Interim / Quarterly Report • Jun 30, 2016
Interim / Quarterly Report
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A VENTURE CAPITAL TRUST
Unaudited Half-Year Report for the six months ended 30 June 2016
Mobeus Income & Growth 4 VCT plc, ("MIG4", the "Company", or the "Fund") is a Venture Capital Trust ("VCT") advised by Mobeus Equity Partners LLP ("Mobeus"), investing primarily in established, 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, while continuing at all times to qualify as a VCT.
| Financial Highlights | 1 |
|---|---|
| Chairman's Statement | 2 |
| Investment Policy | 4 |
| Summary of VCT legislation | 4 |
| Investment Review | 5 |
| Investment Portfolio Summary | 7 |
| Statements of the Directors in respect of the Half-Year Report |
9 |
| Unaudited Condensed Financial Statements | 10 |
| Notes to the Unaudited Condensed Financial Statements | 16 |
| Shareholder Information | 22 |
| Chronology of Mobeus Income & Growth 4 VCT plc | 24 |
| Corporate Information | 25 |
Results for the six months ended 30 June 2016
Net Asset Value ("NAV") Total Return per share of 0.1% for the half-year.
Share Price Total Return per share of 2.6% for the half-year.
Shareholders received a final dividend in respect of the year ended 31 December 2015 of 9.00 pence per share on 25 May 2016.
The Company has declared an interim dividend of 2.00 pence per share, payable on 8 September 2016 to shareholders on the register on 12 August 2016, bringing total cumulative dividends paid to shareholders since inception to 73.20 pence per share.
Two investments have been made under the new VCT rules into Redline Worldwide and MPB Group, totalling £1.31 million.
The net asset value (NAV) per share as at 30 June 2016 was 109.03 pence.
The longer term trend of performance on this measure is shown in the chart below:-
*Cumulative NAV total shareholder return is net asset value plus cumulative dividends paid since 1999 to date.
The chart above shows the recent past performance of the original funds raised in 1999. The original subscription price was 200 pence per share before the benefit of income tax relief. Subscription prices from subsequent fundraisings and historic performance data from 2008 are shown in the Investor Performance Appendix on the Company's website.
On 1 August 2006, Mobeus became sole Investment Adviser to the Company. The cumulative NAV total return at this date was 122.51 pence.
I am pleased to present this Half-Year Report for Mobeus Income & Growth 4 VCT plc covering the six months ended 30 June 2016.
The result of the EU Referendum has triggered a period of UK economic uncertainty and volatility in financial markets. This half-year has been a period of consolidation as the Investment Adviser develops and evaluates a pipeline of opportunities that comply with the Company's new Investment Policy ("the Policy").
By way of reminder, shareholders approved a revised Investment Policy at the Company's AGM on 13 May 2016. This policy was required to enable the Company to continue to comply with changes to the VCT Scheme introduced by the Finance (No 2) Act 2015, enacted last November ("the New VCT Rules"). In summary, the Company may now only make new VCT investments in younger and smaller companies for growth and development purposes. Further information was given in the 2015 Annual Report and an update on this matter is also provided in the section on "Industry developments" later in this Chairman's Statement.
As a consequence of the new, more restrictive criteria in the recent VCT legislation, a lower level of investment activity has occurred. HM Revenue Customs' ("HMRC") process for approving proposed new investments has also been slower than previously experienced and this is slowing the conversion rate for VCT deals in the pipeline into completed investments. In the period, the Company's new investment level fell to £1.31 million, which compared to £5.09 million for the same period last year. This lower level of new investment is consistent with the sharp decline in the generalist VCT industry's completed new investment over this same period. Independent research is showing that new investment across generalist VCTs as a whole fell by 66% for the six month period.
Nevertheless, it is pleasing to report that the Company has completed two new investments under the Company's new Policy and descriptions of these investments are set out in the Investment Review.
The NAV total return to shareholders for the half-year was 0.1% (2015: 2.6%) (being the closing NAV plus dividends paid in the period, divided by the opening NAV). This figure is after adding back the final dividend of 9.00 pence per share for the year ended 31 December 2015, which was paid to shareholders on 25 May 2016. The NAV per share as at 30 June 2016 was 109.03 pence.
The slight rise in NAV total return over the period is principally due to a positive revenue return slightly exceeding a fall in the overall value of the investment portfolio.
To enable shareholders to monitor the performance of their investment (including dividend payments) on a consistent basis, a table showing the returns to shareholders from each allotment is available on the Company's website.
The Board has declared an interim dividend of 2.00 pence per share (comprising 1.00 pence from capital and 1.00 pence from income) which will be paid on 8 September 2016 to shareholders on the Register on 12 August 2016. This payment will bring cumulative dividends paid per share since launch to 73.20 pence.
The investment portfolio recorded a small loss of £0.10 million during the first half of the year (0.3% of the 1 January, 2016 value) and was valued at £37.45 million at the period-end. The portfolio as a whole, which principally comprises MBO investments made prior to the change in the VCT Rules in November of last year, has continued to perform acceptably. The six month period experienced notable increases in the valuations of Jablite and Tushingham. The portfolio also saw valuation declines over the period, principally in the investments in Entanet, Virgin Wines and Bourn Bioscience. Redline Worldwide ("Redline") and Access IS, two recent additions to the portfolio, both made strong starts.
A total of £1.31 million was invested into two new portfolio companies. In February, the Company invested £0.84 million into Redline, a market leader in the provision of security consultancy and training services to airlines, governments, airports and global distribution companies. In June, a new investment of £0.47 million was made into MPB Group Limited ("MPB"), a leading online marketplace for used photo and video equipment.
Following an exceptional period of realisations in 2014 and 2015, the Company has not exited any investments during this period, although a total of £1.64 million of capital proceeds have been received. These were from two principal sources, being firstly £0.38 million of deferred consideration, most of which was received in respect of Focus Pharma (sold in 2014). Secondly, strong cash generation at three portfolio companies (Ward Thomas, Jablite and Fullfield (Motorclean)) contributed to a total of £1.07 million in full and partial loan stock repayments. Ward Thomas has now fully repaid its loan stock and Jablite has so far returned around 92% of the original investment made in April 2015 by the Company.
Further details of all these transactions can be found in the Investment Review on pages 5 and 6 of this Half-Year Report.
Details of the New VCT Rules and their potential impact on the Company and its returns were set out in the 2015 Annual Report and a summary of current VCT regulation for the Company is provided on page 4.
Your Board, together with the Investment Adviser and the whole VCT industry, has sought greater clarity from HMRC at a more detailed, practical level of what investments will or will not be permitted by the legislation. The draft guidance, published by HMRC in May, has now clarified some (but not all) of the implications of these New VCT Rules. The Investment Adviser, together with the Company's VCT Status Adviser, is seeking further clarification of aspects of this guidance. Further practical experience in applying these New VCT Rules to particular transactions is needed.
