We could not find any results for:
Make sure your spelling is correct or try broadening your search.
Register for real-time alerts, custom portfolio, and market movers
| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Income & Growth Vct (the) Plc | LSE:IGV | London | Ordinary Share | GB00B29BN198 | 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% | 70.00 | 68.50 | 71.50 | 70.00 | 70.00 | 70.00 | 39 | 08:00:07 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| Offices-holdng Companies,nec | 8.63M | 5.49M | 0.0348 | 20.11 | 110.27M |
TIDMIGV
RNS Number : 1495C
Income & Growth VCT (The) PLC
16 June 2021
Hot Features
Premium
THE INCOME & GROWTH VCT PLC
LEI: 213800FPC15FNM74YD92
UNAUDITED HALF-YEAR RESULTS FOR THE SIX MONTHS TO 31 MARCH 2021
The Income & Growth VCT plc ("the Company") today announces its Half-Year
results for the six months to 31 March 2021.
You may, in due course, view the Half-Year Report, comprising the
Unaudited Condensed Financial Statements of the Company by visiting
www.incomeandgrowthvct.co.uk.
Financial Highlights
As at 31 March 2021:
Net assets: GBP111.95 million
Net asset value ("NAV") per share: 94.71 pence
Results for the six months to 31 March 2021:
* Net asset value ("NAV") total return(1) per share was 35.2%.
* Share price total return(1) per share was 31.9%.
* The Board has declared an interim dividend in respect
of the year ending 30 September 2021 of 5.00 pence
per share to be paid to Shareholders on 23 July 2021.
* The Company made four new investments totalling
GBP3.07 million and four follow-on investments
totalling GBP1.35 million.
* GBP26.07 million of net unrealised gains were
achieved in the period from strong portfolio
performance.
* The Company realised investments totalling GBP10.22
million of cash proceeds and generated net realised
gains in the period of GBP3.59 million.
(1) Definitions of key terms and alternative performance measures
("APMs") / Key performance indicators ("KPIs") shown above and throughout
are shown in the Glossary of terms in the Half-Year Report, available
on the Company's website.
PERFORMANCE SUMMARY
The table below shows the recent past performance of the Company's
existing class of shares for each of the last five years, and the
current year to date:
Reporting Net NAV Share Cumulative Cumulative total Dividends
date assets per Price(1) dividends return per share per share
Share paid to shareholders(2) paid
per share and
proposed
in respect
of
each year
(NAV (Share price
basis) basis)
As at (GBPm) (p) (p) (p) (p) (p) (p)
31 March
2021 111.95 94.71 78.50 131.50 226.21 210.00 5.00(4)
30
September
2020 83.13 70.06 59.50 131.50 201.56 191.00 14.00
30
September
2019 81.73 79.12 75.50(3) 113.00 192.12 188.50 6.00
30
September
2018 82.58 78.32 69.50 108.00 186.32 177.50 6.00
30
September
2017 64.35 81.24 73.00 102.50 183.74 175.50 21.00
30
September
2016 70.84 98.51 88.80 80.50 179.01 169.30 10.00
(1) Source: Panmure Gordon & Co (mid-market price).
(2) Cumulative total return per share comprises the NAV per share
(NAV basis) or the mid-market price per share (share price basis)
plus cumulative dividends paid since launch of the current share class.
(3) The share price at 30 September 2019 has been adjusted to add
back the dividend of 4.50 pence per share paid on 18 October 2019,
as the listed share price was quoted ex this dividend at this year-end.
(4) An interim dividend of 5.00 pence per share, referred to in the
Financial Highlights above, is payable to Shareholders on 23 July
2021.
Detailed performance data, including a table of dividends paid to
date for all share classes and fundraising rounds, is shown in the
Performance Data section towards the end of the Half-Year Report.
The tables, which give information by allotment date on NAVs and dividends
paid per share, are also available on the Company's website at www.incomeandgrowthvct.co.uk
where they can be accessed by clicking on "table" under "Reviewing
the performance of your investment" on the home page.
Chairman's Statement
I present the Company's Half-Year Report for the six months to 31
March 2021.
Overview
The first six months of the Company's financial year have been very
satisfactory for Shareholders, with the Company achieving a NAV total
return per share of 35.2% for the period. At the time of my last Statement
in the Company's Annual Report for the year ended 30 September 2020,
I was able to report on the resilience of the portfolio and the Company's
strong recovery beyond the initial shock of COVID-19 on the UK economy
last March, restoring the momentum it had built up over prior financial
periods. I am pleased to say that this momentum has been sustained
into the new financial year with a period of unprecedented value growth
and activity, driven fundamentally by strong trading performance across
the portfolio and characterised by a number of landmark transactions
for the VCT.
Whilst the longer-term economic impact of COVID-19 is yet to be fully
understood, and with teething issues following Brexit, most of the
investee companies in the portfolio have proven their ability to adapt
well in a rapidly changing environment. Your Board has been encouraged
by their adeptness in facing challenges by swiftly identifying new
opportunities and capitalising on them. In addition, favourable trading
conditions have emerged for a number of technology-related companies
in the portfolio, particularly those businesses operating direct-to-consumer
models.
During the period under review and despite considerable COVID-19 related
restrictions, the Company has maintained a high level of investment
activity. The Company added four new investments to its portfolio,
deployed follow-on funding into four existing portfolio companies,
achieved three profitable realisations, and supported the successful
admission to AIM of a further two of its investments. The Board has
particularly valued the efforts and achievements of the Investment
Adviser over this tumultuous period.
Performance
The Company's NAV total return per share was 35.2% for the six months
to 31 March 2021 (2020: a fall of (7.8)%), and the share price total
return was 31.9% (2020: a fall of (6.0)%). This represents an exceptional
uplift for the period and contrasts markedly with that recorded following
the onset of COVID-19 for the same period last year. The difference
between the NAV total return and share price total return figures
above arises principally due to the timing of NAV announcements which
are usually made retrospectively.
The exceptional NAV total return for the period was principally the
result of significant unrealised gains in the value of investments
still held as well as realised gains achieved via exits and partial
realisations of several portfolio companies. The combination of these
strong unrealised and realised portfolio returns has generated a performance
fee that is potentially payable to our Investment Adviser for the
first time in over three years. Shareholders should note that this
fee is subject to performance targets continuing to be met for the
remainder of the financial year and approval of the Annual Report
& Financial Statements by Shareholders at the Company's Annual General
Meeting ("AGM"). A breakdown of these fees is contained within Note
5 of the Unaudited Condensed Financial Statements. A positive revenue
return driven by strong dividend receipts has also contributed to
shareholder returns.
The Company's cumulative NAV total return per share (being the closing
net asset value plus total dividends paid since the launch of the
current share class) has increased from 201.56 pence per share at
the start of the period to 226.21 pence per share at the period-end.
This represents an increase of 12.2% over the period.
The Board believes that this performance has demonstrated strong portfolio
resilience over a volatile period. The valuations at the Half-Year
point reflect that many of our investee companies became beneficiaries
of accelerated changes in UK consumer and business behaviour, brought
on by a pandemic and lockdown restrictions. Despite the continued
uncertainty in respect of the pandemic's ultimate effect, both the
Board and the Investment Adviser believe that many of these changes
have become structural and are unlikely to reverse. In the case of
two direct-to-consumer portfolio companies, whose shares were admitted
to public trading on AIM in March 2021, the Company has benefited
from the market's recognition of this rapidly developing channel,
reflected in the substantial investor appetite for the offers of shares.
Nonetheless, the Board remains vigilant in monitoring the lasting
economic uncertainty and increased concentration of risk associated
with holding a significant portion of the portfolio's value in a small
number of public market investments, which accounted for 18.3% of
NAV at 31 March 2021.
Investment portfolio
The portfolio has performed very strongly in the first six months
of the Company's financial year. The overall value increased by GBP29.66
million (2020: decrease of GBP(8.20) million), or 58.3% (2020: (16.3)%)
on a like-for-like basis, compared to the opening portfolio value
at 1 October 2020 of GBP50.86 million. This increase comprised a net
unrealised uplift in portfolio valuations of GBP26.07 million and
GBP3.59 million in net realised gains, over the period.
At the period-end, the portfolio was valued at GBP74.72 million after
taking account of investments purchased and sold in the period, together
with the net realised and unrealised gains referred to above. The
portfolio may present opportunities for further investment in the
future.
Two notable events supported unrealised returns for Shareholders during
the period. The flotation of both Virgin Wines and Parsley Box on
the AIM market in March 2021 resulted in significant uplifts in valuation.
As part of the Virgin Wines transaction, the Company received repayment
of its remaining loan stock, leaving Virgin Wines ungeared. As part
of the IPO of Parsley Box, the Company realised part of its equity
holding, securing a 4.0x return on the cost of shares sold. There
were further substantial increases from MPB Group and EOTH, partially
offset by modest valuation falls at Rota Geek and Kudos Innovations.
Although a minority of companies remain disadvantaged by the COVID-19
pandemic, by contrast these have only had a modest impact on overall
shareholder returns.
Within the net realised gains, the principal contributors were the
full exits of Bourn Bioscience (GBP1.44 million), Omega Diagnostics
(GBP0.14 million) and Vectair (GBP0.06 million), as well as partial
exits of Parsley Box (GBP0.94 million) and MPB (GBP0.82 million).
Proceeds generated from these gains, combined with loan repayments
and other capital receipts, totalled GBP10.22 million received by
the Company in the period.
During the six months under review, the Company invested a total of
GBP3.07 million into four new investments:
Northern Bloc GBP0.47 million
Vegan and plant-based ice cream
producer
Connect Childcare GBP1.16 million
Nursery management software provider
Vivacity GBP1.25 million
Artificial intelligence & urban
traffic control system
Caledonian Leisure Travel GBP0.19 million
UK leisure and experience breaks
In addition, four follow-on investments totalling GBP1.35 million
were made into:
Parsley Box GBP0.38 million
Ambient ready meals for the over
60s
Bleach London GBP0.15 million
Hair colourants brand
Arkk Consulting GBP0.66 million
Regulatory reporting software
Tapas Revolution GBP0.16 million
Spanish restaurant chain in the
casual dining sector
We expect follow-on investments to continue to be a feature of the
growth capital investments as they seek to achieve scale.
Since the period-end, the Company has made two follow-on investments
totalling GBP0.64 million.
