Interim / Quarterly Report • May 31, 2017
Interim / Quarterly Report
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Interim Report For the Six Months Ended 31 May 2017
Maven Income and Growth VCT 3 PLC (the Company) is a venture capital trust (VCT) and its shares are listed on the Premium segment of the Official List and traded on the main market of the London Stock Exchange. The Company (formerly known as Aberdeen Growth Opportunities VCT PLC) was incorporated on 7 September 2001. Following the conversion of the C Ordinary Shares on 28 February 2009, the Company has one class of share.
The Company aims to achieve long-term capital appreciation and generate maintainable levels of income for Shareholders.
The Articles of Association require the Directors to put a proposal for the continuation of the Company, in its then form, to Shareholders at the Company's Annual General Meeting to be held in 2020, and thereafter, at five yearly intervals. For such a resolution not to be passed, Shareholders holding at least 25% of the Shares then in issue must vote against the resolution.
Shares in the Company can be purchased and sold in the market through a stockbroker. For qualifying investors buying shares on the open market:
The Broker to the Company is Shore Capital Stockbrokers Limited (020 7647 8132).
The Company currently conducts its affairs so that the shares issued by it can be recommended by financial advisers to ordinary retail investors in accordance with the rules of the Financial Conduct Authority (FCA) in relation to nonmainstream investment products, and intends to do so for the foreseeable future. The Company's shares are excluded from the FCA's restrictions which apply to non-mainstream investment products because they are shares in a venture capital trust and the returns to investors are predominantly based on investments in private companies or publicly quoted securities.
Shareholders in a number of UK registered companies have received unsolicited calls from organisations, usually based overseas or using false UK addresses or phone lines routed abroad, offering to buy shares at prices much higher than their current market values or to sell non-tradeable, overpriced, high risk or even non-existent securities. Whilst the callers may sound credible and professional, Shareholders should be aware that their intentions are often fraudulent and high pressure sales techniques may be applied, often involving a request for an indemnity or a payment to be provided in advance.
If you receive such a call, you should exercise caution and, based on advice from the FCA, the following precautions are suggested:
ACTION FRAUD
Telephone: 0300 123 2040
Website: www.actionfraud.police.uk
FCA
Telephone: 0800 111 6768 (freephone)
| Financial Highlights | 5 | ||
|---|---|---|---|
| Summary of Investment Changes | 7 | ||
| Interim Review | 8 | ||
| Investment Portfolio Summary | 14 | ||
| Analysis of Unlisted and Quoted Portfolio | 17 | ||
| Financial Statements | |||
| Income Statement | 20 | ||
| Statement of Changes in Equity | 21 | ||
| Balance Sheet | 22 | ||
| Cash Flow Statement | 23 | ||
| Notes to the Financial Statements | 24 | ||
| General Information | |||
| Directors' Responsibility Statement | 26 |
| Financial Highlights | 5 |
|---|---|
| Summary of Investment Changes | 7 |
| Interim Review | 8 |
| Investment Portfolio Summary | 14 |
| Analysis of Unlisted and Quoted Portfolio | 17 |
| 31 May 2017 | 30 November 2016 | 31 May 2016 | |
|---|---|---|---|
| Net asset value (NAV) | £35,222,000 | £37,020,000 | £36,743,000 |
| NAV per Ordinary Share | 86.82p | 90.45p | 89.34p |
| Dividends paid to date | 56.70p | 52.95p | 50.95p |
| NAV total return per share1 | 143.52p | 143.40p | 140.29p |
| Share price2 | 80.00p | 84.00p | 90.50p |
| Discount/(premium) to NAV | 7.86% | 7.13% | (1.30)% |
| Ordinary Shares in issue | 40,568,853 | 40,930,853 | 41,127,853 |
1 Sum of current NAV per share and dividends paid to date (excluding initial tax relief).
2 Closing mid-market price (Source: London Stock Exchange).
The above chart shows the NAV total return per share as at 30 November in each year, except for 2017 which is at 31 May 2017. Dividends that have been proposed but not yet paid are included in the NAV at the balance sheet date.
| Year ended 30 November | Payment date | Interim/final | Rate (p) |
|---|---|---|---|
| 2003-2011 | 29.45 | ||
| 2012 | 31 August 2012 | Interim | 2.00 |
| 30 May 2013 | Final | 3.00 | |
| 2013 | 30 August 2013 | Interim | 2.00 |
| 30 May 2014 | Final | 3.25 | |
| 2014 | 29 August 2014 | Interim | 2.00 |
| 5 June 2015 | Final | 3.50 | |
| 2015 | 28 August 2015 | Interim | 2.00 |
| 29 April 2016 | Final | 3.75 | |
| 2016 | 2 September 2016 | Interim | 2.00 |
| 28 April 2017 | Final | 3.75 | |
| 2017 | 14 July 2017 | First interim | 2.71 |
| Total dividends paid | 59.41 | ||
| 15 September 2017 | Second interim | 5.14 | |
| Total dividends paid or declared | 64.55 |
On 28 February 2009, the C Ordinary Shares converted into Ordinary Shares at a ratio of 1.185 for one. By that time, the holders of C Ordinary Shares had received dividends totalling 4.2p per share, which is equivalent to 3.5p per Ordinary Share post-conversion.
