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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Mobeus Income & Growth 2 Vct Plc | LSE:MIG | London | Ordinary Share | GB00B0LKLZ05 | 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% | 59.00 | 57.50 | 60.50 | 59.00 | 59.00 | 59.00 | 0.00 | 08:00:13 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| Trust,ex Ed,religious,charty | -7.57M | -9.64M | -0.0987 | -5.98 | 57.62M |
TIDMMIG
RNS Number : 0804I
Mobeus Income & Growth 2 VCT PLC
21 November 2018
Hot Features
Premium
MOBEUS INCOME & GROWTH 2 VCT PLC
HALF YEAR RESULTS FOR THE SIX MONTHSED 30 SEPTEMBER 2018
Mobeus Income & Growth 2 VCT plc ("the Company") today announces
its half-year results for the six months ended 30 September
2018.
As at 30 September 2018:
Net assets: GBP48.96 million
Net asset value ("NAV"): 99.10 pence
Financial Highlights
For the six months ended 30 September 2018
* Net asset value ("NAV") Total Return(1) per share
increased by 2.7% while Share Price Total Return(2)
per share increased by 1.7%.
* Investments were sold for GBP1.58 million cash
proceeds which generated realised gains over cost of
GBP0.44 million.
* GBP1.70 million invested into one new and three
existing portfolio companies.
* Total liquidity at the Half-Year is GBP21.89
million(3) .
(1) Calculated as closing NAV per share (99.10p) as a percentage
increase of opening NAV per share (96.54p).
(2) Calculated as closing share price (mid-price) (88.00p)
as a percentage increase of opening share price (mid-price)
(86.50p).
(3) Calculated as the total of Current asset investments and
Cash at bank and in hand, as well as GBP1.03m invested in companies
preparing to trade.
Performance Summary
Cumulative total shareholder return per share (NAV basis)(4)
:
The longer-term trend of performance on this measure is shown
in the chart below:
Net asset value Cumulative Cumulative total
(NAV) per share dividends paid per shareholder return
share per share
(NAV basis)(4)
(p) (p) (p)
As at 30 September
2018 99.10 78.00 177.10
As at 31 March 2018 96.54 78.00 174.54
As at 31 March 2017 106.70 62.00 168.70
As at 31 March 2016 119.61 47.00 166.61
As at 31 March 2015 115.45 42.00 157.45
As at 31 March 2014 120.73 23.00 143.73
As at 30 April 2013 106.75 18.00 124.75
As at 30 April 2012 98.71 14.00 112.71
As at 30 April 2011 96.16 10.00 106.16
As at 30 April 2010 87.47 5.00 92.47
(4) Cumulative total shareholder return (NAV basis) is net
asset value plus cumulative dividends paid to date on the current
share class launched in 2005.
Note: the above data does not reflect the benefit of income
tax relief upon initial subscription for the Company's shares.
Chairman's Statement
I am pleased to present the Half-Year Report for Mobeus Income
& Growth 2 VCT plc ("MIG2") covering the six months ended 30
September 2018.
Overview
There were positive returns totalling GBP0.92 million (GBP0.44
million realised and GBP0.48 million unrealised) from the investment
portfolio, which contributed to a 2.7% increase in net asset
value per share to 99.10p in the six-month period. The realisation
of the Company's investments in Fullfield (trading as Motorclean),
Hemmels and Lightworks generated combined net cash proceeds
of GBP1.32 million, contributing 0.79 pence to this increase
per share. The balance of the increase in net assets arose
from income generated from portfolio investments and cash less
expenses.
The level of new investment in the period has been satisfactory
with one new growth capital investment and further investments
in three existing portfolio companies being completed. Additional
investments in three existing portfolio companies were completed
shortly after the end of the period. Details of these investments
are included under the "Investment Portfolio" section of my
Statement below and in the Investment Review within the Half-Year
Report. Since the changes to the VCT Rules in November 2015,
a total of GBP9.99 million has been invested by this VCT in
growth capital investments. Whilst the VCT industry can no
longer support management buyout investments, these continue
to be an important part of the portfolio, representing 54%
of the portfolio by value at the period end.
Performance for the six months ended 30 September 2018
The principal contributions to the increase in Net Asset Value
("NAV") per share were as follows: Six months to 30 September 30 September
2018 2017
(pence per (pence per
share) share)
Net realised / unrealised gains on
the investment portfolio 1.87 2.63
Income from investment portfolio
and cash 2.12 2.44
Share buybacks and adjustments - 0.25
------------------------------------- ------------- -------------
Gross return 3.99 5.32
Less: Investment Adviser's fees and
other expenses (1.43) (1.77)
------------------------------------- ------------- -------------
Net return 2.56 3.55
The NAV per share at 30 September 2018 was 99.10 pence per
share, compared to 96.54 pence per share at 31 March 2018,
an increase of 2.56 pence (2.7% as above (2017: 3.3%)) over
the period. Your Board regards these returns as satisfactory,
in the context of the significant changes in the VCT Rules
since 2015, driving more recent investments into smaller, higher
risk, but potentially higher reward companies.
Investment Portfolio
The main portfolio movements for the period are summarised
below:
GBPm
Portfolio value at 31 March
2018 26.88
New and further investments 1.70
Disposal proceeds (1.58)
Net realised gains 0.44
Valuation movements 0.48
--------------------------------- -------
Portfolio value at 30 September
2018 27.92
The like-for-like change in valuations, after adding back disposal
proceeds and excluding new investments, showed an overall increase
in the underlying value of the portfolio of 3.4%.
During the period the Company made one new growth capital investment
of GBP0.37 million into Rotageek, a provider of workforce management
software. The investment will be used to further the development
of technology and grow sales. The Company also made three follow-on
investments during the period totalling GBP1.33 million, comprising
a GBP0.63 million investment into MyTutor, a provider of online
tutoring, a GBP0.64 million investment into Preservica, a seller
of proprietary digital archiving software, and a GBP0.06 million
investment into Proactive Investors, a provider of investor
media services.
Shortly after the period end, the Company completed three further
follow-on investments totalling GBP0.87 million, comprising
a GBP0.54 million investment into Biosite, a provider of workforce
management and security services, GBP0.29 million into Proactive
Investors, and GBP0.04 million into MPB Group, an online marketplace
for used camera and video equipment.
The Company received cash proceeds of GBP1.58 million during
the period, including GBP1.32 million of realisation proceeds,
GBP0.16 million of loan stock repayments, GBP0.05 million of
deferred and liquidation proceeds and GBP0.05 million from
the repurchase of preference shares.
Sales of portfolio companies in the period generated net realised
gains of GBP0.44 million. The principal gain was from the sale
of Lightworks, realising a gain in the period of GBP0.48 million.
However, disappointingly, the sale of Hemmels incurred a loss
of GBP0.24 million, as explained further in the Investment
Review.
The main unrealised valuation changes were from Auction Technology
Group, Plastic Surgeon and Access IS, while the main decreases
were from Wetsuit Outlet and BookingTek. Further details of
these movements are explained in the Investment Review.
We remind shareholders that an inherent element of investing
in such smaller companies is understanding that not all ventures
and companies will succeed. This risk has been heightened by
the legislative changes to the VCT scheme which came into effect
in March 2018. These changes, were designed firstly to exclude
tax-motivated investments where capital is not at risk and
secondly, place further restrictions on the way investments
are able to be structured.
Interim Dividend
The Board will consider the payment of an interim dividend
later in the financial year.
Liquidity
The Company's liquid assets of GBP21.89 million remain high
following the successful fundraising which completed in March
2018. This amount corresponds to 44.8% of net assets (31 March
2018: GBP21.59 million (45.4%)) and includes both GBP1.03 million
(31 March 2018: GBP1.03 million) invested in CPTs and GBP14.64
million from the recent fundraising.
Share buybacks
During the period under review there were no share buybacks.
The Board continues to believe that the policy of maintaining
the share price at an average discount of 10% to the prevailing
NAV is appropriate in current market conditions. Continuing
shareholders benefit from the difference between NAV per share
and the price per share at which the shares are bought back.
