Interim / Quarterly Report • Jun 30, 2018
Interim / Quarterly Report
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Interim Report For the Six Months Ended 30 June 2018
Maven Income and Growth VCT 4 PLC (the Company) is a public limited company limited by shares. It was incorporated in Scotland on 26 August 2004 with company registration number SC272568. Its registered office is at Kintyre House, 205 West George Street, Glasgow G2 2LW. 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 is a small registered, internally managed alternative investment fund under the Alternative Investment Fund Managers Directive (AIFMD).
The Company aims to achieve long-term capital appreciation and generate income for Shareholders.
The Articles of Association (Articles) 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 2023 or, if later, at the Annual General Meeting following the fifth anniversary of the latest allotment of new shares.
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 (020 7647 8132).
The Company currently conducts its affairs so that the shares issued by it can be recommended by authorised financial advisers to ordinary retail investors in accordance with the rules of the Financial Conduct Authority (FCA) in relation to non-mainstream investment products and intends to continue to do so for the foreseeable future. The Company's shares are excluded from the FCA's restrictions which apply to nonmainstream investment products because they are shares in VCTs 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:
Telephone: 0300 123 2040
Website: www.actionfraud.police.uk
FCA
| Financial Highlights | 5 | ||
|---|---|---|---|
| Interim Review | 7 | ||
| Investment Portfolio Summary | 13 | ||
| Analysis of Unlisted and Quoted Portfolio | 16 | ||
| Financial Statements | |||
| Income Statement | 19 | ||
| Statement of Changes in Equity | 20 | ||
| Balance Sheet | 21 | ||
| Cash Flow Statement | 22 | ||
| Notes to the Financial Statements | 23 | ||
| General Information | |||
| Directors' Responsibility Statement | 25 | ||
| Glossary | 26 | ||
| Financial Highlights | 5 |
|---|---|
| Interim Review | 7 |
| Investment Portfolio Summary | 13 |
| Analysis of Unlisted and Quoted Portfolio | 16 |
| 30 June 2018 | 31 December 2017 | 30 June 2017 | |
|---|---|---|---|
| Net asset value (NAV) | £41,742,000 | £31,874,000 | £31,471,000 |
| NAV per Ordinary Share | 72.31p | 85.97p | 96.35p |
| Dividends paid per Ordinary Share to date* | 73.60p | 59.90p | 47.45p |
| NAV total return per Ordinary Share1* | 145.91p | 145.87p | 143.80p |
| Share price2 | 67.50p | 75.50p | 83.00p |
| Discount to NAV* | 6.65% | 12.18% | 13.86% |
| Ordinary Shares in issue | 57,726,293 | 37,074,635 | 32,664,502 |
1 Sum of current NAV per Ordinary Share and dividends paid to date (excluding initial tax relief).
2 Closing mid-market price (Source: London Stock Exchange).
*Definitions of these Alternative Performance Measures (APMs) can be found in the Glossary on page 26.
The above chart shows the composition of the NAV total return per Ordinary Share as at 31 December in each year, except for 2018 which is as at 30 June 2018.
Dividends that have been declared or proposed but not yet paid are included in the NAV at the balance sheet date.
The reduction in NAV per share since 31 December 2015 can be largely attributed to the payment of enhanced interim dividends during the period, which reflects a build-up of capital gains that were required to be distributed in order to maintain ongoing compliance with the VCT regulations. During that same period, NAV total return per share has continued to increase. The above chart shows NAV total return per Ordinary Share as at 31 December in each year, except 2018 which is as at 30 June 2018. Dividends that have been proposed but not yet paid are included in the NAV at the balance sheet date.
| Year ended 31 December | Payment date | Interim/final | Rate (p) | Annual rate (p) |
|---|---|---|---|---|
| 2006-2013 | 31.95 | |||
| 2014 | 26 September 2014 | Interim | 2.10 | |
| 5 June 2015 | Final | 2.90 | 5.00 | |
| 2015 | 25 September 2015 | Interim | 2.20 | |
| 6 May 2016 | Final | 3.05 | 5.25 | |
| 2016 | 30 September 2016 | Interim | 2.20 | |
| 26 May 2017 | Final | 3.05 | 5.25 | |
| 2017 | 14 July 2017 | First interim | 3.36 | |
| 15 September 2017 | Second interim | 3.70 | ||
| 30 November 2017 | Third interim | 5.39 | 12.45 | |
| 2018 | 13 April 2018 | Interim | 8.90 | |
| 22 June 2018 | Second interim | 4.80 | ||
| Total dividends paid | 73.60 |
The table shows dividend payments made to holders of Ordinary Shares only.
