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MCAP Macaulay Capital PLC

19.00
0.00 (0.00%)
06:56:51 - Realtime Data
Share Name Share Symbol Market Type Share ISIN Share Description
Macaulay Capital PLC AQSE:MCAP Aquis Stock Exchange Ordinary Share GB00BNKBMF25 Ordinary shares
  Price Change % Change Share Price Bid Price Offer Price High Price Low Price Open Price Shares Traded Last Trade
  0.00 0.00% 19.00 18.00 20.00 19.00 19.00 19.00 0.00 06:56:51
Industry Sector Turnover Profit EPS - Basic PE Ratio Market Cap
0 0 N/A 0

Macaulay Capital PLC Final Results

22/03/2024 7:00am

RNS Regulatory News


RNS Number : 8717H
Macaulay Capital PLC
22 March 2024
 

            

22 March 2024

Macaulay Capital PLC

("Macaulay Capital" or the "Company")

Final Results

 

Macaulay Capital PLC (AQSE: MCAP), which was formed to originate and manage corporate transactions, raise funds from third parties, invest its own funds alongside those of external investors and to manage its investment portfolio with the aim of maximising its value, announces its final results for the year ended 31 December 2023.

 

Copies of the annual report will be sent today to shareholders along with the Notice of the Company's Annual General Meeting which will take place on Friday 26 April 2024 at noon at 11 Laura Place, Bath, BA2 4BL.

 

This announcement contains inside information for the purposes of the UK Market Abuse Regulation and the Directors of the Company are responsible for the release of this announcement.

  

Enquiries:

 

 Macaulay Capital PLC


Clive Milner

+44 (0)20 3946 5980





Cairn Financial Advisers LLP (AQSE Corporate Adviser)


James Caithie
Louise O'Driscoll

Emily Staples

+44 (0)20 7213 0880




Oberon Capital (Broker)


Chris Crawford

+44 (0)20 3179 5304

 

For more information please visit: www.macaulaycapital.com

 

Chairman's Statement

 

Introduction

These accounts are the Company's first full year accounts since its admission to trading on the Aquis Stock Exchange Growth Market (AQSE) in July 2022, when we raised a total of £2 million before costs, at 20p per share.

 

As at 31 December 2023, the Group's net assets stood at £1,361,811, which included investments valued at £900,000 and cash of £338,484.  In the year to 31 December 2023, our revenues were £539,225, on which we incurred losses of £76,195.  Both our revenue and losses were better than budget, principally due to performance fees we received on the successful exit of one of our portfolio companies, Qualification Check Limited ("QCL"), to which I will return later.  Although we expect to incur losses while we build our business, we intend that, as a trading business, we will in due course break even and then become profitable.

 

The Horner Family increased its stake during the year through a purchase of 200,000 shares at 22.5p per share in the market and remains the largest shareholder block with a total of 2.3 million shares (23% of the Company's issued share capital), which will increase by August 2024 by up to a further 6 million shares, to 8.3 million shares (51.9%), through the exercise of warrants priced at 25p per share.  

 

Strategy

Our strategy is to build an investment origination business focused on unquoted companies, generating fees (transactions and ongoing) and investing alongside external investors and management. We believe that private companies represent an attractive asset class and, as the chart below shows, the performance of private companies, as measured by the ten-year time weighted rate of return, has been consistently stronger and less volatile than that of public companies.

 

 

We target smaller private companies with an enterprise value of £2-10 million, with proven businesses which have established niches or developed other defensible qualities that enable them to maintain and grow their activities over an extended period of time.  We are thus different from many private equity funds which seek to invest in larger companies, in high growth sectors often with novel or disruptive business models.

 

 

In addition, because the sector that we target is of less interest to many investors and thus less competitive, we are able to structure investments at attractive valuations, typically in a combination of redeemable loan stock and equity.  This means that investors can expect a yield on their investment, and for most of their capital to be repaid over time, together with an equity interest in the investee company.  Also, because shares in private companies benefit from Business Relief, investors will be able to transfer their shares free of inheritance tax. 

 

Our target market can be illustrated as shown below:

Together with our co-investors, we provide a combination of growth and replacement capital to investee companies, which helps them to finance their future development as well as facilitating partial exits for founder investors and incentivising ongoing management through equity ownership. We believe it important that, where we can, we co-invest alongside the investors we introduce as this not only demonstrates our belief in the investee companies but also aligns our interests with our co-investors and the investee companies.

 

Portfolio companies

We now have seven portfolio companies which includes four previously managed by Chelverton Asset Management ("CAM", the "Legacy Portfolio").  We identified the other three portfolio companies - Vale Foods Holdings Limited, New Star Industries Limited and Kelda Showers Limited and helped to agree the terms and structure of the transactions as well as arranging some or all of the investments. 

