Half-year Report

RNS Number : 0815Z

Mobeus Income & Growth 4 VCT PLC

15 September 2020

 

MOBEUS INCOME & GROWTH 4 VCT PLC

HALF YEAR RESULTS FOR THE SIX MONTHS ENDED 30 JUNE 2020

Mobeus Income & Growth 4 VCT plc ("the Company") today announces its half-year results for the six months ended 30 June 2020.

As at 30 June 2020:

Net assets: £54.57 million

Net asset value ("NAV") per share: 64.59 pence

Financial Highlights

Results for the six months ended 30 June 2020

· Net asset value total return¹ per share was (0.4)% for the six months. 

· Share price total return¹ per share fell by 5.7% for the six months.

· The Company declared an interim dividend in respect of the current year of 6.00 pence per share, paid to Shareholders on 7 May 2020.

· The Company realised investments for a total of £6.75 million, a gain of £1.58 million for the six months.

· The Company invested £0.81 million into two new growth capital investments and £1.15 million into two existing portfolio companies.

1   Alternative Performance measure (APM). See glossary of terms on page 28 of the Half-Year Report.

Performance summary

The longer-term trend of performance on this measure is shown in the chart below:-

Period	Net asset value (NAV)	Cumulative dividends paid to date	Cumulative total shareholder return (NAV basis) since launch
	(pence per share)	(pence per share)	(pence per share)
As at 30 June 2020	64.59	134.20	198.79
As at 31 December 2019	74.90	124.20	199.10
As at 31 December 2018	84.79	105.20	189.99
As at 31 December 2017	86.57	101.20	187.77
As at 31 December 2016	107.57	73.20	180.77
As at 31 December 2015	117.89	62.20	180.09

The chart above shows the recent past performance of the original funds raised in 1999. The original subscription price was 200p per share before the benefit of income tax relief. Subscription prices from subsequent fundraisings and historic performance data from 2008 are shown in the Investor Performance Appendix at 30 June 2020 on the Company's website at: www.mig4vct.co.uk ,  where they can be accessed by clicking on the word "table" under "Reviewing the performance of your investment" heading on the home page.

On 1 August 2006, Mobeus became sole Investment Adviser to the Company. The cumulative NAV total return at this date was 122.51 pence.

Chairman's Statement

I am pleased to present the Company's Half-Year Report for the six months ended 30 June 2020.

Overview

The 2020 half-year was preceded by a commendable NAV total return of 10.7% for the year ended 31 December 2019. This good performance continued in the early part of 2020 with two profitable realisations, Biosite and Auction Technology Group, the latter of which being the Company's most successful exit in its history.

Midway through this half-year, COVID-19 and the UK Government's lockdown measures provoked very significant uncertainty and instability. This resulted in a significant dip in consumer and business confidence and public markets saw a sharp fall in the first quarter of the year.

Over this unprecedented time, the Board has liaised closely with the Investment Adviser, Mobeus Equity Partners LLP ("Mobeus"), who responded well in ensuring that all practical steps were being taken to enable each company to trade through the crisis where possible and could return to grow in value thereafter.

Amongst many portfolio initiatives, all investee companies were alerted to, and some utilised available government support packages. The Company also provided loan interest payment holidays to some portfolio companies, generating vital cash headroom for the portfolio during the lockdown period.

The immediate impact for Shareholders of the COVID-19 crisis was that a number of valuation adjustments were made at the end of March resulting in a fall of 10.1% in underlying NAV per share for the quarter to 63.30 pence. These adjustments were partly market related, but also partly in response to COVID-19's impact on specific market segments and investee companies. In this context it is fortunate that the Company's portfolio has a relatively limited exposure to the travel and hospitality sectors. This fall in NAV was tempered by the beneficial impact of the sale of Auction Technology Group.

In the second quarter, greater clarity has emerged on the impact of the crisis upon the portfolio. To date, this has been more modest than was initially expected and it has become apparent that there have been several portfolio beneficiaries arising from a structural change in activity, behaviour and consumer purchasing habits. Much of the portfolio has demonstrated a strong degree of resilience. Also, quoted markets have seen a significant rally since the March low point, although the FTSE-100 Index has still fallen by almost a fifth over the six months under review. Overall, the view of the Board and Mobeus is that the environment for our investee companies has been less volatile and less uncertain than initially thought, such that the valuation of the portfolio recovered strongly at the end of June. Over the six months to 30 June 2020, the NAV total return was stable which the Board considers a very creditable result in this environment. Further information is set out under Performance in my Statement below.

A number of transactions occurred during th e period. In the first quarter, the Company made two profitable portfolio realisations: Biosite and Auction Technology Group, and a partial disposal of Omega Diagnostics occurred in the second quarter. The exit of Auction Technology Group was the Company's most successful investment to date. In May, two follow-on investments were made into existing portfolio companies in Rotageek and MyTutor, and two new investments were made into Bella & Duke and Andersen EV in February and June respectively. Since the period-end, a follow-on investment of £1.12 million was made into Buster and Punch Holdings Limited. The Board is also encouraged by the recent profitable disposals, following the period-end, of Tovey Management (trading as Access IS) and Blaze Signs Holdings Limited and a further partial realisation of half of its remaining holding in Omega Diagnostics.  These transactions realised cash proceeds totalling £6.18 million in what remains a challenging investment environment.  The impact of these realisations on the NAV per share of 64.59 pence at 30 June 2020 is estimated to be an increase of 1.44 pence per share. This is in isolation to any other matters that may affect NAV per share.  Further details of the investment activity are contained in the Investment Adviser's Review.

Performance

The Company's NAV total return per share was (0.4)% for the six months to 30 June 2020 (2019: 8.5%). This represents a material recovery in NAV per share compared to that announced at the height of the pandemic as at 31 March 2020. The share price total return was a fall of 5.7% (2019: increase of 5.3%), at 30 June, mainly because the share price at 30 June is by reference to the last announced but lower NAV per share of the Company being at 31 March 2020.

Although the NAV was reduced by falls in the valuations of specific portfolio companies, reflecting the impact of COVID-19, this adverse impact was partly offset by a number of factors.  Positive returns came both from realised gains from portfolio exits as well as a strong revenue return. Several of the Company's investment structures incorporate preference structures, such that any reduction in the value of the enterprise does not feed directly into the same reduction in the value of the Company's investment. In addition, the Company has significant liquidity which, in accordance with its policy, has been invested in lower risk liquidity funds and bank deposit accounts and these have retained their value.

The Board therefore believes that the Company's performance has demonstrated a good degree of resilience over a very volatile half-year. At the period-end, your Company was ranked 13th out of 31 Generalist VCTs over ten years and 17th out of 43 over five years, in the Association of Investment Companies' analysis of NAV Cumulative Total Return. Shareholders should note that these figures do  not reflect the increased NAV per share disclosed in this Report.

For further details on the performance of the Company, please refer to the Investment Adviser's Report.

Dividends

A third interim dividend for last year of 4.00 pence per share was paid on 10 January 2020. On 2 April 2020, the Board declared an interim dividend of 6.00 pence per share in respect of the current financial year, paid to Shareholders on 7 May 2020 whose names were on the Register on 14 April 2020.

The Company's target of paying a dividend of at least 4.00 pence per share in respect of each financial year has been reached or exceeded in each of the last ten years. While the Board has not changed the dividend target, ordinary dividend payments are more likely to be volatile and, at least over the medium-term, may be lower than have been paid in the recent past. The gradual move of the portfolio to growth capital investments may make the target more difficult to achieve in future financial years without recourse to the Company's reserves.

Shareholders should note that there may continue to be circumstances where the Company is required to pay dividends in order to maintain its regulatory status as a VCT, for example, to stay above the minimum percentage of assets required to be held in qualifying investments. Such dividends may cause the Company's NAV per share to reduce by a corresponding amount.

Investment portfolio

In the context of a very challenging business environment, the portfolio has performed well during this period. The overall value has decreased by £0.47 million (2019: increase of £4.60 million), or (1.2)% (2019: increase of 12.7%) on a like-for-like basis, compared to the start of the year. This fall was comprised of a net unrealised decrease in valuations of £2.05 million, partially offset by £1.58 million in realised gains over the six- month period. The portfolio was valued at £33.28 million at the period-end (31 December 2019: £38.54 million).

During the six-months under review, the Company invested a total of £1.96 million, (2019: £1.79 million) into two new (2019: two) and two existing (2019: nil) investments.

