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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 | 451,079 | 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 : 0815Z
Mobeus Income & Growth 4 VCT PLC
15 September 2020
MOBEUS INCOME & GROWTH 4 VCT PLC
HALF YEAR RESULTS FOR THE SIX MONTHSED 30 JUNE 2020
Mobeus Income & Growth 4 VCT plc ("the Company") today announces its half-year results for the six months ended 30 June 2020.
As at 30 June 2020:
Net assets: GBP54.57 million
Net asset value ("NAV") per share: 64.59 pence
Financial Highlights
Results for the six months ended 30 June 2020
-- Net asset value total return(1) per share was (0.4)% for the six months. -- Share price total return(1) per share fell by 5.7% for the six months.
-- The Company declared an interim dividend in respect of the current year of 6.00 pence per share, paid to Shareholders on 7 May 2020.
-- The Company realised investments for a total of GBP6.75 million, a gain of GBP1.58 million for the six months.
-- The Company invested GBP0.81 million into two new growth capital investments and GBP1.15 million into two existing portfolio companies.
1 Alternative Performance measure (APM). See glossary of terms on page 28 of the Half-Year Report.
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 (NAV basis)
to date since launch
(pence per (pence per (pence per share)
share) share)
------------- ---------------- -----------------------------
As at 30 June 2020 64.59 134.20 198.79
------------- ---------------- -----------------------------
As at 31 December
2019 74.90 124.20 199.10
------------- ---------------- -----------------------------
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
------------- ---------------- -----------------------------
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 Appendix at 30 June 2020 on the Company's website at: www.mig4vct.co.uk , where they can be accessed by clicking on the word "table" under "Reviewing the performance of your investment" heading on the home page.
On 1 August 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 2020.
Overview
The 2020 half-year was preceded by a commendable NAV total return of 10.7% for the year ended 31 December 2019. This good performance continued in the early part of 2020 with two profitable realisations, Biosite and Auction Technology Group, the latter of which being the Company's most successful exit in its history.
Midway through this half-year, COVID-19 and the UK Government's lockdown measures provoked very significant uncertainty and instability. This resulted in a significant dip in consumer and business confidence and public markets saw a sharp fall in the first quarter of the year.
Over this unprecedented time, the Board has liaised closely with the Investment Adviser, Mobeus Equity Partners LLP ("Mobeus"), who responded well in ensuring that all practical steps were being taken to enable each company to trade through the crisis where possible and could return to grow in value thereafter.
Amongst many portfolio initiatives, all investee companies were alerted to, and some utilised available government support packages. The Company also provided loan interest payment holidays to some portfolio companies, generating vital cash headroom for the portfolio during the lockdown period.
The immediate impact for Shareholders of the COVID-19 crisis was that a number of valuation adjustments were made at the end of March resulting in a fall of 10.1% in underlying NAV per share for the quarter to 63.30 pence. These adjustments were partly market related, but also partly in response to COVID-19's impact on specific market segments and investee companies. In this context it is fortunate that the Company's portfolio has a relatively limited exposure to the travel and hospitality sectors. This fall in NAV was tempered by the beneficial impact of the sale of Auction Technology Group.
In the second quarter, greater clarity has emerged on the impact of the crisis upon the portfolio. To date, this has been more modest than was initially expected and it has become apparent that there have been several portfolio beneficiaries arising from a structural change in activity, behaviour and consumer purchasing habits. Much of the portfolio has demonstrated a strong degree of resilience. Also, quoted markets have seen a significant rally since the March low point, although the FTSE-100 Index has still fallen by almost a fifth over the six months under review. Overall, the view of the Board and Mobeus is that the environment for our investee companies has been less volatile and less uncertain than initially thought, such that the valuation of the portfolio recovered strongly at the end of June. Over the six months to 30 June 2020, the NAV total return was stable which the Board considers a very creditable result in this environment. Further information is set out under Performance in my Statement below.
A number of transactions occurred during th e period. In the first quarter, the Company made two profitable portfolio realisations: Biosite and Auction Technology Group, and a partial disposal of Omega Diagnostics occurred in the second quarter. The exit of Auction Technology Group was the Company's most successful investment to date. In May, two follow-on investments were made into existing portfolio companies in Rotageek and MyTutor, and two new investments were made into Bella & Duke and Andersen EV in February and June respectively. Since the period-end, a follow-on investment of GBP1.12 million was made into Buster and Punch Holdings Limited. The Board is also encouraged by the recent profitable disposals, following the period-end, of Tovey Management (trading as Access IS) and Blaze Signs Holdings Limited and a further partial realisation of half of its remaining holding in Omega Diagnostics. These transactions realised cash proceeds totalling GBP6.18 million in what remains a challenging investment environment. The impact of these realisations on the NAV per share of 64.59 pence at 30 June 2020 is estimated to be an increase of 1.44 pence per share. This is in isolation to any other matters that may affect NAV per share. Further details of the investment activity are contained in the Investment Adviser's Review.
Performance
The Company's NAV total return per share was (0.4)% for the six months to 30 June 2020 (2019: 8.5%). This represents a material recovery in NAV per share compared to that announced at the height of the pandemic as at 31 March 2020. The share price total return was a fall of 5.7% (2019: increase of 5.3%), at 30 June, mainly because the share price at 30 June is by reference to the last announced but lower NAV per share of the Company being at 31 March 2020.
Although the NAV was reduced by falls in the valuations of specific portfolio companies, reflecting the impact of COVID-19, this adverse impact was partly offset by a number of factors. Positive returns came both from realised gains from portfolio exits as well as a strong revenue return. Several of the Company's investment structures incorporate preference structures, such that any reduction in the value of the enterprise does not feed directly into the same reduction in the value of the Company's investment. In addition, the Company has significant liquidity which, in accordance with its policy, has been invested in lower risk liquidity funds and bank deposit accounts and these have retained their value.
The Board therefore believes that the Company's performance has demonstrated a good degree of resilience over a very volatile half-year. At the period-end, your Company was ranked 13th out of 31 Generalist VCTs over ten years and 17th out of 43 over five years, in the Association of Investment Companies' analysis of NAV Cumulative Total Return. Shareholders should note that these figures do not reflect the increased NAV per share disclosed in this Report.
For further details on the performance of the Company, please refer to the Investment Adviser's Report.
Dividends
A third interim dividend for last year of 4.00 pence per share was paid on 10 January 2020. On 2 April 2020, the Board declared an interim dividend of 6.00 pence per share in respect of the current financial year, paid to Shareholders on 7 May 2020 whose names were on the Register on 14 April 2020.
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 ten 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. The gradual move of the portfolio to growth capital investments may make the target more difficult to achieve in future financial years without recourse to the Company's reserves.
Shareholders should note that there may continue to be circumstances where the Company is required to pay dividends in order to maintain its regulatory status as a VCT, for example, to stay above the minimum percentage of assets required to be held in qualifying investments. Such dividends may cause the Company's NAV per share to reduce by a corresponding amount.
Investment portfolio
In the context of a very challenging business environment, the portfolio has performed well during this period. The overall value has decreased by GBP0.47 million (2019: increase of GBP4.60 million), or (1.2)% (2019: increase of 12.7%) on a like-for-like basis, compared to the start of the year. This fall was comprised of a net unrealised decrease in valuations of GBP2.05 million, partially offset by GBP1.58 million in realised gains over the six- month period. The portfolio was valued at GBP33.28 million at the period-end (31 December 2019: GBP38.54 million).
During the six-months under review, the Company invested a total of GBP1.96 million, (2019: GBP1.79 million) into two new (2019: two) and two existing (2019: nil) investments.
The new investments were:
-- Bella & Duke - A premium frozen raw dog food provider
GBP0.62 million
-- Andersen EV - An electric vehicle charge point business
GBP0.19 million
and the existing investments were:
-- MyTutor - A digital marketplace for school tutoring
GBP0.71 million
-- Rotageek - A workforce management software provider
GBP0.44 million
The Company realised investments in Pattern Analytics (trading as Biosite) and Turner Topco (trading as Auction Technology Group) during the period, which, combined with other capital receipts, generated total proceeds of GBP6.75 million.
The realisation of Auction Technology Group achieved a substantial gain over cost and represented proceeds of GBP4.18 million and a gain of GBP1.15 million in the period. Over the 11 1/2 year life of the investment, total proceeds of GBP9.03 million have been received, an overall multiple of over 4.5x original cost and an IRR of 28.9%.