For the Six Months Ended 31 May 2017
| £'000 | Valuation 30 November 2016 % |
Net investment/ (disinvestment) £'000 |
Appreciation/ (depreciation) £'000 |
£'000 | Valuation 31 May 2017 % |
|
|---|---|---|---|---|---|---|
| Unlisted investments | ||||||
| Equities | 13,363 | 36.1 | (1,762) | 847 | 12,448 | 35.3 |
| Loan stock | 17,940 | 48.5 | (1,091) | (905) | 15,944 | 45.3 |
| 31,303 | 84.6 | (2,853) | (58) | 28,392 | 80.6 | |
| AIM/NEX investments | ||||||
| Equities | 230 | 0.6 | 17 | 247 | 0.7 | |
| Listed investments | ||||||
| Equities | 16 | - | - | 6 | 22 | 0.1 |
| Investment trusts | 1,041 | 2.8 | 2 | 97 | 1,140 | 3.2 |
| Total investments | 32,590 | 88.0 | (2,851) | 62 | 29,801 | 84.6 |
| Other net assets | 4,430 | 12.0 | 991 | - | 5,421 | 15.4 |
| Net assets | 37,020 | 100.0 | (1,860) | 62 | 35,222 | 100.0 |
Bill Nixon Managing Partner Maven Capital Partners UK LLP
During the reporting period, further progress has been achieved by your Company, with the completion of four new VCT qualifying investments in fast growing private companies operating across a number of diverse sectors, with a further two new investments completed after the period end. In addition, the Company benefitted from the successful exit from the holding in Nenplas which achieved a 5.0 times money multiple return over the life of the investment. The majority of the businesses in the investee portfolio have continued to trade well, with NAV total return increasing slightly to 143.52p per share.
In the first half of the financial year, Maven continued to focus on sourcing attractive VCT qualifying investment opportunities that meet the requirements of the revised VCT legislation, as detailed in the 2016 Annual Report. Since the introduction of the new VCT rules in 2015, Maven has provided development capital to ten qualifying private companies, demonstrating its flexible approach and ability to adapt to the requirements of the revised legislation. It has, however, become apparent that new transactions are taking considerably longer to complete, due to the requirement to secure Advance Assurance tax clearance from HM Revenue & Customs (HMRC) for each new investment.
Given the complexity of the new rules, Maven maintains a cautious approach and continues to work closely with a specialist VCT adviser, engaged by the Company to assist with the VCT tax clearance process, only completing investments once Advance Assurance has been secured. The investment team continues to progress all other aspects of live transactions in order to facilitate a swift completion once approval is granted. There are a number of active new transactions which are well-progressed and it is anticipated that there will be a good rate of investment activity through the second half of the financial year.
As highlighted by the Board in the 2016 Annual Report, Shareholders should be aware that the move to support younger and earlier stage businesses may result in less predictable capital gains and income flows, with the result that the quantum and timing of future dividend payments is likely to be subject to fluctuation. Due to a number of recent profitable realisations, and in order to ensure your Company's ongoing compliance with the VCT regulations, on 15 June 2017 the Directors considered it appropriate to declare the early payment of a first interim dividend, and a second interim dividend was announced on 10 August 2017.
NAV total return of 143.52p per share at 31 May 2017, compared to 143.40p at 30 November 2016
NAV at 31 May 2017 of 86.82p per share after payment of the final dividend of 3.75p per share
First interim dividend of 2.71p per share paid on 14 July 2017
Second interim dividend of 5.14p per share to be paid on 15 September 2017
Four new VCT qualifying private company holdings added to the portfolio, with a further two completed post the period end
Large pipeline of VCT qualifying investments, with a number in advanced process
Realisation of Nenplas for a 5.0 times money multiple return
The first interim dividend in respect of the year ending 30 November 2017, of 2.71p per Ordinary Share and comprising 0.50p of revenue and 2.21p of capital, was paid on 14 July 2017 to Shareholders on the register at close of business on 23 June 2017. The second interim dividend of 5.14p per share, comprising capital only, will be paid on 15 September 2017 to Shareholders on the register at close of business on 18 August 2017. Since the Company's launch, and after receipt of both interim dividends, Shareholders will have received 64.55p per share in tax-free dividends. The effect of paying these dividends will be to reduce the NAV of the Company by the total cost of the distribution.
Decisions on future distributions will take into consideration the availability of surplus revenue, the proceeds from any further realisations and the VCT qualifying levels of the portfolio. While these two interim dividends will represent an aggregate amount in excess of any previous financial year, it is the Board's intention to maintain distributions for subsequent years at a similar level to that of the year ended 30 November 2016, although this will be dependant on investment realisations.
The portfolio of private company holdings has generally performed well, resulting in the valuations of a number of companies being increased. It is reassuring to note that, despite the political and economic uncertainty resulting from the recent General Election and the UK's intended exit from the European Union (EU), there is, to date, no discernible impact to report, aside from the short term benefit that a number of exporters experienced following the devaluation of Sterling in June 2016.
Cursor Controls, a global leader in the design and niche manufacture of trackballs for cursor movement in industrial applications, has performed well since Maven clients invested in July 2015. The business continues to deliver good levels of organic growth and performance was further enhanced by the acquisition, in April 2016, of Belgian based distributor of trackballs and other associated products, NSI. The acquisition formed part of Maven's investment proposal and is expected to be significantly earnings enhancing, with a number of commercial and operational synergies identified to help drive the growth and profitability of the enlarged group. The management team is encouraged by the integration process to date, with NSI trading to plan and the core Cursor business continuing to deliver organic growth.
Manufacturer and supplier of technical plastic components and interior parts for the global automotive industry, John McGavigan, continues to exceed expectations. The year to 31 December 2016 saw a significant increase in profitability across its operations in China and Scotland, which was achieved through top line growth enhanced by the benefits of a number of productivity improvement projects implemented earlier in the year. This strong momentum has continued in the current year, with the company continuing to grow and exceed budget. The order book remains strong, with a number of significant contracts secured in recent months, increasing the visibility of the future prospects for the business. Given the growth achieved and the forecast projections, the management team has decided to move its Chinese premises in anticipation of capacity constraints in the region, and work is progressing to advance this.