 

Vale Foods Holdings Limited, which trades as Devonvale, is a manufacturer of flapjacks, cakes and cereal bars based in Honiton, Devon, and was our first investee company.  In May 2022, ahead of joining AQSE, we raised £1 million in a combination of ordinary shares (£86,000 for 40% of the equity) and unsecured loan notes (£914,000).  Of the £1 million, we invested £200,000, which includes an 8% equity interest. On 18 December 2023 we announced that we had provided Devonvale with £125,000 of a £275,000 bridging loan that it took on in order to finance new premises required to accommodate increased demand for its products. We intend to refinance this loan by the end of December 2024.

 

In March 2023 we undertook our second transaction. New Star Industries Limited, which trades as Camloc, is an established Midlands based precision engineering business which manufactures compression struts and dampers. We invested £700,000 out of a total fund raising of £1.55 million, giving us a 23.8% equity interest in the secondary buy-out from a private equity fund. Whilst we intend to sell down £500,000 of this investment to other investors in due course, 96.6% of it comprises 8% loan notes, which means that while we continue to hold these loan notes we are earning a significant revenue return on the investment.

 

In June 2023 we completed a transaction in relation to Kelda Showers Limited ("Kelda"), a company which has developed a disruptive water and energy-saving solution for the shower market.  We raised £940,000 from investors, including Kelda's management and existing shareholders, but, on this occasion, the Group did not itself invest as the investment was entirely in ordinary shares that were expected to be eligible for EIS relief, for which the Group is not eligible. The Group received an arrangement fee of £47,000 in respect of the transaction however and continues to receive an annual management fee from Kelda.

 

In addition to the above three companies, during the year we managed an investment portfolio of five private companies, (now four following the QCL exit), previously managed by CAM. Under the agreements with the relevant companies, we are responsible for monitoring their performance on behalf of investors previously introduced by CAM.  This includes a board position, for which we are entitled to monthly management fees and potential performance fees on exit.

 

QCL

QCL is a leading provider of global qualification verification services.  In August 2023, we announced that a trade buyer had acquired all of the shares held by the B Share Investors in QCL, who had been introduced by CAM.  For those who invested in February 2017, the sale price was a gross money multiple return of 7.3 times, taking into account EIS relief, and the gain is free of CGT. For those who invested in March 2021, the sale price was a gross money multiple return of 3.8 times, before CGT, and before management and performance fees payable on the exit.   The management and performance fees were shared by Macaulay and CAM with the net amount received by Macaulay being £211,751.

 

Investors  

We believe that the area of the market that we target for investment is underserved.  This gives us the opportunity to generate good returns for investors by identifying established private companies at attractive valuations: the QCL exit is an excellent example of what we are seeking to achieve. 

 

Whilst we believe it important that investors invest across a range of our opportunities to reduce their investment risk, we are confident that the potential for significant capital returns and the fact that the equity is transferable free of inheritance tax, should mean that our offering is of great interest to High-Net-Worth individuals and Family Offices.

 

Accordingly, and as we have said previously, a business imperative is to look for ways to broaden the pool of potential investors for the investment opportunities that we identify.  This is where we are focusing our marketing efforts. 

 

Outlook

Whilst we did not introduce any new investments to our investors in the second half of 2023, we have a number of highly promising investment opportunities in our pipeline.  Our investment process is rigorous and time-consuming, and we are highly selective, but we hope to bring some of these opportunities to fruition in the first half of 2024.

 

Overall, we believe that we are on track and are pleased with the progress that we have made to date and look forward to the remainder of 2024.

 

Finally, and on behalf of the Board, I would like to thank our Shareholders, employees, advisers and our co-investors for their support.

 

Lindsay Mair

Chairman

21 March 2024

 

Consolidated Statement of Comprehensive Income

for the Year Ended 31 December 2023

 

 

 

Year ended

Period ended

 

 

31 December

31 December

 

 

2023

2022

 

Notes

 

 

 

 

 

 

Income

4

539,225 

118,737 

Other expenses

5/6

(613,501)

(502,827)

Loss on ordinary activities before interest and taxation

 

(74,276)

(384,090)

 

 

 

 

Interest                                       


(1,919)

(904)

 


 

 

Loss on ordinary activities before taxation

 

(76,195)

(384,994)

 

 

 

 

Taxation                                     

7

 

Loss on ordinary activities after taxation

 

(76,195)

(384,994)

 

 

 

 

Loss per Ordinary share in pence

9

 

(0.76)p

(3.85)p 

 

The notes form part of these financial statements.

