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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 May 2019 to May 2024
TIDMMIG4
RNS Number : 4194I
Mobeus Income & Growth 4 VCT PLC
08 August 2019
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 2019
Net assets: GBP59.50 million
Net Asset Value("NAV") per share: 88.02 pence
-Net Asset Value ("NAV") Total Return per share was 8.5% for the six months.
-Share price total return per share was 5.3% for the six months.
-The Company has declared an interim dividend in respect of the current year of 13.00 pence per share, to be paid to shareholders on 20 September 2019.
-The Company realised investments for a total of GBP6.82 million, a gain of GBP1.52 million for the six months.
-The Company invested GBP1.79 million into two new growth capital investments.
Performance Summary
The longer-term trend of performance on this measure is shown in the chart below:
Hot Features
Premium
Period Net asset Cumulative Cumulative total shareholder
value (NAV) dividends paid return per share (NAV
per share per share to basis) since launch(*)
date
(p) (p) (p)
------------- ---------------- -----------------------------
As at 30 June 2019 88.02 109.20 197.22
------------- ---------------- -----------------------------
As at 31 December
2018 84.79 105.20 189.99
------------- ---------------- -----------------------------
As at 31 December
2017 86.57 101.20 187.77
------------- ---------------- -----------------------------
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
------------- ---------------- -----------------------------
The chart above shows the recent past performance of the original funds raised in 1999. The original subscription price was 200p 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 Schedule on the Company's website at: www.mig4vct.co.uk, where they can be accessed 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 the Company's Half Year Report for the six months ended 30 June 2019.
Overview
The half-year has again seen good progress and a positive return for the period. This is detailed in the Performance and the Investment Portfolio sections of my statement below.
During the period under review, the Company achieved two profitable realisations and made two new growth capital investments. Sixteen growth capital investments have now been completed since the 2015 VCT Rule change totalling GBP15.09 million.
The Investment Adviser continues to report an interesting pipeline of growth capital opportunities. Meanwhile, the existing more mature portfolio constructed under the previous rules continues to provide a healthy income yield.
Performance
The Company's NAV total return per share was 8.5% for the six months to 30 June 2019 (2018: 0.6%). The total share price return was 5.3% (2018: 2.6%). At 30 June 2019, and before taking into account this half year result, your Company was ranked 19th out of 40 generalist VCTs, over the last five years, in the Association of Investment Companies' ("AIC") analysis of NAV Cumulative Total Return for each VCT.
Dividends
On 28 May 2019, following shareholder approval at the annual general meeting, the Company paid a final dividend of 4.00 pence per ordinary share, in respect of the financial year ended 31 December 2018.
After taking into account the availability of surplus revenue, the realisation of capital gains, the adequacy of distributable reserves, cash flow forecasts and the need to maintain VCT qualifying ratios, the Board is pleased to declare an interim dividend of 13.00 pence per share in respect of the current financial year. This dividend will be payable to shareholders, whose names appear on the register on 23 August 2019, on 20 September 2019.
The Company's target of paying a dividend of at least 4.00 pence per share in respect of each financial year has been reached or exceeded in each of the last nine years. While the Board has not changed the dividend target, ordinary dividend payments are more likely to be volatile and, at least over the medium-term, may be lower than have been paid in the recent past.
Investment portfolio
The portfolio has performed well during the period, increasing in value by 12.7% (2018: 0.8%) of the opening value. The portfolio achieved a net increase of GBP3.08 million in unrealised gains and GBP1.52 million in realised gains over the six-month period. The portfolio was valued at GBP36.09 million at the period-end (31 December 2018: GBP36.30 million).
During the six-months under review, the Company invested a total of GBP1.79 million (2018: GBP3.06 million) into two (2018: three new, three follow-on) new businesses: Arkk Consulting, a regulatory and reporting requirement service provider; and Parsley Box, a supplier of home delivered ambient ready meals for the elderly.
Shortly after the period end, a follow-on investment of GBP0.45 million was made into existing portfolio company MPB Group, which is a leading online marketplace for used camera and video equipment. The investment was part of a GBP9.00 million funding round led by Acton Capital at a higher valuation which reflects the considerable growth already achieved by this business as well as its future growth potential.
The Company also realised its investments in Plastic Surgeon and ASL Technology during the six months under review. GBP1.38 million was received from the realisation of Plastic Surgeon, generating a gain of GBP0.39 million in the period and contributing to a multiple on cost of 5.6x over the life of the investment, and GBP3.40 million was received from the realisation of ASL Technology, generating a gain of GBP1.08 million and a multiple on cost of 2.2x.
The Company also received cash proceeds of GBP2.04 million during the period, comprising a part disposal of Master Removers Group generating GBP0.39 million, loan stock repayments from investee companies of GBP1.35 million, deferred consideration of GBP0.25 million arising from realisations which occurred in a previous year and preference share repurchases of GBP0.05 million.
Details of this investment activity and the performance of the portfolio are contained in the Investment Review and the Investment Portfolio Summary.
Planned Fundraising
As announced recently, the Board intends to launch offers for subscription for new ordinary shares in the 2019/20 tax year. The Board expects to convene a general meeting of shareholders to seek the necessary authority to allot shares and disapply pre-emption rights in connection with the fundraising and will send shareholders a circular in September confirming the amount to be raised and the purposes for which the funds will be used.
If shareholder approval is obtained, the Board expects to be in a position to launch the offer for subscription in October, full details of which will be contained in the prospectus that will be sent to all registered shareholders.
Share buy-backs
During the six months under review, the Company bought back and cancelled 678,262 of its own shares, representing 1.0% (2018: 0.9%) of the shares in issue at the beginning of the period, at a total cost of GBP0.51 million (2018: GBP0.46 million) inclusive of expenses.
With effect from 1 August 2019, the Board changed its share buyback policy objective of maintaining the discount to NAV at which the Company's shares may trade in the market from approximately 10% or less, to approximately 5% or less.
In pursuing this policy, the Board's priority will remain to ensure that it is acting prudently and in the interests of the remaining shareholders of the Company.
Share buybacks will continue to be entirely at the Board's discretion and will be subject to the Company having sufficient funds and distributable reserves available for such a purpose. They will also continue to be subject to prevailing market conditions, the Listing Rules and any applicable law and regulatory restrictions at the relevant time. Shares bought back in the market will ordinarily be cancelled.
Dividend Investment Scheme
The Board has the operation of the Dividend Investment Scheme ("the Scheme"), which is presently suspended, under review.
It expects to conclude this review and announce a decision in respect of the Scheme before the next AGM in May 2020.
