Preliminary Results

Mercia Asset Management PLC

04 July 2023

 

RNS	4 July 2023

Mercia Asset Management PLC

("Mercia" or the "Group" or the "Company")

Preliminary results for the year ended 31 March 2023

Consistently profitable fund management operations and a strong, debt-free liquidity position underpins an increased proposed final dividend

Mercia Asset Management PLC (AIM: MERC), the proactive and regionally focused specialist asset manager with c.£1.4billion of assets under management ("AuM") is pleased to announce its preliminary results for the year ended 31 March 2023.

Highlights

·  Frontier Development Capital Limited ("FDC") acquired in December 2022 adding c.£415million of funds under management ("FuM"), funded from the Group's own liquid resources. The acquisition is performing in line with expectations

·    Organic FuM inflows of c.£134million during the year and no redemptions

·    Strong liquidity across both the Group's balance sheet and managed funds, with c.£378million of unrestricted cash

·    c.£165million invested into 176 businesses, including 85 new companies during the year

·    Proposed final dividend increase of 6.0%

Financial results

		31 March 2023	31 March 2022
Statutory results
	Revenue	£25.9m	£23.2m
	Realised (loss)/gains on sale of direct investments	£(0.8)m	£9.9m
	Fair value movements in direct investments	£1.2m	£11.4m
	Profit before taxation	£2.4m	£27.4m
	Basic earnings per share	0.64p	5.93p
	Interim dividend per share paid	0.33p	0.30p
	Proposed final dividend per share 1	0.53p	0.50p
	Cash and short-term liquidity investments	£37.8m	£61.3m
	Net assets	£202.9m	£200.6m
Alternative performance measures
	Adjusted operating profit 2	£7.6m	£8.4m
	Net assets per share	45.4p	45.6p
	AuM 3	£1,437.3m	£959.2m

1    The proposed final dividend is subject to shareholder approval at the Company's Annual General Meeting on 21 September 2023, and if approved, will be paid on 27 October 2023 to shareholders on the register at close of business on 29 September 2023.

2    Adjusted operating profit is defined as operating profit before exceptional performance fees net of variable compensation, depreciation, realised gains/(losses) on the sale of direct investments, fair value movements in direct investments, share-based payments charge, amortisation of intangible assets, movement in fair value of deferred consideration and exceptional items. It includes net finance income. The reconciliation of adjusted operating profit to operating profit is included in the Chief Financial Officer's review.

3    Includes the Group's consolidated net assets.

Managed fund highlights

·    Third-party FuM of c.£1,234million (2022: c.£758million) contributed £24.7million in revenue for the year (2022: £19.5million)

·    Cash distributed to fund investors of c.£38million (2022: c.£87million)

·    Venture FuM c.£630million (2022: c.£592million)

o  £31.0million successfully raised across four Enterprise Investment Schemes ("EIS") funds during the year

o  £40.0million raised by the Northern Venture Capital Trusts ("VCTs") in the year, in addition to £2.9million of shareholder dividend reinvestment inflows

o  Interim and final dividends totalling c.£20million paid by the three Northern VCTs

o  Total additional allocations from British Business Bank of £30.3million during the year under the Northern Powerhouse Investment Fund Equity and Midlands Engine Investment Fund Proof of Concept mandates

·    Private equity FuM c.£48million (2022: c.£48million)

o  Portfolio trading performance showing signs of improvement

·    Debt FuM c.£556million (2022: c.£118million)

o  £415.0million of FuM added to the Group through the acquisition of FDC

o  Post acquisition, FDC successfully raised an additional £30.1million for its FDC Debt LP fund

o  Accreditation awarded to the Group to deliver debt funding under the third phase of the Recovery Loan Scheme

Direct investment portfolio highlights

·    Direct investment portfolio fair value of £136.6million (2022: £119.6million), up c.14%

·    Sale of the Group's equity holding in Intechnica Holdings Limited in January 2023 generated cash receipts of £3.7million, with a further £0.3million received in May 2023

·    £20.7million net cash invested into 13 portfolio companies (2022: £18.4million net invested into 16 portfolio companies), including new direct investments into Nova Pangaea (Holdings) Limited, Axis Spine Technologies Limited and Uniphy Limited

·    Revenue growth at most of the direct investment portfolio, including VirtTrade Limited and Invincibles Studio Limited, alongside continued commercial traction at Warwick Acoustics Limited, principally drove fair value increases totalling £11.3million

Post year end developments

·    The three Northern VCTs successfully raised £18.0million, as well as a further £5.0million allocated to the North East Venture Capital fund mandate

·    Mercia managed private equity fund, Enterprise Ventures Growth II LP, sold it's holding in ParkVia, the Manchester-based company behind a leading global parking reservation platform, to CAVU, part of the Manchester Airports Group plc

·    Warwick Acoustics secured its first production contract with a global top 10 luxury vehicle manufacturer

·    Significant opportunities identified within the next 12 months for Mercia to generate additional FuM inflows

Mark Payton, Chief Executive Officer of Mercia, commented:

"Mercia is now an established impact investor operating from a number of key cities across the UK, supporting ambitious founders who are seeking growth capital. During a year of caution from many in our sector, we have increased our levels of capital deployment, completed a successful acquisition and achieved positive fund inflows, with total AuM growing by c.50%.

Debt-free and with only Sterling denominated assets, Mercia's hybrid investment model of an evergreen balance sheet with maturing assets, coupled to a highly synergistic and profitable fund management operation, puts us in a strong position as we face FY24, with c.26% of our AuM in unrestricted cash including £37.8million of our own cash reserves."

This announcement contains inside information for the purposes of Article 7 of the Market Abuse Regulation (EU) 596/2014 which is part of UK law by virtue of the European Union (Withdrawal) Act 2018. Upon publication of this announcement, this inside information is now considered to be in the public domain.

-Ends-

For further information, please contact:

Mercia Asset Management PLC Mark Payton, Chief Executive Officer Martin Glanfield, Chief Financial Officer www.mercia.co.uk	[phone]
Canaccord Genuity Limited (NOMAD and Joint Broker)	[phone]
Simon Bridges, Emma Gabriel
Singer Capital Markets (Joint Broker)	[phone]
Harry Gooden, James Moat
FTI Consulting	[phone]
Tom Blackwell, Immy Ransom
[e-mail]

Analyst briefing

An analyst webcast will be given by Dr Mark Payton, Chief Executive Officer, Martin Glanfield, Chief Financial Officer, and Julian Viggars, Chief Investment Officer, at 9.30am today, 4 July 2023. Analysts wishing to register are asked to contact [e-mail]. An audio webcast of this briefing will subsequently be available later in the day via Mercia's website.

Investor presentation

In addition, as part of its commitment to appropriate and open communication structures for all elements of its shareholder base, Mercia will provide a live management presentation and Q&A via the Investor Meet Company ("IMC") platform at 3.00pm today. Registration details can be accessed via:

https://www.investormeetcompany.com/mercia-asset-management-plc/register-investor

About Mercia Asset Management PLC

Mercia is a debt free and proactive specialist asset manager focused on supporting regional SMEs to achieve their growth aspirations. Mercia provides capital across its four asset classes of venture, private equity, debt and proprietary capital: the Group's 'Complete Connected Capital'. The Group initially nurtures businesses via its third-party funds under management, then over time Mercia can provide further funding to the most promising companies, by deploying direct investment follow-on capital from its own balance sheet.

The Group has a strong UK footprint through its regional offices, university partnerships and extensive personal networks, providing it with access to high-quality deal flow.

Mercia Asset Management PLC is quoted on AIM with the EPIC "MERC".

Non-Executive Chair's statement

It is just over three years since we all heard those words "you must stay at home" and it is sometimes easy to forget just how tough those early days and months in particular were. In my Chair statement for the year ended 31 March 2020, I said that "times such as these can be challenging and difficult, but they can also be defining moments". I am pleased to say that the latter has proven to be the case for Mercia Asset Management PLC during the unprecedented period of pandemic, economic and geo-political upheaval which has followed.

It is worth reflecting on the tangible progress that has been made by Mercia during this three-year period, by comparing the following two reporting years:

	31 March 2023	31 March 2020	Movement %
	£'000	£'000
Assets under management	1,437,300	798,700	+80
Revenue	25,881	12,747	+103
Adjusted operating profit	7,586	518	+1,364
Operating cash inflow	3,019	136	+2,120
Unrestricted cash (incl. short-term liquidity investments)	37,834	30,653	+23
Net assets	202,921	141,460	+43
Net assets per share  (pence)	45.4	32.1	+41
Dividends per share (interim paid and final proposed) (pence)	0.86	-	-
Number of colleagues	142	93	+53

This material growth in all key metrics, in the face of the last three challenging years, amply validates our business model.

Progressing our strategy despite market headwinds - Mercia 20:20

Launched on 1 April 2021, the Group's current three-year strategic plan is known as Mercia 20:20. The Group's twin objectives are to:

·   grow AuM by an average of 20% per annum over the three years to 31 March 2024; and

·   deliver average pre-tax profits of £20million per annum over the same three-year period.

The Group remains focused on seeking to achieve both of these objectives during this, the final year of the current strategic plan. In relation to the Group's AuM growth objective, in December 2022 we were pleased to welcome the staff of FDC into our #OneMercia family. A highly respected and growing regionally focused specialist lender, FDC complements our existing small and medium-sized enterprise ("SME") lending operations. It has already grown its own FuM in the first few months since acquisition. We not only welcome FDC's staff to Mercia, but also their key fund investors and regional stakeholders, whom we will ensure continue to receive the standard of professional investment and service that they have come to expect from FDC.