Shareholder communications
The Investment Adviser holds an annual VCT event for shareholders
in central London. Each event includes a presentation on the
Mobeus Advised VCTs' investment activity and performance. The
next event will be held on Tuesday, 5 February 2019 at the
Royal Institute of British Architects. There will be a daytime
and a separate evening session. Shareholders have been sent
an invitation to this event with further details. If you have
not replied to the invitation, but would like to attend, please
send an email to vcts@mobeusequity.co.uk to register. The Board
looks forward to meeting all shareholders able to attend.
Board Changes
As mentioned in the Company's Annual Report for the year ended
31 March 2018, Nigel Melville retired as Chairman of the Board
following the conclusion of the Annual General Meeting on 12
September 2018. I would like to take this opportunity to thank
Nigel for his outstanding contribution to the Company.
Outlook
The portfolio has a solid foundation of investments made under
the previous MBO strategy, the majority of which are mature
and profitable companies providing attractive income returns.
Meanwhile, your Board believes that your Company continues
to be well positioned to take advantage of the opportunity
to provide growth capital. However, it should be noted that
our Investment Adviser, Mobeus, perceive current entry valuations
to be relatively expensive for the most interesting opportunities.
While the new growth capital element of the portfolio is still
young, both your Board and the Investment Adviser will seek
to assess, balance and diversify the risks within the growing
proportion of the overall portfolio that these investments
will represent. Your Board cautions that investing in such
earlier stage companies involves increased risk, as those that
succeed often take longer to achieve scale. Returns may take
longer to emerge and may be more volatile. The least successful
investments are likely to emerge before the most successful,
causing a slower rate of financial progress to be anticipated
in the earlier years, offset by more significant gains in the
longer-term.
The recent successful fundraising will provide the Company
with sufficient funds to continue the current investment rate
in the short to medium-term. However, until these funds are
fully invested, there is likely to be some short-term dilution
of returns to shareholders in the current low interest rate
environment. We expect the current trend for follow-on investments
into new and existing growth capital portfolio companies to
continue in the foreseeable future.
The Board and Investment Adviser have carried out an analysis
of the possible impact of Brexit on the underlying portfolio
to identify the principal areas of risk. We continue to monitor
Brexit negotiations and take mitigating action where feasible.
Finally, I would like to take this opportunity to thank shareholders
for their continued support.
Ian Blackburn
Chairman
21 November 2018
Investment Policy
The Investment Policy is designed to meet the Company's objective.
Investments
The Company invests primarily in a diverse portfolio of UK
unquoted companies. Investments are made selectively across
a number of sectors, principally in established companies.
Investments are usually structured as part loan stock and part
equity in order to produce a regular income stream and to generate
capital gains from realisations.
There are a number of conditions within the VCT legislation
which need to be met by the Company and which may change from
time to time. The Company will seek to make investments in
accordance with the requirements of prevailing VCT legislation.
Asset allocation and risk diversification policies, including
the size and type of investments the Company makes, are determined
in part by the requirements of prevailing VCT legislation.
No single investment may represent more than 15% (by VCT tax
value) of the Company's total investments at the date of investment.
Liquidity
The Company's cash and liquid funds are held in a portfolio
of readily realisable interest bearing investments, deposit
and current accounts, of varying maturities, subject to the
overriding criterion that the risk of loss of capital be minimised.
Borrowing
The Company's articles of association permit borrowings of
amounts up to 10% of the adjusted capital and reserves (as
defined therein). However, the Company has never borrowed and
the Board would only consider doing so in exceptional circumstances.
Investment Adviser's Review
Demand for growth capital investment remains strong and there
is a large pipeline of investment opportunities. It is expected
that the current pace and quantum of new and follow-on investments
will continue in the short to medium-term.
Portfolio review (GBPm)
Portfolio value at 31 March 2018 26.88
New and further investments 1.70
Disposal proceeds (1.58)
Net realised gains 0.44
Valuation movements 0.48
-------------------------------------- -------
Portfolio value at 30 September 2018 27.92
-------------------------------------- -------
The six months under review has seen one investment into a
new growth business of GBP0.37 million, three existing growth
portfolio companies receiving follow-on funding totalling GBP1.33
million and net cash proceeds received of GBP1.58 million,
primarily from three realisations. After the period end, the
Company invested a further GBP0.87 million into three existing
portfolio companies.
Six months to
Investment Portfolio Capital 30 September 30 September
Movement 2018 2017
GBPm GBPm
Increase in the value of unrealised
investments 1.85 1.23
Decrease in the value of unrealised
investments (1.37) (1.95)
-------------------------------------- ------------- -------------
Net increase/(decrease) in
the value of unrealised investments 0.48 (0.72)
Realised gains 0.68 1.71
Realised losses (0.24) -
-------------------------------------- ------------- -------------
Net realised gains 0.44 1.71
Net investment portfolio movement 0.92 0.99
Unrealised movements in the value of the portfolio
The value of the existing portfolio increased by GBP0.48 million
during the first half of the year. This net increase in the
value of the portfolio of investments was due to increases
in individual valuations of GBP1.85 million outweighing reductions
in individual valuations of GBP1.37 million.
The principal increases in value were seen at Auction Technology
Group (GBP0.24 million), Plastic Surgeon (GBP0.19 million)
and Access IS (GBP0.18 million). Auction Technology Group is
growing in line with its investment plan and has delivered
improved gross profit. Plastic Surgeon is trading well on the
back of a buoyant house-building market, but also showing improved
sales in its other markets. Access IS is trading well and expected
to deliver improved turnover and earnings.
The main decreases were seen at Wetsuit Outlet (GBP0.47 million)
and BookingTek (GBP0.46 million). Wetsuit Outlet has had a
disappointing year post investment, with growth in profitability
not being achieved as envisaged. Management has since implemented
several measures to restore margins. BookingTek has experienced
challenging market conditions and delays in securing key contracts.
Realised gains from sales of investments
The net realised gain from sales of investments was GBP0.44
million during the period under review. This net gain was due
to realised gains of GBP0.68 million being partially offset
by a realised loss of GBP0.24 million.
The largest gain of GBP0.48 million arose from the sale of
Lightworks to Siemens PLM Software, a business of Siemens AG.
The sale of Fullfield (trading as Motorclean) back to management
resulted in a realised gain of GBP0.15 million compared to
its value at 31 March 2018. The realised loss of GBP0.24 million
resulted from the sale of Hemmels to its largest customer.
Although the Hemmels loss was modest in the context of the
whole portfolio, it was unexpected, arising shortly after the
initial investment, and illustrates the inherent higher risk
of investing in early stage growth companies.
The company also realised a gain in the period from deferred
consideration receipts of GBP0.05 million arising from past
realisations, during the year.
Investment portfolio yield and capital repayments
During the period under review, the Company received the following
amounts in loan interest and dividend income:
Investment Portfolio Yield Six months to Six months
30 September to
2018 30 September
GBPm 2017
GBPm
Loan interest received in the
period 0.71 0.82
Dividends received in the period 0.26 0.08
------------------------------------ -------------- --------------
Total portfolio income in the
period 0.97(1) 0.90
Portfolio value at 30 September 27.92 26.17
Portfolio Income Yield
(Income as a % of Portfolio value
at 30 September) 3.5% 3.4%
(1) Total portfolio income in the period is generated from
investee companies within the portfolio. See note 4 for details
of all income receivable by the Company.
The Company also received loan stock repayments of GBP0.16
million and preference share repurchases of GBP0.05 million,
both at cost.
New investment in the period
On 13 August 2018, the Company invested GBP0.37 million into
Rotageek, a provider of workforce management software.
Company Business Date of Investment Amount of new
investment (GBPm)
Rotageek Workforce management software August 2018 0.37
------------------------------- -------------------- -------------------
Rotageek is a provider of cloud-based enterprise software to help larger
retail and leisure organisations predict and meet demand to schedule staff
effectively. This investment will be used for further technology development
and to grow sales from enterprise clients. The company's unaudited accounts
for the year ended 31 December 2017 show revenues of GBP0.90 million and
a loss before interest, tax and amortisation of goodwill of GBP1.57 million.