Pattern Analytics (trading as Biosite), an investment made after the 2015 rule change was realised for proceeds of GBP1.98 million. Over the three-year life of the investment, this company generated a return on original cost of 1.5x and an IRR of 21.0%.
Other capital proceeds of GBP0.59 million and realised gains of GBP0.43 million were principally generated from Omega Diagnostics which was partially realised in the period, Redline Worldwide, an investment realised in a prior period and a loan repayment from BookingTek, an existing portfolio company.
Following the period-end, there were additional realisations from:
-- Access IS - GBP6.24 million cash proceeds received over the lift of the investment equating to a 2.5x multiple of cost and an IRR of 23.4%;
-- Blaze - GBP1.55 million cash proceeds received over the life of the investment: a 2.5x multiple of cost and an IRR of 13.1%.
Details of this investment activity and the performance of the portfolio are contained in the Investment Adviser's Review and the Investment Portfolio Summary.
Revenue account
The results for the period are set out in the Unaudited Condensed Income Statement and show a revenue return (after tax) of 1.28 pence per share (2019: 0.90 pence per share). The revenue return for the period of GBP1.06 million has increased from last year's comparable figure of GBP0.61 million. This increase is mainly due to a significant receipt of loan interest arising from the sale of Auction Technology Group, partially offset by a number of provisions against loan interest.
Fundraising
The Board was very pleased with the support in respect of the Company's Offer for Subscription which was launched on 25 October 2019. This Offer became fully subscribed within two months and raised GBP13.00 million in total. The Company allotted a total of 18,450,535 shares of 1 penny each in the Company on 8 January and 2 April 2020. The Board extends a warm welcome to all new Shareholders.
Share buy-backs
During the six months under review, the Company bought back and cancelled 766,590 of its own shares, representing 1.2% (2019: 1.0%) of the shares in issue at the beginning of the period, at a total cost of GBP0.42 million (2019: GBP0.51 million) inclusive of expenses.
It is the Company's policy to cancel all shares bought back in this way. The Board regularly reviews its buyback policy and currently seeks to maintain the discount at which the Company's shares trade at no more than 5% below the latest published NAV.
Liquidity
Following the Company's successful fundraising and significant realisation proceeds, cash or near cash resources held by the Company as at 30 June 2020 were GBP21.53 million or 39.4% of net assets. After the period-end, following the realisations of Access and Blaze, the partial realisation of Omega Diagnostics, as well as the further investment into Buster and Punch, the pro forma level of liquidity will be GBP26.60 million or 47.6% of net assets. The Board considers the Company to be in a strong cash position.
Shareholder communications
May I remind you that the Company has its own website which is available at www.mig4vct.co.uk containing useful information for Shareholders.
The Investment Adviser held the annual Shareholder event on 4 February 2020 and is planning to hold a virtual event in the first quarter of 2021. Details will be notified to Shareholders when finalised and will be shown on the Company's website: www.mig4vct.co.uk .
Succession
As stated in the 2019 Annual Report, I shall be stepping down as Chairman after a long tenure as a director of the Company, during which time a considerable transformation in prospects and performance has taken place. A full recruitment process was conducted using an independent employment consultant, and I am delighted to announce that my successor is Jonathan Cartwright who joined the Board as a director and Chairman designate at the recent Board meeting. He will be taking over the Chair with effect from 1 October following my retirement on 30 September 2020. He has served, in the past, on the Board of Caledonia Investments PLC and on The Income & Growth VCT plc. He currently sits, inter alia, on the Board of British Smaller Companies VCT PLC and BMO Capital and Income Investment Trust PLC. I am sure that he will continue to deliver good results for Shareholders and safeguard their interests. I would like to welcome him on behalf of all Shareholders.
Outlook
The full impact of COVID-19 is still unclear and is likely to be felt for several years to come. Nevertheless, your Board considers that your Company is well positioned to cope with most of the likely scenarios in so far as they can presently be foreseen. The successful realisations and recent fundraising have given the Company strong liquidity not only to support the existing portfolio if appropriate, but also to capitalise on opportunities which may arise for new investment. The portfolio still comprises a foundation of mature investments that are still providing an income return, as well as a younger, growth capital portfolio seeking to achieve scale, higher levels of profitability and hence value.
The challenges arising from the COVID-19 pandemic should not be underestimated. As of the date of this report the degree of further damage which might be inflicted, and the success or otherwise of governments' handling of the pandemic around the world, cannot be predicted. COVID-19 is a change accelerator. Some businesses, and business models, will be overwhelmed, but it is also noticeable that other business models, for example those that promote heavily automated delivery systems, are prospering. However, once conditions stabilise, the Board and Mobeus believe that attractive new and follow-on investment opportunities will still emerge and are pleased to see that a degree of definite recovery has already been achieved.
Finally, I would like to take this opportunity once again to thank Shareholders for their continued support.
Christopher Moore
Chairman
15 September 2020
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
COVID-19 Pandemic
In March 2020, in response to the COVID-19 pandemic, the UK Government introduced lockdown and social distancing measures. These measures had an immediate adverse impact on UK businesses, with many companies experiencing a significant reduction in consumer and business demand. Businesses' ability to trade was further impacted by restrictions on their employees' working practices and disruption to their supply chains. The six months to 30 June 2020 has been characterised by ongoing volatility and uncertainty caused by these lockdown measures, together with global stock market falls. Following the low point in March however, there has been a strong trend of recovery in market and business activity levels.
Looking forward, there are still uncertainties ahead. The impact on transaction activity has been mixed. New investment activity has been low due to difficulties of appraisal and diligence in lockdown and owners of businesses being unwilling to accept downward price adjustments thus far. The level of portfolio follow-on investment has been higher and there are opportunities to back known portfolio companies that are achieving strong relative performance. The realisation activity outlook continues to be positive with several approaches received from trade and financial investors to a number of investee companies.
Portfolio review
Overall, the value of the portfolio decreased by GBP0.47 million over the period comprising a decrease of GBP2.05 million in the unrealised portfolio and gains of GBP1.58 million through realisations. Despite this fall in the unrealised portfolio, it represents a recovery of the majority of the value lost in the first quarter. It is important to note that the usual approach to portfolio valuation by the Investment Adviser continued to be applied throughout this period and that the recovery in the second quarter was not all market related. It reflected a number of other factors such as earnings and revenues being more resilient than expected, the removal of adjustments related to the uncertainty that were put in place during the March quarter, and improved cash generation as the UK Government lock down restrictions were eased.
There have been a number of portfolio companies that have been clear beneficiaries from UK lockdown which have traded strongly throughout. There is a reasonable expectation that some of these gains will prove permanent. The majority of the portfolio has remained resilient, more so than first thought at the 31 March valuation point which coincided with the height of uncertainty. In particular, there have been very few COVID-19 temporary closures, Tapas Revolution being the only one of note. Several portfolio companies that saw significant falls in activity early in the crisis are now trading strongly again whilst a number have raised capital to ensure that they are ready to capitalise on demand when it returns.
In the six months to 30 June 2020, the Company made two follow-on investments of GBP0.71 million into MyTutor and GBP0.44 million into Rotageek. Two new growth capital investments have also been made into Bella & Duke (GBP0.62 million), a premium frozen raw dog food provider, and Andersen EV (GBP0.19 million), a manufacturer of premium electric vehicle (EV) chargers.
Following the period-end, there was an additional follow-on investment of GBP1.12 million into Buster and Punch.
The Company realised its investments in Biosite and Auction Technology Group during the period, receiving a total of GBP6.16 million in proceeds, and contributed to total receipts of GBP6.75 million during the period. The investment in Biosite generated proceeds of GBP2.07 million over the life of the investment and contributed to a gain over original cost of 1.5x. Auction Technology Group generated a realised gain in the period of GBP1.15 million. This investment generated proceeds over the life of the investment of GBP9.03 million compared to an original cost of GBP2.00 million, a multiple on cost of 4.5x over the 11 1/2 years this investment was held - an exceptional return for Shareholders.
Also, following a significant increase in its share price, the Company received GBP0.46 million from the partial realisation of half its holding in Omega Diagnostics. This represented a realised gain of GBP0.34 million in the period and contributed to an attractive return to date of 4.6x multiple on cost and an IRR of 17.7%, securing a positive return overall whilst maintaining a degree of exposure to any potential upside.