Despite Brexit, we are assuming that any changes to the existing legislation will not occur in the near future. Industry bodies are still continuing discussions with HMRC and HM Treasury to try to secure an amendment to the VCT Rules to permit
VCTs to provide some replacement capital as part of an investment. If obtained, this would enlarge the pool of possible investment opportunities for VCTs compared to the more restricted regime that now applies under the New VCT Rules.
The Board's view remains that the changes in VCT legislation restrict the universe of companies that the Company can invest in. These changes may cause new investments to carry a higher risk, but could also hold the prospect of higher but more variable returns. The VCT's recent investments into Redline and MPB are examples of the type of investment the Company is likely to make in the future.
The net revenue return for the period fell by £0.01 million from £0.62 million at 30 June 2015, to £0.61 million for this half-year. Income has risen by £0.01 million, primarily due to an increase in loan interest income of £0.03 million as a result of new investments such as Access IS and Redline. Dividend income fell by £0.02 million to £0.03 million, due to a lower level of preference dividends received.
Running costs rose as Investment Adviser fees charged to revenue rose by £0.01 million due to rising net assets. Other costs fell marginally over the period, and finally the revenue tax charge has risen by £0.01 million.
The Company continues to hold £10.60 million in a selection of money market funds with AAA credit ratings at 30 June 2016. The balance of cash and current asset investments of £5.31 million is held in deposit accounts with a number of well-known financial institutions across a range of maturities. Alternative ways of prudently investing cash continue to be sought, although the risk of a loss of capital remains the overriding consideration. In addition, there is £8.78 million invested in companies preparing to trade.
As stated in the Annual Report, the Company is not currently anticipating any fundraising until the Board understands more fully the implications of the changes to the VCT legislation discussed above
and until its financial projections indicate a need for further fundraising.
The Company is required to meet the threshold set by HMRC of investing 70% of the funds raised in qualifying unquoted and AIM quoted companies. The Company exceeded this threshold (based on VCT cost as defined in tax legislation, which differs from the actual cost given in the Investment Portfolio Summary on pages 7 - 8) throughout the period. The balance of the portfolio continues to be held in non-qualifying investments and cash.
During the six months ended 30 June 2016, the Company bought back 118,500 Ordinary shares in the Company representing 0.3% of the issued share capital at the beginning of the period, at a price of 97.99 pence per share (including costs) which was at a discount of approximately 10% to the latest announced NAV.
All of the shares offered were boughtback in the period and were subsequently cancelled by the Company. Continuing shareholders benefit from the difference between NAV per share and the price per share at which the shares are bought back and cancelled.
The Company's 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.
Shareholders who already participate, or are considering whether to participate, in the Scheme should give some consideration to the Industry Developments section above and the implications of the changes in VCT Rules. There is an associated five year holding period required to secure income tax relief when new shares are allotted under the Scheme.
Further information on the Scheme, including details of where to obtain an application form, can be found in Shareholder Information on pages 22 and 23.
The Investment Adviser held its sixth annual shareholder event on 26 January 2016. The event was well attended and we were pleased to hear from the Investment Adviser that it received positive feedback from shareholders. The next event is to be held on Tuesday, 24 January 2017, again at the Royal Institute of British Architects in Central London. The programme will again include presentations on the investment activity and performance of the Mobeus VCTs as well as an update on the recent regulatory changes and talks from investee companies. Shareholders have been sent further details, and an invitation to the event, with the shareholder newsletter sent last month.
The outcome of the UK's EU Referendum vote on June 23 has had significant and unexpected political repercussions and created a high degree of economic uncertainty. The prospect of greater political certainty in the UK following the appointment of a new Prime Minister and Cabinet has allowed global markets partially to rebalance, with the exception of currency markets, from the initial negative reactions. Uncertainty is likely to prevail until the direction of, and potential outcome from, Brexit negotiations with the EU and with other economies, becomes clearer.
In this context, it is too early to comment definitively on the outlook for your Company, but both the Board and Investment Adviser remain positive around future prospects. It is a time to keep operating normally and to resist undue distractions until clear trends emerge.
While further clarity at a detailed level is required to apply the New VCT Rules effectively, we are pleased to have completed two new investments that meet these rules and are in accordance with the Company's new Investment Policy. The Investment Adviser has enlarged its team and is focused on developing a strong pipeline of similar opportunities.
Finally, I would like to thank shareholders for their continuing support.
Chairman
3 August 2016
The investment policy is designed to meet the Company's objective.
The Company invests primarily in a diverse portfolio of UK unquoted companies. Investments are made selectively across a number of sectors, principally in established companies. Investments are usually structured as part loan stock and part equity in order to produce a regular income stream and to generate capital gains from realisations.
There are a number of conditions within the VCT legislation which need to be met by the Company and which may change from time to time. The Company will seek to make investments in accordance with the requirements of prevailing VCT legislation.
Asset allocation and risk diversification policies, including the size and type of investments the Company makes, are determined in part by the requirements of prevailing VCT legislation. No single investment may represent more than 15 per cent. (by VCT tax value) of the Company's total investments at the date of investment.
The Company's cash and liquid funds are held in a portfolio of readily realisable interest bearing investments, deposit and current accounts, of varying maturities, subject to the overriding criterion that the risk of loss of capital be minimised.
The Company's articles of association permit borrowings of amounts up to 10 per cent. of the adjusted capital and reserves (as defined therein). However, the Company has never borrowed and the Board would only consider doing so in exceptional circumstances.
To assist shareholders, the following table contains a summary of the most important rules that determine VCT approval.
To achieve continued status as a VCT, the Company must meet a number of conditions, the most important of which are that:-
To be a VCT qualifying holding, a new investment must be in companies:-
*VCT tax value means as valued in accordance with prevailing VCT legislation.
The above takes into account legislation up to the Finance (No 2) Act 2015 enacted on 18 November 2015. Further draft legislation states that, from 6 April 2016 onwards, non-qualifying investments can no longer be made, except for certain exceptions in managing the Company's short-term liquidity.
Activity in the portfolio over these six months has been at a lower level than in recent years. This is principally due to the impact of the introduction of the Finance (No 2) Act 2015 in November 2015.
This has required all VCTs to reconsider the type of investments that VCTs can make in future. The changes in VCT legislation contained in the Finance (No 2) Act 2015 are a significant change for the VCT industry and we, along with other Investment Advisers, have been focused on familiarising ourselves with the practical implications of the rules on the types of prospective opportunities we can now consider for VCT investment. That process is continuing. Further clarification is awaited both from HMRC's draft Guidance so far published and from additional practical experience gained from assessing more prospective opportunities at a detailed level.
These factors have inevitably caused a reduction in the level of new investment. Despite these uncertainties, we are pleased to report that two new investments have been completed under these new rules and the pipeline of prospective opportunities is increasing. We are hopeful that new investment levels may increase in the second half of the year, particularly if further clarification of the rules at a detailed level is forthcoming.
The valuation of the portfolio has fallen slightly by 0.3% on a like for like basis. The underlying performance of the investment portfolio, the significant majority of which comprises investments made prior to the introduction of the new rules, remains solid and cash generative. A number of companies have made loan repayments, with one company, Leap New Co Limited (trading as Ward Thomas), fully repaying its loan in just over a year since investment. Jablite has returned 92% of its original investment cost in a little over a year.