Further investments in existing portfolio companies in the period
The Company made further investments totalling GBP1.33 million
into three existing portfolio companies during the period under
review, as detailed below:
Company Business Date of Investment Amount of new
investment (GBPm)
MyTutor Online tutoring May 2018 0.63
------------------------------- -------------------- -------------------
MyTutor is a digital marketplace that connects school pupils who are seeking
private one-to-one tutoring with university students. The business is
satisfying a growing demand from both schools and parents to improve pupils'
exam results to enhance their academic and career prospects. This investment
supports an opportunity to consolidate the sizeable GBP2bn UK tutoring
market, grow MyTutor's market presence and drive technological development
within the company. The company's latest unaudited accounts for the year
ended 31 December 2017 show turnover of GBP0.56 million and a loss before
interest, tax and amortisation of goodwill of GBP1.40 million.
Seller of proprietary digital
Preservica archiving software September 2018 0.64
------------------------------- -------------------- -------------------
Preservica has developed the world's leading software for the long-term
preservation of digital records ensuring that such digital content can
remain accessible, irrespective of future changes in technology. Previously
a subsidiary of the Company's former portfolio company Tessella, Preservica
was demerged prior to the sale of Tessella in December 2015. The new investment
provided additional growth capital to finance the development of the business.
The Company's latest audited accounts for the year ended 31 March 2018
show turnover of GBP2.85 million and a loss before interest, tax and amortisation
of goodwill of GBP1.93 million.
A small follow-on investment of GBP0.06 million was also made into
Proactive Investors during the period. A further, more substantial,
follow on investment occurred after the period end which is detailed
below.
Further investments in existing portfolio companies after the period
end
A total of GBP0.87 million was invested into three existing portfolio
companies shortly after the period end as detailed below:
Company Business Date of investment Amount of new
investment (GBPm)
Workforce management
software and
Biosite security services October 2018 0.54
--------------------- -------------------- -------------------
Based in the Midlands, Biosite is a provider of biometric access control
and software-based workforce management solutions for the construction
sector. The business is growing significantly and this investment will
support the further development of software and hardware products. The
Company's latest unaudited accounts for the year ended 31 July 2017 show
turnover of GBP6.38 million and a loss before interest, tax and amortisation
of goodwill of GBP0.45 million.
Investor media
Proactive Investors services October 2018 0.29
-------------------- -------------------- -------------------
Proactive Investors specialises in timely multi-media news provision,
events organisation, digital services and investor research. This follow-on
investment was agreed at the time of the original investment in January
2018 and these further funds will be used to develop its brand and enable
the company to continue its global expansion.
In October 2018, a further GBP0.04 million was invested into MPB
Group, an existing portfolio company. This investment was part
of a planned drawdown having previously been approved by the Board
as part of a larger funding round completed in February 2018.
Realisations during the period
The Company realised its investments in Fullfield (trading as Motorclean),
Hemmels and Lightworks during the half-year, generating a net realised
gain of GBP0.39 million for the period. Net cash proceeds received
from the sale of these investments totalled GBP1.32 million, as
detailed below.
Company Business Period of investment Total cash proceeds
over the life
of the investment/
Multiple over
cost
Fullfield Vehicle cleaning July 2011 to GBP2.13 million
(Motorclean) and valet services August 2018 1.2 x cost
-------------------- --------------------- --------------------
The Company sold its investment in Fullfield (trading as Motorclean) back
to management in August 2018 receiving cash proceeds of GBP0.58 million
(realised gain in the period: GBP0.15 million). This realisation contributed
to a return of 1.2 times the original investment cost and an IRR of 5.0%
in the seven years that this investment was held.
Hemmels Classic car March 2018 to GBP0.21 million
restorer September 2018 0.48 x cost
-------------------- --------------------- --------------------
The Company sold its investment in Hemmels to the business's largest customer
for GBP0.20 million in September 2018, generating a realised loss of GBP0.24
million on the original investment cost over the six months that this
investment was held. After a short period following the completion of
the investment it became clear that the company's financial situation
and prospects were significantly at variance to expectations. The investment
was subsequently realised six months after the original investment.
Lightworks Provider of March 2011 to GBP0.56 million
software for CAD September 2018 21.7 x cost
and CAM vendors
-------------------- --------------------- --------------------
The Company sold its investment in Lightworks to Siemens PLM Software
for GBP0.54 million in September 2018 (realised gain in the period: GBP0.48
million), generating a realised gain over the life of the investment of
GBP0.54 million. This equates to a multiple of 21.7 times the investment
cost of GBP0.02 million and an IRR of 57%.
Other realised gains in the period amounted to GBP0.05 million
arising from deferred consideration from companies realised in
a previous year. Together with the realised gains upon the three
disposals of GBP0.39 million, the total for the year was GBP0.44
million.
Capital repayments
The Company received loan stock repayments of GBP0.16 million and
preference share repurchases of GBP0.05 million, both at cost.
Mobeus Equity Partners LLP
Investment Adviser
21 November 2018
Investment Portfolio Summary
as at 30 September 2018
Date of Total Valuation Additions Disposals Change Valuation % value
Investment book at 31 at cost at in at 30 of
Market cost March opening valuation September net
sector at 30 2018 valuation for the 2018 assets
September period by
2018 value
Qualifying Investments
ASL Technology
Holdings
Limited
Printer December
and photocopier 2010 Support
services services 2,092,009 2,126,379 - - 105,696 2,232,075 4.6%
Tovey Management
Limited
(trading
as Access
IS)
Provider October
of data 2015
capture Software
and scanning and Computer
hardware Services 1,733,500 2,027,582 - - 175,268 2,202,850 4.5%
EOTH Limited
(trading
as Rab and
Lowe Alpine)
Branded October
outdoor 2011
equipment General
and clothing Retailers 817,185 1,521,873 - - 137,632 1,659,505 3.4%
Preservica
Limited
Seller of December
proprietary 2015
digital Software
archiving and Computer
software Services 1,133,464 865,666 647,694 - 33,567 1,546,927 3.2%
Virgin Wines
Holding
Company November
Limited 2013
Online General
wine retailer retailers 1,284,333 1,371,490 - - 138,259 1,509,749 3.1%
Vian Marketing
Limited
(trading
as Red Paddle
Co)
Design,
manufacture
and sale
of stand-up
paddleboards July 2015
and windsurfing Leisure
sails Goods 717,038 987,179 - - 123,650 1,110,829 2.3%
MPB Group
Limited
Online
marketplace
for
photographic June 2016
and video General
equipment retailers 730,667 1,254,114 - 89,106 (79,437) 1,085,571 2.2%
My Tutorweb
Limited
Digital
marketplace
connecting
school pupils
seeking May 2017
one to one Support
online tutoring Services 979,834 349,661 630,173 - 98,932 1,078,766 2.2%
Master Removers
Group Limited
(trading
as Anthony
Ward Thomas,
Bishopsgate
and Aussie
Man & Van)
A specialist
logistics, December
storage 2014
and removals Support
business Services 369,625 874,317 - - 169,702 1,044,019 2.2%
Turner Topco
Limited
(trading
as Auction
Technology
Group)
SaaS based
online auction October
market place 2008
platform Media 1,317,100 777,645 - - 239,934 1,017,579 2.1%
CGI Creative
Graphics
International
Limited
Vinyl graphics
to global
automotive,
recreation
vehicle June 2014
and aerospace General
markets Industrials 999,568 1,030,727 - - (21,707) 1,009,020 2.1%
Ibericos
Etc. Limited
(trading
as Tapas
Revolution) January
Spanish 2017
restaurant General
chain retailers 812,248 854,224 - - 93,399 947,623 1.9%