Dividend

Mercia adopted its progressive dividend policy in December 2020, when the Group declared its maiden interim dividend of 0.10 pence per share. Since then, Mercia's continued progress has merited measured increases in both the interim and final dividends. Last December, the Group paid an interim dividend of 0.33 pence per share and is now recommending a final dividend of 0.53 pence per share, making 0.86 pence per share for the full year (2022: 0.80 pence per share), a 7.5% increase on the prior year.

Given the strength of Mercia's business model and its continuing excellent cash position, the Board's objective remains to maintain this progressive policy.

Governance and engagement

Good governance is fundamental to the long-term success of any company. Last year, as part of our continuing commitment to the governance principles of the Quoted Companies Alliance Corporate Governance Code, we commissioned our third independent external Board effectiveness review, since our admission to the AIM in December 2014. In May this year, we invited the independent reviewer back to check on our progress against her recommendations, which she confirmed have been positive.

Part of the Board's work during the past year has been the evolution and composition of its governance structures. This has included Mercia's Senior Independent Director, Diane Seymour-Williams, succeeding myself as Chair of the Remuneration Committee and joining the Nominations Committee. The terms of reference of each Committee have also been reviewed and where appropriate, updated.

It remains critical to our future success that we continue to meet the investment objectives agreed with our many asset class fund investors. This includes our institutional investors, individual investors and the independent boards of the three Northern VCTs. In order to continue to support the VCT investment team in successfully managing and expanding the VCT portfolios and respective net assets per share ("NAV"), Peter Dines has relinquished his Chief Operating Officer role to dedicate himself to co-leading our national venture team. We have begun the search for Peter's replacement as COO, and have received many high-quality applications.

Proactive engagement with all of our stakeholder groups remains particularly important to our Board. Hence, for the first time since our early years, we will be holding our forthcoming Annual General Meeting in London. I look forward to engaging with all of our leading stakeholders during the current financial year.

Responsible investing and culture

For Mercia, responsible investing and company culture go hand-in-hand. We invest with purpose to make a return for our investors, but in such a manner that treats all of our stakeholders and the environment with respect. This respect includes the careful management of any potential conflicts of interest, be they perceived or actual. Culture should never be static and we continue to look at ourselves to see how we can increase our own contribution to the fundamentally important areas of employee well-being and support. We do this through proactive engagement together with a commitment to diversity, wider society and the environment. Our #OneMercia ethos embodies all of these aspects of life. We have continued to adopt a flexible approach to the working week, recognising the needs and mental well-being of our staff. We also recognise the importance of face-to-face collaboration, side-by-side training and the many psychological and social benefits of our friendly open-plan office culture. We believe that team working is best achieved when everyone is together, and we will continue to balance all of these aspects to provide the best possible outcomes for our investors, investees and employees.

Although not yet mandatory for Mercia, we continue to measure and offset our environmental impact. We are fortunate that our business model leaves a relatively small carbon footprint, but we still want to play our part in helping the environment. In terms of both good governance and good citizenship, we believe in practising what we ask of our investee companies, all as part of our mantra of 'responsible investing with purpose'. Carbon offsetting is a positive step, and we will continue to seek ways to reduce our carbon footprint over time.

Opportunity

The many varied and well documented challenges of the last three years have shown the importance of our strong #OneMercia culture, which underpins all that we do, particularly our strong overall financial performance. The significant profitable and cash generative growth that we have achieved during this period has been funded entirely from our own financial resources, without dilutive recourse to shareholders or the need to borrow from third-parties. We see no need for this to change in the foreseeable future.

These financial results clearly demonstrate the robustness and continued maturing of our business model, which is now proven to work in both good and tough times. As Chair, I remain immensely proud to be part of #OneMercia, and on behalf of our Board, I sincerely thank each and every person connected in one way or another with our Group for your continuing support. Notwithstanding the uncertain backdrop, our carefully managed and healthy funds and balance sheet cash positions allow us to remain entirely focused on our respective fund mandates and our strategic priorities, and as a result, we are optimistic for further near and long-term growth.

Ian R Metcalfe OBE
Non-executive Chair

Chief Executive Officer's Review

Introduction

With strong regional roots and an established track record, Mercia is a 'one stop' responsible financial partner contributing towards the growth of the UK economy. Our physical presence in some of the key cities across the UK, including Birmingham, Manchester, Sheffield, Leeds, Bristol, Newcastle and London, results in sight of a significant number of investment opportunities in our sweet spot of ambitious business owners who are looking for between £250,000 and £10million of investment. It is interesting to reflect on the progress made in the last three years since COVID struck in March 2020, with AuM up by c.80%, revenue up by c.103% and NAV per share up by c.41% and, with the completion of FY23, our third consecutive year of adjusted operating profits.

Strategy

Despite a challenging FY23 for specialist asset managers in general, Mercia has nevertheless been able to continue with its growth journey. We are now two years into our current three-year strategic plan, Mercia 20:20. Our strategy is to grow our AuM by an average of 20% per annum and deliver average pre-tax profits ("PBT") of £20million per annum over three years. Another way of looking at this is reaching c.£1.6billion in AuM and achieving c.£60million in cumulative PBT by the end of FY24.

Mercia 20:20 is set in parallel with our aspirations to also achieve top quartile performance by our managed funds in their asset categories, plus continued growth in the direct investment portfolio as the key element of our consolidated balance sheet. We also remain focused on growing our third-party funds under management resulting in further growth in adjusted operating profit. To achieve these growth targets, we have established interconnected pools of capital and a capability to invest from as little as £250,000 through to £10million. Our average investment size per investee continues to grow, standing at £0.9million in FY23, and we are looking to increase this further in FY24 as we continue to scale Mercia's capital deployment and AuM.

Our focused approach of only investing in domestic UK businesses with relatively modest capital needs (typically less than £30million in their entire growth journey to exit) as a generalist, but with several key sector themes, means that we have a portfolio which we can, if necessary, support entirely from within our own capital resources - thus protecting and preserving value during periods of economic instability. The majority of our AuM (c.86%) is in third-party managed funds, all of our direct investments benefit from shared equity positions alongside one or more of the funds we manage and, as a debt-free Group, we remain confident in Mercia's profitable and cash generative investment model.

Positive progress during the year

Whilst the markets, both public and private, have cooled over the last 12 months, we have seen this as an opportunity to step forward with both corporate and organic investment activity. Testament to this is the recent acquisition of FDC, a business capable of lending up to £10million per transaction, now with c.£441million in third-party FuM, headquartered in the heart of Birmingham. In addition, in the last financial year we have supported 176 businesses and invested c.£165million, of which c.£21million was from our own cash resources. Since Mercia's inception, we have backed countless founders with their ambitious goals for growth and we will continue to do so, as we seek to become one of the leading wealth enablers in the UK.

In addition to the acquisition of FDC, we have seen capital inflows of c.£134million from the three pools of capital that we manage: retail (c.£31million from EIS and c.£43million from VCT), British Business Bank (c.£30million) and institutional capital (c.£30million). We are targeting further organic growth from all three pools of capital during FY24.

Summary financials

The last 12 months have been tough for many, with the technology sector being largely out of favour with investors, impacting confidence and valuations. Despite the war in Ukraine, double-digit inflation, interest rates growing almost six fold, and marked domestic liquidity reductions, it is pleasing to report continued year-on-year growth, as summarised by:

·    AuM of c.£1.4billion, a c.50% increase

·    Revenue of c.£26million, a c.12% increase

·    Final proposed dividend up 6.0% to 0.53 pence per share making, if approved by shareholders, 0.86 pence per share for the year, an increase of 7.5%.

Outlook

Whilst the sector that we operate in has generally seen liquidity pressures and material reductions in portfolio values, we see an opportunity during this current financial year to increase our investment activity by taking advantage of our strong, unrestricted liquidity of c.£378million across the Group. Based on our physical presence across the UK and continued improvement in both the quality and volume of investment opportunities, we have set an ambitious target of increasing capital deployment to a record level of £250million in FY24.

Since our IPO in December 2014, each year we have either met or beaten market forecasts from a trading outturn perspective. To achieve this requires an exceptional team at Mercia, as we look to deliver on our vision of being the first choice for investors, investees and employees. At the top of our list of 'value drivers' for any acquisition that we make is cultural fit, and I warmly welcome all FDC staff to Mercia, as we continue on our growth journey together underpinned by our shared values. I am sincerely grateful to the entire team at Mercia, our portfolio companies working tirelessly to fulfil their own growth aspirations, our managed fund investors, and last but by no means least, the continued belief and support of our shareholders.

Dr Mark Payton
Chief Executive Officer

Chief Investment Officer's review

Navigating challenges with strength

FY22 was a remarkable year for Mercia's portfolio companies, with record-breaking fair value movements. But as we ventured into the spring of 2022, the landscape shifted. Geo-political conflicts, inflation and rising interest rates ushered in uncertainty, casting a shadow over the public markets. Technology and high-growth companies bore the brunt, witnessing significant value decreases.

Against this backdrop, I am pleased to confirm that Mercia's portfolio companies have risen above the storm in this reporting period.

Our equity funds have realised an impressive c.£71million from 39 companies, delivering an average return of 2x. This is another excellent performance, to add to the c.£250million of realisations over the previous two years on behalf of individual and Limited Partner ("LP") investors, alongside our own balance sheet.

Investor confidence

The confidence placed in us is further evidenced by the inflow of an additional c.£134million (including £30.1million inflow to FDC) of capital to our FuM. Such inflows are only achieved when investors are pleased with our performance, and we are delighted to see their commitments extended in this manner.