Following the period-end, there were additional realisations of Access IS and Blaze, receiving a total of GBP5.89 million in cash proceeds, as well as a further partial realisation of Omega Diagnostics generating GBP0.29 million.
The portfolio's activity in the six months to 30 June 2020 is summarised as follows:
2020 2019
GBPm GBPm
Opening portfolio value 38.54 36.52
-------- -------
New and follow-on investments 1.96 1. 79
-------- -------
Disposal proceeds (6.75) (6.82)
-------- -------
Net realised gains 1.58 1.52
-------- -------
V aluation movements (2. 05) 3.08
-------- -------
Portfolio value at 30 June 33.28 36. 09
-------- -------
The investment and divestment activity during the period increased the proportion of the portfolio regarded as growth capital investments by value to 68.6% (including AIM and legacy) at the period-end (31 December 2019: 62.0%). The portfolio decreased from 39 to 38 investments at the period-end.
The portfolio's contribution to the overall results of the Company for the six-month period is summarised as follows:
Investment Portfolio Capital Movement 2020 2019
GBPm GBPm
Increase in the value of unrealised
investments 3.77 4.63
-------- -------
Decrease in the value of unrealised
investments (5.82) (1.55)
-------- -------
Net (decrease) / increase in the value (2.
of unrealised investments 05) 3. 08
-------- -------
Realised gains 1. 62 1.52
-------- -------
Realised losses (0.04) -
-------- -------
Net realised gains in the period 1.58 1.52
-------- -------
Net investment portfolio movement in
the period (0 .47) 4. 60
-------- -------
Valuation changes of portfolio investments still held
The valuation reductions of GBP5.82 million principally arise from the Investment Adviser's COVID-19 impact review of the portfolio.
Within total valuation decreases, the main reductions were CGI Creative Graphics International - GBP1.15 million, Tapas Revolution - GBP1.13 million, and Media Business Insight - GBP0.80 million. These three companies saw some of the most significant impact of a sudden decline in demand for their products or services which, even as restrictions are being eased, may take time for value to recover.
By contrast some investee companies' trading has benefited from the lockdown; The main valuation increases included Access IS - GBP0.97 million, Virgin Wines - GBP0.71 million, and Parsley Box - GBP0.66 million. Access IS's valuation reflects the long-term nature of many of its projects. Both Virgin Wines and Parsley Box have generated record earnings and revenues respectively and time will tell if this increased demand will continue in the medium-term.
The period also saw portfolio companies, Jablite and Super Carers, appointing administrators. These two companies were struggling before the impact of COVID-19. Valuation reductions for these companies had already been made, so there has been little impact on shareholder value from these administration processes.
Investment portfolio yield
In the period under review, the Company received the following amounts in interest and dividend income:
Investment Portfolio Yield 2020 2019
GBPm GBPm
Interest receivable in the
period 1.57 0.98
------- -------
Dividends receivable in
the period 0.07 0.07
------- -------
Total portfolio income
in the period (1) 1. 64 1. 05
------- -------
Portfolio value at 30 June 33.28 36. 09
------- -------
Portfolio Income Yield
(Income for the half year
as a % of Portfolio value
at 30 June) 4.9% 2.9%
------- -------
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.
The increase in income was mainly due to interest of GBP1.09 million received on the loan instruments in Auction Technology Group being paid, as part of the sale transaction, which had not previously been recognised.
New investments in the half-year
The Company made two new investments totalling GBP0.81 million during the period, as detailed below.
Company Business Date of Investment Amount of new
investment (GBPm)
Premium frozen
raw dog food
Bella & Duke provider February 2020 0.62
---------------- -------------------- -------------------
Bella & Duke is a direct to consumer subscription service,
providing premium frozen raw dog food to pet owners in the
UK. Founded in 2016, the business provides an alternative
to standard meal options for dog owners by focusing on the
well documented health benefits of a raw food diet. This
area is a growing niche in the large and established pet
food market and is being driven by the premiumisation of
dog food. The investment will seek to optimise its production
and supply facilities, expand and enhance its team and broaden
its product range. The company has grown revenues over 300%
between 2018 and 2019.
E l ec tri c
vehicle ( EV
Andersen EV ) chargers June 2020 0.19
---------------- -------------------- -------------------
Muller EV Limit ed (tr a din g as A nd ersen EV ) is a d
es ign - l e d manufacturer of premium elec tri c vehicle
( EV ) chargers. Inc orporated in 2016, this business has
secured high profile partnerships w ith Porsche and Jaguar
Land Rover , es t ab lishin g an a ttr ac ti ve niche position
in charging p o ints for th e high end EV market. The Company's
funds will be used to scale th e business through in ves
tm en t in further pr o du c ts and so ft w ar e , sal es
and marketing and elec tri c vehicle manuf ac tur er partnerships.
A nd ersen is well positioned in a nascent sec t o r experiencing
significant g r ow th and has increased sales by over 350%
for its m o st recent financial yea r.
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
Workforce management November 2016 GBP2.07 million
Biosite and secu rit to Fe bru a r 1.5 times cost
y ser v i ces y 2020
--------------------- --------------------- --------------------
The Company sold its investment in Pattern Analystics Limited
(trading as Biosite) to ASSA ABLOY AB for GBP1.98 million.
Since investment in 2016, the investment has generated proceeds
of GBP2.07 million compared to an original investment cost
of GBP1.34 million, which is a multiple on cost of 1.5x and
an IRR of 21.0%.
Auction Technology SaaS based online October 2008 GBP9.03 million
Group auction marketplace to February 2020 4.5 times cost
platform
--------------------- --------------------- --------------------
The Company sold its investment in Turner Topco Limited (trading
as Auction Technology Group) to TA Associates for GBP5.27
million (including GBP1.09 million loan interest due on completion).
This investment generated proceeds of GBP9.03 million over
the life of the investment (including proceeds received following
a partial realisation from a sale to ECI Partners in June
2014), compared to an original cost of GBP2.00 million. These
returns generated a multiple on cost of 4.5x and an IRR of
28.9%.
Omega Diagnostics was also partially realised in the period and the Company received proceeds of GBP0.46 million, generating a gain in the period of GBP0.34 million.
Follow-on investments into existing portfolio companies in the period
The Company made two follow-on investments totalling GBP1.15 million into existing portfolio companies in the period, as detailed below:
Company Business Date of Investment Amount of new
investment (GBPm)
Digital marketplace
connecting school
pupils seeking
one-to- one online
MyTutor tutoring May 2020 0.71
---------------------- -------------------- -------------------
MyTutorWeb Limited (trading as MyTutor) is a digital marketplace
that connects school pupils who are seeking private one-to-one
tutoring with university students. The business is satisfying
a growing demand from both schools and parents to improve
pupils' exam results to enhance their academic and career
prospects. This further investment, alongside other existing
shareholders, seeks to build and reinforce its position as
a UK category leader in the online education market as well
as to begin to develop a broader, personalised learning product
offering. The COVID-19 impact on the education sector has
significantly heightened the awareness of online learning
and tutoring. MyTutor has grown strongly over the last six
months with average year on year growth of 70%.
Workforce management
Rotageek software May 2020 0.44
---------------------- -------------------- -------------------
Rota Geek Limited (trading as Rotageek) is a provider of
cloud-based enterprise software to help larger retail and
leisure organisations predict and meet demand to schedule
staff more effectively. This investment, alongside funds
from a new VCT investor and existing shareholders, will be
used to capitalise on opportunities that will emerge as the
retail sector recovers from lockdown restrictions. Rotageek
has also moved into healthcare to help address the workforce
management issues of a sector that is chronically overburdened
at present. For the year ended 31 December 2019, revenues
have grown over 45% on the prior year.
Realisations post the half-year
Following the period-end, there were additional realisations from Access IS and Blaze:
Company Business Period of investment Total cash proceeds
over the life
of the investment/
Multiple over
cost
A cce ss IS Data capture O c to b er 2 GBP 6.24 million
and scanning 0 15 to 2.5 times cost
hardware Au g u st 2 0
20
--------------- --------------------- ------------------------
The Company sold its investment in Tovey Management Limited
(trading as Access IS) to ASSA ABLOY AB for GBP5.32 million.
Since investment in 2015, the investment has generated proceeds
of GBP6.24 million compared to an original investment cost
of GBP2.47 million, which is a multiple on cost of 2.5x and
an IRR of 23.4%.
