual dining sector
focusing on shopping centres sites with high footfall. Having opened
its first restaurant in Shepherd's Bush Westfield, the business
has since opened a further four restaurants. The investment provided
growth capital to a high-calibre team with significant restaurant
roll-out experience who have spent the past five years building
and refining their offer and are now well placed to capitalise on
a strong pipeline of new sites. The company's latest accounts for
the year ended 25 October 2015 show a turnover of GBP2.37 million
and loss before interest, tax and amortisation of goodwill of GBP0.16
million.
-----------------------------------------------------------------------------------
Realisations
There have been no full realisations during the year ended 31 December 2016 (2015: GBP6.92 million from two realisations), although the Company received total cash proceeds of GBP2.97 million (2015: GBP10.28 million). This was in the form of loan stock repayments (GBP1.95 million) detailed below, deferred consideration (GBP0.62 million) from Focus Pharma and Westway, both realised in a previous period, and finally, other receipts of GBP0.40 million.
After the year-end, the Company sold the balance of its AIM quoted investment in Omega Diagnostics Group plc, realising proceeds of GBP0.37 million.
Loan stock repayments
Positive cash flow at a number of companies contributed to GBP1.95 million received as partial and full loan stock repayments during the year. These proceeds are summarised below:-
Company Business Month Amount
(GBP000's)
------------- --------------------------------- ---------- ------------
Logistics, storage and removals
Ward Thomas business January 1,005
------------- --------------------------------- ---------- ------------
Barham Company preparing to trade December 605
------------- --------------------------------- ---------- ------------
Pound FM Company preparing to trade February 170
------------- --------------------------------- ---------- ------------
Vehicle cleaning and valeting
Motorclean services February 92
------------- --------------------------------- ---------- ------------
Jablite Expanded polystyrene products April 76
------------- --------------------------------- ---------- ------------
Total 1,948
------------------------------------------------------------ ------------
After the year-end, the Company received partial loan repayments totalling GBP5.12 million from Backhouse Management Limited, McGrigor Management Limited, Barham Consulting Limited, Hollydale Management Limited and Creasy Marketing Services Limited, all being companies preparing to trade.
Mobeus Equity Partners LLP
29 March 2017
INVESTMENT PORTFOLIO SUMMARY
As at 31 December 2016
Market Date of Total Valuation Like for % value % of
sector investment book like of net equity
cost valuation assets held by
increase/ funds
(decrease) advised
by
Mobeus(2)
GBP'000 GBP'000 over
year(1)
------------------------ --------------------- ----------- ------- --------- ---------- -------- ---------
Qualifying investments
------------------------ --------------------- ----------- ------- --------- ---------- -------- ---------
Unquoted investments
Virgin Wines Holding
Company Limited General
Online Wine retailer retailers Nov-13 2,439 3,393 (3.6)% 5.4% 42.0%
------------------------ --------------------- ----------- ------- --------- ---------- -------- ---------
ASL Technology Holdings
Limited
Printer and photocopier Support
services services Dec-10 2,942 3,170 (6.8)% 5.0% 47.5%
------------------------ --------------------- ----------- ------- --------- ---------- -------- ---------
Tovey Management
Limited
(trading as Access
IS)
Provider of data Software
capture and scanning and computer
hardware services Oct-15 2,979 3,153 5.8% 5.0% 45.0%
------------------------ --------------------- ----------- ------- --------- ---------- -------- ---------
Entanet Holdings
Limited
Wholesale
communications Fixed line
provider Telecommunications Feb-14 2,713 2,820 (32.5)% 4.5% 57.5%
------------------------ --------------------- ----------- ------- --------- ---------- -------- ---------
Turner Topco Limited
(trading as ATG Media)
Publisher and on-line
auction platform
operator Media Oct-08 2,501 2,177 60.7% 3.4% 16.4%
------------------------ --------------------- ----------- ------- --------- ---------- -------- ---------
Fullfield Limited
(trading as Motorclean)
Provider of vehicle
cleaning and valet Support
services services Jul-11 1,626 2,097 10.4% 3.3% 46.0%
------------------------ --------------------- ----------- ------- --------- ---------- -------- ---------
Media Business Insight
Holdings Limited
A publishing and
events business focused
on the creative
production
industries Media Jan-15 2,518 1,910 (3.9)% 3.0% 67.5%
------------------------ --------------------- ----------- ------- --------- ---------- -------- ---------
Gro-Group Holdings
Limited General
Baby sleep products retailers Mar-13 1,975 1,704 19.6% 2.7% 48.0%
------------------------ --------------------- ----------- ------- --------- ---------- -------- ---------
CGI Creative Graphics
International Limited
Vinyl graphics to
global automotive,
recreational vehicle General
and aerospace markets Industrials Jun-14 1,808 1,635 11.1% 2.6% 28.1%
------------------------ --------------------- ----------- ------- --------- ---------- -------- ---------
Veritek Global Holdings
Limited
Maintenance of imaging Support
equipment services Jul-13 2,045 1,620 (22.6)% 2.6% 44.0%
------------------------ --------------------- ----------- ------- --------- ---------- -------- ---------
Leisure
Vian Marketing Limited goods Jul-15 1,189 1,572 32.2% 2.5% 31.5%
Design, manufacture
and sale of stand-up
paddleboards and
windsurfing sails
------------------------ --------------------- ----------- ------- --------- ---------- -------- ---------
Tharstern Group Limited
Software based Software
management and computer
information systems services Jul-14 1,377 1,535 (19.8)% 2.4% 52.5%
------------------------- -------------------- ----------- ------- --------- ---------- -------- ---------
Manufacturing Services
Investment Limited
Company seeking to
carry on a business Company
in the manufacturing preparing
sector to trade Feb-14 1,524 1,524 - 2.4% 50.0%
------------------------- -------------------- ----------- ------- --------- ---------- -------- ---------
Backhouse Management
Limited
Company seeking to Company
carry on a business preparing
in the motor sector to trade Apr-15 1,514 1,514 - 2.4% 50.0%
------------------------- -------------------- ----------- ------- --------- ---------- -------- ---------