 

Consolidated Balance Sheet

as at 31 December 2023

 

 

 

2023

 

2022

 

Notes

 

£

 

£

Fixed assets

 

 

 

 

 

Tangible assets

10

 

2,813 

 

4,219  

Investments at fair value through profit or loss

11

 

900,000 

 

200,000  

 

 

 

902,813 

 

204,219

Current assets

 

 

 

 

 

Debtors: amounts falling due within one year   

13

175,503


104,962

 

Cash at bank and in hand                               


338,484


1,189,219

 


513,987


1,294,181

 

Creditors: amounts falling due within one year





 

 

Other creditors and accruals

14

(54,989)


(60,394)

 

 

Net current assets

 

 

458,998  

 

1,233,787

 

Net assets

 

 

1,361,811

 

1,438,006

 

 

 

 

 

 

Capital and reserves

 

 

 

 

 

Called up share capital  

15

 

1,000,000 

 

1,000,000

Share premium account

2.17

 

823,000 

 

823,000

Profit and loss account

 

 

(461,189)

 

(384,994)

Shareholders' funds

 

 

1,361,811 

 

1,438,006

 

The financial statements were approved and authorised for issue by the Board and were signed on its behalf on 21 March 2024.

Lindsay Mair                                                              

Director                                                                      

 

The notes form part of these financial statements.

 

Company Balance Sheet

as at 31 December 2023

 

 

 

 

2023

 

2022

 

Notes

 

£

 

£

Fixed assets

 

 

 

 

 

Investments in subsidiary

12

 

1,000,000

 

1,000,000 

 

 

 

1,000,000

 

1,000,000

Current assets

 

 

 

 

 

Debtors: amounts falling due within one year        

13

323,408


28,517

 

Cash at bank and in hand                 


259,873


1,082,652

 

 


583,281


1,111,169

 

Creditors: amounts falling due within one year





 

 

Other creditors and accruals

14

(34,944)


(390,814)

 

 

Net current assets

 

 

548,337

 

720,355

 

Net assets

 

 

1,548,337

 

1,720,355

 

 

 

 

 

 

Capital and reserves

 

 

 

 

 

Called up share capital                  

15

 

1,000,000

 

1,000,000

Share premium account                

 

 

823,000

 

823,000

Profit and loss account

 

 

(274,663)

 

(102,645)

Equity Shareholders' funds

 

 

1,548,337

 

1,720,355

 

The financial statements were approved and authorised for issue by the Board on 21 March 2024 and were signed on its behalf by

Lindsay Mair

Director

The notes form part of these financial statements.

 

Consolidated Statement of Changes in Equity

for the Year Ended 31 December 2023

 

 

 

    Called up

             share     capital

          Share      premium

       account

   Profit and loss account

Total

        Equity

Shareholders'

Funds

£ 

£

                   £

                   £

At 1 January 2023

1,000,000

823,000

(384,994)

1,438,006 

Total comprehensive income for the period:

 

 

 

 

Loss for the period

-

-

(76,195)

(76,195)

At 31 December 2023

1,000,000

823,000

(461,189)

1,361,811 

 

 

 

    Called up

             share     capital

          Share      premium

       account

   Profit and loss account

Total

        Equity

Shareholders'

Funds

                   £

   £

                   £

                   £

At 13 May 2022

-

-

-

Total comprehensive income for the period:

 

 

 

 

Loss for the period

(384,994)

(384,994)

 

Transactions with Shareholders

recorded directly to equity:

 

 


 

Issue of Ordinary shares

1,000,000 

1,000,000 

-

2,000,000 

Expenses of share issue

(175,000)

-

(175,000)

 

Irrecoverable VAT on share issue expenses

(2,000)

-

(2,000)

At 31 December 2022

1,000,000 

823,000 

(384,994)

1,438,006 

 

The notes form part of these financial statements.

 

Company Statement of Changes in Equity

 for the Year Ended 31 December 2023

 


    Called up

           share    capital

       Share   premium

   account

Profit and loss account

Total

        Equity

Shareholders'

Funds

                   £

 £

                   £

£

At 1 January 2023

1,000,000

823,000

(102,645)

1,720,355

Total comprehensive income for the period:

 

 

 

 

Loss for the period

-  

-  

(172,018) 

(172,018) 

At 31 December 2023

      1,000,000  

 823,000  

(274,663)

1,548,337  

 

 


Called up

share

capital

Share   premium

   account

Profit and loss account

Total

        Equity

Shareholders'

Funds

                £

                £

                £

                £

At 13 May 2022

-  

-  

-  

-  

Total comprehensive income for

 the period:

 

 

 

 

Loss for the period

-  

-  

(102,645) 

          (102,645)

 

 

 


 

Transactions with Shareholders

recorded directly to equity:

 

 


 

Issue of Ordinary shares

       1,000,000

1,000,000  

-  

         2,000,000

Expenses of share issue

-  

(175,000) 

-  

            (175,000)

Irrecoverable VAT on share issue expenses

-  

(2,000) 

-  

               (2,000)

At 31 December 2022

      1,000,000  

 823,000  

(102,645)

          1,720,355 

 

 

The notes form part of these financial statements.

