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| 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 | 2,588 | 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 |
TIDMMIX
RNS Number : 7971Y
Mobeus Income & Growth VCT PLC
11 September 2020
Hot Features
Premium
MOBEUS INCOME & GROWTH VCT PLC
HALF YEAR RESULTS FOR THE SIX MONTHSED 30 JUNE 2020
Mobeus Income & Growth VCT plc ("the Company") today announces
its half-year results for the six months ended 30 June 2020.
As at 30 June 2020:
Net assets: GBP74.71 million
Net asset value ("NAV") per share: 58.86 pence
Financial Highlights
Results for the six months ended 30 June 2020
* Net asset value total return(1) per share was 0.1%
for the six months.
* Share price total return(1) per share fell by 5.1%
for the six months.
* The Company declared an interim dividend in respect
of the current year of 6.00 pence per share, paid to
Shareholders on 7 May 2020.
* The Company realised investments for a total of
GBP9.35 million, a gain of GBP1.99 million for the
six months over their valuation at 31 December 2019.
* The Company invested GBP1.68 million into one new
growth capital investment and two follow-on
investments.
(1) Alternative performance measure (APM). See glossary of terms
on page 30 of the Half-Year Report.
Performance summary
The table below shows the recent past performance of the original
fundraising launched in 2004. Performance data for all fundraising
rounds and for former Matrix Income & Growth 3 VCT plc ("MIG3 VCT")
shareholders are shown in the tables on pages 28 and 29 of the
Half-Year Report and will be available on the Company's website.
Reporting Net NAV Share Cumulative Cumulative total Dividends
date assets per Price dividends return per share per share
Share (mid-market paid to shareholders(2) declared
price)(1) per share in
respect
of the
period
(NAV (Share price
basis) basis)
As at (GBPm) (p) (p) (p) (p) (p) (p)
---------- ------- ------ ----------- ---------- -------- ------------- ---------
30 June
2020 74.71 58.86 50.50 134.80 193.66 185.30 6.00(3)
31
December
2019 71.89 68.78 63.75(4) 124.80 193.58 188.55 10.00
30 June
2019 77.13 73.00 61.50 118.80 191.80 180.30 4.00
1 Source: Panmure Gordon (mid-price). Note that the Share price
at 30 June 2020 is by reference to the last announced NAV per share
at 31 March 2020 of 52.78p (after adjusting for a 6.00 pence per
share dividend paid in May 2020).
2 Cumulative total return per share comprises either the NAV per
share (NAV basis) or the mid-market price per share (share price
basis), plus cumulative dividends paid since launch in 2004.
3 The Directors declared an interim dividend of 6.00 pence per
share in respect of the year ending 31 December 2020. The dividend
was paid to Shareholders on 7 May 2020.
4 The share price has been adjusted for a 4.00 pence dividend paid
after the year-end on 8 January 2020 which was ex-div at 31 December
2019.
Chairman's Statement
I am pleased to present the Company's Half-Year Report for the
six months ended 30 June 2020.
Overview
The 2020 half-year was preceded by a strong NAV total return of
13.6% for the year ended 31 December 2019. This excellent performance
continued in the early part of 2020 with two profitable realisations,
Biosite and Auction Technology Group, the latter of which was the
Company's most successful exit in its history.
Midway through this half-year, COVID-19 and the UK Government's
lockdown measures provoked significant uncertainty and instability.
This resulted in a significant dip in consumer and business confidence
and the public markets saw a sharp fall for the first quarter of
the year.
Over this unprecedented time, the Board has liaised closely with
the Investment Adviser, Mobeus Equity Partners LLP ("Mobeus"),
who responded well in ensuring that all practical steps were being
taken to enable each company to trade through the crisis where
possible and could seek to grow in value thereafter.
Amongst many portfolio initiatives, all investee companies were
alerted to, and some utilised, available government support packages.
The Company also provided loan interest payment holidays to certain
portfolio companies, generating vital cash headroom for them during
the lockdown period.
The immediate impact for Shareholders of the COVID-19 crisis was
that a number of valuation adjustments were made at the end of
March resulting in a fall of 8.7% in underlying NAV per share for
the quarter to 58.78 pence. These adjustments were partly stock
market related, but also partly in response to COVID-19's impact
on specific market segments and investee companies. This fall in
NAV was tempered by the beneficial impact of the sale of Auction
Technology Group.
In the second quarter, greater clarity has emerged on the impact
of the crisis upon the portfolio. To date, this has been more modest
than was initially expected and it has become apparent that there
have been several portfolio beneficiaries arising from a structural
change in activity, behaviour and consumer purchasing habits. Much
of the portfolio has demonstrated a strong degree of resilience.
Also, quoted stock markets have seen a significant rally since
the March low point, although at the time of writing the FTSE-100
Index has still fallen by almost a fifth over the six months under
review. Overall, the view of the Board and Mobeus is that the environment
for our investee companies has been less volatile and less uncertain
than initially thought, such that the valuation of the portfolio
recovered strongly at the end of June. Over the six months to 30
June 2020, the NAV total return was stable which the Board considers
a very creditable result in this environment. Further information
is set out under Performance in my Statement below.
A number of transactions occurred during the period. In the first
quarter, the Company made two profitable portfolio realisations:
Biosite and Auction Technology Group. The exit of Auction Technology
Group generated the Company's highest absolute profit to date.
In May, two follow-on investments were made into existing portfolio
companies, Rotageek and MyTutor, and one new investment was made
into Andersen EV in June. Since the period-end, a follow-on investment
of GBP1.42 million was made in Buster and Punch Holdings Limited.
Further details of the investment activity are contained in the
Investment Adviser's Review.
The Board is very encouraged by the recent profitable disposals,
following the period-end, of Tovey Management (trading as Access
IS) and Blaze Signs realising cash proceeds of GBP7.07 million
and GBP1.98 million respectively, in what remains a challenging
environment. The impact of these realisations on the NAV per share
of 58.86 pence at 30 June 2020 is estimated to be an increase of
1.71 pence per share. This is in isolation to any other matters
that may affect NAV per share.
Performance
The Company's NAV total return per share was 0.1% for the six months
to 30 June 2020 (2019: 11.0%). This NAV total return reflects a
material recovery in NAV per share compared to that announced at
the height of the pandemic as at 31 March 2020. The share price
total return was a fall of 5.1% (2019: increase of 7.3%), at 30
June, mainly because the share price at 30 June is by reference
to the 52.78 pence NAV per share at 31 March 2020 (after deducting
a dividend of 6.00 pence per share paid in May 2020), and does
not reflect the increase in NAV per share in the quarter to 30
June 2020.
Although the NAV was reduced by falls in the valuations of specific
portfolio companies, reflecting the impact of COVID-19, this adverse
impact was partly offset by a number of factors. Positive returns
came both from realised gains from portfolio exits as well as a
strong revenue return. Several of the Company's investment structures
incorporate a preference, such that any reduction in the value
of the enterprise does not feed directly into the same reduction
in the value of the Company's investment. In addition, the Company
has significant liquidity which, in accordance with its policy,
has been invested in lower risk liquidity funds and bank deposit
accounts and these have retained their value.
The Board therefore believes that the Company's performance has
demonstrated a good degree of resilience over the half-year. At
the period-end, your Company was ranked 12th out of 43 Generalist
VCTs over five years and 2nd out of 31 over 10 years, in the Association
of Investment Companies' analysis of NAV Cumulative Total Return.
For further details on the performance of the Company, please refer
to the Investment Adviser's Report on pages 5 to 8 and the longer-term
Performance Data on pages 28 and 29 of the Half-Year Report.
Dividends
A further interim dividend for last year of 4.00 pence per share
had been paid on 8 January 2020. On 2 April 2020, the Board declared
an interim dividend of 6.00 pence per share in respect of the current
financial year, paid to Shareholders on 7 May 2020, whose names
were on the Register on 14 April 2020.
Your Board has therefore already met the 4.00 pence per share annual
dividend target in respect of the current financial year. However,
the gradual move of the portfolio to growth capital investments
may make the target more difficult to achieve in future financial
years without recourse to the Company's reserves.
Shareholders should note that there may continue to be circumstances
where the Company is required to pay dividends in order to maintain
its regulatory status as a VCT, for example, to stay above the
minimum percentage of assets required to be held in qualifying
investments. Such dividends may cause the Company's NAV per share
to reduce by a corresponding amount.
Investment portfolio
In the context of a very challenging business environment, the
portfolio has performed comparatively well during this period.
The overall value has decreased by GBP0.78 million (2019: GBP7.59
million increase), or -1.5% (2019: +15.7%), compared to the start
of the year. This fall was comprised of a net unrealised decrease
in valuations of GBP2.77 million, partially offset by GBP1.99 million
in realised gains over the six-month period. Taking into account
these realisations, new investments and valuation movements, the
portfolio was valued at GBP43.25 million at the period-end (31
December 2019: GBP51.70 million).
During the six-months under review, the Company invested a total
of GBP1.68 million, (2019: GBP2.30 million) into one new and two
existing investments. The existing investments were:
-- MyTutor - A digital marketplace for school tutoring GBP0.84
million
-- Rotageek - A workforce management software provider GBP0.57
million
and the new investment was:
-- Andersen EV - An electric vehicle charge point business GBP0.27
million
The Company realised investments in Pattern Analytics (trading
as Biosite) and Turner Topco (trading as Auction Technology Group)
during the period, which, combined with other capital receipts,
generated total proceeds of GBP9.35 million.
The realisation of Auction Technology Group achieved a substantial
gain over cost and represented proceeds of GBP6.84 million and
a gain of GBP1.88 million in the period. Over the 11 1/2 year life
of the investment, total proceeds of GBP14.77 million have been
received, an overall multiple of over 4.5x original cost and an
IRR of 29%.
Pattern Analytics (trading as Biosite), an investment made after
the 2015 rule change, was realised for proceeds of GBP2.34 million.
