Annual Results for the year ended 31 December 2018
mobeus Income & Growth 4 VCT plc
Annual Financial Results of the Company for the Year ended 31 December 2018
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Mobeus Income & Growth 4 VCT plc (the "Company") today announces the final results for the year ended 31 December 2018. These results were approved by the Board of Directors on 20 March 2019.
You may, in due course, view the Annual Report & Financial Statements, comprising the statutory accounts of the Company by visiting www.mig4vct.co.uk.
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Financial Highlights
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As at 31 December 2018: Net assets: £57.90 million Net asset value ("NAV") per share: 84.79 pence |
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Net asset value ("NAV") total return per share of 2.6% for the year1. |
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Share Price Total Return per share of 4.6% for the year1. |
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Dividends paid and proposed in respect of the year total 8.00 pence per share. The proposed final dividend of 4.00 pence per share, if approved, will bring cumulative dividends paid to date to 109.20 pence per share1. |
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£5.88 million was invested into five new and five existing growth capital investments during the year. |
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A total of £1.77 million cash proceeds was received primarily from four realisations and loan stock repayments. |
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1 Further details of these alternative performance measures ("APMs") are contained in the Strategic Report in the Annual Report. |
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Cumulative total shareholder return per share (NAV basis)
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The longer-term trend of performance on this measure is shown in the table below: |
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Reporting date as at 31 December |
Net
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NAV |
Cumulative dividends paid per |
Cumulative total return per share to shareholders (NAV basis)1 |
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(£m) |
(p) |
(p) |
(p) |
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2018 |
57.90 |
84.79 |
105.20 |
189.99 |
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2017 |
58.41 |
86.57 |
101.20 |
187.77 |
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2016 |
52.76 |
107.57 |
73.20 |
180.77 |
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2015 |
57.01 |
117.89 |
62.20 |
180.09 |
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2014 |
50.29 |
118.21 |
52.20 |
170.41 |
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1 |
Cumulative total shareholder return (NAV basis) is closing net asset value plus cumulative dividends paid since 1999 to 31 December 2018
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The chart above shows the recent past performance of the original funds raised in 1999. The original subscription price was 200 pence per share before the benefit of income tax relief. Subscription prices from subsequent fundraisings and historic performance data from 2008 are shown in the Investor Performance Appendix on the Company's website, www.mig4vct.co.uk, where they can be downloaded by clicking on table under "Reviewing the performance of your investment" on the home page.
On 31 July 2006, Mobeus became sole Investment Adviser to the Company. The cumulative NAV total return at this date was 122.51 pence.
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CHAIRMAN'S STATEMENT I am pleased to present the annual results of Mobeus Income & Growth 4 VCT plc for the year ended 31 December 2018.
Overview This has been a year of solid performance by the Company during the transition era brought about by the 2015 VCT rule changes, in which returns to shareholders have again been positive, principally due to a strong income return and a rise in the value of the unrealised portfolio. During the year, the Company made investments into five new companies, provided follow-on funding to five existing portfolio companies and realised its investment in four portfolio companies. Further details of this investment activity can be found under the 'Investment Portfolio' section of my Statement below and in the Investment Adviser's Review.
The Company and the Investment Adviser have responded well to the VCT Rules introduced by the Finance (No2) Act 2015. The Investment Adviser's team has been expanded and fourteen growth capital investments have been completed as a result of the change in the Company's investment policy in May 2016. During the year, additional changes to VCT legislation were enacted, further details of which can be found in the Annual Report and under the 'Industry and regulatory developments' section of my Statement below.
The Investment Adviser continues to report an interesting pipeline of growth capital opportunities. The sector is buoyant with much activity, although the entry pricing is, in some cases, challenging. Meanwhile, the existing MBO focused portfolio constructed under the previous VCT rules continues to provide a healthy yield.
As mentioned in my half-year statement, we are delighted with the strong support from investors for our last fundraising, which closed fully subscribed in March 2018.
Performance The Company's NAV total return per share for the year ended 31 December 2018 was 2.6% (2017: 6.5%) (being the closing NAV plus dividends paid in the year, divided by the opening NAV) while the share price total return was 4.6% (2017: 7.2%).
This rise in NAV total return for the year was primarily due to another year of positive income returns (themselves principally because of loan stock interest and higher dividend income) and a net increase in the value of the existing portfolio.
As a result of this performance, the NAV cumulative total return per share (being the closing NAV plus total dividends paid to date) increased during the year by 1.2% from 187.77 pence to 189.99 pence. The NAV at 31 December 2018 was 84.79 pence. For details of these calculations, please refer to the Strategic Report.
For more details on the longer-term performance of your investment in the Company, please consult the Investor Performance Appendix on the Company's website.
Investment portfolio During the year, £5.88 million was invested in five new growth capital investments and five existing growth portfolio companies (analysed in the Investment Review and explained within Note 8 to the Financial Statements).
The new growth capital investments totalling £2.52 million were made into the following companies:
· Proactive Investors, a provider of investor media services; · Super Carers, an online platform connecting people seeking home care; · Hemmels, a restorer of classic cars; · Rotageek, a provider of workforce management software; and · Grow Kudos, a digital platform for dissemination of research.
In addition, five follow-on investments totalling £3.36 million were made into:
· MPB, an online marketplace for used camera and video equipment; · Tapas Revolution, a leading Spanish restaurant chain in the casual dining sector; · MyTutor, a digital marketplace connecting people seeking online tutoring; · Preservica, a seller of proprietary digital archiving software; and · Biosite, a provider of biometric access control and software-based workforce management solutions for the construction sector. Shareholders should note that, at the year end, 46.8% of the value of the investment portfolio was held in MBO type investments and 53.2% was held in growth capital investments. £13.30 million has been invested in growth capital investments since the 2015 VCT rule changes. Cash proceeds totalling £1.77 million for the year were received from portfolio companies. Of this total, £1.23 million was received as cash proceeds from the sale of Fullfield (trading as Motorclean), Hemmels, Lightworks and SparesFinder, with a further £0.40 million being received as loan and share capital repayments and finally, £0.14 million from receipts of deferred consideration. For the year under review, the portfolio generated a net loss of £0.36 million on investments realised. Within this, the principal gains in the year were from the sale of Lightworks (which was realised at a profit over opening valuation of £0.16 million) and receipts from companies realised in a prior year. However, these were more than offset by losses incurred from the sale of Fullfield (trading as Motorclean) (£0.55 million, although this investment generated a positive return overall) and Hemmels (£0.28 million). The loss on the sale of Hemmels is explained further in the Investment Review. It serves to remind shareholders that an inherent risk of investing in relatively early stage smaller companies (as required by the terms of the new VCT regulations), is that not all ventures and companies will succeed.
Investment realisations produced £0.47 million in capital gains and capital losses of £0.87 million when compared to original investment cost, a net loss of £0.40 million.
The portfolio achieved a net unrealised increase of £1.29 million on investments still held, with positive increases from EOTH (Rab and Lowe Alpine), Plastic Surgeon and CGI Creative Graphics, partially offset by valuation falls at BookingTek, Wetsuit Outlet and Veritek. At the year end, the portfolio was valued at £36.30 million (2017: £31.48 million) representing 98.4% of cost (2017: 94.9%).
Further details of the investment activity during the year and a summary of the performance highlights can be found in the Investment Review and in the Strategic Report within the Annual Report.
Dividends Your Board is proposing a final dividend in respect of the year ended 31 December 2018 of 4.00 pence per share (2017: nil). The dividend, comprising 2.25 pence from capital and 1.75 pence from income, will be proposed to shareholders at the Annual General Meeting of the Company to be held on Friday, 10 May 2019, to shareholders on the register on 26 April 2019, for payment on 28 May 2019. If approved by shareholders, this forthcoming final dividend will bring dividends paid in respect of the year ended 31 December 2018 to 8.00 pence (2017: 21.00 pence) per share, and the Company will have paid cumulative dividends since inception of 109.20 pence per share.
The Company's target of paying a dividend of at least 4.00 pence per share in respect of each financial year has been reached or exceeded in each of the last eight years. While the Board has not yet changed the dividend target, ordinary dividend payments are more likely to be volatile, and, at least over the medium-term, may be lower than have been paid in the recent past.
A chart showing the dividends paid in respect of each of the last five years and cumulative dividends on the same basis is included in the Strategic Report within the Annual Report.
For the reasons set out in my half year statement (a copy of which can be found on the Company's website www.mig4vct.co.uk) the Company's Dividend Investment Scheme ("the Scheme") was suspended on 14 August 2018. Your Board will continue to keep the Scheme under review and will provide shareholders with advanced notice of any future decision to reintroduce, modify or cancel the scheme.
Succession planning The Board is in the process of refreshing its composition. As you will read later in the Directors' Report, Andrew Robson, who has served as a Director of the Company since August 2010, has decided not to stand for re-election at the forthcoming annual general meeting and will accordingly retire at the conclusion of that meeting. The Nomination and Remuneration Committee expects to recommend the appointment of a director to succeed Andrew upon his retirement and to assume the role of chairman of the Audit Committee and the Nomination and Remuneration Committee, which Andrew presently chairs. Andrew has done an excellent job for the Company and I would like to take this opportunity to thank Andrew formally for his substantial contribution. As regards my role as Chairman of the Board, I have served as a Director of the Board since 2002, and the Board will shortly begin the process of finding a suitable successor. Industry and regulatory developments As mentioned in my Overview above, a number of additional changes to the VCT rules were introduced with the enactment of the Finance Act 2018 on 15 March 2018. These changes were designed to exclude tax-motivated investments where capital is not at risk (that is, principally seeking to preserve investors' capital) and to encourage VCTs to put their money to work more quickly. They also place further restrictions on the way investments are able to be structured. A summary of current VCT regulation can be found in the Annual Report.