Chatfield Services
Limited
Company seeking to Company
carry on a business preparing
in the retail sector to trade Apr-15 1,514 1,514 - 2.4% 50.0%
------------------------- -------------------- ----------- ------- --------- ---------- -------- ---------
Creasy Marketing
Services Limited
Company seeking to Company
carry on a business preparing
in the textile sector to trade Apr-15 1,514 1,514 - 2.4% 50.0%
------------------------- -------------------- ----------- ------- --------- ---------- -------- ---------
McGrigor Management
Limited
Company seeking to
carry on a business Company
in the pharmaceutical preparing
sector to trade Apr-15 1,514 1,514 - 2.4% 50.0%
------------------------- -------------------- ----------- ------- --------- ---------- -------- ---------
Hollydale Management
Limited
Company seeking to Company
carry on a business preparing
in the food sector to trade Mar-15 1,465 1,465 - 2.3% 50.0%
------------------------- -------------------- ----------- ------- --------- ---------- -------- ---------
The Plastic Surgeon
Holdings Limited
Supplier of snagging
and finishing commercial Support
property markets services Apr-08 478 1,461 7.3% 2.3% 49.5%
------------------------- -------------------- ----------- ------- --------- ---------- -------- ---------
RDL Corporation Limited
Recruitment consultant
for the pharmaceutical,
business intelligence Support
and IT industries services Oct-10 1,558 1,443 48.9% 2.3% 45.2%
------------------------- -------------------- ----------- ------- --------- ---------- -------- ---------
EOTH Limited
(trading as Rab and
Lowe Alpine)
Branded outdoor
equipment General
and clothing retailers Oct-11 1,000 1,310 24.6% 2.1% 8.0%
------------------------- -------------------- ----------- ------- --------- ---------- -------- ---------
Redline Worldwide
Limited
(formerly Pound FM
Consultants Limited)(3)
Provider of security
services to the aviation
industry and other Support
sectors services Feb-16 1,088 1,088 - 1.7% 30.0%
------------------------- -------------------- ----------- ------- --------- ---------- -------- ---------
Vectair Holdings
Limited
Designer and distributor Support
of washroom products services Jan-06 139 1,029 49.1% 1.6% 24.0%
------------------------- -------------------- ----------- ------- --------- ---------- -------- ---------
Blaze Signs Holdings
Limited
Manufacturer and Support
installer of signs services Apr-06 492 1,018 (21.2)% 1.6% 52.5%
------------------------- ------------------- ------------ ------- --------- ---------- -------- ---------
Barham Consulting
Limited
Company seeking to Company
carry on a business preparing
in the catering sector to trade Apr-15 1,150 908 - 1.4% 50.0%
------------------------- ------------------- ------------ ------- --------- ---------- -------- ---------
Preservica Limited(4)
Seller of proprietary Software
digital archiving and computer New
software services Dec-15 900 900 investment 1.4% 20.2%
------------------------- ------------------- ------------ ------- --------- ---------- -------- ---------
Master Removers Group
Limited
(trading as Anthony
Ward Thomas, Bishopsgate
and Aussie Man &
Van)
A specialist logistics,
storage and removals Support
business services Dec-14 614 881 5.7% 1.4% 18.5%
------------------------- ------------------- ------------ ------- --------- ---------- -------- ---------
Jablite Holdings
Limited
Manufacturer of expanded Construction
polystyrene products and materials Apr-15 502 810 (39.5)% 1.3% 40.1%
------------------------- ------------------- ------------ ------- --------- ---------- -------- ---------
Pattern Analytics
Limited
(trading as Biosite)
Workforce management
and security services Software
for the construction and computer New
industry services Nov-16 757 757 investment 1.2% 20.4%
------------------------- ------------------- ------------ ------- --------- ---------- -------- ---------
BookingTek Limited Software
Direct booking software and computer New
for hotels services Oct-16 606 606 investment 1.0% 14.7%
------------------------- ------------------- ------------ ------- --------- ---------- -------- ---------
MPB Group Limited
Online marketplace
for used photographic General New
and video equipment retailers Jun-16 604 604 investment 1.0% 23.5%
------------------------- ------------------- ------------ ------- --------- ---------- -------- ---------
Lightworks Software
Limited Software
Provider of software and computer
for CAD vendors services Apr-06 223 165 39.5% 0.3% 45.0%
------------------------- ------------------- ------------ ------- --------- ---------- -------- ---------
Newquay Helicopters
(2013) Limited
(in creditors' voluntary
liquidation)
Helicopter service Support
operator services Jun-06 49 - (58.4)% 0.0% 34.9%
------------------------- ------------------- ------------ ------- --------- ---------- -------- ---------
CB Imports Group
Limited
Importer and distributor
of artificial flowers General
and floral sundries. retailers Dec-09 350 - - 0.0% 23.2%
------------------------- ------------------- ------------ ------- --------- ---------- -------- ---------
Racoon International
Holdings Limited
Supplier of hair
extensions, hair
care products and Personal
training goods Dec-06 1,213 - - 0.0% 47.5%
------------------------- ------------------- ------------ ------- --------- ---------- -------- ---------
Total unquoted
investments 46,880 48,811 77.3%
------------------------- -------------------------------- ------- --------- ---------- -------- ---------
AIM quoted investments
------------------------- ------------------- ------------ ------- --------- ---------- -------- ---------
Omega Diagnostics
Group plc
In-vitro diagnostics
for food intolerance, Health
autoimmune diseases care equipment
and infectious diseases and services Dec-10 245 357 13.2% 0.6% 5.6%
------------------------- -------------------- ----------- ------- --------- ---------- -------- ---------
Total AIM quoted
investments 245 357 0.6%
------------------------- -------------------- ----------- ------- --------- ---------- -------- ---------
Total qualifying
investments 47,125 49,168 77.9%(5)
------------------------- -------------------- ----------- ------- --------- ---------- -------- ---------
Non-qualifying
investments
------------------------- -------------------- ----------- ------- --------- ---------- -------- ---------
Company
Manufacturing Services preparing
Investment Limited to trade Feb-14 1,142 1,142 1.8% 50.0%
------------------------- -------------------- ----------- ------- --------- ---------- -------- ---------
