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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 | 0.00 | 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 : 4309N
Mobeus Income & Growth VCT PLC
08 August 2017
Mobeus Income & Growth VCT plc
Half-Year results for the six months ended 30 June 2017
Mobeus Income & Growth VCT plc ("the Company", "the Fund" or "MIG VCT") is a Venture Capital Trust ("VCT") listed on the London Stock Exchange. Its investment portfolio, which invests primarily in established, unquoted companies, is advised by Mobeus Equity Partners LLP ("Mobeus" or "the Investment Adviser").
Company Objective
The Objective of the Company is to provide investors with a regular income stream, by way of tax-free dividends generated from income and capital returns, while continuing at all times to qualify as a VCT.
Financial Highlights
Results for the six months ended 30 June 2017
Hot Features
Premium
- Net asset value ("NAV") total return per share
for the Half-Year was 6.0%, while the share
price total return per share for the Half-Year
was -0.3%*.
- Shareholders received a second interim capital
dividend of 6.00 pence per share, in respect
of the year ended 31 December 2016, on 31 March
2017, bringing total dividends paid in respect
of the year ended 31 December 2016 to 14.50
pence per share.
- The Company has declared an interim capital
dividend of 9.00 pence per share, payable on
13 September 2017 to shareholders on the register
on 18 August 2017, bringing total cumulative
dividends paid to shareholders since inception
to 104.80 pence per share.
- Three new investments, plus one follow on investment,
have been made during the period, totalling
GBP1.99 million.
- The Company realised its investment in Entanet
Holdings Limited after the period end in August
2017 for GBP6.12 million, a gain of 4.52 pence
per share, contributing to a 2.5 multiple on
cost over the life of this investment to date.
- The Board intends to raise up to GBP25 million
under an Offer (GBP15 million plus GBP10 million
via an over-allotment facility) alongside the
other Mobeus VCTs, to be launched in September
2017.
* The main reason for the divergence in NAV and share price performance is the uplift in value arising from the prospective sale of Entanet which was not announced before 30 June 2017 and therefore was not reflected in the share price at that date.
Performance Summary
The net asset value per share of the Company at 30 June 2017 was 82.58 pence.
The table below shows the recent past performance of the original fundraising launched in 2004. Performance data for all fundraising rounds and for former Matrix Income & Growth 3 VCT plc ("MIG3 VCT") shareholders are shown in an appendix to the published Half-Year Report and will be available on the Company's website.
Reporting Net NAV Share Cumulative Cumulative Dividends
date assets per Price dividends total return per share
Share (mid-market paid per share to in
price)(1) per share shareholders(2) respect
of the
period
(NAV (Share
basis) price
basis)
As at (GBPm) (p) (p) (p) (p) (p) (p)
------------ ------- ------ ------------ ---------- -------- -------- -----------------------------
30 June
2017 62.43 82.58 68.50 95.80 178.38 164.30 9.00 (3)
31 December
2016 63.15 83.53 74.75 89.80 173.33 164.55 14.50
30 June
2016 68.67 90.80 82.75 81.30 172.10 164.05 8.50
(1) Source: Panmure Gordon & Co (mid-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 2004.
(3) The Directors have declared an interim capital
dividend of 9.00 pence per share in respect
of the six months ended 30 June 2017. The dividend
will be paid to shareholders on 13 September
2017.
Chairman's Statement
I am pleased to present the Half-Year Report for Mobeus Income & Growth VCT plc ("MIG") covering the six month period ended 30 June 2017.
Overview
The half-year has produced a very good return for shareholders with a positive income return as well as realised and unrealised gains from portfolio companies. The Board is pleased to note the sale of the investment in Entanet just after the half-year end, which has contributed substantially to this increase in value.
The level of new investment has been strong with four growth capital investments completed so far in 2017, including one which completed after the period end. Further details of these investments are included under 'Investment Portfolio' below.
These investments reflect the revised focus on providing growth capital to younger and smaller companies in accordance with the revised Investment Policy approved by shareholders last year. By way of reminder, this revised Policy was required to comply with the new VCT measures introduced by the Finance (No. 2) Act 2015 in November of that year. Since that change GBP8.69 million has already been invested in nine such companies.
Although the VCT industry can no longer make investments to finance management buyouts ("MBOs"), these MBO investments made prior to the change in Investment Policy continue to represent 78% of the Company's portfolio at the date of this Half-Year Report. This portfolio has performed well in what is a time of political and economic uncertainty.
Performance
At 30 June 2017, your Company was rated 2nd out of 43 VCTs, over the last 5 years, in the Association of Investment Companies' ("AIC") analysis of NAV Cumulative Total Return.
The Net Asset Value ("NAV") Total Return was 6.0% for the period (compared with 0.3% for the same period last year).
Planned Fund Raising
Your Board has announced its intention to raise up to a further GBP25 million (GBP15 million plus GBP10 million via an over-allotment facility) alongside three other Mobeus-advised VCTs before the end of the financial year. In our view, this is a good time for the Company to increase its liquidity so as to finance intended new investments and capitalise on the opportunities offered by this sector.
We also believe that there continues to be good appetite for further investment in the Company, following a very popular fundraising in the 2014/2015 tax year.
A general meeting was convened and held on 3 August 2017 and shareholder approval was sought and obtained for authority to allot shares and dis-apply pre-emption rights in connection with the fundraising. The Offers for Subscription ("Offers") are expected to be launched in early September 2017, full details of which will be contained in the Prospectus that will be sent to all registered shareholders.
We very much hope that existing shareholders will add to their holdings and look forward to welcoming new investors in the Company.
Dividends
On 31 March 2017, the Company paid a second interim dividend of 6.00 pence per ordinary share, in respect of the financial year ended 31 December 2016.
The Board has declared an interim capital dividend of 9.00 pence per share, payable on 13 September 2017 to shareholders on the register on 18 August 2017. This dividend will be paid out of the Company's Special Distributable Reserve. Once paid, this will bring cumulative dividends paid per share since the launch of the Company to 104.80 pence (30 June 2016: 89.80 pence) per share. Original shareholders who invested 100p per share at launch will therefore have received more than their original investment back in dividends.
Investment Portfolio
As noted above, the Company completed the divestment of Entanet Holdings Limited after the period end in August 2017. Proceeds of GBP6.12 million have been received, while a further GBP0.63 million is deferred consideration that is potentially payable over the next two years. This investment has achieved a return on original investment cost of 2.5 times to date, over the three and a half years that the investment was held, which is a very pleasing performance. The valuation of Entanet at the half-year reflects the full GBP6.12 million of cash proceeds received after the period end.
Overall the performance of the investment portfolio has been good in the current environment. Principally due to the uplift in Entanet, the portfolio achieved a gain of GBP3.08 million (6.0% of the opening value) during the first half of the year and was valued at GBP49.51 million at the period end (30 June 2016: GBP49.59 million). The six month period experienced notable increases in the valuations of Entanet (as explained above) and Access IS. The portfolio also saw valuation declines over the period for Fullfield (trading as Motorclean) and CGI Creative Graphics.