The new investments were:

● Bella & Duke - A premium frozen raw dog food provider

£0.62 million

● Andersen EV - An electric vehicle charge point business

£0.19 million

and the existing investments were:

● MyTutor - A digital marketplace for school tutoring

£0.71 million

● Rotageek - A workforce management software provider

£0.44 million

The Company realised investments in Pattern Analytics (trading as Biosite) and Turner Topco (trading as Auction Technology Group) during the period, which, combined with other capital receipts, generated total proceeds of £6.75 million.

The realisation of Auction Technology Group achieved a substantial gain over cost and represented proceeds of £4.18 million and a gain of £1.15 million in the period. Over the 11½ year life of the investment, total proceeds of £9.03 million have been received, an overall multiple of over 4.5x original cost and an IRR of 28.9%.

Pattern Analytics (trading as Biosite), an investment made after the 2015 rule change was realised for proceeds of £1.98 million. Over the three-year life of the investment, this company generated a return on original cost of 1.5x and an IRR of 21.0%.

Other capital proceeds of £0.59 million and realised gains of £0.43 million were principally generated from Omega Diagnostics which was partially realised in the period, Redline Worldwide, an investment realised in a prior period and a loan repayment from BookingTek, an existing portfolio company.

Following the period-end, there were additional realisations from:

● Access IS - £6.24 million cash proceeds received over the lift of the investment equating to a 2.5x multiple of cost and an IRR of 23.4%;

● Blaze - £1.55 million cash proceeds received over the life of the investment:  a 2.5x multiple of cost and an IRR of 13.1%.

Details of this investment activity and the performance of the portfolio are contained in the Investment Adviser's Review and the Investment Portfolio Summary.

Revenue account

The results for the period are set out in the Unaudited Condensed Income Statement and show a revenue return (after tax) of 1.28 pence per share (2019: 0.90 pence per share). The revenue return for the period of £1.06 million has increased from last year's comparable figure of £0.61 million. This increase is mainly due to a significant receipt of loan interest arising from the sale of Auction Technology Group, partially offset by a number of provisions against loan interest.

Fundraising

The Board was very pleased with the support in respect of the Company's Offer for Subscription which was launched on 25 October 2019. This Offer became fully subscribed within two months and raised £13.00 million in total. The Company allotted a total of 18,450,535 shares of 1 penny each in the Company on 8 January and 2 April 2020. The Board extends a warm welcome to all new Shareholders.

Share buy-backs

During the six months under review, the Company bought back and cancelled 766,590 of its own shares, representing 1.2% (2019: 1.0%) of the shares in issue at the beginning of the period, at a total cost of £0.42 million (2019: £0.51 million) inclusive of expenses.

It is the Company's policy to cancel all shares bought back in this way. The Board regularly reviews its buyback policy and currently seeks to maintain the discount at which the Company's shares trade at no more than 5% below the latest published NAV.

Liquidity

Following the Company's successful fundraising and significant realisation proceeds, cash or near cash resources held by the Company as at 30 June 2020 were £21.53 million or 39.4% of net assets. After the period-end, following the realisations of Access and Blaze, the partial realisation of Omega Diagnostics, as well as the further investment into Buster and Punch, the pro forma level of liquidity will be £26.60 million or 47.6% of net assets. The Board considers the Company to be in a strong cash position.

Shareholder communications

May I remind you that the Company has its own website which is available at www.mig4vct.co.uk containing useful information for Shareholders.

The Investment Adviser held the annual Shareholder event on 4 February 2020 and is planning to hold a virtual event in the first quarter of 2021. Details will be notified to Shareholders when finalised and will be shown on the Company's website: www.mig4vct.co.uk .

Succession

As stated in the 2019 Annual Report, I shall be stepping down as Chairman after a long tenure as a director of the Company, during which time a considerable transformation in prospects and performance has taken place. A full recruitment process was conducted using an independent employment consultant, and I am delighted to announce that my successor is Jonathan Cartwright who joined the Board as a director and Chairman designate at the recent Board meeting. He will be taking over the Chair with effect from 1 October following my retirement on 30 September 2020. He has served, in the past, on the Board of Caledonia Investments PLC and on The Income & Growth VCT plc. He currently sits, inter alia, on the Board of British Smaller Companies VCT PLC and BMO Capital and Income Investment Trust PLC. I am sure that he will continue to deliver good results for Shareholders and safeguard their interests. I would like to welcome him on behalf of all Shareholders.

Outlook

The full impact of COVID-19 is still unclear and is likely to be felt for several years to come. Nevertheless, your Board considers that your Company is well positioned to cope with most of the likely scenarios in so far as they can presently be foreseen. The successful realisations and recent fundraising have given the Company strong liquidity not only to support the existing portfolio if appropriate, but also to capitalise on opportunities which may arise for new investment. The portfolio still comprises a foundation of mature investments that are still providing an income return, as well as a younger, growth capital portfolio seeking to achieve scale, higher levels of profitability and hence value.

The challenges arising from the COVID-19 pandemic should not be underestimated. As of the date of this report the degree of further damage which might be inflicted, and the success or otherwise of governments' handling of the pandemic around the world, cannot be predicted. COVID-19 is a change accelerator. Some businesses, and business models, will be overwhelmed, but it is also noticeable that other business models, for example those that promote heavily automated delivery systems, are prospering. However, once conditions stabilise, the Board and Mobeus believe that attractive new and follow-on investment opportunities will still emerge and are pleased to see that a degree of definite recovery has already been achieved.

Finally, I would like to take this opportunity once again to thank Shareholders for their continued support.

Christopher Moore

Chairman

15 September 2020

Investment Policy

The Investment Policy is designed to meet the Company's objective.

Investments

The Company invests primarily in a diverse portfolio of UK unquoted companies. Investments are made selectively across a number of sectors, principally in established companies. Investments are usually structured as part loan stock and part equity in order to produce a regular income stream and to generate capital gains from realisations.

There are a number of conditions within the VCT legislation which need to be met by the Company and which may change from time to time. The Company will seek to make investments in accordance with the requirements of prevailing VCT legislation.

Asset allocation and risk diversification policies, including the size and type of investments the Company makes, are determined in part by the requirements of prevailing VCT legislation. No single investment may represent more than 15% (by VCT tax value) of the Company's total investments at the date of investment.

Liquidity

The Company's cash and liquid funds are held in a portfolio of readily realisable interest bearing investments, deposit and current accounts, of varying maturities, subject to the overriding criterion that the risk of loss of capital be minimised.

Borrowing

The Company's articles of association permit borrowings of amounts up to 10% of the adjusted capital and reserves (as defined therein). However, the Company has never borrowed and the Board would only consider doing so in exceptional circumstances.

Investment Review

COVID-19 Pandemic

In March 2020, in response to the COVID-19 pandemic, the UK Government introduced lockdown and social distancing measures. These measures had an immediate adverse impact on UK businesses, with many companies experiencing a significant reduction in consumer and business demand. Businesses' ability to trade was further impacted by restrictions on their employees' working practices and disruption to their supply chains. The six months to 30 June 2020 has been characterised by ongoing volatility and uncertainty caused by these lockdown measures, together with global stock market falls. Following the low point in March however, there has been a strong trend of recovery in market and business activity levels.

Looking forward, there are still uncertainties ahead. The impact on transaction activity has been mixed. New investment activity has been low due to difficulties of appraisal and diligence in lockdown and owners of businesses being unwilling to accept downward price adjustments thus far. The level of portfolio follow-on investment has been higher and there are opportunities to back known portfolio companies that are achieving strong relative performance. The realisation activity outlook continues to be positive with several approaches received from trade and financial investors to a number of investee companies.

Portfolio review

Overall, the value of the portfolio decreased by £0.47 million over the period comprising a decrease of £2.05 million in the unrealised portfolio and gains of £1.58 million through realisations. Despite this fall in the unrealised portfolio, it represents a recovery of the majority of the value lost in the first quarter. It is important to note that the usual approach to portfolio valuation by the Investment Adviser continued to be applied throughout this period and that the recovery in the second quarter was not all market related. It reflected a number of other factors such as earnings and revenues being more resilient than expected, the removal of adjustments related to the uncertainty that were put in place during the March quarter, and improved cash generation as the UK Government lock down restrictions were eased.