Blaze Signs Manufacturer April 2006 to GBP 1.55 million
and installer September 2020 2.5 times cost
of signs
--------------- --------------------- ------------------------
The Company sold its investment in Blaze Signs Holdings Limited
via a secondary buy out backed by Elaghmore Advisor LLP and
has received cash proceeds of GBP0.55 million. Over the 14
years this investment was held, cash proceeds of GBP1.55
million have been received compared to original cost of GBP0.61
million, which is a multiple of cost of 2.5x and an IRR of
13.1%.
Also after the period-end, the Company realised half of its remaining holding in Omega Diagnostics Group plc, realising GBP0.29 million.
Follow-on investments post the half-year
Following the period-end, there was one follow-on investment as detailed below:
Company Business Date of Investment Amount of new
investment (GBPm)
Lighting and
Buster & Punch interiors brand September 2020 1.12
------------------ -------------------- -------------------
Buster and Punch is a well-established, premium branded,
fast growing business which designs and manufactures a complete
range of high-quality functional fittings (lighting, electrical
and hardware and other accessories) for the home. The VCT
first invested in 2017 and since then, the business delivered
consistent high growth across its ranges, with revenues growing
in excess of 65%, and reaching nearly GBP10 million in 2020.
Buster and Punch's products are now sold in 99 countries
via both its highly invested ecommerce platform and direct
services to consumers, trade and retailers across the world.
Buster and Punch also operates flagship showrooms in London,
Stockholm and Los Angeles. To support the continued growth
of Buster and Punch, the new funding will be used to drive
the global business plans of the fast-growing luxury interior
fashion label with further expansion and strategic new penetration
into the US and Asia Pacific markets.
Investment Portfolio Summary
At 30 June 2020
Total
cost at Total valuation Total valuation % of % of
30 June at 31 December at 30 June equity portfolio
Mobeus Equity Partners LLP 2020 2019 2020 held by value
GBP GBP GBP
Tovey Management Limited (trading
as Access IS)
Provider of data capture and 2,469 9 .7 13.
scanning hardware ,013 3,571, 056 4,539, 035 % 6%
---------- ------------------ ------------------- -------- -----------
Virgin Wines Holding Company
Limited 9 .7 9.6
Online wine retailer 1,930,813 2,475,731 3,188, 735 % %
---------- ------------------ ------------------- -------- -----------
MPB Group Limited
Online mark etplace for photographic 1,480
and video equipment ,993 2, 701,332 2,837 ,718 5.3% 8.5%
---------- ------------------ ------------------- -------- -----------
Preservica Limited
Seller of proprietary digital 1,585, 11. 7. 6
archiving software 773 2,043,873 2,545,579 0% %
---------- ------------------ ------------------- -------- -----------
My Tutor Web Limited (trading
as Mytutor)
Digital mark etplace connecting
school pupils seeking one to 2,023,
one online tutoring 042 1,307, 644 2,023,042 8.2% 6. 0%
---------- ------------------ ------------------- -------- -----------
Proactive Group Holdings Inc
Provider of media services and
investor conferences for companies
primarily listed on secondary
public mark ets 755,340 1,900,421 1,900,421 2. 6% 5.7%
---------- ------------------ ------------------- -------- -----------
EO TH Limited (trading as Equip
Outdoor T echnologies)
Branded outdoor equipment and
clothing 951,471 2,148, 792 1,852,825 1. 7% 5. 6%
---------- ------------------ ------------------- -------- -----------
Parsley Box Limited
Home delivered ambient ready
meals for the elderly 668,400 704,359 1,364,427 4.9% 4.1%
---------- ------------------ ------------------- -------- -----------
Vian Marketing Limited (trading
as R ed P addle Co)
Design, manufacture and sale
of stand-up paddleboards and
windsurfing sails 899 ,074 1,337,175 1,337,120 10 .9% 4. 0%
---------- ------------------ ------------------- -------- -----------
Data Discovery Solutions Limited
(trading as Active Navigation)
Provider of global mark et leading
file analysis software for information
governance , security and compliance 1, 100,500 1, 100 ,500 1,334,421 6.3% 4. 0%
---------- ------------------ ------------------- -------- -----------
Media Business Insight Holdings
Limited
A publishing and events business
focused on the creative production 15.
industries 2,722,760 1,893,907 1, 093,248 7% 3.3%
---------- ------------------ ------------------- -------- -----------
Buster and Punch Holdings Limited
Industrial inspired lighting 1, 048,
and interiors retailer 530 ,392 925,639 092 4.5% 3.1%
---------- ------------------ ------------------- -------- -----------
R ota Geek Limited
Workforce management software 874, 000 816,619 987 ,571 4.4% 3. 0%
---------- ------------------ ------------------- -------- -----------
Arkk Consulting Limited (trading
as Arkk Solutions)
Regulatory and reporting requirement
service provider 1, 118,490 1,142,351 982,028 7 .5% 3. 0%
---------- ------------------ ------------------- -------- -----------
Bleach L ondon Holdings Limited
Hair colourants brand 519, 672 519,672 728,123 3.1% 2.2%
---------- ------------------ ------------------- -------- -----------
Tharstern Group Limited
Software based management information
systems to the print sector 1, 091,886 1, 106,429 725,707 12.2% 2.2%
---------- ------------------ ------------------- -------- -----------
Manufacturing Services Investment
Limited (trading as W etsuit
Outlet)
Online retailer in the water
sports mark et 2,333,102 1,015,878 699 ,931 6.4% 2.1%
---------- ------------------ ------------------- -------- -----------
IPV Limited
Provider of media asset software 619 ,487 619,487 619,487 5.5% 1.9%
---------- ------------------ ------------------- -------- -----------
Bella & Duke Limited
A premium frozen raw dog food
provider 617 ,400 - 617,400 4.3% 1.9%
---------- ------------------ ------------------- -------- -----------
Master R emovers Group 2019
Limited (trading as Anthony
Ward Thomas, Bishopsgate and
A ussie Man & V an)
A specialist logistics, storage
and removals business 348, 641 785,346 446,477 7 .2% 1.3%
---------- ------------------ ------------------- -------- -----------
Vectair Holdings Limited
Designer and distributor of
washroom products 24,732 522,139 434,461 2.1% 1.3%
---------- ------------------ ------------------- -------- -----------
Omega Diagnostics Group plc(1)
In-vitro diagnostics for food
intolerance, auto-immune diseases
and infectious diseases 100,014 233,345 345,017 0.5% 1.1%
---------- ------------------ ------------------- -------- -----------
Kudos Innovations Limited
Online platform that provides
and promotes academic research
dissemination 328,950 515,372 328,950 3.2% 0.9%
---------- ------------------ ------------------- -------- -----------
Bourn Bioscience Limited
Management of In-vitro fertilisation
clinics 1,132,521 606,708 299,309 7.7% 0.9%
---------- ------------------ ------------------- -------- -----------
Blaze Signs Holdings Limited
Manufacturer and installer of
signs 190,631 291,039 233,801 5.7% 0.7%
---------- ------------------ ------------------- -------- -----------
Muller EV Limited (trading as
Andersen EV)
Provider of premium electrical
vehicle (EV) chargers 195,200 - 195,200 0.5% 0.6%
---------- ------------------ ------------------- -------- -----------
CGI Creative Graphics International
Limited
Vinyl graphics to global automotive,
recreation vehicle and aerospace
markets 1,449,746 1,344,908 192,884 6.3% 0.6%
---------- ------------------ ------------------- -------- -----------
Spanish Restaurant Group Limited
(formerly Ibericos Etc. Limited)
(trading as Tapas Revolution)
Spanish restaurant chain 1,044,869 1,274,306 139,968 5.8% 0.4%
---------- ------------------ ------------------- -------- -----------
Jablite Holdings Limited
Manufacturer of expanded polystyrene
products 376,083 94,021 49,597 9.1% 0.1%
---------- ------------------ ------------------- -------- -----------
BG Training Limited
City-based provider of specialist
technical training 10,625 5,313 2,656 0.0% 0.0%
---------- ------------------ ------------------- -------- -----------
RDL Corporation Limited
Recruitment consultants within
the pharmaceutical, business
intelligence and IT industries 1,000,000 293,708 - 9.1% 0.0%
---------- ------------------ ------------------- -------- -----------
Veritek Global Holdings Limited
Maintenance of imaging equipment 1,620,086 - - 15.4% 0.0%
---------- ------------------ ------------------- -------- -----------
BookingTek Limited
Direct booking software for
hotels 582,300 - - 3.5% 0.0%
---------- ------------------ ------------------- -------- -----------
Oakheath Limited (trading as
Super Carers) (in liquidation)
Online platform that connects
people seeking home care from
experienced independent carers 485,730 - - 4.3% 0.0%
---------- ------------------ ------------------- -------- -----------
Racoon International Group Limited
Supplier of hair extensions,
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 decor products 175,000 - - 5.8% 0.0%
---------- ------------------ ------------------- -------- -----------
Disposals in period
