Interim / Quarterly Report • Jun 30, 2018
Interim / Quarterly Report
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A VENTURE CAPITAL TRUST
Unaudited Half-Year Report for the six months ended 30 June 2018
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 Regulation | 4 |
| Investment Review | 5 |
| Investment Portfolio Summary | 7 |
| Statement of the Directors' Responsibilities | 9 |
| Unaudited Condensed Financial Statements | 10 |
| Notes to the Unaudited Condensed Financial Statements | 16 |
| Shareholder Information | 22 |
| Corporate Information | 24 |
We are committed to protecting and respecting your privacy. To understand how we collect, use and otherwise process personal data relating to you, or that you provide to us, please read our privacy notice, which can be found at www.mig4vct.co.uk.
Net Asset Value ("NAV") Total Return per share of 0.6% for the half-year.
Shareholders received an interim dividend of 4.00 pence per share on 19 June 2018, in respect of the year ending 31 December 2018. Cumulative dividends paid to shareholders since inception are now 105.20 pence per share.
Investments totalling £3.06 million have been made into Proactive Investors, Super Carers and Hemmels, together with further investments into existing portfolio companies, MPB Group, Tapas Revolution and My Tutor.
Fully subscribed Offer for Subscription which closed in March 2018, having raised £15 million since launch in September 2017.
The net asset value (NAV) per share as at 30 June 2018 was 83.12 pence.
The longer term trend of performance on this measure is shown in the chart below:-
*Cumulative total shareholder return (NAV basis) is net asset value plus cumulative dividends paid since 1999 to date. Net Asset Value Cumulative dividends paid to date
The chart above shows the recent past performance of the original funds raised in 1999. The original subscription price was 200p per share before the benefit of income tax relief. Subscription prices from subsequent fundraisings and historic performance data from 2008 are shown in the Investor Performance Schedule on the Company's website at: www.mig4vct.co.uk , where they can be accessed by clicking on "table" under "Reviewing the performance of your investment" on the home page.
On 31 July 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 the Half-Year Report for Mobeus Income & Growth 4 VCT plc ("MIG4") covering the six month period ended 30 June 2018.
The six month period has resulted in continued portfolio progress. In addition the fundraising was successfully completed, raising the £15 million target.
Three new growth capital investments, and three further investments into existing growth portfolio companies were completed in the period. Further details of these investments are included under 'Investment Portfolio' below and in the Investment Review on pages 5 - 6.
These investments have been made in accordance with the revised Investment Policy approved by shareholders in 2016. This is focused on providing growth capital to younger and smaller companies. By way of reminder, this revised Policy was required to comply with the VCT measures introduced by the Finance (No. 2) Act 2015 in November of that year.
More recently, the enactment of the Finance Act 2018 on 15 March 2018 has resulted in further changes to the VCT Scheme. These most recent changes are in response to the Patient Capital Review which was conducted by Her Majesty's Treasury during the course of 2017, further details of which can be found under the 'Industry and regulatory developments' section of my Statement below and on page 4 under 'Summary of VCT Regulation'.
At 30 June 2018, your Company was ranked 18th out of 40 VCTs, over the last five years, in the Association of Investment Companies' ("AIC") analysis of NAV Total Return.
The Net Asset Value ("NAV") Total Return was 0.6% for the period (compared with 5.2% for the same period last year).
On 6 September 2017, the Company launched an Offer for Subscription to raise up to £15 million in aggregate. Demand for the Offer was strong and the Company raised the full amount by 13 March 2018 (£1.00 million of net funds were raised in the current period). The Board would like to thank all new investors and shareholders, their advisers and intermediaries, for their support.
The Board declared an interim capital dividend of 4.00 pence per share which was paid on 19 June 2018. This brings cumulative dividends paid per share since the launch of the Company to 105.20 pence per share.
The portfolio achieved a gain of £0.26 million (0.8% of the opening value) during the first half of the year (2017: £2.45 million; 6.3% of the opening value) and was valued at £34.38 million at the period end (30 June 2017: £37.93 million). The six month period experienced notable increases in the valuations of EOTH, MPB Group and CGI Creative Graphics, but the portfolio saw significant valuation declines over the period for Wetsuit Outlet, Motorclean and Veritek Global.
During the period three new investments and three further investments were made at a total cost of £3.06 million (details on pages 5 - 6 and within Note 10). These were:
After the period end, a new investment of £0.44 million was made into Rota Geek, a provider of workforce management software.
The Company received cash proceeds of £0.43 million during the period, mostly being loan stock repayments from investee companies, but also deferred consideration arising from realisations in a previous year.
Further information on the portfolio can be found under the Investment Review and Investment Portfolio Summary on pages 5 - 8.
As mentioned in my Overview above, a number of additional changes to the VCT Scheme were introduced with the enactment of the Finance Act 2018 on 15 March 2018. These changes were designed to exclude tax-motivated investments where capital is not at risk (that is, principally seeking to preserve investors' capital) and to encourage VCTs to put their money to work faster. While some of these changes (detailed further on page 4) place further restrictions on the way investments may be structured, the Board currently has no reason to believe they will materially affect the Company's Investment Policy.
During the period, the Company bought back a total of 613,330 Ordinary shares for cancellation, amounting to 0.9% of its issued share capital at the start of the year. These shares were bought back at an approximate 10% discount to the Company's latest announced NAV, in accordance with the Company's share buyback policy.
A total of 788,503 new Ordinary shares were issued under the Dividend Investment Scheme during the period at a price of 74.00 pence.
The Company's Dividend Investment Scheme ("the Scheme") has historically been a practical and cost effective way for the Company to retain cash for investment and operating purposes. Given the Company's recent successful fundraising and current relatively high cash position, the Board has taken the decision to suspend the Scheme until further notice. This means that those shareholders who had opted into the Scheme will now receive cash in respect of any dividends paid by the Company while the Scheme is suspended. Allowing high levels of liquidity to persist
can dilute returns to shareholders. Furthermore, as a result of the changes in the Finance Act 2018, funds raised under the Scheme would have an additional impact on the VCT's qualification status conditions, commencing in respect of the Company's 2019 financial year. From the start of that year, 30% of all funds raised (including under the Scheme) have to be invested in qualifying investments , within a year of the financial year-end in which shares under the Scheme are allotted. This would have placed a further compliance hurdle on top of the Company's existing investment obligations.