Manufacturing
Services
Investment
Limited
(trading
as Wetsuit
Outlet Limited)
Online retailer
in the July 2017
watersports General
market retailers 1,412,992 1,412,992 - - (470,553) 942,439 1.9%
Tharstern
Group Limited
Software-based
management
information July 2014
systems Software
to the print and Computer
sector Services 789,815 887,870 - - (35,583) 852,287 1.7%
The Plastic
Surgeon
Holdings
Limited
Snagging
and finishing April
of domestic 2008
and commercial Support
properties Services 39,487 731,523 - 123,953 194,138 801,708 1.6%
Pattern
Analytics
Limited
(trading
as Biosite)
Workforce
management
and security
services November
for the 2016
construction Support
industry Services 495,479 743,219 - - 57,337 800,556 1.6%
Vectair
Holdings
Limited
Designer January
and distributor 2006
of washroom Support
products Services 60,293 740,670 - - 31,727 772,397 1.6%
Media Business
Insight
Holdings
Limited
A publishing
and events
business
focused
on the creative January
production 2015
industries Media 1,447,188 651,225 - - 71,229 722,454 1.5%
Blaze Signs
Holdings
Limited
Manufacturing April
and 2006
installation Support
of signs Services 437,030 639,342 - - 2,504 641,846 1.3%
RDL Corporation
Limited
Recruitment
consultants
for the
pharmaceutical,
business October
intelligence 2010
and IT Support
industries Services 1,000,000 515,476 - - 111,389 626,865 1.3%
Redline
Worldwide
Limited
Provider
of security February
services 2016
to the aviation Support
industry Services 682,222 689,047 - - (110,892) 578,155 1.2%
Bourn Bioscience
Limited January
Management 2014
of In-vitro Healthcare
fertilisation Equipment
clinics & Services 757,101 558,620 - - (16,105) 542,515 1.1%
Buster and
Punch Holdings
Limited
Industrial
inspired March
lighting 2017
and interiors General
retailer retailers 436,391 553,896 - - (39,211) 514,685 1.1%
Super Carers
Limited
Online platform
that connects
people seeking
home care
from March
experienced 2018
independent Support
carers Services 384,720 384,720 - - - 384,720 0.8%
Rota Geek
Limited
Provider
of cloud-based
enterprise
software
that uses
data-driven
technologies
to help
retail and
leisure August
organisations 2018
schedule Support
staff Services 366,600 - 366,600 - - 366,600 0.8%
Proactive
Group Holdings
Inc
Provider
of media
services
and investor
conferences
for companies
primarily January
listed on 2018
secondary General
public markets Financial 346,612 288,952 57,660 - - 346,612 0.7%
BookingTek October
Limited 2016
Software Software
for hotel and Computer
groups Services 504,336 714,211 - - (462,043) 252,168 0.5%
Jablite
Holdings
Limited April
Manufacture 2015
of expanded Construction
polystyrene and
products Materials 281,398 171,931 - - (80,331) 91,600 0.2%
Veritek
Global Holdings
Limited
Maintenance July 2013
of imaging Support
equipment Services 967,780 102,972 - - (48,396) 54,576 0.1%
Racoon
International
Group Limited
Supplier
of hair
extensions, December
hair care 2006
products Personal
and training Goods 906,935 - - - - - 0.0%
Newquay
Helicopters
(2013) Limited
(in members'
voluntary
liquidation)
Helicopter June 2006
service Support
operators Services 18,491 - - - - - 0.0%
Fullfield
Limited
(trading
as Motorclean)
Vehicle
cleaning July 2011
and valet Support
services Services - 433,939 - 433,939 - - 0.0%
Lightworks
Software
Limited
Provider April
of software 2006
for CAD Software
and CAM and Computer
vendors Services - 61,163 - 61,163 - - 0.0%
Total Qualifying
Investments 24,321,441 24,322,625 1,702,127 708,161 420,105 25,736,696 52.8%
------------------------------- ---------- ---------- --------- --------- --------- ---------- -------
Date of Total Valuation Additions Disposals Change Valuation % value
Investment book at 31 at cost at in at 30 of
Market cost March opening valuation September net
sector at 30 2018 valuation for the 2018 assets
September period by
2018 value
Non-Qualifying Investments
Media Business
Insight
Limited
A publishing
and events
business
focused
on the creative January
production 2015
industries Media 561,884 568,576 - - 62,190 630,766 1.3%
Hollydale
Management
Limited
Company
seeking
to carry March
on a business 2015
in the food Support
sector Services 566,400 354,000 - - - 354,000 0.7%
Manufacturing
Services
Investment
Limited
(trading
as Wetsuit
Outlet)
Online retailer
in the July 2017
watersports General
market Retailers 304,000 304,000 - - - 304,000 0.7%
Tovey Management
Limited
(trading
as Access
IS)
Provider October
of data 2015
capture Software
and scanning and Computer
hardware Services 219,873 219,873 - - - 219,873 0.5%
Backhouse
Management
Limited
Company
seeking
to carry April
on a business 2015
in the motor Support
sector Services 441,220 169,700 - - - 169,700 0.3%
Barham
Consulting
Limited
Company
seeking
to carry April
on a business 2015
in the catering Support
sector Services 441,220 169,700 - - - 169,700 0.3%
Creasy Marketing
Services
Limited
Company
seeking
to carry April
on a business 2015
in the textile Support
sector Services 441,220 169,700 - - - 169,700 0.3%
McGrigor
Management
Limited
Company
seeking
to carry
on a business April
in the 2015
pharmaceutical Support
sector Services 441,220 169,700 - - - 169,700 0.3%
Hemmels
Limited
Sourcing,
restoration,
selling
and servicing March
of high 2018
price, classic Automobiles
cars and Parts 19,660 437,238 - 437,238 - - 0.0%
Prefcap
Limited
(formerly
365 Agile
Group plc) March
Development 2001
of energy Electronics
saving devices and
for domestic Electronic
use Equipment 254,586 - - - - - 0.0%
Racoon
International
Group Limited
Supplier
of hair
extensions, December
hair care 2006
products Personal
and training Goods 139,050 - - - - - 0.0%
Turner Topco
Limited
(trading
as Auction
Technology
Group)
SaaS based
online auction October
marketplace 2008
platform Media 3,863 - - - - - 0.0%
Total non-qualifying
investments 3,834,196 2,562,487 - 437,238 62,190 2,187,439 4.4%
------------------------------- ---------- ---------- --------- --------- --------- ---------- -------
Total investment
portfolio 28,155,637 26,885,112 1,702,127 1,145,399 482,295 27,924,135 57.2%
------------------------------- ---------- ---------- --------- --------- --------- ---------- -------
Cash and current
asset investments - 20,559,774 - - - 20,859,620 42.7%
------------------------------- ---------- ---------- --------- --------- --------- ---------- -------
Total investments
(including cash
and current asset
investments) 28,155,637 47,444,886 1,702,127 1,145,399 482,295 48,783,755 99.9%
------------------------------- ---------- ---------- --------- --------- --------- ---------- -------
Other current
assets - 339,187 - - - 292,295 0.6%
------------------------------- ---------- ---------- --------- --------- --------- ---------- -------
Current
liabilities - (185,876) - - - (216,485) (0.5%)
------------------------------- ---------- ---------- --------- --------- --------- ---------- -------
Totals 28,155,637 - 1,702,127 1,145,399 - - -
------------------------------- ---------- ---------- --------- --------- --------- ---------- -------
Net assets at the
period end - 47,598,197 - - - 48,859,565 100.0%
------------------------------- ---------- ---------- --------- --------- --------- ---------- -------
Statement of the Directors' Responsibilities
Responsibility Statement
In accordance with Disclosure and Transparency Rule (DTR) 4.2.10,
Ian Blackburn (Chairman), Adam Kingdon (Chairman of the Audit
Committee), and Sally Duckworth (Chairman of the Investment
Committee), being the Directors of the Company, confirm that,
to the best of their knowledge:
a) the unaudited condensed set of financial statements, which
has been prepared in accordance with Financial Reporting Standard
104 "Interim Financial Reporting" gives a true and fair view
of the assets, liabilities, financial position and profit of
the Company, as required by DTR 4.2.10;
b) the Half-Year Management Report which comprises the Chairman's
Statement, Investment Policy, Investment Review and Investment
Portfolio Summary includes a fair review of the information
required by DTR 4.2.7, being an indication of the important
events that have occurred during the first six months of the
financial year and their impact on the condensed set of financial
statements;
c) a description of the principal risks and uncertainties facing
the Company for the remaining six months is set out below,
in accordance with DTR 4.2.7; and
d) there were no related party transactions in the first six
months of the current financial year that are required to be
disclosed in accordance with DTR 4.2.8.