Maven clients invested in Attraction World, a leading provider of worldwide theme park and attraction tickets, in 2010, supporting the incumbent executive team through a management buy-out. Since investment, the company has made steady progress, and the core business continues to perform well. In March 2016 Attraction World enhanced its operating platform through the complementary acquisition of Day out with the Kids (www.dayoutwiththekids.co.uk), an e-commerce site that focuses on UK attraction information. The development of the new acquisition is progressing to plan and the management team believes that, over time, it will prove to be a valuable addition to the business.
Crawford Scientific, the UK's leading independent provider of outsourced chromatography consumable products and services to the laboratory research and testing sectors, continues to trade ahead of plan. The business leverages its world-class technical expertise to offer end-to-end solutions for users of chromatography instruments and techniques. Crawford has consistently outperformed since the initial investment by Maven clients in August 2014, including the successful acquisition and integration of analytical services company Hall Analytical Laboratories during 2015. The business continues to make good progress across all divisions and is on track to deliver further growth in the current year. Strong financial performance and cash generation has enabled the company to make additional voluntary repayments of Maven client loan notes during the period.
The UK's largest provider of promotional merchandise, SPS (EU), has achieved excellent growth under private equity ownership since Maven clients invested in February 2014. Operational improvements have enhanced profitability following the successful implementation of a new enterprise resource planning system. The complementary acquisitions of HPP and TEC, completed during the year to 31 December 2015, have been successfully integrated within the group and are both delivering a positive profit contribution. The company has invested in sales resource to help penetrate the European market, and this region is starting to contribute significantly to group performance. The balance sheet remains healthy and the business continues to reduce its core term debt.
DPP provides mechanical and electrical maintenance and installation services mainly to the leisure, hospitality and retail sectors in the south of England and in Wales. The company differentiates itself by operating through an employed and managed team of engineers, as opposed to engaging with a network of subcontractors. The business has made considerable progress over the past twelve months by enhancing operational procedures and reducing costs, which has led to a significant improvement in profitability. A number of new contracts were secured during the year and the outlook is positive, which is highly encouraging given the challenges experienced during 2014 when DPP lost a key customer. The company has no external bank debt and was able to make a voluntary partial repayment of Maven client loan notes during the period.
In light of current trading, the valuations of the investments in CHS Engineering Services, Claven, Flexlife and Lambert Contracts have been protectively reduced.
The Manager maintains a close working relationship with investee companies operating within the oil & gas sector and it is encouraging to report that the majority of these assets are seeing early signs of improving market conditions. After three years of steady decline in the sector, conditions appear to have stabilised. Following extensive cost cutting, the Maven portfolio companies are operating with lean structures and have limited or no external debt. As such, they are relatively well positioned to benefit from a market recovery. The majority of Maven's investee companies in this market are focused on operational expenditure, particularly related to health and safety. Although budgets have been set conservatively, there is evidence of growing confidence, with order books and workshops recording higher activity levels. The Board will continue to monitor the performance of investee companies in this sector, maintaining a conservative approach to valuations until there is evidence of a sustained recovery.
The recent new investments in private equity investment trusts and real estate investment trusts have performed well over the period, generating valuable capital growth and income through dividend payments. The Board and the Manager are encouraged by this contribution and believe that these investments will provide a steady and reliable source of income for your Company. This is particularly important in light of the restrictions introduced in the March 2016 Budget Statement, which prevent VCTs from investing in traditional instruments, such as treasury bills or other government securities, for liquidity management purposes.
The Board and the Manager remain highly cognisant of the importance of maintaining an effective liquidity management policy and will continue to consider a range of other permitted income generating investment options.
During the period, your Company provided development capital to four private companies operating across a range of sectors:
Date Sector Investment cost £'000 Website Unlisted ebb3 Limited May 2017 Software & computer services 183 www.ebb3.com Horizon Cremation Limited May 2017 Support services 458 horizoncremation.co.uk QikServe Limited December 2016 Software & computer services 397 www.qikserve.com Whiterock Group Limited December 2016 Technology 208 www.whiterockgroup.net Total unlisted 1,246 Private equity investment trust Standard Life Private Equity Trust PLC December 2016 Investment companies 2 www.slcapital.com Total private equity investment trust 2 Total investments 1,248
The following investments have been completed during the reporting period:
At the period end, the portfolio stood at 68 unlisted and quoted investments, at a total cost of £28.27million.
In December 2016, Maven achieved a full exit from plastics manufacturer Nenplas, through a trade sale to a German acquirer at a premium to carrying value. The exit achieved a total return of 5.0 times for investors in the 2006 buy-out of Homelux Nenplas. This is the second profitable realisation for Maven clients following the demerger process in March 2013, which achieved a partial exit for the Maven VCTs through the sale of the Homelux DIY products division to US firm QEP.
Further realisations were achieved through the partial repayment of loan notes by Crawford Scientific and DPP, and the release of recovery proceeds for Space Student Living.
As at the date of this report, the Manager is engaged with several other investee companies and prospective acquirers at various stages of the negotiation process, although there can be no certainty that these discussions will result in profitable sales.