Your Board will continue to keep the operation of the Scheme under review and will provide shareholders with advanced notice of any future decision to reintroduce, modify or cancel the Scheme.
The cash or near cash resources held by the Company as at 30 June 2018, including the liquidity held by companies preparing to trade, was £24.37 million or 42.6% of net assets. While liquidity is high, the Investment Adviser has a n active pipeline of investment opportunities under review, and so this is expected to reduce over time .
The VCT continues to hold its cash in a selection of money market funds with AAA credit ratings and in a number of deposit accounts , diversified among well-known financial institutions across a range of maturities.
The Investment Adviser held its eighth annual shareholder event on 30 January 2018. As in previous years, the event was well attended and generated an active shareholder response. The next event is to be held on 5 February 2019, again at the Royal Institute of British Architects in central London. The programme will contain highlights from the performance of the Mobeus VCTs as well as presentations by representatives of portfolio companies. Recently, shareholders have received further details and an invitation to the event with their copy of the Mobeus VCT Newsletter.
Your Board continues to feel that Mobeus are adapting well to the new investment parameters for VCTs. They have expanded their management team and have been active in sourcing suitable growth capital investments. The fund has exposure to some exciting businesses, which are higher risk but, if they can survive and scale up, could become very valuable. As previously warned however, shareholders should expect returns to be more volatile and entry prices are not cheap.
Externally there are a number of factors which could affect stock markets including trade and tariff wars and the protracted and indecisive execution of the Brexit negotiations.
The recent successful fundraising will provide the Company with sufficient funds to meet its cash needs and to continue the current investment rate in the medium term.
Finally, I would like to thank all of our shareholders for their continuing support.
Chairman
14 August 201 8
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% (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% 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 maintain its 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, new investments must be in companies:-
In addition, VCTs may not:-
1 For accounting periods beginning on or after 6 April 2019, this percentage will increase to 80%.
From 6 April 2019:
A total of £1.42 million was invested into three companies during the six months under review, comprising new investments into Proactive Investors, Super Carers and Hemmels as detailed below:
| Company | Business | Date of investment |
Amount of new investment (£m) |
|---|---|---|---|
| Proactive Investors | Investor media services |
January / June 2018 |
0.41 |
Proactive Investors specialises in up-to-the-minute multi-media news provision, events organisation, digital services and investor research. Proactive provides breaking news, commentary and analysis on hundreds of small-cap listed companies and pre-IPO businesses across the globe, 24/7. The investment will enable Proactive to expand its services into the US market, which is the largest global market for investor media services in the world. The company's unaudited accounts for the year ended 30 June 2017 show turnover of £3.99 million and a profit before interest, tax and amortisation of goodwill of £0.53 million.
| Super Carers | Online care provision platform |
March 2018 | 0.49 |
|---|---|---|---|
| -------------- | ----------------------------------- | ------------ | ------ |
Super Carers provides an online platform connecting people, typically family members seeking care for their elderly parents, with experienced independent carers. Carers and care-seekers manage care directly, thus reducing the administrative burden and the need for care managers, enabling care to be delivered with greater flexibility and more cost effectively. The company's unaudited accounts for the year ended 31 March 2017 show revenues of £0.18 million and a loss before interest, tax and amortisation of goodwill of £0.72 million.
| Hemmels | Classic car restoration | March 2018 | 0.52 |
|---|---|---|---|
Hemmels commenced trading in September 2016 and specialises in the sourcing, restoration, selling and servicing of high value classic cars, currently focusing on classic Mercedes-Benz. The investment will enable Hemmels to proceed with its expansion plans and secure sufficient development stock. The company's accounts for the year ended 31 December 2017 have not been finalised.
The Company made further investments totalling £1.64 million into three existing portfolio companies during the period under review, as detailed below:
| Company | Business | Date of investment |
Amount of new investment (£m) |
|---|---|---|---|
| MPB Group | Online marketplace for used camera and video equipment |
February 2018 | 0.34 |
MPB is Europe's leading online marketplace for used camera and video equipment. Based in Brighton, its custom-designed 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. Having expanded into the US (opening a New York office) and German markets as part of the initial VCT investment round, this follow on investment, alongside funds provided by the Proven VCTs, is to support its continued growth plan. Having significantly increased its sales over the last year, this investment will give the company sufficient capital to achieve its next phase of expansion. The company's latest audited accounts for the year ended 31 March 2017 show turnover of £13.20 million and loss before interest, tax and amortisation of goodwill of £0.47 million.
| Company | Business | Date of investment |
Amount of new investment (£m) |
|---|---|---|---|
| Tapas Revolution | Restaurant chain | March 2018 | 0.46 |
Based in London, Tapas Revolution is a leading Spanish restaurant chain in the casual dining sector focusing on shopping centre sites with high footfall. Having opened its first restaurant in Shepherd's Bush Westfield, the business now operates six established restaurants, partly due to the support of the initial VCT investment in 2017. This follow on investment is to finance the opening of several new locations around the UK. The company's latest audited accounts for the year ended 29 October 2017 show a turnover of £5.84 million and loss before interest, tax and amortisation of goodwill of £0.68 million.
My Tutor is a digital marketplace that connects school pupils who are seeking private one-to-one tutoring with university students. The business is satisfying a growing demand from both schools and parents to improve pupils' exam results to enhance their academic and career prospects. The follow-on investment is to support further growth in order to capitalise on the company's position as the largest UK provider of online tutoring into both private and school customers. The company's latest unaudited accounts for the year ended 31 December 2017 show turnover of £0.56 million and a loss before interest, tax and amortisation of goodwill of £1.40 million.
| Company | Business | Date of investment |
Amount of new investment (£m) |
|---|---|---|---|
| Rota Geek | Provider of workforce management software |
August 2018 | 0.44 |
Rota Geek is a provider of cloud-based enterprise software that uses data-driven technologies to help predominantly large retail and leisure organisations predict and meet demand to schedule staff effectively and fairly. This investment will be used to further technology development and grow sales from enterprise clients.
There have been no realisations during the period under review. £0.14 million was received as deferred consideration arising from the realisations of Gro-Group and Tessella in previous years.
Loan stock repayments totalled £0.29 million from The Plastic Surgeon Holdings (formerly TPSFF Holdings) and MPB Group during the period under review.