Principal Risks and Uncertainties
In accordance with DTR 4.2.7, the Board confirms that the principal
risks and uncertainties facing the Company have not materially
changed from those identified in the Annual Report and Financial
Statements for the year ended 31 March 2018 ("the Annual Report").
The principal risks faced by the Company are:
-- economic;
-- investment and strategic;
-- loss of approval as a VCT;
-- VCT regulatory changes;
-- regulatory;
-- financial and operating;
-- market;
-- asset liquidity;
-- market liquidity;
-- counterparty; and
-- cyber and data security.
A more detailed explanation of these risks can be found in
the Strategic Report in the Annual Report and Financial Statements
for the year ended 31 March 2018, copies of which are available
on the Investment Adviser's website, www.mobeusequity.co.uk
or by going directly to the VCT's website, www.mig2vct.co.uk.
Going Concern
The Board has assessed the Company's operation as a going concern.
The Company's business activities, together with the factors
likely to affect its future development, performance and position
are set out in the Half-Year management report which comprises
the Chairman's Statement, Investment Policy, Investment 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 continue
to trade profitably and the portfolio taken as a whole remains
resilient and well-diversified. The major cash outflows of
the Company (namely investments, 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 the Annual Report and Financial Statements for
the year ended 31 March 2018. Accordingly, the Directors continue
to adopt the going concern basis of accounting in preparing
the Half-Year report and financial statements.
Cautionary Statement
This report may contain forward looking statements with regards
to the financial condition and results of the Company, which
are made in the light of current economic and business circumstances.
Nothing in this report should be construed as a profit forecast.
For and on behalf of the Board:
Ian Blackburn
Chairman
Unaudited Condensed Income Statement
for the six months ended 30 September 2018
Six months ended 30 September 2018 Year ended 31 March
2018
(unaudited) (audited)
Notes Revenue Capital Total Revenue Capital Total
GBP GBP GBP GBP GBP GBP
Unrealised
gains /
(losses) on
investments 9 - 482,295 482,295 - (755,510) (755,510)
Realised gains
on
investments 9 - 437,864 437,864 - 2,766,722 2,766,722
Income 4 1,043,868 - 1,043,868 1,715,664 - 1,715,664
Investment
Adviser's
fees 5 (128,269) (384,807) (513,076) (247,177) (741,530) (988,707)
Other expenses (171,084) - (171,084) (348,568) - (348,568)
--------------- ------ ---------- ---------- ---------- ---------- ---------- ----------
Profit on
ordinary
activities
before
taxation 744,515 535,352 1,279,867 1,119,919 1,269,682 2,389,601
Tax on profit
on ordinary
activities 6 (91,612) 73,113 (18,499) (191,512) 140,891 (50,621)
--------------- ------ ---------- ---------- ---------- ---------- ---------- ----------
Profit and
total
comprehensive
income 652,903 608,465 1,261,368 928,407 1,410,573 2,338,980
--------------- ------ ---------- ---------- ---------- ---------- ---------- ----------
Basic and
diluted
earnings per
ordinary
share 7 1.32p 1.24p 2.56p 2.25p 3.43p 5.68p
Six months ended 30 September 2017
(unaudited)
Notes Revenue Capital Total
GBP GBP GBP
Unrealised losses on investments 9 - (719,145) (719,145)
Realised gains on investments 9 - 1,709,101 1,709,101
Income 4 916,695 - 916,695
Investment Adviser's fees 5 (111,214) (333,641) (444,855)
Other expenses (183,118) - (183,118)
-------------------------------------------- ------ ---------- ---------- ----------
Profit on ordinary activities before
taxation 622,363 656,315 1,278,678
Tax on profit on ordinary activities 6 (102,619) 63,392 (39,227)
-------------------------------------------- ------ ---------- ---------- ----------
Profit and total comprehensive income 519,744 719,707 1,239,451
-------------------------------------------- ------ ---------- ---------- ----------
Basic and diluted earnings per ordinary
share 7 1.43p 1.99p 3.42p
The revenue column of the Income Statement includes all income
and expenses. The capital column accounts for the unrealised
gains/(losses) and realised gains on investments and the proportion
of the Investment Adviser's fee 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") (updated in January 2017) by the Association
of Investment Companies ("AIC"), supplementary information
which analyses the Income Statement between items of a revenue
and capital nature has been presented alongside the Income
Statement. The revenue column of profit attributable to equity
shareholders is the measure the Directors believe appropriate
in assessing the Company's compliance with certain requirements
set out in Section 274 Income Tax Act 2007.
All the items in the above statement derive from continuing
operations of the Company. No operations were acquired or
discontinued in the period.
Unaudited Condensed Balance Sheet
as at 30 September 2018
30 September 2018 31 March 2018 30 September
2017
(unaudited) (audited) (unaudited)
Notes GBP GBP GBP
Fixed assets
Investments at fair value 9 27,924,135 26,885,112 26,168,685
Current assets
Debtors and prepayments 292,295 339,187 2,512,800
Current asset investments 10 17,657,301 18,287,301 7,947,301
Cash at bank and in hand 10 3,202,319 2,272,473 2,632,660
------------------------------- ------- ----------- -------------- -------------
21,151,915 20,898,961 13,092,761
Creditors: amounts falling due
within one year (216,485) (185,876) (429,540)
------------------------------- ------- ----------- -------------- -------------
Net current assets 20,935,430 20,713,085 12,663,221
------------------------------- ------- ----------- -------------- -------------
Net assets 48,859,565 47,598,197 38,831,906
Capital and reserves
Called up share capital 493,042 493,042 376,099
Capital redemption reserve 94,298 94,298 90,375
Share premium reserve 30,498,349 30,498,349 18,167,334
Revaluation reserve 2,405,699 1,398,656 1,311,778
Special distributable reserve 5,037,085 6,052,525 6,843,441
Realised capital reserve 8,560,337 7,943,475 10,492,795
Revenue reserve 1,770,755 1,117,852 1,550,084
------------------------------- ------- ----------- -------------- -------------
Equity shareholders' funds 48,859,565 47,598,197 38,831,906
------------------------------- ------- ----------- -------------- -------------
Basic and diluted net asset
value per ordinary share 11 99.10p 96.54p 103.25p
Unaudited Condensed Statement of Changes in Equity
for the six months ended 30 September 2018
Non-distributable reserves Distributable reserves
Called Share Capital Revaluation Special Realised Revenue Total
up premium redemption reserve distributable capital reserve
share reserve reserve reserve reserve
capital (Note (Note (Note
a) b) b)
GBP GBP GBP GBP GBP GBP GBP GBP
At 1 April
2018 493,042 30,498,349 94,298 1,398,656 6,052,525 7,943,475 1,117,852 47,598,197
Comprehensive
income for the
period
Profit for the
period - - - 482,295 - 126,170 652,903 1,261,368
--------------- -------- ----------- ----------- ------------ -------------- ---------- ---------- -----------
Total
comprehensive
income for
the period - - - 482,295 - 126,170 652,903 1,261,368
--------------- -------- ----------- ----------- ------------ -------------- ---------- ---------- -----------
Contributions
by and
distributions
to owners
Shares bought - - - - - - - -
back
Dividends paid - - - - - - - -
--------------- -------- ----------- ----------- ------------ -------------- ---------- ---------- -----------
Total - - - - - - - -
contributions
by and
distributions
to owners
--------------- -------- ----------- ----------- ------------ -------------- ---------- ---------- -----------
Other
movements
Realised
losses
transferred
to special
reserve (Note
a) - - - - (1,015,440) 1,015,440 - -
Realisation of
previously
unrealised
depreciation - - - 524,748 - (524,748) - -
--------------- -------- ----------- ----------- ------------ -------------- ---------- ---------- -----------
Total other
movements - - - 524,748 (1,015,440) 490,692 - -
--------------- -------- ----------- ----------- ------------ -------------- ---------- ---------- -----------
At 30
September
2018 493,042 30,498,349 94,298 2,405,699 5,037,085 8,560,337 1,770,755 48,859,565
--------------- -------- ----------- ----------- ------------ -------------- ---------- ---------- -----------
Note a): The cancellation of the formerly named C Share Fund's
share premium reserve (as approved at the Extraordinary General
Meeting held on 10 September 2008 and by the order of the
Court dated 28 October 2009), together with the previous cancellation
of the share premium reserve attributable to the former Ordinary
Share Fund and C Shares, has provided the Company with a special
distribution reserve. The purpose of this fund is to fund
market purchases of the Company's own shares as and when it
is considered by the Board to be in the best interests of
the shareholders, and to write-off existing and future losses
as the Company must take into account capital losses in determining
distributable reserves. The total transfer of GBP1,015,440
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.
