Interim / Quarterly Report • Jun 30, 2014
Interim / Quarterly Report
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A VENTURE CAPITAL TRUST
Unaudited Half-Yearly Report for the six months ended 30 June 2014
Mobeus Income & Growth 4 VCT plc ("MIG4" or the "Company") is a Venture Capital Trust ("VCT") advised by Mobeus Equity Partners LLP ("Mobeus"), investing primarily in established, profitable, unquoted companies.
The objective of the Company is to provide investors with a regular income stream by way of tax-free dividends and to generate capital growth through portfolio realisations which can be distributed by way of additional tax-free dividends.
| Financial Highlights | 1 |
|---|---|
| Chairman's Statement | 3 |
| Investment Policy | 6 |
| Investment Review | 7 |
| Investment Portfolio Summary | 10 |
| Statement of the Directors' Responsibilities | 12 |
| Unaudited Financial Statements | 13 |
| Notes to the Unaudited Financial Statements | 18 |
| Investor Performance Appendix | 23 |
| Shareholder Information | 26 |
| Chronology of Mobeus Income & Growth 4 VCT plc | 28 |
| Corporate Information | 29 |
Net asset value (NAV) total return per share for the period was 8.6%.
An interim exceptional capital dividend of 12 pence per share has been declared as a result of the high level of realisations in the period. This, together with an interim income dividend of 2 pence per share, will bring the total dividend paid to 14 pence per share and cumulative dividends paid to shareholders since launch to 52.2 pence per share.
£5.52 million of cash proceeds were receivable during the period, including the partial sale of ATG Media for £3.10 million, in addition to MachineWorks and Monsal. DiGiCo was realised following the periodend for further cash proceeds of £1.73 million.
A total of £3.56 million was invested in the period into Bourn Bioscience, Entanet International and Creative Graphics International.
Strong liquidity has been enhanced by a successful fundraising in 2014 from which net funds of £8.19 million were raised by the Company.
The net asset value per share of the Company at 30 June 2014 was 126.29 pence.
1 Cumulative NAV total shareholder return per share is net asset value per share plus cumulative dividends paid (pence per share) since 1999 to date excluding dividends declared but not yet paid.
2 An interim exceptional capital dividend of 12 pence per share and an interim income dividend of 2 pence per share was declared. This brings the total dividend declared by the Directors to 14 pence per share. The interim dividend will be paid on 12 September 2014, bringing cumulative dividends paid to date to 52.2 pence per share. The NAV per share will reduce by a corresponding 14 pence.
Performance data for all fundraising rounds is shown in a table on pages 23 – 25 of this Half-Yearly Report.
The table below show the amounts that shareholders, investing in each fundraising round, have received in dividends since investment plus the share price that they would have realised, if they had sold their investment, compared with the amount invested (net of income tax relief also received).
Cash invested (p) based upon rst allotment in that fundraising year 1
Cumulative dividends paid (p) per share plus Share price (mid-market) 2equals Total Shareholder Return (share price basis)
The table above compares the original investment per share with the returns per share received to date. The data is for the first allotment in each fundraising undertaken by the Company.
The returns for shareholders are:
2 The mid-market price may be slightly higher than the bid-price, at which shareholders could realise their investment, by around 0.5-1%.
I am pleased to present this Half-Yearly Report for Mobeus Income & Growth 4 VCT plc covering the six months ended 30 June 2014.
The net asset value per share as at 30 June 2014 was 126.29 pence compared with the NAV per share of 119.92 pence as at 31 December 2013.
The Company's total return to shareholders for the half-year (NAV basis) was 8.6% (2013: 5.5%), after allowing for the final dividend of 4.0 pence per share for the year ended 31 December 2013, which was paid in the period.
This healthy rise in NAV return over the period was largely due to three substantial, profitable realisations of ATG Media (partial), Machineworks and Monsal and also due to other unrealised gains across the portfolio, notably increases in the valuations of ASL Technology, DiGiCo Global, EMaC, Focus and Youngman. The increase in the value of the portfolio reflects the higher levels of profitability of a number of investee companies, several of which have used surplus cash to make loan repayments to the Company.
This has been another period of strong performance for the Company. Consequently, the cumulative NAV total return per share (being the closing net asset value plus total dividends paid to date since launch) rose during the six month period by 6.7% from 154.12 pence to 164.49 pence.
To assist shareholders who originally invested in any of the individual fundraisings to monitor the performance of their investment (including dividend payments) on a consistent basis, a table showing the returns to shareholders from each allotment has been included at the back of this Half-Yearly Report on pages 23 – 25.
The Board is again declaring an interim dividend, comprising an income payment, together with an exceptional capital payment boosted by the highly successful full and partial realisations
referred to above. The income payment amounts to 2 pence per share; the capital payment amounts to 12 pence per share. The interim dividend, amounting in total to 14 pence per share, will be paid on 12 September 2014 to shareholders on the Register on 22 August 2014. This payment will bring cumulative dividends paid per share since launch to 52.2 pence.
With regard to the future, shareholders are again reminded that capital payments can vary significantly, depending on realisations achieved in the relevant financial period.
Overall the investment portfolio recorded a gain of £3.76 million during the first half of the year (15.3% of the 1 January, 2014 value) and was valued at £27.20 million at the period-end.
A total of £3.56 million was invested during the period to finance three transactions. In January 2014, £1.13 million was invested into Bourn Bioscience Limited, the owner and manager of the Bourn Hall fertility clinics in the East of England. The Company invested £1.37 million to support the MBO of Entanet International Limited ("Entanet"), a wholesale communications provider, in February; whilst in June, a new investment of £1.06 million was made to support the Buy-in/MBO of Creative Graphics International Limited ("CGI"), a leading specialist provider of self-adhesive branding solutions to the automotive, recreational vehicle and airline markets.
Shortly after the period-end, a further investment of £1.16 million was made to support the MBO of Tharstern Limited, the UK's leading supplier of softwarebased management information systems to the print sector.
This has been a particularly active period for portfolio realisations. Net cash proceeds receivable during the first six months of the year amounted to £5.52 million, representing realised gains of £1.79 million in the period. This arose primarily from the partial sale of ATG Media and full sales of MachineWorks and Monsal, but also includes the loan stock repayments of £1.01 million from five companies, being mainly from CB Imports (Country Baskets) and Fullfield (Motorclean). In addition, DiGiCo was sold following the period-end, realising further proceeds of £1.73 million and gains of £0.30 million in the period to date, for the Company. This means therefore, total gains over the cost of the investments sold in the period to date, are £5.32 million.
Further details of all these transactions can be found in the Investment Review on pages 9 – 11 of this Half-Yearly Report.
The net revenue return for the period has also achieved a good result, rising by £0.57 million from £0.38 million at the last half-year, to £0.95 million for this half-year. This was mainly because income has risen by £0.56 million, primarily due to a rise in loan stock interest of £0.39 million. Dividend income rose by £0.18 million to £0.25 million. Income from cash balances fell by a net amount of £0.02 million, as interest rates on bank deposits fell, despite more cash being retained in them.
Running costs rose slightly as Investment Adviser fees charged to revenue rose by £0.02 million due to rising net assets. Other costs fell by £0.01 million, mainly due to a fall in trail commission costs as a cap was reached in the period, along with lower registrar's fees, countered by higher professional fees and printing costs.
The Company participated with the other three Mobeus VCTs in a successful linked fundraising that closed on 30 May 2014. A total of £33.7 million (in excess of the original target of £24 million which was subsequently increased to £34 million) was subscribed for under the Offer across the four VCTs, of which £8.4 million (£8.19 million after costs) was raised by the Company. The Board would like to thank the 1,097 new shareholders who invested in the Company through this fundraising. The Company had 4,764 shareholders as at 30 June 2014.
Recent fundraisings have taken the Company to an economic size in terms of cost ratios and diversification.
Annual fundraisings by the Company enable it to maintain a consistent level of cash not only for investment but also to help meet its running costs, fund dividend payments and support the Company's share buyback policy, which
helps to provide a degree of liquidity in the Company's shares in what is normally an extremely illiquid market. The Board is currently minded to participate in future fundraisings for Mobeus VCTs although, given current liquidity levels, such fundraising may be at a lower level than 2014. If the Company does fundraise, shareholders will have the opportunity to increase their investment in the Company and will be sent details of the Offer later in the year.
The 2013/14 fundraising and recent successful disposals increased the level of liquidity to approximately £17 million at 30 June 2014. This will fall by £5.86 million when the interim exceptional capital and interim income dividend is paid. While the Board recognises that liquidity remains at a high level, which impacts on total returns, it is encouraged by the investment opportunities in the pipeline.
