We could not find any results for:
Make sure your spelling is correct or try broadening your search.
Customisable watchlists with full streaming quotes from leading exchanges, such as LSE, NASDAQ, NYSE, AMEX, Bovespa, BIT and more.
| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Mobeus Income & Growth Vct Plc | LSE:MIX | London | Ordinary Share | GB00B01WL239 | 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% | 56.00 | 54.50 | 57.50 | 56.00 | 56.00 | 56.00 | 1,773 | 01:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| Investors, Nec | -15.97M | -18.79M | -0.1128 | -4.96 | 93.29M |
From Apr 2019 to Apr 2024
TIDMMIX
RNS Number : 0322J
Mobeus Income & Growth VCT PLC
07 April 2020
mobeus Income & Growth VCT plc
Annual Financial Results of the Company for the Year ended 31 December 2019
Hot Features
Premium
Mobeus Income & Growth VCT plc (the "Company") today announces
its final results for the year ended 31 December 2019. These results
were approved by the Board of Directors on 6 April 2020.
You may, in due course, view the Annual Report & Financial Statements,
comprising the statutory accounts of the Company by visiting www.migvct.co.uk
.
Financial Highlights
As at 31 December 2019:
Net assets: GBP71.89 million
Net asset value ("NAV") per share: 68.78 pence
- Net asset value ("NAV") total return per share for the year
was 13.6%.
- Share price total return per share was 20.5% for the year.
- Dividends paid and declared in respect of the year total 10.00
pence per share. The cumulative dividends paid to shareholders
in respect of the past five years is 57.50 pence per share.
- The Company received a total of GBP11.77 million from the sale
of investments or repayment of loans, a realised gain in the
year of GBP3.35 million.
- The Company invested a total of GBP5.85 million into five new
growth capital investments and one follow-on investment during
the year.
* Definitions of key terms and alternative performance measures
shown above and throughout this report are shown in the Glossary
of terms in the Annual Report.
PERFORMANCE SUMMARY
Cumulative NAV Total return performance over the last 3, 5 and
10 years is 24.2%, 30.0% and 112.8% respectively.
The table below shows the recent cumulative performance since
launch as at the end of each of the last five years.
Share
price Cumulative total Dividends
Reporting date Net NAV (1) Cumulative return paid
per share to and
as at assets per dividends shareholders proposed
in
respect
share paid per of
(NAV (Share
share each year
price
basis) basis)
(GBPm) (p) (p) (p) (p) (p) (p)
December
31 2019 71.89 68.78 63.75 (2) 124.80 193.58 188.55 10.00(3)
December
31 2018 75.08 70.25 62.00 113.80 184.05 175.80 7.00
December
31 2017 69.90 71.75 63.00 108.80 180.55 171.80 16.00
December
31 2016 63.15 83.53 74.75 89.80 173.33 164.55 14.50
December
31 2015 74.11 97.54 86.50 74.30 171.84 160.80 10.00
Source: Panmure Gordon & Co (mid-market price). The discount
(1) on the Company's shares at 31 December 2019 was 5.0%, as the
share price was based on the NAV per share at 30 September 2019
of 66.96 pence per share, having been adjusted for dividends
paid up until 31 December 2019. In prior years the discount
was 10.0%.
The share price has been adjusted for a 4.00 pence dividend
(2) paid after the year end on 8 January 2020 which was ex-div at
31 December 2019.
The figure of 10.00 pence includes the third interim dividend
(3) of 4.00 pence referred to below. Payment of this dividend will
reduce the net asset value per share at 31 December 2019 of
68.78 pence by the amount of the dividend and increase cumulative
dividends paid to 128.80 pence per share.
Dividends paid post year end in respect of the year ended 31
December 2019
A third interim dividend of 4.00 pence per share (all capital)
was paid to Shareholders on 8 January 2020.
Detailed performance data for all fundraising rounds and for
former Matrix Income & Growth 3 VCT shareholders are shown in
the Performance Data section towards the end of the Annual Report.
CHAIRMAN'S STATEMENT
I am pleased to present the annual results of Mobeus Income &
Growth VCT plc for the year ended 31 December 2019.
Overview
This has been a year of excellent performance by the Company.
New investments, successful realisations of investments and increases
in the value of the existing portfolio have all contributed to
this.
The Company has made investments into five new companies, provided
follow-on funding to one existing portfolio company and has realised
its investment in three portfolio companies, including the Company's
first profitable exit of a younger, growth capital, investment.
Furthermore, after the year end, the Company achieved its most
successful exit to date, Auction Technology Group.
At the time of writing there remains significant uncertainty
with regard to the lasting effects on the world economy of COVID-19
although it is clear that UK economic growth will reduce this
year. Further information is contained within the Outlook section
of my statement, the Investment Adviser's review and Note 10-
Post Balance Sheet Events.
We are delighted with the strong support from investors for our
2019/20 fundraising launched on 25 October 2019, which was fully
subscribed some three months' ahead of the scheduled close date
of 31 March 2020. This liquidity also means that the Company
is well placed to support its investments should they require
further funding in the coming year. The Board appreciates the
continued support from existing Shareholders and extends a warm
welcome to new Shareholders.
Performance
As explained more fully within the Strategic Report of the Annual
Report, the Company's NAV total return per share for the year
ended 31 December 2019 was an exceptional 13.6% (2018: 4.9%)
(being the closing NAV plus dividends paid in the year, divided
by the opening NAV) while the share price total return was 20.5%
(2018: 6.3%) enhanced by the reduction during the year from 10%
to 5% (approximately) in the discount to the net asset value
at which the shares trade (see Share buybacks section below).
As a result of this performance, the NAV cumulative total return
per share (being the closing NAV plus total dividends paid to
date since launch in 2004) rose during the year by 5.2% from
184.05 pence to 193.58 pence.
This NAV total return for the year was primarily attributable
to strong gains in the value of the portfolio of investee companies
held at the year end and profitable exits of more mature investments,
The Plastic Surgeon and ASL, as well as the maiden profitable
exit of a younger growth capital investment, Redline Worldwide.
After the year end, the Company realised its holding in Pattern
Analytics Limited (trading as Biosite), generating an overall
return of 1.5x the original cost.
Shortly afterwards, Turner Topco Limited (trading as Auction
Technology Group), a mature portfolio company, was realised,
generating a return of 4.5x the original cost. In isolation and
after allowing for tax on the income portion of proceeds, this
would result in an uplift of 2.71 pence per share over the 31
December 2019 NAV of 68.78 pence.
Further information on performance during the year is contained
in the Investment Adviser's Review on and the Strategic Report
within the Annual Report.
Dividends
The dividends paid in respect of the year ended 31 December 2019
total 10.00 pence (2018: 7.00 pence) per share, comprising of:
4.00 pence per share paid on 20 September 2019 comprising 2.50
pence from capital and 1.50 pence from income;
2.00 pence per share paid on 6 December 2019 from capital; and
4.00 pence per share paid on 8 January 2020 from capital.
The cumulative dividends paid since inception in 2004 are 128.80
pence (2018:118.80 pence) per share.
The Company's target of paying a dividend of at least 4.00 pence
per share in respect of each financial year has been achieved
and often exceeded. Whilst the Board still believes this dividend
target is attainable, it should be noted that the gradual move
of the portfolio to a larger share of younger growth capital
investments will lead to a reduction in dividends and interest
received from portfolio companies. In turn, dividends in any
given year will increasingly depend upon realised profits on
sales of portfolio companies, bolstered by any distributions
of special reserves, which is likely to result in a greater volatility
of dividends.
To the extent that dividends are paid other than out of income
or from gains on investments, for instance out of special distributable
reserves, Shareholders should note this will result in a reduction
in NAV over the period. Total dividends paid and payable in respect
of the year are 10.00 pence per share comprising 1.50 pence (income)
and 8.50 pence per share (capital) from special distributable
reserves.
A full dividend history is contained in the Performance Data
appendix in the Annual Report and on the Company's website. www.mobeus.co.uk/investor-area/
vct-investors
On 2 April 2020, the Board declared a 6.00 pence per share Interim
dividend in respect of the year ending 31 December 2020 which
will be payable on 7 May 2020 to Shareholders on the Register
on 14 April 2020.
Investment portfolio
The portfolio was valued at GBP51.70 million (2018: GBP48.20
million) at the year-end representing 116.9% of cost (2018: 103.1%).
Nineteen new growth capital investments totalling GBP22.15 million
have been completed since the change in the VCT rules introduced
in 2015. At the year end 45.2% (2018: 34.3%) of the portfolio
was held in younger growth capital investments, while 54.8% (2018:
65.7%) of the value of the investment portfolio was held in more
mature investments made before the rules changed.
During the year, GBP5.85 million was invested in five new growth
capital investments and one existing portfolio company (analysed
in the Investment Adviser's Review and explained within Note
8 to the Financial Statements).
The new growth capital investments totalling GBP5.27 million
were made into the following companies:
* Arkk Consulting, a regulatory and reporting
requirement service provider;
* Parsley Box, a supplier of home delivered ambient
ready meals for the elderly;
* Active Navigation, a provider of enterprise-level
file analysis software;
* IPV, a developer of media asset management software;
and
---- Bleach, an established and trusted brand in the hair colourants
market.
In addition, one follow-on growth investment of GBP0.58 million
was made into:
* MPB Group, an online marketplace for used camera and
video equipment.
We expect follow-on investments to continue to be a feature of
the growth capital investments as they seek to achieve scale.
Cash proceeds totalling GBP11.77 million for the year were received
from portfolio companies that were either sold, repaid loans
or settled other capital proceeds. Of this total, GBP8.88 million
was received as cash proceeds from the sales of The Plastic Surgeon,
ASL and Redline (the first growth capital investment to be profitably
realised). Proceeds of GBP1.09 million were received from consideration
proceeds relating to Entanet, an investment sold in a previous
year, and from the partial realisation of Master Removers Group.
A further GBP1.80 million was received as loan repayments.
For the year under review, the portfolio generated a net gain
of GBP3.35 million on these realised investments. Within this,
the principal gains were from The Plastic Surgeon, ASL and Redline
sales (which were realised at a profit over opening valuations
of GBP0.63 million, GBP1.64 million and GBP0.70 million respectively).
Further gains of GBP0.38 million for the year were achieved by
receipts of consideration from the sale of Entanet realised in
a prior year as well as the partial exit from Master Removers
Group.
The portfolio also achieved a net increase of GBP5.79 million
on investments still held at the year-end, with positive increases
from Auction Technology Group (subsequently realised as noted
below), MPB Group and Proactive partially offset by valuation
falls at Wetsuit Outlet, Supercarers and Master Removers Group.