Investment Adviser 14 August 2018
| Total cost at 30 June 2018 |
Total valuation at 31 December 2017 |
Total valuation at 30 June 2018 |
% of equity held |
% of portfolio by value |
|
|---|---|---|---|---|---|
| Mobeus Equity Partners LLP | £ | £ | £ | ||
| Tovey Management Limited (trading as Access IS) Provider of data capture and scanning hardware |
2,469,013 | 2,758,626 | 2,931,253 | 9.7% | 8.5% |
| Virgin Wines Holding Company Limited Online wine retailer |
1,930,813 | 2,173,407 | 2,197,789 | 9.7% | 6.4% |
| ASL Technology Holdings Limited Printer and photocopier services |
1,933,591 | 2,049,558 | 2,123,648 | 9.5% | 6.2% |
| EOTH Limited (trading as Equip Outdoor Technologies) Branded outdoor equipment and clothing |
951,471 | 1,405,478 | 1,866,358 | 1.7% | 5.4% |
| Media Business Insight Holdings Limited A publishing and events business focused on the creative production industries |
2,722,760 | 1,663,142 | 1,772,828 | 15.7% | 5.2% |
| Manufacturing Services Investment Limited (trading as Wetsuit Outlet) Online retailer in the water sports market |
2,333,102 | 2,333,102 | 1,636,098 | 6.4% | 4.8% |
| CGI Creative Graphics International Limited Vinyl graphics to global automotive, recreation vehicle and aerospace markets |
1,449,746 | 1,087,900 | 1,502,594 | 6.6% | 4.4% |
| My Tutorweb Limited Digital marketplace connecting school pupils seeking one-to-one online tutoring |
1,307,644 | 466,639 | 1,439,673 | 7.2% | 4.1% |
| MPB Group Limited Online marketplace for photographic and video equipment |
919,993 | 777,331 | 1,420,182 | 5.4% | 4.1% |
| Master Removers Group Limited (trading as Anthony Ward Thomas, Bishopsgate and Aussie Man & Van) A specialist logistics, storage and removals business |
511,855 | 1,173,348 | 1,348,537 | 4.7% | 3.9% |
| Vian Marketing Limited (trading as Red Paddle Co) Design, manufacture and sale of stand-up paddleboards and windsurfing sails |
899,074 | 1,416,746 | 1,273,363 | 7.1% | 3.7% |
| Tharstern Group Limited Software based management information systems to the print sector |
1,091,886 | 1,401,362 | 1,270,897 | 12.2% | 3.7% |
| Ibericos Etc. Limited (trading as Tapas Revolution) Spanish restaurant chain |
1,044,869 | 580,469 | 1,219,003 | 5.8% | 3.5% |
| Turner Topco Limited (trading as Auction Technology Group (formerly ATG Media)) SaaS based online auction market place platform |
1,529,075 | 1,292,718 | 1,166,710 | 3.8% | 3.4% |
| Preservica Limited Seller of proprietary digital archiving software |
679,617 | 929,117 | 1,107,361 | 8.6% | 3.2% |
| Pattern Analytics Limited (trading as Biosite) Workforce management and security services for the construction industry |
640,171 | 960,257 | 960,257 | 4.8% | 2.8% |
| Redline Worldwide Limited Provider of security services to the aviation industry and other sectors |
838,377 | 897,989 | 830,750 | 6.7% | 2.4% |
| The Plastic Surgeon Holdings Limited (formerly TPSFF Holdings Limited) Supplier of snagging and finishing services to the domestic and commercial property markets |
46,209 | 809,939 | 800,221 | 8.7% | 2.3% |
| Bourn Bioscience Limited Management of In-vitro fertilisation clinics |
1,132,521 | 818,429 | 772,635 | 7.7% | 2.2% |
| Buster and Punch Holdings Limited Industrial inspired lighting and interiors retailer |
530,392 | 530,392 | 654,799 | 4.5% | 1.9% |
| BookingTek Limited Direct booking software for hotels |
652,137 | 867,257 | 652,138 | 3.5% | 1.9% |
| Fullfield Limited (trading as Motorclean) Vehicle cleaning and valet services |
1,131,444 | 1,185,517 | 608,332 | 9.8% | 1.8% |
| RDL Corporation Limited Recruitment consultants within the pharmaceutical, business intelligence and IT industries |
1,000,000 | 632,005 | 589,796 | 9.1% | 1.7% |
| Total cost at 30 June 2018 |
Total valuation at 31 December 2017 |
Total valuation at 30 June 2018 |
% of equity held |
% of portfolio by value |
|
|---|---|---|---|---|---|
| Mobeus Equity Partners LLP | £ | £ | £ | ||
| Super Carers Limited Online platform that connects people seeking home care from experienced independent carers |
485,730 | - | 485,730 | 4.3% | 1.4% |
| Hemmels Limited Company specialising in the sourcing, restoration, selling and servicing of high price, classic cars |
517,080 | - | 453,607 | 2.9% | 1.3% |
| Hollydale Management Limited Company seeking to carry on a business in the food industry |
701,120 | 438,200 | 438,200 | 11.0% | 1.3% |
| Proactive Group Holdings Inc Provider of media services and investor conferences for companies primarily listed on secondary public markets |
412,074 | - | 412,074 | 1.6% | 1.2% |
| Vectair Holdings Limited Designer and distributor of washroom products |
24,732 | 303,233 | 320,379 | 2.1% | 0.9% |
| Blaze Signs Holdings Limited Manufacturer and installer of signs |
190,631 | 193,997 | 280,898 | 5.7% | 0.8% |
| Jablite Holdings Limited Manufacturer of expanded polystyrene products |
376,083 | 229,783 | 229,783 | 9.1% | 0.7% |
| Backhouse Management Limited Company seeking to carry on a business in the motor sector |
589,680 | 226,800 | 226,800 | 11.3% | 0.7% |
| Barham Consulting Limited Company seeking to carry on a business in the catering sector |
589,680 | 226,800 | 226,800 | 11.3% | 0.7% |
| Creasy Marketing Services Limited Company seeking to carry on a business in the textile sector |
589,680 | 226,800 | 226,800 | 11.3% | 0.7% |
| McGrigor Management Limited Company seeking to carry on a business in the pharmaceutical sector |
589,680 | 226,800 | 226,800 | 11.3% | 0.7% |
| Omega Diagnostics Group plc In-vitro diagnostics for food intolerance, auto-immune diseases and infectious diseases |
200,028 | 274,849 | 191,561 | 1.3% | 0.6% |
| Veritek Global Holdings Limited Maintenance of imaging equipment |
1,620,086 | 547,806 | 153,550 | 11.9% | 0.4% |
| Lightworks Software Limited Provider of software for CAD and CAM vendors |
9,329 | 33,847 | 25,227 | 4.2% | 0.1% |
| BG Training Limited City-based provider of specialist technical training |
10,625 | 5,313 | 5,313 | 0.0% | 0.0% |
| Racoon International Group Limited Supplier of hair extensions, hair care products and training |
484,347 | - | - | 0.0% | 0.0% |
| CB Imports Group Limited (trading as Country Baskets) Importer and distributor of artificial flowers, floral sundries and home décor products |
175,000 | - | - | 5.8% | 0.0% |
