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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Mobeus Income & Growth 4 Vct Plc | LSE:MIG4 | London | Ordinary Share | GB00B1FMDH51 | 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% | 68.00 | 66.50 | 69.50 | 68.00 | 68.00 | 68.00 | 0.00 | 01:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| Trust,ex Ed,religious,charty | -12.69M | -15.17M | -0.1373 | -4.95 | 75.18M |
From Apr 2019 to Apr 2024
TIDMMIG4
RNS Number : 4544N
Mobeus Income & Growth 4 VCT PLC
08 August 2017
Mobeus Income & Growth 4 VCT plc
Mobeus Income & Growth 4 VCT plc, ("MIG4", the "Company", or the "Fund") is a Venture Capital Trust ("VCT") advised by Mobeus Equity Partners LLP ("Mobeus"), investing primarily in established, unquoted companies.
Company Objective
The Objective of the Company is to provide investors with a regular income stream by way of tax-free dividends and to generate capital growth through portfolio realisations which can be distributed by way of additional tax-free dividends, while continuing at all times to qualify as a VCT.
Financial Highlights
Results for the six months ended 30 June 2017
-Net Asset Value ("NAV") Total Return per share of 5.2% for the half-year.
-The Company has declared an interim dividend of 18.00 pence per share, payable on 11 September 2017 to
shareholders on the register on 18 August 2017, bringing total cumulative dividends paid to shareholders since
inception to 98.20 pence per share.
- Investments totalling GBP1.65(1) million have been made into Tapas Revolution, Buster & Punch, MyTutor, and a
follow on investment into BookingTek.
- The Company has realised its investment in Entanet after the period end in August 2017 for GBP4.89 million,
contributing to a 2.5 multiple of cost over the life of the investment to date.
- The Board intends to raise up to GBP15 million under an Offer (GBP10 million plus
GBP5 million via an over-allotment facility) alongside the other Mobeus VCTs, to be launched in September 2017.
(1) - includes GBP0.53 million previously held in a company preparing to trade.
Cumulative total shareholder return per share (NAV basis)*
The net asset value (NAV) per share as at 30 June 2017 was 106.18 pence.
The longer term trend of performance on this measure is shown in the chart below:
Hot Features
Premium
Period Net asset Cumulative Cumulative total
value dividends return per share
(NAV) paid per to shareholders
per share share since launch(*)
------------------- ----------- ----------- ------------------
(NAV basis)
------------------- ----------- ----------- ------------------
(p) (p) (p)
------------------- ----------- ----------- ------------------
As at 30 June
2017 106.18 80.20 186.38
------------------- ----------- ----------- ------------------
As at 31 December
2016 107.57 73.20 180.77
------------------- ----------- ----------- ------------------
As at 31 December
2015 117.89 62.20 180.09
------------------- ----------- ----------- ------------------
As at 31 December
2014 118.21 52.20 170.41
------------------- ----------- ----------- ------------------
As at 31 December
2013 119.92 34.20 154.12
------------------- ----------- ----------- ------------------
As at 31 December
2012 117.31 26.70 144.01
------------------- ----------- ----------- ------------------
As at 31 January
2012 116.73 21.70 138.43
------------------- ----------- ----------- ------------------
*Cumulative NAV total shareholder return is net asset value plus cumulative dividends paid since 1999 to date.
The table above shows the recent past performance of the original funds raised in 1999. The original subscription price was 200 pence per share before the benefit of income tax relief. Subscription prices from subsequent fundraisings and historic performance data from 2008 are shown in the Investor Performance Appendix on the Company's website, www.mig4vct.co.uk, where they can be downloaded by clicking on "table" under "Reviewing the performance of your investment" on the home page.
On 31 July 2006, Mobeus became sole Investment Adviser to the Company. The cumulative NAV total return at this date was 122.51 pence.
Chairman's Statement
I am pleased to present this Half-Year Report for Mobeus Income & Growth 4 VCT plc covering the six months ended 30 June 2017.
Overview
Your Board has announced its intention to raise up to a further GBP15 million comprising GBP10 million with a possible further over-allotment facility of GBP5 million alongside three other Mobeus- advised VCTs before the end of the financial year. This seems sensible to finance the intended investment programme, particularly as it is possible that the rules governing VCT investment may not be as favourable in the future.
We also believe that there continues to be good appetite for further investment in the Company, following a very popular fundraising in the 2014/2015 tax year.
A general meeting was convened and held on 3 August 2017 at which shareholder approval was sought and obtained for authority to allot shares and dis-apply pre-emption rights in connection with the fundraising. The Offers for Subscription ("Offers") are expected to be launched in early September 2017, full details of which will be contained in the Prospectus that will be sent to all registered shareholders.
We very much hope that existing shareholders will add to their holdings and look forward to welcoming new investors in the Company.
The half-year has produced a good return for shareholders with a positive income return and an increase in the value of the portfolio. In particular, the Board is pleased to note the sale of the investment in Entanet just after the half-year end, which has contributed substantially to this good return for shareholders.
The level of new investment has been strong with four growth capital investments completed so far in 2017. Further details of these investments are included under 'Investment Portfolio' below. These investments reflect the revised focus on providing growth capital to younger and smaller companies in accordance with the revised Investment Policy approved by shareholders last year. By way of reminder, this revised Policy was required to comply with the new VCT measures introduced by the Finance (No 2) Act 2015 in November of that year. Since that change GBP7.12 million has been invested to date in nine such companies.
Although the VCT industry can no longer make investments to finance management buyouts ("MBOs") these MBO investments continue to represent 77% of the Company's portfolio. This portfolio has performed well in what is a time of political and economic uncertainty.
Performance
The Net Asset Value ("NAV") Total Return was 5.2% for the period (compared with 0.1% for the same period last year).
Interim dividend
The Board has declared an interim dividend of 18.00 pence per share, comprising 1.00 pence from income (2016: 1.00 pence) and 17.00 pence from capital (2016: 1.00 pence), of which 15.00 pence is payable from the Company's Special Distributable Reserve. Shareholders should not assume further payments from the Special Distributable Reserve in the foreseeable future. The quantum of dividend payments will increasingly depend on the success or otherwise of the current investment policy implemented as a result of regulatory changes.
The interim dividend will be paid on 11 September 2017 to shareholders on the Register on 18 August 2017 and will bring cumulative dividends paid per share since launch to 98.20 pence.
Investment portfolio
As noted above, the Company completed the divestment of Entanet Holdings Limited after the period end. Proceeds of GBP4.89 million have been received, while a further GBP0.50 million of deferred consideration is potentially payable over the next two years. This investment has achieved a return on original investment cost of 2.5 times to date, over the three and a half years that the investment was held, which is a very pleasing. The valuation of Entanet at the half-year reflects the full GBP4.89 million of cash proceeds received after the period-end.
Overall the performance of the investment portfolio has been pleasing. The portfolio achieved a gain of GBP2.45 million (6.3% of the opening value during the first half of the year and was valued at GBP37.93 million at the period-end (30 June 2016: GBP37.45 million). The six month period experienced notable increases in the valuations of Entanet and Access IS. The portfolio also saw valuation declines over the period for Fullfield (Motorclean), CGI Creative Graphics and Media Business Insight.