 

Consolidated Cash Flow

for the Year Ended 31 December 2023

 

 

 

2023

2022

 

 

£

£

Cash flows used in operating activities:

 

 

 

Loss for the year

 

(76,195)

(384,994)

Adjusted for:

 

 

 

Depreciation of assets

 

1,406

1,407

Interest paid

 

1,919

904

Increase in debtors

 

(70,541)

(104,962)

(Decrease)/increase in creditors

 

(5,405)

60,394

Net cash used in operating activities

 

(148,816)   

(427,251)

 


 

 

Cash used in investing activities:


 

 

Purchase of investments


(700,000)   

(200,000)

Purchase of fixed assets


-     

(5,626)

Net cash used in investing activities


(700,000)   

(205,626)

 


 

 

Cash flows (used in)/ generated from financing activities:



 

Issue of Ordinary shares

 

                   -    

2,000,000

Share issue expenses (including irrecoverable VAT)

 

            -   

(177,000)

Interest paid


(1,919)

(904)

Net cash (used in)/ generated from financing activities


(1,919)

1,822,096

 


 

 

Net (decrease)/increase in cash and cash equivalents


(850,735)     

1,189,219

 

 

 

 

Reconciliation of net cash flow to movement in net cash:

 

 

 

(Decrease)/ increase in cash

 

(850,735)

1,189,219

Net cash at start of period

 

1,189,219 

-

 Net cash at end of period

 

338,484

1,189,219

 

The notes form part of these financial statements.
.

Notes to the financial statements
Year ended 31 December 2023

1       General information

       Macaulay Capital Plc was incorporated on 13 May 2022 for the purpose of acquiring Macaulay Management Limited ("MML"). MML was incorporated on 14 October 2021 and was formed to originate and manage corporate transactions, raise funds from third parties, invest the Group's own funds alongside those of external investors and to manage the Group's investment portfolio with the aim of maximising its value. Macaulay Capital Plc acquired the entire issued share capital of MML on 14 June 2022.

 

          The Company is a public limited company, which is incorporated and registered in England and Wales (Registered number: 14105915).

         

          The registered office address is The Office Suite, Den House, Den Promenade, Teignmouth, TQ14 8SY.

 

2       Accounting policies

 

2.1 Basis of preparation of financial statements

          The financial statements have been prepared under the historical cost convention unless otherwise specified within these accounting policies and in accordance with Financial Reporting Standard 102, the Financial Reporting Standard applicable in the UK and the Republic of Ireland and the Companies Act 2006.

 

          The Company has taken advantage of the exemption allowed under section 408 of the Companies Act 2006 and has not presented its own statement of comprehensive income in these financial statements.

 

          The preparation of financial statements in compliance with FRS 102 requires the use of certain critical accounting estimates. It also requires management to exercise judgement in applying the Company's accounting policies (see note 3).

 

          The following principal accounting policies have been applied:

 

2.2     Basis of consolidation

             The consolidated financial statements incorporate the results of the Company and its subsidiary MML, (together the Group), as if they form a single entity using merger accounting. On the establishment of the Company as the ultimate parent of the Group, no change in ownership occurred and the entity was established for the purpose of acquiring MML. Therefore, the requirements of purchase method accounting did not apply.

 

          The financial statements of the subsidiary are prepared for the year ended 31 December 2023 using consistent accounting policies. All inter-company balances and transactions, including unrealised profits arising from them are eliminated on consolidation.

 

2.3     Going concern

Company law requires the Directors to consider the appropriateness of the going concern basis when preparing the financial statements. At 31 December 2023, the Group had cash balances of approximately £0.3 million and has access to £1.5 million from the exercise of the Founder Warrants as detailed in Note 15. Having reviewed cash flow forecasts for the period to 31 December 2025, the Directors confirm that they consider that the going concern basis is appropriate. This review included consideration of the Group's financial position in respect of its cash flows and investment commitments (of which there are none of significance), the working arrangements of key service providers, the impact of the conflicts in Ukraine and the Middle East and the current economic environment. In addition, the Directors are not aware of any material uncertainties that may cast significant doubt upon the Group's ability to continue as a going concern.

 

The Directors believe that the Group has sufficient resources to continue in operational existence for the foreseeable future. Thus, they have adopted the going concern basis of accounting in preparing the annual financial statements.

 

2.4     Revenue recognition

Income from arrangement fees is recognised when the investment has been completed. Invoices for monitoring fees are raised in line with each agreement. Fixed returns on debt securities are recognised on a time-apportioned basis so as to reflect the effective yield. Interest income is recognised in the consolidated profit and loss account using the effective interest method.