During the period three new and one follow on investment were made at a total cost of GBP1.99 million (analysed and explained later in this Report). These were:
-- Ibericos Etc. Limited (trading as Tapas Revolution) - a leading Spanish restaurant chain in the casual dining sector.
-- BookingTek Limited (follow on) - a business that provides direct booking software for hotels.
-- Chatfield Services Limited (trading as Buster & Punch) - a London-based interiors brand.
-- MyTutorweb Limited - a digital marketplace that connects school pupils who are seeking private
one-to-one tutoring with university students.
Shortly after the period end, a further new investment of GBP2.74 million was made in Wetsuit Outlet, a leading online retailer in the water sports market. This investment utilised GBP2.09 million previously held in a company preparing to trade.
There was one other realisation during the period under review; GBP0.37 million proceeds was received from the entire disposal of the balance of the investment in AIM quoted Omega Diagnostics plc. This investment achieved a return on original investment cost of 1.50 times over the period the investment was held.
The company also received cash proceeds of GBP6.20 million during the period, mostly being partial loan stock repayments from companies preparing to trade.
Further information on the portfolio can be found under the Investment Adviser's Review (below).
Revenue account
There was a strong net revenue return for the period, being GBP1.15 million compared to GBP0.77 million recorded this time last year. Income has increased due to a strong stream of dividends, as well as improved loan interest receipts due to new investments and some portfolio companies resuming loan interest payments as their trading improved. Running costs have fallen due to lower Investment Adviser fees arising from lower net assets.
Industry and regulatory developments
The Patient Capital Review, announced in November 2016, is now in its consultation phase ahead of the Autumn Budget 2017. Led by HM Treasury, its objective is to assess what amendments to Government policy, if any, are needed to support the expansion in provision of long-term capital for growing innovative firms. Industry bodies such as the AIC, BVCA and EISA, supported by the VCT Industry, are reinforcing the Board and Mobeus's views that the government should renew its public commitment to the positive role that VCTs play in providing development capital to the small business sector, as well as affirming the long-term future of the scheme.
Share buybacks
We are pleased to note that currently there is relatively little demand for share buybacks. No shares were bought back and cancelled during the period under review.
Shortly after the period end, on 7 July 2017, the Company bought back for cancellation shares amounting to 0.1% of its issued share capital at the start of the year. These were bought back at approximately a 10% discount to the Company's latest announced NAV, in accordance with the Company's buyback policy.
Liquidity
The present level of cash or near cash resources held by the Company as at 30 June 2017, including the liquidity held by companies preparing to trade, was GBP17.38 million or 27.8% of net assets. After the period end, following the investment in Wetsuit Outlet, the realisation of Entanet Holdings, and the payment of the interim dividend in September 2017, the level of liquidity will be GBP13.93 million or 25.1% of net assets.
The VCT continues to hold its cash in a selection of money market funds with AAA credit ratings and in a number of deposit accounts diversified among well-known financial institutions across a range of maturities.
Shareholder event
The Investment Adviser held its seventh annual shareholder event on 27 January 2017. As in previous years, the event was well received by those shareholders who attended. The next event is to be held on Tuesday, 30 January 2018, again at the Royal Institute of British Architects in Central London.
The programme will contain highlights from the performance of the Mobeus VCTs as well as presentations by
representatives of portfolio companies. Shareholders have been sent further details and an invitation to the event
with their copy of the Mobeus VCT Newsletter circulated last week.
Outlook
The UK economy continues to be subject to the uncertainties arising both out of the ability of the UK government to negotiate a satisfactory exit from the European Union and from the recent UK election result. Nevertheless the demand from small UK businesses for development capital remains strong and there continues to be a healthy market to invest in quality smaller companies at attractive prices.
Both the Board and the Investment Adviser continue to have a positive outlook about the Company's future prospects.
The small and medium-sized enterprises (SME) segment is a dynamic target universe for new investment, where the Investment Adviser is reviewing many promising opportunities. The Investment Adviser continues to expand its team
and capabilities and has adapted well to the requirements of the new Investment Policy.
The existing portfolio continues to comprise predominantly established, more mature and profitable companies that have been conservatively financed, but over time the growth capital investments will represent a growing proportion. The latter will tend to be less mature, and not always profitable but will have adequate finance at the point of investment by the Company. They will also typically exhibit more volatility in returns and generate less income as they tend to re-invest profits during their growth phase, but may offer the prospect of higher capital returns too.
Finally, I would like to thank all of our shareholders for their continuing support.
Clive Boothman
Chairman
8 August 2017
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.
Summary of VCT Regulation
To achieve continued status as a VCT, the Company must meet a number of conditions, the most important of which are that:-
- The Company must hold at least 70%, by VCT tax value*, of its total investments (shares, securities and liquidity) in VCT qualifying holdings, within approximately three years of a fundraising;
- Of these qualifying holdings, an overall minimum of 70% by VCT tax value* (30% for funds raised on or before 5 April 2011) must be in ordinary shares which carry no preferential rights (save as may be permitted under VCT rules);
- No investment in a single company or group of companies may represent more than 15% (by VCT tax value*) of the Company's total investments at the date of investment.
- The Company must pay sufficient levels of income dividend from its revenue available for distribution so as not to retain more than 15% of its income from shares and securities in a year;
- The Company's shares must be listed on a regulated European stock market; and
- Non-qualifying investments can no longer be made, except for certain exemptions in managing the Company's short term liquidity.
To be a VCT qualifying holding, new investments must be in companies:-
- which carry on a qualifying trade;
- which have no more than GBP15 million of gross assets at the time of investment and GBP16 million immediately following investment from VCTs;
- whose maximum age is generally seven years (ten years for knowledge intensive businesses);
- that receive no more than an annual limit of GBP5 million and a lifetime limit of GBP12 million (GBP20 million for knowledge intensive companies), from VCTs and similar sources of State Aid funding; and
- that use the funds received from VCTs for growth and development purposes.
* VCT tax value means valued in accordance with prevailing VCT legislation.
The above takes into account legislation up to the Finance Act 2016 but effective from 6 April 2016.
Investment Review
New investments in the period
A total of GBP1.99 million was invested into four companies during the six months under review, comprising new investments into Tapas Revolution, Buster & Punch, MyTutor and a follow on loan into BookingTek. One further new investment in Wetsuit Outlet was completed after the period end.
Company Business Date of investment Amount of new
investment (GBPm)
Tapas 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 centre sites with high footfall.
Having opened its first restaurant in Shepherd's Bush Westfield, the business has since opened
a further six restaurants. The investment provided growth capital to a high-calibre team with
significant restaurant rollout experience which has spent the past five years building and
refining its offer and is now well placed to capitalize on a strong pipeline of new sites.