During the period three new investments and one follow on were completed at a total cost of GBP1.65 million (analysed in the Investment Review and explained within Note 10).
These new investments were:
-- Ibericos Etc. Limited (trading as Tapas Revolution) - a leading Spanish restaurant chain in the casual dining sector.
-- Chatfield Services Limited (trading as Buster & Punch) - a London-based interiors brand.
-- MyTutorweb Limited - a digital marketplace that connects school pupils who are seeking private
one-to-one tutoring with university students.
Shortly after the period end, a further new investment of GBP2.33 million was made into Wetsuit Outlet, a leading online retailer in the water sports market. This investment utilised GBP1.56 million previously held in a company preparing to trade.
The company received cash proceeds of GBP4.57 million during the period, including GBP4.40 million of loan stock repayments.
Further information on the portfolio can be found under the Investment Adviser's Review.
Revenue account
There was an increase in net revenue return for the period, being GBP0.76 million compared to GBP0.61 million recorded this time last year. Income has increased due to a strong stream of dividends, as well as improved loan interest receipts due to new investments and some portfolio companies resuming loan interest payments as their trading improved. Running costs have fallen due to lower Investment Adviser fees arising from lower net assets.
Industry and regulatory developments
The Patient Capital Review, announced in November 2016, is now in its consultation phase ahead of the Autumn Budget 2017. Led by HM Treasury, its objective is to assess what amendments to Government policy, if any, are needed to support the expansion in provision of long-term capital for growing innovative firms. The Board is firmly of the view that the government should use this review to make a renewed public commitment to the positive role that VCTs play in providing development capital to the small business sector, as well as affirming the long-term future of the scheme.
Liquidity
The present level of cash or near cash resources held by the Company as at 30 June 2017, including the liquidity held by companies preparing to trade, was GBP18.25 million or 35% of net assets. After the period end, following the investment in Wetsuit Outlet, the realisation of Entanet Holdings, and the payment of the interim dividend in September 2017, the level of liquidity will be GBP11.86 million or 27% of net assets.
The VCT continues to hold its cash in a selection of money market funds with AAA credit ratings and in a number of deposit accounts diversified among well-known financial institutions across a range of maturities.
Investment in qualifying holdings
The Company is required to meet the threshold set by HM Revenue & Customs ("HMRC") of investing 70% of the funds raised in qualifying unquoted and AIM quoted companies. The Company complied with this limit (based on VCT cost as defined in tax legislation, which differs from the actual cost given in the Investment Portfolio Summary throughout the period. The balance of the portfolio continues to be held in non-qualifying investments and cash.
Share buybacks
We are pleased to note that currently there is relatively little demand for share buybacks. There were no share buybacks during the six months ended 30 June 2017. 10,000 Ordinary shares were bought back following the period end at a price of 90.86 pence per share (including costs). These were bought back at approximately a 10% discount to the Company's latest announced NAV, in accordance with its Buyback policy.
All of the shares bought-back after the period-end were subsequently cancelled by the Company. Continuing shareholders benefit from the difference between NAV per share and the price per share at which the shares are bought back and cancelled.
Dividend Investment Scheme
The Company's Dividend Investment Scheme ("the Scheme") is a convenient, easy and cost effective way for shareholders to build up their shareholding in the Company. Instead of receiving cash dividends they can elect to receive new shares in the Company.
A total of 706,138 new Ordinary shares were issued under the Scheme during the period at a price of 90.00 pence each.
Further information on the Scheme, including details of where to obtain an application form, can be found in Shareholder Information.
Shareholder communications
The Investment Adviser held its seventh annual shareholder event on 24 January 2017. The event was well attended and we were pleased to hear from the Investment Adviser that it received positive feedback from shareholders. The next event is to be held on Tuesday, 30 January 2018, again at the Royal Institute of British Architects in Central London. The programme will again include presentations on the investment activity and performance of the Mobeus VCTs as well as an update on the recent regulatory changes and talks from investee companies. Shareholders have been sent further details, and an invitation to the event, with the shareholder newsletter sent last week.
Outlook
The UK economy continues to be subject to the uncertainties arising both out of the ability of the UK government to negotiate a satisfactory exit from the European Union and from the recent UK election result. Nevertheless the demand from small UK businesses for development capital remains strong and there continues to be a healthy market to purchase quality smaller companies at attractive prices.
Both the Board and the Investment Adviser continue to have a positive outlook about the Company's future prospects. The small and medium-sized enterprises (SME) segment is a dynamic target universe for new investment, where the Investment Adviser is reviewing many promising opportunities. The Investment Adviser continues to expand its team and capabilities and has adapted well to the requirements of the new Investment Policy.
The existing portfolio continues to comprise predominantly established, profitable companies that have been conservatively financed, but over time the growth capital investments will represent a growing proportion. The latter will tend to be younger, and may not always be profitable at the time of investment. They will typically exhibit more volatility in returns and generate less income as they tend to re-invest profits during their growth phase, but may offer the prospect of higher capital returns.
Finally, I would like to thank shareholders for their continuing support.
Christopher Moore
Chairman
8 August 2017
Investment Policy
The investment policy is designed to meet the Company's objective.
Investments
The Company invests primarily in a diverse portfolio of UK unquoted companies. Investments are made selectively across a number of sectors, principally in established companies. Investments are usually structured as part loan stock and part equity in order to produce a regular income stream and to generate capital gains from realisations.
There are a number of conditions within the VCT legislation which need to be met by the Company and which may change from time to time. The Company will seek to make investments in accordance with the requirements of prevailing VCT legislation.
Asset allocation and risk diversification policies, including the size and type of investments the Company makes, are determined in part by the requirements of prevailing VCT legislation. No single investment may represent more than 15 per cent. (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 per cent. of the adjusted capital and reserves (as defined therein). However, the Company has never borrowed and the Board would only consider doing so in exceptional circumstances.
Summary of VCT Regulation
To maintain its status as a VCT, the Company must meet a number of conditions, the most important of which are that:- -The Company must hold at least 70%, by VCT tax value*, of its total investments (shares, securities and liquidity) in VCT qualifying holdings, within approximately three years of a fundraising; -Of these qualifying holdings, an overall minimum of 30% by VCT tax value* (70% for funds raised on or after 6 April 2011) must be in ordinary shares which carry no preferential rights (save as may be permitted under VCT rules); -No investment in a single company or group of companies may represent more than 15% (by VCT tax value*) of the Company's total investments at the date of investment; -The Company must pay sufficient levels of income dividend from its revenue available for distribution so as not to retain more than 15% of its income from shares and securities in a year; -The Company's shares must be listed on a regulated European stock market; and -Non-qualifying investments can no longer be made, except for certain exemptions in managing the Company's short term liquidity. To be a VCT qualifying holding, a new investment must be in companies:- -which carry on a qualifying trade; -which have no more than GBP15 million of gross assets at the time of investment and GBP16 million immediately following investment from VCTs; -whose maximum age is generally seven years (ten years for knowledge intensive businesses); -that receive no more than an annual limit of GBP5 million and a lifetime limit of GBP12 million (GBP20 million for knowledge intensive companies), from VCTs and similar sources of State Aid funding; -that use the funds received from VCTs for growth and development purposes. *VCT tax value means as valued in accordance with prevailing VCT legislation which may not be the actual cost or fair value of the Investment Portfolio Summary. The above takes into account legislation up to the Finance Act 2016 but effective from 6 April 2016.