The Company continues to seek opportunities to increase returns on the liquid assets of the Company without compromising the overriding requirement that risk to the liquid assets portfolio is minimised. It continues to hold £6.52 million in a selection of money market funds with AAA credit ratings at 30 June 2014. The balance of cash and current asset investments is held in deposit accounts with a number of well-known financial institutions across a range of maturities. Current returns from these balances are low, but the Board anticipates that returns will increase when UK interest rates start to rise.
The Company is required to meet the target set by HM Revenue & Customs ("HMRC") of investing 70% of the funds raised in qualifying unquoted and AIM quoted companies. The Company exceeded this limit (based on VCT cost as defined in tax legislation which differs from the actual cost given in the Investment Portfolio Summary on pages 10 and 11) throughout the period. The balance of the portfolio was invested in non-qualifying investments and cash.
During the six months ended 30 June 2014, the Company bought back a further 367,468 of its own shares, representing
1.1% of the issued share capital at the beginning of the period, at an average price, including costs, of £1.06 per share.
All of the shares bought back in the period were subsequently cancelled by the Company. Continuing shareholders benefit from the difference between NAV per share and the lower price per share at which the shares are bought back and cancelled.
The Finance Act 2014, has introduced two measures that affect VCTs. Firstly, shareholders who sell their existing shares within six months before or after the date of subscribing for shares in the same VCT will not retain income tax relief on their new investment, a measure designed to prevent "enhanced buybacks".
Secondly, VCTs will not be able to make payments or distributions to shareholders from share capital or reserves created from converted share premium accounts within a time limit. The limit is three years from the end of the accounting period in which the VCT had raised new funds, from which the converted share premium account originated. This is intended to prevent the return of capital to shareholders prior to any profits being earned from investments. This restriction only applies to shares issued after 5 April 2014, and it will not affect the ability of the Company to continue to pay dividends from realised capital profits, and income.
The Board has appointed the Company as its own Alternative Investment Fund Manager ("AIFM") in compliance with the European Commission's Alternative Investment Fund Manager's Directive, with effect from 22 July 2014. The Company is registered as a small AIFM, and is therefore exempt from the principal requirements of the Directive. Mobeus will continue to provide investment advisory and administrative services to the Company under the current agreement subject to one change. This is that company secretarial staff are now directly responsible to the Board, under its instruction, for accessing and dealing with the documents of title to the Company's investments. These new arrangements will enable the Company to discharge its safekeeping responsibilities for these documents.
Shareholders wishing to follow the Company's progress can visit the Company's website at www.mig4vct.co.uk.
The Investment Adviser ("Adviser") holds an annual VCT workshop for shareholders in Central London. Each workshop includes a presentation on the Mobeus VCTs' investment activity and performance. The Board and the Adviser welcome feedback from shareholders and we have been pleased to receive positive comments from those attending in previous years. The Adviser has taken many of the comments received on board as part of a process of continuous improvement. The next workshop will be held on Tuesday, 27 January 2015 at the Royal Institute of British Architects in Central London. There will be a day-time and a separate evening session. Shareholders will be sent an invitation to this event and further details nearer to the date.
The Company Dividend Investment Scheme ("the Scheme") is a convenient, easy and cost effective way for shareholders to build up their shareholding in the Company. Instead of receiving cash dividends they can elect to receive new shares in the Company. By opting to receive their dividend in this manner, there are three benefits to shareholders:
Shareholders wishing to join the Scheme should submit a mandate form to Capita Asset Services, the Scheme Administrator, by no later than 28 August 2014 to ensure that they receive the above dividend as shares.
Further information on the Scheme, including details of where to obtain an application form can be found in Shareholder Information on page 26.
After a protracted recession, the UK economy is now projected to grow by around 3% this year. It is particularly pleasing to see three investments being realised at substantial gains over cost during the period under review, which demonstrates the effectiveness of the Board's and Adviser's investment strategy. A challenge for the Company will be to sustain current investment levels. The Investment Adviser believes that there continues to be a healthy level of quality dealflow in the market and that many of our investee companies should continue to trade profitably and grow. This should provide further opportunities for positive realisations and for attractive new investments.
Finally, I would like to thank shareholders for their continuing support.
Christopher Moore
Chairman
13 August 2014
The Company's policy is to invest primarily in a diverse portfolio of UK unquoted companies. Investments are structured as part loan and part equity in order to receive regular income and to generate capital gains from trade sales and flotations of investee companies.
Investments are made selectively across a number of sectors, primarily in management buyout transactions (MBOs) i.e. to support incumbent management teams in acquiring the business they manage but do not yet own. Investments are primarily made in companies that are established and profitable.
The Company has a small legacy portfolio of investments in companies from its period prior to 1 August 2006, when it was a multi-manager VCT. This includes investments in early stage and technology companies.
Uninvested funds are held in cash and lower risk money market funds.
The investment policy is designed to ensure that the VCT continues to qualify and is approved as a VCT by HM Revenue & Customs ("HMRC").
Amongst other conditions, the Company may not invest more than 15% of its investments in a single company or group of companies and must have at least 70% by value of its investments throughout the year in shares or securities comprised in VCT qualifying holdings, of which a minimum overall of 30% by value (70% for funds raised from 6 April 2011) must be in ordinary shares which carry no preferential rights. In addition, although the Company can invest less than 30% (70% for funds raised from 6 April 2011) of an investment in a specific company in ordinary shares it must have at least 10% by value of its total investments in each VCT qualifying company in ordinary shares which carry no preferential rights (save as may be permitted under VCT rules).
The companies in which investments are made must have no more than £15 million of gross assets at the time of investment and £16 million immediately following the investment to be classed as a VCT qualifying holding.
The Company initially holds its funds in a portfolio of readily realisable interestbearing investments and deposits. The investment portfolio of qualifying investments is built up over a three year period with the aim of investing and maintaining around 80% of net funds raised in qualifying investments.
Risk is spread by investing in a number of different businesses across different industry sectors. To reduce the risk of investing in unquoted businesses, each qualifying investment is structured to maximise the amount which may be invested in loan stock as opposed to equity.
The Company aims to invest in larger, more mature unquoted companies through investing alongside three other VCTs advised by Mobeus with a similar investment policy. This enables the Company to participate in combined investments advised on by Mobeus of up to £5 million.
The Company's articles permit borrowing of amounts up to 10% of the adjusted capital and reserves (as defined therein). The Company has never borrowed and the Board has no current plans to undertake any borrowing.
The Board has overall responsibility for the Company's affairs including the determination of its investment policy. Investment and divestment proposals are originated, negotiated and recommended by the Investment Adviser and are then subject to formal approval by the Board of Directors. Mobeus Equity Partners LLP also provides Company Secretarial and Accountancy services to the Company.
A total of £5.38 million was invested during the six months under review. This included £3.56 million of substantial new investments in a development capital opportunity in Bourn Bioscience ("Bourn Hall") and to support the MBOs of Entanet International ("Entanet") and Creative Graphics International ("CGI").
| Company | Business | Month | Amount of new investment (£m) |
|---|---|---|---|
| In-vitro fertilisation clinics | January | 1.13 |
Bourn Bioscience is one of the UK's leading IVF/assisted fertility businesses with a dominant presence in East Anglia. Its Bourn Hall clinic near Cambridge was the first IVF clinic in the world. It was founded in 1980 by Robert Edwards and Patrick Steptoe who developed the technology behind the conception of the first test tube baby, Louise Brown, two years earlier in 1978.
| Wholesale provider of internet connectivity solutions | February | 1.37* |
|---|---|---|
Entanet is one of the UK's leading independent wholesale voice and data communications providers. Headquartered in Telford and with over 80 staff, the company provides a diverse portfolio of business class data and voice services via a network of over 2,000 wholesale and reseller channel partners in the UK. The Company's audited accounts for the 13 months ended 31 December 2013 show annual sales of £29.42 million and profit before interest, tax and goodwill of £2.78 million.
Producer of adhesive decorative graphics for vehicles June 1.06
Creative Graphics International is a leading specialist provider of adhesive decorative graphics to the automotive, recreational vehicle and airline markets. It operates from two centres, in Bedford and South Africa. The Company's audited accounts for the year ended 30 November 2012 show annual sales of £12.64 million and profit before interest, tax and goodwill of £2.49 million.