The company's latest accounts for the year ended 25 October 2016 show a turnover of GBP4.25
million and loss before interest, tax and amortisation of goodwill of GBP0.25 million.
Buster & Punch Retailer March 2017 0.67
--------------------------- ------------------------- ------------------------------ -----------------------------
Chatfield Services Limited (trading as Buster & Punch) is a London-based interiors brand founded
in 2012 by architect and industrial designer Massimo Buster Minale. Buster & Punch (www.busterandpunch.com)
started in a small garage in East London, where it built the "world's first designer LED light
bulb" (the Buster Bulb) and made its name with its industrial-inspired lighting. Its products
are now sold in over 50 countries, both directly to end-consumers, designers and architects,
and through well-known retailers including John Lewis, Harvey Nichols and Harrods. The investment
will support the business's international expansion plans and the broadening of its product
range. The company's latest accounts for the year ended 31 March 2016 show a turnover of GBP1.98
million and profit before interest, tax and amortisation of goodwill of GBP0.47 million.
MyTutor Online tutoring May 2017 0.55
--------------------------- ------------------------- ------------------------------ -----------------------------
Mytutorweb Limited is a digital marketplace that connects
school pupils who are seeking private one-to-one tutoring
with university students. The business is satisfying
a growing demand from both schools and parents to
improve pupils' exam results to enhance their academic
and career prospects. This investment represents an
opportunity to consolidate the sizeable GBP2 bn UK
tutoring market, build MyTutor's market presence and
drive technological development. The company's latest
accounts for the year ended 31 December 2016 show
a turnover of GBP0.21 million and loss before interest,
tax and amortisation of goodwill of GBP0.79 million.
A further small loan investment of GBP0.08 million was made into BookingTek Limited (which provides direct booking software for hotel groups), to fund an opportunity for US expansion.
New investments post period-end
Company Business Date of investment Amount of new
investment (GBPm)
Wetsuit Outlet Retailer July 2017 2.74
------------------------------------------------------- ---------- -------------------- ---------------------
B2C Holdings Limited (trading as Wetsuit Outlet) has established itself as a leading online
retailer in the water sports market, stocking an impressive brand portfolio including Musto,
Billabong, Rip Curl, O'Neill, Red Paddle (an existing Mobeus investment) and Gul. The investment
is to fund working capital and growth in the existing activity and enter two new markets.
Established in 2005, the company has developed into a successful and profitable business with
revenues of GBP11.51 million and GBP1.77 million NPBIT&A in the financial year ended 31 March
2017.
Realisations
There was one realisation during the period under review (Omega Diagnostics plc) and one realisation shortly after the period-end (Entanet Holdings Limited) as set out below:
Company Business Period of investment Total cash proceeds
over the life
of the investment
/ Multiple over
cost
Omega Diagnostics In-vitro diagnostics December 2010 GBP0.46 million
for food intolerance, to February 1.5 times cost
autoimmune and 2017
infectious diseases
--------------------- ----------------------------- ----------------------- ----------------------
The investment in Omega Diagnostics plc, an AIM quoted stock, was realised over a phased period
generating proceeds of GBP0.46 million. The realisation generated a 1.50 multiple over cost,
over the life of the investment.
Entanet Wholesale voice February 2014 GBP6.92 million
and data communications to August 2017 2.5 times cost
provider
--------------------- ----------------------------- ----------------------- ----------------------
The Company has just sold this investment to AIM quoted CityFibre Infrastructure Holdings
PLC for GBP6.12 million in August 2017. Between December 2014 and December 2016, Entanet's
revenues increased by 39% to GBP35.75 million. Deferred consideration of up to GBP0.63 million
is potentially payable over the next 24 months. Excluding this deferred consideration, the
company has so far realised a gain of GBP3.41 million, being 4.52 pence per share, and has
returned an IRR of 39% to date - an excellent outcome.
Loan stock repayments
Loan stock repayments totalled GBP5.89 million for the half-year. These proceeds are summarised below:-
Company Business Month Amount (GBP000s)
--------------------- --------------------- ---------- ----------------
Company preparing
Backhouse Management to trade January 1,211
Company preparing
Creasy Marketing to trade March 1,211
Company preparing January,
McGrigor Management to trade February 1,211
Company preparing
Hollydale Management to trade March 879
Company subsequently
used to invest
Chatfield Services in Buster & Punch March 710
Company preparing
Barham Consulting to trade March 605
TPSFF Holdings
(formerly The Building finishing
Plastic Surgeon) services April 67
Total 5,894
------------------------------------------------------ ----------------
Mobeus Equity Partners LLP
Investment Adviser
8 August 2017
Investment Portfolio Summary
as at 30 June 2017
Qualifying investments Market Date of Total book Valuation Like for like % value
sector investment cost GBP'000 valuation of net assets
GBP'000 increase/
(decrease)
over period(1)
Unquoted investments
Entanet Holdings
Limited(2)
Wholesale Fixed Line
communications provider Telecommunications Feb-14 2,713 6,123 117.1% 9.8%
------------------------ ------------------- --------------- ---------- --------- --------------- --------------
Tovey Management Limited
(trading as Access IS)
Provider of data
capture and scanning Software and
hardware Computer Services Oct-15 2,979 3,592 12.8% 5.8%
------------------------ ------------------- --------------- ---------- --------- --------------- --------------
Virgin Wines Holding
Company Limited
Online wine retailer General retailers Nov-13 2,439 3,199 (5.7)% 5.1%
------------------------ ------------------- --------------- ---------- --------- --------------- --------------
ASL Technology Holdings
Limited
Printer and photocopier
services Support services Dec-10 2,942 3,091 (2.5)% 5.0%
------------------------ ------------------- --------------- ---------- --------- --------------- --------------
Turner Topco Limited
(trading as ATG Media)
Publisher and on-line
auction platform
operator Media Oct-08 2,494 2,224 2.2% 3.6%
------------------------ ------------------- --------------- ---------- --------- --------------- --------------
Vian Marketing Limited
(trading as Red Paddle
Co)
Design, manufacture and
sale of stand-up
paddleboards and
windsurfing sails Leisure goods Jul-15 1,189 1,760 12.0% 2.8%
------------------------ ------------------- --------------- ---------- --------- --------------- --------------
Fullfield Limited
(trading as Motorclean)
Provider of vehicle
cleaning and valet
services Support services Jul-11 1,626 1,648 (21.4)% 2.6%
------------------------ ------------------- --------------- ---------- --------- --------------- --------------
TPSFF Holdings Limited
(formerly The Plastic
Surgeon Holdings
Limited)
Supplier of snagging
and finishing services
to the domestic and
commercial property
markets Support services Apr-08 443 1,598 14.0% 2.6%
------------------------ ------------------- --------------- ---------- --------- --------------- --------------
Gro-Group Holdings
Limited
Baby sleep products General retailers Mar-13 1,975 1,578 (7.4)% 2.5%
------------------------ ------------------- --------------- ---------- --------- --------------- --------------
Tharsten Group Limited
Software based
management information Software and
systems computer services Jul-14 1,377 1,573 2.5% 2.5%
------------------------ ------------------- --------------- ---------- --------- --------------- --------------
Veritek Global Holdings
Limited
Maintenance of imaging
equipment Support services Jul-13 2,045 1,547 (4.5)% 2.5%
------------------------ ------------------- --------------- ---------- --------- --------------- --------------
Manufacturing Services
Investment Limited
Company subsequently
used to invest in
Wetsuit Outlet after Company preparing
the period-end to trade Feb-14 1,524 1,524 - 2.4%
------------------------ ------------------- --------------- ---------- --------- --------------- --------------
RDL Corporation Limited
Recruitment consultants
for the pharmaceutical,
business intelligence
and IT industries Support services Oct-10 1,558 1,506 4.4% 2.4%
------------------------ ------------------- --------------- ---------- --------- --------------- --------------