Liquidity
Cash or near cash resources held by the Company as at 30 June 2019 was GBP23.53 million or 39.6% of net assets. After the period end, following the investment into MPB and the payment of the interim dividend in September 2019, the pro forma level of liquidity will be GBP14.30 million or 28.2% of net assets.
Shareholder communications
May I remind you that the Company has its own website which is available at www.mig4vct.co.uk.
The Investment Adviser held its most recent annual Shareholder Event in February 2019 which, from the feedback submitted, was well received by shareholders. The event included presentations on the investment activity and performance of all the Mobeus VCTs. I would like to thank those shareholders who attended for helping to make it a success. The next Event will take place in February 2020 and shareholders will be sent further details and an invitation nearer the time.
The Board
Following nearly nine years of service, Andrew Robson decided to resign from the Board at the last AGM. Again, we are all indebted to Andrew for his very significant contributions during his tenure as a Director. The Board is pleased to welcome the appointment of Graham Paterson, an experienced investment and financial services professional, to the Board; he has also taken up the position of Chair of the Audit Committee. In line with the Board's succession planning arrangements, the process of identifying a chairperson to take over from me is now under way.
Outlook
Your Board considers that your Company is well positioned, with the portfolio being comprised of a strong foundation of more mature investments providing an income return, and a younger, growth capital portfolio of early stage companies seeking to achieve scale. The result achieved during the period reflects growth and valuation increases in both elements of the portfolio, underpinned by two profitable realisations.
The growth capital investment market is active. It is worth noting that the amount of capital available for investment in this sector is substantial. This is causing increased competition and higher entry valuations for the most attractive investment opportunities.
The Board and Investment Adviser have carried out an analysis of the possible impact of Brexit on the investment portfolio. The portfolio as a whole is predominantly UK centric and the greatest risk from Brexit is from the broader impact on the UK economy caused by delay and uncertainty. Some value impact is possible; but in the longer-term good companies will survive and grow. Mobeus believes that the portfolio companies have appropriate plans in place and are as well prepared for Brexit as they can be at this point.
Finally, I would like to take this opportunity once again to thank all shareholders for their continued support.
Christopher Moore
Chairman
8 August 2019
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 Review
Demand for growth capital investment remains strong and there is a significant 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
The portfolio's activity in the six months to 30 June 2019 is summarised as follows:
2019 2018
GBPm GBPm
--------------------------------------------------
Opening portfolio value 36.52* 31.48
---------- ---------
New and follow-on investments 1.79 3.06
---------- ---------
Disposal proceeds (6.82) (0.42)
---------- ---------
Net realised gains 1.52 0.14
---------- ---------
Valuation movements 3.08 0.12
---------- ---------
Portfolio value at 30 June 36.09 34.38
---------- ---------
* Adjusted for deferred consideration recognised in previous period.
The six months to 30 June 2019 has seen further good progress. The Company made two new growth capital investments of GBP1.12 million into Arkk Consulting and GBP0.67 million into Parsley Box. Arkk Consulting is a regulatory and reporting requirement service and product provider and Parsley Box is a supplier of home delivered ambient ready meals for the elderly.
The Company also realised its investments in Plastic Surgeon and ASL Technology during the period, receiving a total of GBP4.78 million, which contributed to total receipts of GBP6.82 million during the period, in proceeds from these realisations.
The investment and divestment activity during the period has increased the proportion of the portfolio comprised of all growth capital investments by value to 62.0% at the period end (including AIM and Legacy).
At the period end, the value of the growth portfolio is GBP22.42 million (current cost: GBP18.41 million).
Shareholders should note that these figures include investments that are growth in nature, but were made before the new VCT regulations in 2015.
After the period end, the Company invested GBP0.45 million into MPB Group, an existing portfolio company. MPB is Europe's leading online marketplace for used camera and video equipment and has more than doubled revenue every year since your Company invested in 2016. This brings the total invested in those growth capital investments made since the introduction of the new VCT regulations in 2015 to GBP15.54 million.
The portfolio's contribution to the overall results of the VCT is summarised as follows:
Investment Portfolio Capital Movement 2019 2018
GBPm GBPm
Increase in the value of unrealised investments 4.63 2.73
------ ------
Decrease in the value of unrealised investments (1.55) (2.61)
------ ------
Net increase in the value of unrealised
investments 3.08 0.12
------ ------
Realised gains 1.52 0.14
------ ------
Realised losses - -
------ ------
Net realised gains in the period 1.52 0.14
------ ------
Net investment portfolio movement in
the period 4.60 0.26
------ ------
Valuation changes of portfolio investments still held
The principal contributors to the valuation increases of GBP4.63 million were Auction Technology Group: GBP1.08 million; MPB Group: GBP0.89 million and Proactive Group: GBP0.84 million.
Auction Technology Group, which the VCT part realised in 2014, is trading well ahead of budget with growth showing in all areas of its business. MPB Group has grown its revenues substantially and, in July, secured a GBP9.00 million further investment at a higher valuation, of which GBP2.00 million was provided by the Mobeus-advised VCTs. Proactive Group is focusing on achieving scale through its revenues and is expected to become profitable in the near future.
A small number of new growth investments have shown initial uplifts from cost, due in large part to the structure of the Company's investment, but, in some cases, also due to the underlying investee company's performance.
The main reductions within total valuation decreases of GBP(1.55) million, were Bourn Bioscience GBP(0.44) million; Wetsuit Outlet GBP(0.37) million and SuperCarers GBP(0.24) million. Bourn has now opened its new facility in Essex but this will take time to reach normal trading levels. Over the medium-term the company has a strong brand and retains a strategic position in its markets. Wetsuit Outlet continues to have a disappointing period post investment, although it is anticipated that measures recently implemented to restore margins will soon begin to improve profitability. SuperCarers is performing behind plan and in response is undertaking a restructure of its cost base.
Realised gains and deferred consideration receipts
The Company realised its investments in ASL Technology and Plastic Surgeon during the period under review, generating gains in the period of GBP1.08 million and GBP0.39 million respectively from these realisations. These contributed to a multiple of original cost of 2.2x for ASL Technology and 5.6x for Plastic Surgeon over the life of the investments. The Company also made a part disposal of Master Removers Group realising GBP0.39 million proceeds and a gain of GBP0.03 million. Finally, the Company received a gain from deferred consideration receipts of GBP0.02 million arising from disposals in a previous year.
Investment portfolio yield and capital repayments
In the period under review, the Company recognised the following amounts in interest and dividend income:
Investment Portfolio Yield 2019 2018
GBPm GBPm
Interest receivable in the period 0.98 0.83
------ -----
Dividends receivable in the period 0.07 0.11
------ -----
Total portfolio income in the period1 1.05 0.94
------ -----
Portfolio value at 30 June 36.09 34.38
------ -----
Portfolio Income Yield (Income as a % of Portfolio
value at 30 June) 2.9% 2.7%
------ -----
(1) Total portfolio income in the period is generated solely from
investee companies within the portfolio. See Note 4 of the Financial
Statements for all income receivable by the Company.