* The investment into Entanet International utilised £1 million from Ackling Management Limited, one of the Company's acquisition vehicles, which is included in the above figures. For further details please see the Investment Portfolio Summary on pages 10 – 11
The VCT has also invested a further £1.82 million into two new acquisition vehicle investments in the period.
| Company | Business | Month | Amount of new investment (£m) |
|---|---|---|---|
| Software-based management information systems | July | 1.16 |
Tharstern is the UK's leading supplier of software-based management information systems (MIS) to the print sector. The Company's audited accounts for the year ended 31 January 2014 show annual sales of £3.87 million and profit before interest, tax and goodwill of £0.80 million.
The VCT completed three full or partial realisations of investments during the period under review for total net proceeds of £5.98 million, which has contributed to total net proceeds of £7.05 million received during the period. Both of the above figures include £1.53 million of loan and equity instruments issued by the acquirer of ATG, and were retained by the Company. Total net cash proceeds received from realisations in the period were therefore £5.52 million.
| Company | Business | Period of investment |
Total cash proceeds over the life of the investment/ Multiple over cost |
|---|---|---|---|
| Software for CAM and | April 2006 – | £0.56 million/ | |
| machine tool vendors | April 2014 | 4.1 times cost |
MachineWorks' core software products are used by builders of machine tools and machine tool controllers to simulate real life manufacturing situations. The company was spun out of the Company's original investment in VSI in March 2011 and was sold to the German company, Dr Johannes Heidenhain GmbH to produce a good return on original investment cost.
| Publisher and online | October 2008 – | £3.67 million | |
|---|---|---|---|
| auction platform | present | 1.8 times cost to date |
ATG Media has grown revenues and profits materially since initial investment in 2008. A partial sale of the company under a secondary MBO to a larger private equity house, ECI Partners, has realised proceeds of £4.63 million, being cash of £3.10 million, with the balance being new loan stock and a minority equity stake. The cash returns received to date have crystallised an annual return of 20%, making this a particularly successful investment.
| Supplier of engineering services | December 2007 – | £1.43 million |
|---|---|---|
| to the water and waste sectors | June 2014 | 1.9 times cost |
The sale of Monsal, a renewable energy consultancy, to the US conglomerate General Electric Company, realised £1.00 million. The return on original cost represents a good return on an investment originally made in 2007 but which required support from further funding rounds in 2009 and 2011.
Loan stock repayments totalled £3.11 million for the period, which amount contains £2.10 million included in the disposals above. Positive cashflow at five other companies contributed to the balance of £1.01 million, as summarised below:-
| Company | Business | Month | Amount (£000's) |
|---|---|---|---|
| Country Baskets | Artificial flowers, floral sundries and home décor products |
June | 625 |
| Motorclean | Vehicle cleaning and valeting services | June | 213 |
| Westway | Air conditioning services | January | 67 |
| Tessella | Consultancy services | Quarterly | 64 |
| Newquay Helicopters | Helicopter services | April | 42 |
| Total | 1,011 |
| Company | Business | Period of investment |
Total cash proceeds over the life of the investment/ Multiple over cost |
|---|---|---|---|
| Audio mixing desks | July 2007 – July 2014 |
£5.49 million 5.5 times cost |
The VCT realised this investment through a sale to a new professional audio group backed by Electra Partners. The business has demonstrated strong and consistent growth since investment. Turnover has grown threefold from £8 to £24 million over the period of the VCT's investment. This full sale follows a partial realisation in December 2011 through a secondary buyout by ISIS Equity Partners.
We have been particularly pleased with the realisation results over the first half of the year which, including DiGiCo, realised after the period-end, have all generated good returns for the Company. Three new deals into Bourn Bioscience, Entanet International and Creative Graphics International completed in the period, and Tharstern completed after the period-end.
We are pursuing a number of opportunities which we hope will materialise over the coming months into both new investments and further realisations for the Company. Dealflow remains healthy, reflecting our perception that the level of M&A activity in the small company sector continues to be buoyant. Our intention is to maximise the opportunities presented by these current favourable market conditions to guide new investment deals and realisations through to completion, to meet our aims of sustaining current investment levels and securing continued good returns to shareholders.
| Total cost at 30 June 2014 £ |
Total valuation at 31 December 2013 £ |
Total valuation at 30 June 2014 £ |
% of equity held |
% of portfolio by value |
|
|---|---|---|---|---|---|
| Mobeus Equity Partners LLP | |||||
| Ingleby (1879) Limited (trading as EMaC) Provider of service plans for the motor trade |
1,000,522 | 1,701,086 | 2,186,697 | 6.3% | 8.0% |
| Virgin Wines Holding Company Limited (formerly Culbone Trading Limited) Online wine retailer |
1,999,771 | 1,999,771 | 1,999,771 | 9.7% | 7.4% |
| DiGiCo Global Limited Design and manufacture of audio mixing desks |
829,769 | 1,470,071 | 1,734,714 | 2.4% | 6.4% |
| Fullfield Limited (trading as Motorclean) Vehicle cleaning and valet services |
1,579,751 | 2,062,805 | 1,728,996 | 9.8% | 6.4% |
| Tessella Holdings Limited Consultancy |
1,113,963 | 1,577,809 | 1,631,413 | 5.4% | 6.0% |
| Turner Topco Limited (trading as ATG Media) Publisher and online auction platform operator |
1,529,075 | – | 1,562,600 | 3.8% | 5.7% |
| Veritek Global Holdings Limited (formerly Madacombe Trading Limited) Maintenance of imaging equipment |
1,620,086 | 1,620,086 | 1,477,328 | 10.3% | 5.4% |
| Gro-Group Holdings Limited Manufacturer of safer sleep solutions for babies and young children |
1,540,061 | 1,540,061 | 1,390,627 | 8.4% | 5.1% |
| Ackling Management Limited (trading as Entanet)1 Wholesale voice and data communications provider |
1,369,050 | – | 1,369,050 | 9.6% | 5.0% |
| ASL Technology Holdings Limited Printer and photocopier services |
1,257,133 | 891,775 | 1,321,189 | 6.8% | 4.9% |
| Focus Pharma Holdings Limited Licensor and distributor of generic pharmaceuticals |
271,566 | 840,258 | 1,211,961 | 3.1% | 4.5% |
| Bourn Bioscience Limited Bourn Hall In-vitro fertilisation clinics |
1,132,521 | – | 1,132,521 | 7.7% | 4.2% |
| Creative Graphics International Limited Provider of adhesive decorative graphics for the automotive, recreational vehicle and airline markets |
1,060,269 | – | 1,060,269 | 6.3% | 3.9% |
| EOTH Limited (trading as Rab and Lowe Alpine) Branded outdoor equipment and clothing |
951,471 | 956,917 | 1,041,821 | 1.7% | 3.8% |
| Manufacturing Services Investment Limited Company seeking to acquire businesses in the manufacturing sector |
912,800 | – | 912,800 | 11.4% | 3.4% |
| South West Services Investment Limited Company seeking to acquire a business service company in the South West of England |
908,000 | – | 908,000 | 11.4% | 3.3% |
| Blaze Signs Holdings Limited Manufacturer and installer of signs |
190,631 | 719,777 | 773,603 | 5.7% | 2.8% |
| RDL Corporation Limited Recruitment consultants for the pharmaceutical, business intelligence and IT industries |
1,000,000 | 461,401 | 636,650 | 9.1% | 2.2% |
| Westway Services Holdings (2010) Limited Installation, maintenance and servicing of air-conditioning systems |
84,537 | 676,723 | 628,865 | 3.2% | 2.2% |
| Youngman Group Limited Manufacturer of ladders and access towers |
500,026 | 349,983 | 564,426 | 4.2% | 2.1% |
| Plastic Surgeon Holdings Limited Snagging and finishing of domestic and commercial properties |