After the year end, the Company realised its holding in Pattern
Analytics Limited (trading as Biosite), another of its growth
capital investments. The Company received GBP2.45 million in
cash over the life of the investment and generated a return on
original cost of 1.5x in the three years that this investment
was held. These proceeds were the same as the year-end valuation
of this investment.
Also after the year-end, the Company achieved a substantial gain
over cost upon the sale of Auction Technology Group, receiving
capital proceeds of GBP6.84 million compared to a value at the
year-end of GBP4.96 million. This further appreciation in capital
value of GBP1.88 million upon sale reflects the strategic premium
paid by the acquirer of the business. The Company also received
interest owed on completion of GBP1.78 million that has not been
recognised in these 2019 accounts. Over the 11 1/2 year life
of the investment, total proceeds of GBP14.77 million have been
received, an overall multiple over cost of 4.5x and an IRR of
29%.
These transactions and valuation movements are explained further
in the Investment Adviser's Review.
Review of longer-term performance
The Board also regularly reviews the Company's total (income
and capital) return performance on both a NAV and Share Price
basis compared to its peer group. Based on the statistics prepared
by Morningstar at 31 December 2019 over the last five years,
the Company was ranked 8th on a NAV total return basis and 1st
on a Share Price total return basis out of 38 generalist VCTs,
both assuming dividends are reinvested (source: AIC). Additionally,
the Company was ranked 2nd on a NAV total return basis and 3rd
on a Share Price total return basis, out of 31 generalist VCTs,
assuming dividends are reinvested, over the last ten years. The
Board believes this to be a commendable performance.
Shareholders who invested in 2004 at the launch of the Company
have seen a NAV cumulative total return of 193.58 pence per share
compared with their initial investment cost of 100 pence per
share, or a net cost of 60 pence per share (after initial income
tax relief of 40 pence of their investment). As part of this
return, 124.80 pence per share has been paid to Shareholders
in dividends up to the year end. This represents an average annual
yield on the initial 100 pence investment of 8.2% and 13.6% on
the adjusted investment cost of 60 pence. The balance of the
total return is the December 2019 NAV of 68.78 pence per share.
Industry and regulatory developments
Although no further changes have emerged in the year, a previous
change, already announced, whereby 80% of the Company's total
investments must be in qualifying investments, applies to the
Company from 1st January 2020. The Board has therefore ensured
that this requirement has been met at this year-end.
Fundraising
On 25 October 2019, the Company launched an offer for subscription
of GBP10 million with an over-allotment facility of an additional
GBP5 million, alongside offers from the other Mobeus advised
VCTs. I am pleased to report that the Offer experienced strong
demand such that the Company received subscriptions amounting
to the full amount sought shortly after the Company's year-end
in January 2020. In accordance with the Offer's prospectus, the
first allotment under the Offer took place on 8 January 2020,
which included all applications received up to 20 December 2019
totalling GBP12.70 million. The balance of subscriptions of GBP2.30
million will be allotted before the end of the tax year on 2
April 2020.
Share buybacks
On 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. This change will have contributed
to the share price total return of 20.5%.
During the year, the Company made five purchases of its shares,
buying back a total of 2,375,656 shares, allowing Shareholders
who wanted to sell their shares to do so. The buybacks represented
2.2% (2018: 1.8%) of the issued share capital of the Company
at the beginning of the year. Further details are included in
the Strategic Report within the Annual Report. The shares bought
back were subsequently cancelled.
Shareholder Event
This year's annual Shareholder Event was held on Tuesday, 4 February
2020 at the National Gallery in Central London. Separate day
time and evening session included presentations on the Mobeus
advised VCTs' investment activity and performance. We have received
positive feedback from many of the circa 400 people who attended
this year's event and were pleased to hear that overall they
found the day informative and worthwhile.
Fraud Warning
Boiler Room fraud and unsolicited communications to shareholders.
We have been made aware of an increase in the number of Shareholders
being contacted in connection with sophisticated but fraudulent
financial scams which purport to come from the Company or to
be authorised by it. This is often by a phone call or an email
usually originating from outside of the UK, often claiming or
appearing to be from a corporate finance firm and typically offering
to buy your VCT shares at an inflated price.
Further information on boiler room scams and fraud advice plus
who to contact, can be found first in the answer to a question
"What should I do if I receive an unsolicited offer for my shares?"
within the section "A guide to VCTs" itself within the VCT Investor
area of the Investment Adviser's website: www.mobeus.co.uk/investor-area
and secondly, a link to the FCA's ScamSmart site: www.fca.org.uk/scamsmart
We strongly recommend that you seek financial advice before taking
any action if you remain in any doubt. You can also contact the
Investment Adviser on 0207 024 7600, or email info@mobeus.co.uk
to check whether any claims are genuine.
Shareholders are also encouraged to ensure their personal data
is always held securely and that data held by the Registrars
of the Company is up to date, to avoid cases of identity fraud.
Annual General Meeting
The next Annual General Meeting ("AGM") of the Company will be
held at 2:00 pm on Tuesday, 12 May 2020 at The Clubhouse, 8 St
James's Square, London SW1Y 4JU. Shareholders should note that
it is likely that the Stay at Home Measures will still be in
place at the time of the AGM and therefore gatherings of two
people or more will not be permitted and Shareholders not allowed
to attend the AGM meeting in person. The Board encourages Shareholders
to submit their vote by proxy either by completing and returning
the form enclosed or proxy votes may also be submitted electronically
via Computershare's Investor Centre at: https://www.
computershare.com/uk/individuals/im-a-shareholder/manage-your-shareholdings-online
If the meeting cannot be held, the Company will make an RNS announcement
advising of the changes, which will also be added to the Company's
website: www.migvct.co.uk to which Shareholders should refer.
The Notice of the meeting is included at the end of the Annual
Report and an explanation of the resolutions to be proposed can
be found in the Directors' Report of the Annual Report
Outlook
While the effects of the COVID-19 outbreak and its recent impact
on world economies generally are uncertain, I draw Shareholders'
attention to the announcement of an unaudited NAV at 24 March
2020 of 58.95p per share (further details are contained within
the Annual Report). The outbreak is already an event of major
significance for all economic activity. In conjunction with the
Investment Adviser, we will continue to assess the consequences
carefully and work to address issues as they arise.
While the short-term outlook for the UK economy is unpredictable,
your Board considers that your Company is well positioned, with
a portfolio still including relatively mature investments providing
an income return, and an increasing proportion of younger, growth
capital companies seeking to achieve scale. The strong results
achieved for the year reflect the growth and valuation increases
in both elements of the portfolio, underpinned by successful
realisations. It is particularly pleasing to report the Company's
realisations of two growth capital investments, Redline and Pattern
Analytics (trading as Biosite), made since the VCT rule change
in 2015.
Your Board again cautions that investing in younger growth capital
investments involves increased risk and that returns from them
may take longer to emerge and may be more volatile. Shareholders
should expect these companies to take time to achieve their desired
objectives and scale, but there also exists the potential for
significant gains in some cases. although this will hopefully
be more than offset by significant longer-term gains in some
cases.
The Company still retains a significant portfolio of investments
made before the rule change in 2015, many of which have the potential
to be realised at a significant profit. The sale of Auction Technology
Group after the year end is a particularly strong example. Shareholders
are reminded that the Company's investments remain relatively
high risk and their returns may remain volatile.
As I referred to in my Overview above, the impact of COVID-19
on the valuation of, and outlook for, companies in the portfolio
is yet to be fully determined but, in conjunction with the Investment
Adviser, we will be working to address issues as they arise.
The successful fundraising in 2019/20 provides the Company with
adequate funds to meet its cash needs (bolstered now by the sales
of Biosite and Auction Technology Group) and to continue to make
growth investments as and when markets stabilise.
Finally, I would like to take this opportunity once again to
thank all Shareholders for their continued support.
Clive Boothman
Chairman
INVESTMENT POLICY
The Company's policy is to invest primarily in a diverse portfolio
of UK unquoted companies. Investments are generally structured
as part loan and part equity in order to receive regular income,
to generate capital gain upon sale and to reduce the risk of high
exposure to equities. To spread the risk further, investments
are made in a number of businesses across different industry sectors.
The Company's cash and liquid resources are held in a range of
investments which can be of varying maturities, subject to the
overriding criterion that the risk of loss of capital be minimised.
The Company seeks to make investments in accordance with the requirements
of VCT regulation.
The full text of the Company's Investment Policy is available
in Key Policies in the Strategic Report within the Annual Report.
Investment ADVISER'S Review
COVID-19 update after the year end
After the year end, the world has been in the midst of a COVID-19
pandemic. Many of the VCTs' portfolio companies are encountering
very challenging trading conditions, the full extent and impact
of which will emerge only over time. The Investment Adviser has
reviewed and evaluated the impact of COVID-19 on each sector exposure
and upon the value of the portfolio. As mentioned in the Chairman's
Statement, an initial evaluation of the impact of COVID-19 on
the valuation of the portfolio companies resulted in an unaudited
NAV of 58.95 pence per share as at 24 March 2020. The Investment
Adviser is fully engaged with the portfolio companies to ensure
that all steps are being taken to assist each to trade through
this crisis and restore and grow value thereafter. As part of
this, Mobeus is reviewing the implications for new and follow-on
investments with the recent fundraising and relatively high liquidity
levels providing a solid foundation for such assessments.
Portfolio review
The portfolio's activity in the year is summarised as follows:
2019 2018
GBPm GBPm
Opening portfolio 48.48(1) 41.52
value
New and further 5.85 7.24
investments
Disposal proceeds (11.77) (2.94)
Net realised
gains / 3.35 (0.13)
(losses)
Valuation movements 5.79 2.51(1)
Portfolio value
at 31 December 51.70 48.20
(1) - These figures, for both tables, have been adjusted due
to GBP0.28 million of consideration recognised as a debtor at
the prior year-end, but received in this year. See Note 8 to the
Financial Statements for further details.
This has been a year of further solid progress building the growth
capital portfolio with five investments into new growth businesses
totalling GBP5.27 million and one existing growth portfolio company
receiving follow-on funding totalling GBP0.58 million.
Net cash proceeds of GBP11.77 million were received, primarily
from three realisations. After the end of the year, two further
disposals have occurred, realising a further GBP10.96 million,
the latter of which has delivered an exceptionally large return
and profit over the life of that investment. This means five significant
disposals have been achieved in nine months, which is unlikely
to be repeated, in the near-term at least. Details of these movements
for each investee company are provided at the end of this Investment
Review.
Since the change in the VCT rules in 2015, the Company has invested
GBP22.15 million in younger growth capital investments, bringing
the proportion of the portfolio held in growth capital investments
made after the rule change in 2015 to 45.2% by value at the year
end.
As mentioned in the Chairman's Statement, investing in younger
growth capital investments does involve increased risk. Returns
from these companies are expected to take longer to materialise
and may be more volatile.