On 25 March 2013, S Shares were re-designated as Ordinary Shares with 804,028 bonus Ordinary Shares being issued. As a result, previous holders of S Shares held 1.1528 Ordinary Shares for every S Share held on the relevant record date, rounded down to the nearest whole share. On 30 September 2014, C Ordinary Shares were consolidated into Ordinary Shares. As a result, 3,863,876 C Ordinary Shares were re-designated as 3,077,827 Ordinary Shares, based on a conversion ratio of 0.7968 Ordinary Shares per C Ordinary Share, rounded down to the nearest whole share.
For the Six Months Ended 30 June 2018
| £'000 | Valuation 31 December 2017 % |
Net investment/ (disinvestment) £'000 |
Appreciation/ (depreciation) £'000 |
£'000 | Valuation 30 June 2018 % |
|
|---|---|---|---|---|---|---|
| Unlisted investments | ||||||
| Equities | 7,367 | 23.1 | 734 | 443 | 8,544 | 20.5 |
| Loan stock | 10,437 | 32.7 | (239) | (210) | 9,988 | 23.9 |
| 17,804 | 55.8 | 495 | 233 | 18,532 | 44.4 | |
| AIM/NEX investments Equities Listed investments |
1,086 | 3.4 | - | 184 | 1,270 | 3.0 |
| Equities | 23 | 0.1 | - | (3) | 20 | - |
| Investment trusts | 1,168 | 3.7 | (243) | (24) | 901 | 2.2 |
| Total investments | 20,081 | 63.0 | 252 | 390 | 20,723 | 49.6 |
| Other net assets | 11,793 | 37.0 | 9,226 | - | 21,019 | 50.4 |
| Net assets | 31,874 | 100.0 | 9,478 | 390 | 41,742 | 100.0 |
NAV total return at 30 June 2018 of 145.91p per share
NAV at 30 June 2018 of 72.31p per share after payment of interim dividends totalling 13.70p per share during the period
Offer for Subscription fully subscribed with £20 million of new capital raised
Net asset value increased to £41.74 million at the period end
Three new VCT qualifying private company holdings added to the portfolio, with a further two completed post the period end
Follow-on funding provided to four portfolio companies
Profitable realisation of Endura for 1.55 times cost
Proposal to merge with Maven Income and Growth VCT 2 PLC
Your Company has achieved positive performance in the first half of the financial year, with one realisation of note, being the sale of Endura to Pentland Brands. Performance across the portfolio as a whole was generally encouraging, with no discernible impact from the current political uncertainty, and a number of portfolio companies making good progress against the commercial milestones set at the time of the original investment.
Whilst NAV total return per share has increased from 145.87p at 31 December 2017 to 145.91p at 30 June 2018, Shareholders will note that the absolute NAV per share has declined from 85.97p to 72.31p. This is primarily as a consequence of the payment of enhanced interim dividends totalling 13.70p during the period, which reflected a build-up of distributable reserves and were required in order to maintain your Company's ongoing compliance with the VCT regulations. These payments represent a highly tax-efficient means of making distributions to Shareholders.
The recent successful fundraising, which closed at full capacity in April 2018, has increased the size of your Company significantly and provides additional resources to build a diverse and broadly based portfolio of attractive VCT qualifying assets that are capable of supporting long term growth in Shareholder value.
Against an objective to continue to grow and diversify the investee company portfolio, it is encouraging to note that three new private company holdings were added during the period, with follow-on funding also provided to four existing portfolio companies to support their continued growth. Given the pipeline of live opportunities, and level of new business introductions currently being assessed across Maven's nationwide network of offices, it is anticipated that there will be a healthy rate of new investment activity during the second half of the financial year. In addition, there are likely to be further follow-on investments as earlier stage portfolio companies develop and require additional capital to deliver their business plans.