| Newquay Helicopters (2013) Limited (in creditors' voluntary liquidation) Helicopter service operator |
7,617 | - | - | 2.5% | 0.0% |
| Watchgate Limited Holding company |
1,000 | - | - | 33.3% | 0.0% |
| Total | 35,319,962 | 31,144,956 | 34,048,744 | 99.0% | |
| Former Elderstreet Private Equity Limited Portfolio | |||||
| Cashfac Limited Provider of virtual banking application software solutions to corporate customers |
260,101 | 339,097 | 330,408 | 2.9% | 1.0% |
| Sparesfinder Limited Supplier of industrial spare parts online |
250,854 | - | - | 2.0% | 0.0% |
| Sift Group Limited Developer of business-to-business internet communities |
135,392 | - | - | 1.3% | 0.0% |
| Total | 646,347 | 339,097 | 330,408 | 1.0% | |
| Total Investment Portfolio | 35,966,309 | 31,484,053 | 34,379,152 | 100.0% |
In accordance with Disclosure and Transparency Rule (DTR) 4.2.10, Christopher Moore (Chairman), Andrew Robson (Chairman of the Audit Committee and Nomination and Remuneration Committee) and Helen Sinclair (Chairman of the Investment Committee), being the Directors of the Company confirm that to the best of their knowledge:
In accordance with DTR 4.2.7, the Board confirms that the principal risks and uncertainties facing the Company have not materially changed from those identified in the Annual Report and Accounts for the year ended 31 December 2017 ("the Annual Report").
The principal risks faced by the Company are:
A detailed explanation of the principal risks can be found in the Annual Report on page 23 and in Note 15 on pages 57 – 63 of the Annual Report and Accounts for the year ended 31 December 2017, 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. 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 financial and capital risks are shown in Notes 15 and 16 on pages 57 – 64 of the Annual Report and Accounts for the year ended 31 December 2017. 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
14 August 2018
| Six months ended 30 June 2018 | |||||
|---|---|---|---|---|---|
| Notes | Revenue £ |
Capital £ |
(unaudited) Total £ |
||
| Unrealised gains/(losses) on investments held at fair value | 10 | - | 123,530 | 123,530 | |
| Realised gains on investments held at fair value | 10 | - | 139,762 | 139,762 | |
| Income | 4 | 1,004,281 | - | 1,004,281 | |
| Investment Adviser's fees | 5 | (157,985) | (473,954) | (631,939) | |
| Other expenses | (213,555) | - | (213,555) | ||
| Profit/(loss) on ordinary activities before taxation | 632,741 | (210,662) | 422,079 | ||
| Tax on profit/(loss) on ordinary activities | 6 | (98,956) | 90,052 | (8,904) | |
| Profit/(loss) and total comprehensive income | 533,785 | (120,610) | 413,175 | ||
| Basic and diluted earnings per ordinary share | 7 | 0.78p | (0.18)p | 0.60p |
The revenue column of the Income Statement includes all income and expenses. The capital column accounts for the unrealised gains/(losses) and realised gains on investments and the proportion of the Investment Adviser's fee charged to capital.
The total column is the Statement of Total Comprehensive Income of the Company prepared in accordance with Financial Reporting Standards ("FRS"). In order to better reflect the activities of a VCT and in accordance with the 2014 Statement of Recommended Practice ("SORP") issued by the Association of Investment Companies ("AIC") and updated in January 2017, supplementary information which analyses the Income Statement between items of a revenue and capital nature has been presented alongside the Income Statement. The revenue column of profit attributable to equity shareholders is the measure the Directors believe appropriate in assessing the Company's compliance with certain requirements set out in Section 274 Income Tax Act 2007.
All the items in the above statement derive from continuing operations of the Company. No operations were acquired or discontinued in the period.
| Six months ended 30 June 2018 (unaudited) |
Six months ended 30 June 2017 (unaudited) |
Year ended 31 December 2017 | (audited) | |||
|---|---|---|---|---|---|---|
| Capital Total £ £ |
Revenue £ |
Capital £ |
Total £ |
Revenue £ |
Capital £ |
Total £ |
| 123,530 123,530 |
- | 2,363,132 | 2,363,132 | - | (792,838) | (792,838) |
| 139,762 139,762 |
- | 87,628 | 87,628 | - | 4,142,375 | 4,142,375 |
| - 1,004,281 |
1,244,177 | - | 1,244,177 | 2,381,649 | - | 2,381,649 |
| (473,954) (631,939) |
(142,763) | (428,288) | (571,051) | (293,312) | (879,937) | (1,173,249) |
| - (213,555) |
(189,358) | - | (189,358) | (422,206) | - | (422,206) |
| 422,079 | 912,056 | 2,022,472 | 2,934,528 | 1,666,131 | 2,469,600 | 4,135,731 |
| 90,052 (8,904) |
(150,244) | 82,446 | (67,798) | (286,870) | 169,388 | (117,482) |
| (120,610) 413,175 |
761,812 2,104,918 |
2,866,730 | 1,379,261 | 2,638,988 | 4,018,249 | |
| (0.18)p 0.60p |
1.54p | 4.26p | 5.80p | 2.60p | 4.99p | 7.59p |
| Notes | 30 June 2018 (unaudited) £ |
30 June 2017 (unaudited) £ |
31 December 2017 (audited) £ |
|
|---|---|---|---|---|
| Fixed assets | ||||
| Investments at fair value | 10 | 34,379,152 | 37,925,220 | 31,484,053 |
| Current assets | ||||
| Debtors and prepayments | 181,149 | 250,771 | 3,166,996 | |
| Current asset investments | 11 | 20,410,681 | 12,193,267 | 21,494,921 |
| Cash at bank | 11 | 2,608,920 | 2,690,122 | 2,847,849 |
| 23,200,750 | 15,134,160 | 27,509,766 | ||
| Creditors: amounts falling due within one year | (365,729) | (235,006) | (582,179) | |
| Net current assets | 22,835,021 | 14,899,154 | 26,927,587 | |
| Net assets | 57,214,173 | 52,824,374 | 58,411,640 | |
| Capital and reserves | ||||
| Called up share capital | 688,365 | 497,492 | 674,751 | |
| Share premium reserve | 31,474,978 | 14,169,354 | 29,895,865 | |
| Capital redemption reserve | 20,722 | 9,342 | 14,589 | |
| Revaluation reserve | 612,630 | 3,512,924 | 517,952 | |
| Special distributable reserve | 16,436,383 | 28,357,894 | 20,029,787 | |
| Realised capital reserve | 6,514,849 | 4,792,400 | 6,346,235 | |
| Revenue reserve | 1,466,246 | 1,484,968 | 932,461 | |
| Equity shareholders' funds | 57,214,173 | 52,824,374 | 58,411,640 | |
| Basic and diluted net asset value: | ||||
| Basic and diluted net asset value per share | 9 | 83.12p | 106.18p | 86.57p |
The financial information for the six months ended 30 June 2018 and the six months ended 30 June 2017 has not been audited.