Media Business Insight
Holdings Limited Media Jan-15 764 764 - 1.2% 67.5%
------------------------- -------------------- ----------- ------- --------- ---------- -------- ---------
EOTH Limited (Rab General
and Lowe Alpine) retailers Oct-11 298 324 - 0.5% 8.0%
------------------------- -------------------- ----------- ------- --------- ---------- -------- ---------
Tovey Management
Limited Software
(trading as Access and computer
IS) services Oct-15 285 285 - 0.5% 45.0%
------------------------- -------------------- ----------- ------- --------- ---------- -------- ---------
Watchgate Limited Support
Holding company services Nov-11 1 - - 0.0% 100.0%
------------------------- -------------------- ----------- ------- --------- ---------- -------- ---------
Total non-qualifying investments 2,490 2,515 4.0% ------------------------- -------------------- ----------- ------- --------- ---------- -------- --------- Total investment portfolio 49,615 51,683 81.9% ------------------------- -------------------- ----------- ------- --------- ---------- -------- --------- Current asset investments and cash at bank(6) 10,562 10,562 16.7% ------------------------- -------------------- ----------- ------- --------- ---------- -------- --------- Total investments 60,177 62,245 98.6% ------------------------- -------------------- ----------- ------- --------- ---------- -------- --------- Other assets 1,154 1.8% ------------------------- -------------------- ----------- ------- --------- ---------- -------- --------- Current liabilities (249) (0.4)% ------------------------- -------------------- ----------- ------- --------- ---------- -------- --------- Net assets 63,150 100.0% ------------------------- -------------------- ----------- ------- --------- ---------- -------- ---------
(1) This percentage change in 'like for like' valuations is a comparison of the 31 December 2016 valuations with the 31 December 2015 valuations having adjusted for any partial disposals, loan stock repayments or new investments in the period.
(2) The other funds advised by Mobeus that also hold these investments are Mobeus Income & Growth 2 VCT plc, Mobeus Income & Growth 4 VCT plc and The Income & Growth VCT plc.
(3) GBP1,513,500 invested in Pound FM Consultants Limited, a company preparing to trade, was used for the investment into Redline Assured Security Limited ("Redline"). This resulted in a net repayment to the Company of GBP425,871. Pound FM Consultants subsequently changed its name to Redline Worldwide Limited.
(4) A further GBP899,613 was invested into Preservica Limited, adding to the Company's existing shareholding that was received as part of the disposal of Tessella Holdings Limited in December 2015.
(5) At 31 December 2016, the Company held more than 70% of its total investments in qualifying holdings, and therefore complied with the VCT qualifying investment test. For the purposes of the VCT qualifying investment test, the Company is permitted to disregard disposals of investments for six months from the date of disposal. It also has up to three years to bring in new funds raised, before these need to be included in the qualifying investment test.
(6) Disclosed as Current asset investments and Cash at bank within Current assets in the Balance sheet.
STATEMENT OF DIRECTORS' RESPONSIBILITIES
The Directors are responsible for preparing the Annual Report and the Financial Statements in accordance with applicable law and regulations.
Company law requires the Directors to prepare Financial Statements for each financial year. Under that law, the Directors have elected to prepare the Financial Statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the Directors must not approve the Financial Statements unless they are satisfied that they give a true and fair view of the state of affairs of the Company and of the profit or loss for the Company for that period.
In preparing these Financial Statements, the Directors are required to:
select suitable accounting policies and then apply them consistently;
-
make judgements and accounting estimates that are reasonable
- and prudent;
state whether the Financial Statements have been prepared
- in accordance with applicable United
Kingdom accounting standards subject to any material departures
disclosed and explained in the
Financial Statements;
prepare the Financial Statements on the going concern basis
- unless it is inappropriate to presume that
the Company will continue in business;
prepare a Strategic Report, a Directors' Report and Directors'
- Remuneration Report which comply with
the requirements of the Companies Act 2006.
The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company's transactions and disclose with reasonable accuracy at any time the financial position of the Company and enable them to ensure that the Financial Statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
Website publication
The Directors are responsible for ensuring the Annual Report and the Financial Statements are made available on a website. Financial statements are published on the Company's website in accordance with legislation in the United Kingdom governing the preparation and dissemination of financial statements, which may vary from legislation in other jurisdictions. The maintenance and integrity of the Company's website is the responsibility of the Directors. The Directors' responsibility also extends to the ongoing integrity of the Financial Statements contained therein.
Directors' responsibilities pursuant to Disclosure and Transparency Rule 4 of the UK Listing Authority
The Directors confirm to the best of their knowledge that:
the Financial Statements have been prepared in accordance
(a) with UK Generally Accepted Accounting Practice and give a
true and fair view of the assets, liabilities, financial position
and the profit of the Company.
the Annual Report includes a fair review of the development
(b) and performance of the business and the position of the Company,
together with a description of the principal risks and uncertainties
that it faces.
Having taken advice from the Audit Committee, the Board considers that the Annual Report and Financial Statements, taken as a whole, is fair, balanced and understandable and that it provides the information necessary for shareholders to assess the Company's performance, business model and strategy.
Neither the Company nor the Directors accept any liability to any person in relation to the Annual Report except to the extent that such liability could arise under English law.
The names and functions of the Directors are stated in the Annual Report.