458,837 | 398,625 | 470,374 | 6.9% | 1.7% |
| Total cost at 30 June 2014 £ |
Total valuation at 31 December 2013 £ |
Total valuation at 30 June 2014 £ |
% of equity held |
% of portfolio by value |
|
|---|---|---|---|---|---|
| CB Imports Group Limited Importer and distributor of artificial flowers, floral sundries and home décor products |
484,375 | 872,988 | 393,771 | 5.8% | 1.4% |
| Omega Diagnostics plc In-vitro diagnostics for food intolerance, auto-immune diseases and infectious diseases |
200,028 | 291,664 | 316,683 | 1.5% | 1.2% |
| Higher Nature Limited Supplier of mineral, vitamin and food supplements |
500,127 | 133,013 | 138,405 | 10.3% | 0.5% |
| Vectair Holdings Limited Designer and distributor of washroom products |
24,732 | 114,615 | 113,298 | 2.1% | 0.4% |
| Duncary 8 Limited (formerly Duncary 4/BG Consulting Limited) Technical training business |
101,995 | 103,607 | 104,183 | 5.1% | 0.4% |
| Newquay Helicopters (2013) Limited (formerly British International Holdings Limited) Operator of helicopter services |
56,500 | 98,412 | 56,500 | 2.5% | 0.2% |
| PXP Holdings Limited (Pinewood Structures) Designer, manufacturer and supplier of timber frames for buildings |
712,925 | 15,687 | 15,687 | 4.4% | 0.1% |
| Lightworks Software Limited Software for CAD vendors |
9,329 | 41,820 | 14,739 | 4.2% | 0.1% |
| Racoon International Holdings Limited Supplier of hair extensions, hair care products and training |
406,805 | 1,000 | 1,000 | 5.7% | 0.0% |
| Monsal Holdings Limited Supplier of engineering services to water and waste sectors |
– | 42,287 | – | 0.0% | 0.0% |
| Legion Group plc - in administration Provider of manned guarding, patrolling and alarm response services |
150,102 | – | – | – | 0.0% |
| Watchgate Limited Holding company |
1,000 | – | – | 33.3% | 0.0% |
| ATG Media Holdings Limited Publisher and online auction platform operator |
– | 4,093,629 | – | 0.0% | 0.0% |
| Ackling Management Limited1 Company looking to acquire businesses in the food manufacturing, distribution and brand management sectors |
– | 1,000,000 | – | 12.5% | 0.0% |
| Machineworks Software Limited Software for CAM and machine tool vendors |
– | 191,474 | – | 4.2% | 0.0% |
| Total | 23,957,757 | 24,267,344 | 26,897,941 | 98.7% | |
| Former Elderstreet Private Equity Limited Portfolio Cashfac Limited Provider of virtual banking application software |
260,101 | 189,692 | 160,273 | 2.9% | 0.7% |
| Sparesfinder Limited Supplier of industrial spare parts on-line |
250,854 | 80,718 | 123,251 | 1.7% | 0.5% |
| Sift Limited Developer of business to business internet communities |
135,391 | 32,015 | 15,869 | 1.3% | 0.1% |
| Total | 646,346 | 302,425 | 299,393 | 1.3% | |
| Investment Advisers' totals | 24,604,103 | 24,569,769 | 27,197,334 | 100.0% |
1 - £1,000,000 of this investment into Ackling Management Limited (trading as Entanet International) had been invested in this company, which was formerly an acquisition vehicle, in a previous period.
In accordance with Disclosure and Transparency Rule (DTR) 4.2.10, Christopher Moore (Chairman), Andrew Robson (Chairman of the Audit Committee and Remuneration and Nomination Committee) and Helen Sinclair (Chairman of the Investment Committee), being the Directors of the Company confirm that to the best of their knowledge:
In accordance with DTR 4.2.7, the Board confirms that the principal risks and uncertainties facing the Company have not materially changed since the publication of the Annual Report and Accounts for the year ended 31 December 2013. The Board acknowledges that there is regulatory risk and continues to manage the Company's affairs in such a manner as to comply with section 274 of the Income Tax Act 2007.
The principal risks faced by the Company are:
A more detailed explanation of these risks can be found in the Strategic Report on pages 21 – 22 and in Note 19 on pages 58 – 64 of the Annual Report and Accounts for the year ended 31 December 2013, copies of which are available on the Investment Adviser's website, www.mobeusequity.co.uk or by going directly to the VCT's website, www.mig4vct.co.uk.
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 interim management report which is included within the Chairman's Statement, Investment Policy, Investment Review and Investment Portfolio Summary. The Directors have satisfied themselves that the Company continues to maintain a significant cash position, 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 capital and financial risks are shown in Note 19 on pages 58 – 64 of the Annual Report and Accounts for the year ended 31 December 2013. Accordingly, the Directors continue to adopt the going concern basis of accounting in preparing the half-yearly report and annual financial statements.
There were no related party transactions in the first six months of the current financial year that are required to be reported.
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.
On behalf of the Board
Christopher Moore Chairman
13 August 2014
| Six months ended 30 June 2014 | |||||
|---|---|---|---|---|---|
| Notes | Revenue £ |
Capital £ |
(unaudited) Total £ |
||
| Unrealised gains on investments held at fair value | 8 | – | 1,974,394 | 1,974,394 | |
| Realised gains on investments held at fair value | 8 | – | 1,786,569 | 1,786,569 | |
| Income | 2 | 1,332,823 | – | 1,332,823 | |
| Investment Adviser fees | 3 | (132,511) | (397,532) | (530,043) | |
| Other expenses | (185,111) | – | (185,111) | ||
| Profit on ordinary activities before taxation | 1,015,201 | 3,363,431 | 4,378,632 | ||
| Tax on profit on ordinary activities | 4 | (63,940) | 63,940 | – | |
| Profit attributable to equity shareholders | 951,261 | 3,427,371 | 4,378,632 | ||
| Basic and diluted earnings per Ordinary share | 5 | 2.43p | 8.76p | 11.19p |
The total column of this statement is the Profit and Loss account of the Company.
All revenue and capital items in the above statement derive from continuing operations.
There were no other recognised gains or losses in the period.
Other than revaluation movements arising on investments held at fair value through profit and loss, there were no differences between the profit as stated above and at historical cost.
| Six months ended 30 June 2014 (unaudited) |
Six months ended 30 June 2013 | (unaudited) | Year ended 31 December 2013 | (audited) | ||
|---|---|---|---|---|---|---|
| Notes Revenue Capital Total |
Revenue | Capital Total |
Revenue | Capital | Total | |
| £ £ |
£ £ |
£ | £ | £ | £ | £ |
| – 1,974,394 1,974,394 |
– | 1,916,779 | 1,916,779 | – | 2,785,539 | 2,785,539 |
| – 1,786,569 1,786,569 |
– | 178,802 | 178,802 | – | 258,724 | 258,724 |
| 1,332,823 – 1,332,823 |
774,873 | – | 774,873 | 1,737,504 | – | 1,737,504 |
| (397,532) (530,043) |
(110,079) | (330,236) | (440,315) | (228,977) | (686,932) | (915,909) |
| (185,111) | (198,359) | – | (198,359) | (373,788) | – | (373,788) |
| 3,363,431 4,378,632 |
466,435 | 1,765,345 | 2,231,780 | 1,134,739 | 2,357,331 | 3,492,070 |
| – (87,217) |
87,217 | – | (133,343) | 133,343 | – | |
| 3,427,371 4,378,632 |
379,218 | 1,852,562 | 2,231,780 | 1,001,396 | 2,490,674 | 3,492,070 |
| 8.76p 11.19p |
1.17p | 5.69p | 6.86p | 2.96p | 7.35p | 10.31p |
| Notes | 30 June 2014 (unaudited) £ |
30 June 2013 (unaudited) £ |
31 December 2013 (audited) £ |
|---|---|---|---|
| 8 | 27,197,334 | 23,496,795 | 24,569,769 |
| 2,195,853 | 411,679 | 305,234 | |
| 9 | 14,334,829 | 14,271,540 | 14,318,103 |
| 9,369,984 | 3,812,235 | 3,125,287 | |
| 25,900,666 | 18,495,454 | 17,748,624 | |
| (219,454) | (313,327) | (194,670) | |
| 25,681,212 | 18,182,127 | 17,553,954 | |
| 52,878,546 | 41,678,922 | 42,123,723 | |
| 10 | |||
| 418,722 | 352,387 | 351,272 | |
| 5,162,961 | 13,279,574 | 13,374,724 | |
| 3,675 | 967,721 | 969,753 | |
| 4,691,442 | 3,543,394 | 4,518,594 | |
| 34,218,500 | 18,587,976 | 17,418,387 | |
| 8,383,246 | 4,947,870 | 5,490,993 | |
| 52,878,546 | 41,678,922 | 42,123,723 | |
| 119.92p | |||
| Creditors: amounts falling due within one year 7 |
126.29p | 118.28p |
| Notes | Six months ended 30 June 2014 (unaudited) £ |
Six months ended 30 June 2013 (unaudited) £ |
Year ended 31 December 2013 (audited) £ |