Over the three-year life of the investment, this company generated
a return on original cost of 1.5x and an IRR of 21%.
Other capital proceeds of GBP0.17 million and realised gains of
GBP0.11 million were principally generated from Redline Worldwide,
an investment realised in a prior period and a loan repayment from
BookingTek, an existing portfolio company.
Following the period-end, there were additional realisations from:
* Access IS - GBP8.25 million cash proceeds received
since investment equating to a 2.5x multiple of cost
and an IRR of 23%;
* Blaze - GBP5.27 million cash proceeds received over
the life of the investment; a 2.7x multiple of cost
and an IRR of 14%.
Details of this investment activity and the performance of the
portfolio are contained in the Investment Adviser's Review and
the Investment Portfolio Summary later in this announcement.
Revenue account
The results for the period are set out in the Unaudited Condensed
Income Statement and show a revenue return (after tax) of 1.54
pence per share (2019: 0.92 pence per share). The revenue return
for the period of GBP1.92 million has increased from last year's
comparable figure of GBP0.98 million. This increase is mainly due
to a significant receipt of loan interest, previously unrecognised,
arising from the sale of Auction Technology Group, partially offset
by a number of provisions against loan interest.
Fundraising
The Board was very pleased with the support in respect of the Company's
Offer for Subscription which was launched on 25 October 2019. This
Offer became fully subscribed within two months and raised GBP15.00
million in total. The Company allotted a total of 23,233,293 shares
of 1 penny each in the Company on 8 January and 2 April 2020. The
Board extends a warm welcome to all new Shareholders.
Shareholder Event
The Investment Adviser held its annual Shareholder event on 4 February
2020 and is planning to hold a virtual event in the first quarter
of 2021. Details will be notified to Shareholders once confirmed
and will be shown on the Company's website: www.migvct.co.uk.
Share buybacks
During the six months under review, the Company bought back and
cancelled 840,716 of its own shares, representing 0.8% (2019: 1.2%)
of the shares in issue at the beginning of the period, at a total
cost of GBP0.42 million (2019: GBP0.76 million) inclusive of expenses.
It is the Company's policy to cancel all shares bought back in
this way. The Board regularly reviews its buyback policy and currently
seeks to maintain the discount at which the Company's shares trade
at no more than 5% below the latest published NAV.
Liquidity
Following the Company's successful fundraising and significant
realisation proceeds, cash or near cash resources held by the Company
as at 30 June 2020 was GBP31.77 million or 42.5% of net assets.
After the period-end, following the realisations of Access and
Blaze, and the further investment in Buster and Punch, the pro
forma level of liquidity will be GBP39.41 million or 51.2% of net
assets. The Board considers the Company to be in a strong cash
position.
Shareholder communications
May I remind you that the Company has its own website which is
available at www.migvct.co.uk containing useful information for
Shareholders.
Outlook
The full impact of COVID-19 is still unclear and is likely to be
felt for several years to come. Nevertheless, your Board considers
that your Company is well positioned to cope with most of the likely
scenarios in so far as they can presently be foreseen. The successful
realisations and recent fundraising have given the Company strong
liquidity not only to support the existing portfolio if appropriate
and allowed by VCT regulations, but also to capitalise on opportunities
which may arise for new investment. The portfolio comprises a foundation
of mature investments that are still providing an income return,
as well as a younger growth capital portfolio seeking to achieve
scale, higher levels of profitability and hence value.
The challenges arising from the COVID-19 pandemic should not be
underestimated. However, once conditions stabilise, the Board and
Mobeus believe that attractive new and follow-on investment opportunities
will emerge and are pleased to see that some recovery has been
achieved in the last quarter.
As the world gradually returns to a new normal in the aftermath
of COVID-19, attention may well return to Brexit and the degree
to which the UK can reach agreements with the rest of the EU for
tariff-free access to our respective markets. All the portfolio
companies have been planning for that since before the COVID-19
pandemic took centre stage.
Finally, I would like to take this opportunity once again to thank
all Shareholders for their continued support.
Clive Boothman
Chairman
11 September 2020
Investment Policy
The Investment Policy is designed to meet the Company's objective.
Investments
The Company invests primarily in a diverse portfolio of UK unquoted
companies. Investments are made selectively across a number of
sectors, principally in established companies. Investments are
usually structured as part loan stock and part equity in order
to produce a regular income stream and to generate capital gains
from realisations.
There are a number of conditions within the VCT legislation which
need to be met by the Company and which may change from time to
time. The Company will seek to make investments in accordance with
the requirements of prevailing VCT legislation.
Asset allocation and risk diversification policies, including the
size and type of investments the Company makes, are determined
in part by the requirements of prevailing VCT legislation. No single
investment may represent more than 15% (by VCT tax value) of the
Company's total investments at the date of investment.
Liquidity
The Company's cash and liquid funds are held in a portfolio of
readily realisable interest bearing investments, deposit and current
accounts, of varying maturities, subject to the overriding criterion
that the risk of loss of capital be minimised.
Borrowing
The Company's articles of association permit borrowings of amounts
up to 10% of the adjusted capital and reserves (as defined therein).
However, the Company has never borrowed and the Board would only
consider doing so in exceptional circumstances.
Investment Review
COVID-19 Pandemic
In March 2020, in response to the COVID-19 pandemic, the UK Government
introduced lockdown and social distancing measures. These measures
had an immediate adverse impact on UK businesses, with many companies
experiencing a significant reduction in consumer and business demand.
Businesses' ability to trade was further impacted by restrictions
on their employees' working practices and disruption to their supply
chains. The six months to 30 June 2020 have therefore been characterised
by ongoing volatility and uncertainty caused by these lockdown
measures, together with global stock market falls. Following the
low point in March however, there has been a strong trend of recovery
in stock market and business activity levels.
Looking forward, there are still uncertainties ahead. The impact
on transaction activity has been mixed. New investment activity
has been low due to difficulties of appraisal and diligence in
lockdown and owners of businesses being unwilling to accept downward
price adjustments thus far. The level of portfolio follow-on investment
has been higher and there are opportunities to back known portfolio
companies that are achieving strong relative performance. The realisation
activity outlook continues to be positive with several approaches
received from trade and financial investors for a number of investee
companies.
Portfolio review
Overall, the value of the portfolio decreased by GBP0.78 million
over the period comprising a decrease of GBP2.77 million in the
unrealised portfolio and gains of GBP1.99 million through realisations.
This represents a recovery of the majority of the value lost in
the first quarter. It is important to note that the usual approach
to portfolio valuation by the Investment Adviser continued to be
applied throughout this period and that the recovery in the second
quarter was not all market related. It reflected a number of other
factors such as earnings and revenues being more resilient than
expected, the removal of provisions related to the uncertainty
that were put in place during the March quarter, and improved cash
generation as the UK Government lock down restrictions were eased.
There have been a number of portfolio companies that have been
clear beneficiaries from UK lockdown which have traded strongly
throughout. There is a reasonable expectation that some of these
gains will prove permanent. The majority of the portfolio has remained
resilient, more so than first thought at the 31 March valuation
point which coincided with the height of uncertainty. In particular,
there have been very few COVID-19 closures, Tapas Revolution being
the only temporary one of note. Several portfolio companies that
saw significant falls in activity early in the crisis are now trading
strongly again whilst a number have raised capital to ensure that
they are ready to capitalise on demand when it returns.
In the six months to 30 June 2020, the Company made two follow-on
investments of GBP0.84 million into MyTutor and GBP0.57 million
into Rotageek. One new growth capital investment has also been
made into Andersen EV of GBP0.27 million, a manufacturer of premium
electric vehicle (EV) chargers.
Following the period-end, there was an additional follow-on investment
of GBP1.42 million into Buster and Punch.
The Company realised its investments in Biosite and Auction Technology
Group during the period, receiving a total of GBP9.18 million in
proceeds from these realisations, which contributed to total receipts
of GBP9.35 million during the period. The realisation of Biosite
generated proceeds of GBP2.45 million over the life of the investment
and contributed a gain over original cost of 1.5x. Auction Technology
Group generated a realised gain in the period of GBP1.88 million
and 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.
Following the period-end, there were additional realisations from
Access IS and Blaze receiving a total of GBP9.05 million in cash
proceeds. The gains from these will be reflected in the second
half of the financial year.
The investment portfolio's activity in the six months to 30 June
2020 is summarised as follows:
2020 2019
GBPm GBPm
Opening portfolio value 51. 70 48.49
------- ---------
New and follow-on investments 1. 68 2.30
------- ---------
Disposal proceeds (9.35) (10. 08)
------- ---------
Net realised gains 1.99 2.33
------- ---------
V aluation movements (2.77) 5.26
------- ---------
Portfolio value at 30 June 43.25 48.30
------- ---------
The investment and divestment activity during the period has increased
the proportion of the portfolio comprised of investments made since
the change in the VCT rules to 52.2% by value at the period-end
(31 December 2019: 45.2%). The portfolio decreased from 34 to 32
investments at the period end.
The portfolio's contribution to the overall results of the Company
for the six-month period is summarised as follows:
Investment Portfolio Capital Movement 2020 2019
GBPm GBPm
Increase in the value of unrealised
investments 4.59 6.54
-------- -------
Decrease in the value of unrealised
investments (7.36) (1.28)
-------- -------
Net (decrease) / increase in the value
of unrealised investments (2.77) 5.26
-------- -------
Realised gains 2. 05 2.33
-------- -------
Realised losses (0 . -
06)
-------- -------
Net realised gains in the period 1.99 2.33
-------- -------
Net portfolio movement in the period (0 .78) 7 .59
-------- -------
Valuation changes of portfolio investments still held
The valuation reductions of GBP2.77 million principally arise from
the Investment Adviser's review of the portfolio and the impact
of COVID-19.
Within total valuation decreases, the main reductions were CGI
Creative Graphics International - GBP1.44 million, Tapas Revolution
- GBP1.35 million, and Media Business Insight - GBP0.97 million.