Direct investments: Solid progress driven by advancing gaming portfolio

The table below lists Mercia's top 20 investments by fair value as at 31 March 2023, including the net cash invested, realisation proceeds, realised gains/(loss), fair value movements and the fully diluted equity percentage held.

	Year of first direct investment	Net investment value as at 1 April 2022 £'000	Net cash invested year to 31 March 2023 £'000	Investment realisations year to 31 March 2023 £'000	Realised gains/(loss) year to 31 March 2023 £'000	Fair value movement year to 31 March 2023 £'000	Net investment value as at 31 March 2023 £'000	Percentage held as at 31 March 2023 %
nDreams Ltd	2014	25,761	-	-	-	-	25,761	33.2
Impression Technologies Ltd	2015	10,372	4,888	-	-	-	15,260	65.1
Netacea Group Ltd	2022	-	3,000	-	-	8,693	11,693	24.1
Voxpopme Ltd	2018	10,511	625	-	-	(121)	11,015	16.6
Medherant Ltd	2016	8,989	1,709	-	-	236	10,934	38.4
VirtTrade Ltd *	2015	5,387	550	-	-	4,145	10,082	40.6
Warwick Acoustics Ltd	2014	6,306	1,450	-	-	1,939	9,695	40.3
Invincibles Studio Ltd	2015	4,600	626	-	-	3,471	8,697	35.5
Eyoto Group Ltd	2017	2,960	1,514	-	-	1,013	5,487	24.7
Ton UK Ltd **	2015	6,074	-	-	-	(692)	5,382	29.9
Locate Bio Ltd	2018	4,858	-	-	-	-	4,858	18.1
Axis Spine Technologies Ltd	2022	-	3,000	-	-	-	3,000	9.4
sureCore Ltd	2016	2,417	-	-	-	-	2,417	22.0
Nova Pangaea (Holdings) Ltd	2022	-	2,250	-	-	-	2,250	-
Akamis Bio Ltd ***	2015	1,780	-	-	-	-	1,780	1.4
Forensic Analytics Ltd	2021	1,750	-	-	-	-	1,750	8.2
MIP Discovery Ltd	2020	1,449	-	-	-	-	1,449	10.2
Pimberly Ltd	2021	1,375	-	-	-	-	1,375	5.7
MyHealthChecked PLC	2016	1,632	-	-	-	(663)	969	13.1
Uniphy Ltd	2022	-	550	-	-	-	550	-
Other direct investments	n/a	8,926	491	(13)	(2,642)	(4,616)	2,146	n/a
Intechnica Holdings Ltd	2017	14,411	-	(4,000)	1,793	(12,204)	-	-
Total		119,558	20,653	(4,013)	(849)	1,201	136,550	n/a

    *       Trading as Avid Games.

     **      Trading as Intelligent Positioning.

    ***    Formerly PsiOxus Therapeutics Limited, prior to a change in registered name to Akamis Bio Limited in January 2023.

As at 31 March 2023, the value of our direct investment portfolio was £136.6million (2022: £119.6million). This reflects a net £20.7million invested during the year, and a £1.2million fair value increase resulting principally from the continued growth of our mobile and digital gaming companies.

Amid the software sector's downward movement we had one successful realisation in January 2023, the sale of Intechnica Holdings, a software and technology consultancy business. Mercia's 25.5% direct holding generated £3.7million in cash proceeds, achieving an internal rate of return ("IRR") of 27% and a 1.7x multiple on its holding value.

We continue to provide support to our top 10 direct investments, with £14.4million invested during the year. Our focus on evaluating new opportunities has resulted in three new direct investments which exhibit growth potential in exciting markets.

Whilst the fair value movements overall for the year appear modest, our core companies continue to expand revenues and forge valuable partnerships, with five of our direct investments seeing fair value uplifts.

Market challenges have inevitably impacted businesses across our direct portfolio. Netacea experienced lower growth than forecast and, coupled with market revenue multiples falling, has led to a £3.5million fair value decrease (excluding the impact of the demerger from Intechnica). Intelligent Positioning and W2 Global Data Solutions both experienced similar pressures during the year. Furthermore, Edge Case Games was informed that Wargaming.net Limited has ceased work on its original game that was subject to royalty receipts, resulting in a downward fair value movement.

The caution from potential acquirers in purchasing relatively early-stage and often loss-making assets has made them increasingly risk-averse. This approach had noticeable effects throughout the financial year, particularly in the last quarter when exit processes stalled and later-stage investors focused on their existing portfolios. As a result, co-investors and acquirers scaled back or withdrew from assets struggling for growth or exhibiting high cash-burn rates. One such example was the exit process for Sense Biodetection, which was ultimately sold through an accelerated process for a fraction of the initially indicated amounts, when buyers and their US funders pulled back. This disappointing outcome amounted to a £2.6million realised loss, as later-stage investors were compelled to accept a minimal stake in the ultimate acquirer, Sherlock Biosciences Inc., through a share-based deal.

Our equity performance

IRR	31 March 2023		31 March 2022
Proprietary capital	13%		16%
TVPI*	Venture	Private Equity	Venture	Private Equity
Institutional Funds
Legacy	188%	149%	193%	132%
Current	113%	119%	111%	109%
Retail EIS Funds
Legacy	108%	n/a	139%	n/a
Current	92%	n/a	96%	n/a
VCTs (pence per Ordinary share)	NAV **	Total return **	NAV	TOTAL return
Northern Venture Trust	62.1	250.6	68.4	252.9
Northern 2 VCT	59.0	195.0	64.4	196.8
Northern 3 VCT	91.6	205.0	97.9	206.3

* TVPI % defined as; distributions + total value + cash/capital paid in.

** VCT total return growth over 12 months, based on 31 March 2023 cumulative total return, of -0.6% to -0.9%.

We use different performance measures across our asset classes. For our direct portfolio, IRR is adopted because our proprietary capital is also used for other activities. As at 31 March 2023, the direct portfolio IRR had decreased to c.13%, with slower growth in fair values.

We measure 'Total Value to Paid In' ("TVPI") across our regional and private equity ("PE") funds as it shows total value returned and accruing to investors after fees; this naturally increases over time as more capital is returned and the portfolio values grow. Our legacy venture funds, at a TVPI of 188%, are largely flat year-on-year as several assets were marked down during FY23. Our newest PE fund saw a recovery in asset values as the impact of the pandemic on its portfolio businesses receded.

For our VCTs, 'total return' includes cumulative dividends paid alongside current net asset value to give a true total performance measure. It has been principally flat year-on-year.

Our continuing strong overall investment performance enables us to raise additional inflows, with a further £30.3million allocated from additional contributions to the Northern Powerhouse Investment Fund Equity and our Midlands Engine Investment Fund Proof of Concept mandate by British Business Bank. Alongside this, our EIS team raised new funds totalling £31.0million, in addition to our Northern VCTs raising £40.0million, with investors re-investing £2.9million of dividends paid during the year. Since year end, a further £18.0million has been successfully raised by our Northern VCTs, together with a £5.0million additional contribution to the North East Venture Capital fund.

At the year end, we had c.£378million of liquidity across all our funds and balance sheet, c.£128million of which sits within FDC's debt funds.

	AuM 1 April 2022	Acquired	Investor Inflows	Performance	Distributions	AuM 31 March 2023	Post year-end inflows
Asset class	£'m	£'m	£'m	£'m	£'m	£'m	£'m
Venture	592	-	104	(32)	(34)	630	23
Private Equity	48	-	-	1	(1)	48	-
Debt	118	415	30	(4)	(3)	556	-
Total FuM	758	415	134	(35)	(38)	1,234	23
Proprietary Capital	201	-	-	6	(4)	203	-
Total AuM	959	415	134	(29)	(42)	1,437	23

Our managed funds as at 31 March 2023 totalled £1.2billion. During the year, we invested c.£165million into 176 businesses, including 85 new companies.

Venture

UK retail investor-focused VCT and EIS managers raised record amounts of capital in FY23 for disruptive businesses, supporting high-quality management teams. This has provided a solid foundation for entry valuations in the pre-series A space where we operate. Our EIS, regional and VCT equity funds' successful track records, supported by consistently high deployment rates and profitable exits, has resulted in c.£104million of capital inflows. During the year, EIS fundraising totalled c.£31million, with a further c.£30million allocated from our LP partners to our regional funds and c.£43million in new VCT subscriptions.

Notable realisations include robust returns from our investments in Ideagen (9.8x return) and Lineup Systems (7.5x return) from the Northern VCT portfolio, plus C7 (14.2x return) from the EIS portfolio.

The Group's overarching strategy is to make a positive impact through investment in purpose-led companies. We have an investment track record in the Life Sciences, Digital and Deep Tech sectors, aiming for a sustainable, healthier and tech-enabled future. These innovative companies are largely located in the regions outside of London.

Private equity

Tough economic times have presented a challenging terrain for lower mid-market, regional PE investors. This has impacted deal volumes and raised entry valuations as mid-market PE firms have been bidding on substantially smaller deals. We have focused on improving performance within our portfolio, yielding significant results with the portfolio fair value growing by 33%, alongside the exit of D&P Group from one of our legacy funds, giving an overall 3x return on the portfolio.

Debt

Leveraging a variety of government-backed schemes and privately raised funds, we are a go-to lender in the regional SME debt market. Our recent acquisition of FDC in the Midlands has extended our services to enable us to offer higher loan values of up to £10million, which were previously capped at £1million.

With a strong performance, Mercia's Debt funds completed 82 deals, resulting in a c.154% increase in the total amount invested to £34.1million (2022: £13.4million). As a highly agile and flexible lender, our expansion has further demonstrated our ability to meet the evolving needs of SMEs.