| Non-distributable reserves | Distributable reserves | ||||||||
|---|---|---|---|---|---|---|---|---|---|
| Called up share |
Share | premium redemption | Capital Revaluation reserve |
Special distributable |
Realised capital |
Revenue reserve |
Total | ||
| capital | reserve | reserve | reserve (Note a) |
reserve (Note b) |
(Note b) | ||||
| Notes | £ | £ | £ | £ | £ | £ | £ | £ | |
| At 1 January 2018 | 674,751 | 29,895,865 | 14,589 | 517,952 | 20,029,787 | 6,346,235 | 932,461 | 58,411,640 | |
| Comprehensive income for the period Profit/(loss) for |
|||||||||
| the period | - | - | - | 123,530 | - | (244,140) | 533,785 | 413,175 | |
| Total comprehensive | |||||||||
| income for the period | - | - | - | 123,530 | - | (244,140) | 533,785 | 413,175 | |
| Contributions by and distributions to owners |
|||||||||
| Shares issued via Offer for Subscription |
|||||||||
| (Note c) Issue of shares |
11,863 | 1,003,505 | - | - | (10,787) | - | 1,004,581 | ||
| under Dividend Investment Scheme Shares bought |
7,884 | 575,608 | - | - | - | - | - | 583,492 | |
| back (Note d) | (6,133) | - | 6,133 | - | (464,370) | - | - | (464,370) | |
| Dividends paid | 8 | - | - | - | - | (2,734,345) | - | - | (2,734,345) |
| Total contributions by and distributions |
|||||||||
| to owners | 13,614 | 1,579,113 | 6,133 | - | (3,209,502) | - | - (1,610,642) | ||
| Other movements Realised losses transferred to special |
|||||||||
| reserve (Note a) Realisation of |
- | - | - | - | (383,902) | 383,902 | - | - | |
| previously unrealised appreciation |
- | - | - | (28,852) | - | 28,852 | - | - | |
| Total other movements |
- | - | - | (28,852) | (383,902) | 412,754 | - | - | |
| At 30 June 2018 | 688,365 31,474,978 | 20,722 | 612,630 | 16,436,383 6,514,849 1,466,246 57,214,173 |
Notes:
a): The cancellation of the share premium reserve and capital redemption reserve in past years 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 2017 Comprehensive income for the period |
490,430 | 13,540,891 | 9,342 | 1,152,007 | 31,646,338 | 4,702,557 | 1,213,591 | 52,755,156 |
| Profit/(loss) for the period | - | - | - | 2,363,132 | - | (258,214) | 761,812 | 2,866,730 |
| Total comprehensive income for the period |
- | - | - | 2,363,132 | - | (258,214) | 761,812 | 2,866,730 |
| Contributions by and distributions to owners Issue of shares under Dividend Investment Scheme Dividends paid |
7,062 - |
628,463 - |
- - |
- - |
- (2,942,602) |
- - |
- (490,435) |
635,525 (3,433,037) |
| Total contributions by and distributions to owners |
7,062 | 628,463 | - | - | (2,942,602) | - | (490,435) (2,797,512) | |
| Other movements Realised losses transferred to special reserve Realisation of previously unrealised appreciation |
- - |
- - |
- - |
- (2,215) |
(345,842) - |
345,842 2,215 |
- - |
- - |
| Total other movements | - | - | - | (2,215) | (345,842) | 348,057 | - | - |
| At 30 June 2017 | 497,492 14,169,354 | 9,342 | 3,512,924 | 28,357,894 | 4,792,400 | 1,484,968 52,824,374 |
The composition of each of these reserves is explained below:
Called up share capital - The nominal value of shares originally issued and increased for subsequent share issues either via an Offer for Subscription or Dividend Investment Scheme or reduced due to shares bought back by the Company.
Capital redemption reserve - The nominal value of shares bought back and cancelled is held in this reserve, so that the Company's capital is maintained.
Share premium reserve - This reserve contains the excess of gross proceeds less issue costs over the nominal value of shares allotted under recent Offers for Subscription and the Company's Dividend Investment Scheme.
Revaluation reserve - Increases and decreases in the valuation of investments held at the period-end are accounted for in this reserve, except to the extent that the diminution is deemed permanent.
In accordance with stating all investments at fair value through profit and loss, all such movements through both revaluation and realised capital reserves are shown within the Income Statement for the period.
Special distributable reserve - The cost of share buybacks is charged to this reserve. In addition, any realised losses on the sale or impairment of investments (excluding transaction costs), and 75% of the Investment Adviser fee expense, and the related tax effect, are transferred from the realised capital reserve to this reserve. The cost of any IFA facilitation fee payable as part of the Offer for Subscription is also charged to this reserve.