Details of this investment activity and the performance of the portfolio
are contained in the Investment Adviser's Review and the Investment
Portfolio Summary below.
Revenue account
The results for the period are set out in the Unaudited Condensed
Income Statement and show a revenue return (after tax) of 0.70 pence
per share (2020: 1.40 pence per share). Despite strong dividend receipts,
the revenue return for the period of GBP0.83 million has decreased
from last year's comparable figure of GBP1.53 million. This is mainly
due to significant investment income received on the disposal of Auction
Technology Group which inflated the prior year's figure.
Dividends
The Board continues to be committed to providing an attractive dividend
stream to Shareholders and is pleased to declare an Interim dividend
of 5.00 pence per share for the year ending 30 September 2021.
This dividend will be paid on 23 July 2021, to Shareholders on the
Register on 25 June 2021, and will bring cumulative dividends paid
per share to 136.50 pence per share.
The Company's target of paying a dividend of at least 6.00 pence per
share in respect of each financial year has been met or exceeded in
each of the last nine years. It has been previously noted that the
evolution of the portfolio to younger growth capital investments may
make dividends harder to achieve from income and capital returns alone
in any given year, or which could affect the timing and frequency
of dividend payments compared to previous distributions. In light
of these factors, the Board continues to monitor the sustainability
of its dividend target.
Dividend Investment Scheme
The Company's Dividend Investment Scheme ("DIS") was recommenced on
12 February 2020, having been temporarily suspended. All previously
registered participants of the Scheme were automatically re-enrolled,
with their future dividends to be re-invested unless they notified
a wish to opt-out. Since its reinstatement in 2020, 4,277,951 Ordinary
shares have been allotted to participants of the DIS at an average
price of 63.13 pence per share.
The Scheme provides Shareholders with the opportunity to reinvest
their cash dividends into new shares in the Company at the latest
published NAV per share (adjusted for any subsequent dividends). New
VCT shares attract the same tax reliefs as shares purchased through
an Offer for Subscription.
Shareholders can opt-in to the DIS by completing a mandate form available
on the Company's website at www.incomeandgrowthvct.co.uk and can opt-out
by contacting Link Group, using their details provided under Shareholder
Information in the Half-Year Report.
Fundraising
The Board, with the Investment Adviser, continues to monitor the Company's
liquidity levels and cashflow requirements in view of investment activity,
market movements and regulatory obligations. With these in mind and
under regular review, the Board comes to a decision with regards to
future fundraising requirements and, in doing so, will notify Shareholders
of any intention to raise further funds for the Company through an
Offer for Subscription.
Cash Available for investment
The Board continues to monitor credit risk in respect of its cash
balances and to prioritise the security and protection of the Company's
capital. Cash and liquidity fund balances as at 31 March 2021 amounted
to GBP34.33 million. This figure included GBP29.80 million held in
money market funds with AAA credit ratings and GBP4.53 million held
in deposit accounts with several well-known financial institutions
across a range of maturities.
Share buybacks
During the six months ended 31 March 2021, the Company bought back
and cancelled 461,200 of its own shares, representing 0.4% (2020:
1.1%) of the shares in issue at the beginning of the period, at a
total cost of GBP0.32 million (2020: GBP0.83 million), inclusive of
expenses.
It is the Company's policy to cancel all shares bought back in this
way. The Board regularly reviews its buyback policy, where its priority
is to act prudently and in the interest of remaining Shareholders,
whilst considering other factors, such as levels of liquidity and
reserves, market conditions and applicable law and regulations. Under
this policy, the Company seeks to maintain the discount at which the
Company's shares trade at no more than 5% below the latest published
NAV.
Shareholder communications
May I remind you that the Company has its own website which is available
at: www.incomeandgrowthvct.co.uk
The Investment Adviser last held its annual Shareholder Event on behalf
of all Mobeus-advised VCTs in early 2020. Last year's event was well
received and the Investment Adviser plans to hold an event later in
2021. Further details will be circulated to Shareholders and shown
on the Company's website in due course.
Fraud Warning
We have been made aware of an increase in the number of Shareholders
being contacted in connection with sophisticated but fraudulent financial
scams which purport to come from the Company or to be authorised by
it. This is often by a phone call or an email usually originating
from outside of the UK, claiming or appearing to be from a corporate
finance firm offering to buy your shares at an inflated price.
Further information and fraud advice plus details of who to contact,
can be found in the Information for Shareholders section of the Half-Year
Report.
Environmental, Social and Governance ("ESG")
Whilst the requirements under company law to detail ESG matters are
not applicable to the Company at the current time, the Board is conscious
of the Company's potential impact on the environment as well as its
social and corporate governance responsibilities. The Investment Adviser
has presented its ESG strategy to the Board and is providing regular
updates regarding the ESG developments.
Your Board would like to assure Shareholders that ESG matters form
a key consideration in investment decisions. The future FCA reporting
requirements consistent with the Task Force on Climate-related Financial
Disclosures commencing from 1 January 2021 do not currently apply
to the Company although will be kept under review in light of any
recommended changes.
Outlook
The impact of COVID-19 was and will continue to be wide reaching.
Nevertheless, your Board considers that your Company is well positioned
to continue to respond and adapt in most likely scenarios that can
presently be foreseen. The successful realisations and previous fundraisings
have given the Company strong liquidity not only to support the existing
portfolio, but also to capitalise on opportunities which may arise
for new investment and the Investment Adviser is seeing a good pipeline
of new and interesting investment opportunities.
COVID-19 uncertainties and economic instability may cause global markets
to be more volatile in the short-term. UK and European businesses
will also continue to operate in an uncertain trading environment
for the near future as the new UK/EU trade agreement beds in. The
companies in the portfolio have been well prepared for a considerable
time for the impact of Brexit and those preparations appear to be
working well. Although the degree and frequency of any future restrictions
as a result of the pandemic are unclear, both the Investment Adviser
and portfolio companies are well equipped to respond. Consequently,
we have cause to be cautiously optimistic about the future.
I would like to take this opportunity once again to thank all Shareholders
for your continued support.
Maurice Helfgott
Chairman
16 June 2021
Investment Policy
The Company's policy is to invest primarily in a diverse portfolio
of UK unquoted companies.
Asset Mix and Diversification
The Company will seek to make investments in UK unquoted companies
in accordance with the requirements of prevailing VCT legislation.
Investments are made selectively across a wide variety of sectors,
principally in established companies.
Investments are generally structured as part loan and part equity
in order to receive regular income and to generate capital gain 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.
No single investment may represent more than 15% (by VCT tax value)
of the Company's total investments at the date of investment.
Save as set out above, the Company's other investments are held in
cash and liquid funds.
Liquidity
The Company's cash and liquid funds are held in a portfolio of readily
realisable interest-bearing investments, deposit and current accounts,
of varying maturities, subject to the overriding criterion that the
risk of loss of capital be minimised.
Borrowing
The Company's Articles of Association permit borrowing of up to 10%
of the adjusted capital and reserves (as defined therein). However,
the Company has never borrowed and the Board would only consider doing
so in exceptional circumstances.
Investment Review
Portfolio review
More than one year on from the March 2020 low point marked by value
reductions and widespread volatility, it is apparent that the overall
portfolio has adapted well and generally remained robust throughout.
Having largely recovered from the COVID-19 related decline by the
start of the period under review, and with the economic uncertainty
subsiding, the portfolio has returned to a more stable and positive
trajectory. It should be noted that, whilst markets showed a buoyant
recovery in 2020, this has not continued into 2021 where the main
driver of value growth has been a continuation of strong underlying
trading performance across the portfolio.
Whilst there have been a few portfolio companies which have experienced
disruption as a result of the ongoing UK lockdowns, a significant
proportion have actually benefited from a structural change in consumer
purchasing habits and are now trading above their pre COVID-19 levels.
The majority of the portfolio has demonstrated a high degree of resilience,
with over 78% of companies by number showing revenue and/or earnings
progression over the previous year. Investments classified as Retailers
now comprise over 56% of the portfolio by value but all these companies
have considerable direct-to-consumer channels, a business model that
has performed well, and all but one have no physical presence. This
has been exemplified by the flotation of Virgin Wines UK PLC and Parsley
Box Group PLC in March 2021, both at a price per share that materially
increased the value of the Company's investment. Software and other
technology enabled businesses have also performed strongly with MPB
attracting a sizeable equity investment from a large private equity
investor in a Series D funding round, whilst the portfolio has limited
exposure to more challenging sectors such as hospitality and travel.
A small number of companies have struggled, but they are in the minority
and their impact on overall shareholder return is minimal. Some of
these companies, namely Media Business Insight and RDL, have seen
a recent uplift in business which suggests a potentially more positive
outlook, however it is still early days in their recovery.
Whilst the exposure to General Retail is very well diversified across
the most attractive business models, it is noted that 24% of the portfolio
value is now concentrated in the two recently AIM-listed investments.
In line with market practice, in both cases the Company's shareholdings
are subject to lock-up arrangements normal for a transaction of this
type.
Strong trading activity levels created investment opportunities for
the Company as portfolio companies sought to enhance their positions
by building capability in light of demand. A number of further growth
capital investments were therefore made into the portfolio during
the period. Mobeus continues to review the opportunities for follow-on
investments and is in a good position to capitalise on these due to
the Company's strong liquidity. M&A sentiment also remained buoyant
with a continuing stream of attractive realisations throughout the
period. The outlook for both follow-on investment and realisations
continues to be positive.
The Company made investments totalling GBP4.42 million (2020: GBP4.15
million), comprising GBP3.07 million (2020: GBP4.15 million) into
four new investments and GBP1.35 million (2020: GBPnil) into four
existing investments. This level of new and follow-on investment is
pleasing given the continued uncertainty and lockdown restrictions
over the period under review. A healthy pipeline of suitable opportunities
continues to be seen to date.
Overall, it is reassuring to see that the traditional investments,
as well as the new growth investments, are continuing to make good
progress. A strong track record for the growth investments is now
emerging which validates the strategic change arising from the change
in VCT rules in 2015.