Post period events

Post year end, £4.2million has been invested into Voxpopme, Eyoto, Netacea, Impression Technologies and TON UK t/a Intelligent Positioning.

Summary and look forward

In the current year, I have encouraged our investment staff to be bold and unwavering in their support of teams and assets we believe in. We have leveraged the expertise of our Mercia Nucleus network to provide experienced advice to these entrepreneurial teams. At the same time, we have made conscious decisions to allocate capital only to those whose models remain differentiated and aligned with our investment strategy.

Over the past three extraordinary years, we have generated significant realisations, surpassing £320million. This accomplishment not only solidifies our business model and investment expertise, but also enhances our resilience as a proactive specialist asset manager. By carefully selecting assets across sectors, we have avoided overreliance on those specific tech sectors that faced challenges during this period.

While our path to achieving Mercia 20:20 may not be a straight line across the three years, our portfolios are well-run and contain incredibly promising assets. I am confident that we are excellently positioned to deliver significant value over the medium term.

I would like to thank all the team members of #OneMercia who have shown unwavering dedication throughout another challenging year. They are the driving force behind our achievements, and I am very grateful for their continued commitment to our shared vision.

Mercia's journey is marked by strength, resilience and a commitment to excellence. Despite the challenges faced, we have emerged with solid performance, robust investments and an optimistic outlook. We stand ready to navigate the ever-changing landscape, guided by our expertise and supported by our exceptional team. Together, we will continue to unlock value for our shareholders, investors and investees.

Julian Viggars
Chief Investment Officer

Chief Financial Officer's review

Overall financial performance

From a fund management profitability perspective, Mercia was able to maintain its first-half momentum in the second half of the financial year, which was supplemented by the first four months' profitable contribution from FDC, which was acquired on 5 December 2022.

Whilst the Group's direct investment portfolio performance against a challenging market backdrop was satisfactory overall, one material full-cash exit was achieved and the Group finished the year in a strong liquidity position, with no debt.

Acquisition of Frontier Development Capital Limited

Mercia acquired the entire issued share capital of the central-Birmingham headquartered FDC on 5 December 2022, for a total consideration of up to £9.5million plus net cash of £1.5million.

This strategic acquisition was for an initial consideration of £5.5million, satisfied in cash and funded from Mercia's own liquid resources. In addition, deferred consideration of up to £4.0million in cash will be payable, contingent upon the achievement of future revenue and net new institutional third-party fundraising targets, for the two years to 30 November 2024.

The acquisition is earnings enhancing and in the post-acquisition trading period to 31 March 2023, FDC has performed in line with the Group's expectations. Further details of the transaction are shown in note 12.

Proposed final dividend

The Board adopted Mercia's progressive dividend policy in December 2020, and since then has announced interim dividends of 0.10 pence per share in December 2020 and 0.30 pence per share in December 2021. Shareholders also approved a maiden final dividend of 0.30 pence per share in September 2021 and 0.50 pence per share in September 2022.

Given the Group's twin sources of profitability and cash inflow, being regionally focused, proactive specialist asset management, plus direct investment and periodic cash realisations, the Group's dividend policy does not need to be anchored to one or other source of liquidity, hence the Board's intention to grow the total dividend year-on-year.

The continuing positive overall Group performance, coupled with its future prospects, enables Mercia's Board to recommend a proposed final dividend of 0.53 pence per share. If approved by shareholders at the Annual General Meeting in September 2023, the total dividend for the year will be 0.86 pence per share (2022: 0.80 pence per share), a 7.5% total year-on-year increase.

If approved by shareholders, the final dividend will be paid on 27 October 2023 to shareholders on the register at close of business on 29 September 2023, with the total dividend payable being £2,367,000 (2022: £2,201,000).

Adjusted operating profit

The Directors believe that the reporting of adjusted operating profit assists in providing a consistent measure of operating performance for businesses such as Mercia and is an important alternative performance measure ("APM") of interest to shareholders.

Adjusted operating profit is defined as operating profit before net exceptional performance fees, depreciation, realised gains/(losses) on the sale of direct investments, fair value movements in direct investments, share-based payments charge, amortisation of intangible assets, movement in fair value of deferred consideration and exceptional items. It includes net finance income.

Results reported on an APM basis are denoted by¹ throughout this review.

	Year ended 31 March 2023 £'000	Year ended 31 March 2022 £'000
Revenue	25,881	20,576
Administrative expenses	(20,692)	(16,618)
Net finance income	2,397	4,437
Adjusted operating profit	7,586	8,395
Net exceptional performance fees	-	1,592
Depreciation	(309)	(224)
Net finance income	(2,397)	(4,437)
Realised (loss)/gains on sale of direct investments	(849)	9,878
Fair value movements in direct investments	1,201	11,385
Share-based payments charge	(1,049)	(1,109)
Amortisation of intangible assets	(2,337)	(2,033)
Movement in fair value of deferred consideration	(1,462)	(522)
Operating profit before exceptional item	384	22,925
Exceptional item	(372)	-
Operating profit	12	22,925
Net finance income	2,397	4,437
Profit before taxation	2,409	27,362
Taxation	427	(1,262)
Profit and total comprehensive income for the year	2,836	26,100

A reconciliation of these results prepared in accordance with International Financial Reporting Standards ("IFRS") to those presented on an APM basis are as follows:

		Year ended 31 March 2023
	IFRS as reported £'000	Performance fees £'000	Depreciation £'000	APM basis1 £'000
Revenue	25,881	-	-	25,881
Administrative expenses	(21,001)	-	309	(20,692)
Depreciation	-	-	(309)	(309)

	Year ended 31 March 2022
	IFRS as reported	Performance fees	Depreciation	APM basis1
	£'000	£'000	£'000	£'000
Revenue	23,183	(2,607)	-	20,576
Administrative expenses	(17,857)	1,015	224	(16,618)
Depreciation	-	-	(224)	(224)

Revenue

Total revenue increased 11.6% to £25,881,000 (2022: £23,183,000) and comprised fund management related fees, initial management and arrangement fees from investment rounds, investment director monitoring fees, sundry business services income and VCT share offer fees. Excluding the four-month revenue contribution from FDC, the VCT share offer fees received in the year and the exceptional performance fee revenue received in the prior year, the like-for-like increase was 11.1%.

Administrative expenses

Total administrative expenses increased 17.6% to £21,001,000 (2022: £17,857,000) and comprised predominantly staff-related, office, marketing, cyber security and professional adviser costs. Excluding the impact of FDC's staff and administrative expenses, VCT share offer-related costs incurred in the year and the staff bonuses paid in the prior year in respect of the exceptional performance fee revenue, the like-for-like increase was 10.0%.

Net finance income

Total gross finance income of £2,428,000 (2022: £4,452,000) arose primarily from crystallised loan interest and redemption premiums received on convertible loans within the direct investment portfolio. Gross finance income also includes £449,000 (2022: £14,000) of interest received on cash deposits, following Bank of England base rate rises during the year.

Finance costs of £31,000 (2022: £15,000) comprised interest payable on office leases and the Groupʼs staff electric car scheme.

Realised gains/(loss) on sale of direct investments

During the year, a realised gain of £1,793,000 (2022: £9,878,000) arose on the disposal of Mercia's direct investment in Intechnica Holdings. Total cash proceeds of £3,731,000 were received upon completion, with a further £269,000 released from escrow held by a third party in May 2023, following finalisation of the completion accounts. A gain of £2,000 also arose on the disposal of the Group's equity holding in Ventive.

In January 2023, the Group realised a loss of £2,644,000 on the disposal of its direct investment in Sense Biodetection, further details of which are given in Julian Viggars' CIO review.

Fair value movements in direct investments

	Year ended 31 March 2023 £'000	Year ended 31 March 2022 £'000
Investment movements excluding cash invested and realisations:
Unrealised gains on the revaluation of direct investments*	11,324	15,122
Unrealised losses on the revaluation of direct investments*	(10,123)	(3,737)
Net fair value movements	1,201	11,385

* Excluding the demerger of Netacea Group Limited from Intechnica Holdings Limited during the year.

Net fair value movements during the year totalled £1,201,000 (2022: £11,385,000) and as at 31 March 2023, the fair value of the Group's direct investment portfolio was £136,550,000 (2022: £119,558,000).

For the year as a whole, and excluding the impact of the Netacea and Intechnica demerger, unrealised fair value gains arose in five (2022: 10) of the Group's direct investments. The largest fair value gain was in respect of VirtTrade, which accounted for £4,145,000 of the total (2022: £6,734,000 fair value gain in respect of nDreams).

There were six (2022: three) fair value decreases, the largest being £3,511,000 which arose in respect of Netacea Group (2022: £2,856,000 fair value decrease in MyHealthChecked PLC).

Share-based payments charge

The £1,049,000 non-cash charge (2022: £1,109,000) arises from the issued share options held by all employees throughout the Group, ranging from 28 January 2020 to 31 March 2023.

Amortisation of intangible assets

The amortisation charge for the year of £2,337,000 (2022: £2,033,000) represents amortisation of the intangible assets recognised on both the recent acquisition of FDC, and the VCT fund management contracts in 2019.

Movement in fair value of deferred consideration

FDC's total purchase price includes £4,000,000 of contingent deferred consideration, which is subject to a number of targets being met in the two-year period to 30 November 2024. Movement in the fair value of contingent consideration from 5 December 2022 to 31 March 2023 has resulted in a charge to the income statement of £131,000.