Revenue reserve - Income and expenses that are revenue in nature are accounted for in this reserve together with the related tax effect, as well as income dividends paid that are classified as revenue in nature.
| Notes | Six months ended 30 June 2018 (unaudited) £ |
Six months ended 30 June 2017 (unaudited) £ |
Year ended 31 December 2017 (audited) £ |
|
|---|---|---|---|---|
| Cash flows from operating activities | ||||
| Profit for the financial period | 413,175 | 2,866,730 | 4,018,249 | |
| Adjustments for: | ||||
| Unrealised (gains)/losses on investments | (123,530) | (2,363,132) | 792,838 | |
| Realised gains on investments | (139,762) | (87,628) | (4,142,375) | |
| Tax charge for the current year | 6 | 8,904 | 67,798 | 117,482 |
| Decrease/(increase) in debtors | 227,082 | 28,771 | (128,689) | |
| Increase/(decrease) in creditors and accruals | 30,185 | (37,965) | 289,612 | |
| Net cash inflow from operations | 416,054 | 474,574 | 947,117 | |
| Corporation tax paid | - | - | (30,088) | |
| Net cash inflow from operating activities | 416,054 | 474,574 | 917,029 | |
| Cash flows from investing activities | ||||
| Sale of investments | 10 | 3,183,830 | 4,568,919 | 10,217,251 |
| Purchase of investments | 10 | (3,056,872) | (536,476) | (1,603,629) |
| Net cash inflow from investing activities | 126,958 | 4,032,443 | 8,613,622 | |
| Cash flows from financing activities | ||||
| Share issued as part of Offer for | ||||
| Subscription (net of issue costs) | 1,004,581 | - | 13,630,616 | |
| Equity dividends paid | 8 | (2,150,853) | (2,797,512) | (11,584,256) |
| Purchase of own shares | (719,909) | - | (408,125) | |
| Net cash (outflow)/inflow from | ||||
| financing activities | (1,866,181) | (2,797,512) | 1,638,235 | |
| Net (decrease)/increase in cash and cash | ||||
| equivalents | (1,323,169) | 1,709,505 | 11,168,886 | |
| Cash and cash equivalents at start of period | 22,342,770 | 11,173,884 | 11,173,884 | |
| Cash and cash equivalents at end of period | 21,019,601 | 12,883,389 | 22,342,770 | |
| Cash and cash equivalents comprise: | ||||
| Cash at bank and in hand | 11 | 2,608,920 | 2,690,122 | 2,847,849 |
| Cash equivalents | 11 | 18,410,681 | 10,193,267 | 19,494,921 |
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 have been 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') (updated in January 2017) issued by the Association of Investment Companies. The Financial Statements have been prepared on the historical cost basis except for the modification to a fair value basis for certain financial instruments as specified in Note 10.
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 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.
| Income from investments | Six months ended 30 June 2018 (unaudited) £ |
Six months ended 30 June 2017 (unaudited) £ |
Year ended 31 December 2017 (audited) £ |
|---|---|---|---|
| Dividends | 111,922 | 131,569 | 176,448 |
| Loan stock interest | 832,801 | 1,087,313 | 2,145,824 |
| Money-market funds | 43,206 | 10,591 | 25,097 |
| Bank deposit interest | 16,352 | 14,704 | 28,578 |
| Interest on preference share dividend arrears | - | - | 92 |
| Other income | - | - | 5,610 |
| Total Income | 1,004,281 | 1,244,177 | 2,381,649 |
25% of the Investment Adviser's fees are charged to the revenue column of the Income Statement, while 75% is charged against the capital column of the Income Statement. This is in line with the Board's expected long-term split of returns from the investment portfolio of the Company. 100% of any performance incentive fee payable for the year would be charged against the capital column of the Income Statement, as it is based upon the achievement of capital growth.
| Six months ended | Six months ended | Year ended | |
|---|---|---|---|
| 30 June 2018 | 30 June 2017 | 31 December 2017 | |
| (unaudited) | (unaudited) | (audited) | |
| Total | Total | Total | |
| £ | £ | £ | |
| Allocated to revenue return: Investment Adviser's fees | 157,985 | 142,763 | 293,312 |
| Allocated to capital return: Investment Adviser's fees | 473,954 | 428,288 | 879,937 |
| Total | 631,939 | 571,051 | 1,173,249 |
With effect from 1 April 2018, the Investment Adviser's fee upon the net funds raised from the use of the over-allotment facility of £5 million under the recent Offer has been reduced to 1% from 2%, for one year.
| Six months ended 30 June 2018 (unaudited) |
Six months ended 30 June 2017 (unaudited) |
Year ended 31 December 2017 (audited) |
||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| Revenue | Capital | Total | Revenue | Capital | Total | Revenue | Capital | Total | ||
| £ | £ | £ | £ | £ | £ | £ | £ | £ | ||
| a) Analysis of tax charge: UK Corporation tax on |
||||||||||
| profits/(losses) for the period | 98,956 | (90,052) | 8,904 | 150,244 | (82,446) | 67,798 | 286,870 | (169,388) | 117,482 | |
| Total current tax charge/(credit) | 98,956 | (90,052) | 8,904 | 150,244 | (82,446) | 67,798 | 286,870 | (169,388) | 117,482 | |
| Corporation tax is based on a rate of 19.0% (2017: 19.3%) b) Profit/(loss) on ordinary activities before tax |
632,741 | (210,662) | 422,079 | 912,056 | 2,022,472 | 2,934,528 | 1,666,131 | 2,469,600 | 4,135,731 | |
| Profit/(loss) on ordinary activities multiplied by rate of corporation tax in the UK of 19.0% (2017: 19.3%) |
120,221 | (40,026) | 80,195 | 175,571 | 389,326 | 564,897 | 320,730 | 475,398 | 796,128 | |
| Effect of: | - | |||||||||
| UK dividends Unrealised (gains)/losses not |
(21,265) | - | (21,265) | (25,327) | - | (25,327) | (33,966) | - | (33,966) | |
| taxable/allowable Realised gains not taxable Unrelieved expenditure |
- - - |
(23,471) (26,555) - |
(23,471) (26,555) - |
- - - |
(454,904) (16,868) - |
(454,904) (16,868) - |
- - 106 |
152,621 (797,407) - |
152,621 (797,407) 106 |
|
| Actual current tax charge | 98,956 | (90,052) | 8,904 | 150,244 | (82,446) | 67,798 | 286,870 | (169,388) | 117,482 |
The basic earnings, revenue earnings and capital earnings 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 | Six months ended | Year ended | |
|---|---|---|---|
| 30 June 2018 | 30 June 2017 | 31 December 2017 | |
| (unaudited) | (unaudited) | (audited) | |
| £ | £ | £ | |
| i) Total earnings after taxation | 413,175 | 2,866,730 | 4,018,249 |
| Basic and diluted earnings per share (pence) (note a) | 0.60p | 5.80p | 7.59p |
| ii) Revenue earnings from ordinary activities after taxation | 533,785 | 761,812 | 1,379,261 |
| Basic and diluted revenue earnings per share (pence) (note b) | 0.78p | 1.54p | 2.60p |
| Net unrealised capital gains/(losses) on investments | 123,530 | 2,363,132 | (792,838) |
| Net realised capital gains on investments | 139,762 | 87,628 | 4,142,375 |
| Capital Investment Adviser's fees less taxation | (383,902) | (345,842) | (710,549) |
| iii) Capital earnings | (120,610) | 2,104,918 | 2,638,988 |
| Basic and diluted capital earnings per share (pence) (note c) | (0.18)p | 4.26p | 4.99p |
| iv) Weighted average number of shares in issue in the period | 68,342,769 | 49,452,671 | 52,973,939 |
Notes:
a): Basic earnings per share is total earnings after taxation divided by the weighted average number of shares in issue.