The portfolio's contribution to the overall results of the Company
is summarised below:
Investment Portfolio 2019 2018
Capital Movement GBPm GBPm
Increase in
the 8.07 6.37
value of unrealised
investments
Decrease in
the (2.28) (3.86)
value of unrealised
investments
Net increase
in the 5.79 2.51(1)
value of unrealised
investments
Realised gains 3.35 0.98
Realised losses - (1.11)
Net realised
gains / 3.35 (0.13)
(losses) in
the year
Net investment 9.14 2.38
portfolio capital
movement in
the year
1 - These figures have been adjusted due to GBP0.28 million of
consideration recognised as a debtor at the prior year-end, but
received in this year. See Note 8 to the Financial Statements
for further details.
Valuation changes of portfolio investments still held
Within the valuation increases of GBP8.07 million, the principal
contributors were: Auction Technology Group - GBP2.90 million,
MPB Group - GBP1.09 million and Proactive Group - GBP1.03 million.
Auction Technology Group, which the Company part realised in 2014,
traded well above budget in 2019 with growth showing in all areas
of its business. The sale of this business after the year end
concluded an 11 1/2 year partnership with the Company. MPB Group
has grown its revenues substantially. In July it secured GBP9.00
million of further investment at a higher valuation, of which
the Company contributed GBP0.58 million and a total of GBP2.00
million was provided by the Mobeus VCTs.
A small number of new growth investments (such as Proactive Group)
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 performance. Proactive
Group has made consistent positive progress in all its markets
since investment. The principal driver of the value increase over
the period however is the preference structure of the investment
which allocates a greater share of economic value to the Company
at the current stage of the business's development.
Within total valuation decreases of GBP(2.28) million, the main
reductions were: Wetsuit Outlet - GBP(0.75) million, Supercarers
- GBP(0.44) million and Master Removers Group - GBP(0.34) million.
Wetsuit Outlet continues to disappoint post investment, although
it is anticipated that measures recently implemented to restore
margins will soon begin to improve profitability. Supercarers
is performing well behind plan and is undertaking a restructure
of its cost base. Finally, whilst Master Removers Group remains
very profitable and cash generative, a slowdown in the London
and South East property market over the last few months has impacted
recent performance.
Growth capital investing involves companies which often have not
achieved profitability, and as a result, have to be measured on
other metrics. The table below shows the proportion of the portfolio
that is represented by high growth but yet to be profitable companies
(often valued by reference to revenue or gross profit multiple),
compared with more mature, established companies with a history
of profitability and which can therefore be valued on an earnings
multiple:
Valuation methodology 2019 2018
GBPm GBPm
Earnings multiple 30.94 33.70
Revenue multiple 14.14 8.91
Gross profit multiple 3.51 3.21
Recent investment price 2.98 0.42
Recent investment price (reviewed
for impairment) 0.13 1.80
Other - 0.16
------ ------
Total 51.70 48.20
Realised gains and losses from sales of investments
The Company achieved net realised gains on the sale of investments
of GBP3.35 million during the year mainly comprising three significant
and profitable exits.
In May, the Company realised its long held investment in The Plastic
Surgeon generating a gain in the year of GBP0.63 million which
contributed to total proceeds over the life of the investment
of 5.6x the cost of the investment.
Shortly afterwards, in June, ASL Technology Group was sold generating
a gain in the year of GBP1.64 million and, including all proceeds
received since investment, a multiple of cost of 2.2x.
In December, the Company realised its first growth capital investment
made under the new VCT rules, Redline Worldwide, generating a
gain of GBP0.70 million in the year. Over the life that this investment
was held, a multiple of 1.6x cost has been achieved to date with
further proceeds potentially receivable in due course. GBP0.10
million of these proceeds were received following the year end,
bringing the multiple on cost achieved to 1.7x
Finally, the Company achieved a further gain of GBP0.34 million
arising from the disposal of Entanet in 2017, increasing the final
return on cost to 2.8x, while the partial realisation of Master
Removers Group during the year generated a gain of GBP0.04 million.
After the year end, in February, the Company exited investments
held in Pattern Analytics (trading as Biosite) and Auction Technology
Group ("ATG"). Pattern Analytics (trading as Biosite) was realised
generating proceeds of GBP2.45 million over the life of the investment
and contributed to a gain over original cost of 1.5x and ATG generated
proceeds over the life of the investment of GBP14.77 million compared
to an original cost of GBP3.27 million, a multiple on cost of
4.5x over the 11 1/2 years this investment was held - an exceptional
return for Shareholders.
Investment portfolio yield and capital repayments
During the year under review, the Company received the following
amounts in loan interest and dividend income: Investment Portfolio 2019 2018
Yield GBPm GBPm
Interest received
in 2.17 2.36
the year
Dividends received
in 0.51 0.70
the year
Total portfolio
income 2.68 3.06
in the year(1)
Portfolio value
at 31 51.70 48.20
December
Portfolio Income
Yield
(Income as a
% of
Portfolio value
at 31
December) 5.2% 6.3%
(1) Total portfolio income in the year is generated solely from
investee companies within the portfolio. See Note 3 of the Financial
Statements for all income receivable by the Company.
The Company also received loan stock repayments of GBP1.80 million,
at cost.
New investment in the year
A total of GBP5.27 million was invested into five new investments
during the year as detailed below:
Company Business Date of investment Amount of new investment
(GBPm)
Home delivered,
ambient ready
meals for the
Parsley Box elderly May 2019 0.85
------------------------- --------------------- --------------------------
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 2019 show revenues of GBP3.08 million and a loss
before
interest, tax and amortisation of goodwill of GBP(0.50) million.
Regulatory and
reporting requirement
Arkk Consulting service provider May 2019 1.45
------------------------- --------------------- --------------------------
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
2018 show turnover of GBP3.36 million and a loss before interest,
tax and amortisation of goodwill of GBP(0.34) million.
File analysis
Active Navigation software November 2019 1.41
------------------------- --------------------- --------------------------
Data Discovery Solutions, trading as Active Navigation, is a fi
le analysis software solution which makes it easier for companies
to clean up network drives, respond to new data protection laws
and dispose of redundant and out dated documents. Active Navigation's
solution is used by significant blue chip customers, particularly
those in highly regulated industries such as energy and professional
services, as well as government entities in the USA, Canada, Australia
and the UK. Active Navigation will seek to drive continued growth
from its fi le analysis platform with the recruitment of experienced
sales and professional services staff. The company's audited accounts
for the year ended 30 June 2018 show revenues of GBP5.02 million
and a profit before interest, tax and amortisation of goodwill
of GBP1.45 million.
IPV Media Asset Software November 2019 0.89
------------------------- --------------------- --------------------------
IPV Limited ("IPV") has developed a media asset management software
product called 'Curator', enabling enterprise level customers
to receive and search hours of video footage, edit into multiple
short clips and broadcast to online video platforms (such as YouTube)
and company intranets, in a very short time. IPV's impressive
list of blue-chip clients, such as Turner Sports, NASA and Sky,
are looking to improve efficiency in managing their video content.
The company has built an impressive senior management team of
proven operators and is targeting a media asset management market
in the US and UK worth an estimated GBP1 billion per annum. The
investment will be used to build out a sales and marketing team
and to fund lead generation for new direct and partner channels
as well as supporting the existing partner network. The company's
audited accounts for the year ended 31 December 2018 show revenues
of GBP2.25 million and a loss before interest, tax and amortisation
of goodwill of GBP(1.28) million.
Hair colourants
Bleach brand December 2019 0.67
------------------------- --------------------- --------------------------
Bleach London Holdings ("Bleach") is an established branded, fast growing business
which manufactures
a range of haircare and colouring products. Bleach is regarded as a leading authority
in the
hair colourant market having opened one of the world's fi rst salons focused solely on
colouring
and subsequently launched its fi rst range of products in 2013. The investment was part
of
a wider GBP5.60 million investment round alongside Burda Principal Investments and
angel investors.
The funds will be used to drive continued growth in sales through retailers as well as
capitalise
on its strong social media presence whilst accelerating its growing direct to consumer
channel.
The company's unaudited accounts for the year ended 31 December 2018 show revenues of GBP3.75 million and a loss before interest, tax and amortisation of goodwill of GBP(0.01 million.
Further investments in existing portfolio companies in the year
The Company made a further investment totalling GBP0.58 million
into one existing portfolio company during the year under review,
as detailed below:
Company Business Date of investment Amount of new investment
(GBPm)
Online marketplace
for used camera
MPB Group and video equipment July 2019 0.58
---------------------- -------------------- -------------------------
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 offi ce) and German
markets as part of the initial VCT investment round, this follow-on
investment, alongside funds provided by the Proven VCTs, is to
support its continued growth plan. Having more than doubled its
sales over the last two years, this investment will help drive
the company's objective to create a GBP100m+ turnover internationally
diverse and profitable re-commerce business. The company's audited
accounts for the year ended 31 March 2019 show turnover of GBP31.91
million and a loss before interest, tax and amortisation of goodwill
of GBP(1.73) million.
Realisations during the year
The Company realised its investments in The Plastic Surgeon, ASL
and Redline, during the year, generating an aggregate net realised
gain for the year of GBP2.97 million. Net cash proceeds received
from the sale of these investments totalled GBP8.88 million, as
detailed below:
Company Business Period of investment Total cash proceeds
over the life of
the investment/
Multiple over cost
The Plastic Supplier of snagging April 2008 to GBP4.15 million
Surgeon and finishing services May 2019 5.6 x cost
to the property sector
------------------------------------------ ------------------------------------- -------------------------------------
The Company sold its remaining investment in The Plastic Surgeon
to Polygon Group for GBP2.32 million (realised gain in the year:
GBP0.63 million), including a preference share repayment of GBP0.09
million in January 2019. Over the eleven years this investment was
held, it generated proceeds of GBP4.15 million compared to an original
investment cost of GBP0.74 million which is a multiple on cost of
5.6x and an IRR of 20.5%.
ASL Printer and photocopier December 2019 GBP6.42 million
services to June 2019 2.2 x cost
------------------------------------------ ------------------------------------- -------------------------------------
The Company sold its investment in ASL Technology for GBP5.18 million
(realised gain in the year of GBP1.64 million). Over the eight and
a half years this investment was held, it generated proceeds of
GBP6.42 million compared to an original investment cost of GBP2.94
million, which is a multiple on cost of 2.2x and an IRR of 12.6%.
Redline Provider of security February 2016 GBP1.78 million
services to the aviation to December 2019 1.6 x cost
industry and other
sectors
------------------------------------------ ------------------------------------- -------------------------------------
The Company sold its investment in Redline Worldwide for GBP1.38
million (realised gain in the year of GBP0.70 million). Since investment
in 2016, the investment has generated proceeds to date of GBP1.78
million compared to an original investment cost of GBP1.10 million,
which is a multiple on cost to date of 1.6x and an IRR of 16.0%.