The VCT fund management contracts' total purchase price included a number of contingent deferred consideration elements payable over a three-year period. The total deferred consideration was fair valued at the date of acquisition in December 2019. A charge to the income statement of £1,331,000 (2022: £522,000) represents the unwinding of the discount on the final deferred consideration payment settled in cash in December 2022, and new Mercia Asset Management PLC Ordinary shares issued in January 2023.

Exceptional item

The exceptional item for the year ended 31 March 2023 relates to professional fees incurred in respect of the acquisition of FDC in December 2022.

Taxation

The components of the Group's tax charge are shown in note 9 of the summary financial information.

Profit and total comprehensive income for the year

The adjusted operating profit, net realised loss on the sale of direct investments and net fair value increase, all contributed to a consolidated total profit and comprehensive income of £2,836,000 (2022: £26,100,000). This has resulted in basic earnings per Ordinary share of 0.64 pence (2022: 5.93 pence).

Summarised statement of financial position

	As at 31 March 2023 £'000	As at 31 March 2022 £'000
Goodwill and intangible assets	39,051	32,355
Direct investment portfolio	136,550	119,558
Other non-current assets, trade and other receivables	4,751	1,604
Cash and short-term liquidity investments	37,834	61,284
Total assets	218,186	214,801
Trade, other payables and lease liabilities	(7,720)	(7,415)
Deferred consideration	(3,005)	(2,869)
Deferred taxation	(4,540)	(3,928)
Total liabilities	(15,265)	(14,212)
Net assets	202,921	200,589
Net assets per share (pence) **	45.4p	45.6p

** In settlement of the final deferred consideration liability in respect of the VCT fund management business acquired in 2019, 6,471,495 Mercia Asset Management PLC Ordinary shares were admitted to trading on the AIM Market of the London Stock Exchange on 31 January 2023. Subsequent to this, 446,581,202 Ordinary shares were in issue and therefore used as the denominator for calculating net assets per share as at 31 March 2023. 440,109,707 Ordinary shares were in issue as at 31 March 2022.

Intangible assets

Details of the Group's intangible assets, including the intangible asset recognised following the acquisition of FDC, are shown in notes 13 and 14.

Direct investment portfolio

During the year under review, Mercia's direct investment portfolio grew from £119,558,000 as at 1 April 2022 (2022: £96,220,000 as at 1 April 2021) to £136,550,000 as at 31 March 2023 (2022: £119,558,000), a c.14% increase notwithstanding the sale of Intechnica Holdings during the year (2022: c.24% increase).

The Group invested £20,653,000 net (2022: £18,384,000) into 10 existing and three new direct investments (2022: 14 and two respectively), with the top 20 direct investments representing 98.4% of the total direct investment portfolio by value (2022: 98.6%).

Further detail on the fair value movements of individual direct portfolio companies are included within Julian Viggars' CIO review.

Cash and short-term liquidity investments

At the year end, Mercia had cash and short-term liquidity investments (which is cash on deposit with maturities of between 32 days and three months) totalling £37,834,000 (2022: £61,284,000), comprising cash of £37,555,000 (2022: £56,049,000) and short-term liquidity investments of £279,000 (2022: £5,235,000).

The Group continues to have limited working capital needs due to the nature of its business and generated operating cash inflow of £3,019,000 (2022: £9,150,000 inflow).

The overriding priorities of the Group's treasury policy remains firstly the preservation of its shareholders' cash for investment, corporate and working capital purposes, secondly timely availability and finally yield. As at 31 March 2023, the Group's cash and short-term liquidity investments were spread across four leading United Kingdom banks.

Notwithstanding the Group's overarching treasury priority, namely preservation, the Board has recently approved a measured focus on yield in the current year.

The summarised movements in the Group's cash and short-term liquidity investments position during the year are shown below.

	Year ended 31 March 2023 £'000	Year ended 31 March 2022 £'000
Opening cash and short-term liquidity investments	61,284	54,725
Cash generated from operating activities	3,019	9,150
Corporation tax paid	(1,819)	-
Net cash (used in)/generated from direct investment activities	(14,930)	2,363
Acquisition of Frontier Development Capital Limited	(6,951)	-
Cash acquired with Frontier Development Capital Limited	2,882	-
Purchase of VCT fund management contracts (deferred consideration)	(2,100)	(2,100)
Cash inflow/(outflow) from other investing activities	371	(62)
Net cash used in financing activities	(3,922)	(2,792)
Closing cash and short-term liquidity investments	37,834	61,284

Outlook

Despite a challenging year for the specialist asset management sector, and venture capital in particular, Mercia has remained profitable, operating cash flow generative and debt free, and as a result is able to continue to support and maximise value from its direct investment portfolio uninhibited by any liquidity constraints.

Mercia's third acquisition since its IPO in December 2014, FDC, has been integrated into the Group and is performing well, having already secured £30.1million of additional funds to manage, in the short post-acquisition period to 31 March 2023.

Overall therefore, these results demonstrate Mercia's robust business fundamentals, during a year of significant market and economic instability. In financial terms, Mercia's focus for the current financial year is centred on organic growth in its funds under management and continued disciplined support for its direct investment portfolio.

Martin Glanfield

Chief Financial Officer

Summary Financial Information

Consolidated statement of comprehensive income

For the year ended 31 March 2023

		Year ended	Year ended
		31 March	31 March
		2023	2022
	Note	£'000	£'000
Revenue	5	25,881	23,183
Administrative expenses	7	(21,001)	(17,857)
Realised (loss)/gains on sale of direct investments	15	(849)	9,878
Fair value movements in direct investments	15	1,201	11,385
Share-based payments charge		(1,049)	(1,109)
Amortisation of intangible assets	14	(2,337)	(2,033)
Movement in fair value of deferred consideration		(1,462)	(522)
Operating profit before exceptional item		384	22,925
Exceptional item		(372)	-
Operating profit		12	22,925
Finance income	8	2,428	4,452
Finance expense		(31)	(15)
Profit before taxation		2,409	27,362
Taxation	9	427	(1,262)
Profit and total comprehensive income for the year		2,836	26,100
Basic earnings per Ordinary share (pence)	10	0.64	5.93
Diluted earnings per Ordinary share (pence)	10	0.63	5.82

All results derive from continuing operations.

Consolidated statement of financial position

As at 31 March 2023

		As at	As at
		31 March	31 March
		2023	2022
	Note	£'000	£'000
Assets
Non-current assets
Goodwill	13	20,892	16,642
Intangible assets	14	18,159	15,713
Property, plant and equipment		122	113
Right-of-use assets		842	417
Investments	15	136,550	119,558
Total non-current assets		176,565	152,443
Current assets
Trade and other receivables		3,787	1,074
Short-term liquidity investments	16	279	5,235
Cash and cash equivalents	16	37,555	56,049
Total current assets		41,621	62,358
Total assets		218,186	214,801
Current liabilities
Trade and other payables		(6,813)	(6,963)
Lease liabilities		(333)	(157)
Deferred consideration	17	(1,227)	(2,869)
Total current liabilities		(8,373)	(9,989)
Non-current liabilities
Lease liabilities		(574)	(295)
Deferred consideration	17	(1,778)	-
Deferred taxation	18	(4,540)	(3,928)
Total non-current liabilities		(6,892)	(4,223)
Total liabilities		(15,265)	(14,212)
Net assets		202,921	200,589
Equity
Issued share capital	19	4	4
Share premium	20	83,744	81,644
Other distributable reserve	21	63,266	66,919
Retained earnings		51,341	48,505
Share-based payments reserve		4,566	3,517
Total equity		202,921	200,589

Consolidated statement of cash flows

For the year ended 31 March 2023

		Year ended	Year ended
		31 March	31 March
		2023	2022
	Note	£'000	£'000
Cash flows from operating activities:
Operating profit		12	22,925
Adjustments to reconcile operating profit to net cash generated from operating activities:
Depreciation of property, plant and equipment		68	70
Depreciation of right-of-use assets		239	154
Loss/(gains) on sale of direct investments	15	849	(9,878)
Fair value movements in direct investments	15	(1,201)	(11,385)
Share-based payments charge		1,049	1,109
Amortisation of intangible assets	14	2,337	2,033
Movement in fair value of contingent consideration	17	1,462	522
Working capital adjustments:
(Increase)/decrease in trade and other receivables		(1,087)	2,986
(Decrease)/increase in trade and other payables		(709)	614
Cash generated from operating activities		3,019	9,150
Corporation tax paid		(1,819)	-
Net cash generated from operating activities		1,200	9,150
Cash flows from direct investment activities:
Sale of direct investments	15	3,744	16,309
Purchase of direct investments	15	(20,778)	(19,884)
Investee company loan repayments	15	125	1,500
Investee company loan redemption premiums and interest received	8	1,979	4,438
Net cash (used in)/generated from direct investment activities		(14,930)	2,363
Cash flows from other investing activities:
Interest received from cash deposits		404	13
Purchase of property, plant and equipment		(77)	(76)
Acquisition of a subsidiary undertaking		(6,951)	-
Cash acquired with purchase of a subsidiary undertaking		2,882	-
Purchase of fund management contracts	17	(2,100)	(2,100)
Decrease/(increase) in short-term liquidity investments		5,000	(5,000)
Net cash used in other investing activities		(842)	(7,163)
Net cash used in total investing activities		(15,772)	(4,800)
Cash flows from financing activities:
Dividends paid	11	(3,653)	(2,641)
Interest paid		(31)	(15)
Payment of lease liabilities		(238)	(136)
Net cash used in financing activities		(3,922)	(2,792)
Net (decrease)/increase in cash and cash equivalents		(18,494)	1,558
Cash and cash equivalents at the beginning of the year		56,049	54,491
Cash and cash equivalents at the end of the year	16	37,555	56,049

Consolidated statement of changes in equity

For the year ended 31 March 2023

	Issued		Other		Share-based
	share	Share	distributable	Retained	payments
	capital	premium	reserve	earnings	reserve	Total
	£'000	£'000	£'000	£'000	£'000	£'000
As at 1 April 2021	4	81,644	69,560	22,405	2,408	176,021
Profit and total comprehensive income for the year	-	-	-	26,100	-	26,100
Dividends paid	-	-	(2,641)	-	-	(2,641)
Share-based payments charge	-	-	-	-	1,109	1,109
As at 31 March 2022	4	81,644	66,919	48,505	3,517	200,589
Issue of share capital	-	2,100	-	-	-	2,100
Profit and total comprehensive income for the year	-	-	-	2,836	-	2,836
Dividends paid	-	-	(3,653)	-	-	(3,653)
Share-based payments charge	-	-	-	-	1,049	1,049
As at 31 March 2023	4	83,744	63,266	51,341	4,566	202,921

1. General information

Mercia Asset Management PLC (the "Group", "Mercia") is a public limited company, incorporated and domiciled in England, United Kingdom, and registered in England and Wales with registered number 09223445. Its Ordinary shares are admitted to trading on the AIM market of the London Stock Exchange. The registered office address is Mercia Asset Management PLC, Forward House, 17 High Street, Henley-in-Arden, Warwickshire B95 5AA.