Unaudited Condensed Statement of Changes in Equity
for the six months ended 30 September 2017
Non-distributable reserves Distributable reserves
Called Share Capital Revaluation Special Realised Revenue Total
up premium redemption reserve distributable capital reserve
share reserve reserve reserve reserve
capital
GBP GBP GBP GBP GBP GBP GBP GBP
At 1 April
2017 356,724 15,901,497 87,583 2,001,764 7,540,615 11,142,462 1,030,340 38,060,985
Comprehensive
income for the
period
(Loss)/profit
for the
period - - - (719,145) - 1,438,852 519,744 1,239,451
--------------- -------- ----------- ----------- ------------ -------------- ------------ ---------- ------------
Total
comprehensive
income for
the period - - - (719,145) - 1,438,852 519,744 1,239,451
--------------- -------- ----------- ----------- ------------ -------------- ------------ ---------- ------------
Contributions
by and
distributions
to owners
Shares issued
under Offer
for
Subscription 22,167 2,299,457 - - (796) - - 2,320,828
Expenses of
share offer - (33,620) - - - - - (33,620)
Shares bought
back (2,792) - 2,792 - (258,671) - - (258,671)
Dividends paid - - - - - (2,497,067) - (2,497,067)
--------------- -------- ----------- ----------- ------------ -------------- ------------ ---------- ------------
Total
contributions
by and
distributions
to owners 19,375 2,265,837 2,792 - (259,467) (2,497,067) - (468,530)
Other
movements
Realised
losses
transferred
to special
reserve - - - - (437,707) 437,707 - -
Realisation of
previously
unrealised
depreciation - - - 29,159 - (29,159) - -
--------------- -------- ----------- ----------- ------------ -------------- ------------ ---------- ------------
Total other
movements - - - 29,159 (437,707) 408,548 - -
--------------- -------- ----------- ----------- ------------ -------------- ------------ ---------- ------------
At 30
September
2017 376,099 18,167,334 90,375 1,311,778 6,843,441 10,492,795 1,550,084 38,831,906
The composition of each of these reserves is explained below:
Called up share capital
The nominal value of shares originally issued, increased for
subsequent share issues either via an Offer for Subscription
or reduced due to shares bought back by the Company.
Capital redemption reserve
The nominal value of shares bought back and cancelled is held
in this reserve, so that the company's capital is maintained.
Share premium reserve
This reserve contains the excess of gross proceeds less issue
costs over the nominal value of shares allotted under Offers
for Subscription.
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
The cost of share buybacks is charged to this reserve. In addition,
any realised losses on the sale or impairment of investments
(excluding transaction costs), and 75% of the Investment Adviser's
fee and 100% of any performance fee expense, and the related
tax effect, are transferred from the realised capital reserve
to this reserve. The cost of any IFA facilitation fee payable
as part of the Offer for Subscription is also charged to this
reserve.
Realised capital reserve
The following are accounted for in this reserve:
-- Gains and losses on realisation of investments;
-- Permanent diminution in value of investments;
-- Transaction costs incurred in the acquisition of investments;
-- 75% of the Investment Adviser's fee (subsequently transferred
to the Special distributable reserve along with the related
tax effect) and 100% of any performance fee payable, together
with the related tax effect to this reserve in accordance with
the policies; and
-- Capital dividends paid.
Revenue reserve
Income and expenses that are revenue in nature are accounted
for in this reserve together with the related tax effect, as
well as income dividends paid that are classified as revenue
in nature.
Unaudited Condensed Statement of Cash Flows
For the six months ended 30 September 2018
Six months Six months
ended 30 Year ended ended 30
September 31 March September
2018 (unaudited) 2018 (audited) 2017 (unaudited)
Notes GBP GBP GBP
---------------------- ------ ------------------ ---------------- ------------------
Cash flows from
operating
activities
Profit for the
financial
period 1,261,368 2,338,980 1,239,451
Adjustments for:
Unrealised
(gains)/losses
on investments (482,295) 755,510 719,145
Realised gains on
investments (437,864) (2,766,722) (1,709,101)
Tax charge for
current
period 6 18,499 50,621 39,227
Decrease/(increase)
in
debtors 38,135 (100,281) (39,996)
Increase in creditors
and accruals 12,110 20,273 5,544
---------------------- ------ ------------------ ---------------- ------------------
Net cash inflow from
operations 409,953 298,381 254,270
Corporation tax paid - (29,118) -
---------------------- ------ ------------------ ---------------- ------------------
Net cash inflow from
operating activities 409,953 269,263 254,270
Cash flows from
investing
activities
Purchase of
investments 9 (1,746,680) (2,733,686) (851,459)
Disposal of
investments 9 1,636,573 5,890,052 3,756,306
---------------- ------------------
Net cash
(outflow)/inflow
from investing
activities (110,107) 3,156,366 2,904,847
Cash flows from
financing
activities
Shares issued as part
of Offer for
subscription - 14,636,013 -
Equity dividends paid 8 - (6,821,660) (2,497,067)
Purchase of own
shares - (616,121) (18,002)
---------------------- ------ ------------------ ---------------- ------------------
Net cash
inflow/(outflow)
from financing
activities - 7,198,232 (2,515,069)
---------------------- ------ ------------------ ---------------- ------------------
Net increase in cash
and cash equivalents 299,846 10,623,861 644,048
Cash and cash
equivalents
at start of period 20,559,774 9,935,913 9,935,913
Cash and cash
equivalents
at end of period 20,859,620 20,559,774 10,579,961
---------------------- ------ ------------------ ---------------- ------------------
Cash and cash
equivalents
comprise:
Cash at bank and in
hand 10 3,202,319 2,272,473 2,632,660
Cash equivalents 10 17,657,301 18,287,301 7,947,301
Notes to the Unaudited Condensed Financial Statements
for the six months ended 30 September 2018
1. Company information
Mobeus Income and Growth 2 VCT plc is a public limited company
incorporated in England, registration number 03946235. The
registered office is 30 Haymarket, London, SW1Y 4EX.
2. Basis of preparation
These Financial Statements are prepared in accordance with
accounting policies consistent with Financial Reporting Standard
102 ("FRS 102"), Financial Reporting Standard 104 ("FRS 104")
- Interim Financial Reporting, with the Companies Act 2006
and the 2014 Statement of Recommended Practice, 'Financial
Statements of Investment Trust Companies and Venture Capital
Trusts' ('the SORP') (updated in January 2017) issued by the
Association of Investment Companies ("AIC"). The Financial
Statements have been prepared on the historical cost basis
except for the modification to a fair value basis for certain
financial instruments as specified in note 9.