In addition to realisation proceeds and deferred consideration receipts outlined earlier, the Company also received loan stock repayments of GBP1.35 million (as the investments in the five companies preparing to trade repaid the final loan stock sums still payable), and preference share repurchases of GBP0.05 million, both at cost.
New investments in the half year
The Company made two new investments totalling GBP1.79 million during the period, as detailed below:
Company Business Date of investment Amount of new investment
(GBPm)
---------------- ------------------------- ------------------- ------------------------
Regulatory and reporting
requirement service
Arkk Consulting provider May 2019 1.12
Arkk Consulting (trading as Arkk Solutions) provides services and
software to enable organisations to remain compliant with regulatory
reporting requirements. Arkk was established in 2009 and currently
has over 800 clients across 20 countries. These include more than
80 of the FTSE 350, and half of the largest 20 accountancy firms in
the UK. The investment will build on Arkk's reputation and customer
base, to target the cloud-based period end reporting market by building
the sales and marketing team. The company's audited accounts for the
year ended 31 December 2017 show turnover of GBP3.18 million and a
profit before interest, tax and amortisation of goodwill of GBP0.52
million.
Home delivered ambient
ready meals for the
Parsley Box elderly May 2019 0.67
Parsley Box is a UK direct to consumer supplier of home delivered
ambient ready meals for the elderly. Founded in 2017, Parsley Box
has grown rapidly and has developed a unique meal delivery solution
for its customers. The company supplies a diverse range of ambient
meals via next day delivery which are easy to store and aim to contribute
to a more independent and healthier lifestyle. The investment will
scale the company's marketing strategy, enable it to process larger
order volumes and continue to build out its team. The company's unaudited
accounts for the period ended 31 March 2018 show revenues of GBP0.25
million and a loss before interest, tax and amortisation of goodwill
of GBP(0.21) million.
Realisations in the half year
The Company realised two investments during the period, as detailed below:
Company Business Period of investment Total cash proceeds
over the life of the
investment / Multiple
over cost
--------------- ----------------------- -------------------- ----------------------
Plastic Surgeon Supplier of snagging April 2008 to GBP2.56 million
and finishing services May 2019 5.6 times cost
The Company sold its remaining investment in Plastic Surgeon to Polygon
Group for GBP1.38 million. Over the eleven years this investment was
held, it generated proceeds of GBP2.56 million compared to an original
investment cost of GBP0.46 million, which is a multiple on cost of
5.6x and an IRR of 20.5%.
ASL Technology Printer and photocopier December 2010 GBP4.22 million
services to June 2019 2.2 times cost
The Company sold its investment in ASL Technology for GBP3.40 million.
Over the eight and a half years this investment was held, it generated
proceeds of GBP4.22 million compared to an original investment cost
of GBP1.93 million, which is a multiple on cost of 2.2x and an IRR
of 12.6%.
Follow-on investment in existing portfolio company after the period-end
After the period end, the Company made one follow-on investment of GBP0.45 million into an existing portfolio company, as detailed below:
Company Business Date of investment Amount of new investment
(GBPm)
Online marketplace
for used camera and
MPB Group video equipment July 2019 0.45
MPB is Europe's leading online marketplace for used camera and video
equipment. Based in Brighton, its custom-designed pricing technology
enables MPB to offer both buy and sell services through the same platform
and offers a one-stop shop for all its customers. Having expanded
into the US (opening a New York office) and German markets as part
of the initial VCT investment round, this follow-on investment, alongside
funds provided by two other third-party investors, is to support its
continued growth plan. Having doubled its sales over the prior year,
this investment will help drive the company's objective to create
a GBP100m+ revenue, internationally diverse and profitable re-commerce
business. The company's latest audited accounts for the year ended
31 March 2018 show turnover of GBP21.71 million and a loss before
interest, tax and amortisation of goodwill of GBP(2.00) million.
------------------------------------------------------------------------------------
Mobeus Equity Partners LLP
Investment Adviser
8 August 2019
Investment Portfolio Summary
at 30 June 2019
Total cost Total valuation
at Total at 30 June % of equity % of
30 June valuation 2019 held portfolio
Mobeus Equity Partners LLP 2019 at 31 December GBP by value
GBP 2018
GBP
---------------------------------- ---------- ---------------- --------------- --------------- ----------------
Tovey Management Limited (trading
as Access IS)
Provider of data capture and
scanning
hardware 2,469,013 3,013,724 2,987,545 9.7% 8.3%
---------------------------------- ---------- ---------------- --------------- --------------- ----------------
Turner Topco Limited (trading as
Auction Technology Group
SaaS based online auction market
place platform 1,529,075 1,255,082 2,333,016 3.8% 6.5%
---------------------------------- ---------- ---------------- --------------- --------------- ----------------
Preservica Limited
Seller of proprietary digital
archiving
software 1,585,773 2,082,403 2,361,166 11.0% 6.5%
---------------------------------- ---------- ---------------- --------------- --------------- ----------------
MPB Group Limited
Online marketplace for
photographic
and video equipment 1,032,187 1,402,016 2,294,789 5.6% 6.4% ---------------------------------- ---------- ---------------- --------------- --------------- ---------------- Virgin Wines Holding Company Limited Online wine retailer 1,930,813 2,372,306 2,214,938 9.7% 6.1% ---------------------------------- ---------- ---------------- --------------- --------------- ---------------- Pattern Analytics Limited (trading as Biosite) Workforce management and security services for the construction industry 1,338,539 1,978,710 2,057,804 5.6% 5.7% ---------------------------------- ---------- ---------------- --------------- --------------- ---------------- EOTH Limited (trading as Equip Outdoor Technologies) Branded outdoor equipment and clothing 951,471 1,976,902 2,054,474 1.7% 5.7% ---------------------------------- ---------- ---------------- --------------- --------------- ---------------- Media Business Insight Holdings Limited A publishing and events business focussed on the creative production industries 2,722,760 1,871,714 2,003,810 15.7% 5.6% ---------------------------------- ---------- ---------------- --------------- --------------- ---------------- Proactive Group Holdings Inc Provider of media services and investor conferences for companies primarily listed on secondary public markets 755,340 1,060,873 1,900,421 2.6% 5.3% ---------------------------------- ---------- ---------------- --------------- --------------- ---------------- Vian Marketing Limited (trading as Red Paddle Co) Design, manufacture and sale of stand-up paddleboards and windsurfing sails 899,074 1,378,902 1,509,800 7.1% 4.2% ---------------------------------- ---------- ---------------- --------------- --------------- ---------------- CGI Creative Graphics International Limited Vinyl graphics to global automotive, recreation vehicle and aerospace markets 1,449,746 1,439,959 1,439,959 6.3% 4.0% ---------------------------------- ---------- ---------------- --------------- --------------- ---------------- Manufacturing Services Investment Limited (trading as Wetsuit Outlet) Online retailer in the water sports market 2,333,102 1,651,280 1,278,483 6.4% 3.5% ---------------------------------- ---------- ---------------- --------------- --------------- ---------------- Master Removers Group 2019 Limited (formerly Master Removers Group) (trading as Anthony Ward Thomas, Bishopsgate and Aussie Man & Van) A specialist logistics, storage and removals business 348,641 1,426,419 1,322,817 7.2% 