 

2.5     Income

         Income is attributable to the principal activities of the Group which are to manage corporate transactions, raise funds from third parties, invest the Group's own funds alongside those of external investors and to manage the Group's investment portfolio.

 

         All of the reported revenue and operational results for the year derive from the Group's principal activities and its investments and are recognised on an accruals basis. The Group is not reliant on any one customer.

 

2.6     Tangible fixed assets

Tangible fixed assets are stated at historical cost less accumulated depreciation and any accumulated impairment losses. Historical cost includes expenditure that is directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management.

 

Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives, using the methods below:

 

Computer equipment - 4 years straight line.

 

2.7     Investment in subsidiaries

Investments in subsidiaries are measured at cost less any accumulated impairment in value.

 

2.8     Financial instruments

The Group only enters into basic financial instruments and transactions that result in the recognition of financial assets and liabilities such as trade debtors, investments and debt instruments and other debtors and creditors. The Company has adopted section 11 of FRS 102 on the recognition and measurement of financial instruments.

 

Financial assets that are measured at cost and amortised cost are assessed at the end of each reporting period for objective evidence of impairment. If objective evidence of impairment is found, an impairment loss is recognised in the statement of comprehensive income.

 

2.9     Investments

Investments are measured initially at cost and at subsequent reporting dates at fair value and derecognised at the trade date. Accordingly, as permitted by FRS 102, investments in shares and loan notes upon their initial recognition are designated as investments at fair value through profit or loss on the basis that they qualify as a group of assets managed, and whose performance is evaluated, on a fair value basis in accordance with a documented investment strategy.  Investments at fair value through profit or loss are measured initially at transaction price (not adjusted for transaction costs) and at subsequent reporting dates at fair value. The changes in fair value of investments are recognised in profit or loss and are treated as unrealised holding gains or losses.  Purchases and sales of investments are recognised in the financial statements at the date of the transaction (trade date).

 

2.10    Debtors

Short-term debtors are measured at transaction price, less any impairment.

 

2.11   Cash and cash equivalents

Cash comprises cash at bank and demand deposits. Cash equivalents are short-term, highly liquid investments that are readily convertible to known amounts of cash and which are subject to insignificant risk of changes in value.

 

For the purpose of the Cash Flow Statement, cash and cash equivalents consist of cash and cash equivalents as defined above.

 

2.12    Creditors

Short-term creditors are measured at the transaction price.  Other financial liabilities, should they arise, will be measured initially at fair value net of transaction costs, and will be measured subsequently at amortised cost using the effective interest method.

 

2.13   Pensions - contributory pension plan

The Group previously operated a contributory plan for its employees. Once the contributions have been paid the Group has no further payment obligations. 

 

In the previous period the contributions were recognised as an expense in the profit and loss account when they fell due. The current employees have opted out of the Scheme and hence there is no charge in the profit and loss account.

 

2.14   Earnings per share

Basic earnings per share is calculated by dividing the profit or loss attributable to ordinary equity holders of the Company by the weighted average number of ordinary shares outstanding during the year.   

 

Diluted earnings per share is calculated by adjusting the earnings and number of shares for the effects of dilutive options and other dilutive potential ordinary shares.

 

2.15   Dividend policy

         The Company expects that returns to Shareholders will be delivered primarily through an appreciation in the price of the Ordinary Shares rather than by capital distribution through regular dividends.

 

2.16    Current and deferred taxation

         The tax expense for the year comprises current and deferred tax. Tax is recognised in profit or loss except that a charge attributable to an item of income and expense recognised as other comprehensive income or to an item recognised directly in equity is also recognised in other comprehensive income or directly in equity respectively.

 

         The current income tax charge is calculated on the basis of tax rates and laws that have been enacted or substantively enacted by the balance sheet date in the countries where the Company operates and generates income.

 

Deferred tax balances are recognised in respect of all timing differences that have originated but not reversed by the balance sheet date, except that:

 

•    The recognition of deferred tax assets is limited to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits;

•    Where they relate to timing differences in respect of interests in subsidiaries and the Group can control the reversal of the timing differences and such reversal is not considered probable in the foreseeable future.

 

         Deferred tax balances are not recognised in respect of permanent differences except in respect of business combinations, when deferred tax is recognised on the differences between the fair values of assets acquired and the future tax deductions available for them and the differences between the fair values of liabilities acquired and the amount that will be assessed for tax. Deferred tax is determined using tax rates and laws that have been enacted or substantively enacted by the balance sheet date.