---------- ------------------ ------------------- -------- -----------
Turner Topco Limited (trading
as Auction Technology Group)
SaaS based online auction market
place platform - 3,029,777 - 0.0% 0.0%
---------- ------------------ ------------------- -------- -----------
Pattern Analytics Limited (trading
as Biosite) Workforce management
and security services for the
construction industry - 1,978,710 - 0.0% 0.0%
---------- ------------------ ------------------- -------- -----------
Total 33,841,083 38,305,557 33,093,230 99.3%
---------- ------------------ ------------------- -------- -----------
Cashfac Limited
Provider of virtual banking
application software solutions
to corporate customers 260,101 232,724 190,265 2.9% 0.7%
---------- ------------------ ------------------- -------- -----------
Sift Group Limited
Developer of business-to-business
internet communities 135,391 - - 1.3% 0.0%
---------- ------------------ ------------------- -------- -----------
Total 395,492 232,724 190,265 0.7%
---------- ------------------ ------------------- -------- -----------
Total Investment Portfolio 34,236,575 38,538,281 33,283,495 100.0%
---------- ------------------ ------------------- -------- -----------
Total Investment Portfolio by
type
---------- ------------------ ------------------- -------- -----------
Growth focused portfolio(1) 20,690,853 23,910,253 22,823,371 68.6%
---------- ------------------ ------------------- -------- -----------
MBO focused portfolio(1) 13,545,722 14,628,028 10,460,124 31.4%
---------- ------------------ ------------------- -------- -----------
Total Investment Portfolio 34,236,575 38,538,281 33,283,495 100.0%
---------- ------------------ ------------------- -------- -----------
(1) - The growth focused portfolio contains all investments made after the change in the VCT regulations in 2015 plus some investments that are growth in nature made before this date. The MBO focused portfolio contains investments made prior to 2015 as part of the previous MBO strategy
Statement of the Directors' Responsibilities
Responsibility 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), Helen Sinclair (Chairman of the Investment Committee) and Christopher Burke, 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 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 2019 ("the Annual Report") other than the risks arising from the COVID-19 pandemic, referred to in the Chairman's Statement and the Investment Adviser's Report, the impact of which has been reflected in the valuation of the Company's investment portfolio.
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 on page 28 and in Note 15 on pages 64 to 71 of the Annual Report and Financial Statements for the year ended 31 December 2019, 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 a significant cash position bolstered by the recent fundraising and four disposals since the year-end, is adequate to enable the Company to continue as a going concern under any plausible stress scenario. 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 financial risks and capital are shown in Note 15 on pages 64 to 71 of the Annual Report and Financial Statements for the year ended 31 December 2019. 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.
For and on behalf of the Board:
Christopher Moore
Chairman
15 September 2020
Unaudited Condensed Income Statement
for the six months ended 30 June 2020
Six months ended 30 Six months ended 30
June 2020 June 2019
(unaudited) (unaudited)
Notes Revenue Capital Total Revenue Capital Total
------ ----------- ----------- ---------- ---------- ---------- -----------
GBP GBP GBP GBP GBP GBP
---------------- ------ ----------- ----------- ---------- ---------- ---------- -----------
Net investment
portfolio
(losses)/gains 10 - (468,108) (468,108) - 4,602,323 4,602,323
------ ----------- ----------- ---------- ---------- ---------- -----------
1, 704, 1, 704, 1, 110 1, 110
Income 4 058 - 058 ,499 - ,499
------ ----------- ----------- ---------- ---------- ---------- -----------
Investment
Adviser's fees 5 (155,891) (467,674) (623,565) (156,858) (470,574) (627,432)
------ ----------- ----------- ---------- ---------- ---------- -----------
Other expenses (257,857) - (257,857) (214,353) - (214,353)
------ ----------- ----------- ---------- ---------- ---------- -----------
Profit/(loss)
on ordinary
activities
before 4, 131,
taxation 1,290,310 (935,782) 354,528 739,288 749 4,871,037
------ ----------- ----------- ---------- ---------- ---------- -----------
Tax on
profit/(loss)
on ordinary (142,
activities 6 (230,920) 88,858 062) (129,463) 89,409 (40,054)
------ ----------- ----------- ---------- ---------- ---------- -----------
Profit/(loss)
and total
comprehensive 1,
income 059,390 (846,924) 212,466 609,825 4,221,158 4,830,983
------ ----------- ----------- ---------- ---------- ---------- -----------
Basic and
diluted
earnings per (1.
share 7 1.28p 02)p 0.26p 0.90p 6.20p 7.10p
------ ----------- ----------- ---------- ---------- ---------- -----------
Year ended 31 December
2019
(audited)
Notes Revenue Capital Total
------ ----------- ----------- ------------
GBP GBP GBP
--------------------------- ------ ----------- ----------- ------------
Net investment
portfolio (losses)/gains - 5,675,164 5,675,164
------ ----------- ----------- ------------
Income 4 2,107,357 - 2,107,357
------ ----------- ----------- ------------
Investment Adviser's
fees 5 (309,641) (928,923) (1,238,564)
------ ----------- ----------- ------------
Other expenses (451,261) (451,261)
------ ----------- ----------- ------------
Profit on ordinary
activities before
taxation 1,346,455 4,746,241 6,092,696
------ ----------- ----------- ------------
Tax on profit
on ordinary
activities 6 (211,879) 176,496 (35,383)
------ ----------- ----------- ------------
Profit for the
year and total
comprehensive
income 1,134,576 4,922,737 6,057,313
------ ----------- ----------- ------------
Basic and diluted
earnings per
share 7 1.67p 7.28p 8.95p
------ ----------- ----------- ------------
The revenue column of the Income Statement includes all income and expenses. The capital column accounts for the net investment portfolio (losses)/gains (unrealised 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 Financial Reporting Standards ("FRS"). In order to better reflect the activities of a VCT and in accordance with the 2014 Statement of Recommended Practice ("SORP") issued by the Association of Investment Companies ("AIC"), and updated in October 2019, supplementary information which analyses the Income Statement between items of a revenue and capital nature has been presented alongside the Income Statement. The revenue column of profit attributable to equity Shareholders is the measure the Directors believe appropriate in assessing the Company's compliance with certain requirements set out in Section 274 Income Tax Act 2007.
All the items in the above statement derive from continuing operations of the Company. No operations were acquired or discontinued in the period/year.
Unaudited Condensed Balance Sheet
as at 30 June 2020
30 June 2020 30 June 2019 31 December
(unaudited) (unaudited) 2019
(audited)
Notes GBP GBP GBP
------ ------------ ------------ ------------
Fixed assets
------ ------------ ------------ ------------
Investments at fair value 10 33,283,495 36,092,736 38,538,281
------ ------------ ------------ ------------
Current assets
------ ------------ ------------ ------------
Debtors and prepayments 205,896 210,928 183,175
------ ------------ ------------ ------------
Current asset investments 9 18,794,483 16,875,554 8,928,456
------ ------------ ------------ ------------
Cash at bank 9 2,733,689 6,658,998 2, 627 ,511
------ ------------ ------------ ------------
21,734, 068 23,745,480 11, 739 ,142
------ ------------ ------------ ------------
Creditors: amounts falling
due within one year (446,720) (335,763) (242,109)
------ ------------ ------------ ------------
Net current assets 21,287,348 23,409,717 11,497, 033
------ ------------ ------------ ------------
Net assets 54,570 ,843 59,502,453 50 , 035,314
------ ------------ ------------ ------------
Capital and reserves
------ ------------ ------------ ------------
Called up share capital 844,831 676,047 667,991
------ ------------ ------------ ------------
Share premium reserve 12,495,261 31,474,977 -
------ ------------ ------------ ------------
Capital redemption reserve 15,722 33,040 8, 056
------ ------------ ------------ ------------
Revaluation reserve 343,483 3, 118,129 3,713,586
------ ------------ ------------ ------------
Special distributable reserve 27,245,898 12,367,414 35,514,889
------ ------------ ------------ ------------
Realised capital reserve 12, 649 ,873 10,148,396 8,935,662
------ ------------ ------------ ------------
Revenue reserve 975,775 1, 684,450 1, 195,130
------ ------------ ------------ ------------
Equity Shareholders' funds 54,570 ,843 59,502,453 50 , 035,314
------ ------------ ------------ ------------
Basic and diluted net asset
value:
Basic and diluted net asset
value per share 11 64.59p 88.02p 74.90p
------ ------------ ------------ ------------
The financial information for the six months ended 30 June 2020 and the six months ended 30 June 2019 has not been audited.