Investment Review
New investments in the Half-Year
A total of GBP1.65 million was invested into three new companies during the six months under review plus one existing portfolio company. This comprised new investments into Tapas Revolution, Buster & Punch, MyTutor and a follow on investment in BookingTek. One further investment in Wetsuit Outlet was completed after the period end.
Company Business Date of Amount of new investment
investment (GBPm)
----------------- ---------------- ------------ ------------------------
January
Tapas Revolution Restaurant 2017 0.58
Based in London, Ibericos Etc. Limited (which trades
as Tapas Revolution) is a leading Spanish restaurant
chain in the casual dining sector focusing on shopping
centre sites with high footfall. Having opened its
first restaurant in Shepherd's Bush Westfield, the
business has since opened a further six restaurants.
The investment provided growth capital to a high-calibre
team with significant restaurant rollout experience
which has spent the past five years building and refining
its offer and is now well placed to capitalise on a
strong pipeline of new sites. The company's latest
accounts for the year ended 25 October 2016 show a
turnover of GBP4.25 million and loss before interest,
tax and amortisation of goodwill of GBP0.25 million.
Buster &
Punch Retailer March 2017 0.53
Chatfield Services Limited (trading as Buster & Punch)
is a London-based interiors brand founded in 2012 by
architect and industrial designer Massimo Buster Minale.
Buster & Punch (www.busterandpunch.com) started in
a small garage in East London, where it built the "world's
first designer LED light bulb" (the Buster Bulb) and
made its name with its industrial-inspired lighting.
Its products are now sold in over 50 countries, both
directly to end-consumers, designers and architects,
and through well-known retailers including John Lewis,
Harvey Nichols and Harrods. The investment will support
the business's international expansion plans and the
broadening of its product range. The company's latest
accounts for the year ended 31 March 2016 show turnover
of GBP1.98 million and profit before interest, tax
and amortisation of goodwill of GBP0.47 million.
MyTutor Online tutoring May 2017 0.47
My Tutorweb Limited is a digital marketplace that connects
school pupils who are seeking private one-to-one tutoring
with university students. The business is satisfying
a growing demand from both schools and parents to improve
pupils' exam results to enhance their academic and
career prospects. This investment represents an opportunity
to consolidate the sizeable GBP2bn UK tutoring market,
build My Tutor's market presence and will also be used
to drive technological development. The company's latest
accounts for the year ended 31 December 2016 show a
turnover of GBP0.21 million and a loss before interest,
tax and amortisation of goodwill of GBP0.79 million.
----------------------------------------------------------------------------
A further small loan investment of GBP0.07 million was made into BookingTek Limited (which provides direct booking software for hotel groups), to fund an opportunity for US expansion.
New investment post period-end
Company Business Date of Amount of new investment
investment (GBPm)
--------------- --------- ------------ ------------------------
Wetsuit Outlet Retailer July 2017 2.33
B2C Holdings Limited (trading as Wetsuit Outlet) has
established itself as a leading online retailer in
the water sports market, stocking an impressive brand
portfolio including Musto, Billabong, Rip Curl, O'Neill,
Red Paddle (an existing Mobeus investment) and Gul.
The investment is to fund working capital and growth
in the existing activity and enter two new markets.
Established in 2005, the company has developed into
a successful and profitable business with revenues
of GBP11.51 million and GBP1.77 million NPBIT&A in
the financial year ended 31 March 2017.
-------------------------------------------------------------------
Realisations in the period
There were no realisations during the period under review, although there was one substantial realisation shortly after the period end (Entanet Holdings Limited) as set out below:
Company Business Period Total cash proceeds
of investment over the life of
the investment/Multiple
over cost
------- ------------------------ -------------- ------------------------
Entanet Wholesale voice February GBP5.53 million
and data communications 2014 to 2.5 times cost
provider August
2017
The VCT has just sold this investment to AIM quoted
CityFibre Infrastructure Holdings PLC for GBP4.89 million.
Between December 2014 and December 2016, Entanet's
revenues increased by 39% to GBP35.75 million. Deferred
consideration of up to GBP0.50 million is potentially
payable over the next 24 months. Excluding this deferred
consideration, the company has so far realised a gain
of GBP2.72 million, being 5.48 pence per share, and
has returned an IRR of 39% to date, an excellent outcome.
-----------------------------------------------------------------------------
Loan stock repayments
Loan stock repayments totalled GBP4.40 million. These proceeds are summarised below:-
Company Business Month Amount
(GBP000s)
--------------------- --------------------- ---------- ----------
Company preparing
Backhouse Management to trade January 907
Company preparing
Creasy Marketing to trade March 907
Company preparing January,
McGrigor Management to trade February 907
Company preparing
Hollydale Management to trade March 657
Company subsequently
used to invest
Chatfield Services in Buster & Punch March 523
Company preparing
Barham Consulting to trade March 454
Building finishing
TPSFF Holdings services April 42
BG Training Technical training January 4
Total 4,401
----------- ------------------------------------------ ----------
Mobeus Equity Partners LLP
Investment Adviser
8 August 2017
Investment Portfolio Summary
at 30 June 2017
Total cost Total valuation
at Total at 30 June % of % of
30 June valuation 2017 equity portfolio
Mobeus Equity 2017 at 31 GBP held by value
Partners LLP GBP December
2016
GBP
----------------------- --------------- ------------------ ----------------- --------------- ----------------
Entanet Holdings
Limited
(1)
Wholesale voice and
data
communications
provider 2,167,662 2,254,135 4,892,454 13.1% 13.0%
Tovey Management
Limited
(trading as Access
IS)
Provider of data
capture
and scanning hardware 2,469,013 2,601,197 2,932,773 10.1% 7.7%
----------------------- --------------- ------------------ ----------------- --------------- ----------------
Virgin Wines Holding
Company
Limited
Online wine retailer 1,930,813 2,685,675 2,531,929 9.7% 6.7%
----------------------- --------------- ------------------ ----------------- --------------- ----------------
ASL Technology
Holdings
Limited
Printer and
photocopier
services 1,933,591 2,082,980 2,031,383 9.5% 5.4%
----------------------- --------------- ------------------ ----------------- --------------- ----------------
Manufacturing Services
Investment
Limited
Company subsequently
used
to invest in Wetsuit
Outlet
after the period- end 2,016,900 2,016,900 2,016,900 11.4% 5.3%
----------------------- --------------- ------------------ ----------------- --------------- ----------------
Media Business Insight
Holdings
Limited
A publishing and
events
business focused on
the
creative production
industries 2,722,760 2,218,152 1,991,494 15.7% 5.3%
----------------------- --------------- ------------------ ----------------- --------------- ----------------
Turner Topco Limited
(trading
as ATG Media)
Publisher and online
auction
platform operator 1,529,075 1,330,326 1,359,196 3.7% 3.6%
----------------------- --------------- ------------------ ----------------- --------------- ----------------
Vian Marketing Limited
(trading
as Red Paddle Co)
Design,
manufacture and sale
of
stand-up paddleboards