The table below gives details of all realisations achieved, and deferred considerations received, during the reporting period:
| Year first invested |
Complete/ partial exit |
Cost of shares disposed of £'000 |
Value at 30 November 2016 £'000 |
Sales proceeds £'000 |
Realised gain/(loss) £'000 |
Gain/(loss) over 30 November 2016 value £'000 |
|
|---|---|---|---|---|---|---|---|
| Unlisted | |||||||
| Assecurare Limited | 2014 | Complete | 600 | 600 | 600 | - | - |
| Broadwave Engineering Limited | 2014 | Complete | 600 | 600 | 600 | - | - |
| Crawford Scientific Holdings Limited1 | 2014 | Partial | 29 | 37 | 29 | - | (8) |
| Cyclotech Limited | 2007 | Complete | - | - | 56 | 56 | 56 |
| Ensco 969 Limited (trading as DPP)1 | 2013 | Partial | 74 | 74 | 74 | - | - |
| Llanllyr Water Company Limited | 2002 | Complete | 5 | 4 | 5 | - | 1 |
| Nenplas Holdings Limited1 | 2013 | Complete | 766 | 2,598 | 2,663 | 1,897 | 65 |
| Space Student Living Limited | 2011 | Partial | - | 72 | 72 | 72 | - |
| Total unlisted | 2,074 | 3,985 | 4,099 | 2,025 | 114 | ||
| Total disposals | 2,074 | 3,985 | 4,099 | 2,025 | 114 |
1 Proceeds exclude yield and redemption premiums received, which are disclosed as revenue for financial reporting purposes. The table includes the redemption of loan notes by a number of investee companies.
Since 31 May 2017, two new private company asset have been added to the portfolio.
ITS Technology, a leading alternative network provider that owns and maintains fibre networks, providing faster and more reliable broadband connectivity, and related services, to customers, particularly in areas that are not well serviced by the existing infrastructure. The business currently has 12 fibre broadband networks in operation, with a further five under construction. The investment will help to fund growth within the existing networks, build a stable recurring revenue base and also support expansion through the addition of new networks.
Contego Fraud Solutions, a provider of a complex, multi-source compliance and fraud detection software platform for public and private sector clients, including property, banking and financial services. The application performs a vast number of screening, verification and vetting assessments, including Know Your Customer and Anti-Money Laundering to fulfil both real-time customer on-boarding and on-going monitoring of regulatory requirements. The investment will support the continued growth of the business, facilitating the hiring of additional sales resources, further product development and expansion into new markets.
The principal risks and uncertainties facing the Company were set out in full in the Strategic Report contained within the 2016 Annual Report, and are the risks associated with investment in small and medium sized unlisted and AIM/NEX quoted companies which, by their nature, carry a higher level of risk and are subject to lower liquidity than investments in large quoted companies. The valuation of investee companies may be affected by economic conditions, the credit environment and other risks including legislation, regulation, adherence to VCT qualifying rules and the effectiveness of the internal controls operated by the Company and the Manager. These risks and procedures are reviewed regularly by the Audit & Risk Committee and reported to your Board. The Board has confirmed that all tests, including the criteria for VCT qualifying status, continue to be monitored and met.
Shareholders have given the Board authority to buy back shares for cancellation or to be held in treasury, subject to such transactions being in the best interests of Shareholders. It is intended that, subject to market conditions, available liquidity and the maintenance of the Company's VCT status, shares will be bought back at prices representing a discount of between 5% and 10% to the prevailing NAV per share. During the period under review 362,000 shares were bought back at a total cost of £285,000.
The Chancellor's March 2017 Budget Statement did not introduce any further amendments to the legislation governing VCTs, but reiterated the announcements made in the 2016 Autumn Statement. The most noteworthy of these was that the Government will no longer be initiating a review of the provision to allow replacement capital in certain new VCT transactions, suggesting that this may be reviewed at some point in the future. Whilst the Board and the Manager were disappointed by this announcement, as the ability to include replacement capital was viewed as an important capability under the new rules, it does not impact the Company's investment strategy which has already adapted to meet the requirements of the new rules.
In addition, in response to the increased volume of applications submitted and the resultant delays experienced in obtaining clearance for proposed investments, a consultation was launched into the options for streamlining the Advance Assurance service provided by HMRC. The summary responses of this consultation were released in late March 2017 and a further detailed report and analysis is expected in due course.
As announced to the market on 19 July 2017, the Directors of your Company, together with the Directors of Maven Income and Growth VCT 4 PLC, have announced their intention to raise up to £30 million, in aggregate, by way of Offers for Subscription of new Ordinary Shares, with over-allotment facilities of up to, in aggregate, a further £10 million. It is anticipated that shares will be issued in the 2017/18 and 2018/19 tax years.
The Board of your Company is confident that, given the strength of the current pipeline of private company introductions, the Manager will continue to be able to identify and complete VCT qualifying transactions in line with each Company's investment strategy.
A Prospectus with full details of the Offers is intended for publication in September 2017.
The Directors have also resolved to re-introduce the Dividend Investment Scheme (DIS), which was suspended on 24 August 2015 due to the restrictions imposed by the Government's Summer 2015 Budget. Now that there is more clarity regarding the investment criteria that apply to VCTs, and with the Company having stated its intention to launch an Offer for Subscription, the DIS has been reinstated, as announced on 10 August 2017.
This means that, unless Shareholders advise otherwise, those Shareholders who had previously elected to participate in the DIS will revert to receiving new shares with effect from 15 September 2017, being the payment date of the second interim dividend. Shares issued under the DIS qualify for the VCT tax reliefs applicable for the tax year in which they are allotted. Full details of the scheme, together with a mandate form, are available from the Company's website. Shareholders who had not previously applied to participate in the DIS and who wish to do so for future dividends should ensure that a mandate form, or CREST instruction if appropriate, is submitted.
The Manager is encouraged by the performance achieved during the reporting period. Notwithstanding the uncertain economic and political backdrop following the UK's decision to leave the EU, and the more recent General Election, the portfolio of investee companies has generally continued to trade well, with no discernible impact on performance as a consequence of the political uncertainty. This demonstrates the strength and breadth of the underlying portfolio and its ability to continue to generate positive returns for Shareholders.