|
|---|---|---|---|---|
| Opening shareholders' funds | 42,123,723 | 33,537,271 | 33,537,271 | |
| Share capital subscribed – net of expenses | 8,413,657 | 15,262,218 | 15,358,285 | |
| Share capital bought back – including expenses | (390,343) | (7,428,019) | (7,634,821) | |
| Profit for the period | 4,378,632 | 2,231,780 | 3,492,070 | |
| Dividends paid in period | 6 | (1,647,123) | (1,924,328) | (2,629,082) |
| Closing shareholders' funds | 52,878,546 | 41,678,922 | 42,123,723 |
| Notes | Six months ended 30 June 2014 (unaudited) £ |
Six months ended 30 June 2013 (unaudited) £ |
Year ended 31 December 2013 (audited) £ |
|
|---|---|---|---|---|
| Operating activities | ||||
| Interest income received | 930,281 | 617,145 | 1,419,008 | |
| Dividend income | 338,640 | 59,152 | 166,382 | |
| Investment Adviser fees paid | (530,043) | (375,235) | (850,830) | |
| Cash payments for other expenses | (150,085) | (112,750) | (364,197) | |
| Net cash inflow from operating activities | 588,793 | 188,312 | 370,363 | |
| Investing activities | ||||
| Sale of investments | 8 | 4,467,945 | 963,180 | 2,514,504 |
| Purchase of investments | 8 | (4,382,670) | (526,227) | (2,201,941) |
| Net cash inflow from investing activities | 85,275 | 436,953 | 312,563 | |
| Dividends | ||||
| Equity dividends paid | 6 | (1,647,123) | (1,924,328) | (2,629,082) |
| Cash outflow before liquid resource | ||||
| management and financing | (973,055) | (1,299,063) | (1,946,156) | |
| Management of liquid resources Increase in monies held in current investments |
(16,726) | (5,251,396) | (5,297,959) | |
| Financing | ||||
| Share issued as part of Linked Offer for Subscription | ||||
| and Dividend Investment Scheme | 10 | 7,624,821 | 8,168,986 | 8,434,913 |
| Purchase of own shares | (390,343) | (348,483) | (586,300) | |
| Shares issued as part of Enhanced Buyback Facility | – | 6,923,372 | 250,000 | |
| Shares bought back as part of Enhanced Buyback | ||||
| Facility (including expenses) | – | (7,027,119) | (375,149) | |
| Cash inflow from financing | 7,234,478 | 7,716,756 | 7,723,464 | |
| Increase in cash | 6,244,697 | 1,166,297 | 479,349 | |
| Reconciliation of net cash inflow to movement in net funds | ||||
| Increase in cash for the period | 6,244,697 | 1,166,297 | 479,349 | |
| Net funds at the start of the period | 3,125,287 | 2,645,938 | 2,645,938 | |
| Net funds at the end of the period | 9,369,984 | 3,812,235 | 3,125,287 |
| Six months ended 30 June 2014 (unaudited) £ |
Six months ended 30 June 2013 (unaudited) £ |
Year ended 31 December 2013 (audited) £ |
|
|---|---|---|---|
| Profit on ordinary activities before taxation | 4,378,632 | 2,231,780 | 3,492,070 |
| Net unrealised gains on investments | (1,974,394) | (1,916,779) | (2,785,539) |
| Net gains on realisations of investments | (1,786,569) | (178,802) | (258,724) |
| Increase in debtors | (53,660) | (27,654) | (90,970) |
| Increase in creditors | 24,784 | 79,767 | 13,526 |
| Net cash inflow from operating activities | 588,793 | 188,312 | 370,363 |
The following accounting policies have been applied consistently throughout the period. Full details of principal accounting policies will be disclosed in the Annual Report.
The unaudited results cover the six months to 30 June 2014 and have been prepared under UK Generally Accepted Accounting Practice (UK GAAP), consistent with the accounting policies set out in the statutory accounts for the year ended 31 December 2013 and the 2009 Statement of Recommended Practice, 'Financial Statements of Investment Trust Companies and Venture Capital Trusts' ('the SORP') issued by the Association of Investment Companies.
In order to better reflect the activities of a VCT and in accordance with the SORP, 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 of the Income Tax Act 2007.
All investments held by the Company are classified as "fair value through profit and loss", and measured in accordance with the International Private Equity and Venture Capital Valuation ("IPEVCV") guidelines, as updated in September 2009. 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.
For investments actively traded in 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. Purchase and sales of unlisted investments are recognised when the contract for acquisition or sale becomes unconditional.
Unquoted investments are stated at fair value by the Directors in accordance with the following rules, which are consistent with the IPEVCV guidelines:
All investments are held at the price of a recent investment for an appropriate period where there is considered to have been no change in fair value. Where such a basis is no longer considered appropriate, the following factors will be considered:
or:-
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.
| Six months ended 30 June 2014 (unaudited) £ |
Six months ended 30 June 2013 (unaudited) £ |
Year ended 31 December 2013 (audited) £ |
|
|---|---|---|---|
| Dividends | 249,962 | 69,023 | 220,304 |
| Money-market funds | 12,593 | 12,493 | 25,216 |
| Loan stock interest | 1,002,854 | 616,071 | 1,344,035 |
| Bank deposit interest | 57,910 | 77,286 | 147,949 |
| Interest on preference dividends | 5,997 | – | – |
| Other Income | 3,507 | – | – |
| Total Income | 1,332,823 | 774,873 | 1,737,504 |
In accordance with the policy statement published under "Management and Administration" in the Company's prospectus dated 8 February 1999, the Directors have charged 75% of the Investment Adviser fees to the capital account. This is in line with the Board's expectation of the long-term split of returns from the investment portfolio of the Company.
There is no tax charge for the period as the Company has tax losses from previous periods, which can be offset between revenue and capital.
The basic earnings, revenue return and capital return per share shown below for each period are respectively based on numerators i)-iii), each divided by the weighted average number of shares in issue in the period – see iv) below
| Six months ended 30 June 2014 (unaudited) £ |
Six months ended 30 June 2013 (unaudited) £ |
Year ended 31 December 2013 (audited) £ |
|
|---|---|---|---|
| i) Total earnings after taxation | 4,378,632 | 2,231,780 | 3,492,070 |
| Basic and diluted earnings per Ordinary share (pence) | 11.19p | 6.86p | 10.31p |
| ii) Revenue earnings from ordinary activities after taxation | 951,261 | 379,218 | 1,001,396 |
| Basic and diluted revenue earnings per Ordinary | |||
| share (pence) | 2.43p | 1.17p | 2.96p |
| Unrealised capital gains | 1,974,394 | 1,916,779 | 2,785,539 |
| Net realised capital gains | 1,786,569 | 178,802 | 258,724 |
| Capital expenses net of taxation | (333,592) | (243,019) | (553,589) |
| iii) Capital return | 3,427,371 | 1,852,562 | 2,490,674 |
| Basic and diluted capital earnings per Ordinary | |||
| share (pence) | 8.76p | 5.69p | 7.35p |
| iv) Weighted average number of Ordinary shares in issue | |||
| in the period | 39,118,336 | 32,541,370 | 33,875,228 |
| Six months ended 30 June 2014 (unaudited) £ |
Six months ended 30 June 2013 (unaudited) £ |
Year ended 31 December 2013 (audited) £ |
|
|---|---|---|---|
| Interim income dividend for the 11 months ended 31 December 2012 of 1 pence per Ordinary share paid 10 May 2013 |
– | 349,877 | 349,878 |
| Interim capital dividend for the 11 months ended 31 December 2012 of 4.5 pence per Ordinary share paid 10 May 2013 |
– | 1,574,451 | 1,574,452 |
| Interim income dividend for the year ended 31 December 2013 of 1.25 pence per Ordinary share paid 20 September 2013 |
– | – | 440,471 |
| Interim capital dividend for the year ended 31 December 2013 of 0.75 pence per Ordinary share paid 20 September 2013 |
– | – | 264,281 |
| Final income dividend for the period ended 31 December 2013 of 1.25 pence per Ordinary share paid 16 May 2014 |
514,726 | – | – |
| Final capital dividend for the year ended 31 December 2013 of 2.75 pence per Ordinary share paid 16 May 2014 |
1,132,397 | – | – |
| 1,647,123* | 1,924,328* | 2,629,082* |
* - Of these amounts £219,742 (30 June 2013: £246,310; 31 December 2013: £342,378) were issued in new shares, issued as part of the Dividend Investment Scheme.