Share buybacks During the year ended 31 December 2018, the Company bought back 1.7% (2017: 1.1%) of the issued share capital of the Company at the start of the year, which was subsequently cancelled. Further details of the purchases are included in the Directors' Report in the Annual Report.
Shareholder communications The annual shareholder event was held on Tuesday, 5 February 2019 at the Royal Institute of British Architects in Central London. This annual event included presentations on the Mobeus advised VCTs' investment activity and performance and from investee companies. There were separate day-time and evening sessions, and feedback from those who attended, which numbered around 350, found it to be informative and worthwhile. The next shareholder event will be held in the first quarter of 2020.
Annual General Meeting The Annual General Meeting of the Company will be held at 11:30 a.m. on Friday, 10 May 2019 at The Clubhouse, 8 St James's Square, London SW1Y 4JU. Both the Board and the Investment Adviser look forward to welcoming shareholders to the meeting which will include a presentation from the Investment Adviser on the investment portfolio and provide an opportunity to ask questions of the Board and the Investment Adviser. The notice of the meeting and an explanation of the resolutions to be proposed can be found in the Annual Report.
Outlook Your Board considers that your Company is well positioned to prosper in the growth capital investment sector. Your Board again cautions that investing in such earlier stage companies does involve increased risk and those that succeed often take longer to achieve scale. Returns, therefore, will take longer to emerge and will be more volatile. It is generally true that the least successful investments are likely to emerge or fail before the most successful contribute. This is likely to cause a slower rate of financial progress in the earlier years, although it should be offset by more significant gains in the longer-term.
Meanwhile, the portfolio retains a solid foundation of investments made under the previous MBO strategy, the majority of which are mature and profitable companies providing attractive income returns.
Uncertainty is always detrimental to markets and economies. The Brexit process has certainly provided much uncertainty over an unreasonably long period. The inconsistent negotiating stance of the UK government, combined with multiple fissures in Parliament and in the country, has done much damage. To be slightly contrary, it is remarkable that so far the UK economy has held up as well as it has, but this could, of course, change rapidly. There are also some non-UK issues which could affect our economy, but as I said last year, investing in the unquoted sector is not a short-term exercise.
The most recent fundraising provides the Company with sufficient funds to meet its commitments and to continue the current investment rate in the short to medium-term, if suitable opportunities are identified and can be invested in at acceptable prices. Your Board is also pleased to note that the Investment Adviser continues to expand and strengthen its investment team to source and manage investments that complement the portfolio.
Finally, I would like to take this opportunity once again to thank all shareholders for their continued support.
Christopher Moore Chairman |
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INVESTMENT POLICY The Company invests primarily in a diverse portfolio of UK unquoted companies. Investments are made selectively across a number of sectors, principally in 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 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.
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.
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 ADVISER'S Review Demand for growth capital investment remains strong and there is an interesting pipeline of investment opportunities. It is expected that the current pace and quantum of new and follow-on investments will continue in the short to medium-term.
Portfolio review The portfolio's activity in the year is summarised as follows:
1 This figure is less than Unrealised gains/ (losses) on investments per the Income Statement due to an amount of deferred consideration of £0.22 million now recognised, from an investment realised in a prior year which no longer forms part of the portfolio - see Note 8 of the Notes to the Financial Statements for further details.
This has been a year of further solid progress building the growth capital portfolio with five investments into new growth businesses totalling £2.52 million, five existing growth portfolio companies receiving follow-on funding totalling £3.36 million, and net cash proceeds received of £1.77 million, primarily from four realisations. This brings the total invested in growth capital investments to £13.30 million since the introduction of the VCT regulations in 2015. The past year's investment and divestment activity has increased the proportion of the portfolio regarded as growth capital investments by value to 53.2% (including AIM and legacy) at the year end.
Detail of these movements for each investee company is provided in the Investment Portfolio Summary.
The portfolio's contribution to the overall results of the VCT is summarised as follows:
1 This figure is less than Unrealised gains/(losses) on investments per the Income Statement due to an amount of deferred consideration of £0.22 million now recognised, from an investment realised in a prior year which no longer forms part of the portfolio - see Note 8 of the Notes to the Financial Statements for further details.
Valuation changes of portfolio investments still held Within the unrealised valuation increases of £4.45 million, the principal contributors were EOTH (Rab and Lowe Alpine) (£571k), Plastic Surgeon (£525k) and CGI Creative Graphics (£352k). EOTH achieved a record year of profitability, underpinned by continued growth in its Rab brand. Plastic Surgeon continues to trade strongly having now achieved three years of sustained profit growth. CGI Creative Graphics has seen an improvement in trading, principally arising from the growth in the UK and European caravan market.
A small number of new growth investments have shown initial uplifts from cost, due in large part to the structure of the Company's investment, but also, in some cases, due to the underlying investee company performance.
Within total valuation decreases of £3.38 million, the main reductions were BookingTek (£704k), Wetsuit Outlet (£682k) and Veritek Global (£538k). BookingTek has experienced delays to the roll out of its software which has impacted its planned turnover growth. Wetsuit Outlet has had a disappointing year post investment, with growth in profitability not being achieved as envisaged. Management has since implemented several measures to restore margins. Finally, Veritek has experienced a challenging trading environment in its sector but is restructuring its operations accordingly.
Realised gains and losses from sales of investments The largest gain was £0.17 million from the sale of Lightworks to Siemens PLM Software, a business of Siemens AG. SparesFinder, a legacy investment previously managed by a former investment adviser, was realised at a gain of £0.16 million, having been previously valued at zero.
The Company also realised a gain in the year from deferred consideration receipts of £0.14 million arising from past realisations during the year.
The largest loss was £0.55 million from the sale of Fullfield (trading as Motorclean) back to management (although the investment yielded a positive return over its life), whilst a loss of £0.28 million resulted from the sale of Hemmels to its largest customer. Although the Hemmels loss was modest, it was unexpected, arising shortly after the initial investment, and illustrates the inherent higher risk of investing in early stage growth companies.
Investment portfolio yield and capital repayments During the year under review, the Company received the following amounts in loan interest and dividend income:
1 Total portfolio income in the period is generated solely from investee companies within the portfolio. See Note 3 of the Financial Statements for all income receivable by the Company.
In addition to deferred consideration receipts of £0.14 million and sales proceeds from disposals of investments of £1.23 million, the Company also received loan stock repayments of £0.29 million and preference share repurchases of £0.11 million, both at cost.
New investment in the year A total of £2.52 million was invested into five new investments during the year as detailed below: |
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Company |
Business |
Date of investment |
Amount of new investment (£m) |
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Proactive Investors |
Investor media services |
January, June and October 2018 |
0.75 |
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Super Carers |
Online care platform |
March 2018 |
0.49 |
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Super Carers provides an online platform connecting people seeking home care, typically for their elderly relatives, with experienced independent carers. Carers and care-seekers manage care directly, thus reducing the administrative burden and the need for care managers, enabling care to be delivered with greater flexibility and more cost effectively. The company's accounts for the year ended 31 March 2018 show revenues of £0.38 million and a loss before interest, tax and amortisation of goodwill of £1.28 million. |
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Hemmels |
Classic car restoration |
March 2018 |
0.51 |
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Hemmels commenced trading in September 2016 and specialised in the sourcing, restoration, selling and servicing of high value classic cars. Hemmels focused on classic Mercedes-Benz and planned to expand into the Porsche marque under a separate brand. The investment was made to enable Hemmels to proceed with its expansion plans and secure sufficient development stock. After a short period following the completion of the investment, it became clear that the company's financial situation and prospects were significantly at variance to expectations and the investment has since been realised, as reported within 'Realisations during the year', below. |
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Rotageek |
Workforce management software |
August 2018 |
0.44 |
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Rotageek is a provider of cloud-based enterprise software to help larger retail and leisure organisations predict and meet demand to schedule staff effectively. This investment will be used for further technology development and to grow sales from enterprise clients. The company's unaudited accounts for the year ended 31 December 2017 show revenues of £0.90 million and a loss before interest, tax and amortisation of goodwill of £1.57 million. |
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Grow Kudos |
Platform for the dissemination of academic research |