and windsurfing sails 899,074 1,188,439 1,330,996 7.1% 3.5% ----------------------- --------------- ------------------ ----------------- --------------- ---------------- Gro-Group Holdings Limited Baby sleep products 1,577,977 1,361,293 1,260,805 10.7% 3.3% ----------------------- --------------- ------------------ ----------------- --------------- ---------------- Tharstern Group Limited Software based management information systems to the print sector 1,091,886 1,217,396 1,247,456 12.2% 3.3% ----------------------- --------------- ------------------ ----------------- --------------- ---------------- Veritek Global Holdings Limited Maintenance of imaging equipment 1,620,086 1,283,041 1,225,723 10.3% 3.2% ----------------------- --------------- ------------------ ----------------- --------------- ---------------- EOTH Limited (trading as Equip Outdoor Technologies) Branded outdoor equipment and clothing 951,471 1,197,945 1,188,932 1.7% 3.1% ----------------------- --------------- ------------------ ----------------- --------------- ---------------- Fullfield Limited (trading as Motorclean) Vehicle cleaning and valet services 1,131,444 1,459,525 1,147,117 9.8% 3.0% ----------------------- --------------- ------------------ ----------------- --------------- ---------------- CGI Creative Graphics International Limited Vinyl graphics to global automotive, recreation vehicle and aerospace markets 1,449,746 1,311,572 1,080,299 6.6% 2.8% ----------------------- --------------- ------------------ ----------------- --------------- ---------------- TPSFF Holdings Limited (formerly The Plastic Surgeon Holdings Limited) Supplier of snagging and finishing services to the domestic and commercial property markets 424,235 902,329 986,808 8.7% 2.7% ---------------------- --------------- ------------------ ----------------- --------------- ---------------- Redline Worldwide Limited Provider of security services to the aviation industry and other sectors 838,377 838,377 971,656 6.7% 2.6% ----------------------- --------------- ------------------ ----------------- --------------- ---------------- RDL Corporation Limited Recruitment consultants within the pharmaceutical, business intelligence and IT industries 1,000,000 926,025 966,274 9.1% 2.5% ----------------------- --------------- ------------------ ----------------- --------------- ---------------- Master Removers Group Limited (formerly Leap New Co Limited (trading as Anthony Ward Thomas, Bishopsgate and Aussie Man & Van)) A specialist logistics, storage and removals business 511,855 734,387 957,783 4.3% 2.5% ----------------------- --------------- ------------------ ----------------- --------------- ---------------- Bourn Bioscience Limited Management of In-vitro fertilisation clinics 1,132,521 864,082 777,161 7.7% 2.0% ----------------------- --------------- ------------------ ----------------- --------------- ---------------- Preservica Limited Seller of proprietary digital archiving software 679,617 679,617 679,617 4.6% 1.8% ----------------------- --------------- ------------------ ----------------- --------------- ---------------- MPB Group Limited Online marketplace for photographic and video equipment 471,216 471,216 677,890 5.3% 1.8% ----------------------- --------------- ------------------ ----------------- --------------- ---------------- Pattern Analytics Limited (trading as Biosite) Workforce management and security services for the construction industry 640,171 640,171 640,171 4.8% 1.7% ----------------------- --------------- ------------------ ----------------- --------------- ---------------- BookingTek Limited Direct booking software for hotels 581,974 512,137 581,974 3.4% 1.5% ----------------------- --------------- ------------------ ----------------- --------------- ---------------- Ibericos Etc. Limited (trading as Tapas Revolution) 580,469 - 580,469 5.8% 1.5% Spanish restaurant chain ----------------------- --------------- ------------------ ----------------- --------------- ------------------ Chatfield Services Limited (trading as Buster & Punch)2 530,392 1,134,000 530,392 4.5% 1.4% Industrial inspired lighting and interiors retailer ----------------------- --------------- ------------------ ----------------- --------------- ------------------ My TutorWeb Limited 466,639 - 466,639 4.5% 1.2% Digtal marketplace connecting school pupils seeking one to one online tutoring ----------------------- --------------- ------------------ ----------------- --------------- ------------------ Jablite Holdings Limited 376,083 606,998 448,343 9.1% 1.2% Manufacturer of expanded polystyrene products ----------------------- --------------- ------------------ ----------------- --------------- ------------------ Hollydale Management Limited 701,120 1,095,500 438,200 11.0% 1.2% Company seeking to carry on a business in the food industry ----------------------- --------------- ------------------ ----------------- --------------- ------------------ Omega Diagnostics Group plc 200,028 291,682 312,516 1.5% 0.8% In-vitro diagnostics for food intolerance, auto-immune diseases and infectious diseases ----------------------- --------------- ------------------ ----------------- --------------- ------------------ Backhouse Management Limited 589,680 1,134,000 226,800 11.3% 0.6% Company seeking to carry on a business in the motor sector ----------------------- --------------- ------------------ ----------------- --------------- ------------------ Barham Consulting Limited 589,680 680,400 226,800 11.3% 0.6% Company seeking to carry on a business in the catering sector ----------------------- --------------- ------------------ ----------------- --------------- ------------------ Creasy Marketing Services Limited 589,680 1,134,000 226,800 11.3% 0.6% Company seeking to carry on a business in the textile sector ----------------------- --------------- ------------------ ----------------- --------------- ------------------ McGrigor Management Limited 589,680 1,134,000 226,800 11.3% 0.6% Company seeking to carry on a business in the pharmaceutical sector ----------------------- --------------- ------------------ ----------------- --------------- ------------------ Blaze Signs Holdings Limited 190,631 280,944 213,131 5.7% 0.6% Manufacturer and installer of signs ----------------------- --------------- ------------------ ----------------- --------------- ------------------ Vectair Holdings Limited 24,732 183,729 160,769 2.1% 0.4% Designer and distributor of washroom products ----------------------- --------------- ------------------ ----------------- --------------- ------------------ Lightworks Software Limited 9,329 34,926 31,444 4.2% 0.1% Provider of software for CAD and CAM vendors ----------------------- --------------- ------------------ ----------------- --------------- ------------------ BG Training Limited 10,625 14,167 5,313 0.0% 0.0% City-based provider of specialist technical training ----------------------- --------------- ------------------ ----------------- --------------- ------------------ Racoon International Holdings Limited 484,347 38,771 - 10.5% 0.0% Supplier of hair extensions, hair care products and training ----------------------- --------------- ------------------ ----------------- --------------- ------------------ CB Imports Group Limited (trading as Country Baskets) 175,000 - - 5.8% 0.0% Importer and distributor of artificial flowers, floral sundries and home decor products
----------------------- --------------- ------------------ ----------------- --------------- ------------------ Newquay Helicopters (2013) Limited (in creditors' voluntary 7,617 - - 2.5% 0.0% liquidation) Helicopter service operator ----------------------- --------------- ------------------ ----------------- --------------- ------------------ Watchgate Limited 1,000 - - 33.3% 0.0% Holding company ----------------------- --------------- ------------------ ----------------- --------------- ------------------ Total 35,888,196 38,540,034 37,571,207 99.1% ----------------------- --------------- ------------------ ----------------- --------------- ------------------ Former Elderstreet Private Equity Limited Portfolio Cashfac Limited Provider of virtual banking application software solutions to 260,101 288,932 300,988 2.9% 0.8% corporate customers ----------------------- --------------- ------------------ ----------------- --------------- ------------------ Sparesfinder Limited 250,854 64,067 53,025 2.0% 0.1% Supplier of industrial spare parts online ----------------------- --------------- ------------------ ----------------- --------------- ------------------ Sift Group Limited 135,391 33,401 - 1.3% 0.0% Developer of business-to-business internet communities ----------------------- --------------- ------------------ ----------------- --------------- ------------------ Total 646,346 386,400 354,013 0.9% ----------------------- --------------- ------------------ ----------------- --------------- ------------------ Total Investment Portfolio 36,534,542 38,926,434 37,925,220 100.0% ----------------------- --------------- ------------------ ----------------- --------------- ------------------
1 - Entanet Holdings Limited was realised after the period end. The valuation at 30 June 2017 reflects the actual proceeds received.