Media Business Insight
Holdings Limited
A publishing and events
business focused on the
creative production
industries Media Jan-15 2,518 1,469 (10.2)% 2.4%
------------------------ ------------------- --------------- ---------- --------- --------------- --------------
CGI Creative Graphics
International Limited
Vinyl graphics to
global automotive,
recreational vehicle
and aerospace markets General Industrials Jun-14 1,808 1,347 (17.6)% 2.2%
------------------------ ------------------- --------------- ---------- --------- --------------- --------------
EOTH Limited
(trading as Rab & Lowe
Alpine)
Branded outdoor
equipment and clothing General retailers Oct-11 1,000 1,298 (0.7)% 2.1%
------------------------ ------------------- --------------- ---------- --------- --------------- --------------
Redline Worldwide
Limited
Provider of security
services to the
aviation industry and
other sectors Support services Feb-16 1,088 1,261 15.9% 2.0%
------------------------ ------------------- --------------- ---------- --------- --------------- --------------
Master Removers Group
Limited (formerly Leap
New Co Limited (trading
as Anthony Ward Thomas,
Bishopsgate and Aussie
Man & Van))
A specialist logistics,
storage and removals
business Support services Dec-14 614 1,150 30.5% 1.8%
------------------------ ------------------- --------------- ---------- --------- --------------- --------------
Vectair Holdings Limited
Designer and
distributor of washroom
products Support services Jan-06 139 901 (12.4)% 1.4%
------------------------ ------------------- --------------- ---------- --------- --------------- --------------
Preservica Limited
Seller of proprietary
digital archiving Software and
software Computer Services Dec-15 900 900 - 1.4%
------------------------ ------------------- --------------- ---------- --------- --------------- --------------
MPB Group Limited
Online marketplace for
used photographic
equipment General retailers Jun-16 604 869 44.0% 1.4%
------------------------ ------------------- --------------- ---------- --------- --------------- --------------
Blaze Signs Holdings
Limited
Manufacturer and
installer of signs Support services Apr-06 492 771 (24.3)% 1.2%
------------------------ ------------------- --------------- ---------- --------- --------------- --------------
Pattern Analytics
Limited (trading as
Biosite)
Workforce management
and security services
for the construction Software and
industry Computer Services Nov-16 757 757 - 1.2%
------------------------ ------------------- --------------- ---------- --------- --------------- --------------
Ibericos Etc. Limited
(trading as Tapas
Revolution)
Spanish restaurant
chain Travel & Leisure Jan-17 692 692 New investment 1.1%
------------------------ ------------------- --------------- ---------- --------- --------------- --------------
BookingTek Limited
Direct booking software Software and
for hotel groups Computer Services Oct-16 688 688 - 1.1%
------------------------ ------------------- --------------- ---------- --------- --------------- --------------
Chatfield Services
Limited
(trading as Buster &
Punch)(3)
Industrial inspired
lighting and interiors
retailer General retailers Mar-17 668 668 New investment 1.1%
------------------------ ------------------- --------------- ---------- --------- --------------- --------------
Jablite Holdings Limited
Manufacturer of
expanded polystyrene Construction &
products building materials Apr-15 502 598 (26.2)% 1.0%
------------------------ ------------------- --------------- ---------- --------- --------------- --------------
My Tutorweb Limited
Digital marketplace
connecting school
pupils seeking
one-to-one online
tutoring Support services May-17 547 547 New investment 0.9%
------------------------ ------------------- --------------- ---------- --------- --------------- --------------
Lightworks Software
Limited
Provider of software Software and
for CAD vendors Computer Services Apr-06 222 148 (10.3)% 0.2%
------------------------ ------------------- --------------- ---------- --------- --------------- --------------
Racoon International
Holdings Limited
Supplier of hair
extensions, hair care
products and training Personal goods Dec-06 1,213 - - 0.0%
------------------------ ------------------- --------------- ---------- --------- --------------- --------------
CB Imports Group Limited
(trading as Country
Baskets)
Importer and
distributor of
artificial flowers and
floral sundries General retailers Dec-09 350 - - 0.0%
------------------------ ------------------- --------------- ---------- --------- --------------- --------------
Newquay Helicopters
(2013) Limited
(in members' voluntary
liquidation)
Helicopter service
operator Support services Jun-06 30 - (100.0)% 0.0%
------------------------ ------------------- --------------- ---------- --------- --------------- --------------
Total qualifying investments 40,136 45,027 6.8% 72.1%
-------------------------------------------------------------- ---------- --------- --------------- --------------
Non-qualifying Market Date of Total Valuation Like % value
investments sector investment book GBP'000 for like of
cost valuation net
GBP'000 increase/ assets
(decrease)
over
period(1)
Manufacturing Services
Investment Limited Company
As stated in previous preparing
table to trade Feb-14 1,143 1,143 - 1.8%
-------------------------- -------------- ------------ -------- --------- ----------- -------
Media Business
Insight Limited
As stated in previous
table Media Jan-15 764 932 - 1.5%
-------------------------- -------------- ------------ -------- --------- ----------- -------
Hollydale Management
Limited
Company seeking Company
to carry on a business preparing
in the food sector to trade Mar-15 938 586 - 0.9%
-------------------------- -------------- ------------ -------- --------- ----------- -------
EOTH Limited (trading
as Rab & Lowe Alpine)
As stated in previous General
table retailers Oct-11 298 324 - 0.5%
-------------------------- -------------- ------------ -------- --------- ----------- -------
Backhouse Management
Limited
Company seeking Company
to carry on a business preparing
in the motor sector to trade Apr-15 787 303 - 0.5%
-------------------------- -------------- ------------ -------- --------- ----------- -------
Barham Consulting
Limited
Company seeking
to carry on a business Company
in the catering preparing
sector to trade Apr-15 787 303 - 0.5%
-------------------------- -------------- ------------ -------- --------- ----------- -------
Creasy Marketing
Services Limited
Company seeking
to carry on a business Company
in the textile preparing
sector to trade Apr-15 787 303 - 0.5%
-------------------------- -------------- ------------ -------- --------- ----------- -------
McGrigor Management
Limited
Company seeking
to carry on a business Company
in the pharmaceutical preparing
sector to trade Apr-15 787 303 - 0.5%
-------------------------- -------------- ------------ -------- --------- ----------- -------
Tovey Management
Limited
(trading as Access
IS) Software
As stated in previous and Computer
table Services Oct-15 285 285 - 0.5%
-------------------------- -------------- ------------ -------- --------- ----------- -------
Turner Topco Limited
(trading as ATG
Media)
As stated in previous
table Media Oct-08 7 - - 0.0%
-------------------------- -------------- ------------ -------- --------- ----------- -------
Watchgate Limited Support
Holding company services Nov-11 1 - - 0.0%
-------------------------- -------------- ------------ -------- --------- ----------- -------
Total non-qualifying
investments 6,584 4,482 1.8% 7.2%
-------------------------------------------------------- -------- --------- ----------- -------
Total investment
portfolio 46,720 49,509 6.0% 79.3%
-------------------------------------------------------- -------- --------- ----------- -------
Current asset investments
and Cash at bank
and in hand 12,920 20.7%
-------------------------------------------------------- -------- --------- ----------- -------
Total investments 46,720 62,429 100.0%
-------------------------------------------------------- -------- --------- ----------- -------
Other assets 331 0.5%
-------------------------------------------------------- -------- --------- ----------- -------
Current liabilities (331) (0.5)%
-------------------------------------------------------- -------- --------- ----------- -------
Net assets 62,429 100.0%
-------------------------------------------------------- -------- --------- ----------- -------
(1) This percentage change in 'like for like' valuations
is a comparison of the 30 June 2017 valuations
with the 31 December 2016 valuations having
adjusted for partial disposals, loan stock repayments
or new investments in the period.