The portfolio movements in the period are summarised as follows:
2021 2020
GBPm GBPm
--------------------------------- -------- --------
Opening portfolio value 50.86 50.22
New and follow-on investments 4.42 4.15
Disposal proceeds (10.22) (8.36 )
Net realised gains 3.59 2.53
Unrealised v aluation movements 26.07 (10.73)
--------------------------------- -------- --------
Portfolio value at 31 March 74.72 37.81
--------------------------------- -------- --------
The portfolio's valuation changes in the period are summarised as
follows:
Investment Portfolio Capital Movement 2021 2020
GBPm GBPm
--------------------------------------- --------- --------
Increase in the value of unrealised
investments 26.68 1.71
Decrease in the value of unrealised
investments (0.61) (12.44)
--------------------------------------- --------- --------
Net increase/(decrease) in the value
of unrealised investments 26.07 (10.73)
--------------------------------------- --------- --------
Realised gains 3.67 2.53
Realised losses (0 . 08) -
--------------------------------------- --------- --------
Net realised gains in the period 3.59 2.53
--------------------------------------- --------- --------
Net investment portfolio movement in
the period 29.66 (8.20)
--------------------------------------- --------- --------
New investments during the period
The Company made four new investments totalling GBP3.07 million during
the period, as detailed below:
Company Business Date of Investment Amount of new
investment (GBPm)
Vegan and plant
based ice cream
Northern Bloc producer December 2020 0.47
------------------- --------------------- --------------------
Northern Bloc Ice Cream (northern-bloc.com) is an established
food brand in the emerging and rapidly growing vegan market. By
focusing on chef quality natural ingredients, Northern Bloc has
carved out an early mover position in the vegan ice cream sector.
The company's focus on plant-based alternatives has strong environmental
credentials as well as it being the first ice cream brand to move
wholly into sustainable packaging. The investment is aimed at
capitalising on the company's market position and accelerating
growth. It has obtained key listings across several large supermarkets
and is well placed to benefit from the food service recovery as
it continues to secure menu placings. Northern Bloc has doubled
its retail store facings in 2020 and saw a 60% increase in retail
sales over the year.
Nursery management
Connect Childcare software provider December 2020 1.16
Connect Childcare (connectchildcare.com) is a fully integrated
nursery management system for childcare providers in the UK. Its
market leading Core Connect product provides nurseries and preschools
with an enterprise software solution enabling more efficient administrative
processes. The investment will be used to drive product marketing,
commercialise their new SaaS product, Foundations, as well as
support the roll out of a payment facility to its underlying customer
base. Supplying 14 of the top 25 largest nursery groups in the
UK, the company has strong recurring revenues which have grown
20% for each of the last three years.
Artificial intelligence
& urban traffic
Vivacity control system February 2021 1.25
------------------------------ ------------------- -------
Vivacity (vivacitylabs.com) develops camera sensors with on-board
video analytics software that enables real-time anonymised data
gathering of road transport system usage. It offers city transport
authorities the ability to manage their road infrastructure more
effectively, enabling more efficient monitoring of congestion
and pollution levels as well as planning for other issues, such
as the changing nature of road usage (e.g. the increasing number
of cyclists). The technology and software represent a significant
leap forward for local planning authorities which have traditionally
relied upon manual data collection methods. The growth capital
funding will allow the management team to achieve deeper penetration
of the UK transport management sector, explore opportunities internationally
and commercialise its new Smart Junction offering. Revenues have
grown 350% over the last three years and it has exceeded its most
recent year's budget despite the onset of the COVID-19 pandemic.
In April 2021, Vivacity won the Queen's Award for Enterprise:
Innovation 2021.
UK Leisure and
Caledonian Leisure experience breaks March 2021 0.19
------------------------------ ------------------- -------
Caledonian Leisure works with accommodation providers, coach businesses
and other experienced providers (such as entertainment destinations
and theme parks) to deliver to its customers UK-based leisure
and experience breaks. It comprises two brands, Caledonian Travel
(caledoniantravel.com) and UK Breakaways (ukbreakaways.com). The
domestic leisure and experience travel market has been devastated
by the COVID-19 pandemic, but the company is well-placed to expand
as lockdown and travel restrictions are eased. This investment,
as part of a series of planned investment tranches, will help
the company prepare for and capitalise on what is expected to
be strong demand for UK staycation holidays.
Follow-on investments during the period
The Company made four further investments into existing portfolio
companies in the period, totalling GBP1.35 million, as detailed below: Company Business Date of Investment Amount of further
investment (GBPm)
Ambient ready
meals targeting January/March
Parsley Box the over 60s 2021 0.38
------------------------ -------------------- -------------------
Parsley Box (parsleybox.com) is a UK direct to consumer supplier
of home delivered, ambient ready meals for the over 60s. Founded
in 2017, Parsley Box has grown rapidly and has developed a unique
meal delivery solution for its customers. The company supplies
a diverse range of ambient meals via next day delivery which are
easy to store and aim to contribute to a more independent and
healthier lifestyle. The company has seen a strong benefit from
the COVID-19 pandemic with revenues nearly eight times that at
the time of the original VCT investment. This further investment
will scale the company's marketing strategy, enable it to process
larger order volumes and continue to build out its team. The company
admitted its shares to trading on AIM on 31 March 2021.
Hair colourants
Bleach London brand February 2021 0.15
------------------------ -------------------- -------------------
Bleach London Holdings ("Bleach") (bleachlondon.com) is an established
branded, fast growing business which manufactures a range of haircare
and colouring products. Bleach has made sound commercial progress
since the VCTs invested in 2019 with its direct-to-consumer channels
benefiting greatly from the COVID-19 pandemic. Revenues have grown
over 90% ahead of the previous year. This further investment,
along with strong support from existing investors, will be used
to invest in marketing and infrastructure to enable the business
to accelerate its direct-to-consumer channel.
Regulatory and
reporting requirement
Arkk Consulting service provider February 2021 0.66
------------------------ -------------------- -------------------
Arkk Consulting (trading as Arkk Solutions) (arkksolutions.com)
provides services and software to enable organisations to remain
compliant with regulatory reporting requirements. Arkk was established
in 2009 and currently has over 800 clients across 20 countries.
These include more than 80 of the FTSE 350, and half of the largest
20 accountancy firms in the UK. This further investment is to
enable continued development of its software in order to capitalise
on HMRC's 'Making Tax Digital' campaign. The company has incorporated
artificial intelligence into its product and recurring revenues
are now over 50% higher than at the point of the original investment
in May 2019.
Spanish restaurant
Tapas Revolution chain March 2021 0.16
------------------------ -------------------- -------------------
Spanish Restaurant Group Limited (trading as Tapas Revolution)
(tapasrevolution.com) is a leading Spanish restaurant chain in
the casual dining sector. At initial investment in January 2017,
it was operating five sites and, subsequent to a further investment
round in March 2018, had grown to 12 sites. Tapas was trading
well and had a strong outlook up until the onset of COVID-19 which
mandated the closure of much of its estate during the course of
2020 in response to the varying patterns of government restrictions.
Costs have been controlled well under the circumstances and this
further investment is to provide financial headroom through the
remaining lockdown period and to capitalise on new site acquisition
opportunities once the lockdown period has ended.
Portfolio valuation movements
The portfolio generated significant net unrealised gains of GBP26.07
million in the first half of its financial year. The scale of the
valuation increases was underpinned by the Company's growth portfolio,
many of which have direct-to-consumer business models that have been
ideally suited to the more physically remote business environment
necessitated by COVID-19. Mobeus believes that this has accelerated
an existing trend and, in many cases, the shift in behaviour will
prove permanent. Over this period, some older style MBO portfolio
companies with similar business practices have also benefited. A few
companies have struggled in this environment, and while there remains
a possibility such businesses could fail, their value has already
been reduced to modest levels, reducing the risk to shareholder value.
Total valuation increases were GBP26.68 million. The main valuation
increases were:
Virgin Wines GBP10.89 million
MPB Group GBP3.21 million
EOTH (Equip) GBP2.33 million
Parsley Box GBP1.49 million
Virgin Wines, MPB and Parsley Box have generated record revenues and
earnings over the lockdown periods and beyond. Both have significantly
increased their customer base and there is evidence that these new
customers are continuing to be at least as active and profitable as
their pre-COVID-19 counterparts. EOTH experienced a very strong end
to its financial year, fully recovering to pre-COVID-19 levels of
profitability and has strong visibility over future orders.
Total valuation decreases were GBP(0.61) million. The main valuation
decreases were:
RotaGeek GBP(0.23) million
Kudos Innovations GBP(0.19) million
These companies saw the most significant impact of a sudden decline
in demand for their products or services as a result of COVID-19.
However, as restrictions are eventually eased, a recovery is anticipated
in due course.
The majority of the increase in portfolio value lies in the top 10
companies which represent over 70% of the portfolio by value (excluding
legacy). Year-on-year growth by either revenues or earnings has been
seen in all of the top ten companies (excluding legacy) and it is
pleasing to note that nine of these are from the younger, growth portfolio.
Portfolio Realisations
The Company realised its investments in Vectair, Bourn Bioscience
and Omega Diagnostics during the period receiving combined proceeds
of GBP3.67 million and contributed to total proceeds of GBP10.22 million
received over the period, as detailed below. In summary, aggregate
proceeds generated over the life of these three investments were GBP6.11
million representing a gain over original cost of GBP4.00 million. Company Business Period of investment Total cash proceeds
over the life
of the investment
/ Multiple over
cost
Designer and January 2006 GBP1.83 million
Vectair distributor of to November 2020 8.5x cost
washroom products
----------------------- ---------------------
The Company sold its investment in Vectair Holdings Limited to
a consortium of US investment funds, including Oxbow Industries
and Arcspring, and has received proceeds of GBP1.14 million (including
GBP0.06 million dividends) (realised gain in the period: GBP0.06
million). This investment generated proceeds over the life of
the investment of GBP1.83 million compared to original cost of
GBP0.22 million, which is a multiple of cost of 8.5x and an IRR
of 22.3%.
Bourn Bioscience In vitro fertilisation January 2014 GBP2.64 million
clinics to 1.6x cost
December 2020
----------------------- --------------------- --------------------
The Company sold its investment in Bourn Bioscience Limited to
Canadian acquirer Triangle Capital, and has received cash proceeds
of GBP2.14 million (including GBP0.14 million interest on completion)
(realised gain in the period: GBP1.44 million). This investment
generated proceeds over the life of the investment of GBP2.64
million compared to original cost of GBP1.61 million, which is
a multiple of cost of 1.6x and an IRR of 8.5%.