Unaudited Condensed Statement of Changes in Equity
for the six months ended 30 June 2020
Non-distributable reserves Distributable reserves
Called Share Capital Revaluation Special Realised Revenue
up premium redemption reserve Distributable Capital reserve Total
share reserve reserve GBP reserve reserve GBP
capital GBP GBP GBP GBP
GBP GBP
Notes
---------------- -------- ------------ ----------------- -------------- ---------- ------------ ---------
At 1 January 35,514,889 8,935, 50
2020 667 ,991 - 8, 056 3,713,586 662 1, 195,130 ,035,314
Comprehensive
income for
the period
-------------- --- -------------------------- ------------------------------- -------------------------- ------------ ---------
(Loss)/profit
for
- (2,050 ,
the period - - 190) - 1,203,266 1, 059,390 212,466
-------------- --- -------------------------- ------------------------------- -------------------------- ------------ ---------
Total
comprehensive
income for
the period - - - (2, 050 ,190) - 1,203,266 1, 059,390 212,466
-------------- --- -------------------------- ------------------------------- -------------------------- ------------ ---------
Contributions
by
------------ ---------
and
distributions
------------
to owners
Shares issued
via
Offer for
Subscription
13,
000
(Note c) 184,506 12,815,494 - - - , 000
-------------- --- ---------- -------------- --------------------- -------- -------------------------- ------------ ---------
Issue costs
and
facilitation
fees on
Offer for
Subscription
(Note c) - (320,233) - - (145,330) - (465,563)
-------------- --- -------------------------- --------------------- -------- -------------------------- ------------ ---------
Shares bought
back (Note
d) (7, 666) - 7 , 666 - (424,429) - - (424,429)
-------------- --- -------------------------- --------------------- -------- -------------------------- ------------ ---------
Dividends (6,508,200) (7,
paid 8 - - - - - (1,278,745) 786,945)
-------------- --- -------------------------- --------------------- -------- -------------------------- ------------ ---------
Total
contributions
by and
distributions (7,077,959 4,323,
to owners 176,840 12,495,261 7, 666 - ) - (1,278,745) 063
-------------- --- -------------------------- --------------------- -------- -------------------------- ------------ ---------
Other
movements
Realised
losses
transferred
to special
reserve (1,191, 032)
(Note a) - - - - 1, 191, 032 - -
Realisation
of previously
unrealised
gains - - - (1,319 ,913) - 1,319 ,913 - -
-------------- --- -------------------------- ------------------------------- -------------------------- ------------ ---------
Total other (1,191, 032)
movements - - - (1,319,913) 2,510 ,945 - -
-------------- --- -------------------------- ------------------------------- -------------------------- ------------ ---------
At 30 June 27,245,898 54,570
2020 844,831 12,495,261 15, 722 343,483 12, 649,873 975,775 ,843
-------------- --- -------------------------- ------------------------------- -------------------------- ------------ ---------
Notes:
a): The Special distributable reserve also provides the Company with a reserve to absorb any existing and future realised losses and, when considered by the Board to be in the interests of Shareholders, to fund share buybacks and for other corporate purposes. The transfer of GBP1,191,032 to the special reserve from the realised capital reserve above is the total of realised losses incurred by the Company in the period. As at 30 June 2020, the Company has a special reserve of GBP27,245,898, GBP9,079,292 of which arises from shares issued more than three years ago. Reserves originating from share issues are not distributable under VCT rules if they arise from share issues that are within three years of the end of an accounting period in which shares were issued.
b): The Realised capital reserve and the Revenue reserve together comprise the Profit and Loss Account of the Company.
c): Under the Company's Offer for Subscription launched on 25 October 2019, 18,450,535 Ordinary Shares were allotted between 8 January 2020 and 2 April 2020, raising net funds of GBP12,534,437 for the Company. This figure is net of issue costs of GBP320,233 and facilitation fees of GBP145,330.
d): During the period, the Company repurchased 766,590 of its own shares at the prevailing market price for a total cost (including stamp duty) of GBP424,429, which were subsequently cancelled. This is GBP66,672 more than the figure shown in the Unaudited Condensed Statement of Cash Flows due to a creditor at the period-end.
Unaudited Condensed Statement of Changes in Equity
for the six months ended 30 June 2019
Non-distributable reserves Distributable reserves
Share Capital Revaluation Special Realised Revenue
Called up premium redemption reserve Distributable Capital reserve Total
share capital reserve reserve GBP reserve reserve GBP
GBP GBP GBP GBP GBP
Notes GBP
---------------------------- -------- ---------------- ------------------ --------------- ------------- ------------- ------------
At 1 January 6,815, 2,263,
2019 682,830 31,474,977 26,257 1,848,472 14,784,518 730 000 57,895,784
Comprehensive
income
for the period
-------------- ------------------------ ------------------------------ --------------- ------------- ------------- ------------
Profit for 1, 137
the period - - - 3, 083,824 - ,334 609 ,825 4,830,983
-------------- -------- -------------- ----------- ----------------- --------------- ------------- ------------- ------------
Total
comprehensive
income for 1, 137
the period - - - 3,083,824 - ,334 609,825 4,830,983
-------------- -------- -------------- ------------------------------ --------------- ------------- ------------- ------------
Contributions
by and
--------------- ------------- ------------- ------------
distributions
to owners
Shares bought (508,
back (6,783) - 6,783 - (508,028) - - 028)
-------------- -------- -------------- ----------- ----------------- --------------- ------------- ------------- ------------
(1,527
Dividends paid 8 - - - - ,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 - - - - (381,165) 381,165 - -
Realisation
of previously
unrealised
gains - - - (1,814,167) - 1,814,167 - -
-------------- ------------------------ ----------- ----------------- --------------- ------------- ------------- ------------
Total other (1,814,
movements - - - 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
-------------- ------------------------ ----------- ----------------- --------------- ------------- ------------- ------------
The composition of each of these reserves is explained below:
Called up share capital - The nominal value of shares originally issued increased for subsequent share issues
either via an Offer for Subscription or reduced due to shares bought back by the Company.
Capital redemption reserve - The nominal value of shares bought back and cancelled is held in this reserve, so that the Company's capital is maintained.
Share premium reserve - This reserve contains the excess of gross proceeds less issue costs over the nominal value of shares allotted under 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 - This reserve is created from cancellations of the balances upon the Share premium reserve, which are transferred to this reserve from time to time. The cost of share buybacks and any realised losses on the sale or impairment of investments (excluding transaction costs) are charged to this reserve. 75% of the Investment Adviser fee expense, and the related tax effect, that are charged to the realised capital reserve are transferred to this reserve. This reserve will also be charged any facilitation payments to financial advisers, which arose as part of the Offer for Subscription.
Realised capital reserve - The following are accounted for in this reserve:
-- Gains and losses on realisation of investments; -- Permanent diminution in value of investments; -- Transaction costs incurred in the acquisition and disposal of investments;
-- 75% of the Investment Adviser fee expense and 100% of any performance 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.