There have been a number of portfolio companies that have been clear beneficiaries from UK lockdown which have traded strongly throughout. There is a reasonable expectation that some of these gains will prove permanent. The majority of the portfolio has remained resilient, more so than first thought at the 31 March valuation point which coincided with the height of uncertainty. In particular, there have been very few COVID-19 temporary closures, Tapas Revolution being the only one of note. Several portfolio companies that saw significant falls in activity early in the crisis are now trading strongly again whilst a number have raised capital to ensure that they are ready to capitalise on demand when it returns.

In the six months to 30 June 2020, the Company made two follow-on investments of £0.71 million into MyTutor and £0.44 million into Rotageek. Two new growth capital investments have also been made into Bella & Duke (£0.62 million), a premium frozen raw dog food provider, and Andersen EV (£0.19 million), a manufacturer of premium electric vehicle (EV) chargers.

Following the period-end, there was an additional follow-on investment of £1.12 million into Buster and Punch.

The Company realised its investments in Biosite and Auction Technology Group during the period, receiving a total of £6.16 million in proceeds, and contributed to total receipts of £6.75 million during the period. The investment in Biosite generated proceeds of £2.07 million over the life of the investment and contributed to a gain over original cost of 1.5x. Auction Technology Group generated a realised gain in the period of £1.15 million. This investment generated proceeds over the life of the investment of £9.03 million compared to an original cost of £2.00 million, a multiple on cost of 4.5x over the 11½ years this investment was held - an exceptional return for Shareholders.

Also, following a significant increase in its share price, the Company received £0.46 million from the partial realisation of half its holding in Omega Diagnostics. This represented a realised gain of £0.34 million in the period and contributed to an attractive return to date of 4.6x multiple on cost and an IRR of 17.7%, securing a positive return overall whilst maintaining a degree of exposure to any potential upside.

Following the period-end, there were additional realisations of Access IS and Blaze, receiving a total of £5.89 million in cash proceeds, as well as a further partial realisation of Omega Diagnostics generating £0.29 million.

The portfolio's activity in the six months to 30 June 2020 is summarised as follows:

	2020 £m	2019 £m
Openingportfolio value	38.54	36.52
Newandfollow-on investments	1.96	1. 79
Disposalproceeds	(6.75)	(6.82)
Netrealisedgains	1.58	1.52
V aluation movements	(2. 05)	3.08
Portfolio valueat 30June	33.28	36. 09

The investment and divestment activity during the period increased the proportion of the portfolio regarded as growth capital investments by value to 68.6% (including AIM and legacy) at the period-end (31 December 2019: 62.0%). The portfolio decreased from 39 to 38 investments at the period-end.

The portfolio's contribution to the overall results of the Company for the six-month period is summarised as follows:

InvestmentPortfolio CapitalMovement	2020 £m	2019 £m
Increaseinthe valueofunrealised investments	3.77	4.63
Decreaseinthe valueofunrealised investments	(5.82)	(1.55)
Net (decrease) / increase in the value of unrealised investments	(2. 05)	3. 08
Realised gains	1. 62	1.52
Realised losses	(0.04)	-
Netrealisedgainsin theperiod	1.58	1.52
Netinvestment portfoliomovementin theperiod	(0 .47)	4. 60

Valuation changes of portfolio investments still held

The valuation reductions of £5.82 million principally arise from the Investment Adviser's COVID-19 impact review of the portfolio.

Within total valuation decreases, the main reductions were CGI Creative Graphics International - £1.15 million, Tapas Revolution - £1.13 million, and Media Business Insight - £0.80 million. These three companies saw some of the most significant impact of a sudden decline in demand for their products or services which, even as restrictions are being eased, may take time for value to recover.

By contrast some investee companies' trading has benefited from the lockdown; The main valuation increases included Access IS - £0.97 million, Virgin Wines - £0.71 million, and Parsley Box - £0.66 million. Access IS's valuation reflects the long-term nature of many of its projects. Both Virgin Wines and Parsley Box have generated record earnings and revenues respectively and time will tell if this increased demand will continue in the medium-term.

The period also saw portfolio companies, Jablite and Super Carers, appointing administrators. These two companies were struggling before the impact of COVID-19. Valuation reductions for these companies had already been made, so there has been little impact on shareholder value from these administration processes.

Investment portfolio yield

In the period under review, the Company received the following amounts in interest and dividend income:

InvestmentPortfolio Yield	2020 £m	2019 £m
Interestreceivablein theperiod	1.57	0.98
Dividendsreceivable intheperiod	0.07	0.07
Total portfolioincome intheperiod1	1. 64	1. 05
Portfolio valueat 30June	33.28	36. 09
Portfolio Income Yield(Incomeforthe halfyearasa%of Portfoliovalueat 30June)	4.9%	2.9%

1 Total portfolio income in the period is generated solely from investee companies within the portfolio. See Note 4 of the Financial Statements for all income receivable by the Company.

The increase in income was mainly due to interest of £1.09 million received on the loan instruments in Auction Technology Group being paid, as part of the sale transaction, which had not previously been recognised.

New investments in the half-year

The Company made two new investments totalling £0.81 million during the period, as detailed below.

Company	Business	Date of Investment	Amount of new investment (£m)
Bella & Duke	Premium frozen raw dog food provider	February 2020	0.62
Bella & Duke is a direct to consumer subscription service, providing premium frozen raw dog food to pet owners in the UK.  Founded in 2016, the business provides an alternative to standard meal options for dog owners by focusing on the well documented health benefits of a raw food diet. This area is a growing niche in the large and established pet food market and is being driven by the premiumisation of dog food. The investment will seek to optimise its production and supply facilities, expand and enhance its team and broaden its product range. The company has grown revenues over 300% between 2018 and 2019.
Andersen EV	E l ec tri c vehicle(EV) chargers	June2020	0.19
Muller EV Limit ed(tradingasAndersenEV)isadesign-ledmanufacturerofpremiumelectricvehicle(EV)chargers. Inc orporatedin2016,thisbusinesshassecuredhighprofilepartnershipswithPorscheandJaguarLandRover,establishingan attractivenichepositioninchargingpointsforthehighendEVmarket.  TheCompany'sfundswillbeusedtoscalethe business through in ves tm en t in further pr o du c ts and so ft w ar e , sal esandmarketingandelectricvehiclemanufacturer partnerships. A nd ersen is wellpositionedinanascentsectorexperiencingsignificantgrowthandhasincreasedsalesbyover 350%foritsmostrecentfinancialyear.

Realisations in the half year

The Company realised two investments during the period, as detailed below:

Company	Business	Period of investment	Total cash proceeds over the life of the investment / Multiple over cost
Biosite	Workforcemanagement and secu rit y ser v i ces	November2016 toFebruary 2020	£2.07 million 1.5 times cost
The Company sold its investment in Pattern Analystics Limited (trading as Biosite) to ASSA ABLOY AB for £1.98 million. Since investment in 2016, the investment has generated proceeds of £2.07 million compared to an original investment cost of £1.34 million, which is a multiple on cost of 1.5x and an IRR of 21.0%.
Auction Technology Group	SaaS based online auction marketplace platform	October 2008 to February 2020	£9.03 million 4.5 times cost
The Company sold its investment in Turner Topco Limited (trading as Auction Technology Group) to TA Associates for £5.27 million (including £1.09 million loan interest due on completion). This investment generated proceeds of £9.03 million over the life of the investment (including proceeds received following a partial realisation from a sale to ECI Partners in June 2014), compared to an original cost of £2.00 million. These returns generated a multiple on cost of 4.5x and an IRR of 28.9%.

Omega Diagnostics was also partially realised in the period and the Company received proceeds of £0.46 million, generating a gain in the period of £0.34 million.

Follow-on investments into existing portfolio companies in the period

The Company made two follow-on investments totalling £1.15 million into existing portfolio companies in the period, as detailed below:

Company	Business	Date of Investment	Amount of new investment (£m)
MyTutor	Digital marketplace connecting school pupils seeking one-to- one online tutoring	May 2020	0.71
MyTutorWeb Limited (trading as MyTutor) is a digital marketplace that connects school pupils who are seeking private one-to-one tutoring with university students. The business is satisfying a growing demand from both schools and parents to improve pupils' exam results to enhance their academic and career prospects. This further investment, alongside other existing shareholders, seeks to build and reinforce its position as a UK category leader in the online education market as well as to begin to develop a broader, personalised learning product offering. The COVID-19 impact on the education sector has significantly heightened the awareness of online learning and tutoring. MyTutor has grown strongly over the last six months with average year on year growth of 70%.
Rotageek	Workforce management software	May 2020	0.44
Rota Geek Limited (trading as Rotageek) is a provider of cloud-based enterprise software to help larger retail and leisure organisations predict and meet demand to schedule staff more effectively. This investment, alongside funds from a new VCT investor and existing shareholders, will be used to capitalise on opportunities that will emerge as the retail sector recovers from lockdown restrictions. Rotageek has also moved into healthcare to help address the workforce management issues of a sector that is chronically overburdened at present. For the year ended 31 December 2019, revenues have grown over 45% on the prior year.