Omega Diagnostics In Vitro diagnostics December 2010 GBP1.64 million
for food intolerance, to 5.9x cost
auto-immune diseases February 2021
and infectious
diseases
----------------------- --------------------- --------------------
Following a further significant increase in the share price, the
Company sold its remaining investment in Omega Diagnostics Group
plc for GBP0.59 million (realised gain in the period: GBP0.14
million). Total proceeds received over the eleven-year life of
the investment were GBP1.64 million compared to an original investment
cost of GBP0.28 million, which is a multiple on cost of 5.9x and
an IRR of 19.9%.
Loan repayments and other gains/(losses) in the period
During the year and following the admission of its shares to AIM,
the Company received GBP1.73 million from the partial realisation
of its holding in Parsley Box, generating a realised gain of GBP0.94
million. Over the two years to date this investment has been held,
this partial sale generated a multiple of cost of 4.0x on the cost
of the shares sold. The Company also received GBP1.74 million from
the partial realisation of MPB Group generating a realised gain of
GBP0.82 million. This partial realisation generated a 7.8x multiple
of cost on the cost of the shares sold and was the result of a large
private equity investor taking a sizeable equity investment in the
company.
Proceeds of GBP2.93 million were received via loan repayments from
Virgin Wines, Vian Marketing (trading as Red Paddle), and BG Training,
generating a net realised gain of GBP0.04 million.
Finally, consideration and realised gains totalling GBP0.23 million
were received in respect of Redline Worldwide and Blaze Signs, both
investments realised in a previous year. A small realised loss of
GBP(0.08) million was also recognised in respect of transaction costs
for BookingTek and Virgin Wines, the latter due to stamp duty paid
upon the listing of shares to AIM.
Portfolio Income and yield
In the period under review, the Company received the following amounts
in loan interest and dividend income:
Investment Portfolio Yield 2021 2020
GBPm GBPm
Interest received in the period 0.72 1.85
Dividends received in the period 0.59 0.35
------------------------------------------ ------ ------
Total portfolio income in the period(1) 1.31 2.20
------------------------------------------ ------ ------
Portfolio Value at 31 March 74.72 37.81
------------------------------------------ ------ ------
Portfolio Income Yield (Income as a % of
Portfolio value at 31 March) 1.8% 5.8%
------------------------------------------ ------ ------
(1) Total portfolio income in the period is generated solely from
investee companies within the portfolio
Further investments made after the period-end
The Company made two further investments into existing portfolio companies,
totalling GBP0.64 million after the period-end, as detailed below:
Company Business Date of Investment Amount of further
investment (GBPm)
UK Leisure and
Caledonian Leisure experience breaks April/May 2021 0.25
----------------------- -------------------- -------------------
Caledonian Leisure works with accommodation providers, coach businesses
and other experienced break providers (such as entertainment destinations
and theme parks) to deliver to its customers UK-based leisure
and experience breaks. It comprises two brands, Caledonian Travel
(caledoniantravel.com) and UK Breakaways (ukbreakaways.com). The
domestic leisure and experience travel market has been devastated
by the COVID-19 pandemic, but the company is well-placed to expand
as lockdown and travel restrictions are eased. This second and
third investment, as part of a series of planned investment tranches,
will continue to help the company prepare for and capitalise on
what is expected to be strong demand for UK staycation holidays.
Premium frozen
Bella & Duke raw dog food provider May 2021 0.39
----------------------- -------------------- -------------------
Bella & Duke (bellaandduke.com) is a direct-to-consumer subscription
service, providing premium frozen raw dog food to pet owners in
the UK. Founded in 2016, the business provides an alternative
to standard meal options for dog owners by focusing on the well
documented health benefits of a raw food diet. This area is a
growing niche in the large and established pet food market and
is being driven by the premiumisation of dog food. Alongside a
co-investment by the British Growth Fund ("BGF") and existing
shareholders, this follow-on investment from the Company will
provide additional working capital enabling Bella & Duke to continue
to scale.
Environmental, Social, Governance considerations
The Investment Adviser believes that the consideration of environmental,
social and corporate governance ("ESG") factors throughout the investment
cycle will contribute towards enhanced Shareholder value.
When seeking new investment opportunities, it operates with a list
of exclusions which preclude it from investing in any businesses operating
in areas perceived to be unsustainable or detrimental to wider society,
or any businesses that have committed purposeful breaches of regulation
or have engaged in unlawful activity. Once identified, each potential
new investment is then subject to a comprehensive due diligence process
that encompasses commercial, financial and ESG principles. This process
helps in the formulation and agreement of strategic objectives at
the stage of business planning and investment. The Investment Adviser
then continues to work closely with each portfolio company board to
support them in addressing their particular ESG challenges and opportunities,
which are diverse across the entire portfolio.
Mobeus Equity Partners LLP is a signatory of the United Nations Principles
of Responsible Investment ("PRI"), considered to be the world's leading
proponent of responsible investing. As a signatory, it must report
to the PRI on an annual basis and is held accountable to worldwide
ESG standards. As such, the Investment Adviser continues to develop
its policies and procedures with the professional advice of specialist
ESG consultants and reports on the development of this ESG framework
to the Board on a regular basis.
Outlook
The growth strategy implemented in 2015 is clearly showing signs of
bearing fruit with many companies beginning to achieve significant
scale and attract the interest of public markets and larger secondary
investors. The portfolio is in a healthy position with many companies
trading well throughout the lockdowns, and several at record levels.
It continues to evolve, offering a balance of fast-growing and more
stable investments at various stages of maturity and scale across
a range of diverse market sectors. There is a significant exposure
to businesses operating a direct-to-consumer business model which
has underpinned performance during the year. This also gives confidence
about the future performance of the portfolio and its ability to cope
with the challenges and opportunities associated with Brexit, the
macro-economic outlook and the ongoing impact of COVID-19. The new
investment pipeline is recovering to levels seen pre-COVID-19 and
the prospects for capital deployment are encouraging.
The exceptional performance experienced since the impact of COVID-19
in March 2020, is likely to moderate over the next 12 months as the
level of activity normalises. However, the portfolio is in a robust
shape and the investment activity levels are promising. Mobeus is
therefore cautiously optimistic for the future.
Mobeus Equity Partners LLP
Investment Adviser
16 June 2021
INVESTMENT PORTFOLIO SUMMARY as at 31 March 2021
Total Valuation Additional Valuation
cost at at at
31 March 30 September investments 31 March
2021 2020 2021
(unaudited) (audited) in the (unaudited)
period
GBP GBP GBP GBP
Virgin Wines UK Plc (formerly
Virgin Wines Holding Company
Limited) (1) 65,288 6,458,434 - 14,673,244
Online wine retailer
------------------------------- ------------ ------------- ------------ ------------
MPB Group Limited 1,820,552 4,698,745 - 6,992,306
Online marketplace for used
photographic equipment
------------------------------- ------------ ------------- ------------ ------------
EOTH Limited (trading as Equip
Outdoor Technologies) 1,383,313 2,986,028 - 5,318,777
Branded outdoor equipment
and clothing including the
Rab and Lowe Alpine brands
------------------------------- ------------ ------------- ------------ ------------
Preservica Limited 2,960,899 4,303,532 - 5,177,255
Seller of proprietary digital
archiving software
------------------------------- ------------ ------------- ------------ ------------
End Ordinary Group Limited
(trading as Buster and Punch)
(formerly Buster and Punch
Holdings Limited) 2,046,612 2,740,635 - 3,965,398
Industrial inspired lighting
and interiors retailer
------------------------------- ------------ ------------- ------------ ------------
My Tutorweb Limited (trading
as MyTutor) 2,759,335 2,972,638 - 3,701,022
Digital marketplace connecting
school pupils seeking
one-to-one
online tutoring
------------------------------- ------------ ------------- ------------ ------------
Parsley Box Group Plc
(formerly
Parsley Box Limited)(2) 874,001 2,168,135 377,486 3,253,102
Supplier of home delivered,
ambient ready meals targeting
the over 60s
------------------------------- ------------ ------------- ------------ ------------
Manufacturing Services
Investment
Limited (trading as Wetsuit
Outlet) 3,205,182 2,371,375 - 3,203,099
Online retailer in the water
sports market
------------------------------- ------------ ------------- ------------ ------------
Data Discovery Solutions
Limited
(trading as Active
Navigation) 1,543,500 3,087,000 - 3,087,000
Provides the global market
leading file analysis software
for information governance,
security and compliance
------------------------------- ------------ ------------- ------------ ------------
I-Dox plc 453,881 1,895,924 - 2,583,458
Developer and supplier of
knowledge management products
------------------------------- ------------ ------------- ------------ ------------
Proactive Group Holdings Inc 988,390 2,486,769 - 2,486,769
Provider of media services
and investor conferences for
companies primarily listed
on secondary public markets
------------------------------- ------------ ------------- ------------ ------------
Media Business Insight
Holdings
Limited 3,666,556 1,407,127 - 2,332,587
A publishing and events
business
focused on the creative
production
industries
------------------------------- ------------ ------------- ------------ ------------
Arkk Consulting Limited
(trading
as Arkk Solutions) 2,182,187 1,348,963 656,180 2,275,782
Provider of services and
software
to enable organisations to
remain compliant with
regulatory
reporting requirements
------------------------------- ------------ ------------- ------------ ------------
Vian Marketing Limited
(trading
as Red Paddle Co) 1,059,617 1,881,880 - 2,106,039
Design, manufacture and sale
of stand-up paddleboards and
windsurfing sails
------------------------------- ------------ ------------- ------------ ------------
Master Removers Group 2019
Limited (trading as Anthony
Ward Thomas, Bishopsgate and
Aussie Man & Van) 464,658 1,175,977 - 2,041,054
A specialist logistics,
storage
and removals business
------------------------------- ------------ ------------- ------------ ------------
Bella & Duke Limited 931,499 931,499 - 1,498,787
A premium frozen raw dog food
provider
------------------------------- ------------ ------------- ------------ ------------
Tharstern Group Limited 1,454,278 1,137,147 - 1,495,708
Software based management
Information systems for the
printing industry
------------------------------- ------------ ------------- ------------ ------------
Connect Childcare Group
Limited 1,157,214 - 1,157,214 1,402,901
Nursery management software
provider
------------------------------- ------------ ------------- ------------ ------------
Bleach London Holdings Limited 874,302 1,232,358 152,850 1,279,006
Hair colourants brand
------------------------------- ------------ ------------- ------------ ------------
Vivacity Labs Limited 1,250,760 - 1,250,760 1,250,760
Provider of artificial
intelligence
& urban traffic control
systems
------------------------------- ------------ ------------- ------------ ------------
IPV Limited 954,674 954,674 - 954,674
Provider of media asset
software
------------------------------- ------------ ------------- ------------ ------------
Rota Geek Limited 1,250,800 1,170,582 - 944,809
Workforce management software
------------------------------- ------------ ------------- ------------ ------------
CGI Creative Graphics
International
Limited 1,943,948 337,590 - 653,479
Vinyl graphics to global
automotive,
recreation vehicle and
aerospace
markets
------------------------------- ------------ ------------- ------------ ------------
RDL Corporation Limited 1,441,667 137,899 - 529,811
Recruitment consultants within
the pharmaceutical, business
intelligence and IT industries
------------------------------- ------------ ------------- ------------ ------------
Northern Bloc Ice Cream
Limited 473,100 - 473,100 495,536
Supplier of premium vegan
ice cream
------------------------------- ------------ ------------- ------------ ------------
Spanish Restaurant Group
Limited
(formerly Ibericos Etc.