Further proceeds may be receivable in due course.
There was a partial realisation of Master Removers Group ("MRG")
which generated proceeds of GBP0.46 million and a realised gain
of GBP0.04 million in the year. This occurred following a reorganisation
of MRG's share capital resulting in the Company increasing its equity
share in MRG from 5.7% to 8.6%.
Loan stock repayments and other receipts
The Company also received loan repayments totalling GBP1.80 million,
most notably Hollydale Management Limited (GBP0.59 million), and
consideration proceeds from an investment realised in a previous
year of GBP0.63 million.
In addition to net realised gains for the year on the three disposals
above of GBP2.97 million, there were also consideration gains of
GBP0.34 million from an investment realised in a prior year and
MRG's realised gain of GBP0.04 million, to equal the total realised
gains for the year of GBP3.35 million.
Realisations after the year end
After the year end, the Company realised its investments in Biosite
and Turner Topco Limited (trading as Auction Technology Group). Company Business Date of investment Total cash proceeds
over the life of
the investment/
Multiple over cost
Biosite Workforce management November 2016 GBP2.45 million
and security to February 2020 1.5 x cost
services
---------------------- ------------------- --------------------
The Company sold its investment in Pattern Analytics Limited (trading
as Biosite) to ASSA ABLOY for GBP2.34 million. Since investment
in 2016, the investment has generated proceeds of GBP2.45 million
compared to an original investment cost of GBP1.58 million, which
is a multiple on cost of 1.5x and an IRR of 21.0%.
Auction Technology Saas based online October 2008
Group auction marketplace to February 2020 GBP14.77 million
platform
4.5 x cost
The Company sold its investment in Turner Topco Limited (trading
as Auction Technology Group) to TA Associates for GBP8.62 million
(including GBP1.78 million loan interest due on completion). This
investment generated proceeds of GBP14.77 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 GBP3.27 million. These returns generated
a multiple on cost of 4.5x and an IRR of 28.9%.
Mobeus Equity Partners LLP
Investment Adviser
Market Date of Total Valuation Like for % value % of equity
sector investment book like of net held by
cost valuation assets funds
advised
increase/ by
Mobeus
GBP'000 GBP'000 (decrease) (2)
over year
(1)
Qualifying investments
Unquoted investments
Tovey Management Electronic
Limited (trading and Oct-15 2,979 4,435 27.6% 6.1% 43.4%
as Access IS) electrical
Provider of data
capture and scanning equipment
hardware
MPB Group Limited General retailers Jun-16 1,900 3,465 60.7% 4.7% 23.6%
Online marketplace
for used
photographic and
video equipment
Virgin Wines Holding
Company General retailers Nov-13 2,439 3,128 4.4% 4.4% 42.0%
Limited
Online wine retailer
Vectair Holdings
Limited Support services Jan-06 139 2,926 45.0% 4.1% 24.0%
Designer and distributor
of washroom
products
Software
Preservica Limited and Dec-15 2,099 2,705 (1.9)% 3.8% 48.4%
Seller of proprietary computer
digital archiving services
software
EOTH Limited (trading
as Equip General retailers Oct-11 1,000 2,607 23.5% 3.6% 8.0%
Outdoor Technologies)
Branded outdoor
equipment
and
clothing
Pattern Analytics
Limited (trading Software
as and Nov-16 1,583 2,341 - 3.3% 23.9%
computer
Biosite) services
Workforce management
and security
services for the
construction industry
Proactive Group Holdings
Inc General financial Jan-18 927 2,331 79.1% 3.2% 11.4%
Provider of media
services and
investor conferences
for companies
primarily listed
on secondary public
markets
Vian Marketing Limited
(trading as Leisure goods Jul-15 1,189 1,768 (3.0)% 2.5% 31.5%
Red Paddle Co)
Design, manufacture
and sale
of stand-up paddleboards
and
windsurfing sails
CGI Creative Graphics
International General industrials Jun-14 1,808 1,677 (6.6)% 2.3% 26.9%
Limited
Vinyl graphics to
global automotive,
recreational vehicle
and aerospace
markets
Market Date of Total Valuation Like for % value % of equity
sector investment book like of net held by
cost valuation assets funds
advised
increase/ by
Mobeus
GBP'000 GBP'000 (decrease) (2)
over
year (1)
My TutorWeb Limited Support services May-17 1,534 1,534 - 2.1% 30.8%
Digital marketplace
connecting
school pupils seeking
one-to-one
online tutoring
Ibericos Etc. Limited Travel &
(trading as Leisure Jan-17 1,245 1,519 12.3% 2.1% 25.0%
Tapas Revolution)
Spanish restaurant
chain
Software
Arkk Consulting Limited and May-19 1,446 1,477 2.1% (3) 2.1% 33.6%
Provider of services computer
and software services
to enable organisations
to remain
compliant with regulatory
reporting
requirements
Data Discovery Solutions Software
Limited and Nov-19 1,413 1,413 New 2.0% 28.5%
(trading as Active computer
Navigation) services investment
Provides the global
market leading
file analysis software
for information
governance, security
and compliance
Media Business Insight
Holdings Media Jan-15 2,518 1,407 65.4% 2.0% 67.5%
Limited
A publishing and
events business
focused on the creative
production
industries
Software
Tharstern Group Limited and Jul-14 1,377 1,395 3.3% 1.9% 52.5%
computer
Software based management services
information systems
Buster and Punch
Holdings Limited General retailers Mar-17 668 1,166 34.7% 1.6% 20.0%
Industrial inspired
lighting and
interiors retailer
Rota Geek Limited Support services Aug-18 571 1,067 19.2% 1.5% 17.1%
Workforce management
software
Blaze Signs Holdings
Limited Support services Apr-06 492 1,054 1.4% 1.5% 52.5%
Manufacturer and
installer of signs
Master Removers Group
2019 Support services Dec-14 418 943 (44.9)% 1.3% 30.5%
Limited (formerly
Master Removers
Group Limited) (trading
as Anthony
Ward Thomas, Bishopsgate
and
Aussie Man & Van)
A specialist logistics,
storage and
removals business
Parsley Box Limited General retailers May-19 854 900 5.4% (3) 1.3% 22.0%
Supplier of home
delivered, ambient
ready meals for the
elderly
Software
IPV Limited and Nov-19 890 890 New 1.2% 26.6%
Provider of media computer
asset software services investment
Bleach London Holdings
Limited General retailers Dec-19 674 674 New 0.9% 15.6%
Hair colourants brand investment
Kudos Innovations Software
Limited and Nov-18 421 660 56.7% 0.9% 14.6%
Online platform that computer
provides and services
promotes academic
research
dissemination
Manufacturing Services
Investment General retailers Jul-17 2,174 624 (12.9)% 0.9% 27.5%
Limited (trading
as Wetsuit Outlet)
Online retailer in
the water sports
market
Market Date of Total Valuation Like for % value % of equity
sector investment book like of net held by
cost valuation assets funds
advised
increase/ by
Mobeus
GBP'000 GBP'000 (decrease) (2)
over year
(1)
RDL Corporation Limited Support services Oct-10 1,558 458 (38.6)% 0.6% 45.2%
Recruitment consultant
for the
pharmaceutical, business
intelligence
and IT industries
Jablite Holdings Construction
Limited and Apr-15 502 126 (23.2)% 0.2% 40.1%
Manufacturer of expanded materials
polystyrene products
Veritek Global Holdings
Limited Support services Jul-13 2,045 - (100.0)% 0.0% 50.8%
Maintenance of imaging
equipment
Racoon International Personal
Group Limited goods Dec-06 1,213 - - 0.0% 36.0%
Supplier of hair
extensions, hair
care
products and training
Software
BookingTek Limited and Oct-16 771 - (100.0)% 0.0% 14.9%
Direct booking software computer
for hotels services
Super Carers Limited Support services Mar-18 580 - (100.0)% 0.0% 18.7%
Online platform that
connects people
seeking care home
from experienced
independent carers
CB Imports Group
Limited (trading General retailers Dec-09 350 - - 0.0% 23.2%
as Country Baskets)
Importer and distributor
of artificial
flowers and floral
sundries
Total qualifying 62.1%
investments 39,777 44,690 (3)
Non-qualifying investments
Turner Topco Limited
(trading as Media Oct-08 2,501 4,957 141.4% 6.9% 15.5%
Auction Technology
Group)
SaaS based online
auction
marketplace platform
Media Business Insight
Limited Media Jan-15 764 876 - 1.2% 67.5%
A publishing and
events business
focused on the creative
production
industries
Manufacturing Services
Investment General retailers Jul-17 571 571 - 0.8% 27.5%
Limited (trading
as Wetsuit Outlet)
Online retailer in
the water sports
market
EOTH Limited (trading
as Equip General retailers Oct-11 298 324 - 0.5% 8.0%
Outdoor Technologies)
Branded outdoor equipment
and
clothing (Rab and
Lowe Alpine)
Market Date of Total Valuation Like for % value % of equity
sector investment book like of net held by
cost valuation assets funds
advised
increase/ by
Mobeus
GBP'000 GBP'000 (decrease) (2)
over year
(1)
Tovey Management Electronic
Limited and Oct-15 285 285 (100.0)% 0.4% 43.4%
(trading as Access
IS) electrical
Provider of data
capture and equipment
scanning hardware
H Realisations (2018)
Limited General retailers Mar-18 27 - - 0.0% 0.0%
(formerly Hemmels
Limited)
Company specialising
in sourcing,
selling and servicing
of high price
classic cars
Total non-qualifying
investments 4,446 7,013 9.8%
Total investment
portfolio 44,223 51,703 71.9%
Current asset investments
and cash 20,175 20,175 28.1%
at bank (3)
Total investments 64,398 71,878 100.0%
Other assets 226 0.3%
Current liabilities (216) (0.3)%
Net assets 71,888 100.0%
Portfolio split by
type
Investment made prior to 2015
VCT rule change 23,875 28,366 54.8%
Investment made after 2015
VCT rule change 20,348 23,337 45.2%
44,223 51,703 100.0%
(1) This percentage change in 'like for like' valuations is a comparison
of the 31 December 2019 valuations with the 31 December 2018 valuations
(or where a new investment has been made in the year, the investment
amount), having adjusted for any partial disposals, loan stock repayments
or new investments in the year.
(2) The other funds advised by Mobeus include Mobeus Income & Growth
2 VCT plc, Mobeus Income & Growth 4 VCT plc and The Income & Growth
VCT plc. Details are contained in Note 9 to the accounts.
(3) New investment in year.
4 Disclosed as urrent asset investments and Cash at bank within
Current assets in the Balance sheet.