These three companies saw some of the most significant impacts
of a sudden decline in demand for their products or services which,
even as restrictions are being eased, may take time for value to
recover.
By contrast, in 5 of the 32 investee companies, trading has benefited
from the lockdown, being Access IS, Virgin Wines, MyTutor, Parsley
Box and Bleach London. Within total valuation increases, the principal
contributors were Access IS: GBP1.28 million, Virgin Wines: GBP0.90
million and, Parsley Box: GBP0.84 million. Access IS's valuation
reflects the long-term nature of many of its projects. Both Virgin
Wines and Parsley Box have generated record earnings and revenues
respectively and time will tell if this increased demand will continue
in the medium-term.
The period also saw portfolio companies, Jablite and Super Carers,
appointing administrators. These two companies were struggling
before the impact of COVID-19. Valuation reductions for these companies
had already been made, so there has been only a modest GBP0.06
million realised loss as a result of these administrations.
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 30 June 31 December
2020 2019
GBPm GBPm
Earnings multiple 20.34 30.94
-------- ------------
Revenue multiple 19.84 14.14
-------- ------------
Gross profit multiple 1.32 3.51
-------- ------------
Recent investment price 0.27 2.98
-------- ------------
Other 1.48 0.13
-------- ------------
Total 43.25 51.70
-------- ------------
Investment portfolio yield
In the period under review, the Company received the following
amounts in interest and dividend income: Investment Portfolio Yield 2020 2019
GBPm GBPm
Interest received in the
period 2.39 1.20
------ ------
Dividends received in the
period 0.30 0.26
------ ------
Total portfolio income
in the period (1) 2. 69 1.46
------ ------
Portfolio value at 30 June 43.25 48.30
------ ------
Portfolio Income Yield
(Income for the half year
as a % of Portfolio value
at 30 June) 6.2% 3.0%
------ ------
(1) The increase in income was principally due to interest of
GBP1.78 million received on the loan instruments in Auction Technology
Group being paid, as part of the sale transaction, which had not
previously been recognised. This income will not be repeated.
New investments in the half-year
The Company made one new investment during the period, as detailed
below.
Company Business Date of Investment Amount of new
investment (GBPm)
E l ec tri c
vehicle ( EV
Andersen EV ) chargers June 2020 0.27
--------------- -------------------- -------------------
Muller EV Limited (trading as Andersen EV) is a design-led
manufacturer of premium electric vehicle (EV) chargers.
Incorporated in 2016, this business has secured high profile
partnerships with Porsche and Jaguar Land Rover, establishing
an attractive niche position in charging points for the high
end EV market. The Company's funds will be used to scale
the
business through investment in further products and software,
sales and marketing and electric vehicle manufacturer
partnerships. Andersen is well positioned in a nascent sector
experiencing significant growth and has increased sales by
over 350% for its most recent financial year.
Follow-on investments made in the half-year
The Company made two follow-on investments totalling GBP1.41 million
into existing portfolio companies in the period, as detailed
below: Company Business Date of Investment Amount of new
investment (GBPm)
Digital marketplace
connecting school
pupils seeking
one-to- one online
MyTutor tutoring May 2020 0.84
----------------------- -------------------- -------------------
MyTutorWeb Limited (trading as MyTutor) is a digital marketplace
that connects school pupils who are seeking private
one-to-one tutoring with university students. The business
is satisfying a growing demand from both schools and parents
to
improve pupils' exam results to enhance their academic and
career prospects. This further investment, alongside other
existing shareholders, seeks to build and reinforce its position
as a UK category leader in the online education market as
well
as to begin to develop a broader, personalised, learning
product offering. The COVID-19 impact on the education sector
has
significantly heightened the awareness of online learning
and tutoring. MyTutor has grown strongly over the last six
months
with average year-on-year revenue growth of 70%.
Workforce management
Rotageek software May 2020 0.57
----------------------- -------------------- -------------------
Rota Geek Limited is a provider of cloud-based enterprise
software to help larger retail leisure and healthcare organisations
predict and meet demand to schedule staff more effectively.
This investment will be used to capitalise on opportunities
that
will emerge as the retail sector recovers from lockdown restrictions.
Rotageek has also moved into healthcare to help address the
workforce management issues of a sector that has become chronically
overburdened. For the year ended 31 December 2019, revenues
have grown over 45% on the prior year.
Follow-on investments post the half-year
After the period-end, the Company made one follow-on investment
as detailed below: Company Business Date of Investment Amount of new
investment (GBPm)
Lighting and
interiors
Buster & Punch brand September 2020 1.42
--------------- -------------------- -------------------
Buster and Punch is a well-established, premium branded,
fast growing business which designs and manufactures a complete
range of high-quality functional fittings (lighting, electrical
and hardware and other accessories) for the home. The VCT
first invested in 2017 and since then, the business delivered
consistent high growth across its ranges, with revenues growing
in excess of 65%, and reaching nearly GBP10 million in 2020.
Buster and Punch's products are now sold in 99 countries
via both its highly invested ecommerce platform and direct
services to consumers, trade and retailers across the world.
Buster and Punch also operates flagship showrooms in London,
Stockholm and Los Angeles. To support the continued growth
of Buster and Punch, the new funding will be used to drive
the global business plans of the fast-growing luxury interior
fashion label with further expansion and strategic new penetration
into the US and Asia Pacific markets.
Realisations in the half-year
The Company realised two investments during the period, as detailed
below: Company Business Period of investment Total cash proceeds
over the life
of the investment
/ Multiple over
cost
Workforce management November 2016 GBP2.45 million
Biosite and secu rit to Fe bru a r 1.5 x cost
y ser v i ces y 2020
--------------------- ---------------------
The Company sold its investment in Biosite to ASSA ABLOY
AB 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%.
Auction Technology SaaS based online October 2008 GBP14.77 million
Group auction marketplace to February 2020 4.5 x cost
platform
--------------------- --------------------- --------------------
The Company sold its investment in 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
compared to an original cost of GBP3.27 million, which is
a multiple on cost of 4.5x and an IRR of 29%.
Realisations post the half-year
Following the period end, there were additional realisations from
Access IS and Blaze. Company Business Period of investment Total cash proceeds
over the life
of the investment/
Multiple over
cost
A cce ss IS Data capture O c to b er 2 GBP 8.25 million
and scanning 0 15 to 2.5 x cost
hardware Au g u st 2 0
20
--------------- --------------------- ------------------------
The Company sold its investment in Tovey Management Limited
(trading as Access IS) to ASSA ABLOY AB for GBP7.04 million.
Since investment in 2015, the investment has generated proceeds
of GBP8.25 million compared to an original investment cost
of GBP3.26 million, which is a multiple on cost of 2.5x and
an IRR of 23%.
Blaze Manufacturer April 2006 to GBP5.27 million
and installer September 2020 2.7 x cost
of signs
--------------- --------------------- ------------------------
The Company sold its investment in Blaze Signs Holdings Limited
via a secondary buy out backed by Elaghmore Advisor LLP and
has received cash proceeds of GBP1.98 million. Over the 14
years this investment was held, cash proceeds of GBP5.27
million have been received compared to original cost of GBP1.95
million, which is a multiple of cost of 2.7x and an IRR of
14%.
Mobeus Equity Partners LLP
Investment Adviser
11 September 2020
Investment Portfolio Summary
as at 30 June 2020
Market Date of Total V Lik e % value
sector investment book aluation for lik of net
cost e valuation assets
increase/
Qualifying GBP'000 (decrease)
investments GBP'000 over period
1
------------------- ----------- ---------- ------------- ------------- ----------
Unquoted
investments
------------------- ----------- ---------- ------------- ------------- ----------
Tovey Management
Limited
(trading as Access
IS)
Provider of data
capture Electronic
and scanning & electrical
hardware equipment Oct-15 2,979 5,715 27 . 1% 7.7 %
------------------- ----------- ---------- ------------- ------------- ----------
Virgin Wines
Holding Company
Limited
Online wine General
retailer retailers Nov-13 2,439 4,029 28.8% 5.4%
------------------- ----------- ---------- ------------- ------------- ----------
MPB Group Limited
Online mark
etplace for
used photographic
and General
video equipment retailers Jun-16 1,900 3,640 5.1% 4.9%
------------------- ----------- ---------- ------------- ------------- ----------
Preservica Limited
Seller of
proprietary Software
digital archiving and computer
software services Dec-15 2,099 3,370 24. 6% 4.5%
------------------- ----------- ---------- ------------- ------------- ----------
V ectair Holdings
Limited
Designer and
distributor
of washroom
products Support services Jan-06 138 2,434 (16.8)% 3.3%
------------------- ----------- ---------- ------------- ------------- ----------
My Tutorweb Limited
(trading
as MyTutor)
Digital mark
etplace connecting
school
pupils seeking
one-to-one
online tutoring Support services May-17 2,374 2,374 - 3.2%
------------------- ----------- ---------- ------------- ------------- ----------
Proactive Group
Holdings
Inc
Provider of media
services
and investor
conferences
for companies
primarily
listed on
secondary public General
mark ets financial Jan-18 926 2,331 - 3.1%
------------------- ----------- ---------- ------------- ------------- ----------
EO TH Limited
(trading
as Equip Outdoor
Technologies)
Branded outdoor
equipment General
and clothing retailers Oct-11 1, 000 2,203 (13.8)% 2.9%
------------------- ----------- ---------- ------------- ------------- ----------
Vian Marketing
Limited
(trading as R ed P
addle
Co)
Design,
manufacture and
sale of stand-up
paddleboards
and windsurfing
sails Leisure goods Jul-15 1, 189 1, 768 - 2.4%
------------------- ----------- ---------- ------------- ------------- ----------
Parsley Box Limited
Supplier of home
delivered
ambient ready
meals for General
the elderly retailers May-19 854 1, 744 93.8% 2.3%
------------------- ----------- ---------- ------------- ------------- ----------
Data Discovery
Solutions
Limited (trading
as Active
Navigation)
Provider of global
mark
et leading file
analysis
software for
information
governance , Software
security and computer
and compliance services Nov-19 1,413 1, 713 21.3% 2.3%
------------------- ----------- ---------- ------------- ------------- --------
Buster and Punch
Holdings
Limited
Industrial
inspired lighting
and interiors General
retailer retailers Mar-17 668 1,320 13.2% 1.8%
------------------- ----------- ---------- ------------- ------------- --------
R ota Geek Limited
Workforce
management 1.