The strategy remains to invest in carefully selected fast growing UK smaller companies, operating across a diverse range of industries that offer either compelling proprietary technology or a disruptive business model capable of scalable growth. Maven also has a preference for supporting a proven management team with a successful track record in a previous business. The expansion of Maven's investment team to include a number of executives with specific sector expertise, particularly in early stage technology, is benefiting the initial asset screening and selection process.
As a result of recent profitable realisations, and to ensure ongoing compliance with the VCT regulations, the Director's considered it necessary to distribute an enhanced level of interim dividends.
Accordingly, the first interim dividend in respect of the year ending 31 December 2018, of 8.90p per Ordinary Share, was paid on 13 April 2018 to Shareholders on the register at close of business on 16 March 2018. The second interim dividend, of 4.80p per Ordinary Share, was paid on 22 June 2018 to Shareholders on the register at close of business on 25 May 2018. The effect of paying these dividends was to reduce the NAV of the Company by the total cost of the distributions.
Since the Company's launch, and after receipt of the most recent dividend, Shareholders have received 73.60p per share in tax-free income. Decisions on future distributions will take into consideration the adequacy of reserves, the proceeds from any further realisations and the VCT qualifying levels of the portfolio, all of which are kept under close and regular review by the Board and the Manager.
On 22 September 2017, the Directors of your Company launched an Offer for Subscription for new Ordinary Shares of up to £15 million, with an over-allotment facility of up to £5 million.
On 24 April 2018, your Board was pleased to announce that the Offer closed at full subscription, having raised £20 million in total, including the full utilisation of the over-allotment facility. During the period, the Company issued 16,714,707 new Ordinary Shares under the Offer for the 2017/2018 tax year, with a further 3,513,830 new Ordinary Shares issued for the 2018/2019 tax year. This additional liquidity will enable the Manager to continue to expand the portfolio by investing in dynamic, earlier stage VCT qualifying businesses that have the potential to deliver an uplift in Shareholder value.
Your Company has in place a DIS, through which Shareholders may elect to have their dividend payments used to apply for new Ordinary Shares issued by the Company under the standing authority requested from Shareholders at Annual General Meetings. Shares issued under the DIS should qualify for VCT tax reliefs applicable for the tax year in which they are allotted.
Shareholders who have not previously applied to participate in the DIS and who wish to do so in respect of future dividends, should ensure that a mandate form, or CREST instruction if appropriate, is submitted to the Registrar (Link Asset Services). Terms & conditions and full details of the scheme are available from the Company's website, together with a mandate form for participation in the DIS. Alternatively a DIS election can be made through the Link Asset Services share portal at www.signalshares.com.
During the period, the majority of the private companies in the investee portfolio have performed in line with expectations, despite the continued uncertainty within the UK economy surrounding the UK's intended exit from the European Union. Although there are, at present, no specific issues to highlight, the Manager will continue to monitor the situation closely.
It is encouraging to report on the continued improvement in trading within the oil & gas portfolio since the year end. After three years of exceptionally challenging market conditions, the companies with exposure to the sector are reporting an upturn in activity and profitability compared to the prior year, with forward order books projecting a continuation of this trend.
The improvement in financial and operational performance reflects the cost cutting and restructuring measures implemented by portfolio companies, with close support from Maven executives, at the onset of the downturn. As a result, each investee company is operating with a lean cost structure and either modest or no external debt, which should provide stability assuming that the recovery continues to strengthen.
Elsewhere in the portfolio, a number of the established private company holdings have had their valuations increased to reflect improved performance.
Cursor Controls, a global leader in the design and manufacture of trackballs, trackpads and keyboards for use in specialist industrial applications, including health, defence and marine, continues to deliver good levels of organic growth. Performance was enhanced by the acquisition of Belgium distributor NSI in April 2016. The enlarged group continues to trade well, with further commercial and operational synergies identified to support future growth and profitability. The balance sheet remains strong and the business continues to pay down its term debt.