2. Basis of preparation

The summary financial information included in this announcement has been extracted from the audited financial statements of the Group for the year ended 31 March 2023, which have been approved by the Board of Directors. The Group's auditor has consented to the publication of this announcement. The summary financial information does not constitute statutory accounts as defined in Section 434 of the Companies Act 2006 (the "Act"). The auditor's report on the financial statements for the year ended 31 March 2023 was unqualified and did not contain any statement under section 498 of the Act. The Group's Annual Report and financial statements will be delivered to the Registrar of Companies in due course.

The financial statements have been prepared on an historical cost basis, as modified by the revaluation of certain financial assets and financial liabilities in accordance with International Financial Reporting Standard ("IFRS") 9 Financial Instruments. The accounting policies presented in the summary financial information are consistent with those set out in the audited financial statements.

3. Going concern

Based on the Group's balance sheet, including its strong liquidity position at the year end, its forecast future operating and investment activities, the Directors have a reasonable expectation that the Group has adequate financial resources to manage business risks in the current economic environment, and continue in operational existence for a period of at least 12 months from the date of this announcement. Accordingly, the Directors continue to adopt the going concern basis in preparing these consolidated financial statements.

4. Significant accounting policies

Basis of consolidation

Subsidiary undertakings are consolidated from the date of their acquisition, being the date on which the Group obtains control, and continue to be consolidated until the date that such control ceases. The financial statements of entities held within the Group's direct investment portfolio are not included within the consolidated financial statements as the Group accounts for these in accordance with the IFRS 10 Investment Entity exemption.

The Group accounts for business combinations using the acquisition method from the date that control is transferred to the Group. Both the identifiable net assets and the consideration transferred in the acquisition are measured at fair value and transaction costs are expensed as incurred. Goodwill arising on acquisitions is tested annually for impairment. Deferred consideration payable to vendors is measured at fair value at acquisition and re-assessed annually, with particular reference to the conditions upon which the consideration is contingent.

New standards, interpretations and amendments effective in the current financial year

No new standards, interpretations and amendments effective in the year have had a material effect on the Group's financial statements.

Critical accounting judgements and key sources of estimation uncertainty

In the application of the Group's accounting policies, the Directors are required to make judgements, estimates and assumptions about the carrying amounts of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods.

The Directors have made the following judgements and estimates, which have had the most significant effect on the carrying amounts of the assets and liabilities in this summary financial information.

Fair value measurements and valuation processes

The judgements required to determine the appropriate valuation methodology of unquoted equity investments mean there is risk of a material adjustment to the carrying amounts of assets and liabilities. These judgements include a decision on whether or not to impair or uplift investment valuations.

The fair value of unlisted securities is established using the International Private Equity and Venture Capital Valuation Guidelines ("IPEVCVG") as updated in December 2022.

Investments are measured at fair value at each measurement date. Fair value is the price that would be received to sell an asset in an orderly transaction between market participants at the measurement date. A fair value measurement assumes that a hypothetical transaction to sell an asset takes place in the principal market or, in its absence, the most advantageous market for the asset. For quoted investments, available market prices will be the exclusive basis for the measurement of fair value for identical instruments. For unquoted investments, the measurement of fair value requires the valuer to assume the underlying business or instrument is realised or sold at the measurement date, appropriately allocated to the various interests, regardless of whether the underlying business is prepared for sale or whether its shareholders intend to sell in the near future.

In estimating fair value for an investment, the valuer should apply a methodology that is appropriate in light of the nature, facts and circumstances of the investment in the context of the total investment portfolio and should use reasonable current market data and inputs, combined with reasonable market participant assumptions.

The price of recent investment can be used to estimate the enterprise value, before allocating to the various interests. The Group believes that this is still the most relevant technique to measure fair value for early-stage investments. However, it has also taken into consideration time elapsed, performance since the investment round and external market events to help inform its judgements.

0-6 months post last funding round

The Group will apply the price of a recent investment for up to six months post the last funding round, subject to there being no material change to the investee company's prospects (which would include the prospects of drawing down the next tranche or raising the next round of funding).

7-18 months post last funding round

Beyond the six months point, the Group seeks assurance that the investee company is progressing against the development milestones which were set out in the initial assessment. Failing to hit milestones will not necessarily impact the valuation - this may simply be an indicator that incremental value will take longer to deliver, but the performance against milestones is assessed as an indicator of a potential change in value. The Group will be cautious about increasing the valuation of an early-stage investee company unless it is based on a new market price or maintainable revenues and/or earnings.

19+ months post last funding round

From this point onwards, the Group looks for additional support for the 'price of recent investment' by calibrating back to that using a discounted cash flow ("DCF") methodology. However, unless the investee company has become established with maintainable revenues and/or earnings and can be valued on an earnings basis, given the inherent risk in early-stage investing and the lack of reliability of using estimates yet to be delivered a number of years into the future, the Group is unlikely to increase the fair value, even if a DCF calculation suggests a higher value. Nevertheless, the DCF calculation helps support the proposed fair value at the valuation point.

The recent macroeconomic uncertainty has created uncertainty in the fair value of the direct investment portfolio. The Directors believe that they have reflected this uncertainty in a balanced way through the assumptions used in the valuation of each investee company. The Directors have assessed the estimates made in relation to each individual valuation and do not believe that a reasonable possible change in estimate would result in a material change in the value of each investment.

Accounting for the acquisition of Frontier Development Capital Limited

On 5 December 2022 Mercia acquired the entire issued share capital of Frontier Development Capital Limited ("FDC"), including its wholly owned subsidiaries, FDC General Partner Limited and FDC SPV Limited.

The fund management contracts held by FDC have been fair valued on a discounted cash flow basis. A post-tax discount rate of 15.0% has been used and is considered a significant assumption. Should this discount rate be increased by 1.0%, the value of the fund management contracts would reduce by £101,000, with goodwill increasing by a corresponding amount.

The expected useful life of five years is derived from the weighted average remaining life of FDC's fund management contracts on 5 December 2022. Should it be increased by one year, the value of the fund management contracts would increase by £520,000 with goodwill decreasing by a corresponding amount. Should the cash flows associated with these contracts increase by 5.0%, the value of the fund management contracts would increase by £44,000 with goodwill decreasing by a corresponding amount.

Goodwill has been recognised as the difference between the fair value of consideration paid and the intangible asset recognised upon acquisition. Further details are included in note 12.

Valuation of deferred contingent consideration

The fair value of deferred contingent consideration payable in respect of the acquisition of FDC is conditional upon certain conditions being met.

The fair value has been derived from the assessed probability of each contingent consideration condition occurring being 90.0%, discounted at an annual rate of 15.0%. Should the probability be reduced by 10.0% across all three conditions, the discounted value of contingent consideration as at 31 March 2023 would reduce by £319,000.

The discount rate used to fair value the contingent consideration liability is reflective of the risks surrounding the conditions being met. Should the discount rate be increased by 1.0%, the fair value of deferred contingent consideration as at 31 March 2023 would reduce by £39,000.

Further detail on the deferred contingent consideration conditions is included in note 17.

5. Segmental reporting

The Group's revenue and profits are derived from its principal activity within the United Kingdom.

IFRS 8 Operating Segments defines operating segments as those activities of an entity about which separate financial information is available and which are evaluated by the Chief Operating Decision Maker to assess performance and determine the allocation of resources. The Chief Operating Decision Maker has been identified as the Board of Directors. The Directors are of the opinion that under IFRS 8 Operating Segments the Group has only one operating segment, being proactive specialist asset management, because the results of the Group are monitored on a Groupwide basis. The Board of Directors assesses the performance of the operating segment using financial information which is measured and presented in a consistent manner.