(2) Entanet Holdings Limited was realised after
the period end. The valuation at 30 June 2017
reflects the actual proceeds received.
(3) GBP1,513,500 invested in Chatfield Services
Limited, a company preparing to trade, was used
for the investment into Buster & Punch. This
resulted in a net repayment to the Company of
GBP845,508.
Disclosed as Current Asset Investment and Cash
at bank and in hand within Current assets in
the Balance Sheet.
Statement of the Directors' Responsibilities
Responsibility statements
In accordance with Disclosure and Transparency Rule (DTR) 4.2.10, Clive Boothman (Chairman), Bridget Guérin (Chairman of the Nomination & Remuneration and Management Engagement Committees), and Catherine Wall (Chairman of the Audit 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 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 changed materially since the publication of the Annual Report and Accounts for the year ended 31 December 2016. The Board acknowledges that there is regulatory risk (for example potential Budget changes arising from the outcome of the Patient Capital Review) and continues to manage the Company's affairs in such a manner as to comply with section 274 of the Income Tax Act 2007.
The principal risks faced by the Company are:
-- Investment and strategic; -- Loss of approval as a Venture Capital Trust; -- Economic; -- Regulatory; -- Financial and operating; -- Market; -- Asset liquidity; -- Market liquidity; and -- Counterparty.
A detailed explanation of these risks can be found in the Strategic Report on pages 19- 20 and in Note 15 on
pages 51 - 58 of the Annual Report and Accounts for the year ended 31 December 2016, copies of which are available on the Investment Adviser's website, www.mobeusequity.co.uk or by going direct to: www.migvct.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 the Company continues to maintain a significant cash position but does intend to raise funds from an Offer for subscription to be launched later this year. The majority of companies in the portfolio continue to trade profitably and the portfolio taken as a whole remains resilient and well-diversified. The major cash outflows of the Company (namely investments, buy-backs 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 capital and financial risks are shown in Notes 15 and 16 on pages 51 - 58 of the Annual Report and Accounts for the year ended 31 December 2016. 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:
Clive Boothman
Chairman
8 August 2017
Unaudited Condensed Income Statement
for the six months ended 30 June 2017
Six months ended 30
Six months ended 30 June 2017 June 2016
(unaudited) (unaudited)
Notes Revenue Capital Total Revenue Capital Total
GBP GBP GBP GBP GBP GBP
-------------------------- ----- --------- ----------- ----------- --------- --------- ---------
Unrealised gains/(losses)
on investments 9 - 2,891,634 2,891,634 - (742,313) (742,313)
Realised gains
on investments 9 - 186,404 186,404 - 616,899 616,899
Income 4 1,691,814 - 1,691,814 1,343,945 - 1,343,945
Investment Adviser's
fees 5 (169,087) (507,259) (676,346) (201,589) (604,765) (806,354)
Other expenses (171,119) - (171,119) (189,557) - (189,557)
Profit/(loss)
on ordinary
activities before
taxation 1,351,608 2,570,779 3,922,387 952,799 (730,179) 222,620
Tax on profit/(loss)
on ordinary
activities 6 (204,510) 97,647 (106,863) (182,620) 120,953 (61,667)
-------------------------- ----- --------- ----------- ----------- --------- --------- ---------
Profit/(loss)
and total comprehensive
income 1,147,098 2,668,426 3,815,524 770,179 (609,226) 160,953
-------------------------- ----- --------- ----------- ----------- --------- --------- ---------
Basic and diluted
earnings per
ordinary share 7 1.52p 3.53p 5.05p 1.02p (0.81)p 0.21p
Year ended 31 December 2016
(audited)
Notes Revenue Capital Total
GBP GBP GBP
-------------------------- ----- --------- ----------- -----------
Unrealised gains/(losses)
on investments - (196,760) (196,760)
Realised gains
on investments - 628,948 628,948
Income 4 2,650,934 - 2,650,934
Investment Adviser's
fees 5 (383,672) (1,151,015) (1,534,687)
Other expenses (349,892) - (349,892)
Profit/(loss)
on ordinary
activities before
taxation 1,917,370 (718,827) 1,198,543
Tax on profit/(loss)
on ordinary
activities 6 (339,532) 230,203 (109,329)
-------------------------- ----- --------- ----------- -----------
Profit/(loss)
and total comprehensive
income 1,577,838 (488,624) 1,089,214
-------------------------- ----- --------- ----------- -----------
Basic and diluted
earnings per
ordinary share 7 2.08p (0.64)p 1.44p
The revenue column of the Income Statement includes all income and expenses. The capital column accounts for the unrealised gains/(losses) 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 UK GAAP, including Financial Reporting Standard 102. In order to better reflect the activities of a VCT and in accordance with the 2014 Statement of Recommended Practice ("SORP") 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 period.