Investments remain spread across a number of sectors, primarily in support services, general retailers, media and fixed line telecommunications.
It is too early to comment on the eventual impact upon the portfolio of the UK leaving the European Union. The increase in uncertainty over the outlook for the UK economy, and recent increased market volatility, are unwelcome, but may present opportunities as the small company sector adapts to meet the change in the political and economic environment.
A total of £1.31 million was invested during the six months under review. This was made up of new investments in Redline and more recently MPB, a UK based online marketplace for used photo and video equipment.
| Company | Business | Date of investment |
Amount of new investment (£m) |
|---|---|---|---|
| Redline | Provision of security products and services |
February 2016 |
0.84* |
Redline is a market leader in the provision of security consultancy and training services to airlines, governments, airports and global distribution companies. Redline currently operates predominantly in the aviation security market and is at the forefront of counter terrorism training and services. The investment will be applied to enable the company to grow in its core aviation market and in other sectors. The company's latest accounts for the year ended 31 March 2015 show turnover of £4.81 million and profit before interest, tax and amortisation of goodwill of £0.82 million.
* £1.13 million held in Pound FM Consultants Limited, a company preparing to trade, was used for this investment. This resulted in a net repayment of £0.29 million. Pound FM Consultants Limited subsequently changed its name to Redline Worldwide Limited.
| MPB Group | Online marketplace for used photo and June 2016 video equipment |
0.47 |
|---|---|---|
| ----------- | -------------------------------------------------------------------------- | ------ |
MPB is Europe's leading online marketplace (www.mpb.com) for used photo and video equipment. Based in Brighton, its customdesigned pricing technology enables MPB to offer both buy and sell services through the same platform and offers a one-stop shop for all its customers. The investment is to fund expansion of its platform globally, beginning with launches into both the US and German markets. The company's latest audited accounts for the year ended 31 March 2015 show turnover of £7.49 million and profit before interest, tax and amortisation of goodwill of £0.30 million.
There have been no full realisations in the period, although the Company received cash proceeds of £1.64 million in the form of loan stock repayments of £1.07 million (detailed below), deferred consideration of £0.38 million and other receipts of £0.19 million. Deferred consideration included £0.37 million received as deferred proceeds from the sale of Focus Pharma, which was realised in 2014. Other receipts were £0.18 million returned to the Company by Pound FM Consultants Limited, a company preparing to trade via a share buyback, and £0.01 million received as an interim distribution resulting from the members' voluntary liquidation of Newquay Helicopters (2013) Limited.
Loan stock repayments totalled £1.07 million for the half-year. These proceeds are summarised below:-
| Company | Business | Month | Amount (£000s) |
|---|---|---|---|
| Leap New Co (Ward Thomas) | Logistics, storage and removals business | January | 837 |
| Pound FM Consultants | Company preparing to trade | February | 111 |
| Fullfield (Motorclean) | Vehicle cleaning and valeting services | February | 64 |
| Jablite | Expanded polystyrene products | April | 57 |
| Total | 1,069 |
Investment Adviser 3 August 2016
| Total cost at 30 June 2016 |
Total Valuation at 31 December 2015 |
Total Valuation at 30 June 2016 |
% of equity held |
% of portfolio by value |
|
|---|---|---|---|---|---|
| Mobeus Equity Partners LLP | £ | £ | £ | ||
| Virgin Wines Holding Company Limited Online wine retailer |
1,930,813 | 2,784,729 | 2,579,204 | 9.7% | 6.9% |
| Tovey Management Limited (trading as Access IS) Provider of data capture and scanning hardware |
2,469,013 | 2,469,013 | 2,469,013 | 10.1% | 6.6% |
| Entanet Holdings Limited Wholesale communications provider |
2,167,662 | 3,338,043 | 2,389,494 | 9.6% | 6.4% |
| Media Business Insight Holdings Limited A publishing and events business focused on the creative production industries |
2,722,760 | 2,282,607 | 2,219,121 | 15.7% | 5.9% |
| ASL Technology Holdings Limited Printer and photocopier services |
1,933,591 | 2,234,937 | 2,152,696 | 9.5% | 5.8% |
| Manufacturing Services Investment Limited Company seeking to carry on a business in the manufacturing sector |
2,016,900 | 2,016,900 | 2,016,900 | 11.4% | 5.4% |
| Veritek Global Holdings Limited Maintenance of imaging equipment |
1,620,086 | 1,659,063 | 1,666,371 | 10.3% | 4.4% |
| Fullfield Limited (trading as Motorclean) Vehicle cleaning and valet services |
1,131,444 | 1,379,974 | 1,583,444 | 9.8% | 4.2% |
| CGI Creative Graphics International Limited Vinyl graphics to global automotive, recreation vehicle and aerospace markets |
1,449,746 | 1,179,872 | 1,439,959 | 6.3% | 3.8% |
| Jablite Holdings Limited Manufacturer of expanded polystyrene products |
376,083 | 1,097,406 | 1,410,288 | 9.1% | 3.8% |
| Tharstern Group Limited MIS & Commercial print software solutions |
1,091,886 | 1,518,767 | 1,334,257 | 12.2% | 3.6% |
| Backhouse Management Limited Company seeking to carry on a business in the motor sector |
1,134,000 | 1,134,000 | 1,134,000 | 11.3% | 3.0% |
| Barham Consulting Limited Company seeking to carry on a business in the catering sector |
1,134,000 | 1,134,000 | 1,134,000 | 11.3% | 3.0% |
| Chatfield Services Limited Company seeking to carry on a business in the retail sector |
1,134,000 | 1,134,000 | 1,134,000 | 11.3% | 3.0% |
| Creasy Marketing Services Limited Company seeking to carry on a business in the textile sector |
1,134,000 | 1,134,000 | 1,134,000 | 11.3% | 3.0% |
| McGrigor Management Limited Company seeking to carry on a business in the pharmaceutical sector |
1,134,000 | 1,134,000 | 1,134,000 | 11.3% | 3.0% |
| Vian Marketing Limited (trading as Tushingham Sails) Design, manufacture and sale of stand-up paddleboards and windsurfing sails |
899,074 | 899,074 | 1,104,104 | 7.1% | 2.9% |
| Hollydale Management Limited Company seeking to carry on a business in the food industry |
1,095,500 | 1,095,500 | 1,095,500 | 11.0% | 2.9% |
| EOTH Limited (trading as Equip Outdoor Technologies) Branded outdoor equipment and clothing |
951,471 | 1,008,235 | 1,028,125 | 1.7% | 2.7% |
| Turner Topco Limited (trading as ATG Media) Publisher and online auction platform operator |
1,529,075 | 828,610 | 1,000,494 | 3.8% | 2.7% |
| Gro-Group Holdings Limited Baby sleep products |
1,577,977 | 1,138,860 | 987,033 | 8.4% | 2.6% |
| The Plastic Surgeon Holdings Limited Snagging and finishing of domestic and commercial properties |
458,935 | 840,837 | 928,244 | 8.6% | 2.5% |
| Redline Worldwide Limited (formerly Pound FM Consultants Limited)1 Provider of security services to the aviation industry and other sectors |
838,377 | 1,134,000 | 838,377 | 6.7% | 2.2% |
1 - £838,377 invested in Pound FM Consultants Limited, a company preparing to trade, was used for the investment into Redline Assured Security Limited ("Redline"). This resulted in a net repayment to the Company of £295,623. Pound FM Consultants Limited subsequently changed its name to Redline Worldwide Limited.