Realisations post the half-year

Following the period-end, there were additional realisations from Access IS and Blaze:

Company	Business	Period of investment	Total cash proceedsover thelifeofthe investment/ Multipleovercost
A ccessIS	Datacaptureandscanninghardware	O c tober2015to August 2020	£ 6.24million 2.5 times cost
The Company sold its investment in Tovey Management Limited (trading as Access IS) to ASSA ABLOY AB for £5.32 million. Since investment in 2015, the investment has generated proceeds of £6.24 million compared to an original investment cost of £2.47 million, which is a multiple on cost of 2.5x and an IRR of 23.4%.
Blaze Signs	Manufacturer and installer of signs	April 2006 to September 2020	£ 1.55  million 2.5 timescost
The Company sold its investment in Blaze Signs Holdings Limited via a secondary buy out backed by Elaghmore Advisor LLP and has received cash proceeds of £0.55 million. Over the 14 years this investment was held, cash proceeds of £1.55 million have been received compared to original cost of £0.61 million, which is a multiple of cost of 2.5x and an IRR of 13.1%.

Also after the period-end, the Company realised half of its remaining holding in Omega Diagnostics Group plc, realising £0.29 million.

Follow-on investments post the half-year

Following the period-end, there was one follow-on investment as detailed below:

Company	Business	Date of Investment	Amount of new investment (£m)
Buster & Punch	Lighting and interiors brand	September 2020	1.12
Buster and Punch is a well-established, premium branded, fast growing business which designs and manufactures a complete range of high-quality functional fittings (lighting, electrical and hardware and other accessories) for the home. The VCT first invested in 2017 and since then, the business delivered consistent high growth across its ranges, with revenues growing in excess of 65%, and reaching nearly £10 million in 2020. Buster and Punch's products are now sold in 99 countries via both its highly invested ecommerce platform and direct services to consumers, trade and retailers across the world. Buster and Punch also operates flagship showrooms in London, Stockholm and Los Angeles. To support the continued growth of Buster and Punch, the new funding will be used to drive the global business plans of the fast-growing luxury interior fashion label with further expansion and strategic new penetration into the US and Asia Pacific markets.

Investment Portfolio Summary

At 30 June 2020

MobeusEquityPartnersLLP	Total costat 30June 2020 £	Total valuation at31December 2019 £	Total valuation at30June 2020 £	%of equity held	%of portfolio byvalue
Tovey ManagementLimited(tradingasAccessIS) Providerofdatacaptureandscanninghardware	2,469 ,013	3,571, 056	4,539, 035	9 .7 %	13. 6%
VirginWinesHoldingCompanyLimited Onlinewineretailer	1,930,813	2,475,731	3,188, 735	9 .7 %	9.6 %
MPBGroupLimited Onlinemarketplaceforphotographicandvideoequipment	1,480 ,993	2, 701,332	2,837 ,718	5.3%	8.5%
PreservicaLimited Sellerofproprietarydigitalarchivingsoftware	1,585, 773	2,043,873	2,545,579	11. 0%	7. 6 %
MyTutorWebLimited(tradingasMytutor) Digitalmarketplaceconnectingschoolpupilsseekingoneto oneonlinetutoring	2,023, 042	1,307, 644	2,023,042	8.2%	6. 0%
ProactiveGroupHoldingsInc Providerofmediaservicesandinvestorconferencesfor companiesprimarilylistedonsecondarypublicmarkets	755,340	1,900,421	1,900,421	2. 6%	5.7%
EO TH Limited(tradingasEquipOutdoorTechnologies) Brandedoutdoorequipmentandclothing	951,471	2,148, 792	1,852,825	1. 7%	5. 6%
Parsley Box Limited Homedeliveredambientreadymealsfortheelderly	668,400	704,359	1,364,427	4.9%	4.1%
VianMarketingLimited(tradingasRedPaddleCo) Design,manufactureandsaleofstand-uppaddleboardsand windsurfingsails	899 ,074	1,337,175	1,337,120	10 .9%	4. 0%
DataDiscoverySolutionsLimited(tradingasActive Navigation) Providerofglobalmarketleadingfileanalysissoftwarefor informationgovernance,securityandcompliance	1, 100,500	1, 100 ,500	1,334,421	6.3%	4. 0%
MediaBusinessInsightHoldingsLimited Apublishingandeventsbusinessfocusedonthecreative productionindustries	2,722,760	1,893,907	1, 093,248	15. 7%	3.3%
BusterandPunchHoldingsLimited Industrialinspiredlightingandinteriorsretailer	530 ,392	925,639	1, 048, 092	4.5%	3.1%
R ota GeekLimited Workforce managementsoftware	874, 000	816,619	987 ,571	4.4%	3. 0%
ArkkConsultingLimited(tradingasArkkSolutions) Regulatory andreportingrequirementserviceprovider	1, 118,490	1,142,351	982,028	7 .5%	3. 0%
BleachLondonHoldingsLimited Haircolourantsbrand	519, 672	519,672	728,123	3.1%	2.2%
TharsternGroupLimited Softwarebasedmanagementinformationsystemstotheprint sector	1, 091,886	1, 106,429	725,707	12.2%	2.2%
ManufacturingServicesInvestmentLimited(tradingas W etsuit Outlet) Onlineretailerinthewatersportsmarket	2,333,102	1,015,878	699 ,931	6.4%	2.1%
IPVLimited Providerofmediaassetsoftware	619 ,487	619,487	619,487	5.5%	1.9%
Bella&DukeLimited Apremiumfrozenrawdogfoodprovider	617 ,400	-	617,400	4.3%	1.9%
MasterRemoversGroup2019Limited(tradingasAnthony Ward Thomas,BishopsgateandAussieMan&Van) Aspecialistlogistics,storageandremovalsbusiness	348, 641	785,346	446,477	7 .2%	1.3%
Vectair Holdings Limited Designer and distributor of washroom products	24,732	522,139	434,461	2.1%	1.3%
Omega Diagnostics Group plc¹ In-vitro diagnostics for food intolerance, auto-immune diseases and infectious diseases	100,014	233,345	345,017	0.5%	1.1%
Kudos Innovations Limited Online platform that provides and promotes academic research dissemination	328,950	515,372	328,950	3.2%	0.9%
Bourn Bioscience Limited Management of In-vitro fertilisation clinics	1,132,521	606,708	299,309	7.7%	0.9%
Blaze Signs Holdings Limited Manufacturer and installer of signs	190,631	291,039	233,801	5.7%	0.7%
Muller EV Limited (trading as Andersen EV) Provider of premium electrical vehicle (EV) chargers	195,200	-	195,200	0.5%	0.6%
CGI Creative Graphics International Limited Vinyl graphics to global automotive, recreation vehicle and aerospace markets	1,449,746	1,344,908	192,884	6.3%	0.6%
Spanish Restaurant Group Limited (formerly Ibericos Etc. Limited) (trading as Tapas Revolution) Spanish restaurant chain	1,044,869	1,274,306	139,968	5.8%	0.4%
Jablite Holdings Limited Manufacturer of expanded polystyrene products	376,083	94,021	49,597	9.1%	0.1%
BG Training Limited City-based provider of specialist technical training	10,625	5,313	2,656	0.0%	0.0%
RDL Corporation Limited Recruitment consultants within the pharmaceutical, business intelligence and IT industries	1,000,000	293,708	-	9.1%	0.0%
Veritek Global Holdings Limited Maintenance of imaging equipment	1,620,086	-	-	15.4%	0.0%
BookingTek Limited Direct booking software for hotels	582,300	-	-	3.5%	0.0%
Oakheath Limited (trading as Super Carers) (in liquidation) Online platform that connects people seeking home care from experienced independent carers	485,730	-	-	4.3%	0.0%
Racoon International Group Limited Supplier of hair extensions, hair care products and training	484,347	-	-	0.0%	0.0%
CB Imports Group Limited (trading as Country Baskets) Importer and distributor of artificial flowers, floral sundries and home decor products	175,000	-	-	5.8%	0.0%
Disposals in period
Turner Topco Limited (trading as Auction Technology Group) SaaS based online auction market place platform	-	3,029,777	-	0.0%	0.0%
Pattern Analytics Limited (trading as Biosite) Workforce management and security services for the construction industry	-	1,978,710	-	0.0%	0.0%
Total	33,841,083	38,305,557	33,093,230		99.3%
Cashfac Limited Provider of virtual banking application software solutions to corporate customers	260,101	232,724	190,265	2.9%	0.7%
Sift Group Limited Developer of business-to-business internet communities	135,391	-	-	1.3%	0.0%
Total	395,492	232,724	190,265		0.7%
Total Investment Portfolio	34,236,575	38,538,281	33,283,495		100.0%
Total Investment Portfolio by type
Growth focused portfolio1	20,690,853	23,910,253	22,823,371		68.6%
MBO focused portfolio1	13,545,722	14,628,028	10,460,124		31.4%
Total Investment Portfolio	34,236,575	38,538,281	33,283,495		100.0%