Diversified renewable energy services group GEV has experienced strong growth over the past year, particularly in the US through its largest division GEV Wind Power, which specialises in wind turbine blade maintenance. The US market opportunity is sizeable and the business is well positioned to capitalise on this over the coming year, having secured contracts with leading providers including MHI Vestas, Eon, Siemens and Invenergy. The management team is also forecasting strong performance in the UK and Europe in the year ahead.
In 2013, your Company participated in a syndicate, led by Penta Capital, to invest in Global Risk Partners, backing a highly experienced management team to pursue a buy & build strategy in the Lloyd's speciality insurance broking and managing general agent markets. Since the investment was made, significant progress has been achieved, including the addition of a commercial and private client division as well as the completion and integration of 28 separate acquisitions. The business is now understood to be one of the ten largest insurance brokers in the UK, and is continuing to grow. There is a strong pipeline of acquisition opportunities currently under review and further increases in profitability anticipated to feed through from margin improvement.
Since Maven clients' investment in Just Trays in 2014, the UK's leading designer and manufacturer of shower trays and related accessories has delivered steady performance. In line with a core business objective of new product development and innovation, the company has expanded its customer base and production volumes, as well as extending its product range, and was recently awarded a second 'Gold Award for Innovation in Design' at the prestigious Designer Kitchen and Bathroom Awards.
Vodat Communications supplies data networks, IP telephony, wi-fi solutions and fixed line connectivity to retail customers, with a solid blue chip customer base including Fat Face, Beaverbrooks and Welcome Break. Maven clients supported the management buy-out in 2012 and, since investment, the business has achieved positive growth and added a number of new customer contracts. In November 2017, Vodat completed the complementary acquisition of Axonex, a provider of specialist IT solutions, services and support specialising in unified communications, data centre, security and network infrastructure. The acquisition, which was funded through cash and bank debt, has created a number of cross selling opportunities to help deliver further growth for the enlarged group.
In addition, follow-on funding was provided to Growth Capital Ventures, ITS Technology, QikServe and The GP Service. Given their stage of development, the requirement to provide further capital to earlier stage qualifying companies was anticipated at the time of initial investment and was reflected in the reduced total commitment size by the Maven VCTs, and by the strategy of co-investing alongside other VCT houses. In terms of valuation, all new development capital investments will continue to be held at cost, or cost less provision, until there is clear evidence of measurable progress or a quantifiable event from which a new valuation level can be validated.
The investment trust portfolio has continued to trade well and generate income. This is particularly important in light of the restrictions introduced by the Finance Act 2016, which prevents non-qualifying investments in traditional instruments such as treasury bills or other government securities for liquidity management purposes. With increased cash resources now available following the fund raising, 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 permitted income generating investment options.
As well as reflecting the positive trading performance highlighted above, your Board has also fully provided against the value of the holding in Lambert Contracts prior to it being placed into administration. A full provision has also been taken against the value of the holding in Chic Lifestyle.
During the period, your Company provided development capital to three VCT qualifying private companies operating in growth markets:
The following investments have been completed during the reporting period:
| Investment cost |
||||
|---|---|---|---|---|
| Date | Sector | £'000 | Website | |
| Unlisted | ||||
| WaterBear Education Limited | February 2018 | Support services | 120 | www.waterbear.org.uk |
| QikServe Limited | March 2018 | Software & computer services |
105 | www.qikserve.com |
| Lending Works Limited | April 2018 | Software & computer services |
299 | www.lendingworks.co.uk |
| BioAscent Discovery Limited | June 2018 | Pharmaceuticals & biotechnology |
199 | www.bioascent.com |
| Growth Capital Ventures Limited | June 2018 | Investment companies | 92 | www.growthcapitalventures.co.uk |
| ITS Technology Group Limited | June 2018 | Telecommunication services |
221 | www.itstechnologygroup.com |
| The GP Service (UK) Limited | June 2018 | Health | 160 | www.thegpservice.co.uk |
| Total unlisted | 1,196 | |||
| Private equity investment trusts1 | ||||
| Apax Global Alpha Limited | June 2018 | Investment companies | 103 | www.apaxglobalalpha.com |
| F&C Private Equity Trust PLC | June 2018 | Investment companies | 123 | www.fandc.com |
| Princess Private Equity Holding Limited |
June 2018 | Investment companies | 119 | www.princess-privateequity.net |
| Total private equity investment trusts | 345 | |||
| Real estate investment trusts1 | ||||
| Custodian REIT PLC | May 2018 | Investment companies | 71 | www.custodianreit.com |
| Schroder REIT Limited | May 2018 | Investment companies | 212 | www.srei.co.uk |
| Target Healthcare REIT Limited | May 2018 | Investment companies | 96 | www.targethealthcarereit.co.uk |
| Regional REIT Limited | June 2018 | Investment companies | 89 | www.regionalreit.com |
| Total real estate investment trusts | 468 | |||
| Total investments | 2,009 |
Part of liquidity management strategy.