November 2018 |
0.33 |
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Further investments in existing portfolio companies in the year
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The Company made further investments totalling £3.36 million into five existing portfolio companies during the year under review, as detailed below: |
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Company |
Business |
Date of investment |
Amount of new investment (£m) |
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MPB Group |
Online marketplace for used camera and video equipment |
February, October and December 2018 |
0.45 |
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MPB is Europe's leading online marketplace for used camera and video equipment. Based in Brighton, its custom-designed pricing technology enables MPB to offer both buy and sell services through the same platform and offers a one-stop shop for all its customers. Having expanded into the US (opening a New York office) and German markets as part of the initial VCT investment round, this follow-on investment, alongside funds provided by the ProVen VCTs, is to support its continued growth plan. Having doubled its sales over the last year, this investment will give the company sufficient capital to achieve its next phase of expansion. The company's latest audited accounts for the year ended 31 March 2018 show turnover of £21.71 million and a loss before interest, tax and amortisation of goodwill of £2.00 million. |
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Tapas Revolution |
Restaurant chain |
March 2018 |
0.46 |
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Based in London, Tapas Revolution is a leading Spanish restaurant chain in the casual dining sector focusing on shopping centre sites with high footfall. Having opened its first restaurant in Shepherd's Bush Westfield, the business now operates seven established restaurants, with the support of the initial VCT investment in 2017. This follow on investment is to finance the opening of several new locations around England. The company's latest unaudited accounts for the year ended 31 October 2017 show turnover of £5.84 million and a £0.68 million loss before interest, tax and amortisation of goodwill. |
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MyTutor |
Online tutoring |
May 2018 |
0.84 |
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My Tutor 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 investment supports an opportunity to consolidate the sizeable £2bn UK tutoring market, grow My Tutor's market presence and drive technological development within the company. The company's latest unaudited accounts for the year ended 31 December 2017 show turnover of £0.56 million and a loss before interest, tax and amortisation of goodwill of £1.40 million. |
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Preservica |
Seller of proprietary digital archiving software |
September 2018 |
0.91 |
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Preservica has developed market leading software for the long-term preservation of digital records ensuring that digital content can remain accessible, irrespective of future changes in technology. Previously a division of the Company's former portfolio company Tessella, Preservica was demerged prior to the sale of Tessella in December 2015. The investment provided additional growth capital to finance the development of the business. The Company's latest audited accounts for the year ended 31 March 2018 show turnover of £2.85 million and a loss before interest, tax and amortisation of goodwill of £1.93 million. |
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Biosite |
Workforce management and security services |
October 2018 |
0.70 |
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Based in the Midlands, Biosite is a provider of biometric access control and software-based workforce management solutions for the construction sector. The business is growing significantly and this investment will support the further development of software and hardware products. The company's latest unaudited accounts for the year-ended 31 July 2017 show turnover of £6.38 million and a loss before interest, tax and amortisation of goodwill of £0.45 million. |
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Realisations during the year
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The Company realised its investments in Fullfield (trading as Motorclean), Hemmels, Lightworks and SparesFinder during the year, generating an aggregate net realised loss of £0.50 million. Net cash proceeds received from the sale of these investments totalled £1.23 million, as detailed below: |
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Company |
Business |
Period of investment |
Total cash proceeds over the life of the investment/ |
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Fullfield (Motorclean) |
Vehicle cleaning and valet services |
July 2011 to August 2018 |
£2.35 million 1.2 x cost |
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The Company sold its investment in Fullfield (trading as Motorclean) back to management in August 2018, receiving cash proceeds of £0.64 million (realised loss in the year: £0.55 million). This realisation contributed to a return of 1.2 times the original investment cost and an IRR of 5.0% in the seven years that this investment was held. |
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Hemmels |
Classic car restorer |
March 2018 to September 2018 |
£0.25 million 0.5 x cost |
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The Company sold its investment in Hemmels to the business's largest customer for £0.23 million in September 2018, resulting in a realised loss of £0.28 million on the original investment cost over the six months the investment was held. The investment was realised six months after the original investment, for reasons already explained under new investments. |
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Lightworks |
Provider of software for CAD and CAM vendors |
March 2011 to September 2018 |
£0.20 million 21.7 x cost |
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The Company sold its investment in Lightworks to Siemens PLM Software for £0.20 million (realised gain in the year: £0.17 million) in September 2018, generating a realised gain over the life of the investment of £0.19 million. This equates to a multiple of 21.7 times the investment cost of £0.01 million and an IRR of 56%. |
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SparesFinder |
Supplier of industrial spare parts online |
August 1999 to August 2018 |
£0.16 million 0.6 x cost |
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The Company sold its investment in SparesFinder to Sphera Solutions Inc for £0.16 million (realised gain in the year: £0.16 million) in August 2018. This investment was held as part of a legacy portfolio having previously been managed by a former investment adviser, Elderstreet Investments. This realisation equates to a multiple of 0.6 times the original investment cost of £0.25 million. |
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During the year, the Company also received loan repayments totalling £0.29 million (notably Plastic Surgeon: £0.17 million), deferred consideration from investments realised in a previous year of £0.14 million and preference share repurchases by Plastic Surgeon of £0.11 million.
Net realised losses upon the four disposals above of £0.50 million, together with gains on deferred consideration of £0.14 million equal the total loss for the year of £0.36 million, as shown at the start of this review.
Funds available for investment
Cash and other liquid investments available for investment amounted to £21.37 million. Of this amount, £2.54 million is held as cash in bank accounts, and the balance is placed in AAA rated money market funds. The returns on these funds are relatively low, but the Board retains its policy of seeking above all to preserve capital for its uninvested funds.
Mobeus Equity Partners LLP
Investment Adviser
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Total Cost at 31 Dec 2018 £ |
Total Valuation at 31 Dec 2017 £ |
Total Valuation at 31 Dec 2018 |
% of equity held |
% of Portfolio by value |
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Mobeus Equity Partners Portfolio |
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Tovey Management Limited (trading as Access IS) Provider of data capture and scanning hardware |
2,469,013 |
2,758,626 |
3,013,724 |
9.7% |
8.3% |
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Virgin Wines Holding Company Limited Online wine retailer |
1,930,813 |
2,173,407 |
2,372,306 |
9.7% |
6.5% |
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ASL Technology Holdings Limited Printer and photocopier services |
1,933,591 |
2,049,558 |
2,327,966 |
9.5% |
6.4% |
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Preservica Limited Seller of proprietary digital archiving software |
1,585.773 |
929,117 |
2,082,403 |
11.0% |
5.7% |
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Pattern Analytics Limited (trading as Biosite) Workforce management and security services for the construction industry |
1,338,539 |
960,257 |
1,978,710 |
5.6% |
5.5% |
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EOTH Limited (trading as Equip Outdoor Technologies) Distributor of branded outdoor equipment and clothing (Rab and Lowe Alpine) |
951,471 |
1,405,478 |
1,976,902 |
1.7% |
5.4% |
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Media Business Insight Holdings Limited A publishing and events business focused on the creative production industries |
2,722,760 |
1,663,142 |
1,871,714 |
15.7% |
5.2% |
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Manufacturing Services Investment Limited (trading as Wetsuit Outlet) Online retailer in the water sports market |
2,333,102 |
2,333,102 |
1,651,280 |
6.4% |
4.5% |
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CGI Creative Graphics International Limited Vinyl graphics to global automotive, recreation vehicle and aerospace markets |
1,449,746 |
1,087,900 |
1,439,959 |
6.6% |
4.0% |
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Master Removers Group Limited (trading as Anthony Ward Thomas, Bishopsgate and Aussie Man & Van) A specialist logistics, storage and removals business |
511,855 |
1,173,348 |
1,426,419 |
4.7% |
3.9% |
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MPB Group Limited Online marketplace for used photographic equipment |
1,032,187 |
777,331 |
1,402,016 |
5.6% |
3.9% |
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Vian Marketing Limited (trading as Red Paddle Co) Design, manufacture and sale of stand-up paddleboards and windsurfing sails |
899,074 |
1,416,746 |
1,378,902 |
7.1% |
3.8% |
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My Tutorweb Limited Digital marketplace connecting school pupils seeking one-to-one online tutoring |
1,307,644 |
466,639 |
1,307,644 |
7.2% |
3.6% |