software Support services A ug-18 1, 142 1,290 0.9% 7%
------------------- ----------- ---------- ------------- ------------- --------
Arkk Consulting
Limited
(trading as Arkk
Solutions)
Provider of
services and
software to enable
organisations
to remain
compliant with
regulatory Software
reporting and computer 1.
requirements services May-19 1,447 1,270 (14. 0)% 6%
------------------- ----------- ---------- ------------- ------------- --------
Bleach L ondon
Holdings
Limited
Hair colourants General
brand retailers Dec-19 674 944 40.0 % 1.3%
------------------- ----------- ---------- ------------- ------------- --------
Tharstern Group
Limited
Software based
management Software
information and computer
systems services Jul-14 1,377 915 (34.4)% 1.2%
------------------- ----------- ---------- ------------- ------------- --------
IPV Limited
Provider of media Software
asset and computer
software services Nov-19 890 890 - 1.2%
------------------- ----------- ---------- ------------- ------------- --------
Blaze Signs
Holdings Limited
Manufacturer and
installer 1.
of signs Support services Apr-06 492 847 (19. 6)% 1%
------------------- ----------- ---------- ------------- ------------- --------
Media Business Insight
Holdings Limited
A publishing and events
business focused on the 1.
creative production industries Media Jan-15 2,518 806 (42.3)% 1%
----------------------------- -------------------- ------------------- -------------- ------------------ ------------------------------
Master R emovers Group
2019 Limited
(trading as Anthony
Ward Thomas, Bishopsgate
and Aussie Man & V an)
A specialist logistics, 0
storage and removals Support .7
business services Dec-14 419 536 (43.2)% %
----------------------------- -------------------- ------------------- -------------- ------------------ ------------------------------
Manufacturing Services
Investment Limited (trading
as W etsuit Outlet)
Online retailer in the General 0.6
water sports mark et retailers Jul-17 2,174 482 (31.1)% %
----------------------------- -------------------- ------------------- -------------- ------------------ ------------------------------
K udos Innovations Limited
Online platform that
provides and promotes Support 0.6
academic research dissemination services Nov-18 421 421 (36.3)% %
----------------------------- -------------------- ------------------- -------------- ------------------ ------------------------------
Muller EV Limited (trading
as Andersen EV) Electronic
Provider of premium electric & electrical New
vehicle (EV) chargers equipment Jun-20 270 270 investment 0.4%
----------------------------- -------------------- ------------------- -------------- ------------------ ------------------------------
CGI Creative Graphics
International Limited
Vinyl graphics to global
automotive , recreational
vehicle and aerospace General
mark ets industrials Jun-14 1,808 240 (85.7)% 0.3%
----------------------------- -------------------- ------------------- -------------- ------------------ ------------------------------
Spanish Restaurant Group
Limited (formerly
Ibericos Etc. Limited)
(trading as Tapas
Revolution) Travel &
Spanish restaurant chain leisure Jan-17 1,245 167 (89.0)% 0.2%
----------------------------- -------------------- ------------------- -------------- ------------------ ------------------------------
Jablite Holdings Limited Construction 0
Manufacturer of expanded and .1
polystyrene products materials Apr-15 502 66 (47.5)% %
----------------------------- -------------------- ------------------- -------------- ------------------ ------------------------------
Veritek Global Holdings
Limited
Maintenance of imaging Support 0.0
equipment services Jul-13 2,045 - - %
----------------------------- -------------------- ------------------- -------------- ------------------ ------------------------------
RDL Corporation Limited
R ecruitment consultants
for the pharmaceutical,
business intelligence Support (100. 0.0
and IT industries services Oct-10 1,558 - 0)% %
----------------------------- -------------------- ------------------- -------------- ------------------ ------------------------------
R acoon International
Group Limited
Supplier of hair extensions,
hair care products and Personal 0.0
training goods Dec-06 1,213 - - %
----------------------------- -------------------- ------------------- -------------- ------------------ ------------------------------
BookingT ek Limited Software
Direct booking software and computer 0.0
for hotel groups services Oct-16 687 - - %
----------------------------- -------------------- ------------------- -------------- ------------------ ------------------------------
Oakheath Limited (trading
as Super Carers) (in
liquidation)
Online platform that
connects people seeking
home care from experienced Support 0.0
independent carers services Mar-18 580 - - %
----------------------------- -------------------- ------------------- -------------- ------------------ ------------------------------
CB Imports Group Limited
(trading as Country Baskets)
Importer and distributor
of artificial flowers General 0.0
and floral sundries retailers Dec-09 350 - - %
----------------------------- -------------------- ------------------- -------------- ------------------ ------------------------------
39 41,
Total qualifying investments ,791 785 55.9%
----------------------------- -------------------- ------------------- -------------- ------------------ ------------------------------
Non-qualifying investments Market Date Total V aluation Lik %
sector of investment book e for value
cost lik e of
valuation net
GBP'000 GBP'000 increase/ assets
(decrease)
over
period
1
----------------------------- -------------------- ------------------- -------------- ------------------ ------------------------------
Media Business Insight
Limited
A publishing and events 0
business focused on the 7. 1 .7
creative production industries Media Jan-15 765 512 % %
----------------------------- -------------------- ------------------- -------------- ------------------ ------------------------------
Manufacturing Services
Investment Limited (trading
as W etsuit Outlet)
Online retailer in the General
water sports mark et retailers Jul-17 571 343 (40.0)% 0.5%
----------------------------- -------------------- ------------------- -------------- ------------------ ------------------------------
EO TH Limited (trading
as Equip Outdoor Technologies)
Branded outdoor equipment General
and clothing retailers Oct-11 298 324 - 0.4%
----------------------------- -------------------- ------------------- -------------- ------------------ ------------------------------
Tovey Management Limited
(trading as Access IS) Electronic
Provider of data capture & electrical
and scanning hardware eq uipment Oct-15 285 285 - 0.4%
----------------------------- -------------------- ------------------- -------------- ------------------ ------------------------------
Total non-qualifying 2.
investments 1,919 1,464 0%
----------------------------- -------------------- ------------------- -------------- ------------------ ------------------------------
57
Total investment portfolio 41,710 43,249 .9%
----------------------------- -------------------- ------------------- -------------- ------------------ ------------------------------
Current asset investments
and Cash at bank and
in hand 2 31,774 31,774 42.5%
----------------------------- -------------------- ------------------- -------------- ------------------ ------------------------------
75,
Total investments 73,484 023 100.4%
----------------------------- -------------------- ------------------- -------------- ------------------ ------------------------------
Other assets 249 0.4%
----------------------------- -------------------- ------------------- -------------- ------------------ ------------------------------
Current liabilities (562) (0.8)%
----------------------------- -------------------- ------------------- -------------- ------------------ ------------------------------
Net assets 74,710 100.0%
----------------------------- -------------------- ------------------- -------------- ------------------ ------------------------------
Portfolio split by type
----------------------------- -------------------- ------------------- -------------- ------------------ ------------------------------
Investments made prior 20 47
to 2015 V CT rule change 21,375 , 682 .8%
----------------------------- -------------------- ------------------- -------------- ------------------ ------------------------------
Investments made after 20
2015 V CT rule change ,335 22,567 52.2%
----------------------------- -------------------- ------------------- -------------- ------------------ ------------------------------
Total Investment Portfolio 41,710 43,249 100.0%
----------------------------- -------------------- ------------------- -------------- ------------------ ------------------------------
(1) - This percentage change in 'like for like' valuations
is a comparison of the 30 June 2020 valuations with the 31
December 2019 valuations (or where a new investment has been
made in the period, the investment amount) having adjusted
for partial disposals, loan stock repayments or new or new
or follow-on investments in the period.
2 - Disclosed as Current Asset Investments and Cash at bank
and in hand within Current assets in the Balance Sheet.
Statement of the Directors' Responsibilities
Responsibility statements
In accordance with Disclosure and Transparency Rule (DTR)
4.2.10, Clive Boothman (Chairman), Bridget Guérin (Chairman
of the Nomination & Remuneration and Management Engagement
Committees), and Catherine Wall (Chairman of the Audit Committee),
being the Directors of the Company, confirm that, to the best
of their knowledge:
a) the condensed set of financial statements, which has been
prepared in accordance with Financial Reporting Standard 104
"Interim Financial Reporting" gives a true and fair view of
the assets, liabilities, financial position and profit of
the Company, as required by DTR 4.2.10;
b) the Half-Year Management Report which comprises the Chairman's
Statement, Investment Policy, Investment Review and Investment
Portfolio Summary includes a fair review of the information
required by DTR 4.2.7, being an indication of the important
events that have occurred during the first six months of the
financial year and their impact on the condensed set of financial
statements;
c) a description of the principal risks and uncertainties
facing the Company for the remaining six months is set out
below, in accordance with DTR 4.2.7; and
d) there were no related party transactions in the first six
months of the current financial year that are required to
be disclosed in accordance with DTR 4.2.8.
Principal risks and uncertainties
In accordance with DTR 4.2.7, the Board confirms, that the
principal risks and uncertainties facing the company have
not changed materially since the publication of the Annual
Report and Financial Statements for the year ended 31 December
2019 other than the risks arising from the COVID-19 pandemic,
referred to in the Chairman's Statement and the Investment
Advisor's Report, the impact of which has been reflected in
the valuation of the Company's investment portfolio. The Board
acknowledges that there is regulatory risk and continues to
manage the Company's affairs in such a manner as to comply
with section 274 of the Income Tax Act 2007.