¹ - The growth focused portfolio contains all investments made after the change in the VCT regulations in 2015 plus some investments that are growth in nature made before this date. The MBO focused portfolio contains investments made prior to 2015 as part of the previous MBO strategy

Statement of the Directors' Responsibilities 

Responsibility statement

In accordance with Disclosure and Transparency Rule (DTR) 4.2.10, Christopher Moore (Chairman), Graham Paterson (Chairman of the Audit Committee and Nomination and Remuneration Committee), Helen Sinclair (Chairman of the Investment Committee) and Christopher Burke, being the Directors of the Company confirm that to the best of their knowledge:

a)  the condensed set of financial statements, which has been prepared in accordance with Financial Reporting Standard 104 "Interim Financial Reporting" gives a true and fair view of the assets, liabilities, financial position and profit of the Company, as required by DTR 4.2.10;

b)  the Half-Year Management Report which comprises the Chairman's Statement, Investment Policy, Investment Review and Investment Portfolio Summary includes a fair review of the information required by DTR 4.2.7, being an indication of the important events that have occurred during the first six months of the financial year and their impact on the condensed set of financial statements;

c)  a description of the principal risks and uncertainties facing the Company for the remaining six months is set out below, in accordance with DTR 4.2.7; and

d)  there were no related party transactions in the first six months of the current financial year that are required to be disclosed in accordance with DTR 4.2.8.

Principal risks and uncertainties

In accordance with DTR 4.2.7, the Board confirms that the principal risks and uncertainties facing the Company have not materially changed from those identified in the Annual Report and Financial Statements for the year ended 31 December 2019 ("the Annual Report") other than the risks arising from the COVID-19 pandemic, referred to in the Chairman's Statement and the Investment Adviser's Report, the impact of which has been reflected in the valuation of the Company's investment portfolio.

The principal risks faced by the Company are:

· loss of approval as a Venture Capital Trust;

· economic and political risk;

· investment risk;

· regulatory risk;

· financial and operating risk;

· market risk;

· asset liquidity risk;

· market liquidity risk; and

· counterparty risk.

A detailed explanation of the principal risks can be found in the Annual Report on page 28 and in Note 15 on pages 64 to 71 of the Annual Report and Financial Statements for the year ended 31 December 2019, copies of which are available on the Investment Adviser's website, www.mobeus.co.uk or by going directly to the VCT's website, www.mig4vct.co.uk .

Going concern

The Board has assessed the Company's operation as a going concern. The Company's business activities, together with the factors likely to affect its future development, performance and position are set out in the Half-Year Management Report. The Directors have satisfied themselves that the Company continues to maintain a significant cash position bolstered by the recent fundraising and four disposals since the year-end, is adequate to enable the Company to continue as a going concern under any plausible stress scenario. The majority of companies in the portfolio continue to trade profitably and the portfolio taken as a whole remains resilient and well-diversified. The major cash outflows of the Company (namely investments, buybacks and dividends) are within the Company's control.

The Board's assessment of liquidity risk and details of the Company's policies for managing its financial risks and capital are shown in Note 15 on pages 64 to 71 of the Annual Report and Financial Statements for the year ended 31 December 2019. Accordingly, the Directors continue to adopt the going concern basis of accounting in preparing the half-year report and annual financial statements.

Cautionary statement

This report may contain forward looking statements with regards to the financial condition and results of the Company, which are made in the light of current economic and business circumstances. Nothing in this report should be construed as a profit forecast.

For and on behalf of the Board:

Christopher Moore

Chairman

15 September 2020

Unaudited Condensed Income Statement for the six months ended 30 June 2020

Six months ended 30 June 2020 (unaudited) Six months ended 30 June 2019  (unaudited) Notes Revenue Capital Total Revenue Capital Total £ £ £ £ £ £ Net investment portfolio (losses)/gains 10 - (468,108) (468,108) - 4,602,323 4,602,323 Income 4 1, 704, 058 - 1, 704, 058 1, 110 ,499 - 1, 110 ,499 Investment Adviser's fees 5 (155,891) (467,674) (623,565) (156,858) (470,574) (627,432) Other expenses (257,857) - (257,857) (214,353) - (214,353) Profit/(loss) on ordinary activities before taxation 1,290,310 (935,782) 354,528 739,288 4, 131, 749 4,871,037 Tax on profit/(loss) on ordinary activities 6 (230,920) 88,858 (142, 062) (129,463) 89,409 (40,054) Profit/(loss) and total comprehensive income 1, 059,390 (846,924) 212,466 609,825 4,221,158 4,830,983 Basic and diluted earnings per share 7 1.28p (1. 02)p 0.26p 0.90p 6.20p 7.10p Year ended 31 December 2019 (audited) Notes Revenue Capital Total £ £ £ Net investment portfolio (losses)/gains - 5,675,164 5,675,164 Income 4 2,107,357 - 2,107,357 Investment Adviser's fees 5 (309,641) (928,923) (1,238,564) Other expenses (451,261) (451,261) Profit on ordinary activities before taxation 1,346,455 4,746,241 6,092,696 Tax on profit on ordinary activities 6 (211,879) 176,496 (35,383) Profit for the year and total comprehensive income 1,134,576 4,922,737 6,057,313 Basic and diluted earnings per share 7 1.67p 7.28p 8.95p

The revenue column of the Income Statement includes all income and expenses. The capital column accounts for the net investment portfolio (losses)/gains (unrealised losses and realised gains on investments) and the proportion of the Investment Adviser's fee charged to capital.

The total column is the Statement of Total Comprehensive Income of the Company prepared in accordance with Financial Reporting Standards ("FRS"). In order to better reflect the activities of a VCT and in accordance with the 2014 Statement of Recommended Practice ("SORP") issued by the Association of Investment Companies ("AIC"), and updated in October 2019, supplementary information which analyses the Income Statement between items of a revenue and capital nature has been presented alongside the Income Statement. The revenue column of profit attributable to equity Shareholders is the measure the Directors believe appropriate in assessing the Company's compliance with certain requirements set out in Section 274 Income Tax Act 2007.

All the items in the above statement derive from continuing operations of the Company. No operations were acquired or discontinued in the period/year.

Unaudited Condensed Balance Sheet

as at 30 June 2020

		30June2020 (unaudited)	30June2019 (unaudited)	31December2019 (audited)
	Notes	£	£	£
Fixed assets
Investmentsatfairvalue	10	33,283,495	36,092,736	38,538,281
Currentassets
Debtorsandprepayments		205,896	210,928	183,175
Currentassetinvestments	9	18,794,483	16,875,554	8,928,456
Cashatbank	9	2,733,689	6,658,998	2, 627 ,511
		21,734, 068	23,745,480	11, 739 ,142
Creditors:amountsfallingduewithinoneyear		(446,720)	(335,763)	(242,109)
Netcurrentassets		21,287,348	23,409,717	11,497, 033
Netassets		54,570 ,843	59,502,453	50 , 035,314
Capitalandreserves
Calledupsharecapital		844,831	676,047	667,991
Sharepremiumreserve		12,495,261	31,474,977	-
Capitalredemptionreserve		15,722	33,040	8, 056
Revaluation reserve		343,483	3, 118,129	3,713,586
Specialdistributablereserve		27,245,898	12,367,414	35,514,889
Realised capitalreserve		12, 649 ,873	10,148,396	8,935,662
Revenue reserve		975,775	1, 684,450	1, 195,130
EquityShareholders'funds		54,570 ,843	59,502,453	50 , 035,314
Basicanddilutednetassetvalue: Basic and diluted net asset value per share	11	64.59p	88.02p	74.90p

The financial information for the six months ended 30 June 2020 and the six months ended 30 June 2019 has not been audited.