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Turner Topco Limited (trading as Auction Technology Group (formerly ATG Media)) SaaS based online auction marketplace platform |
1,529,075 |
1,292,718 |
1,255,082 |
3.8% |
3.5% |
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Ibericos Etc. Limited (trading as Tapas Revolution) Spanish restaurant chain |
1,044,869 |
580,469 |
1,135,102 |
5.8% |
3.2% |
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Tharstern Group Limited MIS & Commercial print software solutions |
1,091,886 |
1,401,362 |
1,070,871 |
12.2% |
3.0% |
|
Proactive Group Holdings Inc Provider of media services and investor conferences for companies primarily listed on secondary public markets |
755,340 |
- |
1,060,873 |
2.6% |
2.9% |
|
The Plastic Surgeon Holdings Limited (formerly TPSFF Holdings Limited) Snagging and finishing of domestic and commercial properties |
46,160 |
809,939 |
1,046,666 |
8.7% |
2.9% |
|
Buster and Punch Holdings Limited Industrial inspired lighting and interiors retailer |
530,392 |
530,392 |
687,347 |
4.5% |
1.9% |
|
Bourn Bioscience Limited Management of In-vitro fertilisation clinics |
1,132,521 |
818,429 |
687,046 |
7.7% |
1.9% |
|
Rota Geek Limited Workforce management software |
437,000 |
- |
685,092 |
3.7% |
1.9% |
|
Redline Worldwide Limited Provider of security services to the aviation industry and other sectors |
838,377 |
897,989 |
521,616 |
6.7% |
1.4% |
|
RDL Corporation Limited Recruitment consultants for the pharmaceutical, business intelligence and IT industries |
1,000,000 |
632,005 |
478,719 |
9.1% |
1.3% |
|
Hollydale Management Limited Company seeking to carry on a business in the food sector |
701,120 |
438,200 |
438,200 |
11.0% |
1.2% |
|
Super Carers Limited Online platform that connects people seeking home care from experienced independent carers |
485,730 |
- |
364,298 |
4.3% |
1.1% |
|
Vectair Holdings Limited Designer and distributor of washroom products |
24,732 |
303,233 |
360,155 |
2.1% |
1.0% |
|
Kudos Innovations Limited Online platform that provides and promotes academic research dissemination |
328,950 |
- |
328,950 |
3.2% |
0.9% |
|
Blaze Signs Holdings Limited Manufacturer and installer of signs |
190,631 |
193,997 |
286,967 |
5.7% |
0.8% |
|
Backhouse Management Limited Company seeking to carry on a business in the motor sector |
589,680 |
226,800 |
226,800 |
11.3% |
0.6% |
|
Creasy Marketing Services Limited Company seeking to carry on a business in the textile sector |
589,680 |
226,800 |
226,800 |
11.3% |
0.6% |
|
McGrigor Management Limited Company seeking to carry on a business in the pharmaceutical sector |
589,680 |
226,800 |
226,800 |
11.3% |
0.6% |
|
Barham Consulting Limited Company seeking to carry on a business in the catering sector |
589,680 |
226,800 |
226,800 |
11.3% |
0.6% |
|
Omega Diagnostics Group plc In-vitro diagnostics for food intolerance, auto-immune diseases and infectious diseases |
200,028 |
274,849 |
208,344 |
1.3% |
0.6% |
|
BookingTek Limited Software for hotel groups |
652,137 |
867,257 |
163,034 |
3.5% |
0.4% |
|
Jablite Holdings Limited Manufacturer of expanded polystyrene products |
376,083 |
229,783 |
122,422 |
9.1% |
0.3% |
|
Veritek Global Holdings Limited Maintenance of imaging equipment |
1,620,086 |
547,806 |
9,953 |
11.9% |
0.0% |
|
BG Training Limited City-based provider of specialist technical training |
10,625 |
5,313 |
5,313 |
0.0% |
0.0% |
|
Racoon International Group Limited Supplier of hair extensions, hair care products and training |
484,347 |
- |
- |
8.0% |
0.0% |
|
CB Imports Group Limited (trading as Country Baskets) Importer and distributor of artificial flowers, floral sundries and home décor products |
175,000 |
- |
- |
5.8% |
0.0% |
|
Hemmels Limited Company specialising in sourcing, selling and servicing of high price classic cars |
23,250 |
- |
- |
|
0.0% |
|
Newquay Helicopters (2013) Limited (in creditors' voluntary liquidation) Helicopter service operator |
4,623 |
- |
- |
2.5% |
0.0% |
|
|
|
|
|
|
|
|
Disposals in year |
|
|
|
|
|
|
Fullfield Limited (trading as Motorclean) Vehicle cleaning and valet services |
- |
1,185,517 |
- |
|
|
|
Lightworks Software Limited Provider of software for CAD and CAM vendors |
- |
33,847 |
- |
|
|
|
Total |
36,507,250 |
31,144,956 |
36,053,195 |
|
99.3% |
|
Former Elderstreet Private Equity Portfolio |
|
|
|
|
|
|
Cashfac Limited Provider of virtual banking application software solutions to corporate customers |
260,101 |
339,097 |
245,465 |
2.9% |
0.7% |
|
Sift Group Limited Developer of business-to-business internet communities |
135,391 |
- |
- |
1.3% |
0.0% |
|
Total |
395,492 |
339,097 |
245,465 |
|
0.7% |
|
Investment Adviser's Total |
36,902,742 |
31,484,053 |
36,298,660 |
|
100.0% |
For further information on the Investment Portfolio, please see the Annual Report and Financial Statements
|
|
||||||||||||||||||||||||||||||||||||||||
|
Principal risks, management and regulatory environment The Directors acknowledge the Board's responsibilities for the Company's internal control systems and have instigated systems and procedures for identifying, evaluating and managing the significant risks faced by the Company. This includes a key risk management review which takes place at each quarterly Board meeting. Further details are contained in the corporate governance section of the Directors' Report in the Annual Report. The principal risks identified by the Board are set out below:
The risk profile of the Company has changed as a result of changes to VCT legislation. As the Company is required to focus its new investment activity on growth capital investments in younger companies it is anticipated that investment returns will be more volatile and have a higher risk profile. The Board remain confident that the Investment Adviser has adapted to these changing investment requirements, although the early stage investment process remains largely unproven. The combination of high liquidity levels in the Company and the challenge of new VCT rules may also result in continuing high liquidity which may be a drag on performance. The Board continues to manage excess liquidity through dividend distributions where appropriate. These issues will be monitored by the Board during the year.
STATEMENT OF DIRECTORS' RESPONSIBILITIES The Directors are responsible for preparing the Annual Report and the Financial Statements in accordance with applicable law and regulations.
Company law requires the Directors to prepare Financial Statements for each financial year and the Directors have elected to prepare the Financial Statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law, the Directors must not approve the Financial Statements unless they are satisfied that they give a true and fair view of the state of affairs of the Company and of the profit or loss for the Company for that period.
In preparing these financial statements, the Directors are required to:
The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company's transactions and disclose with reasonable accuracy at any time the financial position of the Company and enable them to ensure that the Financial Statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
Website publication The Directors are responsible for ensuring the Annual Report and the Financial Statements are made available on a website. Financial Statements are published on the Company's website in accordance with legislation in the United Kingdom governing the preparation and dissemination of Financial Statements, which may vary from legislation in other jurisdictions. The maintenance and integrity of the Company's website is the responsibility of the Directors. The Directors' responsibility also extends to the ongoing integrity of the Financial Statements contained therein.
Directors' responsibilities pursuant to Disclosure and Transparency Rule 4 of the UK Listing Authority The Directors confirm to the best of their knowledge that:
(a) The Financial Statements, which have been prepared in accordance with United Kingdom Generally Accepted Accounting Practice, give a true and fair view of the assets, liabilities, financial position and the profit of the Company.
(b) The Annual Report includes a fair review of the development and performance of the business and the position of the Company, together with a description of the principal risks and uncertainties that it faces.
Having taken advice from the Audit Committee, the Board considers the Annual Report and Financial Statements, taken as a whole, as fair, balanced and understandable and that it provides the information necessary for shareholders to assess the Company's performance, business model and strategy.
Neither the Company nor the Directors accept any liability to any person in relation to the Annual Report except to the extent that such liability could arise under English law. Accordingly, any liability to a person who has demonstrated reliance on any untrue or misleading statement or omission shall be determined in accordance with section 90A and schedule 10A of the Financial Services and Markets Act 2000.
The names and functions of the Directors are stated in the Annual Report.
For and on behalf of the Board:
Christopher Moore Chairman
|
FINANCIAL STATEMENTS
|
Income Statement for the year ended 31 December 2018 |
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
Year ended 31 December 2018 |
Year ended 31 December 2017 |
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
Notes |
Revenue |
Capital |
Total |
Revenue |
Capital |
Total |
|
|
|
|
£ |
£ |
£ |
£ |
£ |
£ |
|
|
Unrealised gains/(losses) on investments |
8 |
- |
1,294,148 |
1,294,148 |
- |
(792,838) |
(792,838) |
|
|
Realised (losses)/gains on investments |
8 |
- |
(363,572) |
(363,572) |
- |
4,142,375 |
4,142,375 |
|
|
Income |
3 |
2,263,918 |
- |
2,263,918 |
2,381,649 |
- |
2,381,649 |
|
|
Investment Adviser's fees |
4a |
(311,111) |
(933,333) |
(1,244,444) |
(293,312) |
(879,937) |
(1,173,249) |
|
|
Other expenses |
4d |
(378,431) |
- |
(378,431) |
(422,206) |
- |
(422,206) |
|
|
Profit/(loss) on ordinary activities before taxation |
|
1,574,376 |
(2,757) |
1,571,619 |
1,666,131 |
2,469,600 |
4,135,731 |
|
|
Taxation on profit/(loss) on ordinary activities |
5 |
(243,837) |
177,334 |
(66,503) |
(286,870) |
169,388 |
(117,482) |
|
|
Profit for the year and total comprehensive income |
|
1,330,539 |
174,577 |
1,505,116 |
1,379,261 |
2,638,988 |
4,018,249 |
|
|
Basic and diluted earnings per ordinary share |
6 |
1.95p |
0.25p |
2.20p |
2.60p |
4.99p |
7.59p |
|
|
|
|
|
|
|
|
|
|
|
|
The revenue column of the Income Statement includes all income and expenses. The capital column accounts for the unrealised gains/(losses) and realised (losses)/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 Statement of Recommended Practice ("SORP") issued in November 2014 by the Association of Investment Companies ("AIC"), supplementary information which analyses the Income Statement between items of a revenue and capital nature has been presented alongside the Income Statement. The revenue column of profit attributable to equity shareholders is the measure the Directors believe appropriate in assessing the Company's compliance with certain requirements set out in Section 274 Income Tax Act 2007.