The principal risks faced by the Company are:
* Economic;
* Loss of approval as a Venture Capital Trust;
* Investment and strategic;
* Regulatory;
* Financial and operating;
* Valuations and stock market;
* Asset liquidity;
* Market liquidity;
* Counterparty; and
* Key staff.
A detailed explanation of these risks can be found in the
Strategic Report on pages 27 to 28 and in Note 15 on pages
62 - 68 of the Annual Report and Financial Statements for
the year ended 31 December 2019, copies of which can be viewed
or downloaded from the Company's website: www.migvct.co.uk.
Going concern
The Board has assessed the Company's operation as a going
concern. The Company's business activities, together with
the factors likely to affect its future development, performance
and position are set out in the Half-Year Management Report.
The Directors have satisfied themselves that the Company's
cash position, bolstered by the recent fundraising and four
disposals since the year-end, is adequate to enable the Company
to continue as a going concern under any plausible stress
scenario. The portfolio taken as a whole remains resilient
and well-diversified although the impact of the COVID-19 pandemic
is still being experienced. The major cash outflows of the
Company (namely investments, share buy-backs and dividends)
are within the Company's control.
The Board's assessment of liquidity risk and details of the
Company's policies for managing its capital and financial
risks are shown in Notes 15 and 16 on pages 62 to 69 of the
Annual Report and Financial Statements for the year ended
31 December 2019. Accordingly, the Directors continue to adopt
the going concern basis of accounting in preparing the half-year
report and annual financial statements.
Cautionary statement
This report may contain forward looking statements with regards
to the financial condition and results of the Company, which
are made in the light of current economic and business circumstances.
Nothing in this report should be construed as a profit forecast.
For and on behalf of the Board:
Clive Boothman
Chairman
11 September 2020
Unaudited Condensed Income Statement
for the six months ended 30 June 2020
Six months ended 30 Six months ended 30
June 2019 June 2019
(unaudited) (unaudited)
Notes Revenue Capital Total Revenue Capital Total
------ ----------- ------------- ---------- ---------- ---------- ----------
GBP GBP GBP GBP GBP GBP
---------------- ------ ----------- ------------- ---------- ---------- ---------- ----------
Net investment
portfolio
(losses)/gains 9 - (787,177) (787,177) - 7,594,291 7,594,291
------ ----------- ------------- ---------- ---------- ---------- ----------
2,770 2,770
Income 4 , 006 - , 006 1,561,649 - 1,561,649
------ ----------- ------------- ---------- ---------- ---------- ----------
Investment (214, (856,
Adviser's fees 5 035) (642,106) 141) (201,020) (603,058) (804,078)
------ ----------- ------------- ---------- ---------- ---------- ----------
Other expenses (253,172) - (253,172) (205,390) - (205,390)
------ ----------- ------------- ---------- ---------- ---------- ----------
Profit/(loss)
on ordinary
activities
before
taxation 2,302,799 (1,429,283) 873,516 1,155,239 6,991,233 8,146,472
------ ----------- ------------- ---------- ---------- ---------- ----------
Tax on profit
on ordinary 122,
activities 6 (380,390) 000 (258,390) (171,952) 114,581 (57,371)
------ ----------- ------------- ---------- ---------- ---------- ----------
Profit/(loss)
and total
comprehensive (1,307
income 1,922,409 ,283) 615,126 983,287 7,105,814 8,089,101
------ ----------- ------------- ---------- ---------- ---------- ----------
Basic and
diluted
earnings per (1.
share 7 1.54p 05)p 0.49p 0.92p 6.69p 7.61p
------ ----------- ------------- ---------- ---------- ---------- ----------
Year ended 31 December
2019
(audited)
Notes Revenue Capital Total
------ ----------- ------------ ------------
GBP GBP GBP
---------------------- ------ ----------- ------------ ------------
Unrealised gains
on investments - 9 ,144,246 9 ,144,246
------ ----------- ------------ ------------
Income 4 2,854,837 - 2,854,837
------ ----------- ------------ ------------
Investment Adviser's
fees 5 (406,306) (1,218,918) (1,625,224)
------ ----------- ------------ ------------
(411, (411,
Other expenses 005) - 005)
------ ----------- ------------ ------------
Profit on ordinary
activities before
taxation 2,037,526 7,925,328 9,962,854
------ ----------- ------------ ------------
Tax on profit
on ordinary
activities 6 (293,485) 231,594 (61,891)
------ ----------- ------------ ------------
Profit for the
year and total
comprehensive
income 1,744,041 8,156,922 9,900,963
------ ----------- ------------ ------------
Basic and diluted
earnings per
share 7 1.65p 7.71p 9.36p
------ ----------- ------------ ------------
The revenue column of the Income Statement includes all income
and expenses. The capital column accounts for the net investment
portfolio (losses)/gains (unrealised (losses)/gains and realised
gains on investments) and the proportion of the Investment
Adviser's fee charged to capital.
The total column is the Statement of Total Comprehensive Income
of the Company prepared in accordance with Financial Reporting
Standards ("FRS"). In order to better reflect the activities
of a VCT and in accordance with the 2014 Statement of Recommended
Practice ("SORP") 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 period/year.
Unaudited Condensed Balance Sheet
as at 30 June 2020
Company registration number: 05153931
30 June 2020 30 June 2019 31
(unaudited) (unaudited) December
2019
(audited)
Notes GBP GBP GBP
-------------- -------------------- ----------------------------------- --------------------------------------------------
Fixed assets
-------------- -------------------- ----------------------------------- --------------------------------------------------
51,
703,
Investments at fair value 9 43,248,661 48,296,028 161
-------------- -------------------- ----------------------------------- --------------------------------------------------
Current assets
-------------- -------------------- ----------------------------------- --------------------------------------------------
Debtors and prepayments 249 ,195 243,315 225,562
-------------- -------------------- ----------------------------------- --------------------------------------------------
Current asset investments 10 28,570,843 19,902,109 12,914,124
-------------- -------------------- ----------------------------------- --------------------------------------------------
Cash at bank 10 3,203,047 9 , 074,632 7,261,618
-------------- -------------------- ----------------------------------- --------------------------------------------------
32,023,085 29,220 , 056 20 ,401,304
-------------- -------------------- ----------------------------------- --------------------------------------------------
Creditors: amounts falling (216,
due within one year (561,945) (387 , 090) 090)
-------------- -------------------- ----------------------------------- --------------------------------------------------
Net current assets 31,461,140 28,832,966 20 ,185,214
-------------- -------------------- ----------------------------------- --------------------------------------------------
Net assets 74, 709 ,801 77,128,994 71,888,375
-------------- -------------------- ----------------------------------- --------------------------------------------------
Capital and reserves
-------------- -------------------- ----------------------------------- --------------------------------------------------
Called up share capital 1,269, 191 1,056,569 1, 045,265
-------------- -------------------- ----------------------------------- --------------------------------------------------
Capital redemption reserve 19,711 44,644 11,304
-------------- -------------------- ----------------------------------- --------------------------------------------------
Share premium reserve 14,397 ,509 43,669,335 -
-------------- -------------------- ----------------------------------- --------------------------------------------------
8,719,
Revaluation reserve 3,767,953 7 , 777,490 606
-------------- -------------------- ----------------------------------- --------------------------------------------------
45,
Special distributable reserve 31,759,150 7,984,414 731,919
-------------- -------------------- ----------------------------------- --------------------------------------------------
Realised capital reserve 19,722,344 13,920 ,908 14,528,747
-------------- -------------------- ----------------------------------- --------------------------------------------------
Revenue reserve 3,773,943 2,675,634 1,851,534
-------------- -------------------- ----------------------------------- --------------------------------------------------
Equity Shareholders' funds 74, 709 ,801 77,128,994 71,888,375
-------------- -------------------- ----------------------------------- --------------------------------------------------
Basic and diluted net asset
value per share 11 58.86p 73. 00p 68.78p
-------------- -------------------- ----------------------------------- --------------------------------------------------
The financial information for the six months ended 30 June
2020 and the six months ended 30 June 2019 has not been audited.
Unaudited Condensed Statement of Changes in Equity
for the six months ended 30 June 2020
Non-distributable reserves Distributable reserves
Called Capital Share Revaluation Special Realised Revenue Total
up share redemption premium reserve distributable capital reserve GBP
capital reserve reserve GBP reserve reserve
GBP GBP GBP (Note (Note
a) b)
Notes GBP GBP
------------- ------------- -------------- -------------------- ------------------- -------------- ------------------ ------------------------------
At 1 January 8, 719,
2020 1,045,265 11,304 - 606 45, 731,919 14,528,747 1,851,534 71,888,375
Comprehensive
income
for the period
(Loss)/profit
for the period - - - (2,777,454) - 1,470,171 1,922,409 615,126
Total comprehensive
income for (2,777
the period - - - ,454) - 1,470,171 1,922,409 615,126
Contributions
by and
distributions
to owners
Shares issued
via Offer
15,
000
for Subscription 14, 767 ,
(Note c) 232,333 - , 667 - - - - 000
Issue costs
and
facilitation
fees on Offer
for Subscription
(Note c) - - (370,158) - (152,153) - - (522,311)
Shares bought
back (Note (424, (424,
d) (8,407) 8,407 - - 741) - - 741)
(11,846, (11,846,
Dividends paid 8 - - - - 648) - - 648)
Total contributions
by and distributions 8,407 14,397
to owners 223,926 ,509 - (12,423,542) - - 2,206,300
Other movements
Realised losses
transferred
to special
reserve (Note
a) - - - - (1,549,227) 1,549,227 - -
Realisation
of previously
unrealised (2, 174,
gains - - - 199) - 2,174,199 - -
Total other (2, (1,549
movements - - - 174,199) ,227) 3, 723,426 - -
----------------------- ------------ ------------- ----------------------------- -------------------- ------------------- -------------- ------------------ ------------------------------
74,
At 30 June 3,767 31, 709
2020 1,269,191 19,711 14,397,509 ,953 759 ,150 19,722,344 3, 773,943 ,801
----------------------- ------------ ------------- ----------------------------- -------------------- ------------------- -------------- ------------------ ------------------------------
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. The transfer of
GBP1,549,227 to the special reserve from the realised capital
reserve above is the total of realised losses incurred by
the Company in the period. As at 30 June 2020, the Company
has a special reserve of GBP31,759,150, of which GBP7,553,664
arises from shares issued more than three years after the
end of the financial year in which they were issued. Reserves
originating from share issues are not distributable under
VCT rules if they arise from share issues that are within
three years of the end of an accounting period in which shares
were issued.