An analysis of the Group's revenue is as follows:

	Year ended	Year ended
	31 March	31 March
	2023	2022
	£'000	£'000
Fund management fees	17,593	14,957
Initial management fees	3,680	2,456
Portfolio directors' fees	2,934	2,969
Other revenue	343	194
VCTs share offer fees	1,331	-
Exceptional performance fees	-	2,607
	25,881	23,183

6. Fair value movements in direct investments

	Year ended	Year ended
	31 March	31 March
	2023	2022
	£'000	£'000
Net fair value movements in direct investments (note 15)	1,201	11,385

7. Operating profit

Operating profit is stated after charging:

	Year ended	Year ended
	31 March	31 March
	2023	2022
	£'000	£'000
Staff costs	14,366	12,961
Other administrative expenses	6,635	4,896
Total administrative expenses	21,001	17,857

8. Finance income

Finance income is derived from:

	Year ended	Year ended
	31 March	31 March
	2023	2022
Cash deposits	404	12
Short-term liquidity investments	45	2
Investee company loans (interest and redemption premiums)	1,979	4,438
Total finance income	2,428	4,452

9. Taxation

	Year ended	Year ended
	31 March	31 March
	2023	2022
Current tax
UK Corporation tax	(157)	(706)
Deferred tax
Origination and reversal of temporary timing differences	584	508
Effects of changes in tax rates	-	(1,064)
Total tax credit/(charge)	427	(1,262)

The UK standard rate of corporation tax is 19% (2022: 19%). The deferred tax credit of £584,000 (2022: £508,000) represents the unwinding of the deferred tax liability recognised in respect of the intangible assets arising on the acquisition of the VCT fund management business and Frontier Development Capital Limited.

A reconciliation from the reported profit to the total tax credit/(charge) is shown below:

	Year ended	Year ended
	31 March	31 March
	2023	2022
Profit before taxation	2,409	27,362
Taxation at the standard rate of corporation tax in the UK of 19% (2022: 19%)	(458)	(5,199)
Effects of:
Income not subject to tax	589	4,039
Expenses not deductible for tax purposes	(318)	(314)
Share of partnership profits	(509)	(513)
Capital losses	234	-
Remeasurement of deferred tax for changes in tax rates	140	252
Other timing differences not recognised	749	473
Total tax credit/(charge)	427	(1,262)

An increase in the UK corporation tax rate from 19% to 25%, with effect from 1 April 2023, was substantively enacted on 24 May 2022. The Group's deferred tax liability has been calculated at a rate of 25% as at 31 March 2023 (2022: 25%).

A total deferred tax liability of £4,540,000 (2022: £3,928,000) as at 31 March 2023 relates to the intangible asset recognised on the acquisition of FDC in December 2022, and the continued recognition of the intangible asset arising on the acquisition of the VCT fund management business in 2019.

A potential deferred tax asset of £3,436,000 (2022: £4,442,000) for cumulative unrelieved management expenses and other tax losses has not been recognised in these consolidated financial statements as their future use is uncertain.

10. Earnings per share

Basic earnings per share is calculated by dividing the profit for the financial year by the weighted average number of Ordinary shares in issue during the year. Diluted earnings per share is calculated by dividing the profit for the financial year by the weighted average number of Ordinary shares outstanding and, when dilutive, adjusted for the effect of all potentially dilutive shares, including share options, on an as-if-converted basis. The potential dilutive shares are included in diluted earnings per share calculations on a weighted average basis for the year. The profit and weighted average number of shares used in the calculations are set out below:

	Year ended	Year ended
	31 March	31 March
	2023	2022
Profit for the financial year (£'000)	2,836	26,100
Basic weighted average number of Ordinary shares ('000)	441,156	440,110
Basic earnings per Ordinary share (pence)	0.64	5.93
Diluted weighted average number of Ordinary shares ('000)	449,348	448,466
Diluted earnings per Ordinary share (pence)	0.63	5.82

The calculation of basic and diluted earnings per share is based on the following weighted average number of Ordinary shares:

	Year ended	Year ended
	31 March	31 March
	2023	2022
	'000	'000
Weighted average number of shares
Basic	441,156	440,110
Dilutive impact of employee share options	8,192	8,356
Diluted weighted average number of Ordinary shares	449,348	448,466

11. Dividends

	Year ended 31 March 2023			Year ended 31 March 2022
Dividends declared/proposed in respect of the year	Pence per share	£'000		Pence per share	£'000
Interim dividend declared in relation to year ended 31 March 2022	-	-		0.30	1,320
Final dividend declared in relation to year ended 31 March 2022	-	-		0.50	2,201
Interim dividend declared in relation to year ended 31 March 2023	0.33	1,452		-	-
Final dividend proposed in relation to year ended 31 March 2023	0.53	2,367		-	-
	0.86	3,819		0.80	3,521

	Year ended 31 March 2023			Year ended 31 March 2022
Dividends paid during the year	Pence per share	£'000		Pence per share	£'000
Final dividend paid in relation to year ended 31 March 2021	-	-		0.30	1,320
Interim dividend paid in relation to year ended 31 March 2022	-	-		0.30	1,321
Final dividend paid in relation to year ended 31 March 2022	0.50	2,201		-	-
Interim dividend paid in relation to year ended 31 March 2023	0.33	1,452		-	-
	0.83	3,653		0.60	2,641

The final dividend for the year ended 31 March 2023 proposed by the Board of 0.53 pence per share, totalling £2,367,000, is subject to shareholder approval at the Annual General Meeting on 21 September 2023, and as such has not been included as a liability in these financial statement in accordance with IAS 10.

12. Business Combination

On 5 December 2022 the Group acquired the entire issued share capital of Frontier Development Capital Limited ("FDC"), including its wholly owned subsidiaries FDC General Partner Limited and FDC SPV Limited, all of which are registered in England. The fair value of the identifiable net assets acquired and the consideration paid under IFRS 3 are as follows:

		Provisional policy
	Pre-acquisition	alignment and fair
	carrying value	value adjustments	Total
	£'000	£'000	£'000
Intangible asset	-	4,783	4,783
Tangible fixed assets	20	-	20
Right-of-use asset	-	566	566
Investments	-	42	42
Cash	2,882	-	2,882
Trade and other receivables	428	(42)	386
Trade and other payables	(1,341)	-	(1,341)
Lease liability	-	(566)	(566)
Deferred tax liability	-	(1,196)	(1,196)
Total identifiable net assets	1,989	3,587	5,576

Under the terms of the acquisition agreement, the fair value of consideration paid to the vendors was:

	£'000
Cash - initial consideration	5,500
Cash - net cash position	1,451
Cash consideration as shown in the Consolidated statement of cash flows	6,951
Fair value of contingent consideration	2,875
Less total identifiable net assets	(5,576)
Goodwill	4,250

Revenue and profits

The Group has recognised the following results in respect of the post-acquisition period from 6 December 2022 to 31 March 2023.

	£'000
Revenue	1,698
Operating profit	401

Prior to the acquisition by the Group, FDC had a 30 November year end. The disclosure of the Group's revenue and profit, had the acquisition occurred on 1 April 2022, has not been presented as the determination of these amounts is impracticable.

Fair value

The fair value of fund management contracts held by FDC has been estimated using a discounted cash flow model. The estimated cash flows have been valued at a discount of 15.0%, with the recognised intangible asset amortised over five years.

13. Goodwill

Goodwill arising on the businesses acquired to date is set out in the table below.

	Mercia Fund Management	Enterprise Ventures Group	VCT fund management business	Frontier Development Capital	Total
	£'000	£'000	£'000	£'000	£'000
Cost
As at 1 April 2021 and 31 March 2022	2,455	7,873	6,314	-	16,642
Addition	-	-	-	4,250	4,250
As at 31 March 2023	2,455	7,873	6,314	4,250	20,892

Goodwill for each business acquired has been assessed for impairment as at 31 March 2023. Recoverable amounts for each cash generating unit ("CGU") are based on the higher of value in use and fair value, less costs of disposal ("FVLCD").

The value in use calculations are based on future expected cash flows generated by each CGU, as derived from the approved budget for the year ended 31 March 2024. Key assumptions are a discount rate of 12.0% and the growth rates used in forecasting future operating results. Where the fund management contracts are 'evergreen', a value into perpetuity has been used based on a zero growth rate beyond a five-year forecast period.

The review concluded that the value in use of each CGU exceeds its carrying value. The Directors do not consider that a reasonably possible change in a key assumption would reduce the recoverable amount of the CGUs to below their carrying value.

14. Intangible assets

Intangible assets represent contractual arrangements in respect of the acquisition of Enterprise Ventures Group in 2016, the acquired VCT fund management business in 2019 and the acquisition of FDC in December 2022, where it is probable that the future economic benefits that are attributable to those assets will flow to the Group and the fair value of the assets can be measured reliably.

	£'000
Cost
As at 1 April 2021 and 31 March 2022	21,835
Acquisition of a subsidiary	4,783
As at 31 March 2023	26,618
Accumulated amortisation
As at 1 April 2021	4,089
Charge for the year	2,033
As at 31 March 2022	6,122
Charge for the year	2,337
As at 31 March 2023	8,459
Net book value
As at 1 April 2021	17,746
As at 31 March 2022	15,713
As at 31 March 2023	18,159

15. Investments

The net change in the value of investments for the year is an increase of £16,992,000 (2022: increase of £23,338,000). The tables below reconcile the opening to closing value of investments.

	Level 1 financial assets	Level 3 financial assets	Total financial assets
	£'000	£'000	£'000
As at 1 April 2021	4,488	91,732	96,220
Investments made during the year	-	19,884	19,884
Investee company loan repayment	-	(1,500)	(1,500)
Disposals	-	(6,431)	(6,431)
Unrealised fair value gains on investments	-	15,122	15,122
Unrealised fair value losses on investments	(2,856)	(881)	(3,737)
As at 31 March 2022	1,632	117,926	119,558
Investments made during the year	-	20,736	20,736
Investments acquired during the year	-	42	42
Investee company loan repayment	-	(125)	(125)
Disposals	-	(4,862)	(4,862)
Unrealised fair value gains on investments	-	20,017	20,017
Unrealised fair value losses on investments	(663)	(18,153)	(18,816)
As at 31 March 2023	969	135,581	136,550

On 4 January 2022, the Group completed the sale of its investment in Faradion Limited, generating a realised gain of £9,878,000. Total cash proceeds of £19,402,000 were received upon completion, comprising £16,309,000 from the sale of the Group's equity holding, a loan repayment of £1,500,000, a loan redemption premium of £1,500,000 and loan interest of £93,000. Additional loan redemption premiums and interest, totalling £738,000, converted into equity immediately prior to disposal of the Group's total equity holding.