 

2.17  Reserves

 

         Share premium account

         The share premium account represents the accumulated premium paid for shares issued in previous periods above their nominal value less issue expenses. This is a reserve forming part of non-distributable reserves. The following items are taken to this reserve:

 

•            costs associated with the issue of equity; and

•            premium on the issue of shares.

 

         Profit and loss account

This reserve holds the accumulation of profits and losses reduced by any dividends paid to Shareholders.

 

3.      Judgements in applying accounting policies and key sources of estimation uncertainty

The preparation of the financial statements requires the Board to make judgements and estimates regarding the application of policies and affecting the reported amounts of assets, liabilities, income and expenses. Estimates and assumptions mainly relate to the fair valuation of the fixed asset investments particularly unquoted investments. Estimates are based on historical experience and other assumptions that are considered reasonable under the circumstances. The estimates and the assumptions are under continuous review with particular attention paid to the carrying value of the investments.

 

Investments at fair value through profit or loss are regularly reviewed to ensure that the fair values are appropriately stated. Unquoted investments in shares and loan notes are valued in accordance with current International Private Equity and Venture Capital Valuation (IPEVC) Valuation Guidelines, which can be found on their website at www.privateequityvaluation.com, although this does rely on subjective estimates such as appropriate sector earnings or revenue multiples, forecast results of investee companies, asset values of investee companies and liquidity or marketability of the investments held.

 

4    Income

 

                       Year to

                   Period to

 

    31 December 2023

    31 December 2022

 

                                 £

                                 £

Arrangement fees

102,168

35,000

Monitoring fees

157,352

74,722

Loan note interest

56,717

9,015

Performance fees received

211,751

-

Interest received

11,237

-

 

539,225

118,737

 

5      Other expenses

 

                       Year to

                   Period to

 

   31 December 2023

   31 December 2022

 

                                 £

                                 £

Administration and secretarial services

29,700

10,417

Auditor's remuneration for:

 

 

         -  Audit services

18,000

15,000

         -  Non-audit services

-

6,319

Data and IT support

31,774

47,969

Legal & professional fees

73,606

67,701

Irrecoverable VAT

24,709

15,897

Other expenses

84,152

51,658

 

261,941

214,961

 

The Audit fee paid by the Company was £9,500 (2022: £9,500).

 

 

6      Directors' remuneration and employee costs

 

 

                Year ended

 

Period to

 

    31 December 2023

31 December 2022 

 

                                 £

£  

Directors' fees

165,666

88,449

Director's healthcare

8,618

459

Staff salaries

140,001

172,975

Pension contributions

-

2,345

Employer's national insurance

37,275

23,638

 

351,560

287,866

 

The average number of employees for the Group was 4 (2022: 4).

 

7         Taxation

 

                       Year to

                   Period to

 

    31 December 2023

    31 December 2022

 

                                 £

                                 £

Analysis of charge in year

 

 

Current tax

                                  -

                                  -


-

 

Factors affecting current tax charge for the year

 

The tax assessed for the year is lower than the standard rate of corporation tax in the UK of 25% (2022:19%). The differences are explained below:

 

 

                       Year to

                    Period to

 

    31 December 2023

    31 December 2022

 

                                  £

                                  £

Loss on ordinary activities

(76,195)

(384,994)

Theoretical tax at UK corporation tax rate of 23.52% (2022:19%)

 

 

Corporation tax

(17,921)

(73,149)

Ineligible depreciation

331 

267 

Expenses not deductible for tax purposes

Excess expenses for the year

17,590 

72,882 

Current tax charge for the year

 

Factors that may affect future tax charges

At 31 December 2023 the Company had surplus management expenses of £458,376 (2022: 383,587).

 

8          Parent company loss for the year

The Company has taken advantage of the exemption allowed under section 408 of the Companies Act 2006 and has not presented its own profit and loss account in these financial statements. The loss after tax of the parent company for the year was £172,018 (2022: £102,645).

9          Loss per share

The calculation of basic return per share is based on the return after tax and on a weighted average number of ordinary shares in issue in the period. Basic and diluted returns per share are the same as there are no dilutive elements on share capital.

 

 

                        Year to

                    Period to

 

    31 December 2023

    31 December 2022

Loss after taxation attributable to Ordinary shareholders (£)

(76,195)

(384,994)

Weighted average Ordinary shares in issue

10,000,000 

10,000,000 

Loss per Ordinary share - basic and diluted (pence)

(0.76)

(3.85)

 

10        Tangible fixed assets

 

      31 December 2023

      31 December 2022

 

                          Group

                          Group

 

Computer equipment

Computer equipment

Cost or valuation

                                    £

                                    £

At 1 January 2023

5,626

-

Additions

-

5,626

At 31 December 2023

5,626

5,626


 

 

Depreciation

 

 

At 1 January 2023

1,407

-

Charge for the year

1,406

1,407

At 31 December 2023

2,813

1,407


 