Unaudited Condensed Balance Sheet
as at 30 June 2017
Company registration number: 05153931
Notes As at 30 As at 30 As at 31
June 2017 June 2016 December
(unaudited) (unaudited) 2016
GBP GBP (audited)
GBP
Fixed assets
Investments at fair
value 9 49,509,076 49,586,695 51,682,768
Current assets
Debtors and prepayments 331,084 297,597 1,154,144
Current asset investments 10 9,646,811 11,818,297 5,246,949
Cash at bank 10 3,273,445 7,147,951 5,314,539
------------------------- ----- ------------------------ --------------------------------- ----------------------------
13,251,340 19,263,845 11,715,632
Creditors: amounts falling
due within one year (331,187) (177,971) (248,847)
-------------------------------- ------------------------ --------------------------------- ----------------------------
Net current assets 12,920,153 19,085,874 11,466,785
-------------------------------- ------------------------ --------------------------------- ----------------------------
Net assets 62,429,229 68,672,569 63,149,553
-------------------------------- ------------------------ --------------------------------- ----------------------------
Capital and reserves
Called up share capital 755,975 756,280 755,975
Capital redemption reserve 9,440 9,135 9,440
Share premium reserve 19,463,849 19,463,849 19,463,849
Revaluation reserve 6,290,934 3,007,708 3,523,180
Special distributable
reserve 30,659,875 39,846,633 35,605,335
Realised capital reserve 3,044,076 3,826,082 2,733,792
Revenue reserve 2,205,080 1,762,882 1,057,982
-------------------------------- ------------------------ --------------------------------- ----------------------------
Equity shareholders'
funds 62,429,229 68,672,569 63,149,553
-------------------------------- ------------------------ --------------------------------- ----------------------------
Basic and diluted net
asset value per share 11 82.58p 90.80p 83.53p
The financial information for the six months ended 30 June 2017 and the six months ended 30 June 2016 has not been audited
Unaudited Condensed Statement of Changes in Equity
for the six months ended 30 June 2017
Non-distributable reserves Distributable reserves Total
Called Capital Share Revaluation Special Realised Revenue
up redemption premium reserve distributable capital reserve
share reserve reserve reserve reserve
capital
(note a) (note b) (note b)
GBP GBP GBP GBP GBP GBP GBP GBP
------------------ ------------ ---------- ---------- ----------- ------------- --------- ------------- -----------
At 1 January
2017 755,975 9,440 19,463,849 3,523,180 35,605,335 2,733,792 1,057,982 63,149,553
Comprehensive
income
for the
period
(Profit/(loss)
for the
period - - - 2,891,634 - (223,208) 1,147,098 3,815,524
Total
comprehensive
income
for the
period - - - 2,891,634 - (223,208) 1,147,098 3,815,524
------------------ ------------ ---------- ---------- ----------- ------------- --------- ------------- -----------
Contributions
by and
distributions
to owners
Shares - - - - - - - - bought back Dividends paid - - - - (4,535,848) - - (4,535,848) Total contributions by and distributions to owners - - - - (4,535,848) - - (4,535,848) ------------------ ------------ ---------- ---------- ----------- ------------- --------- ------------- ----------- Other movements Realised losses transferred to special reserve (note a) - - - - (409,612) 409,612 - - Realisation of previously unrealised appreciation - - - (123,880) - 123,880 - - Total other movements - - - (123,880) (409,612) 533,492 - - ------------------ ------------ ---------- ---------- ----------- ------------- --------- ------------- ----------- At 30 June 2017 755,975 9,440 19,463,849 6,290,934 30,659,875 3,044,076 2,205,080 62,429,229 ------------------ ------------ ---------- ---------- ----------- ------------- --------- ------------- -----------
Notes:
a) The cancellation of the share premium reserve
and capital redemption reserve (as approved
at the General Meeting held on 22 February
2014 and by order of the Court dated 12 March
2014) has increased the Company's special distributable
reserve. The purpose of this reserve is to
fund market purchases of the Company's own
shares, write off any existing and future losses
and for any other corporate purpose, including
dividend distributions. All of this reserve
arose from shares issued before 5 April 2014.
b) The Realised capital reserve and the Revenue
reserve together comprise the Profit and Loss
Account of the Company.
Unaudited Condensed Statement of Changes in Equity
for the six months ended 30 June 2016
Non-distributable reserves Distributable reserves Total
Called Capital Share Revaluation Special Realised Revenue
up
share redemption premium reserve distributable capital reserve
capital reserve reserve reserve reserve
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 period
(Loss)/profit
for the
period - - - (742,313) - 133,087 770,179 160,953
Total
comprehensive
income for
the period - - - (742,313) - 133,087 770,179 160,953
-------------- -------- ---------- ---------- ----------- ------------- ----------- --------- -----------
Contributions
by and
distributions
to owners
Shares bought
back (3,450) 3,450 - - (295,377) - - (295,377)
Dividends paid - - - - - (4,541,877) (756,980) (5,298,857)
Total
contributions
by and
distributions
to owners (3,450) 3,450 - - (295,377) (4,541,877) (756,980) (5,594,234)
-------------- -------- ---------- ---------- ----------- ------------- ----------- --------- -----------
Other
movements
Realised
losses
transferred
to special
reserve - - - - (483,812) 483,812 - -
Realisation of
previously
unrealised
appreciation - - - (35,051) - 35,051 - -
Total other
movements - - - (35,051) (483,812) 518,863 - -
-------------- -------- ---------- ---------- ----------- ------------- ----------- --------- -----------
At 30 June
2016 756,280 9,135 19,463,849 3,007,708 39,846,633 3,826,082 1,762,882 68,672,569
-------------- -------- ---------- ---------- ----------- ------------- ----------- --------- -----------
Unaudited Condensed Statement of Cash Flows
for the six months ended 30 June 2017
Six months Six months Year
ended
ended 30 June ended
2016
30 June 2017 (unaudited) 31 December
2016
(unaudited) (audited)
Notes GBP GBP GBP
--------------------------------- ----- -------------- ------------ ------------
Cash flows from operating
activities
Profit after tax for
the financial period 3,815,524 160,953 1,089,214
Adjustments for:
Net unrealised (gains)/losses
on investments (2,891,634) 742,313 196,760
Net realised gains on
investments (186,404) (616,899) (628,948)
Tax charge for current
period 106,863 61,667 109,329
Decrease/(increase) in
debtors 41,613 36,547 (38,554)
Decrease in creditors
and accruals (24,522) (106,096) (82,593)
Net cash inflow from
operations 861,440 278,485 645,208
Corporation tax paid - (44,108) (44,108)
Net cash inflow from
operating activities 861,440 234,377 601,100
Cash flows from investing
activities
Purchases of investments 9 (630,103) (604,465) (3,559,180)
Disposals of investments 9 6,663,279 2,762,213 3,397,012
Decrease/(increase) in
bank deposits with a
maturity over three months 1,942 (11,467) 2,003,484
Net cash inflow from
investing activities 6,035,118 2,146,281 1,841,316
Cash flows from financing
activities
Equity dividends paid 8 (4,535,848) (5,298,857) (11,727,234)
Purchase of own shares - (295,087) (318,277)
Net cash outflow from
financing activities (4,535,848) (5,593,944) (12,045,511)
Net increase/(decrease)
in cash and cash equivalents 2,360,710 (3,213,286) (9,603,095)
Cash and cash equivalents
at start of period 9,554,221 19,157,316 19,157,316
Cash and cash equivalents
at end of period 11,914,931 15,944,030 9,554,221
Cash and cash equivalents
comprise:
Cash at bank and in hand 10 3,273,445 7,147,951 5,314,539
Cash equivalents 10 8,641,486 8,796,079 4,239,682
Notes to the Unaudited Condensed Financial Statements
for the six months ended 30 June 2017
1. Company information
Mobeus Income and Growth VCT plc is a public
limited company incorporated in England, registration
number 05153931. The registered office is 30
Haymarket, London, SW1Y 4EX.