For further information on the Investment Portfolio, please see the Annual Report and Financial Statements
PRINCIPAL RISKS, management and regulatory environment
The Directors acknowledge the Board's responsibilities for the
Company's internal control systems and have instigated systems
and procedures for identifying, evaluating and managing the significant
risks faced by the Company. The Board's risk appetite is cognitive
of the risks and rewards of investing in small unquoted companies.
A key risk management review takes place at each quarterly Board
meeting. The principal risks identified by the Board, a description
of the possible consequences of each risk and how the Board manages
each risk are set out below: Risk Possible How the Board manages risk
consequence
Economic Events such as
the impact * The Board monitors (1) the portfolio as a whole to
of leaving the ensure that the Company invests in a diversified
EU during portfolio of companies; and
2020, an
economic
recession, (2) developments in the
a movement in macro-economic environment
sterling such as movements in interest
or in interest rates and availability
rates and of labour under new immigration
the impact of plans.
COVID-19,
could affect
trading
conditions
for smaller
companies and
consequently the
value
of the Company's
qualifying
investments.
----------------- -------------------------------------------------------------
Loss of A breach of the
approval VCT Rules, * The Company's VCT qualifying status is continually
as a Venture which change on reviewed by the Board and the Investment Adviser.
Capital a frequent
Trust basis, may lead
to the * The Board receives regular reports from its VCT
Company losing Status Adviser who has been retained by the Board to
its approval monitor the VCT's compliance with the VCT Rules.
as a VCT, which
would inter
alia result in:
(1) qualifying
shareholders who
have not
held their
shares for the
designated
period having
to repay the
income tax
relief they
obtained; (2)
future dividends
paid by
the Company
being subject
to tax; and (3)
the Company
losing its
exemption from
corporation tax
on capital
gains.
----------------- -------------------------------------------------------------
Investment Investment in
and unquoted * The Board regularly reviews the Company's Objective
strategic small companies and Investment Policy.
involves
a higher degree
of risk * Investments are made across a number of diverse
than investment sectors to mitigate risk. Investee companies are
in fully carefully selected by the Investment Adviser for
listed recommendation to the Board. The investment portfoli
companies. o
Smaller is reviewed by the Board on a regular basis.
companies often
have limited
product lines,
markets
or financial
resources
and may be
dependent for
their management
on a smaller
number of key
individuals.
----------------- -------------------------------------------------------------
Regulatory The Company is
required * Regulatory and legislative developments are kept
to meet its under review by the Company's solicitors, its VCT
legal and Status Adviser and the Board. Please see the
regulatory Chairman's Statement for the latest details of the
obligations as a impact of recent VCT legislation.
VCT, a
listed company
and its
own AIFM.
Failure to
comply
might result in
suspension
of the Company's
Stock
Exchange
listing,
financial
penalties, a
qualified
audit report or
loss of
its VCT status.
----------------- -------------------------------------------------------------
Financial Failure of the
and systems * The Board carries out an annual review of the
operating at any of the internal controls in place and reviews the risks
third-party facing the Company at each quarterly Board meeting
service and receives reports by exception.
providers that
the Company has
contracted * It reviews the performance of the service providers
with could lead annually.
to inaccurate
reporting or
monitoring.
Inadequate
controls could
lead to the
misappropriation
or insecurity of
assets.
----------------- -------------------------------------------------------------
Valuations The majority of
and stock the Company's * The Board receives quarterly valuation reports from
market assets are the Investment Adviser.
minority
holdings
in unquoted * The Investment Adviser alerts the Board about any
companies, adverse movements .
which are
inherently
difficult
to value.
Changes in
valuations
are taken to
Profit and
Loss account, so
any inaccuracy
in valuations
will affect
both the Income
Statement
and the Balance
Sheet.
----------------- -------------------------------------------------------------
Asset The Company's
liquidity unquoted * The Board receives reports from the Investment
investments Adviser and reviews the portfolio at each quarterly
cannot be board meeting. It carefully monitors investments
realised where a particular risk has been identified.
in a short
timescale.
Under-performing
unquoted
investments may
be difficult to
realise
on any
timescale.
----------------- -------------------------------------------------------------
Market As a result of
liquidity the limited * The Board has a share buyback policy which seeks to
secondary market mitigate market liquidity risk. This policy is
in VCT reviewed at each quarterly Board meeting.
shares,
shareholders may
find it
difficult to
sell
their shares at
a price
which is close
to the net
asset value.
Whilst demand
has always been
met to
date, it may not
be possible
for the Company
to buy
back large
percentages
of the share
capital, other
than over
several years.
----------------- -------------------------------------------------------------
Counterparty A counterparty
may fail * The Board regularly reviews and agrees policies for
to discharge an managing these risks. Further details can be found
obligation under 'credit risk' in Note 15 to the Financial
or commitment Statements in the Annual Report.
that it has
entered into
with the
Company.
----------------- -------------------------------------------------------------
Key staff A partner or key
member * The Board maintains regular dialogue with the
of staff at the Investment Adviser to ensure that (1) the team is
Investment adequately resourced; and (2) Partners and staff are
Adviser may well-incentivised and trained.
leave the
organisation
or the
Investment
Adviser
may fail to
maintain
adequate
levels of
experience and
expertise in its
team.
This may have an
adverse
effect on the
standard
of service that
the Company
receives from
the Investment
Adviser and
therefore the
performance of
the Company.
----------------- -------------------------------------------------------------
STATEMENT OF DIRECTORS' RESPONSIBILITIES
The Directors are responsible for preparing the Annual Report
and the Financial Statements in accordance with applicable law
and regulations.
Company law requires the Directors to prepare Financial Statements
for each financial year and the Directors have elected to prepare
the Financial Statements in accordance with United Kingdom Generally
Accepted Accounting Practice (United Kingdom Accounting Standards
and applicable law). Under company law the Directors must not
approve the Financial Statements unless they are satisfied that
they give a true and fair view of the state of affairs of the
Company and of the profit or loss of the Company for that period.
In preparing these Financial Statements, the Directors are required
to:
-- select suitable accounting policies and then apply them consistently;
-- make judgements and accounting estimates that are reasonable
and prudent;
* state whether the Financial Statements have been
prepared in accordance with United Kingdom accounting
standards, subject to any material departures
disclosed and explained in the Financial Statements;
* prepare the Financial Statements on the going concern
basis unless it is inappropriate to presume that the
Company will continue in business;
* prepare a Strategic Report, a Director's Report and
Directors' Remuneration Report which comply with the
requirements of the Companies Act 2006.
The Directors are responsible for keeping adequate accounting
records that are sufficient to show and explain the Company's
transactions and disclose with reasonable accuracy at any time
the financial position of the Company and enable them to ensure
that the Financial Statements comply with the Companies Act
2006. They are also responsible for safeguarding the assets
of the Company and hence for taking reasonable steps for the
prevention and detection of fraud and other irregularities.
Website publication
The Directors are responsible for ensuring the Annual Report
and the Financial Statements are made available on a website.
Financial Statements are published on the Company's website
in accordance with legislation in the United Kingdom governing
the preparation and dissemination of Financial Statements, which
may vary from legislation in other jurisdictions. The maintenance
and integrity of the Company's website is the responsibility
of the Directors. The Directors' responsibility also extends
to the ongoing integrity of the Financial Statements contained
therein.
Directors' responsibilities pursuant to Disclosure and Transparency
Rule 4 of the UK Listing Authority
The Directors confirm to the best of their knowledge that:
(a) The Financial Statements, which have been prepared in accordance
with United Kingdom Generally Accepted Accounting Practice,
give a true and fair view of the assets, liabilities, financial
position and the profit of the Company.
(b) The Annual Report includes a fair review of the development
and performance of the business and the position of the Company,
together with a description of the principal risks and uncertainties
that it faces.
Having taken advice from the Audit Committee, the Board considers
the Annual Report and Accounts, taken as a whole, is fair, balanced
and understandable and that it provides the information necessary
for shareholders to assess the Company's performance, business
model and strategy.
Neither the Company nor the Directors accept any liability to
any person in relation to the Annual Report except to the extent
that such liability could arise under English law.
For and on behalf of the Board
Clive Boothman
Chairman
FINANCIAL STATEMENTS
Income Statement for the year ended 31 December 2019
Year ended 31 December Year ended 31 December
2019 2018
Revenue Capital Total Revenue Capital Total
Notes GBP GBP GBP GBP GBP GBP
Net investment portfolio
gains 8a - 9,144,246 9,144,246 - 2,667,292 2,667,292
Income 3 2,854,837 - 2,854,837 3,219,294 - 3,219,294
Investment Adviser's fees 4a (406,306) (1,218,918) (1,625,224) (390,531) (1,171,593) (1,562,124)
Other expenses 4c (411,005) - (411,005) (387,232) - (387,232)
Profit on ordinary activities
before taxation 2,037,526 7,925,328 9,962,854 2,441,531 1,495,699 3,937,230
Taxation on ordinary
on profit activities 5 (293,485) 231,594 (61,891) (331,416) 222,603 (108,813)
Profit for and total
the year comprehensive
income 1,744,041 8,156,922 9,900,963 2,110,115 1,718,302 3,828,417
Basic and diluted earnings
per ordinary
Share 7 1.65p 7.71p 9.36p 1.98p 1.62p 3.60p
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")
(updated in October 2019) by the Association of Investment Companies
("AIC"), supplementary information which analyses the Income Statement
between items of a revenue and capital nature has been presented
alongside the Income Statement. The revenue column of profit attributable
to equity shareholders is the measure the Directors believe appropriate
in assessing the Company's compliance with certain requirements
set out in Section 274 Income Tax Act 2007.
All the items in the above statement derive from continuing operations
of the Company. No operations were acquired or discontinued in the
year.