Limited)
(trading as Tapas Revolution) 1,552,636 186,300 155,250 341,550
Spanish restaurant chain
------------------------------- ------------ ------------- ------------ ------------
Muller EV Limited (trading
as Andersen EV) 317,000 352,473 - 263,474
Provider of premium electric
vehicle (EV) chargers
------------------------------- ------------ ------------- ------------ ------------
Caledonian Leisure Limited 194,675 - 194,675 194,675
Provider of UK leisure and
experience breaks
------------------------------- ------------ ------------- ------------ ------------
Kudos Innovations Limited 472,500 329,354 - 140,795
Online platform that provides
and promotes academic research
dissemination
------------------------------- ------------ ------------- ------------ ------------
Jablite Holdings Limited (in
members' voluntary
liquidation) 498,790 65,779 - 65,779
Manufacturer of expanded
polystyrene
products
------------------------------- ------------ ------------- ------------ ------------
Corero Network Security plc 600,000 7,374 - 11,787
Provider of e-business
technologies
------------------------------- ------------ ------------- ------------ ------------
Oxonica Limited 2,524,527 - - -
International nanomaterials
group
------------------------------- ------------ ------------- ------------ ------------
Veritek Global Holdings 2,289,859 - - -
Limited
Maintenance of imaging
equipment
------------------------------- ------------ ------------- ------------ ------------
BookingTek Limited 779,155 - - -
Software for hotel groups
------------------------------- ------------ ------------- ------------ ------------
Racoon International Group 655,851 - - -
Limited
Supplier of hair extensions,
hair care products and
training
------------------------------- ------------ ------------- ------------ ------------
Oakheath Limited (formerly 649,528 - - -
Super Carers Limited) (in
members' voluntary
liquidation)
Online platform that connects
people seeking home care from
experienced independent carers
------------------------------- ------------ ------------- ------------ ------------
NexxtDrive Limited/Nexxt 487,014 - - -
E-drive
Limited
Developer and exploiter of
mechanical transmission
technologies
------------------------------- ------------ ------------- ------------ ------------
CB Imports Group Limited 175,000 - - -
(trading
as Country Baskets)
(in members' voluntary
liquidation)
Importer and distributor of
artificial flowers, floral
sundries and home decor
products
------------------------------- ------------ ------------- ------------ ------------
Aquasium Technology Limited 166,667 - - -
Manufacturing and marketing
of bespoke electron beam
welding
and vacuum furnace equipment
------------------------------- ------------ ------------- ------------ ------------
Biomer Technology Limited 137,170 - - -
Developer of biomaterials
for medical devices
------------------------------- ------------ ------------- ------------ ------------
Disposals in period
Vectair Holdings Limited - 1,020,351 - -
Designer and distributor of
washroom products
------------------------------- ------------ ------------- ------------ ------------
Bourn Bioscience Limited - 552,130 - -
Management of In-vitro
fertilisation
clinics
------------------------------- ------------ ------------- ------------ ------------
Omega Diagnostics Group plc - 449,180 - -
In-vitro diagnostics for food
intolerance, autoimmune
diseases
and infectious diseases
------------------------------- ------------ ------------- ------------ ------------
BG Training Limited - 13,281 - -
Technical training business
Total 48,706,585 50,861,133 4,417,515 74,720,423
------------------------------- ------------ ------------- ------------ ------------
Total Investment Portfolio
split by type
Growth focused portfolio (3) 32,146,089 37,931,047 4,417,515 52,374,570
MBO focused portfolio (3) 16,560,496 12,930,086 - 22,345,853
Total 48,706,585 50,861,133 4,417,515 74,720,423
------------------------------- ------------ ------------- ------------ ------------
(1) Admitted to AIM during the period. Ahead of the Admission to
AIM of Virgin Wines on 2 March 2021, the Company's equity investment
in Virgin Wines Holding Company Ltd ("VWHCL") had been exchanged
for an equity investment in Rapunzel Newco Limited ("RNL"), a company
owned by the four Mobeus advised VCTs pro rata to each VCT's share
of its investment in Virgin Wines. Immediately prior to Admission,
RNL exchanged its equity investment in VWHCL for an equity investment
in Virgin Wines UK plc ("VWUK"). The Company is beneficially interested
in VWUK, through its holding in RNL. RNL is the legal owner of the
shares in VWUK, but each VCT is the beneficial holder. As part of
Virgin Wines' admission to AIM, the Company received repayment of
its loan stock generating proceeds of GBP2.68 million.
(2) Admitted to AIM during the period. On 7 January 2021, a GBP0.36
million follow-on investment was made into Parsley Box Limited.
The enlarged shareholding was admitted to AIM on 31 March 2021.
Ahead of the admission to AIM, the Company's equity investment in
Parsley Box Limited had been exchanged for an equity investment
in Parsley Box Group UK plc. Upon admission to AIM, the Company
invested a further GBP0.02 million and realised proceeds of GBP1.73
million.
(3) The growth focused portfolio contains all investments made
after the change in the VCT regulations in 2015 plus some investments
that are growth in nature made before this date. The MBO focused
portfolio contains investments made prior to 2015 as part of the
previous MBO strategy.
Statement of the Directors' Responsibilities
Responsibility statements
In accordance with Disclosure and Transparency Rule (DTR) 4.2.10,
Maurice Helfgott (Chairman), Justin Ward (Chairman of the Audit and
Nomination & Remuneration Committees) and Helen Sinclair (Chairman
of the Investment Committee), being the Directors of the Company,
confirm that to the best of their knowledge:
a) the condensed set of financial statements, which has been prepared
in accordance with Financial Reporting Standard 104 "Interim Financial
Reporting" gives a true and fair view of the assets, liabilities,
financial position and profit of the Company, as required by DTR 4.2.10;
b) the Interim 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 materially changed
from those identified in the Annual Report and Financial Statements
for the year ended 30 September 2020 ("the Annual Report"). The COVID-19
pandemic continues to cause some uncertainty, but has not changed
the nature of the principal risks. The Board considers that the present
processes for mitigating those risks remain appropriate.
The principal risks faced by the Company are:
* Investment and liquidity;
* Loss of approval as a Venture Capital Trust;
* Regulatory;
* Economic, political and other external risks;
* Financial and operating; and
* Market liquidity;
A detailed explanation of the principal risks facing the Company can
be found in the Annual Report on pages 31 and 32, as well as in Note
16 on Financial Instruments on pages 67 to 74 of that report. Copies
can be viewed or downloaded from the Company's website: www.incomeandgrowthvct.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 earlier in the Interim management report which comprises the Chairman's
Statement, Investment Policy, Investment Adviser's Review and Investment
Portfolio Summary. The Directors have satisfied themselves that the
Company continues to maintain a significant cash position. The majority
of companies in the portfolio are well funded and the portfolio taken
as a whole remains resilient and well diversified, although the continuing
impact of COVID-19 may impose further considerable demands upon the
liquidity and trading prospects of some of these companies in the
near-term. The major cash outflows of the Company (namely investments,
share buybacks and dividends) are within the Company's control. The
Board's assessment of liquidity risk and details of the Company's
policies for managing its capital and financial risks are shown in
Notes 16 and 17 to the Financial Statements in the Annual Report,
available on the Company's website. Accordingly, the Directors continue
to adopt the going concern basis of accounting in preparing the Interim
report and financial statements.