On 18 January 2023, the Group sold its entire equity holding in Intechnica Holdings Limited, generating a realised gain of £1,793,000. Proceeds of £3,731,000 were received on completion, with £269,000 held in escrow as at 31 March 2023 by a third party, pending finalisation of the completion accounts. In May 2023, the amount held in escrow was received by the Group.

On 28 January 2023, the Group sold its entire equity holding in Sense Biodetection Limited resulting in a realised loss of £2,644,000. Proceeds received were in the form of an equity shareholding in Sherlock Biosciences Inc.

During the year ended 31 March 2023, the Group sold its equity holding in two other portfolio companies with total proceeds of £13,000, resulting in a £2,000 realised gain.

Investments held as part of the Group's direct investment portfolio are carried at fair value in accordance with the IFRS 10 Investment Entity exemption.

The measurement basis for determining the fair value of investments held at 31 March is as follows:

	As at 31 March 2023 £'000	As at 31 March 2022 £'000
Listed investment	969	1,632
Price of recent investment round	79,522	62,233
Enterprise value	52,912	37,772
Cost	3,147	5,625
Impaired value1	-	12,296
	136,550	119,558

¹ Valued using valuation methodologies consistent with the Group's accounting policy.

16. Cash, cash equivalents and short-term liquidity investments

	As at 31 March 2023 £'000	As at 31 March 2022 £'000
Total cash and cash equivalents	37,555	56,049
Total short-term liquidity investments	279	5,235

17. Deferred consideration

	As at	As at
	31 March	31 March
	2023	2022
	£'000	£'000
Payable within one year	1,227	2,869
Payable within two to five years	1,778	-
	3,005	2,869

In the year to 31 March 2023, the two final deferred consideration conditions included as part of the acquisition of the VCT fund management business in 2019, were met. In settlement of the deferred consideration therefore due, a cash payment of £2,100,000 was made to the vendors in December 2022, in addition to the issue of Mercia Asset Management PLC Ordinary shares in January 2023, also with a value of £2,100,000. Settlement of both of these final deferred consideration amounts resulted in a fair value charge to the income statement of £1,331,000.

On 5 December 2022, Mercia completed the acquisition of FDC for a total maximum cash consideration of £9,500,000, comprising an initial cash consideration of £5,500,000, plus up to a maximum of £4,000,000 contingent consideration payable upon certain post-acquisition conditions being met.

The deferred consideration has a fair value of £3,005,000 as at 31 March 2023, and is payable upon satisfaction of the following conditions:

·    The first condition is met if revenue for the 12-month period to 30 November 2023 exceeds a year-one revenue target. The value of contingent consideration payable is up to a maximum of £1,500,000.

·    The second condition is satisfied if revenue for the 12-month period to 30 November 2024 exceeds a year-two revenue target. The value of contingent consideration payable is up to a maximum of £1,000,000.

·    The final condition is met if a net new institutional third-party fundraising target, over a two-year period to 30 November 2024, is achieved. Satisfaction of this target triggers £1,500,000 contingent consideration payable to the vendors.

The undiscounted value of contingent consideration payments that the Group could be required to make is up to £4,000,000. Movement in the fair value of the FDC deferred consideration from 5 December 2022 to 31 March 2023 has resulted in a charge to the income statement of £131,000.

18. Deferred taxation

	As at	As at
	31 March	31 March
	2023	2022
	£'000	£'000
Deferred tax liability	4,540	3,928

Under IAS 12 Income Taxes, provision is made for the deferred tax liability associated with the recognition of the intangible asset arising on the acquisitions of the VCT fund management contracts and FDC. As at 31 March 2023, the deferred tax liability has been calculated using the substantively enacted tax rate of 25% - see note 9 for further detail.

19. Issued share capital

	As at 31 March 2023			As at 31 March 2022
	Number	£'000		Number	£'000
Allotted and fully paid
As at the beginning of the year	440,109,707	4		440,109,707	4
Issue of share capital during the year	6,471,495	-		-	-
As at the end of the year	446,581,202	4		440,109,707	4

On 26 January 2023, 6,471,495 new Ordinary shares were issued at a price of 32.45 pence per share to satisfy the final deferred consideration element due in respect of the acquisition of the VCT fund management business in 2019. These new shares were admitted to trading on the AIM market of the London Stock Exchange on 31 January 2023.

Each Ordinary share is entitled to one vote and has equal rights as to dividends. The Ordinary shares are not redeemable.

20. Share premium

	As at	As at
	31 March	31 March
	2023	2022
	£'000	£'000
As at the beginning of the year	81,644	81,644
Premium arising on the issue of Ordinary shares	2,100	-
As at the end of the year	83,744	81,644

The premium on the issue of Ordinary shares arises from 6,471,495 new Ordinary shares of £0.00001 each issued at a price of 32.45 pence per share on 26 January 2023.

21. Other distributable reserve

	As at	As at
	31 March	31 March
	2023	2022
	£'000	£'000
As at the beginning of the year	66,919	69,560
Dividends paid (note 11)	(3,653)	(2,641)
As at the end of the year	63,266	66,919

22. Fair value measurements

The fair values of the Group's financial assets and liabilities are considered a reasonable approximation to the carrying values shown in the consolidated statement of financial position. Subsequent to their initial recognition at fair value, measurements of movements in fair values of financial instruments are grouped into Levels 1 to 3, based on the degree to which the fair value is observable.

The following table gives information about how the fair values of these financial assets and financial liabilities are determined and presents the Group's assets that are measured at fair value. There have been no movements in financial assets or financial liabilities between levels during the current or prior years. The table in note 15 sets out the movement in the Level 1 and 3 financial assets during the year.

	As at	As at
	31 March	31 March
	2023	2022
	£'000	£'000
Assets:
Financial assets at fair value through profit or loss - direct investment portfolio
Level 1	969	1,632
Level 2	-	-
Level 3	135,581	117,926
	136,550	119,558

			As at	As at
			31 March	31 March
			2023	2022
			£'000	£'000
Liabilities:
Financial liabilities at fair value through profit or loss - deferred consideration
Level 1			-	-
Level 2			-	-
Level 3			3,005	2,869
			3,005	2,869

The Directors consider that the carrying amounts of financial assets and financial liabilities recorded at amortised cost in the consolidated financial statements approximate to their fair values.

Financial instruments in Level 1

The Group had one direct investment listed on AIM, MyHealthChecked PLC, which is valued using the closing bid price as at 31 March 2023.

Financial instruments in Level 3

If one or more of the significant inputs required to fair value an instrument is not based on observable market data, the instrument is included in Level 3. Apart from the one investment classified in Level 1, all other investments held in the Group's direct investment portfolio have been classified in Level 3 of the fair value hierarchy and the individual valuations for each of the companies have been arrived at using appropriate valuation techniques.

The Group has adopted the IPEVCVG for determining its valuation techniques, which specify that the price of a recent investment represents one of a number of inputs used to arrive at fair value, and uses a single classification for all Level 3 investments.

Note 4 of this summary financial information provides further information on the Group's valuation methodology, including a detailed explanation of the valuation techniques used for Level 3 financial instruments.

23. Availability of Annual Report

The Annual Report of Mercia Asset Management PLC will be posted to all shareholders on 28 July 2023. An electronic copy will also be available on Mercia Asset Management PLC's website at www.mercia.co.uk.

24. Annual General Meeting

The Annual General Meeting of Mercia Asset Management PLC will be held at the offices of Reed Smith LLP at The Broadgate Tower, 20 Primrose Street, London, EC2A 2RS on 21 September 2023 at 10:00 am.

 

Directors, secretary and advisers

Directors

Ian Roland Metcalfe OBE                            (Non-executive Chair)

Dr Mark Andrew Payton                             (Chief Executive Officer)

Martin James Glanfield                               (Chief Financial Officer)

Julian George Viggars                                  (Chief Investment Officer)

Diane Seymour-Williams                             (Senior Independent Director)

Raymond Kenneth Chamberlain                (Non-executive Director)

Dr Jonathan David Pell                                 (Non-executive Director)

Caroline Bayantai Plumb OBE                     (Non-executive Director)

Company secretary	Company registration number
Sarah-Louise Anne Williams	09223445
Company website	Company registrar
www.mercia.co.uk	SLC Registrars
	Highdown House
Registered office	Yeoman Way
Forward House	Worthing
17 High Street	West Sussex BN99 3HH
Henley-in-Arden
Warwickshire B95 5AA	Solicitors
	Gowling WLG (UK) LLP
Independent auditor	4 More London Riverside
BDO LLP	London SE1 2AU
55 Baker Street
Marylebone	Nominated adviser and joint broker
London W1U 7EU	Canaccord Genuity Ltd
	88 Wood Street
Principal bankers	London EC2V 7QR
Barclays Bank PLC
One Snowhill	Joint broker
Snow Hill Queensway	Singer Capital Markets Advisory LLP
Birmingham B4 6GN	1 Bartholomew Lane
	London EC2N 2AX
Lloyds Bank plc
125 Colmore Row	Investor relations adviser
Birmingham B3 3SD	FTI Consulting Ltd
	200 Aldersgate
	London EC2A 4HD

 

END