At the period end, the portfolio stood at 69 unlisted and quoted investments, at a total cost of £22.35 million.
In February 2018, the holding in Endura was exited for a total return of 1.55 times cost over the holding period. Maven clients first invested in Endura, a leading designer and manufacturer of high performance cycling apparel and accessories, in 2014 as part of a syndicate. The company focusses on the mid to premium end of the market and sells its products in over thirty countries worldwide with the support of a number of world class sponsors. The sale to UK-based Pentland Brands, which has a stable of global sports, outdoor and fashion brands including Berghaus, Canterbury, Speedo and Ellesse, represents an excellent strategic fit for Endura and will enable it to continue to expand its global brand and market presence.
In January 2018, following the sale of Elite Insurance, its key trading subsidiary, Torridon (Gibraltar) repaid all of the outstanding Maven client loan notes.
As at the date of this report, the Manager is engaged with several 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.
| Year first invested |
Complete/ partial exit |
Cost of shares disposed of £'000 |
Value at 31 December 2017 £'000 |
Sales proceeds £'000 |
Realised gain/(loss) £'000 |
Gain/(loss) over 31 December 2017 value £'000 |
|
|---|---|---|---|---|---|---|---|
| Unlisted | |||||||
| CHS Engineering Services Limited | 2010 | Partial | 2 | - | 2 | - | 2 |
| Endura Limited | 2014 | Complete | 229 | 343 | 355 | 126 | 12 |
| SPS (EU) Holdings Limited | 2014 | Complete | - | - | 18 | 18 | 18 |
| Torridon (Gibraltar) Limited1 | 2010 | Partial | 335 | 359 | 326 | (9) | (33) |
| Total unlisted | 566 | 702 | 701 | 135 | (1) | ||
| Private equity investment trusts2 | |||||||
| Apax Global Alpha Limited | 2016 | Complete | 99 | 113 | 103 | 4 | (10) |
| British Land Company PLC | 2016 | Complete | 99 | 114 | 107 | 8 | (7) |
| F&C Private Equity Trust PLC | 2016 | Partial | 103 | 119 | 122 | 19 | 3 |
| Princess Private Equity Holding Limited | 2016 | Complete | 98 | 129 | 119 | 21 | (10) |
| Total private equity investment trusts | 399 | 475 | 451 | 52 | (24) | ||
| Real estate investment trusts2 | |||||||
| Custodian REIT PLC | 2016 | Partial | 100 | 109 | 108 | 8 | (1) |
| Regional REIT Limited | 2016 | Partial | 99 | 94 | 88 | (11) | (6) |
| Schroder REIT Limited | 2018 | Partial | 204 | 207 | 212 | 8 | 5 |
| Standard Life Investment Property Income Trust Limited |
2016 | Complete | 99 | 105 | 101 | 2 | (4) |
| Target Healthcare REIT Limited | 2016 | Partial | 98 | 98 | 96 | (2) | (2) |
| Total real estate investment trusts | 600 | 613 | 605 | 5 | (8) | ||
| Total disposals | 1,565 | 1,790 | 1,757 | 192 | (33) |
The table below gives details of all realisations achieved, and deferred considerations received, during the reporting period:
1 Proceeds exclude yield and redemption premiums received, which are disclosed as revenue for financial reporting purposes.