 

Net book value at 31 December 2023

2,813

4,219

 

11     Investments

 

 

 

 

31 December

2023

31 December

2022

 

 

Investment in loan notes

Investment in unlisted shares

 

 

Total

 

 

Total

 

                                  £

£

£

£

Investments held at fair value through profit or loss

 

 

 

 

Opening book cost

182,800

17,200

200,000

-

Opening valuation

182,800

17,200

200,000

-


 

 

 

 

Movements in the year:

 

 

 

 

Purchases at cost

676,231

23,769

700,000

200,000

Closing valuation

859,031

40,969

900,000

200,000


 

 

 

 

Closing book cost

859,031

40,969

900,000

200,000

Closing valuation

859,031

40,969

900,000

200,000


 

 

 

 

 

On 20 May 2022, the Group invested in a company in the bakery industry by purchasing 17,200 Ordinary B shares at £1 per share and issuing an unsecured loan note of £182,800 with 8% interest. Interest is received as it falls due every anniversary date and the principal is to be repaid in full on 20 May 2027. 

 

On 23 March 2023, the Group invested in an engineering company by purchasing 23,769 Ordinary B shares at £1 per share and issuing an unsecured loan note of £676,231 with 8% interest. Interest is received as it falls due every anniversary date and the principal is to be repaid in full on 20 May 2028. 

 

The fair value of the investments is established by using measures of value such as the price of recent transactions, earnings or revenue multiples, discounted cash flows and net assets. These are consistent with the IPEVC Valuation Guidelines.

 

Investment in shares and loan notes were valued using recent EBITDA information and relevant industry multiples, where value deemed reasonable as compared to using industry EBITDA multiple and net assets value approach.

 

At 31 December 31, 2023, the fair market value of the investment in shares and loan notes approximated to its carrying value.

12        Investment in subsidiary undertaking

           

               31 December

 2023

31 December

2022

 

                     Company

                     Company

 

                                   £

£

At 1 January 2023

1,000,000

-

Additions

-

1,000,000

Carrying value at 31 December 2023

1,000,000

1,000,000

 

At 31 December 2023 the Company held interests in the following subsidiary company

 

 

Country of incorporation

% of capital held

% share of voting rights

Nature of business

 

 

 

 

 

Macaulay Management Limited

England

100%

100%

Investment company

 

 

                                The registered address of the subsidiary is the same as the Company.

 

13       Debtors

 

 

                        Group

                  Company

 

   31 December 2023

   31 December 2023

 

                                 £

                                 £

Due within one year:

 

 

Trade debtors

27,600

-

Other debtors

126,820

-

Amounts due from subsidiary

-

314,316

Prepayments and accrued income

21,083

9,092

 

175,503

323,408

 

 

 

 

 

 

 

                        Group

                  Company

 

   31 December 2022

   31 December 2022

 

                                 £

                                 £

Due within one year:

 

 

Trade debtors

58,781

-

Other debtors

31,920

23,949

Prepayments and accrued income

14,261

4,568


104,962

28,517

 

 

14       Creditors amounts falling due within one year

 

                       Group

                  Company

 

   31 December 2023

   31 December 2023

 

                                 £

                                 £

Trade creditors

7,377

4,607

Other taxation and social security

11,389

6,624

Accruals and other creditors

36,223

23,713

 

54,989

34,944

 

 

 

 

                       Group

                  Company

 

   31 December 2022

   31 December 2022

 

                                 £

                                 £

Amounts due to subsidiary

-

350,908

Trade creditors

4,173

963

Other taxation and social security

12,155

7,391

Accruals and other creditors

44,066

31,552


60,394

390,814

 

15       Called up share capital

 

Group and Company

 

31 December 2022 & 2023

Issued, allotted and fully paid:

                     Number

                                £

Ordinary shares of 10p each

                 10,000,000

                  1,000,000

 

Ordinary shares have full voting rights with 1 vote per share, they are entitled to dividends when proposed and are due a capital distribution on a company exit event.

 

Share options

The Company may adopt a formal incentive plan under which it contemplates awarding Share Options to Directors, employees and consultants pursuant to share option and incentive schemes approved by the Board. It is intended that any individual awards under any such scheme will be subject to vesting and/or performance conditions. The proportion of Ordinary Shares which will be made the subject of Share Options will not exceed 20 per cent. of the Company's issued Ordinary Share capital from time to time without the prior approval of the Shareholders and no Share Options are intended to be granted to David Horner.

 

Founder Warrants

Unconditional Founder Warrants have been issued to subscribe for 6,000,000 Ordinary Shares exercisable at £0.25 per share and which the Founder Warrant Holders have irrevocably undertaken to exercise in full within two years of admission.