|
||||||||
|
All the items in the above statement derive from continuing operations of the Company. No operations were acquired or discontinued in the year. |
||||||||
|
Balance Sheet as at 31 December 2018
|
|
|
|
|
|
|
|
|
|
|
|
31 December 2018 |
31 December 2017 |
|
|
Notes |
£ |
£ |
|
Fixed assets |
|
|
|
|
Investments at fair value |
8 |
36,298,660 |
31,484,053 |
|
Current assets |
|
|
|
|
Debtors and prepayments |
|
529,190 |
3,166,996 |
|
Current investments |
9 |
18,830,389 |
21,494,921 |
|
Cash at bank |
9 |
2,541,058 |
2,847,849 |
|
|
|
21,900,637 |
27,509,766 |
|
|
|
|
|
|
Creditors: amounts falling due within one year |
|
(303,513) |
(582,179) |
|
Net current assets |
|
21,597,124 |
26,927,587 |
|
Net assets |
|
57,895,784 |
58,411,640 |
|
|
|
|
|
|
Capital and reserves |
|
|
|
|
Called up share capital |
|
682,830 |
674,751 |
|
Share premium reserve |
|
31,474,977 |
29,895,865 |
|
Capital redemption reserve |
|
26,257 |
14,589 |
|
Revaluation reserve |
|
1,848,472 |
517,952 |
|
Special distributable reserve |
|
14,784,518 |
20,029,787 |
|
Realised capital reserve |
|
6,815,730 |
6,346,235 |
|
Revenue reserve |
|
2,263,000 |
932,461 |
|
Equity shareholders' funds |
|
57,895,784 |
58,411,640 |
|
Basic and diluted net asset value per ordinary share |
|
84.79p |
86.57p |
|
Statement of Changes in Equity for the year ended 31 December 2018
|
|
|||||||||||
|
|
|
Non-distributable reserves |
Distributable reserves |
|
|
|||||||
|
|
|
|
|
|
|
|||||||
|
|
Notes |
Called up share capital |
Share Premium reserve |
Capital redemption reserve |
Revaluation reserve |
Special distributable reserve |
Realised capital reserve |
Revenue reserve |
Total |
|
||
|
|
|
|
||||||||||
|
|
|
|
||||||||||
|
|
|
|
|
|
|
(note a) |
(note b) |
(note b) |
|
|
||
|
|
£ |
£ |
£ |
£ |
£ |
£ |
£ |
£ |
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
||
|
At 1 January 2018 Comprehensive income for the year |
|
674,751 |
29,895,865 |
14,589 |
517,952 |
20,029,787 |
6,346,235 |
932,461 |
58,411,640 |
|||
|
Profit/(loss) for the year |
|
- |
- |
- |
1,294,148 |
- |
(1,119,571) |
1,330,539 |
1,505,116 |
|||
|
Total comprehensive income for the year |
|
- |
- |
- |
1,294,148 |
- |
(1,119,571) |
1,330,539 |
1,505,116 |
|||
|
Contributions by and distributions to owners |
|
|
|
|
|
|
|
|
|
|
||
|
Shares issued via Offer for Subscription (note c) |
|
11,862 |
1,003,505 |
- |
- |
(10,787) |
- |
- |
1,004,580 |
|
||
|
Dividends re-invested into new shares |
|
7,885 |
575,607 |
- |
- |
- |
- |
- |
583,492 |
|
||
|
Shares bought back (note d) |
|
(11,668) |
- |
11,668 |
- |
(874,700) |
- |
- |
(874,700) |
|
||
|
Dividends paid |
7 |
- |
- |
- |
- |
(2,734,344) |
- |
- |
(2,734,344) |
|
||
|
Total contributions by and distributions to owners |
|
8,079 |
1,579,112 |
11,668 |
- |
(3,619,831) |
- |
- |
(2,020,972) |
|
||
|
Other movements |
|
|
|
|
|
|
|
|
|
|
||
|
Realised losses transferred to special reserve (note a) |
|
- |
- |
- |
- |
(1,625,438) |
1,625,438 |
- |
- |
|
||
|
Realisation of previously unrealised depreciation |
|
- |
- |
- |
36,372 |
- |
(36,372) |
- |
- |
|
||
|
Total other movements |
|
- |
- |
- |
36,372 |
(1,625,438) |
1,589,066 |
- |
- |
|
||
|
At 31 December 2018 |
|
682,830 |
31,474,977 |
26,257 |
1,848,472 |
14,784,518 |
6,815,730 |
2,263,000 |
57,895,784 |
|
||
|
Note a: The Special distributable reserve also provides the Company with a reserve to absorb any existing and future realised losses and, when considered by the Board to be in the interests of shareholders, to fund share buybacks and for other corporate purposes. All of this reserve originates from funds raised prior to 6 April 2014. The transfer of £1,625,438 to the special reserve from the realised capital reserve above is the total of realised losses incurred by the Company in the year. |
|||||||||
|
Note b: The realised capital reserve and the revenue reserve together comprise the Profit and Loss Account of the Company. |
|||||||||
|
|
|
|
|
|
|
|
|
|
|
|
Note c: Under the 2017/18 Offer for Subscription, 1,186,253 shares were allotted between January and March 2018, raising net funds of £1,004,580 for the Company. The figure is net of issue costs of £27,133. |
|||||||||
|
|
|
|
|
|
|
|
|
|
|
|
Note d: During the year, the Company purchased 1,166,848 of its own shares at the prevailing market price for a total cost of £874,700, which were subsequently cancelled. This differs to the figure shown in the Statement of Cash Flows of £1,066,736 by £192,036, due to £63,503 included in creditors at the year end, offset by £255,539 which was a creditor from the previous year. |
|
||||||||
|
Statement of Changes in Equity for the year ended 31 December 2017
|
|
||||||||||||
|
|
|
Non-distributable reserves |
Distributable reserves |
|
|||||||||
|
|
|
|
|
|
|||||||||
|
|
|
Called up share capital |
Share premium reserve |
Capital redemption reserve |
Revaluation reserve |
Special distributable reserve |
Realised capital reserve |
Revenue reserve |
Total |
||||
|
|
|
||||||||||||
|
|
|
||||||||||||
|
|
£ |
£ |
£ |
£ |
£ |
£ |
£ |
£ |
|||||
|
|
|
|
|
|
|
|
|
|
|
||||
|
At 1 January 2017 |
|
490,430 |
13,540,891 |
9,342 |
1,152,007 |
31,646,338 |
4,702,557 |
1,213,591 |
52,755,156 |
||||
|
|
|
|
|
|
|
|
|
|
|
||||
|
Comprehensive income for the year |
|
|
|
|
|
|
|
||||||
|
(Loss)/profit for the year |
|
- |
- |
- |
(792,838) |
- |
3,431,826 |
1,379,261 |
4,018,249 |
||||
|
Total comprehensive income for the year |
|
- |
- |
- |
(792,838) |
- |
3,431,826 |
1,379,261 |
4,018,249 |
||||
|
Contributions by and distributions to owners |
|
|
|
|
|
|
|||||||
|
Shares issued via Offer for Subscription |
|
154,721 |
13,570,259 |
- |
- |
(94,364) |
- |
- |
13,630,616 |
||||
|
Dividends re-invested into new shares |
|
34,847 |
2,784,715 |
- |
- |
- |
- |
- |
2,819,562 |
||||
|
Shares bought back |
|
(5,247) |
- |
5,247 |
- |
(408,125) |
- |
- |
(408,125) |
||||
|
Dividends paid |
|
- |
- |
- |
- |
(10,403,513) |
(2,339,914) |
(1,660,391) |
(14,403,818) |
||||
|
Total contributions by and distributions to owners |
|
184,321 |
16,354,974 |
5,247 |
- |
(10,906,002) |
(2,339,914) |
(1,660,391) |
1,638,235 |
||||
|
Other movements |
|
|
|
|
|
|
|
|
|
||||
|
Realised losses transferred to special reserve |
|
- |
- |
- |
- |
(710,549) |
710,549 |
- |
- |
||||
|
Realisation of previously unrealised depreciation |
|
- |
- |
- |
158,783 |
- |
(158,783) |
- |
- |
||||
|
Total other movements |
|
- |
- |
- |
158,783 |
(710,549) |
551,766 |
- |
- |
||||
|
At 31 December 2017 |
|
674,751 |
29,895,865 |
14,589 |
517,952 |
20,029,787 |
6,346,235 |
932,461 |
58,411,640 |
||||
|
The composition of each of these reserves is explained below:
|
|
Called up share capital |
|
The nominal value of shares originally issued increased for subsequent share issues either via an Offer for Subscription or Dividend Investment Scheme or reduced due to shares bought back by the Company. |
|
Share premium reserve |
|
This reserve contains the excess of gross proceeds less issue costs over the nominal value of shares allotted under recent Offers for Subscription and the Company's Dividend Investment Scheme. |
|
|
|
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. |
|
Revaluation reserve |
|
Increases and decreases in the valuation of investments held at the year end are accounted for in this reserve, except to the extent that the diminution is deemed permanent.
In accordance with stating all investments at fair value through profit and loss (as recorded in note 8), all such movements through both revaluation and realised capital reserves are shown within the Income Statement for the year.
|
|
Special distributable reserve |
|
The cost of share buybacks is charged to this reserve. In addition, any realised losses on the sale or impairment of investments (excluding transaction costs), and 75% of the Investment Adviser fee expense, and the related tax effect, are transferred from the realised capital reserve to this reserve. The cost of any IFA facilitation fee payable as part of the Offer for Subscription is also charged to this reserve. |
|
Realised capital reserve |
|
The following are accounted for in this reserve:
• Gains and losses on realisation of investments; • Permanent diminution in value of investments; • Transaction costs incurred in the acquisition and disposal of investments; • 75% of the Investment Adviser fee expense and 100% of any performance incentive fee payable, together with the related tax effect to this reserve in accordance with the policies; and • Capital dividends paid.
|
|
Revenue reserve |
|
Income and expenses that are revenue in nature are accounted for in this reserve together with the related tax effect, as well as income dividends paid that are classified as revenue in nature. |
Statement of Cash Flows for the year ended 31 December 2018
|
|
Notes |
Year ended 31 December 2018 |
|
Year ended 31 December 2017 |
||
|
|
||||||
|
|
||||||
|
|
|
|
|
|||
|
|
£ |
|
£ |
|||
|
Cash flows from operating activities |
|
|
|
|
||
|
Profit after tax for the financial year |
|
1,505,116 |
|
4,018,249 |
||
|
Adjustments for: |
|
|
|
|
||
|
Net unrealised (gains)/losses on investments |
|
(1,294,148) |
|
792,838 |
||
|
Net losses/(gains) on realisations of investments |
|
363,572 |
|
(4,142,375) |
||
|
Tax charge for current year |
|
66,503 |
|
117,482 |
||
|
Decrease/(increase) in debtors |
|
104,935 |
|
(128,689) |
||
|
(Decrease)/increase in creditors |
|
(35,677) |
|
289,612 |
||
|
Net cash inflow from operations |
|
710,301 |
|
947,117 |
||
|
Corporation tax paid |
|
(117,456) |
|
(30,088) |
||
|
Net cash inflow from operating activities |
|
592,845 |
|
917,029 |
||
|
|
|
|
|
|
||
|
Cash flows from investing activities |
|
|
|
|
||
|
Sale of investments |
8 |
4,531,646 |
|
10,217,251 |
||
|
Purchase of investments |
8 |
(5,882,806) |
|
(1,603,629) |
||
|
Net cash (outflow)/inflow from investing activities |
|
(1,351,160) |
|
8,613,622 |
||
|
|
|
|
|
|
||
|
Cash flows from financing activities |
|
|
|
|
||
|
Shares issued as part of Offer for Subscription (net of issue costs) |
|
1,004,580 |
|
13,630,616 |
||
|
Equity dividends paid |
7 |
(2,150,852) |
|
(11,584,256) |
||
|
Purchase of own shares |
|
(1,066,736) |
|
(408,125) |
||
|
Net cash (outflow)/inflow from financing activities |
|
(2,213,008) |
|
1,638,235 |
||
|
Net (decrease)/increase in cash and cash equivalents |
|
(2,971,323) |
|
11,168,886 |
||
|
Cash and cash equivalents at start of year |
|
22,342,770 |
|
11,173,884 |
||
|
Cash and cash equivalents at end of year |
|
19,371,447 |
|
22,342,770 |
||
|
|
|
|
|
|
||
|
Cash and cash equivalents comprise: |
|
|
|
|
||
|
Cash at bank and in hand |
9 |
2,541,058 |
|
2,847,849 |
||
|
Cash equivalents |
9 |
16,830,389 |
|
19,494,921 |
||
Notes to the Financial Statements for the year ended 31 December 2018
1 Company Information
|
Mobeus Income and Growth 4 VCT plc is a public limited company incorporated in England, registration number 03707697. The registered office is 30 Haymarket, London, SW1Y 4EX. |
2 Basis of preparation of the Financial Statements
|
A summary of the principal accounting policies, all of which have been applied consistently throughout the year are set out next to the related disclosure throughout the Notes to the Financial Statements. All accounting policies are included within an outlined box at the top of each relevant note.