| As at 30 June 2014 (unaudited) £ |
As at 30 June 2013 (unaudited) £ |
As at 31 December 2013 (audited) £ |
|
|---|---|---|---|
| Net assets | 52,878,546 | 41,678,922 | 42,123,723 |
| Number of shares in issue | 41,872,204 | 35,238,721 | 35,127,218 |
| Net asset value per Ordinary share (pence) | 126.29p | 118.28p | 119.92p |
| Traded on AIM |
Unquoted equity |
Unquoted preference |
Loan stock |
Total | |
|---|---|---|---|---|---|
| £ | shares £ |
shares £ |
£ | £ | |
| Valuation at 31 December 2013 | 291,664 | 8,140,282 | 16,119 | 16,121,704 | 24,569,769 |
| Purchases at cost | 30 | 1,634,976 | 1,330 | 4,275,409 | 5,911,745 |
| Sales - proceeds | – | (4,110,457) | (1,111) | (3,110,065) | (7,221,633) |
| - realised gains | – | 1,465,144 | – | 497,915 | 1,963,059 |
| Unrealised gains | 24,989 | 1,214,884 | 5,303 | 729,218 | 1,974,394 |
| Valuation at 30 June 2014 | 316,683 | 8,344,829 | 21,641 | 18,514,181 | 27,197,334 |
| Book cost at 30 June 2014 | 200,028 | 6,906,183 | 25,289 | 17,472,603 | 24,604,103 |
| Unrealised gains/(losses) at 30 June 2014 | 116,655 | 2,140,343 | (1,999) | 1,609,064 | 3,864,063 |
| Permanent impairment of investments | – | (701,697) | (1,649) | (567,486) | (1,270,832) |
| Valuation at 30 June 2014 | 316,683 | 8,344,829 | 21,641 | 18,514,181 | 27,197,334 |
| Gains on investments | – | 3,527,988 | – | 236,617 | 3,764,605 |
| Less amounts recognised as unrealised gains/(losses) in | |||||
| previous years | – | 2,062,844 | – | (261,298) | 1,801,546 |
| Realised gains based on carrying value at 31 December 2013 | – | 1,465,144 | – | 497,915 | 1,963,059 |
| Net movement in unrealised appreciation in the period | 24,989 | 1,214,884 | 5,303 | 729,218 | 1,974,394 |
| Gains on investments for the six months ended 30 June 2014 | 24,989 | 2,680,028 | 5,303 | 1,227,133 | 3,937,453 |
Transaction costs of £176,490 were incurred in the period and are deducted in arriving at realised gains on investments in the Income Statement. Deducting these from realised gains above gives £1,786,569 of gains as shown in the Income Statement.
Purchases above of £5,911,745 differ to that shown in the Cash Flow Statement of £4,382,670 by £1,529,075 which is the accounting cost of ATG proceeds received, in the form of equity and loan stock in the acquirer, of £1,529,075. Sales proceeds above of £7,221,633 differ to that shown in the Cash Flow Statement of £4,467,945 by £2,753,688. This is due to proceeds receivable from the sale of Monsal Holdings Limited of £1,073,742, new equity and loan stock instruments of £1,529,075 received as consideration for the sale of ATG, an ATG equity proceeds retention of £49,489 and transaction costs of £101,382.
Unrealised gains at 30 June 2014 of £3,864,063 differ to that shown in the Revaluation Reserve of £4,691,442. The difference of £827,379 is loan stock received as part of the disposal of DiGiCo Europe Limited in December 2011 which was not recognised as a realised gain in that year.
These comprise investments of £6,524,156 (30 June 2013: £6,521,540; 31 December 2013: £6,522,954) in six OEIC money market funds (five Dublin based and one London based) subject to immediate access, and £7,810,673 (30 June 2013: £7,750,000; 31 December 2013: £7,795,149) in four bank deposit or money market accounts, repayable within one year.
| Called up share capital |
Share premium account |
Capital redemption reserve |
Revaluation reserve |
Special distributable reserve |
Profit and loss reserve |
Total | |
|---|---|---|---|---|---|---|---|
| £ | £ | £ | £ | £ | £ | £ | |
| At 1 January 2014 | 351,272 | 13,374,724 | 969,753 | 4,518,594 | 17,418,387 | 5,490,993 | 42,123,723 |
| Shares issued via Linked Offer | |||||||
| for Subscription (note a) | 69,072 | 8,128,331 | – | – | (3,488) | – | 8,193,915 |
| Dividends re-invested into new shares | 2,053 | 217,689 | – | – | – | – | 219,742 |
| Shares bought back | (3,675) | – | 3,675 | – | (390,343) | – | (390,343) |
| Cancellation of the share premium | |||||||
| account (note b) | – | (16,557,783) | (969,753) | – | 17,527,536 | – | – |
| Profit for the period | – | – | – | 1,974,394 | – | 2,404,238 | 4,378,632 |
| Realised losses transferred to special | |||||||
| reserve (note b) | – | – | – | – | (333,592) | 333,592 | – |
| Realisation of previously unrealised | |||||||
| appreciation | – | – | – | (1,801,546) | – | 1,801,546 | – |
| Dividends paid | – | – | – | – | – | (1,647,123) | (1,647,123) |
| At 30 June 2014 | 418,722 | 5,162,961 | 3,675 | 4,691,442 | 34,218,500 | 8,383,246 | 52,878,546 |
Note a: As part of the 2014 Linked Offer for Subscription, a total of 6,907,184 Ordinary shares were allotted at average effective offer prices ranging from 120.36 pence to 125.79 pence per share, raising net funds of £8,193,915.
Shares issued as part of the joint fundraising offer for subscription and Dividend Investment Scheme per the cash flow statement of £7,624,821 differs to the total shown separately above, firstly as shares issued of £8,193,915 and secondly as shares allotted under the Company's dividend investment scheme of £219,742, by £788,836. This is due to £788,836 of net funds, being due to the Company arising from shares allotted on 6 June 2014, which was received after the period end.
Note b: The cancellation of £16,557,783 from the share premium account and £967,753 from the capital redemption reserve (as approved at the General Meeting held on 22 February 2013 and by order of the Court dated 12 March 2014) has increased the Company's special distributable reserve. The purpose of this reserve is to fund market purchases of the Company's own shares, to write off existing and future losses and for any other corporate purpose. All of this reserve arose from shares issued before 5 April 2014.
On 18 July 2014, the Company made an investment of £1,158,500 to support the management buy-out of Tharstern Limited, a leading supplier of software based management information systems to the global commercial printing and graphic arts industries.
On 30 July 2014, the entire holding of DiGiCo Global Limited was realised for net proceeds of £1,734,714.
The financial information for the six months ended 30 June 2014 does not comprise full financial statements within the meaning of Section 435 of the Companies Act 2006. The financial statements for the year ended 31 December 2013 have been filed with the Registrar of Companies. The auditor has reported on the financial statements for the year ended 31 December 2013 and that report was unqualified and did not contain a statement under section 498(2) of the Companies Act 2006.
This Half-Yearly Report is available on, and can be downloaded from, our website: www.mig4vct.co.uk and is circulated by post to those shareholders who have requested copies of the Report. Further copies are also available free of charge from the Company's registered office, 30 Haymarket, London SW1Y 4EX.
The following tables show, for all investors in Mobeus Income & Growth 4 VCT plc, how their investments have performed since they were originally allotted shares in each fundraising.
Shareholders should note that funds from the original fundraising in 1999 were managed by three Investment Advisers, up until 1 August 2006. At that date, Mobeus became the sole adviser, to this and all subsequent fundraisings.