Cautionary statement
This report may contain forward looking statements with regard 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:
Maurice Helfgott
Chairman
16 June 2021
UNAUDITED CONDENSED FINANCIAL STATEMENTS
Unaudited Condensed Income Statement for the six months to 31 March
2021
Six months ended 31 March Six months ended 31
2021 (unaudited) March 2020 (unaudited)
------------------------------------ --------------------------------------
Notes Revenue Capital Total Revenue Capital Total
---------- ---------- ------------ ------------
GBP GBP GBP GBP GBP GBP
---------------- ------ ---------- ----------- ----------- ---------- ------------ ------------
Net investment
portfolio
gains/(losses) 9 - 29,661,261 29,661,261 - (8,201,658) (8,201,658)
------ ---------- ----------- ----------- ---------- ------------ ------------
Income 4 1,328,132 - 1,328,132 2,311,854 - 2,311,854
------ ---------- ----------- ----------- ---------- ------------ ------------
Investment
Adviser's
fees 5 (223,439) (670,315) (893,754) (236,541) (709,625) (946,166)
------ ---------- ----------- ----------- ---------- ------------ ------------
Investment
Adviser's
performance
fees 5 - (742,900) (742,900) - - -
------ ---------- ----------- ----------- ---------- ------------ ------------
Other expenses (218,943) - (218,943) (270,947) - (270,947)
------ ---------- ----------- ----------- ---------- ------------ ------------
Profit/(loss)
on ordinary
activities
before
taxation 885,750 28,248,046 29,133,796 1,804,366 (8,911,283) (7,106,917)
------ ---------- ----------- ----------- ---------- ------------ ------------
Tax on
profit/(loss)
on ordinary
activities 6 (56,538) 56,538 - (276,098) 276,098 -
------ ---------- ----------- ----------- ---------- ------------ ------------
Profit/(loss)
for the period
and total
comprehensive
income 829,212 28,304,584 29,133,796 1,528,268 (8,635,185) (7,106,917)
------ ---------- ----------- ----------- ---------- ------------ ------------
Basic and
diluted
earnings per
share 7 0.70p 23.90p 24.60p 1.40p (7.93)p (6.53)p
------ ---------- ----------- ----------- ---------- ------------ ------------
Year ended 30 September
2020 (audited)
Notes Revenue Capital Total
----------
GBP GBP GBP
--------------------------- ------ ---------- ------------ ------------
Net investment
portfolio gains/(losses) - 9,848,433 9,848,433
------ ---------- ------------ ------------
Income 4 3,660,837 - 3,660,837
------ ---------- ------------ ------------
Investment Adviser's
fees 5 (458,619) (1,375,856) (1,834,475)
------ ---------- ------------ ------------
Investment Adviser's
performance fees 5 - - -
------ ---------- ------------ ------------
Other expenses (528,481) - (528,481)
------ ---------- ------------ ------------
Profit/(loss)
on ordinary activities
before taxation 2,673,737 8,472,577 11,146,314
------ ---------- ------------ ------------
Tax on profit/(loss)
on ordinary activities 6 (348,948) 348,948 -
------ ---------- ------------ ------------
Profit/(loss)
for the period
and total comprehensive
income 2,324,789 8,821,525 11,146,314
------ ---------- ------------ ------------
Basic and diluted
earnings per
share 7 2.07p 7.87p 9.94p
------ ---------- ------------ ------------
The revenue column of the Income Statement includes all income and
expenses. The capital column accounts for the net investment portfolio
gains (unrealised gains/(losses) and realised gains on investments)
and the proportion of the Investment Adviser's fee and performance
fee charged to capital.
The total column is the Statement of Total Comprehensive Income of
the Company prepared in accordance with Financial Reporting Standards
("FRS"). In order to better reflect the activities of a VCT and in
accordance with the 2014 Statement of Recommended Practice ("SORP")
issued by the Association of Investment Companies ("AIC") and updated
in October 2019, supplementary information which analyses the Income
Statement between items of a revenue and capital nature has been presented
alongside the Income Statement. The revenue column of profit attributable
to equity shareholders is the measure the Directors believe appropriate
in assessing the Company's compliance with certain requirements set
out in Section 274 Income Tax Act 2007.
All the items in the above statement derive from continuing operations
of the Company. No operations were acquired or discontinued in the
period/year.
The notes to the unaudited financial statements form part of these
Half-Year Financial Statements.
Unaudited Condensed Balance Sheet as at 31 March 2021
-----------------------------------------------------------------------------------
31 March 31 March 30 September
2021 2020 2020
(unaudited) (unaudited) (audited)
Notes GBP GBP GBP
-------------------------------- ------ ------------ ------------ -------------
Fixed assets
Investments at fair value 9 74,720,423 37,808,748 50,861,133
Current assets
Debtors and prepayments 3,917,073 362,814 398,489
Current asset investments 10 32,954,426 39,479,736 30,449,213
Cash at bank 10 1,378,815 1,406,450 1,739,602
38,250,314 41,249,000 32,587,304
Creditors: amounts falling due
within one year (1,022,895) (282,076) (315,007)
Net current assets 37,227,419 40,966,924 32,272,297
Net assets 111,947,842 78,775,672 83,133,430
Capital and reserves
Called up share capital 1,182,005 1,150,685 1,186,617
Capital redemption reserve 28,439 16,980 23,827
Share premium reserve 12,283,303 9,625,433 12,283,303
Revaluation reserve 31,570,937 (6,814,985) 6,862,342
Special distributable reserve 52,950,812 61,740,118 54,626,873
Realised capital reserve 10,890,667 9,626,672 5,938,001
Revenue reserve 3,041,679 3,430,769 2,212,467
Equity Shareholders' funds 111,947,842 78,775,672 83,133,430
Basic and diluted net asset
value:
Basic and diluted net asset
value per share 11 94.71p 68.46p 70.06p
-------------------------------- ------ ------------ ------------ -------------
The financial information for the six months ended 31 March 2021
and the six months ended 31 March 2020 has not been audited.
The notes to the unaudited financial statements form part of these
Half-Year Financial Statements.
Unaudited Condensed Statement of Changes in Equity
for the six months to 31 March 2021
--------------------------------------------------------------------------------------------------------------------------
Non-distributable reserves Distributable reserves
Called
up Capital Share Special Realised
share redemption premium Revaluation distributable capital Revenue
capital reserve reserve reserve reserve reserve reserve Total
(Note (Note (Note
a) b) b)
GBP GBP GBP GBP GBP GBP GBP GBP
--------------- ---------- ----------- ----------- ------------ -------------- ----------- ---------- ------------
At 1 October
2020 1,186,617 23,827 12,283,303 6,862,342 54,626,873 5,938,001 2,212,467 83,133,430
Comprehensive
income
for the period
Profit for the
period - - - 26,073,426 - 2,231,158 829,212 29,133,796
Total
comprehensive
income for
the period - - - 26,073,426 - 2,231,158 829,212 29,133,796
----------- ----------- -------------- -----------
Contributions
by
and
distributions
to owners
Shares bought
back
(Note c) (4,612) 4,612 - - (319,384) - - (319,384)
Total
contributions
by and
distributions
to owners (4,612) 4,612 - - (319,384) - - (319,384)
----------- ----------- -------------- -----------
Other
movements
Realised
losses
transferred
to special
reserve (Note
a) - - - - (1,356,677) 1,356,677 - -
Realisation of
previously
unrealised
appreciation - - - (1,364,831) - 1,364,831 - -
Total other
movements - - - (1,364,831) (1,356,677) 2,721,508 - -
----------- ----------- -------------- -----------
At 31 March
2021 1,182,005 28,439 12,283,303 31,570,937 52,950,812 10,890,667 3,041,679 111,947,842
----------- ----------- -------------- -----------
Notes
Note a): The Company's special reserve is available to fund buybacks
of shares as and when it is considered by the Board to be in the
interests of Shareholders, and to absorb any existing and future
realised losses and for other corporate purposes. At 31 March 2021,
the Company has a special reserve of GBP52,950,812, GBP30,576,363
of which arises from shares issued more than three years after the
end of the financial year in which they were issued. Reserves originating
from share issues are not distributable under VCT rules if they
are within three years of the end of an accounting period in which
the shares were issued. The total transfer of GBP1,356,677 from
the realised capital reserve to the special distributable reserve
above is the total of realised losses incurred by the Company in
the period.
Note b): The realised capital reserve and the revenue reserve together
comprise the Profit and Loss Account of the Company.
Note c): During the period, the Company repurchased 461,200 of its
own shares at the prevailing market price for a total cost (including
stamp duty) of GBP319,384, which were subsequently cancelled. The
difference between the figure shown above of GBP319,384 and that
per the Statement of Cash Flows of GBP413,435 is GBP94,051 which
was a creditor at the previous year-end.
Unaudited Condensed Statement of Changes in Equity
for the six months to 31 March 2020
Non-distributable reserves Distributable reserves
Called
up Capital Share Special Realised
share redemption premium Revaluation distributable capital Revenue
capital reserve reserve reserve reserve reserve reserve Total
GBP GBP GBP GBP GBP GBP GBP GBP
--------------- ---------- ----------- ---------- ------------- -------------- ------------ ---------- ------------
At 1 October
2019 1,033,029 5,245 - 4,652,457 63,751,255 9,864,455 2,421,638 81,728,079
Comprehensive
income
for the period
(Loss)/profit
for
the period - - - (10,733,344) - 2,098,159 1,528,268 (7,106,917)
Total
comprehensive
income for
the period - - - (10,733,344) - 2,098,159 1,528,268 (7,106,917)
----------- ---------- -------------- ------------
Contributions
by
and
distributions
to owners
Shares issued
via
Offer for
Subscription 129,391 - 9,625,433 - (99,106) - - 9,655,718
Shares bought
back (11,735) 11,735 - - (828,976) - - (828,976)
Dividends paid - - - - - (4,153,095) (519,137) (4,672,232)
Total
contributions
by and
distributions
to owners 117,656 11,735 9,625,433 - (928,082) (4,153,095) (519,137) 4,154,510
----------- ---------- -------------- ------------
Other
movements
Realised
losses
transferred
to special
reserve - - - - (1,083,055) 1,083,055 - -
Realisation of
previously
unrealised
appreciation - - - (734,098) - 734,098 - -
Total other
movements - - - (734,098) (1,083,055) 1,817,153 - -
----------- ---------- -------------- ------------
At 31 March
2020 1,150,685 16,980 9,625,433 (6,814,985) 61,740,118 9,626,672 3,430,769 78,775,672
----------- ---------- -------------- ------------
The notes to the unaudited financial statements form part of these
Half-Year Financial Statements.
The composition of each of these reserves is explained below:
Called up share capital - The nominal value of shares originally
issued, increased for subsequent share issues either via an Offer
for Subscription or Dividend Investment Scheme or reduced due to
shares bought back by the Company.
Capital redemption reserve - The nominal value of shares bought
back and cancelled is held in this reserve, so that the Company's
capital is maintained.
Share premium reserve - This reserve contains the excess of gross
proceeds less issue costs over the nominal value of shares allotted
under recent Offers for Subscription and the Company's Dividend Investment
Scheme.
Revaluation reserve - Increases and decreases in the valuation of
investments held at the period-end are accounted for in this reserve,
except to the extent that the diminution is deemed permanent.
In accordance with stating all investments at fair value through
profit and loss (as recorded in Note 9), all such movements through
both revaluation and realised capital reserves are shown within the
Income Statement for the period.
Special distributable reserve - This reserve is created from cancellations
of the balances upon the Share premium reserve, which are transferred
to this reserve from time to time. The cost of share buybacks and
any realised losses on the sale or impairment of investments (excluding
transaction costs) are charged to this reserve. 75% of the Investment
Adviser fee expense, and the related tax effect, that are charged
to the realised capital reserve are transferred to this reserve.
This reserve will also be charged any facilitation fee payments to
financial advisers, which arose as part of the Offer for Subscription.