Whilst it is early days for a number of the new investee companies, initial indications suggest that they are performing to plan and should, over time, represent valuable additions to the portfolio. Maven extended its nationwide presence through the opening of four new offices during the period, expanding the network to ten locations across the UK. This regional approach ensures that the investment team is best positioned to access potential investment opportunities through their local network of contacts. The Manager's geographic presence is delivering a strong pipeline of prospective investment opportunities and, based on current momentum, it is anticipated that the rate of investment in the remainder of the financial year will be at a higher level compared to the previous year, subject to securing Advance Assurance from HMRC.
On behalf of the Board Maven Capital Partners UK LLP Secretary
25 August 2017
As at 31 May 2017
| Investment | Valuation £'000 |
Cost £'000 |
% of total assets |
% of equity held |
% of equity held by other clients¹ |
|---|---|---|---|---|---|
| Unlisted | |||||
| Torridon (Gibraltar) Limited | 2,665 | 400 | 7.7 | 4.5 | 35.5 |
| Lemac No. 1 Limited (trading as John McGavigan) | 2,527 | 806 | 7.2 | 10.5 | 26.3 |
| SPS (EU) Limited | 1,513 | 801 | 4.3 | 6.5 | 36.0 |
| Crawford Scientific Holdings Limited | 1,171 | 438 | 3.3 | 6.5 | 41.7 |
| Ensco 969 Limited (trading as DPP) | 1,133 | 1,133 | 3.2 | 4.8 | 29.7 |
| CatTech International Limited | 982 | 627 | 2.8 | 6.0 | 24.0 |
| Martel Instruments Holdings Limited | 918 | 1,026 | 2.6 | 12.4 | 31.8 |
| Majenta Logistics Limited | 800 | 800 | 2.3 | 10.6 | 39.2 |
| Metropol Communications Limited | 800 | 800 | 2.3 | 10.6 | 39.2 |
| Onyx Logistics Limited | 800 | 800 | 2.3 | 10.6 | 39.2 |
| Vectis Technology Limited | 800 | 800 | 2.3 | 10.6 | 39.2 |
| Vodat Communications Group Limited | 784 | 567 | 2.2 | 6.6 | 35.2 |
| Fathom Systems Group Limited | 710 | 710 | 2.0 | 7.8 | 52.2 |
| Glacier Energy Services Holdings Limited | 686 | 686 | 1.9 | 2.6 | 25.0 |
| GEV Holdings Limited | 672 | 672 | 1.9 | 4.1 | 31.9 |
| JT Holdings (UK) Limited (trading as Just Trays) | 650 | 496 | 1.8 | 5.3 | 24.7 |
| Constant Progress Limited | 650 | 650 | 1.8 | 12.7 | 37.1 |
| Equator Capital Limited | 650 | 650 | 1.8 | 12.7 | 37.1 |
| Toward Technology Limited | 650 | 650 | 1.8 | 12.7 | 37.1 |
| TC Communications Holdings Limited | 645 | 980 | 1.8 | 8.3 | 21.7 |
| Flow Communications UK Limited | 597 | 597 | 1.7 | 7.0 | 28.0 |
| R&M Engineering Group Limited | 572 | 761 | 1.6 | 8.3 | 62.3 |
| CB Technology Group Limited | 558 | 558 | 1.6 | 11.2 | 67.7 |
| HCS Control Systems Group Limited | 539 | 746 | 1.5 | 6.1 | 30.4 |
| The GP Service (UK) Limited2 | 496 | 496 | 1.4 | 6.0 | 26.5 |
| Rockar 2016 Limited (trading as Rockar) | 481 | 481 | 1.4 | 2.6 | 11.1 |
| Maven Co-invest Endeavour Limited Partnership (invested in Global Risk Partners) |
479 | 417 | 1.4 | 8.1 | 91.9 |
| Horizon Cremation Limited | 458 | 458 | 1.3 | 15.3 | 68.4 |
| RMEC Group Limited | 446 | 446 | 1.3 | 2.7 | 47.4 |
| Flexlife Group Limited | 436 | 597 | 1.2 | 2.4 | 12.3 |
As at 31 May 2017
| Investment | Valuation £'000 |
Cost £'000 |
% of total assets |
% of equity held |
% of equity held by other clients¹ |
|---|---|---|---|---|---|
| Attraction World Holdings Limited | 432 | 23 | 1.2 | 6.7 | 31.7 |
| Castlegate 737 Limited (trading as Cursor Controls) | 432 | 324 | 1.2 | 3.2 | 44.3 |
| QikServe Limited | 397 | 397 | 1.1 | 4.0 | 16.0 |
| Lambert Contracts Holdings Limited | 298 | 838 | 0.8 | 12.6 | 52.1 |
| Chic Lifestyle Limited (trading as Chic Retreats) | 291 | 291 | 0.8 | 8.4 | 38.4 |
| Endura Limited | 230 | 230 | 0.7 | 0.7 | 5.2 |
| Whiterock Group Limited | 208 | 208 | 0.6 | 4.4 | 20.6 |
| ISN Solutions Group Limited | 205 | 321 | 0.6 | 4.5 | 50.5 |
| ebb3 Limited | 183 | 183 | 0.5 | 4.1 | 20.4 |
| Growth Capital Ventures Limited | 159 | 159 | 0.5 | 4.4 | 26.1 |
| Lawrence Recycling & Waste Management Limited | 130 | 914 | 0.4 | 10.0 | 52.0 |
| Space Student Living Limited | 72 | - | 0.2 | 11.5 | 68.6 |
| Claven Holdings Limited | 64 | 195 | 0.2 | 13.3 | 36.7 |
| Llanllyr Water Company Limited3 | 23 | 27 | 0.1 | - | - |
| Other unlisted investments | - | 2,199 | - | ||
| Total unlisted | 28,392 | 26,358 | 80.6 |
As at 31 May 2017
| Investment | Valuation £'000 |
Cost £'000 |
% of total assets |
% of equity held |
% of equity held by other clients¹ |
|---|---|---|---|---|---|
| Quoted | |||||
| Plastics Capital PLC | 140 | 122 | 0.4 | 0.3 | 1.1 |
| Cello Group PLC | 72 | 54 | 0.2 | 0.1 | 0.4 |
| Vianet Group PLC (formerly Brulines Group PLC) | 27 | 31 | 0.1 | 0.1 | 1.4 |
| esure Group PLC | 22 | - | 0.1 | - | - |