For and on behalf of the Board
Clive Boothman
Chairman
FINANCIAL STATEMENTS
Income Statement
for the year ended 31 December 2016
Year ended 31 December Year ended 31 December
2016 2015
Notes Revenue Capital Total Revenue Capital Total
GBP GBP GBP GBP GBP GBP
------------------------------ ----- --------- ----------- ----------- --------- ----------- -----------
Unrealised (losses)/gains
on investments 8 - (196,760) (196,760) - 1,766,616 1,766,616
Realised gains on investments 8 - 628,948 628,948 - 4,538,894 4,538,894
Income 3 2,650,934 - 2,650,934 2,820,521 - 2,820,521
Investment Adviser's fees 4a (383,672) (1,151,015) (1,534,687) (391,279) (1,173,838) (1,565,117)
Investment Adviser's bonus
payment 4a - - - - (250,000) (250,000)
Other expenses 4c (349,892) - (349,892) (462,989) - (462,989)
Profit/(loss) on ordinary
activities before
taxation 1,917,370 (718,827) 1,198,543 1,966,253 4,881,672 6,847,925
Taxation on profit/(loss)
on ordinary activities 5 (339,532) 230,203 (109,329) (369,305) 289,531 (79,774)
Profit/(loss) for the year
and total
comprehensive income 1,577,838 (488,624) 1,089,214 1,596,948 5,171,203 6,768,151
Basic and diluted earnings
per ordinary share 7 2.08p (0.64)p 1.44p 2.16p 6.98p 9.14p
The revenue column of the Income Statement includes all income and expenses. The capital column accounts for the 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 Statement of Recommended Practice ("SORP") issued in November 2014 (updated in January 2017) 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 year.
Balance Sheet
As at 31 December 2016
31 December 2016 31 December 2015
Notes GBP GBP
-------------------------------------- ----- ---------------- ----------------
Fixed assets
Investments at fair value 8 51,682,768 51,355,611
Current assets
Debtors and prepayments 1,154,144 848,390
Current asset investments 9 5,246,949 14,946,274
Cash at bank and in hand 9 5,314,539 7,221,793
-------------------------------------- ----- ---------------- ----------------
11,715,632 23,016,457
Creditors: amounts falling due within
one year (248,847) (266,218)
-------------------------------------- ----- ---------------- ----------------
Net current assets 11,466,785 22,750,239
Net assets 63,149,553 74,105,850
-------------------------------------- ----- ---------------- ----------------
Capital and reserves
Called up share capital 755,975 759,730
Capital redemption reserve 9,440 5,685
Share premium reserve 19,463,849 19,463,849
Revaluation reserve 3,523,180 3,785,072
Special distributable reserve 35,605,335 40,625,822
Realised capital reserve 2,733,792 7,716,009
Revenue reserve 1,057,982 1,749,683
-------------------------------------- ----- ---------------- ----------------
Equity shareholders' funds 63,149,553 74,105,850
-------------------------------------- ----- ---------------- ----------------
Basic and diluted net asset value
per ordinary share 83.53p 97.54p
-------------------------------------- ----- ---------------- ----------------
Statement of changes in equity
for the year ended 31 December 2016
Non-distributable reserves Distributable reserves
Called
up Capital Share Special Realised Revenue
share redemption premium Revaluation distributable capital reserve
Notes capital reserve reserve reserve reserve reserve Total
(note (note (note
a) b) b)
GBP GBP GBP GBP GBP GBP GBP GBP
-------------- ---- ------- ---------- ---------- ----------- ------------- ----------- ----------- ------------
At 1 January
2016 759,730 5,685 19,463,849 3,785,072 40,625,822 7,716,009 1,749,683 74,105,850
Comprehensive
income
for the year
(Loss)/profit
for the year - - - (196,760) - (291,864) 1,577,838 1,089,214
Total
comprehensive
income for the
year - - - (196,760) - (291,864) 1,577,838 1,089,214
Contributions
by and
distributions
to owners
Shares bought
back (3,755) 3,755 - - (318,277) - - (318,277)
Dividends paid 6 - - - - (3,781,398) (5,676,297) (2,269,539) (11,727,234)
Total
contributions
by
and
distributions
to
owners (3,755) 3,755 - - (4,099,675) (5,676,297) (2,269,539) (12,045,511)
Other movements
Realised losses
transferred
to special
reserve (note
a) - - - - (920,812) 920,812 - -
Realisation
of
previously
unrealised
appreciation - - - (65,132) - 65,132 - -
Total other
movements - - - (65,132) (920,812) 985,944 - -
At 31 December
2016 755,975 9,440 19,463,849 3,523,180 35,605,335 2,733,792 1,057,982 63,149,553
Note a: The purpose of this reserve is to fund market purchases of the Company's own shares, to write off existing and future losses and for any other corporate purpose. All of this reserve arose from shares issued before 5 April 2014. The transfer of GBP920,812 to the special distributable reserve from the realised capital reserve above is the total of realised losses incurred by the Company in the year.
Note b: The realised capital reserve and the revenue reserve together comprise the Profit and Loss Account of the Company.
Statement of changes in equity
for the year ended 31 December 2015
Non-distributable
reserves Distributable reserves
Called
up Capital Share Special Realised Revenue
share redemption premium Revaluation distributable capital reserve
capital reserve reserve reserve reserve reserve Total
GBP GBP GBP GBP GBP GBP GBP GBP
--------------- -------- -------- ---------- ----------- ------------- ----------- ----------- -----------
At 1 January
2015 607,500 5,367 4,938,201 3,734,981 41,911,188 7,388,319 1,824,521 60,410,077
Comprehensive
income for
the year
Profit for the
year - - - 1,766,616 - 3,404,587 1,596,948 6,768,151
Total
comprehensive
income
for the year - - - 1,766,616 - 3,404,587 1,596,948 6,768,151
Contributions
by and
distributions
to owners
Shares issued
under Offer for
Subscription 152,548 - 14,525,648 - (124,753) - - 14,553,443
Shares bought
back (318) 318 - - (26,306) - - (26,306)
Dividends paid - - - - - (5,927,729) (1,671,786) (7,599,515)
Total
contributions
by and
distributions
to owners 152,230 318 14,525,648 - (151,059) (5,927,729) (1,671,786) 6,927,622
Other movements
Realised losses
transferred to
special reserve - - - - (1,134,307) 1,134,307 - -
Realisation of
previously
unrealised
appreciation - - - (1,716,525) - 1,716,525 - -
Total other
movements - - - (1,716,525) (1,134,307) 2,850,832 - -
At 31 December
2015 759,730 5,685 19,463,849 3,785,072 40,625,822 7,716,009 1,749,683 74,105,850
The composition of each of these reserves is explained below:
Called up share capital - The nominal value of shares originally issued, increased for subsequent share issues either via an Offer for Subscription or reduced due to shares bought back by the Company.