2 Part of liquidity management strategy.
Since 30 June 2018, two new private company holdings have been added to the portfolio.
optical waveguides that are used to minimise energy dissipation in a wide range of applications in the telecom, datacom and mobile network markets. Optoscribe's innovative techniques are able to form these guides in precise 3D orientations, and simplify manufacturing processes by delivering highly efficient and scalable products. The barriers to entry into this market are significant and, therefore, the company's existing intellectual property (including patents) and technical know-how provides a defensible market position. The investment will enable the management team to scale manufacturing capacity and will support further business development activity.
In addition, follow-on development capital funding was provided to Whiterock to assist with its further growth.
The principal risks and uncertainties facing the Company were set out in full in the Strategic Report contained within the 2017 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 and Risk Committees 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 always 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 continue to be bought back at prices representing a discount of up to 15% of the prevailing NAV per share. During the period under review, 250,000 share were bought back at a total cost of £189,000.
As previously outlined, VCT legislation continues to move towards supporting higher risk investments, with recent changes including the introduction of a 'risk to capital' based test, increased measures designed to assist the financing of knowledge-intensive companies and certain sector exclusions. The Finance Act 2018, which received Royal Assent in March 2018, introduced a new requirement that, for accounting dates from 6 April 2019 (from 31 December 2019 in the case of the Company) the percentage of funds a VCT must hold in qualifying investments will increase from 70% to 80%. In order to assist with this, the add-back period on sales will be increased from six to twelve months with effect from 6 April 2019. The Board and the Manager will continue to consider these developments when planning future strategy.
The General Data Protection Regulation came into force on 25 May 2018, replacing the Data Protection Act 1998. This regulation enforces the principle of 'privacy by design and by default' and enshrines new rights for individuals, including the right to be forgotten and to data portability. The Manager has worked with the third parties that process Shareholders' personal data to ensure that their rights under the new regulation are respected.
On 13 September 2018, the Company announced that it had entered formal negotiations on a proposed merger with Maven Income and Growth VCT 2 PLC. A circular relating to this is expected to be published in October 2018, prior to the convening of a general meeting at which Shareholders' approval will be sought on the proposal.
Based on the current level of new transaction activity, it is expected that a meaningful number of new investments will be completed during the second half of the financial year, consistent with the Company's strategy of further expanding and diversifying the portfolio. The success of the recent Offer for Subscription has provided further funds to ensure the delivery of this strategy, and your Board and the Manager remain committed to building a large and broadly based portfolio of valuable private companies that are capable of delivering consistently positive Shareholder returns in the years ahead.