| Total cost at 30 June 2016 |
Total Valuation at 31 December 2015 |
Total Valuation at 30 June 2016 |
% of equity held |
% of portfolio by value |
|
|---|---|---|---|---|---|
| Mobeus Equity Partners LLP | £ | £ | £ | ||
| Bourn Bioscience Limited Bourn Hall In-vitro fertilisation clinics |
1,132,521 | 895,428 | 769,106 | 7.7% | 2.1% |
| Leap New Co Limited (trading as Ward Thomas Removals, Bishopsgate and Aussie Man & Van) A specialist logistics, storage and removals business |
511,855 | 1,485,897 | 657,318 | 4.3% | 1.8% |
| RDL Corporation Limited Recruitment consultants within the pharmaceutical, business intelligence and IT industries |
1,000,000 | 622,056 | 590,424 | 9.1% | 1.6% |
| MPB Group Limited Online marketplace for used photographic equipment |
471,216 | - | 471,216 | 5.3% | 1.3% |
| Omega Diagnostics plc In-vitro diagnostics for food intolerance, auto-immune diseases and infectious diseases |
200,028 | 258,347 | 266,680 | 1.5% | 0.7% |
| Blaze Signs Holdings Limited Manufacturer and installer of signs |
190,631 | 356,486 | 250,318 | 5.7% | 0.7% |
| Vectair Holdings Limited Designer and distributor of washroom products |
24,732 | 123,079 | 109,582 | 2.1% | 0.3% |
| Racoon International Holdings Limited Supplier of hair extensions, hair care products and training |
484,347 | 77,542 | 77,542 | 10.5% | 0.3% |
| Lightworks Software Limited Provider of software for CAD and CAM vendors |
9,329 | 24,858 | 25,217 | 4.2% | 0.1% |
| BG Training Limited City-based provider of specialist technical training |
14,167 | 14,167 | 14,167 | 0.0% | 0.0% |
| Newquay Helicopters (2013) Limited (in members' voluntary liquidation) Helicopter service operator |
16,542 | 21,250 | - | 2.5% | 0.0% |
| PXP Holdings Limited (dissolved 12 July 2016) Former designer, manufacturer and supplier of timber frames for buildings |
712,925 | - | - | 4.4% | 0.0% |
| CB Imports Group Limited Importer and distributor of artificial flowers, floral sundries and home decor products |
175,000 | - | - | 5.8% | 0.0% |
| Watchgate Limited Holding company |
1,000 | - | - | 33.3% | 0.0% |
| Preservica Limited Seller of proprietary digital archiving software |
- | - | - | 4.6% | 0.0% |
| Sub-total | 36,874,686 | 38,455,537 | 37,144,194 | 99.2% | |
| Former Elderstreet Private Equity Limited Portfolio | |||||
| Cashfac Limited Provider of virtual banking application software solutions to corporate customers |
260,101 | 187,108 | 184,639 | 2.9% | 0.5% |
| Sparesfinder Limited Supplier of industrial spare parts online |
250,854 | 46,977 | 77,958 | 2.0% | 0.2% |
| Sift Limited Developer of business-to-business internet communities |
135,391 | 27,048 | 43,716 | 1.3% | 0.1% |
| Sub-total | 646,346 | 261,133 | 306,313 | 0.8% | |
| Total Investment Portfolio | 37,521,032 | 38,716,670 | 37,450,507 | 100.0% |
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 changed materially from those identified in the Annual Report and Accounts for the year ended 31 December 2015.
The principal risks faced by the Company are:
A more detailed explanation of these risks can be found in the Strategic Report on pages 25 – 26 and in Note 15 on pages 65 – 72 of the Annual Report and Accounts for the year ended 31 December 2015, 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 half-year management report which comprises 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 Notes 15 and 16 on pages 65 – 72 of the Annual Report and Accounts for the year ended 31 December 2015. Accordingly, the Directors continue to adopt the going concern basis of accounting in preparing the half-year report and annual financial statements.
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
3 August 2016
| Six months ended 30 June 2016 | ||||
|---|---|---|---|---|
| Notes | Revenue £ |
Capital £ |
(unaudited) Total £ |
|
| Unrealised (losses)/gains on investments held at fair value | 10 | - | (479,479) | (479,479) |
| Realised gains on investments held at fair value | 10 | - | 381,087 | 381,087 |
| Income | 4 | 1,054,766 | - | 1,054,766 |
| Investment Adviser's fees | 5 | (156,674) | (470,021) | (626,695) |
| Other expenses | (187,868) | - | (187,868) | |
| Profit on ordinary activities before taxation | 710,224 | (568,413) | 141,811 | |
| Tax on profit on ordinary activities | 6 | (101,479) | 94,004 | (7,475) |
| Profit and total comprehensive income | 608,745 | (474,409) | 134,336 | |
| Basic and diluted earnings per ordinary share | 7 | 1.26p | (0.98)p | 0.28p |
The revenue column of the Income Statement includes all income and expenses. The capital column accounts for the unrealised gains/(losses) and realised gains/(losses) on investments and the proportion of the Investment Adviser's fee charged to capital.
The total column is the Statement of Total Comprehensive Income of the Company prepared in accordance with Financial Reporting Standards ("FRS"). In order to better reflect the activities of a VCT and in accordance with the Statement of Recommended Practice ("SORP") issued in November 2014 by the Association of Investment Companies ("AIC"), supplementary information which analyses the Income Statement between items of a revenue and capital nature has been presented alongside the Income Statement. The revenue column of profit attributable to equity shareholders is the measure the Directors believe appropriate in assessing the Company's compliance with certain requirements set out in Section 274 Income Tax Act 2007.