2 - GBP1,134,000 invested in Chatfield Services Limited, a company preparing to trade, was used for the investment into Buster & Punch. This resulted in a net repayment to the company of GBP603,608.
Statements of the Directors' Responsibilities
Responsibility Statement
In accordance with Disclosure and Transparency Rule (DTR) 4.2.10, Christopher Moore (Chairman), Andrew Robson (Chairman of the Audit Committee and Nomination and Remuneration Committee) 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 Half-Year Management Report which comprises the Chairman's Statement, Investment Policy, Investment Review and the Investment Portfolio Summary includes a fair review of the information required by DTR 4.2.7, being an indication of the important events that have occurred during the first six months of the financial year and their impact on the condensed set of financial statements;
(c) a description of the principal risks and uncertainties facing the Company for the remaining six months is set out below, in accordance with DTR 4.2.7; and
(d) there were no related party transactions in the first six months of the current financial year that are required to be disclosed, in accordance with DTR 4.2.8.
Principal Risks and Uncertainties
In accordance with DTR 4.2.7, the Board confirms that the principal risks and uncertainties facing the Company have not changed materially from those identified in the Annual Report and Accounts for the year ended 31 December 2016 ("the Annual Report").
The principal risks faced by the Company are:
-- economic risk; -- loss of approval as a Venture Capital Trust; -- investment risk; -- regulatory risk; -- financial and operating risk; -- market risk; -- asset liquidity risk; -- market liquidity risk; and -- counterparty risk.
A detailed explanation of these risks can be found in the Annual Report on page 19 and in Note 15 on pages 54 - 60 of the Annual Report and Accounts for the year ended 31 December 2016, copies of which are available on the Investment Adviser's website, www.mobeusequity.co.uk or by going directly to the VCT's website, www.mig4vct.co.uk.
Going Concern
The Board has assessed the Company's operation as a going concern. The Company's business activities, together with the factors likely to affect its future development, performance and position are set out in the Half-Year Management Report. The Directors have satisfied themselves that the Company continues to maintain a significant cash position but does intend to raise funds from an offer of subscription later this year. The majority of companies in the portfolio continue to trade profitably and the portfolio taken as a whole remains resilient and well-diversified. The major cash outflows of the Company (namely investments, 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 15 and 16 on pages 54 - 61 of the Annual Report and Accounts for the year ended 31 December 2016. Accordingly, the Directors continue to adopt the going concern basis of accounting in preparing the half-year report and annual financial statements.
Cautionary Statement
This report may contain forward looking statements with regards to the financial condition and results of the Company, which are made in the light of current economic and business circumstances. Nothing in this report should be construed as a profit forecast.
On behalf of the Board
Christopher Moore
Chairman
8 August 2017
Unaudited Condensed Income Statement
for the six months ended 30 June 2017
Six months ended Six months ended Year ended 31
30 June 2017 30 June 2016 December 2016
(unaudited) (unaudited) (audited)
Notes Revenue Capital Total Revenue Capital Total Revenue Capital Total
GBP GBP GBP GBP GBP GBP GBP GBP GBP
Unrealised
gains/(losses)
gains
on investments
held at
fair value 10 - 2,363,132 2,363,132 - (479,479) (479,479) - (377,677) (377,677)
Realised
gains
on investments
held at
fair value 10 - 87,628 87,628 - 381,087 381,087 - 381,087 381,087
Income 4 1,244,177 - 1,244,177 1,054,766 - 1,054,766 2,019,579 - 2,019,579
Investment
Adviser's
fees 5 (142,763) (428,288) (571,051) (156,674) (470,021) (626,695) (304,628) (913,884) (1,218,512)
Other
expenses (189,358) - (189,358) (187,868) - (187,868) (370,899) - (370,899)
Profit/(loss)
on ordinary
activities
before
taxation 912,056 2,022,472 2,934,528 710,224 (568,413) 141,811 1,344,052 (910,474) 433,578
Tax on
profit/(loss)
on ordinary
activities 6 (150,244) 82,446 (67,798) (101,479) 94,004 (7,475) (212,864) 182,776 (30,088)
--------------- --------- --------- --------- --------- --------- --------- --------- --------- -----------
Profit/(loss)
and total
comprehensive
income 761,812 2,104,918 2,866,730 608,745 (474,409) 134,336 1,131,188 (727,698) 403,490
--------------- --------- --------- --------- --------- --------- --------- --------- --------- -----------
Basic
and diluted
earnings
per ordinary
share 7 1.54p 4.26p 5.80p 1.26p (0.98)p 0.28p 2.32p (1.49)p 0.83p
--------------- --------- --------- --------- --------- --------- --------- --------- --------- -----------
The revenue column of the Income Statement includes all income and expenses. The capital column accounts for the unrealised gains/(losses) and realised gains on investments and the proportion of the Investment Adviser's fee charged to capital.
The total column is the Statement of Total Comprehensive Income of the Company prepared in accordance with UK GAAP, including Financial Reporting Standard 102. In order to better reflect the activities of a VCT and in accordance with the 2014 Statement of Recommended Practice ("SORP") updated in January 2017 by the Association of Investment Companies ("AIC"), supplementary information which analyses the Income Statement between items of a revenue and capital nature has been presented alongside the Income Statement. The revenue column of profit attributable to equity shareholders is the measure the Directors believe appropriate in assessing the Company's compliance with certain requirements set out in Section 274 Income Tax Act 2007.
All the items in the above statement derive from continuing operations of the Company. No operations were acquired or discontinued in the period.