The Half-Year Report has not been audited, nor has it been
reviewed by the auditor pursuant to the Financial Reporting
Council's (FRC) guidance on Review of Interim Financial Information.
3. Principal accounting policies
The accounting policies have been applied consistently throughout
the period. Full details of principal accounting policies will
be disclosed in the Annual Report, while the policy in respect
of investments is included within an outlined box at the top
of note 9 on investments.
4. Income
Six months ended Year ended Six months ended
30 September 31 March 2018 30 September 2017
2018
(unaudited) (audited) (unaudited)
Income from investments GBP GBP GBP
------------------------ ---------------- -------------- ------------------
Dividends 264,940 114,698 82,264
OEIC dividends 46,871 33,137 6,899
Loan stock interest 712,798 1,551,995 823,112
Bank deposit interest 6,473 11,161 4,420
Interest on preference
dividends 12,786 218 -
Other income - 4,455 -
Total Income 1,043,868 1,715,664 916,695
------------------------ ---------------- -------------- ------------------
5. Investment Adviser's fees and performance fee
Investment Adviser's fees
25% of the Investment Adviser's fees are charged to the revenue
column of the Income Statement, while 75% is charged against
the capital column of the Income Statement. This is in line
with the Board's expected long-term split of returns from the
investment portfolio of the Company.
100% of any performance incentive fee payable for the year
is charged against the capital column of the Income Statement.
This is because although the incentive fee is linked to an
annual dividend target, it is ultimately based upon the achievement
of capital growth.
Performance fees
Performance incentive agreement
New Ordinary and former C share fund shares
Basis of calculation
The performance incentive fee payable is calculated as an amount
equivalent to 20 per cent of the excess of a "Target rate"
comprising:
i) an annual dividend target (indexed each year for RPI); and
ii) a requirement that any cumulative shortfalls below the
annual dividend target must be made up in later years. Any
excess is not carried forward, whether a fee is payable for
that year or not.
Payment of a fee is also conditional upon the average Net Asset
Value ("NAV") per share for each such year equalling or exceeding
the average "Base NAV" per share for the same year. Base NAV
commenced at GBP1 per share when C fund shares were first issued
in 2005, which is adjusted for subsequent shares issued and
bought back.
Any performance fee will be payable annually. It will be reduced
to the proportion which the number of "Incentive Fee Shares"
represent of the total number of shares in issue at any calculation
date. Incentive Fees Shares are the only shares upon which
an incentive fee is payable. They will be the number of C fund
shares in issue just before the Merger of the two former share
classes on 10 September 2010, (which subsequently became Ordinary
shares) plus Ordinary shares issued under new fundraisings
since the Merger. This total is then reduced by an estimated
proportion of the shares bought back by the Company since the
Merger, that are attributable to the Incentive Fee Shares.
There has been no performance incentive fee accrued for the
current period.
Six months Year ended Six months
ended ended
30 September 31 March 2018 30 September
2018 2017
(unaudited) (audited) (unaudited)
Mobeus Equity Partners LLP GBP GBP GBP
--------------------------- -------------- --------------- --------------
Investment Adviser's fees 513,076 988,707 444,855
Total 513,076 988,707 444,855
--------------------------- -------------- --------------- --------------
6. Taxation
There is a tax charge for the period as the Company has taxable
income in excess of deductible expenses.
Six months ended Year ended Six months ended
30 September 2018 31 March 2018 30 September 2017
(unaudited) (audited) (unaudited)
Revenue Capital Total Revenue Capital Total Revenue Capital Total
GBP GBP GBP GBP GBP GBP GBP GBP GBP
------------------ -------- -------- --------- --------- --------- --------- -------- --------- ---------
a) Analysis
of tax change:
UK Corporation
tax on profits
for the period 91,612 (73,113) 18,499 191,512 (140,891) 50,621 102,619 (63,392) 39,227
------------------ -------- -------- --------- --------- --------- --------- -------- --------- ---------
Total current
tax charge 91,612 (73,113) 18,499 191,512 (140,891) 50,621 102,619 (63,392) 39,227
------------------ -------- -------- --------- --------- --------- --------- -------- --------- ---------
Corporation
tax is based
on a rate of
19% (2017:
19%)
b) Profit on
ordinary
activities
before tax 744,515 535,352 1,279,867 1,119,919 1,269,682 2,389,601 622,363 656,315 1,278,678
Profit on ordinary
activities
multiplied
by small company
rate of
corporation
tax in the
UK of 19% (2017:
19%) 141,458 101,717 243,175 212,785 241,239 454,024 118,249 124,699 242,948
Effect of:
UK dividends (50,338) - (50,338) (21,792) - (21,792) (15,630) - (15,630)
Unrealised
(gains)/losses
not
taxable/allowable - (91,636) (91,636) - 143,547 143,547 - 136,638 136,638
Realised gains
not taxable - (83,194) (83,194) - (525,677) (525,677) - (324,729) (324,729)
Unrelieved
expenditure 492 - 492 310 - 310 - - -
Under provision
in prior period - - - 209 - 209 - - -
------------------ -------- -------- --------- --------- --------- --------- -------- --------- ---------
Actual tax
charge 91,612 (73,113) 18,499 191,512 (140,891) 50,621 102,619 (63,392) 39,227
------------------ -------- -------- --------- --------- --------- --------- -------- --------- ---------
7. Basic and diluted earnings per share
Six months Year ended Six months
ended ended
30 September 31 March 30 September
2018 2018 2017
(unaudited) (audited) (unaudited)
GBP GBP GBP
-------------------------------------- -------------- ----------- --------------
Total earnings after taxation: 1,261,368 2,338,980 1,239,451
Basic and diluted earnings
per share (note a) 2.56p 5.68p 3.42p
Net revenue from ordinary
activities after taxation 652,903 928,407 519,744
Basic and diluted revenue
earnings per share (note b) 1.32p 2.25p 1.43p
Net unrealised capital gains/(losses) 482,295 (755,510) (719,145)
Net realised capital gains 437,864 2,766,722 1,709,101
Capital expenses (net of taxation) (311,694) (600,639) (270,249)
Total capital return 608,465 1,410,573 719,707
Basic and diluted capital
earnings per share (note c) 1.24p 3.43p 1.99p
-------------------------------------- -------------- ----------- --------------
Weighted average number of
shares in issue in the period 49,304,159 41,190,198 36,279,026
Notes
a) Basic and diluted earnings per share is total earnings after
taxation divided by the weighted average number of shares in
issue.
b) Basic and diluted revenue earnings per share is revenue
earnings after taxation divided by the weighted average number
of shares in issue.
c) Basic and diluted capital earnings per share is total capital
earnings divided by the weighted average number of shares in
issue.
8. Dividends paid
Dividend Type For year Pence Date Paid Six months Year ended Six months
ended per share ended 30 ended 30
September September
2018 2017
31 March (unaudited) 31 March (unaudited)
2018
GBP (audited) GBP
GBP
--------- -------- ----------- --------- ---------- ------------ ----------- ------------
Interim Capital 2018 7.00p 27/07/2017 - 2,497,067 2,497,067
Second
Interim Income 2018 1.75p 22/01/2018 - 840,894 -
Second
Interim Capital 2018 7.25p 22/01/2018 - 3,483,699 -
- 6,821,660 2,497,067
------------------------------ --------- ---------- ------------ ----------- ------------
9. Investments at fair value
The most critical estimates, assumptions and judgements relate to the
determination of the carrying value of investments at "fair value through
profit and loss" (FVTPL). All investments held by the Company are classified
as FVTPL and measured in accordance with the International Private Equity
and Venture Capital Valuation ("IPEV") guidelines, as updated in December
2015. This classification is followed as the Company's business is to
invest in financial assets with a view to profiting from their total return
in the form of capital growth and income.
For investments actively traded 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. Purchases and sales of unlisted investments are
recognised when the contract for acquisition or sale becomes unconditional.
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 in accordance
with the following rules, which are consistent with the IPEV guidelines:
All investments are held at the price of a recent investment for an appropriate
period where there is considered to have been no change in fair value.