All the items in the above statement derive from continuing operations of the Company. No operations were acquired or discontinued in the periods/year.
| (audited) | Year ended 31 December 2015 | (unaudited) | Six months ended 30 June 2015 | |||
|---|---|---|---|---|---|---|
| Total £ |
Capital £ |
Revenue £ |
Total £ |
Capital £ |
Revenue £ |
|
| 1,094,287 | 1,094,287 | - | 1,168,300 | 1,168,300 | - | |
| 3,302,320 | 3,302,320 | - | 363,926 | 363,926 | - | |
| 2,202,056 | - | 2,202,056 | 1,049,392 | - | 1,049,392 | |
| (1,214,901) | (911,176) | (303,725) | (604,200) | (453,150) | (151,050) | |
| (402,156) | - | (402,156) | (188,387) | - | (188,387) | |
| 4,981,606 | 3,485,431 | 1,496,175 | 1,789,031 | 1,079,076 | 709,955 | |
| - | 184,209 | (184,209) | - | 91,622 | (91,622) | |
| 4,981,606 | 3,669,640 | 1,311,966 | 1,789,031 | 1,170,698 | 618,333 | |
| 10.41p | 7.67p | 2.74p | 3.77p | 2.47p | 1.30p |
| Notes | 30 June 2016 (unaudited) £ |
30 June 2015 (unaudited) £ |
31 December 2015 (audited) £ |
|
|---|---|---|---|---|
| Fixed assets | ||||
| Investments at fair value | 10 | 37,450,507 | 40,719,809 | 38,716,670 |
| Current assets | ||||
| Debtors and prepayments | 227,399 | 198,428 | 561,950 | |
| Current asset investments | 11 | 13,308,457 | 11,592,074 | 14,619,207 |
| Cash at bank | 11 | 2,596,622 | 2,295,224 | 3,386,635 |
| 16,132,478 | 14,085,726 | 18,567,792 | ||
| Creditors: amounts falling due within one year | (167,128) | (196,711) | (276,680) | |
| Net current assets | 15,965,350 | 13,889,015 | 18,291,112 | |
| Net assets | 53,415,857 | 54,608,824 | 57,007,782 | |
| Capital and reserves Called up share capital |
489,909 | 481,870 | 483,562 | |
| Share premium reserve | 13,364,351 | 12,461,332 | 12,629,944 | |
| Capital redemption reserve | 8,012 | 6,827 | 6,827 | |
| Revaluation reserve | 1,050,205 | 2,758,561 | 1,545,364 | |
| Special distributable reserve | 32,129,885 | 32,991,954 | 32,622,021 | |
| Realised capital reserve | 5,192,452 | 4,822,308 | 8,422,420 | |
| Revenue reserve | 1,181,043 | 1,085,972 | 1,297,644 | |
| Equity shareholders' funds | 53,415,857 | 54,608,824 | 57,007,782 | |
| Basic and diluted net asset value per share | 9 | 109.03p | 113.33p | 117.89p |
| Non-distributable reserves | Distributable reserves | |||||||
|---|---|---|---|---|---|---|---|---|
| Called up share capital |
Share reserve |
premium redemption reserve |
Capital Revaluation reserve |
Special distributable reserve |
Realised capital reserve |
Revenue reserve (Note b) |
Total | |
| £ | £ | £ | £ | (Note a) £ |
(Note b) £ |
£ | £ | |
| At 1 January 2016 Comprehensive income for the period |
483,562 | 12,629,944 | 6,827 | 1,545,364 | 32,622,021 | 8,422,420 | 1,297,644 | 57,007,782 |
| Profit for the period | - | - | - | (479,479) | - | 5,070 | 608,745 | 134,336 |
| Total comprehensive | ||||||||
| income for the period | - | - | - | (479,479) | - | 5,070 | 608,745 | 134,336 |
| Contributions by and distributions to owners Dividends re-invested |
||||||||
| into new shares | 7,532 | 734,407 | - | - | - | - | - | 741,939 |
| Shares bought back | (1,185) | - | 1,185 | - | (116,119) | - | - | (116,119) |
| Dividends paid | - | - | - | - | - | (3,626,735) | (725,346) | (4,352,081) |
| Total contributions by and distributions |
||||||||
| to owners | 6,347 | 734,407 | 1,185 | - | (116,119) (3,626,735) | (725,346) (3,726,261) | ||
| Other movements Realised losses transferred |
||||||||
| to special reserve (note a) Realisation of previously |
- | - | - | - | (376,017) | 376,017 | - | - |
| unrealised appreciation | - | - | - | (15,680) | - | 15,680 | - | - |
| Total other movements | - | - | - | (15,680) | (376,017) | 391,697 | - | - |
| At 30 June 2016 | 489,909 13,364,351 | 8,012 | 1,050,205 | 32,129,885 | 5,192,452 1,181,043 53,415,857 |
Notes
a): The cancellation of the share premium reserve and capital redemption reserve has increased the Company's special distributable reserve. The purpose of this reserve is to fund market purchases of the Company's own shares, write off any existing and future losses and for any other corporate purpose. All of this reserve arose from shares issued before 5 April 2014.
b): The Realised capital reserve and the Revenue reserve together comprise the Profit and Loss Account of the Company.
| Non-distributable reserves | Distributable reserves | |||||||
|---|---|---|---|---|---|---|---|---|
| Called up share capital |
Share reserve |
premium redemption reserve |
Capital Revaluation reserve |
Special distributable reserve |
Realised capital reserve |
Revenue reserve |
Total | |
| £ | £ | £ | £ | £ | £ | £ | £ | |
| At 1 January 2015 Comprehensive income for the period |
425,434 | 5,985,042 | 5,143 | 1,214,933 | 33,748,039 | 7,968,451 | 943,995 | 50,291,037 |
| Profit for the period | - | - | - | 1,168,300 | - | 2,398 | 618,333 | 1,789,031 |
| Total comprehensive income for the period |
- | - | - | 1,168,300 | - | 2,398 | 618,333 | 1,789,031 |
| Contributions by and distributions to owners Shares issued via Offer |
||||||||
| for Subscription Dividends re-invested |
51,679 | 5,841,843 | - | - | (26,070) | - | - | 5,867,452 |
| into new shares Shares bought back Dividends paid |
6,441 (1,684) - |
634,447 - - |
- 1,684 - |
- - - |
- (168,734) - |
- - (3,334,494) |
- - (476,356) |
640,888 (168,734) (3,810,850) |
| Total contributions by and distributions to owners |
56,436 | 6,476,290 | 1,684 | - | (194,804) (3,334,494) | (476,356) | 2,528,756 | |
| Other movements Realised losses transferred to special reserve Realisation of previously unrealised depreciation |
- - |
- - |
- - |
- 375,328 |
(561,281) - |
561,281 (375,328) |
- - |
- - |
| Total other movements | - | - | - | 375,328 | (561,281) | 185,953 | - | - |
| At 30 June 2015 | 481,870 12,461,332 | 6,827 | 2,758,561 | 32,991,954 | 4,822,308 | 1,085,972 54,608,824 |
| Notes | Six months ended 30 June 2016 (unaudited) £ |
Six months ended 30 June 2015 (unaudited) £ |
Year ended 31 December 2015 (audited) £ |
|
|---|---|---|---|---|
| Cash flows from operating activities | ||||
| Profit for the financial period | 134,336 | 1,789,031 | 4,981,606 | |
| Adjustments for: | ||||
| Unrealised losses/(gains) on investments | 479,479 | (1,168,300) | (1,094,287) | |
| Realised gains on investments | (381,087) | (363,926) | (3,302,320) | |
| Decrease/(increase) in debtors | 29,330 | (10,457) | (68,758) | |
| (Decrease)/increase in creditors and accruals | (110,131) | (71,482) | 8,948 | |
| Net cash inflow from operating activities | 151,927 | 174,866 | 525,189 | |
| Cash flows from investing activities | ||||
| Purchase of investments | 10 | (471,216) | (15,443,897) | (16,809,665) |
| Disposal of investments | 10 | 1,944,207 | 1,311,736 | 7,239,803 |
| (Increase)/decrease in bank deposits | ||||
| with a maturity over three months | (621,023) | (22,632) | 453,120 | |
| Net cash inflow/(outflow) from | ||||
| investing activities | 851,968 | (14,154,793) | (9,116,742) | |
| Cash flows from financing activities | ||||
| Share issued as part of Offer for Subscription | - | 5,867,452 | 5,867,452 | |
| Equity dividends paid | 8 | (3,610,142) | (3,169,962) | (3,963,579) |
| Purchase of own shares | (115,539) | (168,274) | (168,734) | |
| Net cash (outflow)/inflow from | ||||
| financing activities | (3,725,681) | 2,529,216 | 1,735,139 | |
| Net decrease in cash and cash equivalents | (2,721,786) | (11,450,711) | (6,856,414) | |
| Cash and cash equivalents at start of period | 15,920,712 | 22,777,126 | 22,777,126 | |
| Cash and cash equivalents at end of period | 13,198,926 | 11,326,415 | 15,920,712 | |
| Cash and cash equivalents comprise: | ||||
| Cash at bank and in hand | 11 | 2,596,622 | 2,295,224 | 3,386,635 |
| Cash equivalents | 11 | 10,602,304 | 9,031,191 | 12,534,077 |
Mobeus Income and Growth 4 VCT plc is a public limited company incorporated in England, registration number 03707697. The registered office is 30 Haymarket, London, SW1Y 4EX.