Balance Sheet as at 31 December 2019 Company No. 5153931
31 December 31 December
2019 2018
Notes GBP GBP
Fixed assets
Investments at fair value 8 51,703,161 48,195,051
Current assets
Debtors and prepayments 225,562 793,953
Current asset investments 9 12,914,124 23,310,315
Cash at bank and in hand 9 7,261,618 3,181,475
20,401,304 27,285,743
Creditors: amounts falling due within
one year (216,090) (402,812)
Net current assets 20,185,214 26,882,931
Net assets 71,888,375 75,077,982
Capital and reserves
Called up share capital 1,045,265 1,068,659
Capital redemption reserve 11,304 32,191
Share premium reserve - 43,644,698
Revaluation reserve 8,719,606 5,285,632
Special distributable reserve 45,731,919 12,681,614
Realised capital reserve 14,528,747 8,818,475
Revenue reserve 1,851,534 3,546,713
Equity shareholders' funds 71,888,375 75,077,982
Basic and diluted net asset value
per ordinary share 68.78p 70.25p
The Financial Statements were approved and authorised for issue by the Board of Directors on 25 March 2020 and were signed on its behalf by:
Clive Boothman
Chairman
Statement of Changes in Equity for the year ended 31 December 2019
Non-distributable
reserves Distributable reserves
Called
up Capital Share Special Realised Revenue
share redemption premium Revaluation distributable capital reserve
Notes capital reserve reserve reserve reserve reserve Total
(note (note (note
a) b) b)
GBP GBP GBP GBP GBP GBP GBP GBP
At 1 January
2019 1,068,659 32,191 43,644,698 5,285,632 12,681,614 8,818,475 3,546,713 75,077,982
Comprehensive
income for
the year
Profit for
the year - - - 5,793,216 - 2,363,706 1,744,041 9,900,963
Total comprehensive
income for
the year - - - 5,793,216 - 2,363,706 1,744,041 9,900,963
Contributions
by and
distributions
to owners
Shares issued
under Offer
for
Subscription
(note c) 363 - 24,637 - - - - 25,000
Shares bought
back
(note d) (23,757) 23,757 - - (1,492,825) - - (1,492,825)
Dividends paid 6 - - - - (8,183,525) - (3,439,220) (11,622,745)
Total contributions
by and
distributions
to owners (23,394) 23,757 24,637 - (9,676,350) - (3,439,220) (13,090,570)
Other movements
Cancellation
of
share premium
reserve (note
e) - (44,644) (43,669,335) - 43,713,979 - - -
Realised losses
transferred
to
special reserve
(note a) - - - - (987,324) 987,324 - -
Realisation
of previously
unrealised
appreciation - - - (2,359,242) - 2,359,242 - -
Total other
movements - (44,644) (43,669,335) (2,359,242) 42,726,655 3,346,566 - -
At 31 December
2019 1,045,265 11,304 - 8,719,606 45,731,919 14,528,747 1,851,534 71,888,375
Note a: The purpose of this reserve is to fund market purchases of the Company's own shares, to write off existing and future losses and for any other corporate purpose. All of this reserve arose from shares issued before 5 April 2014. The transfer of GBP987,324 to the special reserve from the realised capital reserve above is the total of realised losses incurred by the Company in the year. As at 31 December 2019, the Company has a special reserve of GBP45,731,919, GBP21,526,433 of which relates to reserves from shares issued on or before 5 April 2014, or that arise from shares issued more than three years ago. Share issues are not distributable under VCT rules if they are within three years of the end of an accounting period in which shares were issued.
Note b: The realised capital reserve and the revenue reserve together comprise the Profit and Loss Account of the Company.
Note c: 36,295 new Ordinary Shares were allotted during the year, raising net funds of GBP25,000 for the Company.
Note d: During the year, the Company purchased 2,375,656 of its own shares at the prevailing market price for a total cost of GBP1,492,825, which were subsequently cancelled. This differs from the figure shown in the Statement of Cash Flows by GBP122,542 which was a creditor from the previous year.
Note e: The cancellation of GBP43,669,335 from the Share Premium Reserve and GBP44,644 from the Capital Redemption Reserve (as approved at the General Meeting on 10 May 2019 and by the court order dated 30 July 2019) has increased the Company's special reserve out of which it can fund buybacks of shares as and when it is considered by the Board to be in the interests of the Shareholders, and to absorb any existing and future realised losses, or for other corporate purposes.
Statement of Changes in Equity for the year ended 31 December 2018
Non-distributable
reserves Distributable reserves
Called
up Capital Share Special Realised Revenue
share redemption premium Revaluation distributable capital reserve
capital reserve reserve reserve reserve reserve Total
GBP GBP GBP GBP GBP GBP GBP GBP
At 1 January
2018 974,257 15,040 35,856,430 2,786,782 19,058,094 8,147,387 3,061,787 69,899,777
Comprehensive
income for
the year
Profit/(loss)
for the year 2,796,306 - (1,078,004) 2,110,115 3,828,417
Total
comprehensive
income
for the year - - - 2,796,306 - (1,078,004) 2,110,115 3,828,417
Contributions
by and
distributions
to owners
Shares issued
under Offer
for
Subscription
(note
c) 111,553 - 7,788,268 - (82,001) - - 7,817,820
Shares bought
back (17,151) 17,151 - - (1,058,135) - - (1,058,135)
Dividends paid - - - - (3,242,978) (541,730) (1,625,189) (5,409,897)
Total
contributions
by and
distributions
to owners 94,402 17,151 7,788,268 - (4,383,114) (541,730) (1,625,189) 1,349,788
Other
movements
Realised
losses
transferred to
special
reserve - - - - (1,993,366) 1,993,366 - -
Realisation of
previously
unrealised
appreciation - - - (297,456) - 297,456 - -
Total other
movements - - - (297,456) (1,993,366) 2,290,822 - -
At 31 December
2018 1,068,659 32,191 43,644,698 5,285,632 12,681,614 8,818,475 3,546,713 75,077,982
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.
Revaluation reserve - Increases and decreases in the valuation of investments held at the year-end are accounted for in this reserve, except to the extent that the diminution is deemed permanent.
In accordance with stating all investments at fair value through profit and loss (as recorded in note 8), all such movements through both revaluation and realised capital reserves are shown within the Income Statement for the year.
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 fee payable, together with the related
tax effect to this reserve in accordance with the policies; and - Capital dividends paid.
Revenue reserve - Income and expenses that are revenue in nature are accounted for in this reserve, as well as 25% of the Investment Adviser fee together with the related tax effect, as well as income dividends paid that are classified as revenue in nature.
Statement of Cash Flows for the year ended 31 December 2019
Year ended Year ended
31 December 31 December
Notes 2019 2018
GBP GBP
Cash flows from operating activities
Profit after
tax for the financial year 9,900,963 3,828,417
Adjustments
for:
Net investment
portfolio gains (9,144,246) (2,667,292)
Tax charge for
current year 5 61,891 108,813
Decrease in
debtors 285,660 12,155
Decrease in
creditors (17,589) (14,106)
Net cash inflow
from operations 1,086,679 1,267,987
Corporation
tax paid (108,482) (190,374)
Net cash inflow
from operating activities 978,197 1,077,613
Cash flows from investing activities
Acquisitions of
investments 8 (5,853,554) (7,238,337)
Disposals of investments 8 11,772,421 6,396,046
No change/(increase) in bank deposits
with a maturity over three months - (130)
Net cash inflow/(outflow)
from investing activities 5,918,867 (842,421)
Cash flows from financing activities
Shares issued as part of Offer for subscription 25,000 8,104,504
Issue costs as
part of Offer for Subscription - (286,684)
Equity dividends
paid 6 (11,622,745) (5,409,897)
Share capital bought
back (1,615,367) (982,450)
Net cash (outflow)/inflow
from financing activities (13,213,112) 1,425,473
Net (decrease)/increase in cash and
cash equivalents (6,316,048) 1,660,665
Cash and cash equivalents at start of
year 25,486,108 23,825,443
Cash and cash equivalents at end of
year 19,170,060 25,486,108
Cash and cash equivalents comprise:
Cash equivalents 9 11,908,442 22,304,633
Cash at bank and
in hand 9 7,261,618 3,181,475
1 Company Information
Mobeus Income and Growth VCT plc is a public limited company incorporated in England, registration number 5153931. The registered office is 30 Haymarket, London, SW1Y 4EX.
2 Basis of preparation of the Financial Statements
A summary of the principal accounting policies, all of which have been applied consistently throughout the year are set out at the start of the related disclosure throughout the Notes to the Financial Statements. All accounting policies are included within an outlined box at the top of each relevant note.
These Financial statements have been prepared in accordance with applicable United Kingdom accounting standards, including Financial Reporting Standard 102 ("FRS102"), 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.
3 Income
Dividends receivable on quoted equity shares are brought into account on the ex-dividend date. Dividends receivable on unquoted equity shares are brought into account when the Company's right to receive payment is established and there is no reasonable doubt that payment will be received.
Interest income on loan stock is accrued on a daily basis. Provision is made against this income where recovery is doubtful or where it will not be received in the foreseeable future. Where the loan stocks only require interest or a redemption premium to be paid on redemption, the interest and redemption premium is recognised as income or capital as appropriate once redemption is reasonably certain. When a redemption premium is designed to protect the value of the instrument holder's investment rather than reflect a commercial rate of revenue return the redemption premium is recognised as capital. The treatment of redemption premiums is analysed to consider if they are revenue or capital in nature on a company by company basis. Accordingly, the redemption premium recognised in the year ended 31 December 2019 has been classified as capital and has been included within gains on investments.
2019 2018
GBP GBP
Income from bank deposits 29,674 23,663
Income from investments
- from equities 505,401 699,029
- from OEIC funds 151,532 132,832
- from loan stock 2,161,352 2,321,462
- from interest on preference share dividend
arrears 6,878 40,205
2,825,163 3,193,528
Other income - 2,103
Total income 2,854,837 3,219,294
Total income comprises
Dividends 656,933 831,861
Interest 2,197,904 2,385,330
Other income - 2,103
2,854,837 3,219,294
Total loan stock interest due but not recognised in the year was GBP580,811 (2018: GBP905,181).
4 Investment adviser's fees and Other expenses
All expenses are accounted for on an accruals basis
a) 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.
Revenue Capital Total Revenue Capital Total
2019 2019 2019 2018 2018 2018
GBP GBP GBP GBP GBP GBP
Mobeus Equity Partners
LLP
Investment Adviser's
fees 406,306 1,218,918 1,625,224 390,531 1,171,593 1,562,124
Under the terms of a revised investment management agreement dated 20 May 2010 (amended and restated on 9 November 2016), Mobeus Equity Partners LLP ("Mobeus") provides investment advisory, administrative and company secretarial services to the Company, for a fee of 2% per annum of closing net assets, paid in advance, calculated on a quarterly basis by reference to the net assets at the end of the preceding quarter, plus a fixed fee of GBP134,168 per annum, the latter inclusive of VAT and subject to annual increases in RPI. In 2013, Mobeus agreed to waive such further increases due to indexation, until otherwise agreed with the Board.
The Investment Adviser's fee includes provision for a cap on expenses excluding irrecoverable VAT and exceptional items set at 3.6% of closing net assets at the year end. In accordance with the Investment Management Agreement, any excess expenses are borne by the Investment Adviser. The excess expenses during the year amounted to GBPnil (2018: GBPnil). With effect from 1 April 2018, the Investment Adviser's fee upon the net funds raised from use of the over-allotment facility of GBP10 million under the 2017/18 offer had been reduced from 2% to 1% per annum for one year.
The Company is responsible for external costs such as legal and accounting fees, incurred on transactions that do not proceed to completion ("abort expenses") subject to the cap on total annual expenses referred to above. No such costs have been incurred in the current or previous year.