Unaudited Condensed Statement of Changes in Equity

for the six months ended 30 June 2020

Non-distributablereserves Distributablereserves Notes Calledup share capital £ Share premium reserve £ Capital redemption reserve £ Revaluation reserve £ Special Distributable reserve £ Realised Capital reserve £ Revenue reserve £ Total £ At 1January2020 667 ,991  - 8, 056  3,713,586 35,514,889   8,935,662 1, 195,130 50 ,035,314 Comprehensive incomefortheperiod (Loss)/profit for theperiod -  - -  (2,050,190) -   1,203,266 1, 059,390 212,466 Total comprehensive incomefortheperiod -  - -   (2,050,190) -   1,203,266 1, 059,390 212,466 Contributionsby - 13, 000 , 000 anddistributions toowners Shares  issued   via Offer  for  Subscription (Notec) 184,506 12,815,494 - - Issuecostsand facilitationfeeson OfferforSubscription (Notec) -  (320,233) - - (145,330)  - (465,563) Sharesbought back(Noted) (7, 666)  - 7 , 666 - (424,429)  - - (424,429) Dividendspaid 8 -  - - - (6,508,200)  - (1,278,745) (7, 786,945) Total contributions byanddistributions toowners 176,840   12,495,261 7, 666 - (7,077,959 )  - (1,278,745) 4,323, 063 Othermovements (1,191, 032)  1, 191, 032 - - Realised losses transferredtospecial reserve(Note  a) - - - - Realisation ofpreviously unrealised  gains -  - -    (1,319 ,913) -  1,319 ,913 - - Total other movements -  - -  (1,319,913) (1,191, 032)    2,510 ,945 - - At 30June2020 844,831   12,495,261 15, 722  343,483   27,245,898   12, 649,873 975,775 54,570 ,843

Notes:

a): The Special distributable reserve also provides the Company with a reserve to absorb any existing and future realised losses and, when considered by the Board to be in the interests of Shareholders, to fund share buybacks and for other corporate purposes. The transfer of £1,191,032 to the special reserve from the realised capital reserve above is the total of realised losses incurred by the Company in the period. As at 30 June 2020, the Company has a special reserve of £27,245,898, £9,079,292 of which arises from shares issued more than three years ago. Reserves originating from share issues are not distributable under VCT rules if they arise from share issues that are within three years of the end of an accounting period in which shares were issued.

b): The Realised capital reserve and the Revenue reserve together comprise the Profit and Loss Account of the Company.

c): Under the Company's Offer for Subscription launched on 25 October 2019, 18,450,535 Ordinary Shares were allotted between 8 January 2020 and 2 April 2020, raising net funds of £12,534,437 for the Company. This figure is net of issue costs of £320,233 and facilitation fees of £145,330.

d): During the period, the Company repurchased 766,590 of its own shares at the prevailing market price for a total cost (including stamp duty) of £424,429, which were subsequently cancelled. This is £66,672 more than the figure shown in the Unaudited Condensed Statement of Cash Flows due to a creditor at the period-end.

Unaudited Condensed Statement of Changes in Equity

for the six months ended 30 June 2019

Non-distributablereserves Distributablereserves Calledup share capital   Notes  £ Share premium reserve £ Capital redemption reserve £ Revaluation reserve £ Special Distributable reserve £ Realised Capital reserve £ Revenue reserve £ Total £ At 1January2019 682,830 31,474,977 26,257 1,848,472 14,784,518 6,815, 730 2,263, 000 57,895,784 Comprehensiveincome fortheperiod Profitfortheperiod - - - 3, 083,824 - 1, 137 ,334 609 ,825 4,830,983 Total comprehensive incomefortheperiod - - -   3,083,824 - 1, 137 ,334 609,825 4,830,983 Contributions by and (508,028) - - (508, 028) distributions to owners Sharesbought back (6,783) - 6,783 - Dividendspaid 8 - - - - (1,527 ,911) - (1, 188,375) (2,716,286) Total contributions byanddistributions toowners (6,783) - 6,783 - (2, 035,939) - (1, 188,375) (3,224,314) Othermovements (381,165) 381,165 - - Realised losses transferred to special reserve - - - - Realisation ofpreviously unrealisedgains -  - - (1,814,167) - 1,814,167 - - Total othermovements -  - - (1,814, 167) (381,165) 2, 195,332 - - At 30June2019 676,047    31,474,977 33, 040 3, 118,129 12,367,414 10,148,396 1, 684,450 59,502,453

The composition of each of these reserves is explained below:

Called up share capital - The nominal value of shares originally issued increased for subsequent share issues either via an   Offer for Subscription or reduced due to shares bought back by the Company.

Capital redemption reserve - The nominal value of shares bought back and cancelled is held in this reserve, so that the Company's capital is maintained.

Share premium reserve - This reserve contains the excess of gross proceeds less issue costs over the nominal value of shares allotted under recent Offers for Subscription and the Company's Dividend Investment Scheme.

Revaluation reserve - Increases and decreases in the valuation of investments held at the period-end are accounted for in this reserve, except to the extent that the diminution is deemed permanent.

In accordance with stating all investments at fair value through profit and loss, all such movements through both revaluation and realised capital reserves are shown within the Income Statement for the period.

Special distributable reserve - This reserve is created from cancellations of the balances upon the Share premium reserve, which are transferred to this reserve from time to time. The cost of share buybacks and any realised losses on the sale or impairment of investments (excluding transaction costs) are charged to this reserve. 75% of the Investment Adviser fee expense, and the related tax effect, that are charged to the realised capital reserve are transferred to this reserve. This reserve will also be charged any facilitation payments to financial advisers, which arose as part of the Offer for Subscription.

Realised capital reserve - The following are accounted for in this reserve:

● Gains and losses on realisation of investments;

● Permanent diminution in value of investments;

● Transaction costs incurred in the acquisition and disposal of investments;

● 75% of the Investment Adviser fee expense and 100% of any performance incentive fee payable, together with the related tax effect to this reserve in accordance with the policies; and

● Capital dividends paid.

Revenue reserve - Income and expenses that are revenue in nature are accounted for in this reserve together with the related tax effect, as well as income dividends paid that are classified as revenue in nature.

Unaudited Condensed Statement of Cash Flows

for the six months ended 30 June 2020

		Sixmonthsended 30June2020 (unaudited)	Sixmonthsended 30June2019 (unaudited)	Year ended 31December2019 (audited)
	Notes	£	£	£
Cashflowsfromoperatingactivities
Profitforthefinancialperiod		212,466	4,830,983	6,057,313
Adjustmentsfor:
Netinvestmentportfolio(losses)/gains		468,108	(4,602,323)	(5, 675, 164)
Tax chargeforthecurrentyear	6	142, 062	40 , 054	35,383
(Increase)/decreaseindebtors		(22,721)	145,503	120,121
(Decrease)/increaseincreditorsandaccruals		(4,123)	55,699	33,245
Netcashinflowfromoperations		795,792	469 ,916	570,898
Corporationtaxpaid		-	-	(66,529)
Netcashinflowfromoperatingactivities		795,792	469 ,916	504,369
Cashflowsfrominvestingactivities
Saleofinvestments	10	6,751,676	6,767,896	8,136,792
Purchaseofinvestments	10	(1,964,998)	(1,786,890)	(4,475,355)
Netcashinflowfrominvestingactivities		4, 786,678	4,981, 006	3, 661,437
Cashflowsfromfinancingactivities
ShareissuedaspartofOfferforSubscription		13, 000 , 000	-	-
Issuecostsandfacilitationfeesas partofOfferforsubscription		(465,563)	-	-
Equitydividendspaid	8	(7 , 786,945)	(2,716,286)	(12,846,457)
Purchaseofownshares		(357 , 757)	(571,531)	(1,134,829)
Netcashinflow/(outflow)from financingactivities		4,389 , 735	(3,287 ,817)	(13,981,286)
Netincrease/(decrease)incashandcash equivalents		9,972,205	2, 163,105	(9 ,815,480)
Cashandcashequivalentsatstartofperiod		9,555,967	19,371,447	19,371,447
Cashandcashequivalentsatendofperiod		19 ,528, 172	21,534,552	9,555,967
Cashandcashequivalentscomprise:
Cashatbankandinhand	9	2,733,689	6,658,998	2, 627 ,511
Cashequivalents	9	16,794,483	14,875,554	6,928,456

Notes to the Unaudited Condensed Financial Statements

for the six months ended 30 June 2020

1.  Company information

Mobeus Income and Growth 4 VCT plc is a public limited company incorporated in England, registration number 3707697. The registered office is 30 Haymarket, London, SW1Y 4EX.