These financial statements are prepared in accordance with accounting policies consistent with Financial Reporting Standard 102 ("FRS102"), Financial Reporting Standard 104 ("FRS104") - Interim Financial Reporting, with the Companies Act 2006 and the 2014 Statement of Recommended Practice, 'Financial Statements of Investment Trust Companies and Venture Capital Trusts' ('the SORP') issued by the Association of Investment Companies ("AIC").
The Company has elected to apply early the revised disclosure requirements as set out in Amendments to FRS102 - Fair Value hierarchy disclosures, issued in March 2016.
The Half-Year Report has not been audited, nor has it been reviewed by the auditor pursuant to the Financial Reporting Council's (FRC) guidance on Review of Interim Financial Information.
The comparatives to these Unaudited Condensed Financial Statements are those disclosed in each prior period/year's financial statements other than in relation to Monies held pending investment, Current asset investments and Cash at bank. These comparative figures have been reallocated to reflect more accurately the nature of the underlying instruments. This is just a presentational change and has had no effect on net assets.
The accounting policies have been applied consistently throughout the period. Full details of principal accounting policies will be disclosed in the Annual Report, while the policy in respect of investments is included within an outlined box at the top of Note 10 on investments.
| Six months ended 30 June 2016 (unaudited) £ |
Six months ended 30 June 2015 (unaudited) £ |
Year ended 31 December 2015 (audited) £ |
|
|---|---|---|---|
| Dividends | 29,140 | 45,858 | 61,752 |
| Loan stock interest | 967,555 | 942,879 | 2,031,331 |
| Money-market funds | 29,864 | 14,074 | 30,470 |
| Bank deposit interest | 28,207 | 46,412 | 78,334 |
| Interest on preference share dividend arrears | - | 169 | 169 |
| Total Income | 1,054,766 | 1,049,392 | 2,202,056 |
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's 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. For further details, see Note 4 on page 55 of the 2015 Annual Report.
| Six months ended 30 June 2016 (unaudited) |
Six months ended 30 June 2015 (unaudited) |
Year ended 31 December 2015 (audited) |
|||||||
|---|---|---|---|---|---|---|---|---|---|
| Revenue | Capital | Total | Revenue | Capital | Total | Revenue | Capital | Total | |
| £ | £ | £ | £ | £ | £ | £ | £ | £ | |
| a) Analysis of tax charge: UK Corporation tax on |
|||||||||
| profits/(losses) for the period | 101,479 | (94,004) | 7,475 | 91,622 | (91,622) | - | 184,209 | (184,209) | - |
| Total current tax charge/(credit) | 101,479 | (94,004) | 7,475 | 91,622 | (91,622) | - | 184,209 | (184,209) | - |
| Corporation tax is based on a rate of 20.0% (2015: 20.0%) |
|||||||||
| b) Profit on ordinary activities | |||||||||
| before tax | 710,224 | (568,413) | 141,811 | 709,955 | 1,079,076 | 1,789,031 | 1,496,175 | 3,485,431 | 4,981,606 |
| Profit on ordinary | |||||||||
| activities multiplied by rate of | |||||||||
| corporation tax in the UK of | |||||||||
| 20.0% (2015: 20.0%) | 142,045 | (113,683) | 28,362 | 141,991 | 215,815 | 357,806 | 299,235 | 697,086 | 996,321 |
| Effect of: | - | ||||||||
| UK dividends | (5,828) | - | (5,828) | (9,172) | - | (9,172) | (12,350) | - | (12,350) |
| Unrealised losses/(gains) not | |||||||||
| allowable | - | 95,896 | 95,896 | - | (233,660) | (233,660) | - | (218,857) | (218,857) |
| Realised gains not taxable | - | (76,217) | (76,217) | - | (72,785) | (72,785) | - | (660,464) | (660,464) |
| Marginal relief | - | - | - | 992 | (992) | - | 1,974 | (1,974) | - |
| Losses brought forward | (34,738) | - | (34,738) | (42,189) | - | (42,189) | (104,650) | - | (104,650) |
| Actual current tax charge | 101,479 | (94,004) | 7,475 | 91,622 | (91,622) | - | 184,209 | (184,209) | - |
A tax charge arises as tax losses brought forward from previous years have been exceeded by taxable profits for the period.