These financial statements have been prepared in accordance with applicable United Kingdom accounting standards, including Financial Reporting Standard 102 ("FRS102"), with the Companies Act 2006 and the 2014 Statement of Recommended practice, 'Financial Statements of Investment Trust Companies and Venture Capital Trusts' ('the SORP') (updated in January 2017) issued by the Association of Investment Companies. The Company has a number of financial instruments which are disclosed under FRS102 s11/12 as shown in note 15. |
3 Income
|
Dividends receivable on quoted equity shares are brought into account on the ex-dividend date. Dividends receivable on unquoted equity shares are brought into account when the Company's right to receive payment is established and there is no reasonable doubt that payment will be received.
Interest income on loan stock is accrued on a daily basis. Provision is made against this income where recovery is doubtful or where it will not be received in the foreseeable future. Where the loan stocks only require interest or a redemption premium to be paid on redemption, the interest and redemption premium is recognised as income or capital as appropriate once redemption is reasonably certain.
When a redemption premium is designed to protect the value of the instrument holder's investment rather than reflect a commercial rate of revenue return the redemption premium is recognised as capital. The treatment of redemption premiums is analysed to consider if they are revenue or capital in nature on a company by company basis. Accordingly, the redemption premium recognised in the year ended 31 December 2018 has been classified as capital and has been included within gains on investments. |
|
|
2018 |
2017 |
|
|
£ |
£ |
|
Income from bank deposits |
34,179 |
28,578 |
|
|
|
|
|
Income from investments |
|
|
|
- from equities |
290,937 |
176,448 |
|
- from OEIC funds |
101,193 |
25,097 |
|
- from loan stock |
1,824,903 |
2,145,824 |
|
- from interest on preference share dividend arrears |
11,061 |
92 |
|
|
2,228,094 |
2,347,461 |
|
|
|
|
|
Other income |
1,645 |
5,610 |
|
Total income |
2,263,918 |
2,381,649 |
|
|
|
|
|
Total income comprises |
|
|
|
Dividends |
392,130 |
201,545 |
|
Interest |
1,870,143 |
2,174,494 |
|
Other income |
1,645 |
5,610 |
|
|
2,263,918 |
2,381,649 |
Total loan stock interest due but not recognised in the year was £638,642 (2017: £257,512). The increase over the year is due to the provision of interest of one investee company and another investee company utilising an agreed payment holiday for part of the year.
4 Investment Adviser's fees and other expenses
|
All expenses are accounted for on an accruals basis. |
a) Investment Adviser's fees and performance fees
|
25% of the Investment Adviser's fees are charged to the revenue column of the Income Statement, while 75% is charged against the capital column of the Income Statement. This is in line with the Board's expected long-term split of returns from the investment portfolio of the Company.
100% of any performance incentive fee payable for the year is charged against the capital column of the Income Statement, as it is based upon the achievement of capital growth. |
|
|
Revenue |
Capital |
Total |
Revenue |
Capital |
Total |
|
|
2018 |
2018 |
2018 |
2017 |
2017 |
2017 |
|
|
£ |
£ |
£ |
£ |
£ |
£ |
|
Mobeus Equity Partners LLP |
|
|
|
|
|
|
|
Investment Adviser's fees |
311,111 |
933,333 |
1,244,444 |
293,312 |
879,937 |
1,173,249 |
|
Under the terms of a revised investment management agreement dated 12 November 2010, Mobeus Equity Partners LLP ("Mobeus") provides investment advisory, administrative and company secretarial services to the Company, for a fee of 2% per annum of closing net assets, calculated on a quarterly basis by reference to the net assets at the end of the preceding quarter, plus a fixed fee of £115,440 per annum, the latter being subject to indexation, if applicable. In 2013, Mobeus agreed to waive such further increases due to indexation, until otherwise agreed with the Board.
The Investment Adviser's fee includes provision for a cap on expenses excluding irrecoverable VAT and exceptional items set at 3.4% of closing net assets at the year end. In accordance with the investment management agreement, any excess expenses are borne by the Investment Adviser. The excess expenses during the year amounted to £nil (2017: £nil). With effect from 1 April 2018, the Investment Advisors fee upon the net funds raised from use of the over-allotment facility of £5 million under the 2017/18 offer has been reduced from 2% to 1% per annum for one year.
The Company is responsible for external costs such as legal and accounting fees, incurred on transactions that do not proceed to completion ("abort expenses") subject to the cap on total annual expenses referred to above. No such costs have been incurred in the current or previous year.
In line with common practice, Mobeus retains the right to charge arrangement and syndication fees and directors' or monitoring fees to companies in which the Company invests. The Investment Adviser received fees totalling £351,713 (2017: £285,904) during the year ended 31 December 2018, being £146,450 (2017: £99,523) for arrangement fees and £205,263 (2017: £186,381) for acting as non-executive directors on a number of investee company boards. These fees attributable to MIG 4 VCT are based upon the investment allocation applicable to MIG 4 VCT which applied at the time of each investment. These figures are not part of these financial statements.
|
b) Incentive fee agreement
|
Under the terms of a separate agreement dated 1 November 2006, from the end of the accounting period ending on 31 January 2009 and in each subsequent accounting period throughout the life of the company, the Investment Adviser will be entitled to receive a performance related incentive fee of 20% of the dividends paid in excess of a "Target Rate" comprising firstly, an annual dividend target of 6% of the net asset value per share at 5 April 2007 (indexed each year for RPI) and secondly a requirement that any cumulative shortfalls below the 6 per cent hurdle must be made up in later years, while any excess is not carried forward, whether a fee is payable for that year or not. Payment of a fee is also conditional upon the average Net Asset Value ("NAV") per share for each such year equalling or exceeding the average Base NAV per share for the same year. The performance fee will be payable annually. No incentive fee is payable to date.
|
c) Offer for Subscription fees
|
|
2018 |
2017 |
|
|
£m |
£m |
|
Funds raised by MIG 4 VCT |
1.04 |
13.96 |
|
Offer costs payable to Mobeus at 3.25% of funds raised by MIG4 VCT |
0.03 |
0.45 |
|
Under the terms of an Offer for Subscription, with the other Mobeus advised VCTs, launched on 6 September 2017, Mobeus was entitled to fees of 3.25% of the investment amount received from investors. This amount totalled £0.64 million for the final two allotments during the year across all four VCTs, out of which all the costs associated with the allotment were met, excluding any payments to advisers facilitated under the terms of the Offer. |
d) Other expenses
|
Expenses are charged wholly to revenue, with the exception of expenses incidental to the acquisition or disposal of an investment, which are written off to the capital column of the Income Statement or deducted from the disposal proceeds as appropriate. |
|
|
2018 |
2017 |
|
|
£ |
£ |
|
Directors' remuneration (including NIC of £9,099 (2017: £8,313)) - note i) |
105,349 |
98,813 |
|
IFA trail commission |
61,863 |
86,124 |
|
Broker's fees |
12,000 |
12,000 |
|
Auditor's fees - Audit of Company (excluding VAT) |
24,088 |
23,832 |
|
- Audit related assurance services - note ii) (excluding VAT) |
4,613 |
4,562 |
|
- tax compliance services - note ii) (excluding VAT) |
1,922 |
1,358 |
|
Registrar's fees |
39,252 |
65,302 |
|
Printing |
48,085 |
42,480 |
|
Legal & professional fees |
10,590 |
7,174 |
|
VCT monitoring fees |
9,600 |
9,600 |
|
Directors' insurance |
7,631 |
8,152 |
|
Listing and regulatory fees |
38,874 |
53,507 |
|
Sundry |
14,564 |
9,302 |
|
Other expenses |
378,431 |
422,206 |
|
Note i): See the Directors' Remuneration Report in the Annual Report, which excludes the NIC above. The key management personnel are the three non-executive Directors. The Company has no employees.
Note ii): The audit related assurance services are in relation to the review of the Financial Statements within the Company's Half Year Report. The Audit Committee reviews the nature and extent of these services to ensure that auditor independence is maintained. In this regard, while iXBRL services are carried out by the auditor, the majority of tax compliance services are carried out by another firm, so are included within legal and professional fees. |
5 Taxation on profit on ordinary activities
|
The tax expense for the year comprises current tax and is recognised in profit or loss. The current income tax charge is calculated on the basis of tax rates and laws that have been enacted or substantively enacted by the reporting date.
Any tax relief obtained in respect of adviser fees allocated to capital is reflected in the capital reserve - realised and a corresponding amount is charged against revenue. The tax relief is the amount by which corporation tax payable is reduced as a result of these capital expenses.
Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the balance sheet date where transactions or events that result in an obligation to pay more tax in the future or a right to pay less tax in the future have occurred at the balance sheet date. Timing differences are differences between the Company's taxable profits and its results as stated in the Financial Statements that arise from the inclusion of gains and losses in the tax assessments in periods different from those in which they are recognised in the Financial Statements.
Deferred tax is measured at the average tax rates that are expected to apply in the years in which the timing differences are expected to reverse based on tax rates and laws that have been enacted or substantively enacted at the balance sheet date. Deferred tax is measured on a non-discounted basis.
A deferred tax asset would be recognised only to the extent that it is more likely than not that future taxable profits will be available against which the asset can be utilised. |
|
|
2018 |
2018 |
2018 |
2017 |
2017 |
2017 |
|
|
Revenue |
Capital |
Total |
Revenue |
Capital |
Total |
|
|
£ |
£ |
£ |
£ |
£ |
£ |
|
a) Analysis of tax charge: |
|
|
|
|
|
|
|
UK Corporation tax on profits/(losses) for the year |
243,837 |
(177,334) |
66,503 |
286,870 |
(169,388) |
117,482 |
|
Total current tax charge/(credit) |
243,837 |
(177,334) |
66,503 |
286,870 |
(169,388) |
117,482 |
|
Corporation tax is based on a rate of 19% (2017: 19.25%) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
b) Profit/(loss) on ordinary activities before tax |
1,574,376 |
(2,757) |
1,571,619 |
1,666,131 |
2,469,600 |
4,135,731 |
|
Profit/(loss) on ordinary activities multiplied by main company rate of corporation tax in the UK of 19% (2017: 19.25%) |
299,131 |
(523) |
298,608 |
320,730 |
475,398 |
796,128 |
|
Effect of: |
|
|
|
|
|
|
|
UK dividends not taxable |
(55,278) |
- |
(55,278) |
(33,966) |
- |
(33,966) |
|
Unrealised (gains)/losses not taxable |
- |
(245,889) |
(245,889) |
- |
152,621 |
152,621 |
|
Realised losses/(gains) not taxable |
- |
69,078 |
69,078 |
|
(797,407) |
(797,407) |
|
Overprovision in prior period |
(26) |
- |
(26) |
- |
- |
- |
|
Unrelieved expenditure |
10 |
- |
10 |
106 |
- |
106 |
|
Actual tax charge/(credit) |
243,837 |
(177,334) |
66,503 |
286,870 |
(169,388) |
117,482 |
Tax relief relating to investment adviser fees is allocated between revenue and capital where such relief can be utilised.
No asset of liability has been recognised for deferred tax in relation to capital gains or losses on revaluing investments as the Company is exempt from corporation tax in relation to capital gains or losses as a result of qualifying as a Venture Capital Trust.
There is no potential liability to deferred tax (2017: £nil). There is no unrecognised deferred tax asset in 2018 (2017: £nil).
6 Basic and diluted earnings per share
|
|
2018 |
2017 |
|
|
£ |
£ |
|
Total earnings after taxation: |
1,505,116 |
4,018,249 |
|
Basic and diluted earnings per share (note a) |
2.20p |
7.59p |
|
Net revenue from ordinary activities after taxation |
1,330,539 |
1,379,261 |
|
Basic and diluted revenue return per share (note b) |
1.95p |
2.60p |
|
|
|
|
|
Net unrealised capital gains/(losses) on investments |
1,294,148 |
(792,838) |
|
Net realised capital (losses)/gains on investments |
(363,572) |
4,142,375 |
|
Capital expenses (net of taxation) |
(755,999) |
(710,549) |
|
Total capital return |
174,577 |
2,638,988 |
|
Basic and diluted capital return per share (note c) |
0.25p |
4.99p |
|
Weighted average number of shares in issue in the year |
68,499,583 |
52,973,939 |
|
Notes: a) Basic earnings per share is total earnings after taxation divided by the weighted average number of shares in issue.
b) Revenue earnings per share is the revenue earnings after taxation divided by the weighted average number of shares in issue.
c) Capital earnings per share is the total capital earnings after taxation divided by the weighted average number of shares in issue. |
There are no instruments that will increase the number of shares in issue in future. Accordingly, the above figures currently represent both basic and diluted earnings per share.
7 Dividends paid and payable
|
Dividends payable are recognised as distributions in the Financial Statements when the Company's liability to pay them has been established. This liability is established for interim dividends when they are paid, and for final dividends when they are approved by the shareholders, usually at the Company's Annual General Meeting.
A key judgement in applying the above accounting policy is in determining the amount of minimum dividend to be paid in respect of a year. The Company's status as a VCT means it has to comply with Section 259 of the Income Tax Act 2007, which requires that no more than 15% of the income from shares and securities in a year can be retained from the revenue available for distribution for the year. |
|
Amounts recognised as distributions to equity shareholders in the year: |
|
|
||||
|
Dividend |
Type |
For year ended 31 December |
Pence per share |
Date Paid |
2018 £ |
2017 £ |
|
Second interim |
Income |
2016 |
1.00p |
17/03/2017 |
- |
490,434 |
|
Second interim |
Capital* |
2016 |
6.00p |
17/03/2017 |
- |
2,942,602 |
|
Interim |
Income |
2017 |
1.00p |
11/09/2017 |
- |
497,394 |
|
Interim |
Capital |
2017 |
2.00p |
11/09/2017 |
|
994,788 |
|
Interim |
Capital* |
2017 |
15.00p |
11/09/2017 |
- |
7,460,911 |
|
Second interim |
Income |
2017 |
1.00p |
21/12/2017 |
- |
672,563 |
|
Second interim |
Capital |
2017 |
2.00p |
21/12/2017 |
- |
1,345,126 |
|
Interim |
Capital* |
2018 |
4.00p |
19/06/2018 |
2,734,344 |
- |
|
|
|
|
|
|
2,734,344** |
14,403,818 |
* - 6.00p of the dividend paid on 17 March 2017, 15.00p of the dividend paid on 11 September 2017, and the 4.00p dividend paid on 19 June 2018 were paid out of the Company's special distributable reserve.
** - £2,734,344 (2017: £14,403,818) disclosed above differs to that shown in the Statement of Cash Flows of £2,150,852 (2017: £11,584,256) due to £583,492 (2017: £2,819,562) of new shares issued as part of the DIS Scheme.
|
Proposed distributions to equity holders after the year end |
||||||
|
Dividend |
Type |
For the year ended 31 December |
Pence per share |
Date Payable |
2018 £ |
2017 £ |
|
Final |
Income |
2018 |
1.75p |
28/05/2019 |
1,194,952 |
- |
|
Final |
Capital* |
2018 |
2.25p |
28/05/2019 |
1,536,368 |
- |
|
|
|
|
|
|
2,731,320 |
- |
* This dividend will be paid out of the Company's special distributable reserve.
Any proposed final dividend is subject to approval by shareholders at the Annual General Meeting and has not been included as a liability in these financial statements.
|
Set out below are the total income dividends payable in respect of the financial year, which is the basis on which the requirements of Section 274 of the Income Tax Act 2007 are considered. |
|
Recognised income distributions in the financial statements for the year |
|
|
||||
|
Dividend |
Type |
For year ended 31 December |
Pence per share |
Date paid/payable |
2018 £ |
2017 £ |
|
Revenue available for distribution by way of dividends for the year
|
1,330,539 |
1,379,261 |
||||
|
Interim |
Income |
2017 |
1.00p |
11/09/2017 |
- |
497,394 |
|
Second interim |
Income |
2017 |
1.00p |
21/12/2017 |
- |
672,563 |
|
Final |
Income |
2018 |
1.75p |
28/05/2019 |
1,194,952 |
- |
|
Total income dividends for the year |
|
1,194,952 |
1,169,957 |
|||
8 Investments at fair value
|
The most critical estimates, assumptions and judgements relate to the determination of the carrying value of investments at "fair value through profit and loss" (FVTPL). All investments held by the Company are classified as FVTPL and measured in accordance with the International Private Equity and Venture Capital Valuation ("IPEV") guidelines, as updated in December 2018. This classification is followed as the Company's business is to invest in financial assets with a view to profiting from their total return in the form of capital growth and income.
Purchases and sales of unlisted investments are recognised when the contract for acquisition or sale becomes unconditional. For investments actively traded on organised financial markets, fair value is generally determined by reference to Stock Exchange market quoted bid prices at the close of business on the balance sheet date. Purchases and sales of quoted investments are recognised on the trade date where a contract of sale exists whose terms require delivery within a time frame determined by the relevant market where the terms of the disposal state that consideration may be received at some future date and, subject to the conditionality and materiality of the amount of deferred consideration, an estimate of the fair value, discounted for the true value of money, may be recognised through the Income Statement. In other cases, the proceeds will only be recognised once the right to receive payment is established and there is no reasonable doubt that payment will be received.
Unquoted investments are stated at fair value by the Directors at each measurement date in accordance with appropriate valuation techniques, which are consistent with the IPEV guidelines:
(i) Each investment is considered as a whole on a 'unit of account' basis, alongside consideration of:
The price of new investments made, if deemed to be made as part of an orderly transaction, are considered to be at fair value at the date of the transaction. The inputs that derived the investment price are calibrated 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 shares may be valued by applying a suitable price-earnings ratio, revenue or gross profit multiple to that company's historic, current or forecast post-tax earnings before interest and amortisation, or revenue, or gross profit (the ratio used being based on a comparable sector but the resulting value being adjusted to reflect points of difference identified by the Investment Adviser compared to the sector including, inter alia, scale and liquidity).
or:-
- where a company's underperformance against plan indicates a diminution in the value of the investment, provision against the price of a new investment is made, as appropriate.