Unaudited Condensed Statement of Cash Flows
for the six months ended 30 June 2020
Six months Six months Year ended
ended 30 June ended 30 June 31 December
2020 (unaudited) 2019 (unaudited) 2019 (audited)
Notes GBP GBP GBP
-------- ----------------- ------------------ ---------------
Cash flows from operating
activities
-------- ----------------- ------------------ ---------------
Profit for the financial
period 212,466 4,830,983 6,057,313
-------- ----------------- ------------------ ---------------
Adjustments for:
-------- ----------------- ------------------ ---------------
Net investment portfolio (5, 675,
(losses)/gains 468,108 (4,602,323) 164)
-------- ----------------- ------------------ ---------------
Tax charge for the current
year 6 142, 062 40 , 054 35,383
-------- ----------------- ------------------ ---------------
(Increase)/decrease in debtors (22,721) 145,503 120,121
-------- ----------------- ------------------ ---------------
(Decrease)/increase in creditors
and accruals (4,123) 55,699 33,245
-------- ----------------- ------------------ ---------------
Net cash inflow from operations 795,792 469 ,916 570,898
-------- ----------------- ------------------ ---------------
Corporation tax paid - - (66,529)
-------- ----------------- ------------------ ---------------
Net cash inflow from operating
activities 795,792 469 ,916 504,369
-------- ----------------- ------------------ ---------------
Cash flows from investing
activities
-------- ----------------- ------------------ ---------------
Sale of investments 10 6,751,676 6,767,896 8,136,792
-------- ----------------- ------------------ ---------------
Purchase of investments 10 (1,964,998) (1,786,890) (4,475,355)
-------- ----------------- ------------------ ---------------
Net cash inflow from investing
activities 4, 786,678 4,981, 006 3, 661,437
-------- ----------------- ------------------ ---------------
Cash flows from financing
activities
-------- ----------------- ------------------ ---------------
Share issued as part of
Offer for Subscription 13, 000 , 000 - -
-------- ----------------- ------------------ ---------------
Issue costs and facilitation
fees as part of Offer for (465,563) - -
subscription
-------- ----------------- ------------------ ---------------
Equity dividends paid 8 (7 , 786,945) (2,716,286) (12,846,457)
-------- ----------------- ------------------ ---------------
Purchase of own shares (357 , 757) (571,531) (1,134,829)
-------- ----------------- ------------------ ---------------
Net cash inflow/(outflow)
from financing activities 4,389 , 735 (3,287 ,817) (13,981,286)
-------- ----------------- ------------------ ---------------
Net increase/(decrease)
in cash and cash equivalents 9,972,205 2, 163,105 (9 ,815,480)
-------- ----------------- ------------------ ---------------
Cash and cash equivalents
at start of period 9,555,967 19,371,447 19,371,447
-------- ----------------- ------------------ ---------------
Cash and cash equivalents
at end of period 19 ,528, 172 21,534,552 9,555,967
-------- ----------------- ------------------ -----------------
Cash and cash equivalents
comprise:
-------- ----------------- ------------------ -----------------
Cash at bank and in hand 9 2,733,689 6,658,998 2, 627 ,511
-------- ----------------- ------------------ -----------------
Cash equivalents 9 16,794,483 14,875,554 6,928,456
-------- ----------------- ------------------ -----------------
Notes to the Unaudited Condensed Financial Statements
for the six months ended 30 June 2020
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 are prepared in accordance with accounting policies consistent with Financial Reporting Standard 102 ("FRS 102"), Financial Reporting Standard 104 ("FRS 104") - Interim Financial Reporting, with the Companies Act 2006 and the 2014 Statement of Recommended Practice, 'Financial Statements of Investment Trust Companies and Venture Capital Trusts' ('the SORP') (updated in October 2019) issued by the Association of Investment Companies ("AIC").
The Half-Year Report has not been audited, nor has it been reviewed by the Auditor pursuant to the Financial Reporting Council's (FRC) guidance on Review of Interim Financial Information.
3. Principal accounting policies
The accounting policies have been applied consistently throughout the period. Full details of principal accounting policies will be disclosed in the Annual Report, while the policy in respect of investments is included within an outlined box at the top of note 10 on investments.
4. Income
Six months ended Six months Year ended
30 June 2020 ended 30 June 31 December
(unaudited) 2019 (unaudited) 2019 (audited)
Income from investments GBP GBP GBP
Dividends 74,942 68,462 243,975
-----------------
Loan stock interest 1,572,242 957,809 1, 714,938
Money-market funds 37 ,071 62,648 106,151
Bank deposit interest 17 ,489 19,585 40,298
Interest on preference share
dividend arrears 129 1,995 1,995
Other income 2,185 - -
Total Income 1, 704,058 1, 110 ,499 2, 107 ,357
5. Investment Adviser's fees
25% of the Investment Adviser's fees are charged to the revenue column of the Income Statement, while 75% is charged against the capital column of the Income Statement. This is in line with the Board's expected long-term split of returns from the investment portfolio of the Company. 100% of any performance incentive fee payable for the year 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 Year ended
30 June 2020 ended 30 June 31 December
(unaudited) 2019 (unaudited) 2019 (audited)
GBP GBP GBP
------------------ ------------------- -----------------
Allocated to revenue return:
Investment Adviser's fees 155,891 156,858 309 ,641
------------------ ------------------- -----------------
Allocated to capital return:
Investment Adviser's fees 467 , 674 470,574 928,923
------------------ ------------------- -----------------
Total Income 623,565 627,432 1,238,564
------------------ ------------------- -----------------
Between 1 July 2020 and 30 June 2021, the Investment Adviser's fee upon the net funds raised from the use of the over- allotment facility of GBP5 million under the 2019/20 Offer will be reduced to 1% from 2% per annum, for one year. 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 Six months ended Year ended
ended 30 June 30 June 2019 31 December
2020 (unaudited) (unaudited) 2019
Capital Total Capital Total (audited)
R evenue GBP GBP R evenue Revenue Capital
GBP GBP GBP GBP GBP Total
GBP GBP
-------- -------------------------
a) Analysis of
tax charge:
UK Corporation
tax on profits/
(losses) for
the period 230,920 (88,858) 142, 062 129,463 (89,409) 40,054 211,879 (176,496) 35,383
--------- --------- ---------- -------- --------- --------- ----------- ------------
Total current
tax charge/(credit) 230,920 (88,858) 142, 062 129,463 (89,409) 40,054 211,879 (176,496) 35,383
--------- --------- ---------- -------- --------- --------- ------------- ---------- -----------
Corporation tax
is based on a
--------- --------- ---------- -------- --------- --------- ----------- -----------
rate of 19. 0%
(2019: 19. 0%)
b) Profit/(loss)
on ordinary
activities before 4, 131, 4,871,
tax 1,290,310 (935,782) 354,528 739,288 749 037 1,346,455 4,746,241 6,092,696
--------- --------- ---------- -------- --------- --------- ----------- ------------ -----------
Profit/(loss)
on ordinary
activities
multiplied by
rate of corporation
tax in the UK
of 19. 0% (2019:
(177,
19. 0%) 245,159 799) 67,360 140,465 785,033 925,498 255,826 901,786 1, 157,612
--------- --------- ---------- -------- --------- --------- ----------- ------------ -----------
Effect of: -
--------- --------- ---------- -------- --------- --------- ----------- ------------ -----------
(13, (13,
UK dividends (14,239) - (14,239) 008) - 008) (46,355) - (46,355)
--------- --------- ---------- -------- --------- --------- ----------- ------------ -----------
Net investment
portfolio losses/
gains not (1,
allowable/(taxable) - 88,941 88,941 - (874,442) (874,442) - 078,282) (1,078,282)
-------------------- --------- --------- ---------- -------- --------- --------- ----------- ------------ -----------
Expenditure not
allowable for
tax purposes - - - 2,006 - 2,006 2,408 - 2,408
--------- --------- ---------- -------- --------- --------- ----------- ------------ -----------
Actual current
tax charge 230,920 (88,858) 142, 062 129,463 (89,409) 40,054 211,879 (176,496) 35,383
--------- --------- ---------- -------- --------- --------- ----------- ------------ -----------
7. Basic and diluted earnings per share
The basic and diluted 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 Six months Year ended
ended 30 June ended 30 June 31 December
2020 2019 2019
(unaudited) (unaudited)
(audited)
GBP GBP GBP
--------------- -------------- -------------
i) Total earnings after taxation 212,466 4,830,983 6,057,313
--------------- -------------- -------------
Basic and diluted earnings per
share (pence) 0.26p 7 . 10p 8.95p
--------------- -------------- -------------
ii) Revenue earnings from ordinary
activities after taxation 1, 059 ,390 609,825 1, 134,576
--------------- -------------- -------------
Basic and diluted revenue earnings
per share (pence) 1.28p 0 .90p 1. 67p
--------------- -------------- -------------
Net investment portfolio (losses)/gains (468,108) 4,602,323 5,675,164
--------------- -------------- -------------
Capital Investment Adviser's fees
less taxation (378,816) (381,165) (752,427)
--------------- -------------- -------------
iii) Total capital earnings (846,924) 4,221,158 4,922,737
--------------- -------------- -------------
Basic and diluted capital earnings
per share (pence) (1. 02)p 6.20p 7 .28p
--------------- -------------- -------------
iv) W eighted average number of 67 , 649
shares in issue in the period 82,552,958 68,007,404 , 790
--------------- -------------- -------------
8. Dividends paid
Six months Six months Year
ended
ended ended 31 December
30 June 30 June
2020 2019 2019
(unaudited) (unaudited) (audited)
For the GBP GBP GBP
year
ended
31 P ence
Dividend Type December per share Date paid
--------------------- ------------- -----------------------
Final Income 2018 1. 75p 28 May 2019 - 1, 188,375 1, 188,375
----------------- ------------------ --------------------- --------------------- ------------- -----------------------
28 May
Final Capital* 2018 2.25p 2019 - 1,527,911 1,527,911
----------------- ------------------ --------------------- --------------------- ------------- -----------------------
20
September
Interim Income 2019 1.50p 2019 - - 1,014,071
----------------- ------------------ --------------------- --------------------- ------------- -----------------------
20 September 1, 690
Interim Capital 2019 2.50p 2019 - - ,118
----------------- ------------------ --------------------- --------------------- ------------- -----------------------
9.0 0 20 September
Interim Capital* 2019 p 2019 - - 6,084,426
----------------- ------------------ --------------------- --------------------- ------------- -----------------------
30
December
Interim Capital* 2019 2. 00p 2019 - - 1,341,556
----------------- ------------------ --------------------- --------------------- ------------- -----------------------
10
January
Interim Capital* 2019 4. 00p 2020 2,671,965 - -
----------------- ------------------ --------------------- --------------------- ------------- -----------------------
Interim Income 2020 1.50p 7 May 2020 1,278,745 - -
----------------- ------------------ --------------------- --------------------- ------------- -----------------------
Interim Capital* 2020 4.50p 7 May 2020 3,836,235 - -
----------------- ------------------ --------------------- --------------------- ------------- -----------------------
Total Dividends P aid 7, 786,945 2,716,286 12,846,457
--------------------- ------------- -----------------------
* These dividends were paid out of the Company's special distributable
reserve.
