Quarterly trading update and NAV announcement

Literacy Capital PLC

29 April 2024

 

The information contained in this announcement is restricted and is not for publication, release or distribution in the United States of America, any member state of the European Economic Area, Canada, Australia, Japan or the Republic of South Africa.

This announcement contains inside information.

29 April 2024

Literacy Capital plc

Quarterly trading update and NAV announcement for Q1 2024

NAV increases to £306.2m, with BOOK generating a positive NAV return of +2.0% in Q1

Literacy Capital plc ("Literacy", "BOOK" or the "Company"), a listed investment trust primarily focused on investing directly into private businesses based in the UK, today announces its quarterly trading and NAV update for the three months ending 31 March 2024.

Q1 Highlights:

●	Total return in the quarter of +2.0%, an uplift of £6.0m (10.0p per share), taking net asset value ("NAV") per share to 510.4p (Q4'23: 500.4p), or NAV of £306.2m (Q4'23: £300.3m).
●	Cash inflows in Q1 (£19.4m), were close to Literacy's record high in Q4'23. Most of this related to the refinancing and capital reorganisation announced on 3 April, with these proceeds used to reduce debt.
●	RCI, the fund's largest holding, continues to develop positively and was the strongest contributor again in Q1.
●	Acquired a significant minority stake in Live Business Group, a prominent provider of turnkey entertainment solutions for global travel operators, specifically in holiday resorts or on cruise ships.
●	Total charitable donations since the inception of Literacy Capital now amount to £9.2m, including a charitable donation provision of £694k Q1 2024.

Commenting on the Q1 performance, CEO of BOOK's investment manager, Richard Pindar, said:

"BOOK demonstrated continued progress in the quarter, with a 2.0% increase in NAV. Cash inflows were again substantial, as the portfolio was rebalanced with capital recycled from more mature assets into new investment opportunities or used to pay down the fund's drawings under its RCF. We expect cash inflows to remain strong in the remainder of 2024, whilst we are also seeing many attractive opportunities to redeploy capital into newer investments."

Net Asset Value

The Company announces that, as at 31 March 2024, the NAV per ordinary share was 510.4 pence. This represents a 2.0%, or 10.0p per share, uplift since 31 December 2023, when NAV per ordinary share was 500.4p.

	At 31 Mar 24	At 31 Dec 23	At 31 Mar 23
Net asset value	£306.2m	£300.3m	£280.4m
NAV per ordinary share	510.4p	500.4p	467.3p

The above NAV calculation is based on the Company's issued ordinary share capital as at 31 March 2024 of 60,000,000 ordinary shares of £0.001 each. This NAV calculation includes the cost to ordinary shareholders of the 600,000 warrants in issue. This cost is accrued on a straight-line basis over the vesting period of the warrants.

Portfolio company performance

Growth year-on-year recorded by BOOK's portfolio companies has been varied, with several companies continuing to trade and grow in line with expectations. Whilst others, particularly those that experienced exceptionally strong trading in 2021 and 2022 (which contributed to BOOK's especially strong performance during those periods) have found these historical levels of trading more difficult to repeat. Based on current trends, growth rates are expected to improve in H2 2024.

It is clear that the level of activity and interest from prospective acquirors, including private equity and trade buyers, is increasing. This is also visible from the handful of third party private equity interests BOOK has, from which we expect to receive more than 10% of their 31 December 2023 carrying value distributed in cash in H1 2024.

Transactions and investments

In aggregate, £12.8m was invested by BOOK in Q1 2024. Some of these proceeds were deployed into the one new platform investment that was completed. This was a minority investment into Live Business Group, a leading provider of entertainment solutions to the travel and tourism sectors, particularly hotel and cruise operators. This completed and was announced in March.

The balance of the funding was provided to several existing portfolio companies to support their growth, as well as to acquire additional equity in certain businesses.

Cash & liquidity

In the quarter, cash inflows amounted to £19.4m. The largest component of this (£18.5m), related to the refinancing of a significant portfolio company, announced on 3 April, with the remaining amounts courtesy of distributions from third party fund investments.

Literacy's credit facility was £5.3m drawn, following repayments made immediately after the Easter bank holiday weekend (the facility was £9.4m drawn on 31 December 2023).

Post-balance sheet events

No events occurred between the end of Q1 and the publication of the factsheet requiring reported NAV to be revised.

Factsheet

The Company's factsheet for the three months to 31 March 2024 is now available on the Company's website: www.literacycapital.com/investors

-ENDS-

For further information, please contact:

Literacy Capital plc / Book Asset Management LLP

Tom Vernon / Richard Pindar

[phone]

MHP Group

Reg Hoare / Ollie Hoare / Matthew Taylor

[e-mail]

[phone]

Singer Capital Markets Securities Limited

Robert Peel

[phone]

About Literacy Capital plc

Literacy Capital (BOOK.L) is a closed-end investment company that was co-founded by Paul Pindar and Richard Pindar in 2017 with £54m of capital. Literacy listed on the London Stock Exchange's Main Market in June 2021, before gaining Investment Trust status on 1 April 2022. The Company focuses on opportunities to invest for the long-term in growing private businesses where a clear route to creating additional value can be seen with its support.

It also has a unique charitable objective, to donate 0.9% of annual NAV to charities focused on improving UK literacy in children. £9.2 million has been donated or reserved for donation to charities since the trust's creation in 2017. For more information, please visit our website: www.literacycapital.com.

A copy of this announcement will be available on the Company's website at www.literacycapital.com.

The information contained in this announcement regarding the Company's investments has been provided by the relevant underlying portfolio company and has not been independently verified by the Company. The information contained herein is unaudited.

This announcement is for information purposes only and is not an offer to invest. All investments are subject to risk.  Past performance is no guarantee of future returns.  Prospective investors are advised to seek expert legal, financial, tax and other professional advice before making any investment decision.  The value of investments may fluctuate.  Results achieved in the past are no guarantee of future results. Neither the content of the Company's website, nor the content on any website accessible from hyperlinks on its website for any other website, is incorporated into, or forms part of, this announcement nor, unless previously published by means of a recognised information service, should any such content be relied upon in reaching a decision as to whether or not to acquire, continue to hold, or dispose of, securities in the Company.

LEI: 2549006P3DFN5HLFGR54

 

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