| Work Group PLC | 6 | 201 | - | 0.9 | 2.2 |
| Other quoted investments | 2 | 463 | - | ||
| Total quoted | 269 | 871 | 0.8 | ||
| Private equity investment trusts | |||||
| F&C Private Equity Investment Trust PLC | 126 | 103 | 0.3 | 0.1 | 0.3 |
| Princess Private Equity Holding Limited | 121 | 98 | 0.3 | - | 0.1 |
| Apax Global Alpha Limited | 110 | 99 | 0.3 | - | 0.1 |
| HgCapital Trust PLC | 108 | 100 | 0.3 | - | 0.1 |
| Standard Life Private Equity Trust PLC | 52 | 43 | 0.2 | - | - |
| Total private equity investment trusts | 517 | 443 | 1.4 | ||
| Real estate investment trusts | |||||
| Schroder REIT Limited | 111 | 99 | 0.3 | - | 0.2 |
| Custodian REIT PLC | 105 | 99 | 0.3 | - | 0.2 |
| British Land Company PLC | 105 | 99 | 0.3 | - | - |
| Target Healthcare REIT PLC | 103 | 98 | 0.3 | - | 0.2 |
| Standard Life Investment Property Income Trust Limited |
100 | 99 | 0.3 | - | 0.2 |
| Regional REIT Limited | 99 | 99 | 0.3 | - | 0.2 |
| Total real estate investment trusts | 623 | 593 | 1.8 | ||
| Total investments | 29,801 | 28,265 | 84.6 |
¹ Other clients of Maven Capital Partners UK LLP.
2 Atul Devani, Chairman of the Company, is executive chairman of this company.
3 Secured loan notes in respect of deferred consideration.
As at 31 May 2017
| Industry sector | Unlisted valuation £'000 |
% | Quoted valuation £'000 |
% | Total valuation £'000 |
% |
|---|---|---|---|---|---|---|
| Support services | 6,371 | 21.4 | 6 | - | 6,377 | 21.4 |
| Insurance | 3,144 | 10.6 | 22 | 0.1 | 3,166 | 10.7 |
| Automobiles & parts | 3,008 | 10.1 | - | - | 3,008 | 10.1 |
| Energy services | 2,679 | 9.0 | - | - | 2,679 | 9.0 |
| Telecommunication services | 2,234 | 7.5 | - | - | 2,234 | 7.5 |
| Technology | 2,055 | 6.9 | - | - | 2,055 | 6.9 |
| Electronic & electrical equipment | 1,475 | 4.9 | - | - | 1,475 | 4.9 |
| Diversified industrials | 1,382 | 4.6 | - | - | 1,382 | 4.6 |
| Investment companies | 159 | 0.5 | 1,140 | 3.8 | 1,299 | 4.3 |
| Pharmaceuticals & biotechnology | 1,171 | 3.9 | - | - | 1,171 | 3.9 |
| Speciality & other finance | 864 | 2.9 | - | - | 864 | 2.9 |
| Software & computer services | 780 | 2.6 | 27 | 0.1 | 807 | 2.7 |
| Household goods & textiles | 650 | 2.2 | 140 | 0.5 | 790 | 2.7 |
| Food producers & processors | 650 | 2.2 | - | - | 650 | 2.2 |
| Health | 496 | 1.7 | - | - | 496 | 1.7 |
| Engineering & machinery | 432 | 1.4 | - | - | 432 | 1.4 |
| Construction & building materials | 298 | 1.0 | - | - | 298 | 1.0 |
| Leisure & hotels | 291 | 1.0 | - | - | 291 | 1.0 |
| General retailers | 230 | 0.8 | - | - | 230 | 0.8 |
| Media & entertainment | - | - | 74 | 0.2 | 74 | 0.2 |
| Beverages | 23 | 0.1 | - | - | 23 | 0.1 |
| Total | 28,392 | 95.3 | 1,409 | 4.7 | 29,801 | 100.0 |
As at 31 May 2017
| Deal type | Number | Valuation £'000 |
% |
|---|---|---|---|
| Unlisted | |||
| Management buy-out | 13 | 11,048 | 37.1 |
| Development capital | 16 | 6,059 | 20.3 |
| Acquisition finance | 7 | 5,150 | 17.3 |
| Replacement capital | 5 | 3,403 | 11.4 |
| Buy-in/management buy-out | 3 | 1,671 | 5.6 |
| Management buy-in | 1 | 558 | 1.9 |
| Buy & build | 1 | 479 | 1.6 |
| Early stage | 1 | 24 | 0.1 |
| Mezzanine | 1 | - | - |
| Total unlisted | 48 | 28,392 | 95.3 |
| Quoted | |||
| Listed | 11 | 1,140 | 3.8 |
| AIM/NEX | 9 | 269 | 0.9 |
| Total quoted | 20 | 1,409 | 4.7 |
| Total unlisted and quoted | 68 | 29,801 | 100.0 |
| Income Statement | 20 |
|---|---|
| Statement of Changes in Equity | 21 |
| Balance Sheet | 22 |
| Cash Flow Statement | 23 |
| Notes to the Financial Statements | 24 |
For the Six Months Ended 31 May 2017
| Six months ended 31 May 2017 | (unaudited) | Six months ended 31 May 2016 (unaudited) |
Year ended 30 November 2016 (audited) |
||||||
|---|---|---|---|---|---|---|---|---|---|
| Revenue £'000 |
Capital £'000 |
Total £'000 |
Revenue £'000 |
Capital £'000 |
Total £'000 |
Revenue £'000 |
Capital £'000 |
Total £'000 |
|
| Gains on investments | - | 62 | 62 | - | 766 | 766 | - | 2,066 | 2,066 |
| Income from investments | 530 | - | 530 | 637 | - | 637 | 1,328 | - | 1,328 |
| Other income | 6 | - | 6 | 1 | - | 1 | 4 | - | 4 |
| Investment management fees |
(90) | (362) | (452) | (94) | (377) | (471) | (186) | (743) | (929) |
| Other expenses | (124) | - | (124) | (132) | - | (132) | (408) | - | (408) |
| Net return on ordinary activities before taxation |
322 | (300) | 22 | 412 | 389 | 801 | 738 | 1,323 | 2,061 |
| Tax on ordinary activities | (56) | 56 | - | (81) | 75 | (6) | (147) | 147 | - |
| Return attributable to Equity Shareholders |
266 | (244) | 22 | 331 | 464 | 795 | 591 | 1,470 | 2,061 |
| Earnings per share (pence) | 0.65 | (0.60) | 0.05 | 0.80 | 1.13 | 1.93 | 1.44 | 3.57 | 5.01 |
All gains and losses are recognised in the Income Statement.