Note b: The Realised capital reserve and the Revenue reserve
together comprise the Profit and Loss Account of the Company.
Note c: Under the Company's Offer for Subscription launched
on 25 October 2019, 23,233,293 Ordinary Shares were allotted
between 8 January 2020 and 2 April 2020, raising net funds
of GBP14,477,689 for the Company. This figure is net of issue
costs of GBP370,158 and facilitation fees of GBP152,153.
Note d: During the period, the Company repurchased 840,716
of its own shares at the prevailing market price for a total
cost of GBP424,741, which were subsequently cancelled. This
figure is GBP42,866 more than that shown in the Unaudited
Statement of Cash flows due to a creditor held at the period-end.
Unaudited Condensed Statement of Changes in Equity
for the six months ended 30 June 2019
Non-distributable reserves Distributable reserves
Called Capital Share Revaluation Special Realised Revenue Total
up share redemption premium reserve distributable capital reserve GBP
capital reserve reserve GBP reserve reserve
GBP GBP GBP (Note (Note
a) b)
Notes GBP GBP
------------- ------------- -------------- -------------------- ------------------- -------------- ------------------ --------------------------------
At 1 January 1, 068, 32, 3,546, 75,077
2019 659 191 43,644,698 5,285,632 12,681,614 8,818,475 713 ,982
------------- ------------- -------------- -------------------- ------------------- -------------- ------------------ --------------------------------
Comprehensive
------------- ------------- -------------- -------------------- ------------------- -------------- ------------------ --------------------------------
income for the
period
------------- ------------- -------------- -------------------- ------------------- -------------- ------------------ --------------------------------
Profit for the 8,089
period - - - 5,262,037 - 1,843,777 983,287 ,101
------------- ------------- -------------- -------------------- ------------------- -------------- ------------------ --------------------------------
Total comprehensive
income for the 8,089
period - - - 5,262,037 - 1,843,777 983,287 ,101
------------- ------------- -------------- -------------------- ------------------- -------------- ------------------ --------------------------------
Contributions
by and
------------ ------------- ------------- -------------- --------------------
distributions
to owners
------------ ------------- ------------- -------------- --------------------
Shares issued
pursuant
------------ ------------- ------------- -------------- --------------------
to application 363 - 24,637 - - - - 25,000
------------ ------------- ------------- -------------- -------------------- ------------------- -------------- ------------------ --------------------------------
Shares bought
back (12,453) 12,453 - - (764,900) - - (764,900)
------------ ------------- ------------- -------------- -------------------- ------------------- -------------- ------------------ --------------------------------
Dividends (5,298,
paid 8 - - - - (3,443,823) - (1,854,366) 189)
------------ ------------- ------------- -------------- -------------------- ------------------- -------------- ------------------ --------------------------------
Total contributions
by and distributions (12, (4,208,
to owners 090) 12,453 24,637 - 723) (1,854,366) (6, 038,089)
------------ ------------- ------------- -------------- -------------------- ------------------- -------------- ------------------ --------------------------------
Other movements
------------ ------------- ------------- ------------------------------------
Realised
losses
------------ ------------- ------------- ------------------------------------
transferred
to
------------ ------------- ------------- ------------------------------------
special reserve - - - - (488,477) 488,477 -
------------ ------------- ------------- -------------- -------------------- ------------------- -------------- ------------------ --------------------------------
Realisation
of previously
------------ ------------- ------------- ------------------------------------ ------------------- ---------------------------------- --------------------------------
unrealised (2,770 2,770
gains - - - ,179) - , 179 - -
------------ ------------- ------------- -------------- -------------------- ------------------- -------------- ------------------ --------------------------------
Total other (2,770 3,258,
movements - - - ,179) (488,477) 656 - -
------------ ------------- ------------- -------------- -------------------- ------------------- -------------- ------------------ --------------------------------
At 30 June 44, 7,777 13,920
2019 1, 056,569 644 43,669,335 ,490 7,984,414 ,908 2,675,634 77,128,994
------------ ------------- ------------- -------------- -------------------- ------------------- -------------- ------------------ --------------------------------
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 period-end are accounted for in this
reserve, except to the extent that the diminution is deemed
permanent.
In accordance with stating all investments at fair value through
profit and loss, all such movements through both revaluation
and realised capital reserves are shown within the Income Statement
for the period.
Special distributable reserve - This reserve is created from
cancellations of the balances upon the Share premium reserve,
which are transferred to this reserve from time to time. The
cost of share buybacks and any realised losses on the sale or
impairment of investments (excluding transaction costs) are
charged to this reserve. 75% of the Investment Adviser fee expense,
and the related tax effect, that are charged to the realised
capital reserve. This reserve will also be charged any facilitation
payments to financial advisers, which arose as part of the Offer
for Subscription.
Realised capital reserve - The following are accounted for
in this reserve:
-- Gains and losses on realisation of investments;
-- Permanent diminution in value of investments;
-- Transaction costs incurred in the acquisition and disposal
of investments;
* 75% of the Investment Adviser fee expense and 100% of
any performance incentive fee payable, together with
the related tax effect to this reserve in accordance
with the policies; and
-- Capital dividends paid.
Revenue reserve - Income and expenses that are revenue in nature
are accounted for in this reserve together with the related
tax effect, as well as income dividends paid that are classified
as revenue in nature.
Unaudited Condensed Statement of Cash Flows
for the six months ended 30 June 2020
Six months Six months Year ended
ended 30 June ended 30 June
2020 (unaudited) 2019 (unaudited)
31 December
2019
(audited)
Notes GBP GBP GBP
------------- ------------------------------------ ----------------------------------- ----------------------------------------------------
Cash flows from operating
activities
------------- ------------------------------------ ----------------------------------- ----------------------------------------------------
Profit after tax for
the financial period 615,126 8, 089 , 101 9,900,963
------------- ------------------------------------ ----------------------------------- ----------------------------------------------------
Adjustments for:
------------- ------------------------------------ ----------------------------------- ----------------------------------------------------
Net investment portfolio
losses/(gains) 787 ,177 (7,594,291) (9 ,144,246)
------------- ------------------------------------ ----------------------------------- ----------------------------------------------------
Tax charge for current
period 6 258,390 57 ,371 61,891
------------- ------------------------------------ ----------------------------------- ----------------------------------------------------
(Increase)/decrease in
debtors (23,667) 331, 692 285,660
------------- ------------------------------------ ----------------------------------- ----------------------------------------------------
Increase/(decrease) in
creditors and accruals 44,458 49,449 (17 ,589)
------------- ------------------------------------ ----------------------------------- ----------------------------------------------------
Net cash inflow from
operations 1, 681,484 933,322 1, 086,679
------------- ------------------------------------ ----------------------------------- ----------------------------------------------------
Corporation tax refunded/(paid) 175 - (108,482)
------------- ------------------------------------ ----------------------------------- ----------------------------------------------------
Net cash inflow from
operating activities 1,681, 659 933,322 978, 197
------------- ------------------------------------ ----------------------------------- ----------------------------------------------------
Cash flows from investing
activities
------------- ------------------------------------ ----------------------------------- ----------------------------------------------------
Purchases of investments 9 (1, 680 ,145) (2,300,908) (5,853,554)
------------- ------------------------------------ ----------------------------------- ----------------------------------------------------
Disposals of investments 9 9,347,468 10,013,168 11, 772,421
------------- ------------------------------------ ----------------------------------- ----------------------------------------------------
Decrease/no change in
bank deposits with a
maturity over three months 769 24 -
------------- ------------------------------------ ----------------------------------- ----------------------------------------------------
Net cash inflow from
investing activities 7, 668, 092 7,712,284 5,918,867
------------- ------------------------------------ ----------------------------------- ----------------------------------------------------
Cash flows from financing
activities
------------- ------------------------------------ ----------------------------------- ----------------------------------------------------
Shares issued as part 15, 000 ,
of Offer for subscription 000 25,000 25,000
------------- ------------------------------------ ----------------------------------- ----------------------------------------------------
Issue costs and facilitation
fees as part of Offer (522,311) - -
for subscription
------------- ------------------------------------ ----------------------------------- ----------------------------------------------------
(11, 622,
Equity dividends paid 8 (11,846, 648) (5,298,189) 745)
------------- ------------------------------------ ----------------------------------- ----------------------------------------------------
Share capital bought
back (381,875) (887,442) (1, 615,367)
------------- ------------------------------------ ----------------------------------- ----------------------------------------------------
Net cash inflow/(outflow)
from financing activities 2,249 ,166 (6,160,631) (13,213,112)
------------- ------------------------------------ ----------------------------------- ----------------------------------------------------
Net increase/(decrease)
in cash and cash equivalents 11,598,917 2,484,975 (6,316, 048)
------------- ------------------------------------ ----------------------------------- ----------------------------------------------------
Cash and cash equivalents 19, 170 ,
at start of period 060 25,486,108 25,486,108
------------- ------------------------------------ ----------------------------------- ----------------------------------------------------
Cash and cash equivalents 27 ,971,
at end of period 30 , 768,977 083 19,170, 060
------------- ------------------------------------ ----------------------------------- ----------------------------------------------------
Cash and cash equivalents
comprise:
------------- ------------------------------------ ----------------------------------- ----------------------------------------------------
Cash at bank and in hand 10 3,203,047 9 , 074,632 7,261,618
------------- ------------------------------------ ----------------------------------- ----------------------------------------------------
Cash equivalents 10 27,565,930 18,896,451 11,908,442
------------- ------------------------------------ ----------------------------------- ----------------------------------------------------
Notes to the Unaudited Condensed Financial Statements
for the six months ended 30 June 2020
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
These Financial Statements are prepared in accordance with accounting
policies consistent with Financial Reporting Standard 102 ("FRS
102"), Financial Reporting Standard 104 ("FRS 104") - Interim
Financial Reporting, with the Companies Act 2006 and the 2014
Statement of Recommended Practice, 'Financial Statements of
Investment Trust Companies and Venture Capital Trusts' ('the
SORP') (updated in October 2019) issued by the Association of
Investment Companies ("AIC").