Total return data, which includes cumulative dividends paid to date, is shown on both a share price and a NAV basis as at 30 June 2014. The NAV basis enables shareholders to evaluate more clearly the performance of the Adviser, as it reflects the underlying value of the portfolio at the reporting date. This is the most widely used measure of performance in the VCT sector.
| Allotment date(s) | Allotment | Net | Cumulative | Total return per share to shareholders since allotment |
||
|---|---|---|---|---|---|---|
| price | allotment price2 |
dividends paid |
% increase | |||
| per share | since 31 | |||||
| (Share price basis) |
(NAV basis) |
December 2013 (NAV basis) |
||||
| (p) | (p) | (p) | (p) | (p) | (%) | |
| Funds raised 19993 | ||||||
| (launched 8 February 1999) | ||||||
| Between 8 February 1999 and | ||||||
| 30 June 1999 | 200.00 | 160.00 | 38.20 | 146.95 | 164.49 | 6.73% |
| Funds raised 2006/07 | ||||||
| (launched 2 November 2006) | ||||||
| 01 February 2007 | 118.58 | 83.01 | 27.50 | 136.25 | 153.79 | 7.23% |
| 19 February 2007 | 118.58 | 83.01 | 27.50 | 136.25 | 153.79 | 7.23% |
| 05 March 2007 | 121.18 | 84.83 | 27.50 | 136.25 | 153.79 | 7.23% |
| 19 March 2007 | 121.18 | 84.83 | 27.50 | 136.25 | 153.79 | 7.23% |
| 02 April 2007 | 121.18 | 84.83 | 27.50 | 136.25 | 153.79 | 7.23% |
| 04 April 2007 | 121.18 | 84.83 | 27.50 | 136.25 | 153.79 | 7.23% |
| 05 April 2007 | 121.18 | 84.83 | 27.50 | 136.25 | 153.79 | 7.23% |
| Funds raised 2010 Top Up Offer | ||||||
| (launched 20 January 2010) | ||||||
| 31 March 2010 | 112.40 | 78.68 | 22.50 | 131.25 | 148.79 | 7.49% |
| 01 April 2010 | 112.40 | 78.68 | 22.50 | 131.25 | 148.79 | 7.49% |
| Funds raised 2011 | ||||||
| (launched 12 November 2010) | ||||||
| 21 January 2011 | 121.80 | 85.26 | 19.50 | 128.25 | 145.79 | 7.65% |
| 28 February 2011 | 121.80 | 85.26 | 19.50 | 128.25 | 145.79 | 7.65% |
| 22 March 2011 | 121.80 | 85.26 | 19.50 | 128.25 | 145.79 | 7.65% |
| 01 April 2011 | 121.80 | 85.26 | 19.50 | 128.25 | 145.79 | 7.65% |
| 05 April 2011 | 121.80 | 85.26 | 19.50 | 128.25 | 145.79 | 7.65% |
| 10 May 2011 | 119.50 | 83.65 | 19.50 | 128.25 | 145.79 | 7.65% |
| 06 July 2011 | 119.50 | 83.65 | 16.50 | 125.25 | 142.79 | 7.83% |
| Funds raised 2012 | ||||||
| (launched 20 January 2012) | ||||||
| 08 March 2012 | 123.50 | 86.45 | 16.50 | 125.25 | 142.79 | 7.83% |
| 04 April 2012 | 123.50 | 86.45 | 16.50 | 125.25 | 142.79 | 7.83% |
| 05 April 2012 | 123.50 | 86.45 | 16.50 | 125.25 | 142.79 | 7.83% |
| 10 May 2012 | 123.50 | 86.45 | 16.50 | 125.25 | 142.79 | 7.83% |
| 10 July 2012 | 119.10 | 83.37 | 11.50 | 120.25 | 137.79 | 8.13% |
| Allotment date(s) | Allotment price |
Net allotment |
Cumulative dividends |
Total return per share to shareholders since allotment |
||
|---|---|---|---|---|---|---|
| price2 | paid per share |
% increase since 31 |
||||
| (Share price basis) |
(NAV basis) |
December 2013 (NAV basis) |
||||
| (p) | (p) | (p) | (p) | (p) | (%) | |
| Funds raised 2013 | ||||||
| (launched 29 November 2012) | ||||||
| 14 January 2013 | 120.10 | 84.07 | 11.50 | 120.25 | 137.79 | 8.13% |
| 28 March 2013 | 121.30 | 84.91 | 11.50 | 120.25 | 137.79 | 8.13% |
| 04 April 2013 | 121.30 | 84.91 | 11.50 | 120.25 | 137.79 | 8.13% |
| 05 April 2013 | 121.30 | 84.91 | 11.50 | 120.25 | 137.79 | 8.13% |
| 10 April 2013 Pre RDR4 | 124.20 | 86.94 | 11.50 | 120.25 | 137.79 | 8.13% |
| 10 April 2013 Post RDR4 | 121.30 | 84.91 | 11.50 | 120.25 | 137.79 | 8.13% |
| 07 May 2013 | 115.60 | 80.92 | 6.00 | 114.75 | 132.29 | 8.50% |
| Funds raised 2014 | ||||||
| (launched 28 November 2013) | ||||||
| 09 January 2014 | 120.365 | 84.25 | 4.00 | 112.75 | 130.29 | – |
| 11 February 2014 | 120.665 | 84.46 | 4.00 | 112.75 | 130.29 | – |
| 31 March 2014 | 125.225 | 87.65 | 4.00 | 112.75 | 130.29 | – |
| 03 April 2014 | 125.795 | 88.05 | 4.00 | 112.75 | 130.29 | – |
| 04 April 2014 | 125.015 | 87.51 | 4.00 | 112.75 | 130.29 | – |
| 06 June 2014 | 125.115 | 87.58 | – | 108.75 | 126.29 | – |
1 - Source: London Stock Exchange (mid-price), when the latest announced NAV was 120.44p.
4 - RDR mean the date of implementation of the Retail Distribution Review on 31 December 2012, which affected the level of charges in the allotment price for applications
received before and after that date. - Average effective offer price. Shares were allotted pursuant to the 2013/14 offer at individual prices for each investor in accordance with the allotment formula set out in the Securities Note.
| Funds raised 1998/99 (p) |
Funds raised 2006/07 (p) |
Funds raised 2010 – Top up (p) |
Funds raised 2011 (p) |
Funds raised 2012 (p) |
Funds raised 2013 (p) |
Funds raised 2014 (p) |
|
|---|---|---|---|---|---|---|---|
| 16 May 2014 | 4.00 | 4.00 | 4.00 | 4.00 | 4.00 | 4.00 | 4.00 |
| 20 September 2013 | 2.00 | 2.00 | 2.00 | 2.00 | 2.00 | 2.00 | |
| 10 May 2013 | 5.50 | 5.50 | 5.50 | 5.50 | 5.50 | 5.50 | |
| 06 June 2012 | 5.00 | 5.00 | 5.00 | 5.00 | 5.00 | ||
| 24 June 2011 | 3.00 | 3.00 | 3.00 | 3.00 | |||
| 05 November 2010 | 1.00 | 1.00 | 1.00 | ||||
| 09 June 2010 | 2.00 | 2.00 | 2.00 | ||||
| 07 November 2009 | 1.00 | 1.00 | |||||
| 10 June 2009 | 1.00 | 1.00 | |||||
| 07 November 2008 | 1.00 | 1.00 | |||||
| 11 June 2008 | 1.25 | 1.25 | |||||
| 08 November 2007 | 0.75 | 0.75 | |||||
| 26 October 2006 | 1.801 | ||||||
| 07 June 2006 | 0.501 | ||||||
| 08 June 2005 | 0.201 | ||||||
| 09 June 2004 | 0.501 | ||||||
| 29 May 2003 | 0.501 | ||||||
| 17 June 2002 | 1.001 | ||||||
| 16 July 2001 | 3.101 | ||||||
| 30 June 2000 | 3.101 | ||||||
| Total cumulative dividends paid2 |
38.20 | 27.50 | 22.50 | 19.50 | 16.50 | 11.50 | 4.00 |
Dividend payment amounts have been restated following a capital reorganisation in October 2006.
The above data relates to an investor in the first allotment of each fundraising. The precise amount of cumulative dividends paid to shareholders by date of allotment is shown on page 24.
The table below shows the historical performance of the original funds raised in 1999 since 31 January 2008.
| Period | Net assets | Net asset value (NAV) per share |
NAV total return to shareholders since launch per share |
Share price | Share price total return to shareholders |
|---|---|---|---|---|---|
| (£m) | (p) | (p) 2 |
(p)1 | (p)2 | |
| As at 30 June 2014 | 52.9 | 126.3 | 164.5 | 108.8 | 147.0 |
| As at 31 December 2013 | 42.1 | 119.9 | 154.1 | 104.8 | 139.0 |
| As at 30 June 2013 | 41.7 | 118.3 | 150.5 | 103.3 | 135.5 |
| As at 31 December 2012 | 33.5 | 117.3 | 144.0 | 102.5 | 129.2 |
| As at 31 January 2012 | 29.4 | 116.7 | 138.4 | 102.0 | 121.7 |
| As at 31 January 2011 | 25.3 | 112.9 | 131.6 | 103.5 | 122.2 |
| As at 31 January 2010 | 21.2 | 106.3 | 122.0 | 92.3 | 108.0 |
| As at 31 January 2009 | 21.0 | 104.6 | 118.3 | 92.0 | 105.7 |
| As at 31 January 2008 | 24.1 | 117.4 | 128.9 | 109.0 | 120.5 |
2 - Total returns to Shareholders include dividends paid.