(ii) Premiums, to the extent that they are considered capital in nature, and that they will be received upon repayment of loan stock investments, are accrued at fair value when the Company receives the right to the premium and when considered recoverable.
(iii) Where a multiple or the price of recent investment less impairment basis is not appropriate and overriding factors apply, a discounted cash flow, net asset valuation or realisation proceeds basis may be applied.
Capital gains and losses on investments, whether realised or unrealised, are dealt with in the profit and loss and revaluation reserves and movements in the period are shown in the Income Statement.
All investments are initially recognised and subsequently measured at fair value. Changes in fair value are recognised in the Income Statement.
A key judgement made in applying the above accounting policy relates to investments that are permanently impaired. Where the value of an investment has fallen permanently below the price of recent investment, the loss is treated as a permanent impairment and as a realised loss, even though the investment is still held. The Board assesses the portfolio for such investments and, after agreement with the Investment Adviser, will agree the values that represent the extent to which an investment loss has become realised. This is based upon an assessment of objective evidence of that investment's future prospects, to determine whether there is potential for the investment to recover in value.
The methods of fair value measurement are classified into hierarchy based on the reliability of the information used to determine the valuation.
- Level 1 - Fair value is measured based on quoted prices in an active market.
- Level 2 - Fair value is measured based on directly observable current market prices or indirectly being derived from market prices.
- Level 3 - Fair value is measured using valuation techniques using inputs that are not based on observable market data. |
Movements in investments during the year are summarised as follows:
|
|
Traded on AIM |
Unquoted equity shares |
Unquoted preference shares |
Unquoted Loan stock |
Total |
|
|
|
£ |
£ |
£ |
£ |
£ |
|
|
Cost at 31 December 2017 |
200,028 |
14,062,390 |
13,432 |
18,890,038 |
33,165,888 |
|
|
|
|
|
|
|
|
|
|
Unrealised gains/(losses) at 31 December 2017 |
74,821 |
(1,274,615) |
440,657 |
1,277,089 |
517,952 |
|
|
|
|
|
|
|
|
|
|
Permanent impairment in value of investments as at 31 December 2017 |
- |
(2,135,400) |
- |
(64,387) |
(2,199,787) |
|
|
|
|
|
|
|
|
|
|
Valuation at 31 December 2017 |
274,849 |
10,652,375 |
454,089 |
20,102,740 |
31,484,053 |
|
|
|
|
|
|
|
|
|
|
Purchases at cost |
- |
3,630,553 |
- |
2,252,253 |
5,882,806 |
|
|
|
|
|
|
|
|
|
|
Sale proceeds (Notes a and b) |
- |
(499,486) |
(114,706) |
(1,158,689) |
(1,772,881) |
|
|
|
|
|
|
|
|
|
|
Net realised gains/(losses) in the year |
- |
344,371 |
- |
(707,943) |
(363,572) |
|
|
|
|
|
|
|
|
|
|
Unrealised (losses)/gains in the year (Note c) |
(66,505) |
1,684,957 |
- |
(550,198) |
1,068,2541 |
|
|
Valuation at 31 December 2018 |
208,344 |
15,812,770 |
339,383 |
19,938,163 |
36,298,660 |
|
|
|
|
|
|
|
|
|
|
Cost at 31 December 2018 |
200,028 |
16,903,109 |
13,382 |
19,786,223 |
36,902,742 |
|
|
|
|
|
|
|
|
|
|
Unrealised gains at 31 December 2018 |
8,316 |
1,048,683 |
326,001 |
239,578 |
1,622,5781 |
|
|
|
|
|
|
|
|
|
|
Permanent impairment in value of investments at 31 December 2018 (Note d) |
- |
(2,139,022) |
- |
(87,638) |
(2,226,660) |
|
|
Valuation at 31 December 2018 |
208,344 |
15,812,770 |
339,383 |
19,938,163 |
36,298,660 |
|
Details of investment transactions such as disposal proceeds, valuation movements cost and carrying value at the end of the previous year are contained in the Investment Portfolio Summary.
Net unrealised gains above of £1,068,254 differ from that shown in the Income Statement of £1,294,148. The difference of £225,894 is the estimated fair value of contingent consideration due in relation to the sale of Entanet Holdings in the prior year, recognised at the Balance Sheet date which has been included within Other debtors in note 10. The £225,894 contingent consideration also explains the difference between unrealised gains at 31 December 2018 above of £1,622,578 and that shown within the Revaluation Reserve on the balance sheet of £1,848,472. A further sum of £250,994 is potentially payable on 1 August 2019. There are conditions attached to this deferred consideration such that the amount receivable is uncertain and so has not been recognised in the current year's financial statements.
Note a) Disposals of investment portfolio companies during the year were:
|
Company |
Type |
Investment cost |
Disposal proceeds |
Valuation at 31 December 2017 |
Realised (loss)/ gain in year |
|
|
|
£ |
£ |
£ |
£ |
|
Fullfield Limited (Motorclean) |
Realisation |
1,131,444 |
638,560 |
1,185,517 |
(546,957) |
|
Lightworks Software Limited |
Realisation |
9,329 |
197,433 |
33,847 |
163,586 |
|
SparesFinder Limited |
Realisation |
250,854 |
159,297 |
- |
159,297 |
|
Hemmels Limited1 |
Realisation and permanent impairment |
493,830 |
234,826 |
493,830 |
(282,254) |
|
The Plastic Surgeon Holdings Limited (formerly TPSFF Holdings Limited) |
Loan repayments and repurchase of preference shares |
144,307 |
287,815 |
287,815 |
- |
|
MPB Group Limited |
Loan repayment |
112,194 |
112,194 |
112,194 |
- |
|
Other |
|
3,994 |
142,756 |
- |
142,756 |
|
|
|
2,145,952 |
1,772,881 |
2,113,203 |
(363,572) |
|
1 - New investment in year. |
|
Note b) Investment proceeds shown above of £1,772,881 differs from the sale proceeds shown in the Statement of Cash flows of £4,531,646 by £2,758,765. These funds, received in 2018, related to the disposal of Gro Group at the end of 2017 and were held in debtors at the 2017 year end.
Note c) The major components of the increase in unrealised valuations of £1,068,254 in the year were increases of £571,424 in EOTH Limited, £524,542 in The Plastic Surgeon Holdings Limited (formerly TPSFF Holdings Limited), £352,059 in CGI Creative Graphics International Limited, £320,085 in Pattern Analytics Limited (trading as Biosite), £305,533 in Proactive Group Holdings Inc, £288,102 in MPB Group Limited, and £278,408 in ASL Technology Holdings Limited. This increase was partly offset by the falls of £704,223 in BookingTek Limited, £681,822 in Manufacturing Services Investment Limited (trading as Wetsuit Outlet), £537,853 in Veritek Global Limited, £376,373 in Redline Worldwide Limited, and £330,491 in Tharstern Group Limited. The decrease in unrealised valuations of the loan stock investments above reflects the changes in the entitlement to loan premiums, and/or in the underlying enterprise value of the investee company. The decrease does not arise from assessments of credit risk or market risk upon these instruments. Note d) During the year, permanent impairments of the cost of investments have increased from £2,199,787 to £2,226,660. The increase of £26,873 is due the impairments of two investee companies, offset slightly by the disposal of a company that had previously been impaired. |
9 Cash at bank and Current Investments
|
Cash equivalents, for the purposes of the Statement of Cash flows, comprises bank deposits repayable on up to three months' notice and funds held in OEIC money-market funds. Current asset investments are the same but also include bank deposits that mature after three months. Current asset investments are disposable without curtailing or disrupting the business and are readily convertible into known amounts of cash at their carrying values at immediate or up to three months' notice. Cash, for the purposes of the Statement of Cash Flows is cash held with banks in accounts subject to immediate access. Cash at bank in the Balance Sheet is the same. |
||
|
|
||
|
|
2018 |
2017 |
|
£ |
£ |
|
|
OEIC Money market funds |
16,830,389 |
19,494,921 |
|
Cash equivalents per Statement of Cash Flows |
16,830,389 |
19,494,921 |
|
Bank deposits that mature after three months |
2,000,000 |
2,000,000 |
|
Current asset investments |
18,830,389 |
21,494,921 |
|
Cash at bank |
2,541,058 |
2,847,849 |
10 Post balance sheet events
On 31 January 2019, the Plastic Surgeon Holdings Limited (formerly TPSFF Holdings Limited) carried out a further repurchase of preference shares in which £0.06 million of proceeds were received by the Company.
On 15 February 2019, £0.25 million of contingent consideration was received as part of the sale of Entanet Holdings in August 2017.
11 Statutory information
The financial information set out in these statements does not constitute the Company's statutory accounts for the year ended 31 December 2017 but is derived from those accounts. Statutory accounts will be delivered to the Registrar of Companies after the Annual General Meeting. The auditors have reported on these accounts and their report was unqualified and did not contain a statement under section 498(2) of the Companies Act 2006.
12 Annual Report
The Annual Report will be published on the Company's website at www.migvct.co.uk shortly and shareholders who have not requested a hard copy of the report will shortly receive notification from the Company on how to download a pdf of the Report from the website. Shareholders and members of the public who wish to receive a hard copy of the Annual Report, may request a copy by writing to the Company Secretary, Mobeus Equity Partners LLP, 30 Haymarket (4th floor), London SW1Y 4EX or by email: vcts@mobeus.co.uk.
13 Annual General Meeting
The Annual General Meeting of the Company will be held at 2.00 p.m. on Friday, 10 May 2019 at The Clubhouse, 8 St James's Square, London SW1Y 4JU.
Contact details for further enquiries:
Robert Brittain or Robert King of Mobeus Equity Partners LLP (the Company Secretary) on 020 7024 7600 or by email 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, of forms part of, this announcement.
This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.
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