The Half-Year Report has not been audited, nor has it been reviewed
by the Auditor pursuant to the Financial Reporting Council's
(FRC) guidance on Review of Interim Financial Information.
3. Principal accounting policies
The accounting policies have been applied consistently throughout
the period. Full details of principal accounting policies will
be disclosed in the Annual Report, while the policy in respect
of investments is included at the top of note 9 on investments.
4. Income Six months Six months Year ended
ended 30 June ended 30 June 31 December
2020 (unaudited) 2019 (unaudited) 2019
GBP GBP GBP
----------------- ------------------- -----------------------
Dividends 300,003 260 ,215 505,401
----------------- ------------------- -----------------------
Money-market funds 61, 670 81,840 151,532
----------------- ------------------- -----------------------
Loan stock interest 2,393,778 1, 196,940 2, 161,352
----------------- ------------------- -----------------------
Bank deposit interest 10,974 15,776 29 , 674
----------------- ------------------- -----------------------
Interest on preference
share
dividend arrears 726 6,878 6,878
----------------- ------------------- -----------------------
Other income 2,855 - -
----------------- ------------------- -----------------------
Total Income 2,770, 006 1,561, 649 2,854,837
----------------- ------------------- -----------------------
5. Investment Adviser's fees
In accordance with the policy statement published under "Management
and Administration" in the Company's prospectus dated 9 July
2004, the Directors have charged 75% of the Investment Adviser's
fees to the capital reserve. This is in line with the Board's
expectation of the long-term split of returns from the investment
portfolio of the Company. For further details, see note 4a on
page 52 of the 2019 Annual Report. Six months Six months Year ended
ended 30 June ended 30 June 31 December
2020 2019 2019
GBP GBP GBP
---------------- ---------------- --------------
Allocated to revenue return:
Investment Adviser's fees 214, 035 201, 020 406,306
---------------- ---------------- --------------
Allocated to capital return:
Investment Adviser's fees 642,106 603,058 1,218,918
---------------- ---------------- --------------
Total Income 856, 141 804,078 1, 625,224
---------------- ---------------- --------------
Between 1 July 2020 and 30 June 2021, the Investment Adviser's
fee upon the net funds raised from the use of the over-
allotment facility of GBP5 million under the 2019/20 Offer
will be reduced to 1% from 2% per annum, for one year.
Between 1 April 2018 and 31 March 2019, the Investment Adviser's
fee upon the net funds raised from the use of the over- allotment
facility of GBP10 million under the 2017/18 Offer was reduced
to 1% from 2% per annum, for one year.
Between 1 April 2018 and 31 March 2019, the Investment Adviser's
fee upon the net funds raised from the use of the overallotment
facility of GBP10 million under the 2017/18 Offer was reduced
to 1% from 2% per annum, for one year.
6. Taxation
There is a tax charge for the period as the Company has taxable
income in excess of deductible expenses
. Six months Six months ended
Year ended
ended 30 June 30 June 2019 (unaudited)
31 December
2020 (unaudited) Capital Total Revenue
2019
Capital Total GBP GBP GBP
(audited)
R evenue GBP GBP
Capital Total
GBP
GBP GBP
R evenue
GBP
------------------------------------
a) Analysis of
tax charge:
UK Corporation
tax on profit (122,
for the period 380,390 000) 258,390 171,952 (114,581) 57 ,371 293,485 (23
1,594) 61,891
-------------------- --------- ----------- ------------ ------------ ------------- ------------- ---------- ----
------ -------------
Total current 380,390 (122,
tax charge/(credit) 000) 258,390 171,952 (114,581) 57 ,371 293,485 (23
1,594) 61,891
-------------------- ---------------------- ------------ ------------ ------------- ------------- ----------------
------ -------------
Corporation tax
is based on a
rate
-------------------- --------- ----------- ------------ ------------ ------------- ------------- ---------- ----
------ -------------
of 19. 0% (2019:
19. 0%)
--------------------
b) Profit on
ordinary activities
--------------------
before tax 2,302,799 (1,429,283) 873,516 1, 155,239 6,991,233 8,146,472 2,037,526 7,9
25,328 9,962,854
-------------------- --------- ----------- ------------ ------------ ------------- ------------- ---------- ----
------ -------------
Profit on ordinary
activities
-------------------- --------- ----------- ------------ ------------ ------------- ------------- ---------- ----
------ -------------
multiplied by
rate of corporation
-------------------- --------- ----------- ------------ ------------ ------------- ------------- ---------- ----
------ -------------
tax in the UK
of 19. 0% (2019: 1,547 387
19. 0%) 437,532 (271,564) 165,968 219,495 1,328,334 ,829 ,129 1,5
05,813 1,892,942
-------------------- --------- ----------- ------------ ------------ ------------- ------------- ---------- ----
------ -------------
Effect of:
-------------------- --------- ----------- ------------ ------------ ------------- ------------- ---------- ----
------ -------------
UK dividends (57,001) - (57,001) (49 ,441) - (49 ,441) (96,026)
- (96,026)
-------------------- --------- ----------- ------------ ------------ ------------- ------------- ---------- ----
------ -------------
Net investment
portfolio losses/
-------------------- --------- ----------- ------------ ------------ ------------- ------------- ---------- ----
------ -------------
(gains) not
(1,
allowable/(taxable) - 149,564 149,564 - (1,442,915) (1,442,915) - 73
7,407) (1, 737,407)
-------------------- --------- ----------- ------------ ------------ ------------- ------------- ---------- ----
------ -------------
Unrelieved
expenditure - - - 1,898 - 1,898 2,382
- 2,382
Under provision
in prior period (141) - (141) - - - - -
-
-------------------- --------- ----------- ------------ ------------ ------------- ------------- ---------- ----
------ -------------
Actual current (122,
tax charge 380,390 000) 258,390 171,952 (114,581) 57 ,371 293,485 (231
,594) 61,891
-------------------- --------- ----------- ------------ ------------ ------------- ------------- ---------- ----
------ -------------
Over provision
in prior period (141) - (141) - - - - - -
Actual current
tax charge 380,390 (122,000) 258,390 171,952 (114,581) 57,371 293,485 (231,594) 61,891
------------ ------------- ------------- -------------- -------------------- ------------------- -------------- ------------------ ------------------------------
7. Basic and diluted earnings per share
The basic and diluted earnings, revenue return and capital return per share shown below for each period are respectively based on numerators i)-iii), each divided by the weighted average number of shares in issue in the period - see iv) below.
Six months Six months Year ended
ended 30 June ended 30 June 31 December
2020 (unaudited) 2019 (unaudited) 2019
(audited)
GBP GBP GBP
------------------ ----------------- -------------
i) Total earnings after taxation 615,126 8, 089 ,101 9,900,963
------------------ ----------------- -------------
Basic and diluted earnings per
share (Note a) 0.49p 7 . 61p 9.36p
------------------ ----------------- -------------
ii) Revenue earnings from
ordinary
activities after taxation 1,922,409 983,287 1, 744, 041
------------------ ----------------- -------------
Basic and diluted revenue
earnings
per share (Note b) 1.54p 0.92p 1. 65p
------------------ ----------------- -------------
Net investment portfolio
(losses)/gains
on investments (787,177) 7,594,291 9 ,144,246
------------------ ----------------- -------------
Capital Investment Adviser's fees
less taxation (520 ,106) (488,477) (987,324)
------------------ ----------------- -------------
iii) Total capital earnings (1,307 ,283) 7,105,814 8,156,922
------------------ ----------------- -------------
Basic and diluted capital
earnings
per share (Note c) (1. 05)p 6.69p 7.71p
------------------ ----------------- -------------
iv) W eighted average number of 105, 785,
shares in issue in the period 124, 645,269 106,355,772 777
------------------ ----------------- -------------
Notes:
a) Basic earnings per share is total earnings after taxation divided
by the weighted average number of shares in issue.
b) Basic revenue earnings per share is the revenue earnings after
taxation divided by the weighted average number of shares in issue.
c) Basic capital earnings per share is the total capital earnings
after taxation divided by the weighted average number of shares in
issue.
8. Dividends paid
Six months Six months Year ended
ended ended 31 December
30 June 30 June
2020 2019 2019
(unaudited) (unaudited) (audited)
For the P GBP GBP GBP
year ence
ended 31 per
Dividend Type December share Date paid
-------------- ------------ ------------
17 May
Final Income 2018 1. 75p 2019 - 1,854,366 1,854,366
------------ ----------------- --------- --------- -------------- ------------ ------------
17 May
Final Capital 2018 3.25p* 2019 - 3,443,823 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
------------ ----------------- --------- --------- -------------- ------------ ------------
6
December
Interim Capital 2019 2.00p* 2019 - - 2,098,280
------------ ----------------- --------- --------- -------------- ------------ ------------
8 January 4, 181,
Interim Capital 2019 4.00p* 2020 060 - -
------------ ----------------- --------- --------- -------------- ------------ ------------
7 May
Interim Capital 2020 6.00p* 2020 7 , 665,588 - -
------------ ----------------- --------- --------- -------------- ------------ ------------
11,846, 5,298,
648 189 11, 622,745
---------------------- ----------------- --------- --------- -------------- ------------ ------------
* These dividends were paid out of the Company's special distributable
reserve.