On behalf of the Board Maven Capital Partners UK LLP Secretary
14 September 2018
As at 30 June 2018
| % of equity held |
|||||
|---|---|---|---|---|---|
| Investment | Valuation £'000 |
Cost £'000 |
% of total assets |
% of equity held |
by other clients¹ |
| Unlisted | |||||
| Ensco 969 Limited (trading as DPP) | 1,202 | 1,060 | 2.8 | 4.6 | 29.9 |
| Vodat Communications Group Limited | 1,069 | 592 | 2.5 | 4.4 | 22.4 |
| GEV Holdings Limited | 986 | 672 | 2.4 | 4.3 | 31.7 |
| Glacier Energy Services Holdings Limited | 957 | 957 | 2.3 | 3.7 | 23.9 |
| JT Holdings (UK) Limited (trading as Just Trays) | 796 | 522 | 1.9 | 5.8 | 24.2 |
| CatTech International Limited | 779 | 498 | 1.9 | 4.8 | 25.3 |
| CB Technology Group Limited | 730 | 559 | 1.7 | 11.4 | 67.6 |
| Maven Co-invest Endeavour Limited Partnership (invested in Global Risk Partners)² |
720 | 360 | 1.7 | 7.0 | 93.0 |
| Fathom Systems Group Limited | 681 | 681 | 1.6 | 7.7 | 52.3 |
| Maven Capital (Marlow) Limited | 650 | 650 | 1.6 | - | 100.0 |
| Castlegate 737 Limited (trading as Cursor Controls) | 645 | 299 | 1.5 | 3.0 | 44.5 |
| Horizon Cremation Limited | 626 | 626 | 1.5 | 3.4 | 18.8 |
| ITS Technology Group Limited | 619 | 619 | 1.5 | 4.9 | 30.8 |
| HCS Control Systems Group Limited | 603 | 836 | 1.4 | 6.8 | 29.7 |
| Flow UK Holdings Limited | 598 | 598 | 1.4 | 7.3 | 27.7 |
| The GP Service (UK) Limited | 584 | 558 | 1.4 | 7.7 | 41.8 |
| R&M Engineering Group Limited | 581 | 774 | 1.4 | 8.7 | 61.9 |
| TC Communications Holdings Limited | 554 | 777 | 1.3 | 8.1 | 21.9 |
| RMEC Group Limited | 463 | 463 | 1.1 | 2.9 | 47.2 |
| QikServe Limited | 453 | 453 | 1.1 | 3.1 | 15.8 |
| Rockar 2016 Limited (trading as Rockar) | 403 | 403 | 1.0 | 2.2 | 13.4 |
| Attraction World Holdings Limited | 400 | 98 | 1.0 | 6.2 | 32.2 |
| ADC Biotechnology Limited | 338 | 338 | 0.8 | 2.5 | 12.4 |
| Contego Solutions Limited (trading as NorthRow) | 323 | 323 | 0.8 | 2.8 | 12.8 |
| Martel Instruments Holdings Limited | 310 | 347 | 0.7 | 4.2 | 40.0 |
| Lending Works Limited | 299 | 299 | 0.7 | 2.8 | 16.8 |
| Growth Capital Ventures Limited | 252 | 241 | 0.6 | 5.8 | 32.7 |
| eSafe Systems Limited | 224 | 224 | 0.5 | 4.3 | 27.8 |
| Torridon (Gibraltar) Limited | 221 | 347 | 0.5 | 3.7 | 36.3 |
| ISN Solutions Group Limited | 207 | 327 | 0.5 | 4.6 | 50.4 |
| BioAscent Discovery Limited | 199 | 199 | 0.5 | 5.0 | 35.0 |
| Cognitive Geology Limited | 159 | 159 | 0.4 | 2.0 | 10.5 |
As at 30 June 2018
| Investment (continued) | Valuation £'000 |
Cost £'000 |
% of total assets |
% of equity held |
% of equity held by other clients¹ |
|---|---|---|---|---|---|
| Unlisted (continued) | |||||
| Whiterock Group Limited | 159 | 159 | 0.4 | 3.5 | 21.5 |
| ebb3 Limited | 150 | 150 | 0.4 | 3.5 | 21.0 |
| Curo Compensation Limited | 149 | 149 | 0.4 | 1.9 | 13.5 |
| WaterBear Education Limited | 120 | 120 | 0.3 | 4.5 | 39.2 |
| Lawrence Recycling and Waste Management Limited |
109 | 770 | 0.3 | 8.4 | 53.6 |
| D Mack Limited | 80 | 504 | 0.2 | 4.8 | 25.2 |
| Space Student Living Limited | 67 | - | 0.2 | 10.6 | 69.4 |
| FLXG Scotland Limited (formerly Flexlife Group Limited) |
65 | 298 | 0.2 | 1.9 | 12.4 |
| Other unlisted investments | 2 | 2,411 | - | ||