b): Basic revenue earnings per share is the revenue earnings after taxation divided by the weighted average number of shares in issue.
c): Basic capital earnings per share is the capital earnings after taxation divided by the weighted average number of shares in issue.
| Dividend | Type | For the year ended 31 December |
Pence per share |
Date paid | Six months ended 30 June 2018 (unaudited) £ |
Six months ended 30 June 2017 (unaudited) £ |
Year ended 31 December 2017 (audited) £ |
|---|---|---|---|---|---|---|---|
| Second interim | Income | 2016 | 1.00p | 17 March 2017 | - | 490,435 | 490,435 |
| Second interim | Capital | 2016 | 6.00p** | 17 March 2017 | - | 2,942,602 | 2,942,602 |
| Interim | Income | 2017 | 1.00p | 11 September 2017 | - | - | 497,394 |
| Interim | Capital | 2017 | 2.00p | 11 September 2017 | - | - | 994,787 |
| Interim | Capital | 2017 | 15.00p** | 11 September 2017 | - | - | 7,460,911 |
| Second interim | Income | 2017 | 1.00p | 21 December 2017 | - | - | 672,563 |
| Second interim | Capital | 2017 | 2.00p | 21 December 2017 | - | - | 1,345,126 |
| Interim | Capital | 2018 | 4.00p** | 19 June 2018 | 2,734,345 | - | - |
| Total Dividends Paid * | 2,734,345 | 3,433,037 | 14,403,818 |
* - £2,734,345 (30 June 2017: £3,433,037; 31 December 2017: £14,403,818) disclosed above differs to that shown in the Condensed Statement of Cash Flows of £2,150,853 (30 June 2017: £2,797,512; 31 December 2017: £11,584,256) due to £583,492 (30 June 2017: £635,525; 31 December 2017: £2,819,562) of new shares issued under the Company's Dividend Investment Scheme ("DIS").
** - The dividends were paid out of the Company's special distributable reserve.
Shareholders should note that the Board has decided to suspend the operation of the DIS scheme until further notice, as explained in the Chairman's Statement.
| As at | As at | As at | |
|---|---|---|---|
| 30 June 2018 | 30 June 2017 | 31 December 2017 | |
| (unaudited) | (unaudited) | (audited) | |
| Net assets | £57,214,173 | £52,824,374 | £58,411,640 |
| Number of shares in issue | 68,836,512 | 49,749,171 | 67,475,086 |
| Net asset value per share (pence) | 83.12p | 106.18p | 86.57p |
The most critical estimates, assumptions and judgements relate to the determination of the carrying value of investments at 'fair value through profit and loss' ("FVTPL"). All investments held by the Company are classified as FVTPL, and measured in accordance with the International Private Equity and Venture Capital Valuation ("IPEV") guidelines, as updated in December 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. Where the terms of a disposal state that consideration may be received at some future date and, subject to the conditionality and materiality of the amount of deferred consideration, an estimate of the fair value, discounted for the time value of money may be recognised through the Income Statement. In other cases, the proceeds will only be recognised once the right to receive payment is established and there is no reasonable doubt that payment will be received.
Unquoted investments are stated at fair value by the Directors in accordance with the following rules, which are consistent with the IPEV 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, each investment is considered as a whole on a 'unit of account' basis, alongside consideration of:
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.
A key judgement made in applying the above accounting policy relates to investments that are permanently impaired. Where the value of an investment has fallen permanently below cost, the loss is treated as a permanent impairment and as a realised loss, even though the investment is still held. The Board assesses the portfolio for such investments and, after agreement with the Investment Adviser, will agree the values that represent the extent to which an investment loss has become realised. This is based upon an assessment of objective evidence of that investment's future prospects, to determine whether there is potential for the investment to recover in value.
The methods of fair value measurement are classified into hierarchy based on the reliability of the information used to determine the valuation.
| 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 2017 | 274,849 | 10,652,375 | 454,089 | 20,102,740 | 31,484,053 |
| Purchases at cost Sales - proceeds - realised gains Unrealised (losses)/gains on |
- - - |
2,070,315 (139,762) 139,762 |
- - - |
986,557 (285,303) - |
3,056,872 (425,065) 139,762 |
| investments in the period | (83,288) | 858,673 | 4,572 | (656,427) | 123,530 |
| Valuation at 30 June 2018 | 191,561 | 13,581,363 | 458,661 | 20,147,567 | 34,379,152 |
| Book cost at 30 June 2018 Unrealised (losses)/gains at 30 June 2018 Permanent impairment of investments |
200,028 (8,467) - |
16,132,705 (415,942) (2,135,400) |
13,432 445,229 - |
19,620,144 591,810 (64,387) |
35,966,309 612,630 (2,199,787) |
| Valuation at 30 June 2018 | 191,561 | 13,581,363 | 458,661 | 20,147,567 | 34,379,152 |
| Gains on investments Less amounts recognised as unrealised |
- | 139,762 | - | 28,852 | 168,614 |
| gains in previous years | - | - | - | (28,852) | (28,852) |
| Realised gains based on carrying value at 31 December 2017 Net movement in unrealised (depreciation)/ |
- | 139,762 | - | - | 139,762 |
| appreciation in the period | (83,288) | 858,673 | 4,572 | (656,427) | 123,530 |
| (Losses)/gains on investments for the six months ended 30 June 2018 |
(83,288) | 998,435 | 4,572 | (656,427) | 263,292 |
Sales proceeds above of £425,065 are less than that shown in the Condensed Statement of Cash Flows of £3,183,830 by £2,758,765. This amount is cash proceeds received in the current period arising from the disposal of Gro-Group that occurred in the previous year.