3.7% ---------------------------------- ---------- ---------------- --------------- --------------- ---------------- My Tutorweb Limited Digital marketplace connecting school pupils seeking one-to-one online tutoring 1,307,644 1,306,644 1,307,644 7.2% 3.5% ---------------------------------- ---------- ---------------- --------------- --------------- ---------------- Tharstern Group Limited Software based management information systems to the print sector 1,091,886 1,070,871 1,151,406 12.2% 3.2% ---------------------------------- ---------- ---------------- --------------- --------------- ---------------- Arkk Consulting Limited Regulatory and reporting requirement service provider 1,118,490 - 1,118,490 7.5% 3.1% ---------------------------------- ---------- ---------------- --------------- --------------- ---------------- Ibericos Etc. Limited (trading as Tapas Revolution) Spanish restaurant chain 1,044,869 1,135,102 1,002,228 5.8% 2.8% ---------------------------------- ---------- ---------------- --------------- --------------- ---------------- Buster and Punch Holdings Limited Industrial inspired lighting and interiors retailer 530,392 687,347 858,247 4.5% 2.4% ---------------------------------- ---------- ---------------- --------------- --------------- ---------------- Rota Geek Limited Workforce management software 437,000 685,092 690,921 3.7% 1.9% ---------------------------------- ---------- ---------------- --------------- --------------- ---------------- Parsley Box Limited Home delivered ambient ready meals for the elderly 668,400 - 668,400 5.6% 1.9% ---------------------------------- ---------- ---------------- --------------- --------------- ---------------- Kudos Innovations Limited Online platform that provides and promotes research dissemination 328,950 328,950 657,900 3.2% 1.7% ---------------------------------- ---------- ---------------- --------------- --------------- ---------------- RDL Corporation Limited Recruitment consultants within the pharmaceutical, business intelligence and IT industries 1,000,000 478,719 577,788 9.1% 1.6% ---------------------------------- ---------- ---------------- --------------- --------------- ---------------- Vectair Holdings Limited Designer and distributor of washroom products 24,732 360,155 421,537 2.1% 1.2% ---------------------------------- ---------- ---------------- --------------- --------------- ---------------- Redline Worldwide Limited Provider of security services to the aviation industry and other sectors 838,377 521,616 417,340 6.7% 1.2% ---------------------------------- ---------- ---------------- --------------- --------------- ---------------- Blaze Signs Holdings Limited Manufacturer and installer of signs 190,631 286,967 280,451 5.7% 0.8% ---------------------------------- ---------- ---------------- --------------- --------------- ---------------- Bourn Bioscience Limited Management of In-vitro fertilisation clinics 1,132,521 687,046 250,863 7.7% 0.7% ---------------------------------- ---------- ---------------- --------------- --------------- ---------------- BookingTek Limited Direct booking software for hotels. 652,137 163,034 163,009 3.5% 0.5% ---------------------------------- ---------- ---------------- --------------- --------------- ---------------- Omega Diagnostics Group plc(1) In-vitro diagnostics for food intolerance, auto-immune diseases and infectious diseases. 200,028 208,344 161,675 1.3% 0.4% ---------------------------------- ---------- ---------------- --------------- --------------- ---------------- Veritek Global Holdings Limited Maintenance of imaging equipment 1.620,086 9,953 132,707 11.9% 0.4% ---------------------------------- ---------- ---------------- --------------- --------------- ---------------- Jablite Holdings Limited Manufacturer of expanded polystyrene products. 376,083 122,422 122,422 9.1% 0.3% ---------------------------------- ---------- ---------------- --------------- --------------- ---------------- Super Carers Limited Online platform that connects people seeking home care from experienced independent carers. 485,730 364,298 121,432 4.3% 0.3% ---------------------------------- ---------- ---------------- --------------- --------------- ---------------- BG Training Limited City-based provider of specialist technical training. 10,625 5,313 5,313 0.0% 0.0% ---------------------------------- ---------- ---------------- --------------- --------------- ---------------- Hollydale Management Limited(2) Company was seeking to carry on a business in the food industry 453,600 438,200 - 11.0% 0.0% ---------------------------------- ---------- ---------------- --------------- --------------- ---------------- Backhouse Management Limited(2) Company was seeking to carry on a business in the motor sector 453,600 226,800 - 11.3% 0.0% ---------------------------------- ---------- ---------------- --------------- --------------- ---------------- Barham Consulting Limited(2) Company was seeking to carry on a business in the catering sector 453,600 226,800 - 11.3% 0.0%
---------------------------------- ---------- ---------------- --------------- --------------- ----------------
Creasy Marketing Services
Limited(2)
Company was seeking to carry on
a
business in the textile sector 453,600 226,800 - 11.3% 0.0%
---------------------------------- ---------- ---------------- --------------- --------------- ----------------
McGrigor Management Limited(2)
Company was seeking to carry on
a
business in the pharmaceutical
sector 453,600 226,800 - 11.3% 0.0%
---------------------------------- ---------- ---------------- --------------- --------------- ----------------
Racoon International Group
Limited
Supplier of hair extension, hair
care products and training 484,347 - - 0.0% 0.0%
---------------------------------- ---------- ---------------- --------------- --------------- ----------------
CB Imports Group Limited (trading
as Country Baskets)
Importer and distributor of
artificial
flowers, floral sundries and
home
décor products 175,000 - - 5.8% 0.0%
---------------------------------- ---------- ---------------- --------------- --------------- ----------------
H Realisations (2018) Limited
(formerly
Hemmels Limited) (in
liquidation)
Company specialising in the
sourcing,
restoration, selling and
servicing
of high price, classic cars 23,250 - - 0.0% 0.0%
---------------------------------- ---------- ---------------- --------------- --------------- ----------------
The Plastic Surgeon Holdings
Limited
(formerly TPSFF Holdings
Limited)
Supplier of snagging and
finishing
services to the domestic and
commercial
property markets - 1,046,666 - 0.0% 0.0%
---------------------------------- ---------- ---------------- --------------- --------------- ----------------
ASL Technology Holdings Limited
Printer and photocopier services - 2,327,966 - 0.0% 0.0%
---------------------------------- ---------- ---------------- --------------- --------------- ----------------
Total 35,339,312 36,053,195 35,868,795 99.4%
---------------------------------- ---------- ---------------- --------------- --------------- ----------------
Former Elderstreet Private Equity
Limited Portfolio
Cashfac Limited
Provider of virtual banking
application
software solutions to
corporate customers 260,101 245,465 223,941 2.9% 0.6%
Sift Group Limited
Developer of
business-to-business
internet communities 135,391 - - 1.3% 0.0%
Total 395,492 245,465 223,941 - 0.6%
---------------------------------- ---------- ---------------- --------------- --------------- ----------------
Total Investment Portfolio 35,734,804 36,298,660 36,092,736 - 100.0%
---------------------------------- ---------- ---------------- --------------- --------------- ----------------
Portfolio split by type
---------------------------------- ---------- ---------------- --------------- --------------- ----------------
Growth Focussed Portfolio 18,407,407 19,291,443 22,421,844 - 62.0%
---------------------------------- ---------- ---------------- --------------- --------------- ----------------
MBO Focussed Portfolio 17,327,397 17,007,217 13,670,892 - 38.0%
---------------------------------- ---------- ---------------- --------------- --------------- ----------------
35,734,804 36,298,660 36,092,736 - 100.0%
---------------------------------- ---------- ---------------- --------------- --------------- ----------------
Notes
1 - Quoted on AIM.