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 2016 (unaudited) £ |
Six months ended 30 June 2015 (unaudited) £ |
Year ended 31 December 2015 (audited) £ |
|
|---|---|---|---|
| i) Total earnings after taxation: Basic and diluted earnings per share (pence) |
134,336 0.28p |
1,789,031 3.77p |
4,981,606 10.41p |
| ii) Revenue earnings from ordinary activities after taxation Basic and diluted revenue earnings per share (pence) |
608,745 1.26p |
618,333 1.30p |
1,311,966 2.74p |
| Net unrealised capital (losses)/gains on investments Net realised capital gains on investments Capital Investment Adviser's fees less taxation |
(479,479) 381,087 (376,017) |
1,168,300 363,926 (361,528) |
1,094,287 3,302,320 (726,967) |
| iii) Capital earnings Basic and diluted capital earnings per share (pence) |
(474,409) (0.98)p |
1,170,698 2.47p |
3,669,640 7.67p |
| iv) Weighted average number of shares in issue in the period | 48,504,551 | 47,431,807 | 47,857,465 |
| Dividend | Type | For the year ended 31 December |
Pence per share |
Date paid | Six months ended 30 June 2016 (unaudited) £ |
Six months ended 30 June 2015 (unaudited) £ |
Year ended 31 December 2015 (audited) £ |
|---|---|---|---|---|---|---|---|
| Second interim | Income | 2014 | 1.00p | 6 May 2015 | - | 476,356 | 476,355 |
| Second interim | Capital | 2014 | 7.00p | 6 May 2015 | - | 3,334,494 | 3,334,494 |
| Interim | Income | 2015 | 1.00p 25 September 2015 | - | - | 481,961 | |
| Interim | Capital | 2015 | 1.00p 25 September 2015 | - | - | 481,961 | |
| Final | Income | 2015 | 1.50p | 25 May 2016 | 725,346 | - | - |
| Final | Capital | 2015 | 7.50p | 25 May 2016 | 3,626,735 | - | - |
| 4,352,081* | 3,810,850 * | 4,774,771* |
* - £4,352,081 (30 June 2015: £3,810,850; 31 December 2015: £4,774,771) disclosed above differs to that shown in the Condensed Statement of Cash Flows of £3,610,142 (30 June 2015: £3,169,962; 31 December 2015: £3,963,579) due to £741,939 (30 June 2015: £640,888; 31 December 2015: £811,192) of new shares issued under the Company's Dividend Investment Scheme.
| as at 30 June 2016 (unaudited) |
as at 30 June 2015 (unaudited) |
as at 31 December 2015 (audited) |
|
|---|---|---|---|
| Net assets | £53,415,857 | £54,608,824 | £57,007,782 |
| Number of shares in issue | 48,990,948 | 48,186,955 | 48,356,210 |
| Net asset value per share (pence) | 109.03p | 113.33p | 117.89p |
All investments held by the Company are classified as "fair value through profit and loss", and valued in accordance with the International Private Equity and Venture Capital Valuation ("IPEVCV") guidelines, as updated in December 2015. 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. Purchases 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.
All investments are initially recognised and subsequently measured at fair value. Changes in fair value are recognised in the Income Statement.
The methods of fair value measurement are classified into a hierachy based on the reliability of the information used to determine the valuation.
| Traded on AIM |
Unquoted equity shares |
Unquoted preference shares |
Unquoted Loan Stock |
Total | |
|---|---|---|---|---|---|
| Level 1 | Level 3 | Level 3 | Level 3 | ||
| £ | £ | £ | £ | £ | |
| Valuation at 31 December 2015 | 258,347 | 11,262,657 | 13,051 | 27,182,615 | 38,716,670 |
| Purchases at cost | - | 359,022 | - | 112,194 | 471,216 |
| Sales - proceeds | - | (570,205) | - | (1,068,782) | (1,638,987) |
| - realised gains | - | 381,087 | - | - | 381,087 |
| Unrealised gains/(losses) on | |||||
| investments in the period | 8,333 | (1,550,832) | - | 1,063,020 | (479,479) |
| Valuation at 30 June 2016 | 266,680 | 9,881,729 | 13,051 | 27,289,047 | 37,450,507 |
| Book cost at 30 June 2016 | 200,028 | 11,997,198 | 15,144 | 25,308,662 | 37,521,032 |
| Unrealised gains/(losses) at 30 June 2016 | 66,652 | (1,563,874) | (444) | 2,547,871 | 1,050,205 |
| Permanent impairment of investments | - | (551,595) | (1,649) | (567,486) | (1,120,730) |
| Valuation at 30 June 2016 | 266,680 | 9,881,729 | 13,051 | 27,289,047 | 37,450,507 |
| Gains on investments | - | 381,087 | - | 15,680 | 396,767 |
| Less amounts recognised as unrealised | |||||
| gains in previous years | - | - | - | (15,680) | (15,680) |
| Realised gains based on carrying | |||||
| value at 31 December 2015 | - | 381,087 | - | - | 381,087 |
| Net movement in unrealised appreciation/ | |||||
| (depreciation) in the period | 8,333 | (1,550,832) | - | 1,063,020 | (479,479) |
| Gains/(losses) on investments for the | |||||
| six months ended 30 June 2016 | 8,333 | (1,169,745) | - | 1,063,020 | (98,392) |
Sales proceeds above of £1,638,987 are less than that shown in the Condensed Statement of Cash Flows of £1,944,207 by £305,220. This amount is deferred cash proceeds received in the current period that related to investments realised in previous years.
There has been no significant change in the risk analysis as disclosed in Note 15 of the financial statements in the Company's Annual Report. The increase in unrealised valuations of the loan stock investments above reflect the changes in the entitlement to loan premiums, and/or in the underlying enterprise value of the investee company. The increase does not arise from assessments of credit or market risk upon these instruments.
Level 3 unquoted equity and loan stock investments are valued in accordance with IPEVCV guidelines as follows:
| as at 30 June 2016 (unaudited) £ |
as at 30 June 2015 (unaudited) £ |
as at 31 December 2015 (audited) £ |
|
|---|---|---|---|
| Valuation methodology | |||
| Estimated realisation proceeds | 14,167 | 56,500 | 35,417 |
| Recent investment price | 12,638,548 | 18,735,584 | 13,362,029 |
| Earnings multiple | 24,531,112 | 21,577,707 | 25,060,877 |
| Total | 37,183,827 | 40,369,791 | 38,458,323 |
| as at 30 June 2016 (unaudited) £ |
as at 30 June 2015 (unaudited) £ |
as at 31 December 2015 (audited) £ |
|
|---|---|---|---|
| OEIC Money market funds Bank deposits that mature within three months |
10,597,771 | 6,527,581 | 12,529,513 |
| but are not immediately repayable | 4,533 | 2,503,610 | 4,564 |
| Cash equivalents per Condensed Statement of Cash Flows Bank deposits that mature after three months |
10,602,304 2,706,153 |
9,031,191 2,560,883 |
12,534,077 2,085,130 |
| Current asset investments | 13,308,457 | 11,592,074 | 14,619,207 |
| Cash at bank | 2,596,622 | 2,295,224 | 3,386,635 |
There have been no significant post balance sheet events.
The financial information for the period ended 30 June 2016 does not comprise statutory accounts within the meaning of Section 434 of the Companies Act 2006. The financial statements for the year ended 31 December 2015 have been filed with the Registrar of Companies. The auditor has reported on the financial statements for the year ended 31 December 2015 and that report was unqualified and did not contain a statement under section 498(2) or (3) of the Companies Act 2006.
This Half-Year Report will shortly be made available on our website: www.mig4vct.co.uk and will be circulated by post to those shareholders who have requested copies of the Report. Further copies are available free of charge from the Company's registered office, 30 Haymarket, London SW1Y 4EX or can be downloaded via the website.
We aim to communicate regularly with our shareholders. In addition to the Half-Year and Annual Reports, shareholders receive a twice-yearly VCT newsletter from the Investment Adviser, approved by the Board. The May annual general meeting provides a useful platform for the Board to meet shareholders and exchange views. Your Board welcomes your attendance at general meetings to give you the opportunity to meet your Directors and representatives of the Investment Adviser.