Shareholders wishing to follow the Company's progress can visit its website at www.mig4vct.co.uk. The website includes dedicated pages on the Company providing up-to-date details on fund performance and dividends as well as publicly available information on the Company's portfolio of investments and copies of company reports. There is also a link to the London Stock Exchange's website at: www.londonstockexchange.com where shareholders can obtain up to the minute details of the share price and latest NAV announcements, etc. A number of commentators such as Allenbridge at www.taxshelterreport.co.uk provide comparative performance figures for the VCT sector as a whole. The share price is also quoted in the Financial Times.
The Company's NAV per share as at 30 June 2014 was 126.29 pence. The Company announces its audited NAV in respect of its annual accounts in March of each year. It announces unaudited NAVs in respect of the remaining quarters.
The Directors have declared an interim exceptional capital and an interim income dividend in respect of the year ending 31 December 2014 totalling 14 pence per share (comprising 12 pence from capital and 2 pence from income). These dividends will be paid on 12 September 2014 to shareholders on the Register on 22 August 2014.
Shareholders who wish to have dividends paid directly into their bank account rather than sent by cheque to their registered address can complete a mandate for this purpose. Mandates can be obtained by contacting the Company's Registrars, Capita Asset Services at the address given at the end of this section.
Shareholders are encouraged to ensure that the Registrars maintain up-to-date details for themselves and to check whether they have received and banked all dividends payable to them. This is particularly important if they have recently moved house or changed their bank. We are aware that a number of dividends remain unclaimed by shareholders and whilst we will endeavour to contact them if this is the case, we cannot guarantee that we will be able to do so if the Registrars do not have an up-to-date telephone number and/or email address.
| Late August 2014 | Half-Yearly Report for the six months ended 30 June 2014 to be circulated to shareholders. |
|---|---|
| 22 August 2014 | Record date for shareholders to be eligible for interim dividend payable on 12 September 2014. |
| 12 September 2014 | Payment date for an interim dividend of 14 pence per share. |
| 31 December 2014 | Year-end. |
| 27 January 2015 | Shareholder workshop. |
| Late March 2015 | Annual Report for the year ended 31 December 2014 to be circulated to shareholders. |
| May 2015 | Annual General Meeting. |
The Company has adopted electronic communications, which enables shareholders to choose between electing to receive communications by email or as hard copies through the post. Many shareholders who have not specifically chosen either of these options receive a letter notifying them where to access the reports on the website.
For details on your individual shareholding and to manage your account online, you can log into or register with the Capita Shareholder Portal by going to: www.capitashareportal.com
This provides the most efficient way of checking information on your account and making changes to your information. You can use the Shareholder Portal to change your address details, check your holding balance and transactions, view the dividends you have received, add and amend your bank details and manage how you receive your dividends. You can also use the site to manage your options for receiving communications from the Company, including submitting proxy votes for general meetings.
The Company's shares are listed on the London Stock Exchange and as such they can be sold in the same way as any other quoted company through a stockbroker. However, to ensure that they obtain the best price, shareholders wishing to sell their shares are advised to contact the Company's stockbroker, Panmure Gordon, by telephoning 020 7886 2716/7 before agreeing a price with their stockbroker. Shareholders are also advised to discuss their individual tax position with their financial adviser before deciding to sell their shares.
We aim to communicate regularly with our shareholders. In addition to the Half-Yearly and Annual Reports, shareholders receive a twice-yearly newsletter from the Adviser, approved by the Board. The newsletter includes information on the latest investments made by the Company and portfolio news as well as performance data. The Board welcomes the opportunity to meet shareholders at the Company's General Meetings. The next AGM of the Company will be held in May 2015. Representatives of the Adviser will be present at the meeting to discuss the progress of the portfolio with shareholders.
The Adviser held its fourth annual shareholder workshop in January 2014. The workshop, which was attended by around 160 Mobeus VCT shareholders, included presentations from the Adviser and the managing directors of two diverse portfolio companies, Gro-Group and Newquay Helicopters. The Adviser is planning a further workshop to be held on Tuesday, 27 January 2015 at the Royal Institute of British Architects in Central London. Shareholders will be sent an invitation to this event and further details nearer to the date.
We are aware that from time to time our shareholders have received unsolicited telephone calls and/or mail which purport to come from the Company or to be authorised by the VCT.
MIG4 VCT is obliged by law to make its share register publicly available on request and, as a result, it is possible that shareholder address information could be used by third parties to obtain telephone numbers and/or send unsolicited mail. However, the Company has the right to challenge such a request when the reason given for the request is not acceptable to us and we will be taking advantage of these provisions as appropriate.
The practice of boiler room fraud has been highlighted by the Financial Conduct Authority (FCA) and the Institute of Chartered Secretaries and Administrators ("ICSA"), and their warning notice to shareholders is reproduced below.
In recent years, many companies have become aware that their shareholders have received unsolicited phone calls or correspondence concerning investment matters. These are typically from overseas based 'brokers' who target UK shareholders, offering to sell them what often turn out to be worthless or high risk shares in US or UK investments. These operations are commonly known as 'boiler rooms'. These 'brokers' can be very persistent and extremely persuasive, and a 2006 survey by the FCA has reported that the average amount lost by investors is around £20,000.
It is not just the novice investor that has been duped in this way; many of the victims have been successfully investing for several years. Shareholders are advised to be very wary of any unsolicited advice, offers to buy shares at a discount or offers of free company reports. If you receive any unsolicited investment advice:
If you deal with an unauthorised firm, you will not be eligible to receive payment under the Financial Services Compensation Scheme ("FSCS"). The FSCS can be contacted via their website at www.fscs.org.uk.
Details of any share dealing facilities that the Company endorses will be included in Company mailings.
More detailed information on this or similar activity can be found on the Money Advice Service website: www.moneyadviceservice. org.uk.
For further information, shareholders may also contact Mobeus, the Company Secretary, Tel : 020 7024 7600.
The Registrars may be contacted by telephone or post at:
Capita Asset Services, The Registry, 34 Beckenham Road, Beckenham, Kent BR3 4TU Tel: 0871 664 0324.
To contact the Chairman or any member of Board, please contact the Company Secretary, Mobeus Equity Partners LLP in the first instance, on 020 7024 7600 or by e-mail to [email protected].
| 1998 | Company launched as Triven VCT plc and managed by three managers, LICA, Elderstreet and GLE Development Capital. |
|---|---|
| 1999 | Company completes its first fundraising. |
| October 2002 | LICA acquired by NOVA Capital Management. |
| April 2004 | GLE Development Capital team joins Matrix Group to form Matrix Private Equity Partners and continues with the management of its share of the Company's portfolio in the Company. |
| July 2006 | Matrix Private Equity Partners appointed as sole manager of the Company. Triven VCT plc changes its name to Matrix Income & Growth 4 VCT plc to be consistent with the Investment Adviser's change of name. |
| June 2012 | Matrix Private Equity Partners becomes a fully independent firm owned by its partners and renames itself Mobeus Equity Partners LLP. Matrix Income & Growth 4 VCT plc changes its name to Mobeus Income & Growth 4 VCT plc to be consistent with the Investment Adviser's change of name. |
2010 – 2013 The Company launched four linked fundraisings with other Mobeus VCTs.
Christopher Moore (Chairman) Andrew Robson Helen Sinclair
Mobeus Equity Partners LLP 30 Haymarket London SW1Y 4EX
30 Haymarket London SW1Y 4EX
3707697
Mobeus Equity Partners LLP 30 Haymarket London SW1Y 4EX www.mobeusequity.co.uk Telephone: 020 7024 7600
Website
www.mig4vct.co.uk
SGH Martineau LLP No 1 Colmore Square Birmingham B4 6AA
Also at One America Square Crosswall London EC3N 2SG
Panmure Gordon (UK) Limited 1 New Change London EC4M 9AF
Capita Asset Services The Registry 34 Beckenham Road Beckenham Kent BR3 4TU
Tel: 0871 664 0300 (calls cost 10p per minute plus network extras. Lines are open 9.00am – 5.30pm Mon-Fri. If calling from overseas please ring +44 208 639 3399)
BDO LLP 55 Baker Street London W1U 7EU
PricewaterhouseCoopers LLP 1 Embankment Place London WC2N 6RH
National Westminster Bank plc City of London Office PO Box 12258 1 Princes Street London EC2R 8BP
Mobeus Equity Partners LLP 30 Haymarket London SW1Y 4EX
020 7024 7600 www.mig4vct.co.uk
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