In line with common practice, Mobeus retains the right to charge arrangement and syndication fees and directors' or monitoring fees to companies in which the Company invests. The Investment Adviser received fees totalling GBP425,708 during the year ended 31 December 2019 (2018: GBP402,777), being GBP146,336 (2018: GBP128,406) for arrangement fees and GBP279,372 (2018: GBP274,371) for acting as non-executive directors on a number of investee company boards. These fees attributable to MIG VCT are based upon the investment allocation applicable to MIG VCT which applied at the time of each investment. These figures are not part of these financial statements.
Incentive agreement
Under the Incentive Agreement dated 9 July 2004, and a variation of this agreement dated 20 May 2010, the Investment Adviser is entitled to receive an annual performance-related incentive fee of 20% of the dividends paid in a year in excess of a "Target Rate" comprising firstly, an annual dividend paid in a year target which started at 6.00 pence per share on launch (indexed each year for RPI) and secondly a requirement that any shortfall of cumulative dividends paid in each year beneath the cumulative annual dividend target is carried forward and added to the Target Rate for the next accounting period. Any excess of cumulative dividends paid above the cumulative annual dividend target is not carried forward, whether an incentive fee is payable for that year or not. Payment of a fee is also conditional upon the daily weighted average Net Asset Value ("NAV") per share throughout such year equalling or exceeding the daily weighted average Base NAV per share throughout the same year. The performance fee will be payable annually.
At 31 December 2019, the annual dividend target is 8.01 pence per share and as cumulative dividends paid were 11.00 pence, this target was met. However, the average NAV per share was 70.54 pence for the year, which was less than the average base NAV per share for the year of 92.09 pence. Accordingly, no performance incentive fee is payable for the year (2018: nil).
b) Offer for subscription fees
2019 2018
GBP GBP
Funds raised across the four Mobeus VCTs - 19.64
of which the funds raised by MIG VCT were - 8.10
Offer costs payable to Mobeus at 3.25%
of funds raised by MIG VCT - 0.26
Under the terms of an Offer for Subscription, with the other Mobeus advised VCTs, launched on 6 September 2017, Mobeus was entitled to fees of 3.25% of the investment amount received from investors. This amount (for 2018 only) totalled GBP0.64 million for the final two allotments during 2018 across all four VCTs (GBP0.26million for the Company), out of which all the costs associated with the allotment were met, excluding any payments to advisers facilitated under the terms of the Offer.
c) Other expenses
Expenses are charged wholly to revenue, with the exception of expenses incidental to the acquisition or disposal of an investment, which are written off to the capital column of the Income Statement or deducted from the disposal proceeds as appropriate.
2019 2018
GBP GBP
Directors' remuneration (including NIC of GBP7,916
(2018: GBP8,002)) - note a) 112,916 113,002
IFA trail commission 75,439 81,025
Broker's fees 14,400 14,400
Auditor's fees - Audit of Company (excluding VAT) 29,213 24,088
- audit related assurance services - note b) (excluding
VAT) 6,663 4,613
- tax compliance services - note b) (excluding
VAT) 1,845 1,922
Registrar's fees 55,221 55,030
Printing 33,095 28,084
Legal & professional fees 24,501 10,422
VCT monitoring fees 9,000 9,000
Directors' insurance 6,644 7,630
Listing and regulatory fees 31,571 29,526
Sundry 10,497 8,490
Other expenses 411,005 387,232
Note a): See analysis in the Directors' Remuneration Report within the Annual Report, which excludes the NIC above. The key management personnel are the three non-executive Directors. The Company has no employees.
Note b): The audit related assurance services are in relation to the review of the Financial Statements within the Company's Half Year Report. The Audit Committee reviews the nature and extent of these services to ensure that auditor independence carried out by another firm, so are included within legal and professional fees.
5 Taxation on profit/(loss) on ordinary activities
The tax expense for the year comprises current tax and is recognised in profit or loss. The current income tax charge is calculated on the basis of tax rates and laws that have been enacted or substantively enacted by the reporting date.
Any tax relief obtained in respect of adviser fees allocated to capital is reflected in the realised capital reserve and a corresponding amount is charged against revenue. The tax relief is the amount by which corporation tax payable is reduced as a result of these capital expenses.
Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the balance sheet date where transactions or events that result in an obligation to pay more tax in the future or a right to pay less tax in the future have occurred at the balance sheet date. Timing differences are differences between the Company's taxable profits and its results as stated in the Financial Statements that arise from the inclusion of gains and losses in the tax assessments in periods different from those in which they are recognised in the Financial Statements.
Deferred tax is measured at the average tax rates that are expected to apply in the years in which the timing differences are expected to reverse based on tax rates and laws that have been enacted or substantively enacted at the balance sheet date. Deferred tax is measured on a non-discounted basis.
A deferred tax asset would be recognised only to the extent that it is more likely than not that future taxable profits will be available against which the asset can be utilised.
Tax relief relating to Investment Adviser fees is allocated between revenue and capital where such relief can be utilised. The Company is an Investment Trust and Investment Trust companies are exempt from tax on capital gains if they meet the HMRC criteria set out in section 274 of the ITA.
2019 2019 2019 2018 2018 2018
Revenue Capital Total Revenue Capital Total
GBP GBP GBP GBP GBP GBP
a) Analysis of tax charge:
UK Corporation tax on profits/(losses)
for the year 293,485 (231,594) 61,891 331,416 (222,603) 108,813
Total current tax charge/(credit) 293,485 (231,594) 61,891 331,416 (222,603) 108,813
Corporation tax is based
on a rate of 19.00%
(2018: 19.00%)
on ordinary activities
b) Profit before tax 2,037,526 7,925,328 9,962,854 2,441,531 1,495,699 3,937,230
Profit ordinary activities
on multiplied by main
company rate of corporation
tax in the UK of 19.00%
(2018: 19.00%) 387,129 1,505,813 1,892,942 463,892 284,182 748,074
Effect
of:
UK dividends (96,026) - (96,026) (132,816) - (132,816)
Net investment portfolio
gains not taxable - (1,737,407) (1,737,407) - (506,785) (506,785)
Expenditure not allowable
for tax purposes 2,382 - 2,382 9 - 9
Underprovision in prior period - - - 331 - 331
Actual current tax charge 293,485 (231,594) 61,891 331,416 (222,603) 108,813
Deferred taxation
No provision for deferred taxation has been made on potential capital gains due to the Company's current status as a VCT under section 274 of the ITA and the Directors' intention to maintain that status.
6 Dividends paid and payable
Dividends payable are recognised as distributions in the Financial Statements when the Company's liability to pay them has been established. This liability is established for interim dividends when they are paid, and for final dividends when they are approved by the shareholders, usually at the Company's Annual General Meeting.
A key judgement in applying the above accounting policy is in determining the amount of minimum dividend to be paid in respect of a year. The Company's status as a VCT means it has to comply with Section 259 of the ITA, which requires that no more than 15% of the income from shares and securities in a year can be retained from the revenue available for distribution for the year.
Amounts recognised as distributions to equity shareholders in the year:
For year ended Pence 2019 2018
Dividend Type 31 December per share Date Paid GBP GBP
Final Income 2017 1.50p 17 May 2018 - 1,625,190
Final Capital 2017 0.50p 17 May 2018 - 541,730
Final Capital 2017 1.00p* 17 May 2018 - 1,083,459
21 September
Interim Capital 2018 2.00p* 2018 - 2,159,518
Final Income 2018 1.75p 17 May 2019 1,854,366 -
Final Capital 2018 3.25p* 17 May 2019 3,443,822 -
20 September
Interim Income 2019 1.50p 2019 1,584,854 -
20 September
Interim Capital 2019 2.50p* 2019 2,641,423 -
06 December
Interim Capital 2019 2.00p* 2019 2,098,280 -
11,622,745 5,409,897
Proposed distributions to equity
holders at the year end: Date Payable
Final Income 2018 1.75p 17 May 2019 - 1,854,366
Final Capital 2018 3.25p* 17 May 2019 - 3,443,822
Interim Capital 2019 4.00p* 8 January 2020 4,183,502 -
4,183,502 5,298,188
* These dividends were paid out of the Company's special distributable reserve.
On 2 April 2020, the Board declared a 6.00 pence per share Interim dividend in respect of the year ending 31 December 2020 which will be payable on 7 May 2020 to Shareholders on the Register on 14 April 2020.
Set out below are the total income dividends payable in respect of the financial year, which is the basis on which the requirements of Section 259 of the ITA concerning the Company not retaining more than 15% of its income from shares and securities, is considered.
Recognised income distributions in the financial
statements for the year
For year ended Pence 2019 2018
Dividend Type 31 December per share Date Paid/Payable GBP GBP
Revenue available for distribution by way of
dividends for the year 1,744,041 2,110,115
Final Income 2018 1.75p 17 May 2019 - 1,854,366
20 September
Interim Income 2019 1.50p 2019 1,584,854 -
Total income dividends for
the year 1,584,854 1,854,366
7 Basic and diluted earnings per share
2019 2018
GBP GBP
Total earnings after taxation: 9,900,963 3,828,417
Basic and diluted earnings per share (note
a) 9.36p 3.60p
Revenue earnings from ordinary activities
after taxation 1,744,041 2,110,115
Basic and diluted revenue earnings per
share (note b) 1.65p 1.98p
Net investment portfolio gains 9,144,246 2,667,292
Capital Investment Adviser fees less taxation ( 987,324) ( 948,990)
Total capital earnings 8,156,922 1,718,302
Basic and diluted capital earnings per
share (note c) 7.71p 1.62p
Weighted average number of shares in issue
in the year 105,785,777 106,350,801
Notes
a) Basic earnings per share is total earnings after taxation divided by the weighted average number of shares in issue.
b) Basic revenue earnings per share is the revenue return after taxation divided by the weighted average number of shares in issue.
c) Basic capital earnings per share is the total capital return after taxation divided by the weighted average number of shares in issue.
d) There are no instruments that will increase the number of shares in issue in future. Accordingly, the above figures currently represent both basic and diluted earnings per share.
8 Investments at fair value
The most critical estimates, assumptions and judgements relate to the determination of the carrying value of investments at "fair value through profit and loss" (FVTPL). All investments held by the Company are classified as FVTPL and measured in accordance with the International Private Equity and Venture Capital Valuation ("IPEV") guidelines, as updated in December 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. 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. The inputs that derived the investment price are calibrated within individual valuation models and at every subsequent quarterly measurement date, are reconsidered for any changes in light of more recent events or changes in the market performance of the investee company. The valuation bases used are the following:
- a multiple basis. The enterprise value of the investment may be determined by applying a suitable price-earnings ratio, revenue or gross profit multiple to that company's historic, current or forecast post-tax earnings before interest 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 figures are shown net of any applicable transaction costs incurred by the Company.