Recent changes to the European Commission's Transparency Directive mean that the Company is no longer required to publish quarterly Interim Management Statements. However, the Board intends to continue doing so to keep shareholders informed of the Company's progress.
Shareholders wishing to follow the Company's development can also visit the Company website at www.mig4vct.co.uk which contains publicly available information or links to information about the Company's largest investments, the latest NAV and the share price. The London Stock Exchange's website at: www.londonstockexchange.com provides up to the minute details of the share price and latest NAV announcements, etc. A number of commentators such as Tax Efficient Review at www.taxefficientreview.com provide comparative performance figures for the VCT sector as a whole.
The Investment Adviser held a successful shareholder event on 26 January 2016 at the Royal Institute of British Architects in Central London. The next event will be held on Tuesday, 24 January 2017, again at the Royal Institute of British Architects in Central London. The programme will again include presentations on the investment activity and performance of the Mobeus VCTs as well as an update on the recent regulatory changes and talks from investee companies. Shareholders have been sent further details, and an invitation to the event, with the shareholder newsletter sent last month.
Shareholders can check the performance of the VCT by visiting the Investment Adviser's website at www.mobeusequity.co.uk. This is regularly updated with information on your investment including case studies of portfolio companies. The Company continues to have its own dedicated section of the website which shareholders may prefer to access directly by going to www.mig4vct.co.uk. This includes performance tables and details of dividends paid as well as copies of past reports to shareholders and information on fundraisings.
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 on page 25.
Shareholders are encouraged to ensure that the Registrars maintain up-to-date details for yourselves and to check whether you have received all dividends payable to you. This is particularly important if you have recently moved house or changed your bank. We are aware that a number of dividends remain unclaimed by shareholders and whilst we will endeavour to contact shareholders 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 address and/or email address.
The Scheme is a convenient, easy and cost effective way to build up your shareholding in the Company. Application forms for the Scheme are available on the Company website. If shareholders wish to reinvest the recently declared dividend of 2.00 pence per share in further shares, the application from must be received by Capita by 24 August 2016. There are three benefits available to shareholders by opting to receive your dividend in this manner:
Shareholders who already participate, or are considering whether to participate, in the Scheme should be aware of the current uncertainties and regulatory changes enacted in the Finance (No 2) Act 2015, as referred to on page 2 and 3 of the Chairman's Statement. There is an associated five year holding period required to secure income tax relief when new shares are allotted under the Scheme. Shareholders may wish to defer or suspend their participation until the implications of these changes are clearer. If you are in any doubt about whether to participate in the Scheme or not, you should consult your financial adviser.
| August 2016 | Half-Year Report for the six months ended 30 June 2016 to be announced and circulated to shareholders. |
|---|---|
| 8 September 2016 | Payment date for an interim dividend of 2.00 pence per share. |
| 31 December 2016 | Year-end. |
| 24 January 2017 | Shareholder event. |
| May 2017 | Annual General Meeting. |
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 shareholders obtain the best price, if you wish to sell your shares, you are strongly advised to contact the Company's stockbroker, Panmure Gordon, by telephoning 020 7886 2717 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.
For details on your individual shareholding and to manage your account online, shareholders may log into or register with the Capita Shareholder Portal at: www.capitashareportal.com.
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.
With effect from 1 January 2016 new tax legislation under the Organisation for Economic Co-operation and Development Common Reporting Standard for Automatic Exchange of Financial Account Information is being introduced. The legislation will require investment trust companies to provide personal and financial account information to HMRC on certain investors who purchase their shares including details of their shareholding and income from the shares. As an affected entity, the Company will have to provide information annually to HMRC relating to a number of non-UK based certificated shareholders who are deemed to be resident for tax purposes in any of the 90 plus countries who have joined CRS. All new shareholders, excluding those whose shares are held in CREST, who are entered onto the share register from 1 January 2016 will be asked to provide the relevant information. Additionally, HMRC changed its policy position on the FATCA in June of this year. We understand that this will mean that as a result of the restricted secondary market in VCT shares the Company's shares will not be considered to be "regularly traded". This will mean that the Company will also be an affected entity for the purposes of this legislation and as such will have to provide information annually to HMRC relating to shareholders who are resident for tax purposes in the United States.
All new shareholders, excluding those whose shares are held in CREST, who are entered onto the share register from 1 January 2016 will be sent a certification form for the purposes of collecting this information.
For further information, please see HMRC's Quick Guide: Automatic Exchange of Information – information for account holders https://www.gov.uk/government/publications/exchange-of-information-account-holders.
Boiler room fraud: Details on what to do to combat boiler room fraud can be found on the Company's website.
For enquiries concerning the Company, please contact the Investment Adviser, Mobeus Equity Partners LLP, on 020 7024 7600 or by e-mail to [email protected].
For information on your holding, to notify the Company of a change of address or to request a dividend mandate form (should you wish to have future dividends paid directly into your bank account) please contact the Company's Registrars:
Capita Asset Services, The Registry, 34 Beckenham Road, Beckenham, Kent BR3 4TU, or by e-mail at www.capitashareportal.com.
The Capita VCT investor line: +44 (0)371 664 0324. Telephone lines are open 9.00am-5.30pm Monday-Friday excluding public holidays in England and Wales.
To contact the Chairman or any member of the 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].
Company launched as Triven VCT plc and managed by three managers, LICA, Elderstreet and GLE Development Capital.
Company completed its first fundraising.
LICA acquired by NOVA Capital Management.
GLE Development Capital team joined Matrix Group to form Matrix Private Equity Partners and continues with the management of its share of the Company's portfolio in the Company.
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.
Matrix Private Equity Partners became 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.
The Company launched four linked fundraisings with other Mobeus advised VCTs.
Christopher Moore (Chairman) Andrew Robson Helen Sinclair
Mobeus Equity Partners LLP 30 Haymarket London SW1Y 4EX
30 Haymarket London SW1Y 4EX
Company Registration Number
03707697
Mobeus Equity Partners LLP 30 Haymarket London SW1Y 4EX Telephone: 020 7024 7600 www.mobeusequity.co.uk
www.mig4vct.co.uk
BDO LLP 55 Baker Street London W1U 7EU
The City Partnership (UK) Limited Thistle House 21 Thistle Street Edinburgh EH2 1DF
Howard Kennedy Corporate Services LLP 1 London Bridge Walk London SE1 9BG
Shakespeare Martineau LLP No 1 Colmore Square Birmingham B4 6AA
Capita Asset Services The Registry 34 Beckenham Road Beckenham Kent BR3 4TU
Tel: +44 (0) 371 664 0324 Telephone lines are open 9.00am- 5.30pm Mon-Fri excluding public holidays in England and Wales.
Panmure Gordon (UK) Limited 1 New Change London EC4M 9AF
Philip Hare & Associates LLP 4-6 Staple Inn High Holborn London WC1V 7QH
National Westminster Bank plc City of London Office PO Box 12258 1 Princes Street London EC2R 8PB
Mobeus Equity Partners LLP 30 Haymarket London SW1Y 4EX
020 7024 7600 www.mig4vct.co.uk
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