Capital redemption reserve - The nominal value of shares bought back and cancelled is held in this reserve, so that the company's capital is maintained.
Share premium reserve - This reserve contains the excess of gross proceeds less issue costs over the nominal value of shares allotted under recent Offers for Subscription.
Revaluation reserve - Increases and decreases in the valuation of investments held at the year-end are accounted for in this reserve, except to the extent that the diminution is deemed permanent.
In accordance with stating all investments at fair value through profit and loss (as recorded in note 8), all such movements through both revaluation and realised capital reserves are shown within the Income Statement for the year.
Special distributable reserve - The cost of share buybacks is charged to this reserve. In addition, any realised losses on the sale or impairment of investments (excluding transaction costs), and 75% of the Investment Adviser fee expense, and the related tax effect, are transferred from the realised capital reserve to this reserve. Capital dividends may also be payable from this reserve.
Realised capital reserve - The following are accounted for in this reserve: - Gains and losses on realisation of investments;
- Permanent diminution in value of investments;
- Transaction costs incurred in the acquisition and disposal of investments;
- 75% of the Investment Adviser fee and 100% of any performance fee payable, together with the related tax effect to this reserve in accordance with the policies; and
- Capital dividends paid.
Revenue reserve - Income and expenses that are revenue in nature are accounted for in this reserve together with the related tax effect, as well as income dividends paid that are classified as revenue in nature.
Statement of cash flows
For the year ended 31 December 2016
Year ended Year ended
31 December 31 December
Notes 2016 2015
GBP GBP
------------------------------------------ ----- ------------ ------------
Cash flows from operating activities
Profit after tax for the financial
year 1,089,214 6,768,151
Adjustments for:
Net unrealised losses/(gains) on
investments 196,760 (1,766,616)
Net gains on realisations of investments (628,948) (4,538,894)
Tax charge for current year 109,329 79,774
Increase in debtors (38,554) (85,867)
(Decrease)/increase in creditors (82,593) 38,304
------------------------------------------ ----- ------------ ------------
Net cash inflow from operations 645,208 494,852
Corporation tax paid (44,108) (146,884)
------------------------------------------ ----- ------------ ------------
Net cash inflow from operating activities 601,100 347,968
Cash flows from investing activities
Acquisitions of investments 8 (3,559,180) (21,970,561)
Disposals of investments 8 3,397,012 9,862,770
Decrease in bank deposits with a
maturity over three months 2,003,484 489,249
------------------------------------------ ----- ------------ ------------
Net cash inflow/(outflow) from investing
activities 1,841,316 (11,618,542)
Cash flows from financing activities
Shares issued as part of Offer for
subscription - 14,553,443
Equity dividends paid 6 (11,727,234) (7,599,515)
Share capital bought back (318,277) (47,683)
------------------------------------------ ----- ------------ ------------
Net cash (outflow)/inflow from financing
activities (12,045,511) 6,906,245
Net decrease in cash and cash equivalents (9,603,095) (4,364,329)
Cash and cash equivalents at start
of year 19,157,316 23,521,645
------------------------------------------ ----- ------------ ------------
Cash and cash equivalents at end
of year 9,554,221 19,157,316
Cash and cash equivalents comprise:
Cash equivalents 9 4,239,682 11,935,523
Cash at bank and in hand 9 5,314,539 7,221,793
------------------------------------------ ----- ------------ ------------
1 Company Information
Mobeus Income and Growth VCT plc is a public limited company incorporated in England, registration number 5153931. The registered office is 30 Haymarket, London, SW1Y 4EX.
2 Basis of preparation of the Financial Statements
A summary of the principal accounting policies, all of which have been applied consistently throughout the year are set out at the start of the related disclosure throughout the Notes to the Financial Statements. All accounting policies are included within an outlined box at the top of each relevant note.
These Financial Statements have been prepared in accordance with applicable United Kingdom accounting standards, including Financial Reporting Standard 102 ("FRS102"), with the Companies Act 2006 and the 2014 Statement of Recommended practice, 'Financial Statements of Investment Trust Companies and Venture Capital Trusts' ('the SORP') issued by the Association of Investment Companies (updated in January 2017). The Company has a number of financial instruments which are disclosed under FRS102 s11/12 as shown in Note 15 of the Annual Report.
3 Income
2016 2015
GBP GBP
------------------------------------ --------- ---------
Income from bank deposits 60,115 79,780
Income from investments
- from equities 220,910 144,711
- from overseas based OEICs 31,429 8,297
- from loan stock 2,338,480 2,586,788
- from interest on preference share
dividend arrears - 945
2,590,819 2,740,741
Total income 2,650,934 2,820,521
Total income comprises
Dividends 252,339 153,008
Interest 2,398,595 2,667,513
2,650,934 2,820,521
Income from investments comprises
Listed overseas securities 31,429 8,297
Unlisted UK securities 220,910 144,711
Loan stock interest 2,338,480 2,586,788
2,590,819 2,739,796
Total loan stock interest due but not recognised in the year was GBP602,221 (2015: GBP297,027).