Unaudited Condensed Balance Sheet
as at 30 June 2017
30 June 30 June 31 December
2017 2016 2016
(unaudited) (unaudited) (audited)
Notes GBP GBP GBP
Fixed assets
Investments at fair
value 10 37,925,220 37,450,507 38,926,434
Current assets
Debtors and prepayments 250,771 227,399 860,011
Current asset investments 11 12,193,267 13,308,457 9,511,810
Cash at bank 11 2,690,122 2,596,622 3,662,074
15,134,160 16,132,478 14,033,895
Creditors: amounts
falling due within
one year (235,006) (167,128) (205,173)
Net current assets 14,899,154 15,965,350 13,828,722
Net assets 52,824,374 53,415,857 52,755,156
Capital and reserves
Called up share capital 497,492 489,909 490,430
Share premium reserve 14,169,354 13,364,351 13,540,891
Capital redemption
reserve 9,342 8,012 9,342
Revaluation reserve 3,512,924 1,050,205 1,152,007
Special distributable
reserve 28,357,894 32,129,885 31,646,338
Realised capital reserve 4,792,400 5,192,452 4,702,557
Revenue reserve 1,484,968 1,181,043 1,213,591
Equity shareholders'
funds 52,824,374 53,415,857 52,755,156
Basic and diluted
net asset value per
share 9 106.18p 109.03p 107.57p
Unaudited Condensed Statement of Changes in Equity
for the six months ended 30 June 2017
Non-distributable reserves Distributable reserves
Called up Share Capital Revaluation Special Realised Revenue Total
share premium redemption reserve distributable capital reserve
capital reserve reserve reserve reserve (Note b)
(Note a) (Note b)
GBP GBP GBP GBP GBP GBP GBP GBP
At 1 January
2017 490,430 13,540,891 9,342 1,152,007 31,646,338 4,702,557 1,213,591 52,755,156
Comprehensive
income
for the
period
Profit/(loss)
for the
period - - - 2,363,132 - (258,214) 761,812 2,866,730
Total comprehensive
income
for the
period - - - 2,363,132 - (258,214) 761,812 2,866,730
Contributions
by and
distributions
to owners
Issue of
shares under
Dividend
Investment
Scheme 7,062 628,463 - - - - - 635,525
Shares bought - - - - - - - -
back
Dividends
paid - - - - (2,942,602) - (490,435) (3,433,037)
Total contributions
by and
distributions
to owners 7,062 628,463 - - (2,942,602) - (490,435) (2,797,512)
-------------------- --------- ---------- ---------- ----------- ------------- --------- --------- -----------
Other movements
Realised
losses transferred
to special
reserve
(note a) - - - - (345,842) 345,842 - -
Realisation
of previously
unrealised
appreciation - - - (2,215) - 2,215 - -
Total other
movements - - - (2,215) (345,842) 348,057 - -
-------------------- --------- ---------- ---------- ----------- ------------- --------- --------- -----------
At 30 June
2017 497,492 14,169,354 9,342 3,512,924 28,357,894 4,792,400 1,484,968 52,824,374
Notes
a): The cancellation of the share premium reserve and capital redemption reserve has increased the Company's special distributable reserve. The purpose of this reserve is to fund market purchases of the Company's own shares, write off any existing and future losses and for any other corporate purpose. All of this reserve arose from shares issued before 5 April 2014.
b): The Realised capital reserve and the Revenue reserve together comprise the Profit and Loss Account of the Company.
Unaudited Condensed Statement of Changes in Equity
for the six months ended 30 June 2016
Non-distributable reserves Distributable reserves
Called up Share Capital Revaluation Special Realised Revenue Total
share premium redemption reserve distributable capital reserve
capital reserve reserve reserve reserve (Note b)
(Note a) (Note b)
GBP GBP GBP GBP GBP GBP GBP GBP
At 1 January
2016 483,562 12,629,944 6,827 1,545,364 32,622,021 8,422,420 1,297,644 57,007,782
Comprehensive
income
for the
period
(Loss)/
Profit for
the period - - - (479,479) - 5,070 608,745 134,336
Total
comprehensive
income
for the
period - - - (479,479) - 5,070 608,745 134,336
Contributions
by and
distributions
to owners
Issue of
shares under
Dividend
Investment
Scheme 7,532 734,407 - - - - - 741,939
Shares bought
back (1,185) - 1,185 - (116,119) - - (116,119)
Dividends
paid - - - - - (3,626,735) (725,346) (4,352,081)
Total
contributions
by and
distributions
to owners 6,347 734,407 1,185 - (116,119) (3,626,735) (725,346) (3,726,261)
------------------ --------- ---------- ---------- ----------- ------------- ----------- --------- -----------
Other movements
Realised
losses
transferred
to special
reserve - - - - (376,017) 376,017 - -
Realisation
of previously
unrealised
appreciation - - - (15,680) - 15,680 - -
Total other
movements - - - (15,680) (376,017) 391,697 - -
------------------ --------- ---------- ---------- ----------- ------------- ----------- --------- -----------
At 30 June
2016 489,909 13,364,351 8,012 1,050,205 32,129,885 5,192,452 1,181,043 53,415,857
Unaudited Condensed Statement of Cash Flows
for the six months ended 30 June 2017
Six months ended Six months ended Year ended
30 June 2017 30 June 2016 31 December 2016
(unaudited) (unaudited) (audited)
Notes GBP GBP GBP
Cash flows from operating activities
Profit for the financial period 2,866,730 134,336 403,490
Adjustments for:
Unrealised (gains)/losses on investments (2,363,132) 479,479 377,677
Realised gains on investments (87,628) (381,087) (381,087)
Tax charge for the current year 67,798 - 30,088
Decrease/(increase) in debtors 28,771 29,330 (22,813)
Decrease in creditors and accruals (37,965) (110,131) (102,175)
Net cash inflow from operating activities 474,574 151,927 305,180
Cash flows from investing activities
Sale of investments 10 4,568,919 1,944,207 2,402,008
Purchase of investments 10 (536,476) (471,216) (2,883,610)
(Increase)/decrease in bank deposits with a maturity
over three months - (621,023) 85,130
Net cash inflow/(outflow) from investing activities 4,032,443 851,968 (396,472)
Cash flows from financing activities
Equity dividends paid 8 (2,797,512) (3,610,142) (4,411,541) Purchase of own shares - (115,539) (243,995) Net cash outflow from financing activities (2,797,512) (3,725,681) (4,655,536) Net increase/(decrease) in cash and cash equivalents 1,709,505 (2,721,786) (4,746,828) Cash and cash equivalents at start of period 11,173,884 15,920,712 15,920,712 Cash and cash equivalents at end of period 12,883,389 13,198,926 11,173,884 Cash and cash equivalents comprise: Cash at bank and in hand 11 2,690,122 2,596,622 3,662,074 Cash equivalents 11 10,193,267 10,602,304 7,511,810
Notes to the Unaudited Condensed Financial Statements
for the six months ended 30 June 2017
1. Company information
Mobeus Income and Growth 4 VCT plc is a public limited company incorporated in England, registration number 03707697. The registered office is 30 Haymarket, London, SW1Y 4EX.
2. Basis of preparation of the financial statements
These financial statements are prepared in accordance with accounting policies consistent with Financial Reporting Standard 102 ("FRS102"), Financial Reporting Standard 104 ("FRS104") - Interim Financial Reporting, with the Companies Act 2006 and the 2014 Statement of Recommended Practice, 'Financial Statements of Investment Trust Companies and Venture Capital Trusts' ('the SORP') issued by the Association of Investment Companies (updated in January 2017).
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 10 on investments.
4. Income
Six months Six months Year ended
ended ended
30 June 30 June 2016 31 December
2017 2016
(unaudited) (unaudited) (audited)
GBP GBP GBP
Dividends 131,569 29,140 106,043
Loan stock interest 1,087,313 967,555 1,817,393
Money-market funds 10,591 29,864 47,986
Bank deposit interest 14,704 28,207 48,157
Total Income 1,244,177 1,054,766 2,019,579
5. Investment Adviser's fees and performance 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 would be charged against the capital column of the Income Statement, as it is based upon the achievement of capital growth.