2 - An application to strike off each of these companies from the Register
of Companies has been applied for, as each has been unable to identify
suitable opportunities in which to invest.
3 - The Growth focussed portfolio contains all investments made after
the change in the VCT regulations in 2015 plus some investments that
are growth in nature made before this date. The MBO focussed portfolio
contains investment made prior to 2015 as part of the previous MBO strategy
and also includes five companies preparing to trade (see note 2 above).
--------------------------------------------------------------------------------------------------------------------
Statement of the Directors' Responsibilities
Responsibility statement
In accordance with Disclosure and Transparency Rule (DTR) 4.2.10, Christopher Moore (Chairman), Graham Paterson (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 materially changed from those identified in the Annual Report and Financial Statements for the year ended 31 December 2018 ("the Annual Report").
The principal risks faced by the Company are:
-- loss of approval as a Venture Capital Trust; -- economic and political risk; -- investment risk; -- regulatory risk; -- financial and operating risk; -- market risk; -- asset liquidity risk; -- market liquidity risk; and -- counterparty risk.
A detailed explanation of the principal risks can be found in the Annual Report and Financial Statements for the year ended 31 December 2018, copies of which are available on the Investment Adviser's website, www.mobeus.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 an adequate cash position. The majority of companies in the portfolio are well funded 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 financial risks and capital are shown in Notes of the Annual Report and Financial Statements for the year ended 31 December 2018. 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 2019
Unaudited Condensed Income Statement
for the six months ended 30 June 2019
Six months ended 30 Six months ended Year ended 31 December
June 2019 30 June 2018 2018
(unaudited) (unaudited) (audited)
Notes Revenue Capital Total Revenue Capital Total Revenue Capital Total
GBP GBP GBP GBP GBP GBP GBP GBP GBP
Unrealised
gains on
investments
held at
fair value 9 - 3,083,824 3,083,824 - 123,530 123,530 - 1,294,148 1,294,148
Realised
gains/(losses)
on investments
held at
fair value 9 - 1,518,499 1,518,499 - 139,762 139,762 - (363,572) (363,572)
Income 4 1,110,499 - 1,110,499 1,004,281 - 1,004,281 2,263,918 - 2,263,918
Investment
Adviser's
fees 5 (156,858) (470,574) (627,432) (157,985) (473,954) (631,939) (311,111) (933,333) (1,244,444)
Other expenses (214,353) - (214,353) (213,555) - (213,555) (378,431) - (378,431)
Profit/(loss)
on ordinary
activities
before
taxation 739,288 4,131,749 4,871,037 632,741 (210,662) 422,079 1,574,376 (2,757) 1,571,619
Tax on
profit/(loss)
on ordinary
activities 6 (129,463) 89,409 (40,054) (98,956) 90,052 (8,904) (243,837) 177,334 (66,503)
Profit/(loss)
and total
comprehensive
income 609,8245 4,221,158 4,830,983 533,785 (120,610) 413,175 1,330,539 174,577 1,505,116
Basic and
diluted
earnings
per ordinary
share 7 0.90p 6.20p 7.10p 0.78p (0.18)p 0.60p 1.95p 0.25p 2.20p
The revenue column of the Income Statement includes all income and expenses.
The capital column accounts for the unrealised gains and realised gains/(losses)
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 Financial Reporting Standards ("FRS").
In order to better reflect the activities of a VCT and in accordance
with the 2014 Statement of Recommended Practice ("SORP") issued by the
Association of Investment Companies ("AIC") and updated in January 2017,
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 2019
30 June 30 June 31 December
2019 2018 2018
(unaudited) (unaudited) (audited)
Notes GBP GBP GBP
Fixed assets
Investments at fair value 9 36,092,736 34,379,152 36,298,660
Current assets
Debtors and prepayments 210,928 181,149 529,190
Current asset investments 10 16,875,554 20,410,681 18,830,389
Cash at bank 10 6,658,998 2,608,920 2,541,058
23,745,480 23,200,750 21,900,637
Creditors: amounts falling
due within one year (335,763) (365,729) (303,513)
Net current assets 23,409,717 22,835,021 21,597,124
Net assets 59,502,453 57,214,173 57,895,784
Capital and reserves
Called up share capital 676,047 688,365 682,830
Share premium reserve 31,474,977 31,474,978 31,474,977
Capital redemption reserve 33,040 20,722 26,257
Revaluation reserve 3,118,129 612,630 1,848,472
Special distributable
reserve 12,367,414 16,436,383 14,784,518
Realised capital reserve 10,148,396 6,514,849 6,815,730
Revenue reserve 1,684,450 1,466,246 2,263,000
Equity shareholders' funds 59,502,453 57,214,173 57,895,784
Basic and diluted net
asset value:
Basic and diluted net
asset value per share 11 88.02p 83.12p 84.79p
Unaudited Condensed Statement of Changes in Equity
for the six months ended 30 June 2019
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)
For the Notes GBP GBP GBP GBP GBP GBP GBP GBP
six months
ended 30
June 2019
At 1 January
2019 682,830 31,474,977 26,257 1,848,472 14,784,518 6,815,730 2,263,000 57,895,784
Comprehensive
income
for the
period
Profit
for the
period - - - 3,083,824 - 1,137,334 609,825 4,830,983
Total
comprehensive
income
for the
period - - - 3,083,824 - 1,137,334 609,825 4,830,983
Contributions
by and
distributions
to owners
Shares
bought
back (Note
c) (6,783) - 6,783 - (508,028) - - (508,028)
Dividends
paid 8 - - - - (1,527,911) - (1,188,375) (2,716,286)
Total
contributions
by and
distributions
to owners (6,783) - 6,783 - (2,035,939) - (1,188,375) (3,224,314)
Other
movements
Realised
losses
transferred
to special
reserve
(Note a) - - - - (381,165) 381,165 - -
Realisation
of previously
unrealised
gains - - - (1,814,167) - 1,814,167 - -
Total other
movements - - - (1,814,167) (381,165) 2,195,332 - -
At 30 June
2019 676,047 31,474,977 33,040 3,118,129 12,367,414 10,148,396 1,684,450 59,502,453
a): The cancellation of the share premium reserve and capital
redemption reserve in past years 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. c): During
the period, the Company repurchased 678,262 of its own shares
at the prevailing market price for a total cost (including stamp
duty) of GBP508,028, which were subsequently cancelled. This is
less than the figure shown in the Condensed Statement of Cash
Flows by GBP63,503, which was included in creditors at the previous
year end.