2. Basis of preparation of the financial statements
These financial statements are 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 January 2017) issued by the Association of
Investment Companies ("AIC"). The Financial
Statements have been prepared on the historical
cost basis except for the modification to a
fair value basis for certain financial instruments
as specified in note 9.
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 note 9.
4. Income
Six months Six months Year ended
ended ended
30 June 2017 30 June 2016 31 December
2016
(unaudited) (unaudited) (audited)
GBP GBP GBP
--------------------------------------------------- -------------- -------------- -------------
Dividends 289,217 40,897 220,910
Money-market
funds 7,938 21,041 31,429
Loan stock interest 1,386,114 1,241,971 2,338,480
Bank deposit
interest 8,545 40,036 60,115
-------------------------------------------------------- -------------- -------------- -------------
Total Income 1,691,814 1,343,945 2,650,934
-------------------------------------------------------- -------------- -------------- -------------
5. Investment Adviser's fees
In accordance with the policy statement published under
"Management and Administration" in the Company's prospectus
dated 9 July 2004, the Directors have charged 75% of
the Investment Adviser's fees to the capital reserve.
This is in line with the Board's expectation of the
long-term split of returns from the investment portfolio
of the Company. For further details, see Note 4 on
page 45 of the 2016 Annual Report.
6. Taxation
There is a tax charge for the period as the Company
has taxable income in excess of deductible expenses.
Six months ended 30 June 2017 Six months ended 30 June 2016 Year ended 31 December 2016
(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 204,510 (97,647) 106,863 182,620 (120,953) 61,667 339,532 (230,203) 109,329
Total
current
tax charge/(credit) 204,510 (97,647) 106,863 182,620 (120,953) 61,667 339,532 (230,203) 109,329
----------------------- ---------- ---------- ---------- --------- ----------- ---------- ---------- ---------- ----------
Corporation tax is based
on a rate of 19.3% (2016:
20.0%)
b) Profit/(loss)
on ordinary
activities
before
tax 1,351,608 2,570,779 3,922,387 952,799 (730,179) 222,620 1,917,370 (718,827) 1,198,543
Profit
on ordinary
activities
multiplied
by rate
of
corporation
tax in
the UK
of 19.3%
(2016:
20.0%) 260,185 494,876 755,061 190,560 (146,036) 44,524 383,474 (143,765) 239,709
Effect
of:
UK dividends (55,675) - (55,675) (8,180) - (8,180) (44,182) - (44,182)
Unrealised
(gains)/losses
not taxable/
allowable - (556,640) (556,640) - 148,463 148,463 - 39,352 39,352
Realised
gains
not taxable - (35,883) (35,883) - (123,380) (123,380) - (125,790) (125,790)
Under
provision
in prior
period - - - 240 - 240 240 - 240
Actual
current
tax charge 204,510 (97,647) 106,863 182,620 (120,953) 61,667 339,532 (230,203) 109,329
----------------------- ---------- ---------- ---------- --------- ----------- ---------- ---------- ---------- ----------
7. Basic and diluted earnings and return per share
The basic and diluted 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 ended Six months ended Year ended
30 June 2017 30 June 2016 31 December 2016
(unaudited) (unaudited) (audited)
GBP GBP GBP
----- ------------------------------------ ---------------- ---------------- ------------------
i) Total earnings after taxation 3,815,524 160,953 1,089,214
Basic and diluted earnings
per share 5.05p 0.21p 1.44p
Net revenue from ordinary
ii) activities after taxation 1,147,098 770,179 1,577,838
Basic and diluted revenue
return per share 1.52p 1.02p 2.08p
Net unrealised capital gains/(losses)
on investments 2,891,634 (742,313) (196,760)
Net realised capital gains
on investments 186,404 616,899 628,948
Capital Investment Adviser's
fees less taxation (409,612) (483,812) (920,812)
iii) Total capital return 2,668,426 (609,226) (488,624)
Basic and diluted capital
return per share 3.53p (0.81)p (0.64)p
Weighted average number of
iv) shares in issue in the period 75,597,471 75,857,731 75,741,214
----- ------------------------------------ ---------------- ---------------- ------------------
8. Dividends paid
Dividend Type For the Pence Date paid Six months Six months Year ended
year ended per ended ended 31 December
31 December share 30 June 30 June 2016
2017 2016 (audited)
(unaudited) (unaudited)
31 May
Final Income 2015 1.00p 2016 - 756,980 756,980
31 May
Final Capital 2015 6.00p 2016 - 4,541,877 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(1)
Second 31 March
interim Capital 2016 6.00p 2017 4,535,848(1) - -
4,535,848 5,298,857 11,727,234
----------------- -------------------------- ------ ------------ ------------ ------------ --------------
(1) These dividends were paid out of the Company's
special distributable reserve.
9. 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 2015. 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.
For investments actively traded in 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.
Purchases and sales of unlisted investments are
recognised when the contract for acquisition or
sale becomes unconditional.
Unquoted investments are stated at fair value
by the Directors in accordance with the following
rules, which are consistent with the IPEV guidelines:
All investments are held at the price of a recent
investment for an appropriate period where there
is considered to have been no change in fair value.
Where such a basis is no longer considered appropriate,
each investment is considered as a whole on a
'unit of account' basis alongside consideration
of:
(i) Where a value is indicated by a material arms-length
transaction by an independent third party
in the shares of a company, this value will
be used.
(ii) In the absence of i), and depending upon both
the subsequent trading performance and investment
structure of an investee company, the valuation
basis will usually move to either:-
a) a multiple basis. The shares may be valued
by applying a suitable price-earnings ratio
to that company's historic, current or
forecast post-tax earnings before interest
and amortisation, or revenue, (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, a lack of
marketability).
or:-
b) where a company's underperformance against
plan indicates a diminution in the value
of the investment, provision against cost
is made, as appropriate.
(iii) Premiums, to the extent they are considered
capital in nature, that 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.