Where such a basis is no longer considered appropriate, each investment
is considered as a whole on a 'unit of account' basis, alongside the following
factors:
(i) Where a value is indicated by a material arms-length transaction by
an independent third party in the shares of a company, this value will
be used.
(ii) In the absence of i), and depending upon both the subsequent trading
performance and investment structure of an investee company, the valuation
basis will usually move to either:
a) a multiple basis. The shares may be valued by applying a suitable
price-earnings
ratio, revenue or gross profit multiple to that company's historic, current
or forecast post-tax earnings before interest and amortisation of goodwill,
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, a lack of marketability).
or:
b) where a company's underperformance against plan indicates a diminution
in the value of the investment, provision against cost is made, as appropriate.
(iii) Premiums, to the extent that they are considered capital in nature,
and that will be received upon repayment of loan stock investments, are
accrued at fair value when the Company receives the right to the premium
and when considered recoverable.
(iv) Where a multiple or cost less impairment basis is not appropriate
and overriding factors apply, discounted cash flow or net asset valuation
bases may be applied.
Capital gains and losses on investments, whether realised or unrealised,
are dealt with in the profit and loss and revaluation reserves and movements
in the period are shown in the Income Statement.
All investments are initially recognised and subsequently measured at
fair value. Changes in fair value are recognised in the Income Statement.
A key judgement made in applying the above accounting policy relates to
investments that are permanently impaired. Where the value of an investment
has fallen permanently below cost, the loss is treated as a permanent
impairment and as a realised loss, even though the investment is still
held. The Board assesses the portfolio for such investments and, after
agreement with the Investment Adviser, will agree the values that represent
the extent to which an investment loss has become realised and treated
as a realised loss in the Income Statement. This is based upon an assessment
of objective evidence of that investment's future prospects, to determine
whether there is potential for the investment to recover in value.
The methods of fair value measurement are classified in to 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 Total
Ordinary Preference Unquoted
shares shares Loan Stock
Level 3 Level 3 Level 3
GBP GBP GBP GBP
------------------------------------ ----------- ----------- ----------- -----------
Cost at 31 March 2018 12,398,820 22,159 15,664,527 28,085,506
Unrealised gains at 31 March 2018 36,292 377,635 984,729 1,398,656
Permanent impairment at 31 March
2018 (1,704,184) (739) (894,127) (2,599,050)
------------------------------------ ----------- ----------- ----------- -----------
Valuation at 31 March 2018 10,730,928 399,055 15,755,129 26,885,112
Purchases at cost 1,320,620 - 381,507 1,702,127
Sale proceeds (593,069) (49,033) (941,161) (1,583,263)
Increase in unrealised
gains on investments 97,533 - 384,762 482,295
Realised gains/(losses) on
investments 478,235 - (40,371) 437,864
------------------------------------ ----------- ----------- ----------- -----------
Valuation at 30 September 2018 12,034,247 350,022 15,539,866 27,924,135
------------------------------------ ----------- ----------- ----------- -----------
Book cost at 30 September 2018 13,209,299 22,138 14,924,200 28,155,637
Unrealised gains at 30 September
2018 547,623 328,623 1,529,453 2,405,699
Permanent impairment at 30 September
2018 (1,722,675) (739) (913,787) (2,637,201)
------------------------------------ ----------- ----------- ----------- -----------
Valuation at 30 September 2018 12,034,247 350,022 15,539,866 27,924,135
Net unrealised (losses)/gains at 1
April 2018 (1,667,892) 376,896 90,602 (1,200,394)
Net movement in unrealised
appreciation
in the period 97,533 - 384,762 482,295
Permanent impairments in the period (18,491) - (19,660) (38,151)
Realisation of previously unrealised
losses/(gains) 413,798 (49,012) 159,962 524,748
------------------------------------ ----------- ----------- ----------- -----------
(Losses)/gains on investments
at 30 September 2018 (1,175,052) 327,884 615,666 (231,502)
------------------------------------ ----------- ----------- ----------- -----------
Reconciliation to Condensed Statement of Cash Flows
Purchases above of GBP1,702,127 are less than that shown in
the Condensed Statement of Cash Flows of GBP1,746,680 by GBP44,553.
This amount was held in a solicitor's client account included
as part of debtors at the period-end for the follow-on investment
into MPB Group, which completed on 19 October 2018.
Sales proceeds above of GBP1,583,263 are less than that shown
in the Condensed Statement of Cash Flows of GBP1,636,573 by
GBP53,310. This amount is deferred consideration arising from
the realisation of Gro-Group in December 2017 which was held
within debtors at the last year end.
There has been no significant change in the risk analysis as
disclosed in note 15 of the Financial Statements in the Company's
Annual Report.
The decrease in unrealised valuations of the loan stock investments
above reflects the changes in the entitlement to loan premiums,
and/or in the underlying enterprise value of the investee company.
The decrease does not arise from assessments of credit or market
risk upon these instruments.
Level 3 unquoted equity and loan investments are valued in
accordance with IPEV guidelines as follows: As at As at As at
30 September 31 March 2018 30 September
2018 2017
(unaudited) (audited) (unaudited)
GBP GBP GBP
Investment methodology
Cost (reviewed for impairment) 252,168 - -
Recent investment price 5,541,508 5,464,477 5,418,783
Multiple of earnings,
revenues or gross margin,
as appropriate 22,038,859 21,248,704 20,577,971
Net asset value 91,600 171,931 171,931
27,924,135 26,885,112 26,168,685
------------------------------- ------------- -------------- -------------
10. Current asset investments and cash at bank and in hand As at As at As at
30 September 31 March 2018 30 September
2018 2017
(unaudited) (audited) (unaudited)
GBP GBP GBP
OEIC Money market funds 17,657,301 18,287,301 7,947,301
Current asset investments
and cash equivalents per
Condensed Statement of Cashflows 17,657,301 18,287,301 7,947,301
Cash at bank and in hand 3,202,319 2,272,473 2,632,660
---------------------------------- ------------- -------------- -------------
11. Net asset value per share As at As at As at
30 September 31 March 2018 30 September
2018 2017
(unaudited) (audited) (unaudited)
Net assets GBP48,859,565 GBP47,598,197 GBP38,831,906
Number of shares in
issue 49,304,159 49,304,159 37,609,938
Net asset value per
share (pence) 99.10p 96.54p 103.25p
12. Post Balance Sheet Events
On 9 October 2018, a follow-on investment of GBP0.54 million
was made into Pattern Analytics Limited (trading as Biosite).
On 10 October 2018, a follow-on investment of GBP0.29 million
was made into Proactive Group Holdings Inc.
On 19 October 2018, a follow-on investment of GBP0.04 million
was made into MPB Group Limited.
On 31 October 2018, The Plastic Surgeon Holdings Limited repurchased
A preference shares, realising GBP0.05 million of proceeds
for the Company.
13. Financial statements for the six months ended 30 September
2018
The financial information set out in this Half-Year financial
report does not constitute statutory accounts as defined in
section 434 of the Companies Act 2006. The information for
the year ended 31 March 2018 has been extracted from the latest
published audited financial statements, which have been filed
with the Registrar of Companies. The auditors have reported
on these financial statements and that report was unqualified
and did not contain a statement under section 498 (2) or (3)
of the Companies Act 2006.
14. Half-Year Report
Copies of this report are being sent to all shareholders. 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.mig2vct.co.uk.
Contact details for further enquiries:
Rob Brittain or Robert King at Mobeus Equity Partners LLP (the
Company Secretary) on 020 7024 7600 or by e-mail on vcts@mobeusequity.co.uk.
DISCLAIMER
Neither the contents of the Company's website nor the contents
of any website accessible from hyperlinks on the Company's
website (or any other website) is incorporated into, or forms
part of, this announcement.
This information is provided by RNS, the 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.
END
IR FEEFSFFASEEF
(END) Dow Jones Newswires
November 21, 2018 05:27 ET (10:27 GMT)
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