Unaudited Condensed Statement of Changes in Equity
for the six months ended 30 June 2018
Non-distributable reserves Distributable reserves
Called Share Capital Special Realised
up
share premium redemption Revaluation distributable capital Revenue
capital account reserve reserve reserve reserve reserve Total
For the Notes GBP GBP GBP GBP GBP GBP GBP GBP
six months
ended 30
June 2018
At 1 January
2018 674,751 29,895,865 14,589 517,952 20,029,787 6,346,235 932,461 58,411,640
Comprehensive
income
for the
period
Profit/(loss)
for the
period - - - 123,530 - (244,140) 533,785 413,175
Total
comprehensive
income
for the
period - - - 123,530 - (244,140) 533,785 413,175
Contributions
by and
distributions
to owners
Shares
issued
via Offer
for
Subscription 11,863 1,003,505 - - (10,787) - - 1,004,581
Issue of
shares
under
Dividend
Investment
Scheme 7,884 575,608 - - - - - 583,492
Shares
bought
back (6,133) - 6,133 - (464,370) - - (464,370)
Dividends
paid 8 - - - - (2,734,345) - - (2,734,345)
Total
contributions
by and
distributions
to owners 13,614 1,579,113 6,133 - (3,209,502) - - (1,610,642)
Other
movements
Realised
losses
transferred
to special
reserve - - - - (383,902) 383,902 - -
Realisation
of previously
unrealised
gains - - - (28,852) - 28,852 - -
Total other
movements - - - (28,852) (383,902) 412,754 - -
At 30 June
2018 688,365 31,474,978 20,722 612,630 16,436,383 6,514,849 1,466,246 57,214,173
The composition of each of these reserves is explained below:
Called up share capital - The nominal value of shares originally issued
increased for subsequent share issues either via an Offer for Subscription
or Dividend Investment Scheme or reduced due to shares bought back by
the Company.
Capital redemption reserve - The nominal value of shares bought back
and cancelled is held in this reserve, so that the company's capital
is maintained.
Share premium reserve - This reserve contains the excess of gross proceeds
less issue costs over the nominal value of shares allotted under recent
Offers for Subscription and the Company's Dividend Investment Scheme.
Revaluation reserve - Increases and decreases in the valuation of investments
held at the period end are accounted for in this reserve, except to
the extent that the diminution is deemed permanent.
In accordance with stating all investments at fair value through profit
and loss, 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 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 and disposal of investments;
-- 75% of the Investment Adviser fee expense and 100% of any performance
incentive 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.
The notes to the unaudited financial statements form part of these Half-Year
Financial Statements.
Unaudited Condensed Statement
of Cash Flows
for the six months ended
30 June 2019
Six months Six months Year ended
ended 30 June ended 30 June 31 December
2019 2018 2018
Notes (unaudited) (unaudited) (audited)
GBP GBP GBP
Cash flows from operating
activities
Profit for the financial
period 4,830,983 413,175 1,505,116
Adjustments for:
Unrealised gains on investments (3,083,824) (123,530) (1,294,148)
Realised (gains)/losses
on investments (1,518,499) (139,762) 363,572
Tax charge for the current
year 6 40,054 8,904 66,503
Decrease in debtors 145,503 227,082 104,935
Increase/(decrease) in
creditors and accruals 55,699 30,185 (35,677)
Net cash inflow from
operations 469,915 416,054 710,301
Corporation tax paid - - (117,456)
Net cash inflow from
operating activities 469,916 416,054 592,845
Cash flows from investing
activities
Sale of investments 9 6,767,896 3,183,830 4,531,646
Purchase of investments 9 (1,786,890) (3,056,872) (5,882,806)
Net cash inflow/(outflow)
from investing activities 4,981,006 126,958 (1,351,160)
Cash flows from financing
activities
Share issued as part
of Offer for Subscription
(net of issue costs) - 1,004,581 1,004,580
Equity dividends paid 8 (2,716,286) (2,150,853) (2,150,852)
Purchase of own shares (571,531) (719,909) (1,066,736)
Net cash outflow from
financing activities (3,287,817) (1,866,181) (2,213,008)
Net increase/(decrease)
in cash and cash equivalents 2,163,105 (1,323,169) (2,971,323)
Cash and cash equivalents
at start of period 19,371,447 22,342,770 22,342,770
Cash and cash equivalents
at end of period 21,534,552 21,019,601 19,371,447
Cash and cash equivalents
comprise:
Cash at bank and in hand 10 6,658,998 2,608,920 2,541,058
Cash equivalents 10 14,875,554 18,410,681 16,830,389
Notes to the Unaudited Condensed Financial Statements
for the six months ended 30 June 2019
1. Company information
Mobeus Income and Growth 4 VCT plc is a public limited company incorporated
in England, registration number 3707697. The registered office is
30 Haymarket, London, SW1Y 4EX.
2. Basis of preparation of the financial
statements
These Financial Statements have been prepared in accordance with
accounting policies consistent with Financial Reporting Standard
102 ("FRS102"), Financial Reporting Standard 104 ("FRS104") - Interim
Financial Reporting, with the Companies Act 2006 and the 2014 Statement
of Recommended Practice, 'Financial Statements of Investment Trust
Companies and Venture Capital Trusts' ('the SORP') (updated in January
2017) issued by the Association of Investment Companies. 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 10 on investments.