9. Summary of movement on investments during the period
The most critical estimates, assumptions and judgements relate to
the determination of the carrying value of investments at "fair value
through profit and loss" (FVTPL). All investments held by the Company
are classified as FVTPL and measured in accordance with the International
Private Equity and Venture Capital Valuation ("IPEV") guidelines,
as updated in December 2018. This classification is followed as the
Company's business is to invest in financial assets with a view to
profiting from their total return in the form of capital growth and
income.
Purchases and sales of unlisted investments are recognised when the
contract for acquisition or sale becomes unconditional. For investments
actively traded on organised financial markets, fair value is generally
determined by reference to Stock Exchange market quoted bid prices
at the close of business on the balance sheet date. Purchases and
sales of quoted investments are recognised on the trade date where
a contract of sale exists whose terms require delivery within a time
frame determined by the relevant market. Where the terms of the disposal
state that consideration may be received at some future date and,
subject to the conditionality and materiality of the amount of deferred
consideration, an estimate of the fair value, discounted for the
true value of money, may be recognised through the Income Statement.
In other cases, the proceeds will only be recognised once the right
to receive payment is established and there is no reasonable doubt
that payment will be received.
Unquoted investments are stated at fair value by the Directors at
each measurement date in accordance with appropriate valuation techniques,
which are consistent with the IPEV guidelines:-
(i) Each investment is considered as a whole on a 'unit of account'
basis, i.e. that the value of each portfolio company is considered
as a whole, 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 subsequent
quarterly measurement dates 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, a lack
of marketability).
or:-
* where a company's underperformance against plan
indicates a diminution in the value of the investment,
provision against the price of a new investment is
made, as appropriate.
(iI) Premiums, to the extent that they are considered capital in
nature, and that they will be received upon repayment of loan stock
investments are accrued at fair value when the Company receives the
right to the premium and when considered recoverable.
(iII) Where a multiple or the price of recent investment less impairment
basis is not appropriate and overriding factors apply, a discounted
cash flow, net asset valuation, realisation proceeds or a weighted
average of these bases may be applied.
Capital gains and losses on investments, whether realised or unrealised,
are dealt with in the profit and loss and revaluation reserves and
movements in the period are shown in the Income Statement.
All investments are initially recognised and subsequently measured
at fair value. Changes in fair value are recognised in the Income
Statement.
A key judgement made in applying the above accounting policy relates
to investments that are permanently impaired. Where the value of
an investment has fallen permanently below the price of recent investment,
the loss is treated as a permanent impairment and as a realised loss,
even though the investment is still held. The Board assesses the
portfolio for such investments and, after agreement with the Investment
Adviser, will agree the values that represent the extent to which
an investment loss has become realised. This is based upon an assessment
of objective evidence of that investment's future prospects, to determine
whether there is potential for the investment to recover in value.
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.
Notes to the Unaudited Condensed Financial Statements
for the six months ended 30 June 2020
Unquoted Unquoted Unquoted Total
equity preference loan stock
shares shares
Level 3 Level 3
Level 3
GBP GBP GBP GBP
------------- ------------ ------------- -------------
30 ,967 51, 703,
V aluation at 1 January 2020 ,137 27,420 20 , 708,604 161
------------- ------------ ------------- -------------
Purchases at cost 1,437,325 - 242,820 1, 680 ,145
------------- ------------ ------------- -------------
Sales - proceeds (5,941,887) - (3,405,581) (9,347,468)
------------- ------------ ------------- -------------
Net realised gains/(losses)
(Note a) 1,905,594 (302) 84,985 1,990,277
------------- ------------ ------------- -------------
Net unrealised
gains/(losses)
on investments (Note a) 1,562,089 - (4,339,543) (2,777,454)
------------- ------------ ------------- -------------
43,248,
V aluation at 30 June 2020 29,930,258 27 , 118 13,291,285 661
------------- ------------ ------------- -------------
17, 658,
Book cost at 30 June 2020 24,024,389 27 , 108 009 41, 709,506
------------- ------------ ------------- -------------
Permanent impairment in
value
of investments (2,228,496) (302) - (2,228,798)
------------- ------------ ------------- -------------
Unrealised gains/(losses) at
30 June 2020 8,134,365 312 (4,366,724) 3,767,953
------------- ------------ ------------- -------------
43,248,
V aluation at 30 June 2020 29,930,258 27 , 118 13,291,285 661
------------- ------------ ------------- -------------
Gains on investments
------------- ------------ ------------- -------------
Net realised gains/(losses)
based on historical cost 4,162,412 (302) 2,366 4,164,476
------------- ------------ ------------- -------------
Less amounts recognised as
unrealised
(gains)/losses in previous
years (2,256,818) - 82,619 (2, 174,199)
------------- ------------ ------------- -------------
Net realised gains/(losses)
based on carrying value at
31
December 2019 1,905,594 (302) 84,985 1,990,277
------------- ------------ ------------- -------------
Net movement in unrealised
gains/(losses)
in the period 1,562,089 - (4,339,543) (2,777,454)
------------- ------------ ------------- -------------
Net investment portfolio
gains/(losses)
for the period ended 30
June 3,467 ,
2020 683 (302) (4,254,558) (787,177)
------------- ------------ ------------- -------------
Note a) Net realised gains on investments of GBP1,990,277 together
with net unrealised losses of GBP2,777,454 equal net investment portfolio
losses of GBP787,177 as disclosed in the Income Statement.
There has been no significant change in the risk analysis as disclosed
in Note 15 of the Financial Statements in the Company's Annual Report.
The decrease in unrealised valuations of the loan stock investments
above reflect the changes in the entitlement to loan premiums, and/or
in the underlying enterprise value of the investee company. The decrease
does not arise from assessments of credit or market risk upon these
instruments.
Level 3 unquoted equity and loan investments are valued in accordance
with IPEV guidelines as follows: As at 30 June As at 30 June As at 31 December
2020 (unaudited) 2019 (unaudited) 2019
GBP GBP (audited)
GBP
Multiple of earnings,
revenue
, or gross margin, as
appropriate 41,503,626 45,494,032 48, 600 ,751
------------------- ----------------- ------------------
Net asset value 1,409,041 163,390 125,484
------------------- ----------------- ------------------
Recent investment price 269,800 2,300,908 2,976,926
------------------- ----------------- ------------------
Estimated realisation
proceeds 66,194 192, 693 -
------------------- ----------------- ------------------
Recent investment price
(reviewed
for impairment) - 145, 005 -
------------------- ----------------- ------------------
Total 43,248, 661 48,296,028 51, 703, 161
------------------- ----------------- ------------------
10. Current asset investments and cash at bank As at 30 June As at 30 June As at 31 December
2020 (unaudited) 2019 (unaudited) 2019
GBP GBP (audited)
GBP
OEIC Money mark et funds 27,565,930 18,896,451 11,908,442
----------------- ----------------- -------------------
Cash equivalents per S
tatement
of Cash Flows 27,565,930 18,896,451 11,908,442
----------------- ----------------- -------------------
Bank deposits that mature
after
three months 1,004,913 1, 005,658 1, 005,682
----------------- ----------------- -------------------
Current asset investments 28,570 ,843 19 ,902, 109 12,914,124
----------------- ----------------- -------------------
Cash at bank 3,203,047 9 ,074, 632 7,261,618
----------------- ----------------- -------------------
11. Basic and diluted net asset value per share As at 30 June As at 30 June As at 31 December
2020 (unaudited) 2019 (unaudited) 2019
(audited)
Net assets GBP74, 709 GBP77,128,994 GBP71,888,375
,801
----------------- ------------------- -------------------
Number of shares in issue 126,919, 084 105,656,926 104,526,507
----------------- ------------------- -------------------
Basic and diluted net
asset
value per share (pence) 58.86p 73. 00p 68.78p
----------------- ------------------- -------------------
12. Post balance sheet events
On 14 August 2020, the Company realised its investment in Tovey Management
Limited (trading as Access IS) generating proceeds of GBP7.04 million.
On 1 September 2020, the Company invested a further GBP1.42 million
into Buster and Punch Holdings Limited, an existing portfolio company.
On 2 September 2020, the Company realised its investment in Blaze
Signs Holdings Limited generating cash proceeds of GBP1.98 million.
13. Financial statements for the period ended 30 June 2020
The information for the six months ended 30 June 2020 does not comprise
statutory accounts within the meaning of Section 434 of the Companies
Act 2006. The Financial Statements for the year ended 31 December
2019 have been filed with the Registrar of Companies. The auditor
has reported on these Financial Statements and that report was unqualified
and did not contain a statement under section 498(2) or (3) of the
Companies Act 2006.
14. Half-Year Report
This Half-Year Report will shortly be made available on our website:
www.migvct.co.uk and will be circulated by post to those Shareholders
who have requested copies of the Report. Further copies are available
free of charge from the Company's registered office, 30 Haymarket,
London, SW1Y 4EX or can be downloaded via the website.
Contact details for further enquiries:
Mobeus Equity Partners LLP (the Company Secretary) on 020 7024 7600
or by e-mail to vcts@mobeus.co.uk
Mobeus Equity Partners LLP (the Investment Adviser) on 020 7024 7600
or by e-mail to info@mobeus.co.uk
DISCLAIMER
Neither the contents of the Company's website nor the contents of
any website accessible from hyperlinks on the Company's website (or
any other website) is incorporated into, or forms part of, this announcement.
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END
IR UARSRRWUKAAR
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