Realised capital reserve - The following are accounted for in this
reserve:
- Gains and losses on realisation of investments;
- Permanent diminution in value of investments;
- Transaction costs incurred in the acquisition and disposal of
investments;
- 75% of the Investment Adviser fee expense and 100% of any performance
fee payable, together with the related tax effect to this reserve
in accordance with the policies; and
- Capital dividends paid.
Revenue reserve - Income and expenses that are revenue in nature
are accounted for in this reserve, as well as 25% of the Investment
Adviser fee together with the related tax effect, as well as income
dividends paid that are classified as revenue in nature.
Unaudited Condensed Statement of Cash Flows
for the six months ended 31 March 2021
Six months Six months
ended ended Year ended
31 March 31 March 30 September
2021 2020 2020
Notes (unaudited) (unaudited) (audited)
GBP GBP GBP
Cash flows from operating
activities
Profit/(loss) for the
financial period 29,133,796 (7,106,917) 11,146,314
Adjustments for:
Net investment portfolio
(gains)/losses (29,661,261) 8,201,658 (9,848,433)
Increase in debtors (12,233) (80,341) (135,373)
Increase in creditors
and accruals 799,205 37,456 39,354
---------------------------- ------ -------------
Net cash inflow from
operating activities 259,507 1,051,856 1,201,862
Cash flows from investing
activities
Purchase of investments 9 (4,417,515) (4,151,125) (8,385,023)
Disposal of investments 9 6,715,869 8,346,088 17,597,050
---------------------------- ------
Net cash inflow from
investing activities 2,298,354 4,194,963 9,212,027
Cash flows from financing
activities
Shares issued as part
of Offer for subscription - 10,000,000 10,000,000
Issue costs as part of
Offer for subscription - (344,282) (344,282)
Equity dividends paid 8 - (4,672,232) (18,153,151)
Purchase of own shares (413,435) (806,336) (1,189,858)
---------------------------- ------ ------------- ------------ -------------
Net cash (outflow)/inflow
from financing activities (413,435) 4,177,150 (9,687,291)
Net increase in cash
and cash equivalents 2,144,426 9,423,969 726,598
Cash and cash equivalents
at start of period 29,037,046 28,310,448 28,310,448
Cash and cash equivalents
at end of period 31,181,472 37,734,417 29,037,046
============================ ====== ============= ============ =============
Cash and cash equivalents
comprise:
Cash at bank and in hand 10 1,378,815 1,406,450 1,739,602
Cash equivalents 10 29,802,657 36,327,967 27,297,444
---------------------------- ------ ------------- ------------ -------------
The notes to the unaudited financial statements form part of these
Half-Year Financial Statements.
Notes to the Unaudited Condensed Financial Statements
1. Company
information
The Income and Growth VCT plc is a public limited company incorporated
in England, registration number 04069483. The registered office
is 30 Haymarket, London, SW1Y 4EX.
2. Basis of preparation of the
Financial
Statements
These Financial Statements 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 October 2019) issued by the Association of Investment Companies
("AIC").
The Half-Year Report has not been audited, nor has it been reviewed
by the auditor pursuant to the Financial Reporting Council's
(FRC) guidance on Review of Interim Financial Information.
3. Principal accounting policies
The accounting policies have been applied consistently throughout
the period. Full details of principal accounting policies will
be disclosed in the Annual Report, while the policy in respect
of investments is included within an outlined box at the top
of Note 9 on investments.
4. Income
Six months Six months Year ended
ended ended
31 March 2021 31 March 2020 30 September
2020
(unaudited) (unaudited) (audited)
Total Total Total
GBP GBP GBP
Income
- Dividends 588,183 351,220 837,168
- Money market
funds 2,569 83,823 112,575
- Loan stock
interest 715,528 1,851,961 2,625,570
- Bank deposit
interest 16,063 24,570 43,410
- Interest on
preference share
dividend arrears - 280 38,987
- Other income 5,789 - 3,127
Total Income 1,328,132 2,311,854 3,660,837
================ ============== =================
5. Investment Adviser's fees and
performance fees
Six months Six months Year ended
ended ended
31 March 2021 31 March 2020 30 September
2020
(unaudited) (unaudited) (audited)
Total Total Total
GBP GBP GBP
Allocated to
revenue
return:
Investment
Adviser's fees 223,439 236,541 458,619
Allocated to
capital
return:
Investment
Adviser's fees 670,315 709,625 1,375,856
Investment 742,900 - -
Adviser's
performance fees
Total 1,636,654 946,166 1,834,475
------------------- --- ---------------- -------------- -----------------
Investment
Adviser's
fee 893,754 946,166 1,834,475
Investment 742,900 - -
Adviser's
performance fees
Total 1,636,654 946,166 1,834,475
------------------- --- ---------------- -------------- -----------------
The Directors have charged 75% of the fees payable under the
Investment Adviser's agreement, and 100% of the amounts payable
under the Incentive Agreement, to the capital reserve. The Directors
believe it is appropriate to charge the incentive fees wholly
against the capital return, as any fees payable depend on capital
performance, as explained below.
On 30 September 2014, a revised incentive fee agreement was signed
between the Board, on behalf of the Company, and Mobeus, with
effect from 1 October 2013, to amend and replace the previous
agreement. The previous agreement remained in force, but only
with the former adviser, Foresight Group LLP ("Foresight"). Mobeus
waived their right to their portion of the fee under the previous
agreement. This agreement expired on 10 March 2019.
Any payment under the revised incentive agreement is now 15%
of net realised gains for each year, payable in cash. It is payable
only if Cumulative Net Asset Value (NAV) total return per share
(being the closing NAV at a year end plus cumulative dividends
paid to that year end, since 1 October 2013) equals or exceeds
a "Target Return". The Target Return is the greater of two targets,
being either:
(i) compound growth of 6% per annum (but 5% per annum for the
year ended 30 September 2014 only), before deducting any incentive
fee payable (for the year of calculation only) under both this
amended agreement and the existing incentive agreement with Foresight
in Cumulative NAV total return per share; or
(ii) the cumulative percentage change in the Consumer Prices
Index since 1 October 2013 to the relevant financial year-end,
the resultant figure then being multiplied by (100+A)/100, where
A is the number of full 12 month periods (or part thereof ) that
have passed between 1 October 2013 and the relevant financial
year-end.
Both measures of Target Return are applied to the same opening
base, being NAV per share as at 30 September 2013 of 113.90 pence.
The objective of this Target Return is to enable shareholders
to benefit from a cumulative NAV return of at least 6% per annum
(5% in the financial year ended 30 September 2014), before any
incentive fee is payable. Once a payment has been made, cumulative
NAV total return is calculated after deducting past years' incentive
fees paid and payable.
Under this revised incentive agreement, any fee payments to Mobeus
are subject to an annual cap of an amount equal to 2% of the
net assets of the Company as at the immediately preceding year-end.
This cap included any fee payable to Foresight under the old
agreement, although any such payment to Foresight was not capped,
but that agreement expired on 10 March 2019. Any excess over
the 2% remains payable to Mobeus in the following year(s), subject
to the 2% annual cap in such subsequent year(s) and after any
payment in respect of such subsequent year(s).
For the year ending 30 September 2021, the Target Return will
be 179.83 pence per share (being a 6% uplift on the Target Return
at the previous year-end of 169.65 pence per share). As at 31
March 2021, the Cumulative Total NAV return is 186.34 pence per
share, so the Target Return for the 2021 financial year has currently
been met and a fee of GBP742,900 has been accrued. This fee is
payable subject to the cumulative Target NAV return continuing
to exceed the Target Return at the year-end and the approval
of the Company's Annual Report by shareholders at the AGM.
Between 1 April 2020 and 31 March 2021, the Investment Adviser's
fee upon the net assets raised under the 2019/20 Offer for Subscription
from the use of the over-allotment facility of GBP5 million was
reduced to 1.4% from 2.4%.
6. Taxation
There is no tax charge for the period as the Company has tax
losses brought forward from previous periods, which can be offset
against taxable income.
7. Basic and diluted earnings and return per share
Year
Six months Six months ended
ended ended 30
31 March 31 March September
2021 2020 2020
(unaudited) (unaudited) (audited)
Total Total Total
GBP GBP GBP
Total earnings
i) after taxation: 29,133,796 (7,106,917) 11,146,314
Basic and diluted
earnings per share 24.60 9.94
(Note a) p (6.53)p p
Revenue earnings from
ii) ordinary activities
after taxation 829,212 1,528,268 2,324,789
Basic and diluted
revenue earnings
per share (Note 0.70 2.07
b) p 1.40 p p
Net investment
portfolio
gains/(losses) 29,661,261 (8,201,658) 9,848,433
Capitalised Investment
Adviser fees and
performance fees
less taxation (1,356,677) (433,527) (1,026,908)
----------------------- ------------ ------------ ------------
Total capital
iii) return 28,304,584 (8,635,185) 8,821,525
Basic and diluted
capital earnings
per share (Note 23.90 7.87
c) p (7.93)p p
Weighted average
iv) number of shares
in issue in the
period (Note d) 118,453,326 108,874,052 112,120,361
Notes:
a) Basic earnings per share is total earnings after taxation
divided by the weighted average number of shares in issue.
b) Basic revenue earnings per share is the revenue return after
taxation divided by the weighted average number of shares
in issue.
c) Basic capital earnings per share is the total capital return
after taxation divided by the weighted average number of
shares in issue.
There are no instruments that will increase the number of
shares in issue in the future. Accordingly, the above figures
currently represent both basic and diluted earnings per
d) share.
8. Dividends
Six
months Six months
ended ended Year ended
31 30
March 31 March September
2021 2020 2020
(unaudited) (unaudited) (audited)
For the
year
ended
30 Pence Date
Dividend Type September per share paid GBP GBP GBP
18 October
Interim Income 2019 0.50p 2019 - 519,137 519,137
18 October
Interim Capital 2019 4.00p 2019 - 4,153,095 4,153,095
10 July
Interim Income 2020 1.50p 2020 - - 1,725,492
10 July
Interim Capital 2020 1.50p 2020 - - 1,725,492
28
September
Interim Income 2020 0.25p 2020 - - 289,331
28
September
Interim Capital 2020 6.00p 2020 - - 6,943,954
28
September
Interim Capital* 2020 4.75p 2020 - - 5,497,299
- 4,672,232 20,853,800
------- ------------ -----------
* - This dividend was paid out
of the Company's Special distributable
reserve.