4. Income
Six months Six months ended Year ended
ended 30 June 30 June 2018 31 December
2019 2018
(unaudited) (unaudited) (audited)
Income from investments GBP GBP GBP
Dividends 68,462 111,922 290,937
Loan stock interest 957,809 832,801 1,824,903
Money-market funds 62,648 43,206 101,193
Bank deposit interest 19,585 16,352 34,179
Interest on preference
share dividend arrears 1,995 - 11,061
Other income - - 1,645
Total income 1,110,499 1,004,281 2,263,918
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 ended Six months ended Year ended
30 June 2019 30 June 2018 31 December
2018
(unaudited) (unaudited) (audited)
Total Total Total
GBP GBP GBP
Allocated to revenue
return: Investment
Adviser's fees 156,858 157,985 311,111
Allocated to capital
return: Investment
Adviser's fees 470,574 473,954 933,333
Total 627,432 631,939 1,244,444
Between 1 April 2018 and 31 March 2019, the Investment Adviser's
fee upon the net funds raised from the use of the over-allotment
facility of GBP5 million under the 2017/18 Offer was reduced to
1% from 2% per annum, for one year.
6 Taxation
Six months ended 30 Six months ended Year ended 31 December
June 2019 30 June 2018 2018
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 129,463 (89,409) 40,054 98,956 (90,052) 8,904 243,837 (177,334) 66,503
Total current
tax charge/(credit) 129,463 (89,409) 40,054 98,956 (90,052) 8,904 243,837 (177,334) 66,503
Corporation
tax is
based on
a rate
of 19.0%
(2018:
19.0%)
b) Profit/(loss)
on ordinary
activities
before
tax 739,288 4,131,749 4,871,037 632,741 (210,662) 422,079 1,574,376 (2,757) 1,571,619
Profit/(loss)
on ordinary
activities
multiplied
by rate
of corporation
tax in
the UK
of 19.0%.
(2018:
19.0%) 140,465 785,033 925,498 120,221 (40,026) 80,195 299,131 (523) 298,608
Effect
of:
UK dividends (13,008) - (13,008) (21,265) - (21,265) (55,278) - (55,278)
Unrealised
gains not
taxable - (585,927) (585,927) - (23,471) (23,471) - (245,889) (245,889)
Realised
(gains)/losses
not taxable
/ allowable - (288,515) (288,515) - (26,555) (26,555) - 69,078 69,078
Overprovision
in prior
period - - - - - - (26) - (26)
Unrelieved
expenditure 2,006 - 2,006 - - - 10 - 10
Actual
current
tax charge 129,463 (89,409) 40,054 98,956 (90,052) 8,904 243,837 (177,334) 66,503
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 Six months Year ended 31
30 June 2019 ended 30 December 2018
June 2018
(unaudited) (unaudited) (audited)
GBP GBP GBP
i) Total earnings
after taxation 4,830,983 413,175 1,505,116
Basic and
diluted earnings
per share
(pence) (Note
a) 7.10p 0.60p 2.20p
ii) Revenue
earnings from
ordinary activities
after taxation 609,824 533,785 1,330,539
Basic and
diluted revenue
earnings per
share (pence)
(Note b) 0.90p 0.78p 1.95p
Net unrealised
capital gains
on investments 3,083,825 123,530 1,294,148
Net realised
capital gains/(losses)
on investments 1,518,499 139,762 (363,572)
Capital Investment
Adviser's
fees less
taxation (381,165) (383,902) (755,999)
iii) Capital
earnings 4,221,159 (120,610) 174,577
Basic and
diluted capital
earnings per
share (pence)
(Note c) 6.20p (0.18)p 0.25p
iv) Weighted
average number
of shares
in issue in
the period 68,007,404 68,342,769 68,499,583
Notes:
a) Basic earnings per share is total earnings after taxation divided
by the weighted average number of shares in issue.
b) Basic revenue earnings per share is the revenue earnings after taxation
divided by the weighted average number of shares in issue.
c) Basic capital earnings per share is the capital earnings after taxation
divided by the weighted average number of shares in issue.
8. Dividends paid
Dividend Type For the Pence Date Paid Six months Six months Year ended
year ended per share ended ended 31 December
31 December 30 June 30 June 2018
2019 2018
(unaudited) (unaudited) (audited)
GBP GBP GBP
19 June
Interim Capital 2018 4.00p** 2018 - 2,734,345 2,734,344
28 May
Final Income 2018 1.75p 2019 1,188,375 - -
Final Capital 2018 2.25p** 28 May 1,527,911 - -
2019
Total dividends paid* 2,716,286 2,734,345 2,734,344
*For the period ended 30 June 2018: GBP2,734,344; 31 December 2018:
GBP2,734,344) disclosed above differs to that shown in the Condensed
Statement of Cash Flows of GBP2,150,852; 31 December 2018: GBP2,150,852)
due to GBP583,492 (31 December 2018: GBP583,492) of new shares issued
under the Company's Dividend Investment Scheme ('DIS').
** These dividends were paid out of the Company's special distributable
reserve.
Shareholders should note that the DIS scheme is suspended until
further notice, as explained in the Chairman's Statement.
9. Summary of movement on investments during period
The most critical estimates, assumptions and judgements relate to
the determination of the carrying value of investments at "fair
value through profit and loss" (FVTPL). All investments held by
the Company are classified as FVTPL and measured in accordance with
the International Private Equity and Venture Capital Valuation ("IPEV")
guidelines, as updated in December 2018. This classification is
followed as the Company's business is to invest in financial assets
with a view to profiting from their total return in the form of
capital growth and income.
Purchases and sales of unlisted investments are recognised when
the contract for acquisition or sale becomes unconditional. For
investments actively traded on organised financial markets, fair
value is generally determined by reference to Stock Exchange market
quoted bid prices at the close of business on the balance sheet
date. Purchases and sales of quoted investments are recognised on
the trade date where a contract of sale exists whose terms require
delivery within a time frame determined by the relevant market where
the terms of the 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 true value of money, may be recognised
through the Income Statement. In other cases, the proceeds will
only be recognised once the right to receive payment is established
and there is no reasonable doubt that payment will be received.