4 Investment Adviser's fees and Other expenses
a) Investment Adviser's fees and performance fees
Revenue Capital Total Revenue Capital Total
2016 2016 2016 2015 2015 2015
GBP GBP GBP GBP GBP GBP
----------------------- ------- --------- --------- ------- --------- ---------
Mobeus Equity Partners
LLP
Investment Adviser's
fees 383,672 1,151,015 1,534,687 391,279 1,173,838 1,565,117
Investment Adviser's
bonus
payment - - - - 250,000 250,000
383,672 1,151,015 1,534,687 391,279 1,423,838 1,815,117
Under the terms of a revised investment management agreement dated 20 May 2010, Mobeus Equity Partners LLP ("Mobeus") provides investment advisory, administrative and company secretarial services to the Company, for a fee of 2% per annum of closing net assets, paid in advance, calculated on a quarterly basis by reference to the net assets at the end of the preceding quarter, plus a fixed fee of GBP134,168 per annum, the latter inclusive of VAT and subject to annual increases in RPI. In 2013, Mobeus agreed to waive such further increases due to indexation, until otherwise agreed with the Board.
The Investment Adviser's fee includes provision for a cap on expenses excluding irrecoverable VAT and exceptional items set at 3.6% of closing net assets at the year-end. In accordance with the Investment Management Agreement, any excess expenses are borne by the Investment Adviser. The excess expenses during the year amounted to GBPnil (2015: GBPnil).
The Company is responsible for external costs such as legal and accounting fees, incurred on transactions that do not proceed to completion ("abort expenses") subject to the cap on total annual expenses referred to above.
In line with common practice, Mobeus retains the right to charge arrangement and syndication fees and directors' or monitoring fees to companies in which the Company invests. The Investment Adviser received fees totalling GBP326,660 during the year ended 31 December 2016 (2015: GBP486,396), being GBP98,881 (2015: GBP268,246) for arrangement fees and GBP227,779 (2015: GBP218,150) for acting as non-executive directors on a number of investee company boards. These fees attributable to MIG VCT are based upon the investment allocation applicable to MIG VCT which applied at the time of each investment. These figures are not part of these financial statements.
Incentive agreement
Under the Incentive Agreement dated 9 July 2004, and a variation of this agreement dated 20 May 2010, the Investment Adviser is entitled to receive an annual performance-related incentive fee of 20% of the dividends paid in a year in excess of a "Target Rate" comprising firstly, an annual dividend paid in a year target which started at 6.00 pence per share on launch (indexed each year for RPI) and secondly a requirement that any shortfall of cumulative dividends paid in each year beneath the cumulative annual dividend target is carried forward and added to the Target Rate for the next accounting period. Any excess of cumulative dividends paid above the cumulative annual dividend target is not carried forward, whether an incentive fee is payable for that year or not. Payment of a fee is also conditional upon the daily weighted average Net Asset Value ("NAV") per share throughout such year equalling or exceeding the daily weighted average Base NAV per share throughout the same year. The performance fee will be payable annually.
At 31 December 2016, the annual dividend target is 7.33 pence per share and there was an excess of cumulative dividends paid over the cumulative annual dividend target of 7.13 pence per share. However, the average NAV per share is 91.56 pence for the year, which was less than the average base NAV per share for the year of 98.53 pence. Accordingly, no performance incentive fee is payable for the year and the excess of cumulative dividends paid over the cumulative annual dividend target of 7.13 pence will not be carried forward.
For the year ended 31 December 2014, depending upon the interpretation of the terms contained in the original Incentive Agreement, a performance fee was potentially payable to the Investment Adviser. In light of the absence of sufficient clarity in several parts of the Incentive Agreement, and to recognise the particularly strong returns achieved by the Investment Adviser for the Company during the preceding eighteen months, the Board recommended the payment of an ex-gratia bonus of GBP250,000 to the Investment Adviser. This payment was approved by shareholders at a general meeting on 3 September 2015 and subsequently made on 30 September 2015. A contribution of GBP17,325 to the costs of the Circular sent to shareholders before the general meeting was made by the Investment Adviser.
b) Offer for subscription fees
No funds were raised by an offer by the VCT in the year (2015: GBP15 million). Accordingly, no subscription fees were payable to Mobeus in the year (2015: GBP0.49 million where all costs associated with the offer were met out of these fees by Mobeus, excluding any payments to financial advisers facilitated under the terms of the offer).
c) Other expenses
2016 2015
GBP GBP
-------------------------------------------------------- -------- -------
Directors' remuneration (including NIC of GBP8,755
(2015: GBP7,449)) - note a) 132,780 137,866
IFA trail commission 53,684 90,116
Broker's fees 14,400 14,400
Auditor's fees - Audit of Company (excluding
VAT) 23,575 23,063
- audit related assurance services - note b)
(excluding VAT) 4,203 4,100
- tax compliance services - note b) (excluding
VAT) 3,393 6,132
Registrar's fees 33,121 33,796
Printing 20,495 27,475
Legal & professional fees 8,544 19,578
VCT monitoring fees 9,000 9,300
Directors' insurance 8,349 9,248
Listing and regulatory fees 29,176 30,229
Sundry 9,172 10,100
Running costs 349,892 415,403
Provision against loan interest receivable (note
c) - 47,586
Other expenses 349,892 462,989
a) See analysis in the Directors' Remuneration Report on page
31 of the Annual Report, which excludes the NIC above. The key
management personnel are the three non-executive Directors. The
Company has no employees.
b) The Directors consider the Auditor was best placed to provide
the audit-related services and tax compliance services disclosed
above. The Audit Committee reviews the nature and extent of these
services to ensure that auditor independence is maintained.
c) Provision against loan interest receivable of GBPnil (2015:
GBP47,586) is a provision made against loan stock interest recognised
in previous years.