Six months Six months Year ended
ended ended
30 June 30 June 2016 31 December
2017 2016
(unaudited) (unaudited) (audited)
Total Total Total
GBP GBP GBP
Allocation to
revenue return:
Investment Adviser's
fees 142,763 156,674 304,628
Allocation of
capital return:
Investment Adviser's
fees 428,288 470,021 913,884
Total Income 571,051 626,695 1,218,512
6. Taxation
Six months ended Six months ended Year ended
30 June 2017 30 June 2016 31 December 2016
(unaudited) (unaudited) (audited)
Revenue Capital Total Revenue Capital Total Revenue Capital Total
GBP GBP GBP GBP GBP GBP GBP GBP GBP
a) Analysis
of tax charge:
UK Corporation
tax on
profits/(losses)
for the period 150,244 (82,446) 67,798 101,479 (94,004) 7,475 212,864 (182,776) 30,088
Total current
tax charge/(credit) 150,244 (82,446) 67,798 101,479 (94,004) 7,475 212,864 (182,776) 30,088
Corporation
tax is based
on a
rate of
19.3% (2016:
20.0%)
b) Profit
on ordinary
activities
before tax 912,056 2,022,472 2,934,528 710,224 (568,413) 141,811 1,344,052 (910,474) 433,578
Profit/(loss)
on ordinary
activities
multiplied
by rate of
corporation
tax in the
UK of
19.3% (2016:
20.0%) 175,571 389,326 564,897 142,045 (113,683) 28,362 268,810 (182,095) 86,715
Effect of:
UK dividends (25,327) - (25,327) (5,828) - (5,828) (21,209) - (21,209)
Unrealised
(gains)/losses
not
taxable/allowable - (454,904) (454,904) - 95,896 95,896 - 75,535 75,535
Realised
gains not
taxable - (16,868) (16,868) - (76,217) (76,217) - (76,216) (76,216)
Losses brought
forward - - - (34,738) - (34,738) (34,737) - (34,737)
Actual current
tax charge 150,244 (82,446) 67,798 101,479 (94,004) 7,475 212,864 (182,776) 30,088
7. Basic and diluted earnings per share
The basic earnings, revenue return and capital return per share shown below for each period are respectively based on numerators i)-iii), each divided by the weighted average number of shares in issue in the period - see iv) below:
Six months
ended Year ended
30 June Six months 31 December
2017 ended 2016
30 June
(unaudited) 2016 (unaudited) (audited)
GBP GBP GBP
i) Total earnings after taxation: 2,866,730 134,336 403,490
Basic and diluted earnings per share (pence) 5.80p 0.28p 0.83p
ii) Revenue earnings from ordinary activities after taxation 761,812 608,745 1,131,188
Basic and diluted revenue earnings per share (pence) 1.54p 1.26p 2.32p
Net unrealised capital gains/(losses) on investments 2,363,132 (479,479) (377,677)
Net realised capital gains on investments 87,628 381,087 381,087
Capital Investment Adviser's fees less taxation (345,842) (376,017) (731,108)
iii) Capital earnings 2,104,918 (474,409) (727,698)
Basic and diluted capital earnings per share (pence) 4.26p (0.98)p (1.49)p
iv) Weighted average number of shares in issue in the period 49,452,671 48,504,551 48,793,978
------------------------------------------------------------- ------------- ------------------ -------------
8. Dividends paid
Dividend Type For the year ended Pence Date paid Year
31 December per share Six months
Six months ended ended ended
30 June 30 June 31 December
2017 2016 2016
(unaudited) (unaudited) (audited)
--------- -------- ------------------- ---------- --------------
GBP GBP GBP
--------- -------- ------------------- ---------- -------------- ---------------- ------------ ------------
Final Income 2015 1.50p 25 May 2016 725,346 725,346
Final Capital 2015 7.50p 25 May 2016 3,626,735 3,626,735
8 September
Interim Income 2016 1.00p 2016 - - 489,895
8 September
Interim Capital 2016 1.00p 2016 - - 489,895
Second
Interim Income 2016 1.00p 17 March 2017 490,435 - -
Second
Interim Capital 2016 6.00p 17 March 2017 2,942,602(1) - -
Total Dividends Paid* 3,433,037 4,352,081 5,331,871
1- This dividend was paid out of the Company's special distributable reserve.
* - GBP3,433,037 (30 June 2016: GBP4,352,081; 31 December 2016: GBP5,331,871) disclosed above differs to that shown in the Condensed Statement of Cash Flows of GBP2,797,512 (30 June 2016: GBP3,610,142; 31 December 2016: GBP4,411,541) due to GBP635,525 (30 June 2016: GBP741,939; 31 December 2016: GBP920,330) of new shares issued under the Company's Dividend Investment Scheme.
9. Net asset value per share
as at as at as at
30 June 30 June 31 December
2017 2016 2016
(unaudited) (unaudited) (audited)
Net assets GBP52,824,374 GBP53,415,857 GBP52,755,156
Number of shares
in issue 48,749,171 48,990,948 49,043,033
Net asset value
per share (pence) 106.18p 109.03p 107.57p
------------------- ------------- ------------- -------------
10. Summary of movement on investments during the period
The most critical estimates, assumptions and judgements
relate to the determination of the carrying value of
investments at 'fair value through profit and loss'
("FVTPL"). All investments held by the Company are classified
as FVTPL, and measured in accordance with the International
Private Equity and Venture Capital Valuation ("IPEV")
guidelines, as updated in December 2015. This classification
is followed as the Company's business is to invest in
financial assets with a view to profiting from their
total return in the form of capital growth and income.
For investments actively traded in organised financial
markets, fair value is generally determined by reference
to Stock Exchange market quoted bid prices at the close
of business on the balance sheet date. Purchases and
sales of quoted investments are recognised on the trade
date where a contract of sale exists whose terms require
delivery within a time frame determined by the relevant
market. Purchases and sales of unlisted investments
are recognised when the contract for acquisition or
sale becomes unconditional.
Unquoted investments are stated at fair value by the
Directors in accordance with the following rules, which
are consistent with the IPEV guidelines:
All investments are held at the price of a recent investment
for an appropriate period where there is considered
to have been no change in fair value. Where such a basis
is no longer considered appropriate, each investment
is considered as a whole on a 'unit of account' basis
alongside consideration of:
(i) Where a value is indicated by a material arms-length
transaction by an independent third party in the shares
of a company, this value will be used.
(ii) In the absence of i), and depending upon both the
subsequent trading performance and investment structure
of an investee company, the valuation basis will usually
move to either:-
a) a multiple basis. The shares may be valued by applying
a suitable price-earnings ratio or revenue multiple
to that company's historic, current or forecast post-tax
earnings before interest and amortisation or revenue
(the ratio used being based on a comparable sector but
the resulting value being adjusted to reflect points
of difference identified by the Investment Adviser compared
to the sector including, inter alia, a lack of marketability).
or:-
b) where a company's underperformance against plan indicates
a diminution in the value of the investment, provision
against cost is made, as appropriate.