(iv) Where a multiple or cost less impairment basis
is not appropriate and overriding factors
apply, a discounted cash flow, net asset valuation
or realisation proceeds basis 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 cost, 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 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
in to a hierarchy based on the reliability of
the information used to determine the valuation.
Level Fair value is measured based on quoted
1 - prices in an active market.
Level Fair value is measured based on directly
2 - observable current market prices or indirectly
being derived from market prices.
Level Fair value is measured using valuation
3 - techniques using inputs that are not based
on observable market data.
Traded Unquoted Unquoted Unquoted Total
on AIM equity preference loan
shares shares stock
Level Level Level
1 3 3 Level
3
GBP GBP GBP GBP GBP
---------------------------- ---------- ------------ ------------ ------------ ------------
Valuation at
1 January 2017 357,306 14,330,923 28,948 36,965,591 51,682,768
Purchases at
cost - 962,581 - 359,419 1,322,000
Sales - proceeds (367,810) (311,441) - (5,894,479) (6,573,730)
- realised gains/(losses) 10,504 (1,870,940) - 2,046,840 186,404
Reclassification
at valuation - (159) 159 - -
Unrealised gains/(losses)
on
investments
in the period - 2,437,778 718,698 (264,842) 2,891,634
Valuation at
30 June 2017 - 15,548,742 747,805 33,212,529 49,509,076
---------------------------- ---------- ------------ ------------ ------------ ------------
Book cost at
30 June 2017 - 17,912,459 30,009 28,777,707 46,720,175
Permanent impairment
in value of investments - (2,453,963) (3,078) (1,044,992) (3,502,033)
Unrealised gains
at 30 June 2017 - 90,246 720,874 5,479,814 6,290,934
Valuation at
30 June 2017 - 15,548,742 747,805 33,212,529 49,509,076
---------------------------- ---------- ------------ ------------ ------------ ------------
Gains/(losses)
on investments
Net realised
gains/(losses)
based on historical
cost 122,798 (1,889,840) - 2,077,326 310,284
Less amounts
recognised as
unrealised (gains)/losses
in previous years (112,294) 18,900 - (30,486) (123,880)
Net realised
gains/(losses)
based on carrying
value at
31 December 2016 10,504 (1,870,940) - 2,046,840 186,404
Net movement
in unrealised
gains/(losses)
in the period - 2,437,778 718,698 (264,842) 2,891,634
Gains on investments
for the
six months ended
30 June 2017 10,504 566,838 718,698 1,781,998 3,078,038
---------------------------- ---------- ------------ ------------ ------------ ------------
Reconciliation to Condensed Statement of Cash Flows
Sales proceeds above of GBP6,573,730 are less than
that shown in the Condensed Statement of Cash Flows
of GBP6,663,279 by GBP89,549. This amount is cash
proceeds received in the current period that related
to an investment realised in the previous year.
Purchases at cost above of GBP1,322,000 are more
than that shown in the Condensed Statement of Cash
Flows of GBP630,103 by GBP691,897. This amount
is funds remitted in December 2016 for the investment
in Ibericos Etc. Limited (trading as Tapas Revolution),
which completed in this Half-Year period. Purchases
of investments referred to in the Chairman's Statement
of GBP1,989,992 are higher than that shown above
by GBP667,992. This amount represents funds previously
held in Chatfield Services Limited, a company preparing
to trade, utilised for the investment into Buster
& Punch, as referred to in the Investment Adviser's
Review.
There has been no significant change in the risk
analysis as disclosed in Note 15 of the Financial
Statements in the Company's Annual Report. The
decrease in unrealised valuations of the loan stock
investment above reflect the changes in the entitlement
to loan premiums, and/or in the underlying enterprise
values of the investee company. The decrease does
not arise from assessments of credit or market
risk upon these instruments.
Level 3 unquoted equity and loan investments are valued in accordance with IPEV guidelines as follows:
As at As at As at
30 June 2017 30 June 2016 31 December
2016
(unaudited) (unaudited) (audited)
GBP GBP GBP
Estimated realisation proceeds 6,123,453 - -
Recent investment price 8,716,511 16,655,476 15,049,213
Price-earnings or revenue multiple 34,669,112 32,524,539 36,276,249
49,509,076 49,180,015 51,325,462
10. Current asset investments and Cash at bank
As at As at As at
30 June 2017 30 June 2016 31 December 2016
(unaudited) (unaudited) (audited)
GBP GBP GBP
----------------------------------------------------- ------------- ------------- -----------------
OEIC Money market funds 8,641,486 6,287,480 4,239,682
Bank deposits that mature within three months but are not
immediately repayable - 2,508,599 -
Cash equivalents per Condensed Statement of Cash Flows 8,641,486 8,796,079 4,239,682
Bank deposits that mature after three months 1,005,325 3,022,218 1,007,267
Current asset investments 9,646,811 11,818,297 5,246,949
Cash at bank 3,273,445 7,147,951 5,314,539
------------------------------------------------------------ ------------- ------------- -----------------
11. Basic and diluted net asset value per ordinary share
As at As at As at
30 June 2017 30 June 2016 31 December 2016
(unaudited) (unaudited) (audited)
GBP GBP GBP
---------------------------------------------------- ------------- ------------- -----------------
Net assets GBP62,429,229 GBP68,672,569 GBP63,149,553
Number of shares in issue 75,597,471 75,627,951 75,597,471
Basic and diluted net asset value per share (pence) 82.58p 90.80p 83.53p
---------------------------------------------------- ------------- ------------- -----------------
12. Post balance sheet events
On 5 July 2017, one of the Company's investments,
Manufacturing Services Investment Limited, a
company preparing to trade, alongside funds
from the VCT, provided capital of GBP2.74 million
to invest in Wetsuit Outlet Limited.
On 1 August 2017, the Company realised its entire
holding in Entanet Holdings Limited for proceeds
of GBP6.12 million, realising a gain over original
cost of GBP3.41 million, or 4.52 pence per share
to date. These proceeds have been fully reflected
in the valuation of the Company at 30 June 2017,
as the Board consider that the transaction was
sufficiently progressed at 30 June to justify
a valuation reflecting the full cash proceeds.
13. Financial Statements for the year ended 31 December
2016
The information for the period ended 30 June
2017 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 2016 have been filed with
the Registrar of Companies. The auditor has
reported on these Financial Statements and that
report was unqualified and did not contain a
statement under section 498(2) or (3) of the
Companies Act 2006.
14. Half-Year Report
This Half-Year Report will be sent to shareholders
shortly and will be made available on the Company's
website: www.migvct.co.uk. Further copies are
available free of charge from the Company's
registered office, 30 Haymarket, London, SW1Y
4EX or can be downloaded via the website.
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR UWAORBKAWRAR
(END) Dow Jones Newswires
August 08, 2017 09:25 ET (13:25 GMT)
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