The Board has declared an interim dividend in respect of
the year ending 30 September 2021 of 5.00 pence per share
to be paid to Shareholders on 23 July 2021.
For the year ended 30 September 2020, GBP20,853,800 disclosed
above differs to that shown in the Statement of Cash Flows
of GBP18,153,151 due to GBP2,700,649 of new shares allotted
subject to listing under the Company's Dividend Investment
Scheme.
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
2018 (as updated by Special Valuation guidance issued in March
2020). This classification is followed as the Company's business
is to invest in financial assets with a view to profiting from
their total return in the form of capital growth and income.
Purchases and sales of unlisted investments are recognised when
the contract for acquisition or sale becomes unconditional.
For investments actively traded on organised financial markets,
fair value is generally determined by reference to Stock Exchange
market quoted bid prices at the close of business on the balance
sheet date. Purchases and sales of quoted investments are recognised
on the trade date where a contract of sale exists whose terms
require delivery within a time frame determined by the relevant
market. Where the terms of a disposal state that consideration
may be received at some future date and, subject to the conditionality
and materiality of the amount of deferred consideration, an
estimate of the fair value discounted for the time value of
money may be recognised through the Income Statement. In other
cases, the proceeds will only be recognised once the right to
receive payment is established and there is no reasonable doubt
that payment will be received.
Unquoted investments are stated at fair value by the Directors
at each measurement date in accordance with appropriate valuation
techniques, which are consistent with the IPEV guidelines:-
(i) Each investment is considered as a whole on a 'unit of account'
basis, i.e. that the value of each portfolio company is considered
as a whole, alongside consideration of:-
The price of new or follow on investments made, if deemed
to be made as part of an orderly transaction, are considered
to be at fair value at the date of the transaction. The
inputs that derived the investment price are calibrated
within individual valuation models and at every subsequent
quarterly measurement date, are reconsidered for any changes
in light of more recent events or changes in the market
performance of the investee company. The valuation bases
used are the following:
a) a multiple basis. The enterprise value of the investment
may be determined by applying a suitable price-earnings ratio,
revenue or gross profit multiple to that company's historic,
current or forecast post-tax earnings before interest, depreciation
and amortisation, or revenue, or gross profit (the ratio used
being based on a comparable sector but the resulting value being
adjusted to reflect points of difference identified by the Investment
Adviser compared to the sector including, inter alia, scale
and liquidity).
or:-
b) where a company's underperformance against plan indicates
a diminution in the value of the investment, provision against
the price of a new investment is made, as appropriate.
(ii) Premiums, to the extent that they are considered capital
in nature, and that they will be received upon repayment of
loan stock investments are accrued at fair value when the Company
receives the right to the premium and when considered recoverable.
(iii) Where a multiple or the price of recent investment less
impairment basis is not appropriate and overriding factors apply,
a discounted cash flow, net asset valuation, realisation proceeds,
or a weighted average of these bases may be applied.
Capital gains and losses on investments, whether realised or
unrealised, are dealt with in the profit and loss and revaluation
reserves and movements in the period are shown in the Income
Statement. All figures are shown net of any applicable transaction
costs incurred by the Company.
All investments are initially recognised and subsequently
measured at fair value. Changes in fair value
are recognised in the Income Statement.
A key judgement made in applying the above accounting policy
relates to investments that are permanently impaired. Where
the value of an investment has fallen permanently below the
price of recent investment, the loss is treated as a permanent
impairment and as a realised loss, even though the investment
is still held. The Board assesses the portfolio for such investments
and, after agreement with the Investment Adviser, will agree
the values that represent the extent to which an investment
loss has become realised. This is based upon an assessment of
objective evidence of that investment's future prospects, to
determine whether there is potential for the investment to recover
in value.
The methods of fair value measurement are classified into hierarchy
based on the reliability of the information used to determine
the valuation.
- Level 1 - Fair value is measured based on quoted prices
in an active market.
- Level 2 - Fair value is measured based on directly observable
current market prices or indirectly being derived from
market prices.
- Level 3 - Fair value is measured using valuation techniques
using inputs that are not based on observable market data.
Unquoted Unquoted
Traded ordinary preference Unquoted Total
loan
on AIM shares shares stock
Level Level Level Level
1 3 3 3
GBP GBP GBP GBP GBP
-------- ------------- --------------- ------------ -------------- ----------- -------------- -------------
Valuation at 1 October
2020 2,352,478 34,894,706 1,168,593 12,445,356 50,861,133
Purchases at
cost 377,486 2,071,359 - 1,968,670 4,417,515
Sales - proceeds
(Note a) (2,236,021) (3,888,490) (360) (4,094,615) (10,219,486)
- net realised
gains/(losses) 999,759 1,953,582 (3,491) 637,985 3,587,835
Reclassification
at valuation
(Note b) 5,946,354 (5,946,354) - - -
Net unrealised gains
on investments 13,081,535 11,202,941 184,708 1,604,242 26,073,426
Valuation at
31 March 2021 20,521,591 40,287,744 1,349,450 12,561,638 74,720,423
Book cost at
31 March 2021 1,993,170 29,361,816 1,240,546 16,111,053 48,706,585
Unrealised
gains/(losses)
at 31 March 2021 19,028,421 15,895,539 109,205 (3,462,228) 31,570,937
Permanent impairment
of investments (500,000) (4,969,611) (301) (87,187) (5,557,099)
Valuation at
31 March 2021 20,521,591 40,287,744 1,349,450 12,561,638 74,720,423
----------------------- ----- --------------- ------------ -------------- ----------- -------------- -------------
Gains/(losses) on investments
Realised gains based on
historical cost 1,736,725 3,152,590 - 63,351 4,952,666
Less amounts recognised
as unrealised gains/(losses)
in previous years (736,966) (1,199,008) (3,491) 574,634 (1,364,831)
----------------------------------------------- ------------ -------------- ----------- -------------- -------------
Net realised gains/(losses)
based on carrying value
at 30 September 2020 999,759 1,953,582 (3,491) 637,985 3,587,835
Net movement in unrealised
gains in the period 13,081,535 11,202,941 184,708 1,604,242 26,073,426
Net investment portfolio
gains for the period ended
31 March 2021 14,081,294 13,156,523 181,217 2,242,227 29,661,261
=============================================== ============ ============== =========== ============== =============
Notes:
a): The sale proceeds shown above of GBP10,219,486 is GBP3,503,617
more than that shown on the Condensed Statement of Cash Flows
of GBP6,715,869 due to further proceeds receivable in respect
of Vectair as well as proceeds receivable from the part realisations
of MPB and Parsley Box. These amounts are recognised as debtors
at 31 March 2021.
b): The Company's equity investments in Virgin Wines and Parsley
Box were admitted to AIM during the period. The amount transferred
from Level 3 to Level 1 of GBP5,946,354 reflects the combined
equity value held at the start of the period.
Level 3 unquoted equity and loan investments
are valued in accordance with IPEV guidelines
as follows:
As at As at As at
31 March 31 March 30 September
2021 2020 2020
(unaudited) (unaudited) (audited)
Valuation
methodology GBP GBP GBP
Multiple of
earnings,
revenues
or gross
margin,
as
appropriate 52,346,068 35,136,619 47,240,479
Recent
investment
price 1,445,435 - -
Net asset
value 341,550 1,063,667 1,189,116
Estimated
realisation
proceeds 65,779 13,281 79,060
54,198,832 36,213,567 48,508,655
10. Current asset investments and Cash at bank
As at As at As at
31 March 31 March 30 September
2021 2020 2020
(unaudited) (unaudited) (audited)
GBP GBP GBP
OEIC Money
market funds 29,802,657 36,327,967 27,297,444
Cash
equivalents
per
Statement
of Cash
Flows 29,802,657 36,327,967 27,297,444
Bank deposits
that mature
after three
months 3,151,769 3,151,769 3,151,769
--------------- -------------- --------------
Current asset
investments 32,954,426 39,479,736 30,449,213
--------------- -------------- --------------
Cash at
bank 1,378,815 1,406,450 1,739,602
--------------- -------------- --------------
11. Net asset value
per share As at As at As at
31 March 31 March 30 September
2021 2020 2020
(unaudited) (unaudited) (audited)
Net
assets GBP111,947,842 GBP78,775,672 GBP83,133,430
Number of shares
in issue 118,200,511 115,068,452 118,661,711
Net asset value
per share - basic
and diluted 94.71p 68.46p 70.06p
12. Post balance sheet events
On 16 April 2021 and 18 May 2021, follow-on investments of GBP0.15
million and GBP0.10 million respectively were made into Caledonian
Leisure Limited, an existing portfolio company.
On 1 April 2021, a loan repayment of GBP0.32 million was received
from Vian Marketing Limited (trading as Red Paddle Co).
On 26 May 2021, a follow-on investment of GBP0.39 was made into
Bella & Duke Limited, an existing portfolio company.
On 28 May 2021, a loan repayment of GBP0.46 million was received
from MPB Group Limited.
13. Statutory Information
The financial information for the six months ended 31 March
2021 and the six months ended 31 March 2020 has not been audited.
The financial information contained in this Half-Year report
does not constitute statutory accounts as defined in Section
434 of the Companies Act 2006. The financial statements for
the year ended 30 September 2020 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 either section 498(2) or 498(3) of the Companies Act 2006.
14. Half-Year Report
Copies of this report are being sent to all Shareholders who
elected to receive a paper copy otherwise Shareholders are being
notified that a copy is available on the Company's website.
Further copies are available free of charge from the Company's
registered office, 30 Haymarket, London, SW1Y 4EX, or can be
downloaded via the Company's website at www.incomeandgrowthvct.co.uk.
This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.
RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our Privacy Policy.
END
IR EQLFFFQLFBBK
(END) Dow Jones Newswires
June 16, 2021 11:25 ET (15:25 GMT)
1 Year Income & Growth Vct Chart |
1 Month Income & Growth Vct Chart |
It looks like you are not logged in. Click the button below to log in and keep track of your recent history.
Support: +44 (0) 203 8794 460 | support@advfn.com
By accessing the services available at ADVFN you are agreeing to be bound by ADVFN's Terms & Conditions