2.  Basis of preparation of the Financial Statements

These Financial Statements are prepared in accordance with accounting policies consistent with Financial Reporting Standard 102 ("FRS 102"), Financial Reporting Standard 104 ("FRS 104") - Interim Financial Reporting, with the Companies Act 2006 and the 2014 Statement of Recommended Practice, 'Financial Statements of Investment Trust Companies and Venture Capital Trusts' ('the SORP') (updated in October 2019) issued by the Association of Investment Companies ("AIC").

The Half-Year Report has not been audited, nor has it been reviewed by the Auditor pursuant to the Financial Reporting Council's (FRC) guidance on Review of Interim Financial Information.

3.  Principal accounting policies

The accounting policies have been applied consistently throughout the period. Full details of principal accounting policies will be disclosed in the Annual Report, while the policy in respect of investments is included within an outlined box at the top of note 10 on investments.

4.  Income

	Sixmonthsended 30June2020 (unaudited)	Sixmonthsended 30June2019 (unaudited)	Year ended 31  December2019 (audited)
Income from investments	£	£	£
Dividends	74,942	68,462	243,975
Loan stockinterest	1,572,242	957,809	1, 714,938
Money-market  funds	37 ,071	62,648	106,151
Bankdepositinterest	17 ,489	19,585	40,298
Interestonpreferencesharedividendarrears	129	1,995	1,995
Otherincome	2,185	-	-
Total Income	1, 704,058	1, 110 ,499	2, 107 ,357

5. Investment Adviser's fees

25% of the Investment Adviser's fees are charged to the revenue column of the Income Statement, while 75% is charged against the capital column of the Income Statement. This is in line with the Board's expected long-term split of returns from the investment portfolio of the Company. 100% of any performance incentive fee payable for the year would be charged against the capital column of the Income Statement, as it is based upon the achievement of capital growth.

	Sixmonthsended 30June2020 (unaudited)	Sixmonthsended 30June2019 (unaudited)	Year ended 31December2019 (audited)
	£	£	£
Allocatedtorevenuereturn:InvestmentAdviser'sfees	155,891	156,858	309 ,641
Allocatedtocapitalreturn:InvestmentAdviser'sfees	467 , 674	470,574	928,923
Total Income	623,565	627,432	1,238,564

Between 1 July 2020 and 30 June 2021, the Investment Adviser's fee upon the net funds raised from the use of the over- allotment facility of £5 million under the 2019/20 Offer will be reduced to 1% from 2% per annum, for one year. Between 1 April 2018 and 31 March 2019, the Investment Adviser's fee upon the net funds raised from the use of the over-allotment facility of £5 million under the 2017/18 Offer was reduced to 1% from 2% per annum, for one year.

6 .  Taxation R evenue £ Sixmonthsended 30June2020 (unaudited) Capital  Total £ £ R evenue £ Sixmonthsended 30June2019 (unaudited) Capital  Total   Revenue £ £ £ Year ended 31December2019 (audited) Capital  Total £ £ a)Analysisoftaxcharge: UKCorporationtaxonprofits/ (losses)fortheperiod 230,920 (88,858) 142, 062 129,463 (89,409) 40,054 211,879 (176,496) 35,383 Total currenttaxcharge/(credit) 230,920 (88,858) 142, 062 129,463 (89,409) 40,054 211,879 (176,496) 35,383 Corporationtaxisbasedona 1,290,310 (935,782) 354,528 739,288 4, 131, 749 4,871, 037 1,346,455 4,746,241 6,092,696 rateof19.0%(2019:19.0%) b)Profit/(loss)onordinary activitiesbeforetax Profit/(loss) on ordinary activities multiplied by rate of corporation tax in the UK of 19. 0% (2019: 19. 0%) 245,159 (177, 799) 67,360 140,465 785,033 925,498 255,826 901,786 1, 157,612 Effectof: - UKdividends (14,239) - (14,239) (13, 008) - (13, 008) (46,355) - (46,355) Netinvestmentportfoliolosses/ gainsnotallowable/(taxable) - 88,941 88,941 - (874,442) (874,442) - (1, 078,282) (1,078,282) Expenditurenotallowablefor taxpurposes - - - 2,006 - 2,006 2,408 - 2,408 Actualcurrenttaxcharge 230,920 (88,858) 142, 062 129,463 (89,409) 40,054 211,879 (176,496) 35,383

7.  Basic and diluted earnings per share The basic and diluted earnings, revenue return and capital return per share shown below for each period are respectively based on numerators i)-iii), each divided by the weighted average number of shares in issue in the period - see iv) below.

Sixmonthsended 30June2020   (unaudited) Sixmonthsended 30June2019 (unaudited) Year ended 31December2019 (audited) £ £ £ i)Totalearningsaftertaxation 212,466 4,830,983 6,057,313 Basicanddilutedearningspershare(pence) 0.26p 7 . 10p 8.95p ii)  Revenueearningsfromordinaryactivitiesaftertaxation 1, 059 ,390 609,825 1, 134,576 Basicanddilutedrevenueearningspershare(pence) 1.28p 0 .90p 1. 67p Netinvestment portfolio (losses)/gains (468,108) 4,602,323 5,675,164 CapitalInvestmentAdviser'sfeeslesstaxation (378,816) (381,165) (752,427) iii)Totalcapitalearnings (846,924) 4,221,158 4,922,737 Basicanddilutedcapitalearningspershare(pence) (1. 02)p 6.20p 7 .28p iv)Weightedaveragenumberofsharesinissueinthe period 82,552,958 68,007,404 67 , 649 , 790

8.  Dividends paid Dividend Type Fortheyear ended 31 December P ence pershare Datepaid Sixmonths ended 30June 2020 (unaudited) Sixmonths ended 30June 2019 (unaudited) Year ended 31December 2019 (audited) £ £ £ Final  Income 2018 1. 75p 28May2019 - 1, 188,375 1, 188,375 Final  Capital* 2018 2.25p 28May2019 - 1,527,911 1,527,911 Interim  Income 2019 1.50p 20September2019 - - 1,014,071 Interim  Capital 2019 2.50p 20September2019 - - 1, 690 ,118 Interim  Capital* 2019 9.0 0 p 20September2019 - - 6,084,426 Interim  Capital* 2019 2. 00p 30December2019 - - 1,341,556 Interim  Capital* 2019 4. 00p 10January2020 2,671,965 - -   Interim  Income 2020 1.50p 7May2020 1,278,745 - -   Interim    Capital* 2020 4.50p 7May2020   3,836,235  - - Total DividendsPaid 7, 786,945 2,716,286 12,846,457 * These dividends were paid out of the Company's special distributable reserve.

9.  Current asset investments and cash at bank

	Asat 30June2020 (unaudited) £	Asat 30June2019 (unaudited) £	Asat 31 December2019 (audited) £
OEICMoneymarketfunds	16,794,483	14,875,554	6,928,456
CashequivalentsperStatementofCashFlows	16,794,483	14,875,554	6,928,456
Bankdepositsthatmatureafterthreemonths	2,000 , 000	2,000 , 000	2,000 , 000
Current  asset  investments	18, 794,483	16,875,554	8,928,456
Cashatbank	2, 733, 689	6, 658,998	2,627 ,511

10.  Summary of movement on investments during the period

The most critical estimates, assumptions and judgements relate to the determination of the carrying value of investments at "fair value through profit and loss" (FVTPL). All investments held by the Company are classified as FVTPL and measured in accordance with the International Private Equity and Venture Capital Valuation ("IPEV") guidelines, as updated in December 2018. This classification is followed as the Company's business is to invest in financial assets with a view to profiting from their total return in the form of capital growth and income.