All investments are initially recognised and subsequently measured at fair value. Changes in fair value are recognised in the Income Statement.
A key judgement made in applying the above accounting policy relates to investments that are permanently impaired. Where the value of an investment has fallen permanently below the price of recent investment, the loss is treated as a permanent impairment and as a realised loss, even though the investment is still held. The Board assesses the portfolio for such investments and, after agreement with the Investment Adviser, will agree the values that represent the extent to which an investment loss has become realised. This is based upon an assessment of objective evidence of that investment's future prospects, to determine whether there is potential for the investment to recover in value.
Accounting standards classify methods of fair value measurement as Levels 1, 2 and 3. This hierarchy is based upon the reliability of information used to determine the valuation. All of the unquoted investments are Level 3, i.e. fair value is measured using techniques using inputs that are not based on observable market data.
Movements in investments during the year are summarised as follows:
Unquoted Unquoted Unquoted Total
ordinary preference Loan
shares shares stock
GBP GBP GBP GBP
Cost at 31 December 2018 21,631,195 27,663 25,080,727 46,739,585
Net unrealised gains at 31 December
2018 4,053,584 531,544 417,772 5,002,900
Permanent impairment in value
of investments
as at 31 December 2018 (3,520,524) - (26,910) (3,547,434)
Valuation at 31 December 2018 22,164,255 559,207 25,471,589 48,195,051
Purchases at cost 5,853,554 - - 5,853,554
Sale proceeds (note a) (5,488,953) (532,089) (5,751,379) (11,772,421)
Net realised gains on investments
(note a) 3,023,764 - 327,266 3,351,030
Net unrealised gains on investments
(note b) 5,414,517 302 661,128 6,075,947
Valuation at 31 December 2019 30,967,137 27,420 20,708,604 51,703,161
Cost at 31 December 2019 23,351,076 27,108 20,845,314 44,223,498
Net unrealised gains/(losses)
at 31 December 2019 8,829,094 312 (109,800) 8,719,606
Permanent impairment in cost of
investments
as at 31 December 2019 (note c) (1,213,033) - (26,910) (1,239,943)
Valuation at 31 December 2019 30,967,137 27,420 20,708,604 51,703,161
Note a) Disposals of investment portfolio companies during the year were:
Valuation
Company Type Investment Disposal at Realised
cost proceeds 31 December gain
2018 in year
GBP GBP GBP GBP
ASL Technology Holdings
Limited Realisation 2,942,292 5,178,595 3,542,398 1,636,197
The Plastic Surgeon
Holdings Limited Realisation 39,302 2,323,469 1,694,490 628,979
Redline Worldwide
Limited Realisation 1,087,629 1,381,323 676,692 704,631
Master Removers Group
Limited Part Realisation 195,926 463,743 428,080 35,663
Entanet Holdings Limited Contingent Consideration - 628,291 - 345,560
Hollydale Management
Limited Realisation 937,920 586,200 586,200 -
Backhouse Management
Limited Realisation 787,020 302,700 302,700
Barham Consulting
Limited Realisation 787,020 302,700 302,700
Creasy Marketing Services
Limited Realisation 787,020 302,700 302,700
McGrigor Management
Limited Realisation 787,020 302,700 302,700
Newquay Helicopters
(2013) Limited Realisation 18,492 - - -
8,369,641 11,772,421 8,138,660 3,351,030
Net realised gains on investments of GBP3,351,030 together with net unrealised gains on investments of GBP6,075,947 equal net investment portfolio gains of GBP9,426,977. This figure is more than that shown in the Income Statement of GBP9,144,246. The difference of GBP282,731 is the estimated fair value of contingent consideration in relation to the sale of Entanet Holdings in a prior year, recognised at the 31 December 2018 balance sheet date. The full undiscounted value of GBP314,146 was subsequently received, along with a further sum of GBP314,146 later in the year.
Note b) The major components of the net increase in unrealised valuations of GBP6,075,947 in the year were increases of GBP2,903,598 in Turner Topco Limited (trading as Auction Technology Group), GBP1,091,030 in MPB Group Limited, GBP1,029,871 in Proactive Group Holdings Inc, GBP907,590 in Vectair Holdings Limited, and GBP736,734 in Tovey Management Limited (trading as Access IS). This increase was partly offset by falls of GBP747,504 in Manufacturing Services Investment Limited (trading as Wetsuit Outlet), GBP435,016 in Supercarers Limited, GBP341,480 in Master Removers Group 2019 Limited, GBP288,308 in RDL Corporation Limited and GBP192,724 in BookingTek Limited.
The increase in unrealised valuations of the loan stock investments above reflects the changes in the entitlement to loan premiums, and/or in the underlying enterprise value of the investee company. The increase does not arise from assessments of credit risk or market risk upon these instruments.
Note c) During the year, permanent impairments of the cost of investments have reduced from GBP3,547,434 to GBP1,239,943 due to the members' voluntary liquidation of six investee companies in the year, all of which had been permanently impaired previously.
The difference of GBP282,731 is the estimated fair value of contingent consideration in relation to the sale of Entanet Holdings in a prior year, recognised at the 31 December 2018 balance sheet date. The full undiscounted value of GBP314,146 was subsequently received, along with a further sum of GBP314,146 later in the year.
Net realised gains on investments of GBP3,351,030 together with net unrealised gains on investments of GBP6,075,947 equal net investment portfolio gains of GBP9,426,977.
9 Current asset investments and Cash at bank
Cash equivalents, for the purposes of the Statement of Cash flows, comprises bank deposits repayable on up to three months' notice and funds held in OEIC money-market funds. Current asset investments are the same but also include bank deposits that mature after three months. Current asset investments are disposable without curtailing or disrupting the business and are readily convertible into known amounts of cash at their carrying values at immediate or up to three months' notice. Cash, for the purposes of the Statement of Cash Flows is cash held with banks in accounts subject to immediate access. Cash at bank in the Balance Sheet is the same.
2019 2018
GBP GBP
OEIC Money market funds 11,908,442 22,304,633
Cash equivalents per Statement of Cash Flows 11,908,442 22,304,633
Bank deposits that mature after three months
but are not immediately repayable 1,005,682 1,005,682
Current asset investments 12,914,124 23,310,315
Cash at bank 7,261,618 3,181,475
10 Post balance sheet events
On 8 January 2020, 19,480,843 new Ordinary Shares were allotted under the Company's Offer for Subscription for applications received and accepted up to and including 20 December 2019, raising net funds of GBP12.27 million.
On 7 February 2020, Pattern Analytics Limited (trading as Biosite) was sold by the Company, realising GBP2.34 million of proceeds.
On 13 February 2020, cash proceeds of GBP8.62 million were received upon the sale of Turner Topco Limited (trading as Auction Technology Group) by the Company.
On 19 March 2020, GBP0.10 million of further proceeds were received from Redline Worldwide Limited, an investment realised in the previous year.
On 2 April 2020, a further 3,752,450 new Ordinary Shares were allotted under the Company's Offer for Subscription raising further net funds of GBP2.21 million. Following this allotment, the Offer for Subscription was closed. In total, net funds raised from the Offer are GBP 14.48 million.
On 2 April 2020, the Board has declared an interim dividend of 6.00 pence per share for the year ending 31 December 2020, payable to shareholders on the register on 14 April 2020, on 7 May 2020.
COVID-19 Impact
Since the Balance sheet date, the scale of the COVID-19 pandemic began to affect the UK and most other world economies significantly. In line with countries whose infection rates took hold earlier, the UK Government has now prohibited most non-essential movement of people, goods and services. This has severely affected UK trade and business but it remains too early to predict when these restrictions may be eased and thus what the eventual impact of these restrictions will be.
The VCT Board and Investment Adviser have nonetheless evaluated the extent of the impact on the Company, its portfolio of investee companies and their future to date. On 26 March 2020, the Company announced an unaudited net asset value ("NAV") based upon an evaluation of available information held as at 24 March 2020, which is shown below:
31 December 24 March 2020 %
2019
NAV per share 64.78p(1) 58.95 (9.0)%
1 - The NAV per share at 31 December 2019 has been reduced from that reported on the Balance sheet by a dividend of 4.00 pence per share paid on 8 January 2020.
Due to the rapidly evolving nature of the impact of COVID-19, there will be further information that emerges, while the impact of known information evaluated at 24 March 2020 may have since changed. Both known and as yet unknown information may affect the portfolio companies further in ways that cannot be predicted with any certainty by the Board or the Investment Adviser. As a result, any further movements in NAV per share from that reported above may occur but the Board is unaware of any matter that will have caused NAV per share to have changed significantly since 24 March 2020.
11 Statutory information The financial information set out in these statements does not constitute the Company's statutory accounts for the year ended 31 December 2018 but is derived from those accounts. Statutory accounts will be delivered to the Registrar of Companies after the Annual General Meeting. The auditors have reported on these accounts and their report was unqualified and did not contain a statement under section 498(2) of the Companies Act 2006. 12 Annual Report The Annual Report will be published on the Company's website at www.migvct.co.uk shortly and shareholders who have not requested a hard copy of the report will shortly receive notification from the Company on how to download a pdf of the Report from the website. Shareholders and members of the public who wish to receive a hard copy of the Annual Report, may request a copy by writing to the Company Secretary, Mobeus Equity Partners LLP, 30 Haymarket (4th floor), London SW1Y 4EX or by email: vcts@mobeus.co.uk. 13 Annual General Meeting The Company's next Annual General Meeting will be held at 2:00 p.m. on Wednesday 12 May 2020 at The Clubhouse, 8 St James's Square, London SW1Y 4JU. Shareholders should note that the impact of COVID-19 and the Stay at Home Measures currently in place could mean that the AGM cannot be held on 12 May 2020. If this is the case, the Company will make an RNS announcement advising of any changes, which will also be added to the Company's website: www.migvct.co.uk to which Shareholders should refer. A copy of the notice of the meeting can be found towards the rear of the Annual Report. Shareholders are encouraged to submit their votes by proxy rather than attend the meeting in person, a proxy form for the meeting is included with Shareholders' copies of this Annual Report or can be lodged online at www.investcentre.co.uk/eproxy. 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
FR EAKLXELLEEEA
(END) Dow Jones Newswires
April 07, 2020 02:48 ET (06:48 GMT)
1 Year Mobeus Income & Growth Vct Chart |
1 Month Mobeus Income & Growth Vct Chart |
It looks like you are not logged in. Click the button below to log in and keep track of your recent history.
Support: +44 (0) 203 8794 460 | support@advfn.com
By accessing the services available at ADVFN you are agreeing to be bound by ADVFN's Terms & Conditions