 

Conditional Founder Warrants have been issued to subscribe for a further 5,000,000 Ordinary Shares, exercisable at the higher of £0.25 per share or the mid- market price of an Ordinary Share at the time of exercise, conditional on the exercise of Share Options and in numbers of up to a maximum of (but not exceeding) the numbers of Ordinary Shares issued following the exercise of such Share Options.

 

16      Capital commitments

At 31 December 2023 and 2022 there were no capital commitments outstanding and no contingent liabilities.

 

17       Directors' interests and related party transactions (Group and Company)

The Company has taken advantage of the exemption in section 33 of FRS 102 from the requirement to disclose transactions with its wholly owned subsidiary on the grounds that consolidated financial statements are prepared by the Parent Company.

 

The Directors are considered to be the key management of the business. Their remuneration for the year is disclosed in note 6 of these financial statements.

 

The Directors and connected persons held the following interests in the voting shares of the Company at 31 December 2023.


                                                                       Number of shares         % of total voting rights

David Horner                                                    250,000                                  2.5%

Mary Horner                                                        50,000                                  0.5%   

Lindsay Mair                                                      125,000                                1.25%

 

For the purposes of the AQSE Growth Market Access Rulebook the parties referred to below are related parties of the Company for the reasons set out in those paragraphs.

 

David Horner is a related party of the Company because he is a Director of the Company; and Mary Horner, who is David Horner's wife, is for that reason an associate of David Horner and thereby a related party to the Company.

 

CAM, a company of which David Horner is a director and significant shareholder, is a related party of the Company because CAM is an associate of David Horner.

 

Each of Harry and Tom Horner is a related party of the Company for the following two reasons:

each of them will be entitled to exercise, or to control the exercise of, 10 per cent or more of the votes able to be cast on all or substantially all matters at general meetings of the Company; and each of them is a son of David Horner and, as a result, an associate of his and therefore is a related party.

 

Others

MML has taken over the investment management of the unquoted investment portfolio of CAM, which David Horner, a director of the Company, founded and of which he is managing director. In line with its strategy, CAM's current and future focus is on quoted companies, rather than unquoted businesses, and therefore the unquoted portfolio is now insignificant, relative to CAM's quoted company portfolio.

 

In the year the Company's operations manager has spent a proportion of his time working with a private business owned by David Horner and his wife.  Under this agreement, the private business paid the Group £34,500 (2022: £7,500), equivalent to the pro-rata cost of the operations manager's employment to the Group.

18     Financial instruments

The Group's financial instruments comprise securities and other investments, cash balances and debtors and creditors that arise from its operations, for example, in respect of sales and purchases awaiting settlement and debtors for accrued income.

 

The financial instruments of the Group fall into the following categories:

Group

                       

  At amortised

                 cost

Assets at fair value through   profit or loss

               Total

31 December 2023

                      £

                      £

                      £

Assets as per the Balance Sheet

 

 

 

Investments

-

900,000

900,000

Debtors

152,600

-

152,600

Cash and cash equivalents

338,484

-

338,484

Total

491,084

900,000

1,391,084

 

 

 

 

Liabilities as per the Balance Sheet

 

 

 

Creditors

43,600

-  

43,600

Total

43,600

-

43,600

 

 

 

 

 

 

 

 

Group

                       

  At amortised

                 cost

Assets at fair value through   profit or loss

               Total

31 December 2022

                      £

                      £

                      £

Assets as per the Balance Sheet

 

 

 

Investments

-

200,000

200,000

Debtors

90,701

-

90,701

Cash and cash equivalents

1,189,219

-

1,189,219

Total

1,279,920

200,000

1,479,920

 

 

 

 

Liabilities as per the Balance Sheet

 

 

 

Creditors

48,239

-

48,239

Total

48,239

-

48,239

 

Company

  At amortised

                 cost

Assets at fair value through   profit or loss

               Total

31 December 2023

                      £

                      £

                      £

Assets as per the balance sheet

 

 

 

Amounts due from subsidiary

314,316

-

314,316

Cash and cash equivalents

259,873

-

259,873

Total

574,189

-

574,189


 

 

 

Liabilities as per the balance sheet

 

 

 

Creditors

28,320

-

28,320

Total

28,320

-

28,320

 

 

 

 

Company

  At amortised

                 cost

Assets at fair value through   profit or loss

               Total

31 December 2022

                      £

                      £

                      £

Assets as per the balance sheet

 

 

 

Other debtors

23,949

 

23,949

Cash and cash equivalents

1,082,652

-

1,082,652

Total

1,106,601

-

1,106,601

 

 

 

 

Liabilities as per the balance sheet

 

 

 

Creditors

383,423

-

383,423

Total

383,423

-

383,423

 

 

 

 

 

 

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