Purchases and sales of unlisted investments are recognised when the contract for acquisition or sale becomes unconditional. For investments actively traded on organised financial markets, fair value is generally determined by reference to Stock Exchange market quoted bid prices at the close of business on the balance sheet date. Purchases and sales of quoted investments are recognised on the trade date where a contract of sale exists whose terms require delivery within a time  frame determined by the relevant market. Where the terms of the disposal state that consideration may be received at some future date and, subject to the conditionality and materiality of the amount of deferred consideration, an estimate of the fair value, discounted for the true value of money, may be recognised through the Income Statement. In other cases, the proceeds will only be recognised once the right to receive payment is established and there is no reasonable doubt that payment will be received.

Unquoted investments are stated at fair value by the Directors at each measurement date in accordance with appropriate valuation techniques, which are consistent with the IPEV guidelines:-

(i)  Each investment is considered as a whole on a 'unit of account' basis, alongside consideration of:-

The price of new or follow on investments made, if deemed to be made as part of an orderly transaction, are considered to be at fair value at the date of the transaction. At subsequent measurement dates, the inputs that derived the investment price are reconsidered for any changes in light of more recent events or changes in the market performance of the investee company, such that the valuation bases used are the following:

-  a multiple basis. The shares may be valued by applying a suitable price-earnings ratio, revenue or gross profit multiple to that company's historic, current or forecast post-tax earnings before interest and amortisation, or revenue, or gross profit (the ratio used being based on a comparable sector but the resulting value being adjusted to reflect points of difference identified by the Investment Adviser compared to the sector including, inter alia, scale and liquidity).

or:-

-  where a company's underperformance against plan indicates a diminution in the value of the investment, provision against the price of a new investment is made, as appropriate.

(ii) Premiums, to the extent that they are considered capital in nature, and that they will be received upon repayment of loan stock investments are accrued at fair value when the Company receives the right to the premium and when considered recoverable.

(iii) Where a multiple or the price of recent investment less impairment basis is not appropriate and overriding factors apply, a discounted cash flow, net asset valuation, realisation proceeds or a weighted average of these bases may be applied.

Capital gains and losses on investments, whether realised or unrealised, are dealt with in the profit and loss and revaluation reserves and movements in the period are shown in the Income Statement.

All investments are initially recognised and subsequently measured at fair value. Changes in fair value are recognised in the Income Statement.

A key judgement made in applying the above accounting policy relates to investments that are permanently impaired. Where the value of an investment has fallen permanently below the price of recent investment, the loss is treated as a permanent impairment and as a realised loss, even though the investment is still held. The Board assesses the portfolio for such investments and, after agreement with the Investment Adviser, will agree the values that represent the extent to which an investment loss has become realised. This is based upon an assessment of objective evidence of that investment's future prospects, to determine whether there is potential for the investment to recover in value.

The methods of fair value measurement are classified into hierarchy based on the reliability of the information used to determine the valuation.

-  Level 1 - Fair value is measured based on quoted prices in an active market.

-  Level 2 - Fair value is measured based on directly observable current market prices or indirectly being derived from market prices.

-  Level 3 - Fair value is measured using valuation techniques using inputs that are not based on observable market data.

	T raded onAIM L evel 1	Unquoted equity shares Level   3	Unquoted preference shares Level   3	Unquoted LoanStock Level   3	Total
	£	£	£	£	£
V aluation at31December2019	233,345	21,802,934	10,729	16,491,273	38,538,281
Purchasesatcost	-	1, 789 ,318	-	175, 680	1,964,998
Sales-proceeds	(458,297)	(3,998,527)	-	(2,294,852)	(6,751, 676)
-realisedgains/(losses)(Notea)	341,614	1,168,814	(227)	71,881	1,582, 082
Unrealisedgains/(losses)on investmentsintheperiod(Notea)	228,355	1,503,534	-	(3,782,079)	(2, 050 ,190)
V aluation at30June2020	345, 017	22,266,073	10 ,502	10, 661,903	33,283,495
Bookcostat30  June  2020	100,014	19,443,871	12,871	14, 679 ,819	34,236,575
Unrealisedgains/(losses)at30June2020	245,003	4,054,150	(2,142)	(3,953,528)	343,483
Permanent impairmentofinvestments	-	(1,231,948)	(227)	(64,388)	(1,296,563)
V aluation at30June2020	345, 017	22,266,073	10 ,502	10, 661,903	33,283,495
Gains/(losses)oninvestments	358,283	2,541,895	(227)	2,044	2,901,995
Less amountsrecognisedasunrealised ( gains)/lossesinpreviousyears	(16, 669)	(1,373,081)	-	69,837	(1,319,913)
R ealised gainsbasedoncarrying valueat31December2019	341,614	1,168,814	(227)	71,881	1,582, 082
Netmovementinunrealised (losses)/gainsintheperiod	228,355	1,503,534	-	(3,782,079)	(2, 050 ,190)
Gains/(losses)oninvestmentsforthe sixmonthsended30June2020	569,969	2,672,348	(227)	(3,710,198)	(468, 108)

Note a) Net realised gains on investments of £1,582,082 together with net unrealised losses of £2,050,190 equal net investment portfolio losses of £468,108 as disclosed in the Income Statement.

There has been no significant change in the risk analysis as disclosed in Note 15 of the Financial Statements in the Company's Annual Report. The decrease in unrealised valuations of the loan stock investments above reflect the changes in the entitlement to loan premiums, and/or in the underlying enterprise value of the investee company. The decrease does not arise from assessments of credit or market risk upon these instruments.

Level 3 unquoted equity and loan investments are valued in accordance with IPEV guidelines as follows:

	Asat 30June2020 (unaudited) £	Asat 30June2019 (unaudited) £	Asat 31December2019 (audited) £
Valuation Methodology
Multiple of earnings, revenues or gross margin as appropriate	31,214,307	33,731,995	35,359,235
Net Asset Value	1,476,718	122,422	606,708
Recent investment price	195,200	1,786,890	2,239,659
Estimated and discounted realisation proceeds	52,253	168,322	5,313
Recent investment price (reviewed for impairment)	-	121,432	94,021
	32,938,478	35,931,061	38,304,936

11.  Net Asset Value per share  

	Asat 30June2020 (unaudited)	Asat 30June 2019   (unaudited)	Asat 31December2019 (audited)
Netassets	£54,570,843	£59,502,453	£50 ,035,314
Numberofsharesinissue	84,483,074	67 , 604,732	66,799,129
Basicanddilutednetassetvaluepershare(pence)	64.59p	88.02p	74.90p

12.  Post balance sheet events

On 14 August 2020, the Company realised its investment in Tovey Management Limited (trading as Access IS), generating proceeds of £5.32 million.

On 1 September 2020, the Company invested a further £1.12 million into Buster and Punch Holdings Limited, an existing portfolio company.

On 2 September 2020, the Company realised its investment in Blaze Signs Holdings Limited generating cash proceeds of £0.55 million.

On 10 September 2020, the Company realised half of its remaining holding in Omega Diagnostics Group plc for proceeds of £0.29 million.

13.  Financial statements for the period ended 30 June 2020

The financial information for the six months ended 30 June 2020 does not comprise statutory accounts within the meaning of Section 434 of the Companies Act 2006. The financial statements for the year ended 31 December 2019 have been filed  with the Registrar of Companies. The auditor has reported on the financial statements for the year ended 31 December 2019 and that report was unqualified and did not contain a statement under section 498(2) or (3) of the Companies Act 2006.

14.  Half-Year Report

This Half-Year Report will shortly be made available on our website: www.mig4vct.co.uk and will be circulated by post to those Shareholders who have requested copies of the Report. Further copies are available free of charge from the Company's registered office, 30 Haymarket, London SW1Y 4EX or can be downloaded via the website.

Contact details for further enquiries:

Mobeus Equity Partners LLP (the Company Secretary) on 020 7024 7600 or by e-mail to [e-mail]

Mobeus Equity Partners LLP (the Investment Adviser) on 020 7024 7600 or by e-mail to [e-mail]

DISCLAIMER

Neither the contents of the Company's website nor the contents of any website accessible from hyperlinks on the Company's website (or any other website) is incorporated into, or forms part of, this announcement.

LEI:  213800IFNJ65R8AQW943

 

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