There has been no significant change in the risk analysis as disclosed in Note 15 of the Financial Statements in the Company's Annual Report. The decrease in unrealised valuations of the loan stock investments above reflect the changes in the entitlement to loan premiums, and/or in the underlying enterprise value of the investee company. The decrease does not arise from assessments of credit or market risk upon these instruments.
Level 3 unquoted equity and loan investments are valued in accordance with IPEV guidelines as follows:
| as at 30 June 2018 (unaudited) £ |
as at 30 June 2017 (unaudited) £ |
as at 31 December 2017 (audited) £ |
|
|---|---|---|---|
| Valuation methodology | |||
| Cost (reviewed for impairment) | 453,607 | - | - |
| Discounted realisation proceeds | 5,313 | 4,897,767 | 5,313 |
| Net asset value | 229,783 | - | 229,783 |
| Recent investment price | 6,322,062 | 6,841,561 | 5,256,002 |
| Multiple of earnings, revenue or | |||
| gross margin, as appropriate | 27,176,826 | 25,873,376 | 25,718,106 |
| 34,187,591 | 37,612,704 | 31,209,204 |
| as at 30 June 2018 (unaudited) £ |
as at 30 June 2017 (unaudited) £ |
as at 31 December 2017 (audited) £ |
|
|---|---|---|---|
| OEIC Money market funds | 18,410,681 | 10,193,267 | 19,494,921 |
| Cash equivalents per Statement of Cash Flows Bank deposits that mature after three months |
18,410,681 2,000,000 |
10,193,267 2,000,000 |
19,494,921 2,000,000 |
| Current asset investments | 20,410,681 | 12,193,267 | 21,494,921 |
| Cash at bank | 2,608,920 | 2,690,122 | 2,847,849 |
On 13 August 2018, the Company made a new investment of £0.44 million into Rota Geek.
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 meetings provide 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. The Company releases Interim Management Statements, in respect of those quarters when it does not publish full or half-year accounts.
The Investment Adviser holds an annual shareholder event. The next event will be held on 5 February 2019 at the Royal Institute of British Architects in Central London. Shareholders were recently sent further details and an invitation to the event with their copy of the Mobeus VCT Newsletter.
Shareholders wishing to follow the Company's development can also visit the Company website at www.mig4vct.co.uk . The website includes up-to-date information on fund performance, including the most recent NAV, and dividends paid as well as publicly available information on the Company's portfolio of investments and copies of company reports. There is also a link to the London Stock Exchange's website at: www.londonstockexchange.com where shareholders can obtain details of the share price and latest NAV announcements etc.
| August 2018 | Half-Year Report for the six months ended 30 June 2018 to be announced and circulated to shareholders. |
|---|---|
| 31 December 2018 | Year-end. |
| 5 February 2019 | Shareholder event. |
| 10 May 2019 | Annual General Meeting. |
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, Link Asset Services at the address given on page 24.
Shareholders are encouraged to ensure that the Registrars have the correct up-to-date details for their accounts and to check that they have received all dividend payments. This is particularly important if a shareholder has recently moved house or changed their bank. We are aware that a number of dividends remain unclaimed by shareholders and whilst we will endeavour to contact them, we cannot guarantee that we will be able to do so if the Registrars do not have an up-todate postal address or email address.
As explained in the Chairman's Statement, the Dividend Investment Scheme is currently suspended for the time being following a successful Offer for Subscription, which raised £15 million and closed on 13 March 2018. The Board will consider reintroducing the Scheme at a future date.
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 you obtain the best price, you are strongly advised to contact the Company's stockbroker, Panmure Gordon, by telephoning 020 7886 2716 before agreeing a price with your 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 Link Shareholder Portal www.signalshares.com to change and update your preferences including changing 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 communications from the Company.
Tax legislation was introduced with effect from 1st January 2016 under the Organisation for Economic Co-operation and Development Common Reporting Standard for Automatic Exchange of Financial Account Information. The legislation requires investment trust companies to provide personal information to HMRC on certain investors who purchase shares. As an affected entity, the Company has 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, entered onto the share register from 1 January 2016 will be asked to provide the relevant information. Additionally, HMRC's policy on FATCA now means that, as a result of the restricted secondary market in VCT shares, the Company's shares are not considered to be "regularly traded". The Company is therefore also an affected entity for the purposes of this legislation and as to provide information annually to HMRC relating to shareholders who are resident for tax purposes in the United States.
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.
Details on what to do to combat boiler room fraud can be found on the Company's website.
For enquiries concerning the investment portfolio of the Company in general, please contact the Investment Adviser, Mobeus Equity Partners. To contact the Chairman or any member of the Board, please contact the Company Secretary, also at Mobeus Equity Partners, in the first instance at: [email protected].
The Registrars, Link Asset Services, may be contacted via their Shareholder Portal, post or telephone for queries relating to your shareholding including dividend payments, dividend mandate forms, change of address, etc.
Full contact details for each of Mobeus and Link Asset Services are included under Corporate Information on page 24.
The European Union's Packaged Retail Investment and Insurance based Products ("PRIIP"s) Regulations cover VCTs and require boards to prepare a key information document ("KID") in respect of their companies. Your Company's KID is available on the Company's website. Investors should note that the processes for calculating the risks, costs and potential returns in the KID are prescribed by EU law and the Company has no discretion over the format or content of the document. The illustrated performance returns in the KID cannot be guaranteed and, together with the prescribed cost calculation and risk categorisation, may not reflect figures for the Company derived using other methods. Accordingly, the Board recommends that investors also take account of information from other sources, including the Annual Report.
Christopher Moore (Chairman) Andrew Robson Helen Sinclair
Mobeus Equity Partners LLP 30 Haymarket London SW1Y 4EX
30 Haymarket London SW1Y 4EX
03707697 LEI No: 213800IFNJ65R8AQW943
Mobeus Equity Partners LLP 30 Haymarket London SW1Y 4EX Telephone: 020 7024 7600 www.mobeusequity.co.uk
www.mig4vct.co.uk
E-mail [email protected]
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
Link Asset Services The Registry 34 Beckenham Road Beckenham Kent BR3 4TU
Tel: +44 (0)371 644 0324
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 8PA
Mobeus Equity Partners LLP 30 Haymarket London SW1Y 4EX
020 7024 7600 www.mig4vct.co.uk
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