All items in the above statement are derived from continuing operations. The Company has only one class of business and one reportable segment, the results of which are set out in the Income Statement and Balance Sheet. The Company derives its income from investments made in shares, securities and bank deposits.
There are no potentially dilutive capital instruments in issue and, therefore, no diluted returns per share figures are relevant. The basic and diluted earnings per share are, therefore, identical.
The total column of this Statement is the Profit and Loss Account of the Company.
For the Six Months Ended 31 May 2017
| Six months ended 31 May 2017 (unaudited) |
Share capital £'000 |
Share premium account £'000 |
Capital reserve realised £'000 |
Capital reserve unrealised £'000 |
Special distributable reserve £'000 |
Capital redemption reserve £'000 |
Revenue reserve £'000 |
Total £'000 |
|---|---|---|---|---|---|---|---|---|
| At 30 November 2016 | 4,093 | 13,820 | (2,115) | 3,499 | 16,251 | 752 | 720 | 37,020 |
| Net return | - | - | 1,719 | (1,963) | - | - | 266 | 22 |
| Dividends paid | - | - | (921) | - | - | - | (614) | (1,535) |
| Repurchase and cancellation of shares | (36) | - | - | - | (285) | 36 | - | (285) |
| At 31 May 2017 | 4,057 | 13,820 | (1,317) | 1,536 | 15,966 | 788 | 372 | 35,222 |
| Six months ended 31 May 2016 (unaudited) |
Share capital £'000 |
Share premium account £'000 |
Capital reserve realised £'000 |
Capital reserve unrealised £'000 |
Special distributable reserve £'000 |
Capital redemption reserve £'000 |
Revenue reserve £'000 |
Total £'000 |
|---|---|---|---|---|---|---|---|---|
| At 30 November 2015 | 4,132 | 13,820 | (2,064) | 3,315 | 16,563 | 713 | 1,157 | 37,636 |
| Net return | - | - | 1,530 | (1,066) | - | - | 331 | 795 |
| Dividends paid | - | - | (925) | - | - | - | (617) | (1,542) |
| Repurchase and cancellation of shares | (19) | - | - | - | (146) | 19 | - | (146) |
| At 31 May 2016 | 4,113 | 13,820 | (1,459) | 2,249 | 16,417 | 732 | 871 | 36,743 |
| Year ended 30 November 2016 (audited) |
Share capital £'000 |
Share premium account £'000 |
Capital reserve realised £'000 |
Capital reserve unrealised £'000 |
Special distributable reserve £'000 |
Capital redemption reserve £'000 |
Revenue reserve £'000 |
Total £'000 |
|---|---|---|---|---|---|---|---|---|
| At 30 November 2015 | 4,132 | 13,820 | (2,064) | 3,315 | 16,563 | 713 | 1,157 | 37,636 |
| Net return | - | - | 1,286 | 184 | - | - | 591 | 2,061 |
| Dividends paid | - | - | (1,337) | - | - | - | (1,028) | (2,365) |
| Repurchase and cancellation of shares | (39) | - | - | - | (312) | 39 | - | (312) |
| At 30 November 2016 | 4,093 | 13,820 | (2,115) | 3,499 | 16,251 | 752 | 720 | 37,020 |
As at 31 May 2017
| 31 May 2017 (unaudited) £'000 |
31 May 2016 (unaudited) £'000 |
30 November 2016 (audited) £'000 |
|
|---|---|---|---|
| Fixed assets | |||
| Investments at fair value through profit or loss | 29,801 | 36,313 | 32,590 |
| Current assets | |||
| Debtors | 409 | 407 | 394 |
| Cash | 5,032 | 165 | 4,269 |
| 5,441 | 572 | 4,663 | |
| Creditors | |||
| Amounts falling due within one year | (20) | (142) | (233) |
| Net current assets | 5,421 | 430 | 4,430 |
| Net assets | 35,222 | 36,743 | 37,020 |
| Capital and reserves | |||
| Called up share capital | 4,057 | 4,113 | 4,093 |
| Share premium account | 13,820 | 13,820 | 13,820 |
| Capital reserve - realised | (1,317) | (1,459) | (2,115) |
| Capital reserve - unrealised | 1,536 | 2,249 | 3,499 |
| Special distributable reserve | 15,966 | 16,417 | 16,251 |
| Capital redemption reserve | 788 | 732 | 752 |
| Revenue reserve | 372 | 871 | 720 |
| Net assets attributable to Ordinary Shareholders | 35,222 | 36,743 | 37,020 |
| Net asset value per Ordinary Share (pence) | 86.82 | 89.34 | 90.45 |
The Financial Statements of Maven Income and Growth VCT 3 PLC, registered number 04283350, were approved by the Board and were signed on its behalf by:
Atul Devani Director
25 August 2017
For the Six Months Ended 31 May 2017
| Six months ended 31 May 2017 (unaudited) £'000 |
Six months ended 31 May 2016 (unaudited) £'000 |
Year ended 30 November 2016 (audited) £'000 |
|
|---|---|---|---|
| Net cash flows from operating activities | (602) | (628) | (1,453) |
| Cash flows from investing activities | |||
| Investment income received | 516 | 644 | 1,348 |
| Deposit interest received | 6 | 1 | 4 |
| Purchase of investments | (1,436) | (9,329) | (11,105) |
| Sale of investments | 4,099 | 10,333 | 17,320 |