(iii) Premiums, to the extent they are considered capital
in nature, 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.
(vi) Where an earnings or revenue multiple or cost less
impairment basis is not appropriate and overriding factors
apply, adiscounted cash flow, net asset valuation, or
realisation proceeds basis may be applied.
Capital gains and losses on investments, whether realised
or unrealised, are dealt with in the profit and loss
and revaluation reserves and movements in the period
are shown in the Income Statement.
All investments are initially recognised and subsequently
measured at fair value. Changes in fair value are recognised
in the Income Statement.
A key judgement made in applying the above accounting
policy relates to investments that are permanently impaired.
Where the value of an investment has fallen permanently
below cost, the loss is treated as a permanent impairment
and as a realised loss, even though the investment is
still held. The Board assesses the portfolio for such
investments and, after agreement with the Investment
Adviser, will agree the values that represent the extent
to which an investment has become realised. This is
based upon an assessment of objective evidence of that
investment's future prospects, to determine whether
there is potential for the investment to recover in
value
All investments are initially recognised and subsequently
measured at fair value. Changes in fair value are recognised
in the Income Statement.
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.
----------------------------------------------------------------------
10. Summary of movement on investments during the period (continued)
Traded Unquoted Unquoted Unquoted Total
on AIM equity preference Loan Stock
shares shares
Level Level
Level 1 Level 3 3 3
GBP GBP GBP GBP GBP
--------------------------------------------------------- ------- ----------- ----------- ----------- -----------
Valuation at 31 December 2016 291,682 10,204,887 12,767 28,417,098 38,926,434
Purchase at cost - 814,908 - 302,037 1,116,945
Reclassification at value - (98) 98 - -
Sales - proceeds - (168,156) - (4,400,763) (4,568,919)
-realised (losses)/gains - (1,445,372) - 1,533,000 87,628
Unrealised gains/(losses) on
investments in the period 20,834 2,220,983 442,365 (321,050) 2,363,132
--------------------------------------------------------- ------- ----------- ----------- ----------- -----------
Valuation at 30 June 2017 312,516 11,627,152 455,230 25,530,322 37,925,220
Book cost at 30 June 2017 200,028 13,841,556 15,242 22,477,716 36,534,542
Unrealised gains/(losses) at 30 June 2017 112,488 (376,920) 440,569 3,336,787 3,512,924
Permanent impairment of investments - (1,837,484) (581) (284,181) (2,122,246)
Valuation at 30 June 2017 312,516 11,627,152 455,230 25,530,322 37,925,220
(Losses)/gains on investments - (1,450,097) - 1,539,940 89,843
Less amounts recognised as unrealised gains/(losses) in
previous period - 4,725 - (6,940) (2,215)
--------------------------------------------------------- ------- ----------- ----------- ----------- -----------
Realised (losses)/gains based on carrying
value at 31 December 2016 - (1,445,372) - 1,533,000 87,628 Net movement in unrealised appreciation/ (depreciation) in the period 20,834 2,220,983 442,365 (321,050) 2,363,132 Gains on investments for the six months ended 30 June 2017 20,834 775,611 442,365 1,211,950 2,450,760
Purchases of investments above of GBP1,116,945 are more than that shown in the Condensed Statement of Cash Flows of GBP536,476 by GBP580,469. This amount represents funds remitted in December 2016, for the investment in Ibericos Etc. Limited (trading as Tapas Revolution), which completed in this Half-Year period. Purchases of investments referred to in the Chairman's Statement of GBP1,647,337 are higher than that shown above by GBP530,392. This amount represents funds previously held in Chatfield Services Limited, a company preparing to trade, utilised for the investment into Buster & Punch, as referred to in the Investment Adviser's Review.
There has been no significant change in the risk analysis as disclosed in Note 15 of the financial statements in the Company's Annual Report. The decrease in unrealised valuations of the loan stock investments above reflect 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 stock investments are valued in accordance with IPEV guidelines as follows:
as at as at as at
30 June 30 June 31 December
2017 2016 2016
(unaudited) (unaudited) (audited)
GBP GBP GBP
---------------------- ------------ ------------ ------------
Valuation methodology
Estimated realisation
proceeds 4,897,767 14,167 14,167
Cost (reviewed
for impairment) - - 38,771
Recent investment
price 6,841,561 12,638,548 11,470,318
Price earnings
or revenue multiple 25,873,376 24,531,112 27,111,496
37,612,704 37,183,827 38,634,752
11. Current asset investments and cash at bank
as at as at as at
30 June 2017 30 June 2016 31 December 2016
(unaudited) (unaudited) (audited)
GBP GBP GBP
--------------------------------------------------------------------- ------------- ------------- -----------------
OEIC Money market funds 10,193,267 10,597,771 7,511,810
Bank deposits that mature within three months but are not immediately
repayable - 4,533 -
Cash equivalents per Condensed Statement of Cash Flows 10,193,267 10,602,304 7,511,810
Bank deposits that mature after three months 2,000,000 2,706,153 2,000,000
Current asset investments 12,193,267 13,308,457 9,511,810
--------------------------------------------------------------------- ------------- ------------- -----------------
Cash at bank 2,690,122 2,596,622 3,662,074
12. Post balance sheet events
On 5 July 2017, an investment of GBP2.33 million was made in Wetsuit Outlet Limited, comprising GBP0.77 million of funds from the Company and GBP1.56 million from one of the Company's investments, Manufacturing Services Investment Limited, a company preparing to trade.
On 1 August 2017, the Company realised its entire holding in Entanet Holdings Limited for proceeds of GBP4.89 million, realising a gain over original cost of GBP2.72 million, or 5.48 pence per share to date. These proceeds have been fully reflected in the valuation of the company at 30 June 2017, as the Board consider the transaction was sufficiently progressed at 30 June to justify a valuation reflecting the full cash proceeds.
13. Financial statements for the year ended 31 December 2016
The financial information for the period ended 30 June 2017 does not comprise statutory accounts within the meaning of Section 434 of the Companies Act 2006. The financial statements for the year ended 31 December 2016 have been filed with the Registrar of Companies. The auditor has reported on the financial statements for the year ended 31 December 2016 and that report was unqualified and did not contain a statement under section 498(2) or (3) of the Companies Act 2006.
14. Half-Year Report
This Half-Year Report will shortly be made available on our website: www.mig4vct.co.uk and will be circulated by post to those shareholders who have requested copies of the Report. Further copies are available free of charge from the Company's registered office, 30 Haymarket, London SW1Y 4EX or can be downloaded via the website.
Contact details for further enquiries:
Jonathan McGuire at Mobeus Equity Partners LLP (the Company Secretary) on 020 7024 7600 or by e-mail on mig4@mobeusequity.co.uk
Jonathan Gregory at Mobeus Equity Partners LLP (the Investment Adviser), on 020 7024 7600 or by e-mail on info@mobeusequity.co.uk.
DISCLAIMER
Neither the contents of the Company's website nor the contents of any website accessible from hyperlinks on the Company's website (or any other website) is incorporated into, or forms part of, this announcement.
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR SSFFMAFWSEDA
(END) Dow Jones Newswires
August 08, 2017 12:34 ET (16:34 GMT)
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