5 Taxation on profit/(loss) on ordinary activities
2016 2016 2016 2015 2015 2015
Revenue Capital Total Revenue Capital Total
GBP GBP GBP GBP GBP GBP
--------------------------------- --------- --------- --------- --------- --------- ---------
a) Analysis of tax charge:
UK Corporation tax on
profits/(losses)
for the year 339,532 (230,203) 109,329 369,305 (289,531) 79,774
Total current tax charge/(credit) 339,532 (230,203) 109,329 369,305 (289,531) 79,774
Corporation tax is based
on a rate of 20%
(2015: 20.08%)
b) Profit/(loss) on ordinary
activities
before tax 1,917,370 (718,827) 1,198,543 1,966,253 4,881,672 6,847,925
Profit/(loss) on ordinary
activities multiplied
by main company rate
of corporation tax in
the UK of 20% (2015:
20.08%) 383,474 (143,765) 239,709 394,867 980,347 1,375,214
Effect of:
UK dividends (44,182) - (44,182) (29,061) - (29,061)
Unrealised losses/(gains)
not taxable - 39,352 39,352 - (354,775) (354,775)
Realised gains not taxable - (125,790) (125,790) - (911,510) (911,510)
Under/(over) provision
in prior period 240 - 240 (94) - (94)
Marginal rate - - - 3,593 (3,593) -
Actual current tax charge 339,532 (230,203) 109,329 369,305 (289,531) 79,774
Tax relief relating to Investment Adviser fees is allocated between revenue and capital where such relief can be utilised.
The Company is an Investment Trust and Investment Trust companies are exempt from tax on capital gains if they meet the HMRC criteria set out in section 274 of the ITA.
Deferred taxation
No provision for deferred taxation has been made on potential capital gains due to the Company's current status as a VCT under section 274 of the ITA and the Directors' intention to maintain that status.
6 Dividends paid and payable
Amounts recognized as distributions to equity shareholders in the year:
For year ended Pence 2016 2015
Dividend Type 31 December per share Date Paid GBP GBP
--------------- -------- --------------- --------- ------------- ---------- ---------
Second Interim Income 2014 1.20p 30 April 2015 - 912,056
Second Interim Capital 2014 5.80p 30 April 2015 - 4,408,271
17 September
Interim Income 2015 1.00p 2015 - 759,730
17 September
Interim Capital 2015 2.00p 2015 - 1,519,458
Final Income 2015 1.00p 31 May 2016 756,980 -
Final Capital 2015 6.00p 31 May 2016 4,541,877 -
20 September
Interim Income 2016 2.00p 2016 1,512,559 -
20 September
Interim Capital 2016 1.50p 2016 1,134,420 -
20 September
Interim Capital 2016 5.00p 2016 3,781,398* -
11,727,234 7,599,515
Distributions to equity holders
after the year-end: Date Payable
Second interim Capital 2016 6.00p 31 March 2017 4,535,848* -
* These dividends were and will be payable out of the Company's special distributable reserve.
Set out below are the total income dividends payable in respect of the financial year, which is the basis on which the requirements of Section 259 of the ITA concerning the Company not retaining more than 15% of its income from shares and securities, is considered.
Recognised income distributions in the financial
statements for the year
For year ended Pence 2016 2015
Dividend Type 31 December per share Date paid/payable GBP GBP
--------- ------- --------------- --------- ----------------- --------- ---------
Revenue available for distribution by way of
dividends for the year 1,577,838 1,596,948
17 September
Interim Income 2015 1.00p 2015 - 759,730
Final Income 2015 1.00p 31 May 2016 - 759,730
20 September
Interim Income 2016 2.00p 2016 1,512,559 -
Total income dividends for
the year 1,512,559 1,519,460
7 Basic and diluted earnings per share
2016 2015
GBP GBP
------------------------------------------ ---------- ----------
Total earnings after taxation: 1,089,214 6,768,151
Basic and diluted earnings per share
(note a) 1.44p 9.14p
Revenue earnings from ordinary activities
after taxation 1,577,838 1,596,948
Basic and diluted revenue earnings per
share (note b) 2.08p 2.16p
Net unrealised capital (losses)/gains
on investments (196,760) 1,766,616
Net realised capital gains on investments 628,948 4,538,894
Capital Investment Adviser fees less
taxation (920,812) (884,307)
Investment Adviser's bonus payment - (250,000)
Total capital earnings (488,624) 5,171,203 Basic and diluted capital earnings per share (note c) (0.64)p 6.98p Weighted average number of shares in issue in the year 75,741,214 74,063,445
Notes
a) Basic earnings per share is total earnings after taxation divided by the weighted average number of shares in issue.
b) Revenue earnings per share is the revenue earnings after taxation divided by the weighted average number of shares in issue.
c) Capital earnings per share is the total capital earnings after taxation divided by the weighted average number of shares in issue.
d) There are no instruments that will increase the number of shares in issue in future. Accordingly, the above figures currently represent both basic and diluted earnings per share.
8 Investments at fair value
Movements in investments during the year are summarised as follows:
Traded
on Unquoted Unquoted Loan Total
AIM ordinary preference stock
shares shares
GBP GBP GBP GBP GBP
--------------------------------- -------- ----------- ---------- ----------- -----------
Cost at 31 December 2015 305,030 15,950,645 29,850 33,775,769 50,061,294
Net unrealised gains at 31
December 2015 88,941 1,360,322 5,081 2,330,728 3,785,072
Permanent impairment in value
of investments as at
31 December 2015 - (1,442,685) (3,078) (1,044,992) (2,490,755)
Valuation at 31 December 2015 393,971 15,868,282 31,853 35,061,505 51,355,611
Purchases at cost (note a) - 2,723,364 - 143,920 2,867,284
Sale proceeds (note b) (89,548) (935,432) - (1,947,335) (2,972,315)
Net realised gains (note c) 12,049 374,739 - 242,160 628,948
Net unrealised gains/(losses)
for the year (note d) 40,834 (3,700,030) (2,905) 3,465,341 (196,760)
Closing valuation at 31 December
2016 357,306 14,330,923 28,948 36,965,591 51,682,768
Cost at 31 December 2016 245,012 17,104,478 29,850 32,235,441 49,614,781
Net unrealised gains at 31
December 2016 112,294 (2,366,432) 2,176 5,775,142 3,523,180
Permanent impairment in cost
of investments as at 31
December 2016 (note e) - (407,123) (3,078) (1,044,992) (1,455,193)
Valuation at 31 December 2016 357,306 14,330,923 28,948 36,965,591 51,682,768
Reconciliation of investment transactions to Statement of Cash flows
Note a: Purchases above of GBP2,867,284 are less than that shown as Acquisitions of investments in the Statement of Cash flows of GBP3,559,180. This difference of GBP691,896 relates to an investment into Ibericos Etc. Limited (trading as Tapas Revolution) that completed after the year end. This amount is shown as held in a solicitor's client account within debtors at the year end.