| Net cash flows from investing activities | 3,185 | 1,649 | 7,567 |
| Cash flows from financing activities | |||
| Equity dividends paid | (1,535) | (1,542) | (2,365) |
| Repurchase of Ordinary Shares | (285) | (180) | (346) |
| Net cash flows from financing activities | (1,820) | (1,722) | (2,711) |
| Net increase/(decrease) in cash | 763 | (701) | 3,403 |
| Cash at beginning of period | 4,269 | 866 | 866 |
| Cash at end of period | 5,032 | 165 | 4,269 |
The financial information for the six months ended 31 May 2017 and the six months ended 31 May 2016 comprises non-statutory accounts within the meaning of S435 of the Companies Act 2006. The financial information contained in this report has been prepared on the basis of the accounting policies set out in the Annual Report and Financial Statements for the year ended 30 November 2016, which have been filed at Companies House and which contained an Auditor's Report that was not qualified and did not contain a statement under S498(2) or S498(3) of the Companies Act 2006.
The share premium account represents the premium above nominal value received by the Company on issuing shares net of issue costs.
Gains or losses on investments realised in the year that have been recognised in the Income Statement are transferred to the capital reserve realised account on disposal. Furthermore, any prior unrealised gains or losses on such investments are transferred from the capital reserve unrealised account to the capital reserve realised account on disposal.
Increases and decreases in the fair value of investments are recognised in the Income Statement and are then transferred to the capital reserve unrealised account. The capital reserve realised account also represents capital dividends, capital investment management fees and the tax effect of capital items.
The total cost to the Company of the repurchase and cancellation of shares is represented in the special distributable reserve.
The nominal value of shares repurchased and cancelled is represented in the capital redemption reserve.
The revenue reserve represents accumulated profits retained by the Company that have not been distributed to Shareholders.
| Six months ended 31 May 2017 (unaudited) £'000 |
Six months ended 31 May 2016 (unaudited) £'000 |
Year ended 30 November 2016 (audited) £'000 |
|
|---|---|---|---|
| The return per Ordinary Share is based on the following figures: |
|||
| Revenue return | 266 | 331 | 591 |
| Capital return | (244) | 464 | 1,470 |
| Total return | 22 | 795 | 2,061 |
| Weighted average number of Ordinary Shares | 40,891,143 | 41,198,731 | 41,121,125 |
| Revenue return per Ordinary Share | 0.65p | 0.80p | 1.44p |
| Capital return per Ordinary Share | (0.60p) | 1.13p | 3.57p |
| Return per Ordinary Share | 0.05p | 1.93p | 5.01p |
The net asset value per Ordinary Share has been calculated using the number of shares in issue at 31 May 2017 of 40,568,853.
Directors' Responsibility Statement 26
Each Director believes that, to the best of their knowledge:
On behalf of the Board Maven Capital Partners UK LLP Secretary
25 August 2017
| Directors | Atul Devani (Chairman) David Allan Keith Pickering Bill Nixon |
|---|---|
| Manager and Secretary | Maven Capital Partners UK LLP Kintyre House 205 West George Street Glasgow G2 2LW Telephone: 0141 306 7400 E-mail: [email protected] |
| Registered Office | Fifth Floor 1-2 Royal Exchange Buildings London EC3V 3LF |
| Registered in England and Wales | Company Registration Number: 04283350 |
| Website | www.mavencp.com/migvct3 |
| Registrars | Capita Asset Services The Registry 34 Beckenham Road Beckenham Kent BR3 4TU |
| Website: www.capitaassetservices.com | |
| Shareholder Portal: www.signalshares.com | |
| Shareholder Helpline: 0333 300 1566 (Lines are open 9.00am until 5.30pm, Monday to Friday, excluding public holidays in England and Wales. Calls are charged at the standard geographic rate and will vary by provider. Calls outside the United Kingdom should be made to +44 371 664 0300 and will be charged at the applicable international rate) |
|
| Auditor | Deloitte LLP |
| Bankers | J P Morgan Chase Bank |
| Stockbrokers | Shore Capital Stockbrokers Limited Telephone: 020 7647 8132 |
| VCT Adviser | Phillip Hare & Associates LLP |
Maven Capital Partners UK LLP Kintyre House 205 West George Street Glasgow G2 2LW Tel: 0141 306 7400
Authorised and Regulated by The Financial Conduct Authority
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