Unquoted investments are stated at fair value by the Directors at
each measurement date in accordance with appropriate valuation techniques,
which are consistent with the IPEV guidelines:-
(i) Each investment is considered as a whole on a 'unit of account'
basis, alongside consideration of:-
The price of new investments made, if deemed to be made as part
of an orderly transaction, are considered to be at fair value at
the date of the transaction. At subsequent measurement dates, the
inputs that derived the investment price are reconsidered for any
changes in light of more recent events or changes in the market
performance of the investee company such that the valuation bases
used are the following: -
- 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 pre-tax earnings before interest and
amortisation, or revenue, or gross profit (the ratio used being
based on a comparable sector but the resulting value being adjusted
to reflect points of difference identified by the Investment Adviser
compared to the sector including, inter alia, scale and liquidity).
or:-
- where a company's underperformance against plan indicates a diminution
in the value of the investment, provision against the price of a
new investment is made, as appropriate.
(ii) Premiums, to the extent that they are considered capital in
nature, and that they will be received upon repayment of loan stock
investments are accrued at fair value when the Company receives
the right to the premium and when considered recoverable.
(iii) Where a multiple or the price of recent investment less impairment
basis is not appropriate and overriding factors apply, a discounted
cash flow, net asset valuation 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 the price of recent investment,
the loss is treated as a permanent impairment and as a realised
loss, even though the investment is still held. The Board assesses
the portfolio for such investments and, after agreement with the
Investment Adviser, will agree the values that represent the extent
to which an investment loss has become realised. This is based upon
an assessment of objective evidence of that investment's future
prospects, to determine whether there is potential for the investment
to recover in value.
The methods of fair value measurement are classified into hierarchy
based on the reliability of the information used to determine the
valuation.
- Level 1 - Fair value is measured based on quoted prices in an
active market.
- Level 2 - Fair value is measured based on directly observable
current market prices or indirectly being derived from market prices.
- Level 3 - Fair value is measured using valuation techniques using
inputs that are not based on observable market data.
Traded Unquoted Unquoted Unquoted Total
on AIM equity preference Loan
Stock
shares shares
Level Level Level Level
1 3 3 3
GBP GBP GBP GBP GBP
Valuation at
31 December
2018 208,344 15,812,770 339,383 19,938,163 36,298,660
Purchases at
cost - 1,339,490 447,400 - 1,786,890
Sales - proceeds - (3,208,008) (328,654) (3,284,369) (6,821,031)
- realised
gains - 980,338 - 538,161 1,518,499
Unrealised
(losses)/gains
on investments
in the period (46,669) 3,153,323 - 203,064 3,309,718
Valuation at
30 June 2019 161,675 18,077,913 458,129 17,395,019 36,092,736
Book cost at
30 June 2019 200,028 17,685,121 460,271 17,389,384 35,734,804
Unrealised
(losses)/gains
at 30 June
2019 (38,353) 3,065,357 (2,142) 93,273 3,118,129
Permanent impairment
of investments - (2,672,559) - (87,638) (2,760,197)
Valuation at
30 June 2019 161,675 18,077,913 458,129 17,395,019 36,092,736
Gains on investments - 2,116,993 328,143 887,530 3,332,666
Less amounts
recognised
as unrealised
gains in previous
years - (1,136,655) (328,143) (349,369) (1,814,167)
Realised gains
based on carrying
value at 31
December 2018 - 980,338 - 538,161 1,518,499
Net movement
in unrealised
(depreciation)/appreciation
in the period (46,669) 3,153,323 - 203,064 3,309,718
(Losses)/gains
on investments
for the six
months ended
30 June 2019 (46,669) 4,133,661 - 741,225 4,828,217
Net unrealised gains above of GBP3,309,718 differ to that
shown in the Income Statement of GBP3,083,824. The difference
of GBP225,894 is deferred consideration in relation to the
sale of Entanet Holdings that was recognised at the previous
year end and was subsequently received during this half year.
A further sum of GBP250,994 was paid on 2 August 2019. As
there were conditions attached to this deferred consideration
such that the amount receivable was uncertain, which had
not ben satisfied at the period end, it has not been recognised
in these financial statements.
Sales proceeds above of GBP6,821,031 are more than that shown
in the Condensed Statement of Cash Flows of GBP6,767,896
by GBP53,135. This amount is cash proceeds not yet received
arising from the part disposal of Master Removers Group.
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 increase 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 increase does
not arise from assessments of credit or market risk upon
these instruments.
Level 3 unquoted equity and loan investments are valued in
accordance with IPEV guidelines as follows:
as at as at as at
30 June 30 June 31 December
2019 2018 2018
(unaudited) (unaudited) (audited)
GBP GBP GBP
Valuation methodology
Cost (reviewed
for impairment) 284,441 453,607 527,332
Discounted
realisation
proceeds 5,313 5,313 5,313
Net asset value 122,422 229,783 122,422
Recent investment
price 2,444,790 6,322,062 1,674,350
Multiple of
earnings, revenues
or gross margin,
as appropriate 33,074,095 27,176,826 33,760,899
35,931,061 34,187,591 36,090,316
10. Current asset
investments
and cash at
bank
as at as at as at
30 June 30 June 31 December
2019 2018 2018
(unaudited) (unaudited) (audited)
GBP GBP GBP
OEIC Money
market funds 14,875,554 18,410,681 16,830,389
Cash equivalents
per Statement
of Cash Flows 14,875,554 18,410,681 16,830,389
Bank deposits
that mature
after three
months 2,000,000 2,000,000 2,000,000
Current asset
investments 16,875,554 20,410,681 18,830,389
Cash at Bank 6,658,998 2,608,920 2,541,058
11. Net asset value As at 30 As at As at
per share June 2019 30 June 31 December
2018 2018
(unaudited) (unaudited) (audited)
Net assets GBP59,502,453 GBP57,214,173 GBP57,895,784
Number of shares
in issue 67,604,732 68,836,512 68,282,994
Net asset value
per share (pence) 88.02p 83.12p 84.79p
12. Post balance sheet events
On 10 July 2019, a further GBP0.45 million was invested into
MPB Group Limited, an existing portfolio company.
On 30 July 2019, by the order of the Court at that date,
the Company cancelled its share premium reserve and capital
redemption reserve. The balance on these reserves has been
transferred to the Company's special reserve.
On 2 August 2019, GBP0.25 million of contingent consideration
was received as part of the sale of Entanet Holdings in August
2017.
13. Financial statements for the year ended 31 December 2018
The financial information for the period ended 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 2018 have been filed with the Registrar
of Companies. The auditor has reported on the financial statements
for the year ended 31 December 2018 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:
Robert Brittain at Mobeus Equity Partners LLP (the Company
Secretary) on 020 7024 7600 or by e-mail on vcts@mobeus.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 SSSSUAFUSEIA
(END) Dow Jones Newswires
August 08, 2019 05:54 ET (09:54 GMT)
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