Note b: The cash flow from investment proceeds shown above of GBP2,972,315 differs from the Disposals of investments shown in the Statement of Cash flows of GBP3,397,012 by GBP424,697. This is due to GBP89,548 of deferred cash sale proceeds not received until after the year-end, against which GBP514,245 of deferred cash sale proceeds were received during the year relating to a prior year.
Major movements in investments
Note c: Disposals of investment portfolio companies during the year were:
Valuation
Type Investment Disposal at Realised
cost proceeds 31 December gain
2015 in year
GBP GBP GBP GBP
---------------------- ----------------------- ---------- --------- ----------- --------
Master Removers
Group Limited Loan repayment 1,004,547 1,004,547 1,004,547 -
Barham Consulting
Limited Loan repayment 363,240 605,400 605,400 -
Focus Pharma Holdings
Limited Deferred consideration - 601,630 - 601,630
Pound FM Consultants Loan repayment and
Limited share buyback 425,871 425,871 425,871 -
Loan payments/deferred
Others consideration 242,417 334,867 307,549 27,318
2,036,075 2,972,315 2,343,367 628,948
Note d: Within net unrealised losses of GBP196,760 for the year, the significant falls in value compared to last year were as follows: GBP1,357,565 in Entanet Holdings Limited, GBP578,850 in Jablite Holdings Limited, GBP474,707 in Veritek Global Limited, and GBP379,931 in Tharstern Group Limited. These losses were partially set off by significant unrealised gains in valuation compared to last year, being: GBP820,861 in Turner Topco Limited (trading as ATG Media), GBP473,686 in RDL Corporation Limited, GBP382,661 in Vian Marketing Limited (trading as Tushingham Sails) and GBP339,822 in Vectair Holdings Limited.
The increase in unrealised valuations of the loan stock investments above reflects the changes in the entitlement to loan premiums, and/or in the underlying enterprise value of the investee company. The increase does not arise from assessments of credit risk or market risk upon these instruments.
Note e: During the year, permanent impairments of the cost of investments have reduced from GBP2,490,755 to GBP1,455,193. The net reduction of GBP1,035,562 is due to a) an investee company being dissolved in the year, which removes the cost and related impairment of this investment from these Financial Statements, and b) an impairment of equity of one investee company.
9 Current asset investments and Cash at bank
2016 2015
GBP GBP
--------------------------------------------- --------- ----------
OEIC Money market funds 4,239,682 9,434,251
Bank deposits that mature within up to three
months - 2,501,272
Cash equivalents per Statement of Cash Flows 4,239,682 11,935,523
Bank deposits that mature after three months
but are not immediately repayable 1,007,267 3,010,751
Current asset investments 5,246,949 14,946,274
Cash at bank 5,314,539 7,221,793
10 Post balance sheet events
On 4 January 2017, the Company invested GBP0.69 million into Ibericos etc. Limited (trading as Tapas Revolution). This sum was held in a solicitor's client account at the year-end, and was included as part of debtors in the year-end balance sheet.
In January and February 2017, the Company sold its entire holding in Omega Diagnostics Group plc, realising GBP0.37 million of proceeds.
In January and February 2017, the Company received a further GBP0.13 million of deferred consideration as a result of the realisation of Focus Pharma Holdings Limited in a previous year.
Since the year-end, the Company has received partial loan repayments totalling GBP5.12 million from Backhouse Management Limited, McGrigor Management Limited, Barham Consulting Limited, Hollydale Management Limited and Creasy Marketing Services Limited, all being companies preparing to trade.
11 Statutory information
The financial information set out in these statements does not constitute the Company's statutory accounts for the year ended 31 December 2016 but is derived from those accounts. Statutory accounts will be delivered to the Registrar of Companies after the Annual General Meeting. The auditors have reported on these accounts and their report was unqualified and did not contain a statement under section 498(2) of the Companies Act 2006.
12 Annual Report
The Annual Report will be published on the Company's website at www.migvct.co.uk shortly and shareholders who have not requested a hard copy of the report will shortly receive notification from the Company on how to download a pdf of the Report from the website. Shareholders and members of the public, who wish to receive a hard copy of the Annual Report, may request a copy by writing to the Company Secretary, Mobeus Equity Partners LLP, 30 Haymarket (4th floor), London SW1Y 4EX or by email: vcts@mobeusequity.co.uk.
13 Annual General Meeting
The Annual General Meeting of the Company will be held at 2.00 pm on Wednesday, 10 May 2017 at The Clubhouse, 8 St James's Square, London, SW1Y 4JU.
Contact details for further enquiries:
Robert Brittain of Mobeus Equity Partners LLP (the Company Secretary) on 020 7024 7600 or by e-mail to vcts@mobeusequity.co.uk.
Mark Wignall or Mike Walker at Mobeus Equity Partners LLP (the Investment Adviser) on 020 7024 7600 or by e-mail to info@mobeusequity.co.uk.
DISCLAIMER
Neither the contents of the Company's website nor the contents of any website accessible from hyperlinks on the Company's website (or any other website) is incorporated into, or forms part of, this announcement.
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR VBLBXDXFXBBK
(END) Dow Jones Newswires
March 30, 2017 06:35 ET (10:35 GMT)
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