9. Current asset investments and cash at bank
As at 30 June As at 30 June As at 31 December
2020 (unaudited) 2019 (unaudited) 2019
GBP GBP (audited)
GBP
OEIC Money mark et funds 16,794,483 14,875,554 6,928,456
----------------- ----------------- -------------------
Cash equivalents per S tatement
of Cash Flows 16,794,483 14,875,554 6,928,456
----------------- ----------------- -------------------
Bank deposits that mature after
three months 2,000 , 000 2,000 , 000 2,000 , 000
----------------- ----------------- -------------------
Current asset investments 18, 794,483 16,875,554 8,928,456
----------------- ----------------- -------------------
Cash at bank 2, 733, 689 6, 658,998 2,627 ,511
----------------- ----------------- -------------------
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 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 or follow on investments made, if deemed to be made as part of an orderly transaction, are considered to be at fair value at the date of the transaction. 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 post-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, realisation proceeds or a weighted average of these bases may be applied.
Capital gains and losses on investments, whether realised or unrealised, are dealt with in the profit and loss and revaluation reserves and movements in the period are shown in the Income Statement.
All 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.
T raded Unquoted Unquoted Unquoted Total
on AIM equity preference L oan S
shares shares tock
L evel Level 3 Level
1 3 Level
3
GBP GBP GBP GBP GBP
----------- ------------- ----------- ------------- -------------
V aluation at 31 December
2019 233,345 21,802,934 10,729 16,491,273 38,538,281
----------- ------------- ----------- ------------- -------------
1, 789
Purchases at cost - ,318 - 175, 680 1,964,998
----------- ------------- ----------- ------------- -------------
(6,751,
Sales - proceeds (458,297) (3,998,527) - (2,294,852) 676)
----------- ------------- ----------- ------------- -------------
- realised gains/(losses) 1,582,
(Note a) 341,614 1,168,814 (227) 71,881 082
----------- ------------- ----------- ------------- -------------
Unrealised gains/(losses)
on investments in the (2, 050
period (Note a) 228,355 1,503,534 - (3,782,079) ,190)
----------- ------------- ----------- ------------- -------------
V aluation at 30 June 345,
2020 017 22,266,073 10 ,502 10, 661,903 33,283,495
----------- ------------- ----------- ------------- -------------
Book cost at 30 June 14, 679
2020 100,014 19,443,871 12,871 ,819 34,236,575
----------- ------------- ----------- ------------- -------------
Unrealised gains/(losses)
at 30 June 2020 245,003 4,054,150 (2,142) (3,953,528) 343,483
----------- ------------- ----------- ------------- -------------
Permanent impairment
of investments - (1,231,948) (227) (64,388) (1,296,563)
----------- ------------- ----------- ------------- -------------
V aluation at 30 June 345,
2020 017 22,266,073 10 ,502 10, 661,903 33,283,495
----------- ------------- ----------- ------------- -------------
Gains/(losses) on investments 358,283 2,541,895 (227) 2,044 2,901,995
----------- ------------- ----------- ------------- -------------
Less amounts recognised
as unrealised ( gains)/losses
in previous years (16, 669) (1,373,081) - 69,837 (1,319,913)
----------- ------------- ----------- ------------- -------------
R ealised gains based
on carrying value at 1,582,
31 December 2019 341,614 1,168,814 (227) 71,881 082
----------- ------------- ----------- ------------- -------------
Net movement in unrealised
(losses)/gains in the (2, 050
period 228,355 1,503,534 - (3,782,079) ,190)
----------- ------------- ----------- ------------- -------------
Gains/(losses) on investments
for the six months ended (468,
30 June 2020 569,969 2,672,348 (227) (3,710,198) 108)
----------- ------------- ----------- ------------- -------------
Note a) Net realised gains on investments of GBP1,582,082 together with net unrealised losses of GBP2,050,190 equal net investment portfolio losses of GBP468,108 as disclosed in the Income Statement.
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 investments are valued in accordance with IPEV guidelines as follows:
As at 30 June As at 30 June As at 31 December
2020 (unaudited) 2019 (unaudited) 2019
GBP GBP (audited)
GBP
Valuation Methodology
----------------- ----------------- -------------------
Multiple of earnings, revenues
or gross margin as appropriate 31,214,307 33,731,995 35,359,235
----------------- ----------------- -------------------
Net Asset Value 1,476,718 122,422 606,708
----------------- ----------------- -------------------
Recent investment price 195,200 1,786,890 2,239,659
----------------- ----------------- -------------------
Estimated and discounted realisation
proceeds 52,253 168,322 5,313
----------------- ----------------- -------------------
Recent investment price (reviewed
for impairment) - 121,432 94,021
----------------- ----------------- -------------------
32,938,478 35,931,061 38,304,936
----------------- ----------------- -------------------
11. Net Asset Value per share
As at 30 June As at 30 June As at 31 December
2020 2019 2019
(unaudited) (unaudited) (audited)
Net assets GBP54,570,843 GBP59,502,453 GBP50 ,035,314
--------------- ----------------- -------------------
Number of shares in issue 84,483,074 67 , 604,732 66,799,129
--------------- ----------------- -------------------
Basic and diluted net asset
value per share (pence) 64.59p 88.02p 74.90p
--------------- ----------------- -------------------
12. Post balance sheet events
On 14 August 2020, the Company realised its investment in Tovey Management Limited (trading as Access IS), generating proceeds of GBP5.32 million.
On 1 September 2020, the Company invested a further GBP1.12 million into Buster and Punch Holdings Limited, an existing portfolio company.
On 2 September 2020, the Company realised its investment in Blaze Signs Holdings Limited generating cash proceeds of GBP0.55 million.
On 10 September 2020, the Company realised half of its remaining holding in Omega Diagnostics Group plc for proceeds of GBP0.29 million.
13. Financial statements for the period ended 30 June 2020
The financial information for the six months ended 30 June 2020 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 2019 have been filed with the Registrar of Companies. The auditor has reported on the financial statements for the year ended 31 December 2019 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:
Mobeus Equity Partners LLP (the Company Secretary) on 020 7024 7600 or by e-mail to vcts@mobeus.co.uk
Mobeus Equity Partners LLP (the Investment Adviser) on 020 7024 7600 or by e-mail to info@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.
LEI: 213800IFNJ65R8AQW943
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END
IR SFAFIIESSEFU
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September 15, 2020 11:57 ET (15:57 GMT)
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