| Total unlisted | 18,532 | 20,420 | 44.4 | ||
| Quoted | |||||
| Ideagen PLC | 687 | 184 | 1.7 | 0.3 | 1.5 |
| Byotrol PLC | 187 | 197 | 0.4 | 1.2 | 2.4 |
| Oxford Metrics PLC (formerly OMG PLC) | 177 | 80 | 0.4 | 0.2 | - |
| Plastics Capital PLC | 94 | 85 | 0.2 | 0.2 | 1.2 |
| Vectura Group PLC | 87 | 100 | 0.2 | - | - |
| Angle PLC | 25 | 27 | 0.1 | - | 0.2 |
| esure Group PLC | 20 | - | - | - | - |
| Gordon Dadds Group PLC (formerly Work Group PLC) |
10 | 151 | - | - | 0.1 |
| Deltex Medical Group PLC | 2 | 33 | - | 0.1 | - |
| Other quoted investments | 1 | 221 | - | ||
| Total quoted | 1,290 | 1,078 | 3.0 |
As at 30 June 2018
| Investment (continued) | Valuation £'000 |
Cost £'000 |
% of total assets |
% of equity held |
% of equity held by other clients¹ |
|---|---|---|---|---|---|
| Private equity investment trusts | |||||
| HgCapital Trust PLC | 137 | 100 | 0.4 | - | 0.1 |
| Princess Private Equity Holding Limited | 121 | 120 | 0.4 | - | 0.1 |
| F&C Private Equity Investment Trust PLC | 121 | 123 | 0.3 | 0.1 | 0.3 |
| Apax Global Alpha Limited | 104 | 103 | 0.1 | - | 0.1 |
| Standard Life Private Equity Trust PLC | 54 | 43 | 0.1 | - | - |
| Total private equity investment trusts | 537 | 489 | 1.3 | ||
| Real estate investment trusts | |||||
| Schroder REIT Limited | 106 | 107 | 0.2 | - | 0.2 |
| Target Healthcare REIT Limited | 97 | 96 | 0.2 | - | 0.2 |
| Regional REIT Limited | 88 | 89 | 0.2 | - | 0.2 |
| Custodian REIT PLC | 73 | 71 | 0.3 | - | 0.2 |
| Total real estate investment trusts | 364 | 363 | 0.9 | ||
| Total investments | 20,723 | 22,350 | 49.6 |
¹ Other clients of Maven Capital Partners UK LLP.
² Investment managed by Penta Capital LLP of which a Director of the Company, Steven Scott, is a partner.
As at 30 June 2018
| Industry sector | Unlisted valuation £'000 |
% | Quoted valuation £'000 |
% | Total valuation £'000 |
% |
|---|---|---|---|---|---|---|
| Support services | 4,066 | 19.7 | 35 | 0.2 | 4,101 | 19.9 |
| Software & computer services | 2,196 | 10.6 | 865 | 4.2 | 3,061 | 14.8 |
| Energy services | 2,828 | 13.6 | - | - | 2,828 | 13.6 |
| Telecommunication services | 1,688 | 8.1 | - | - | 1,688 | 8.1 |
| Diversified industrials | 1,667 | 8.0 | - | - | 1,667 | 8.0 |
| Investment companies | 252 | 1.2 | 901 | 4.4 | 1,153 | 5.6 |
| Electronic & electrical equipment | 1,040 | 5.0 | - | - | 1,040 | 5.0 |
| Insurance | 940 | 4.5 | 20 | - | 960 | 4.5 |
| Household goods & textiles | 796 | 3.9 | 94 | 0.5 | 890 | 4.4 |
| Real estate | 650 | 3.1 | - | - | 650 | 3.1 |
| Engineering & machinery | 645 | 3.1 | - | - | 645 | 3.1 |
| Pharmaceuticals & biotechnology | 537 | 2.6 | 87 | 0.4 | 624 | 3.0 |
| Health | 584 | 2.8 | 2 | - | 586 | 2.8 |
| Automobiles & parts | 484 | 2.4 | - | - | 484 | 2.4 |
| Chemicals | - | - | 187 | 0.9 | 187 | 0.9 |
| Technology | 159 | 0.8 | - | - | 159 | 0.8 |
| Total | 18,532 | 89.4 | 2,191 | 10.6 | 20,723 | 100.0 |
As at 30 June 2018
| Deal type | Number | Valuation £'000 |
% |
|---|---|---|---|
| Unlisted | |||
| Management buy-out | 12 | 7,091 | 34.2 |
| Development capital - post November 20151 | 17 | 5,852 | 28.2 |
| Buy-in/management buy-out | 3 | 2,023 | 9.8 |
| Replacement capital | 4 | 2,007 | 9.7 |
| Management buy-in | 1 | 730 | 3.5 |
| Buy & build | 1 | 720 | 3.5 |
| Development capital - pre November 20151 | 10 | 109 | 0.5 |
| Total unlisted | 48 | 18,532 | 89.4 |
| Quoted | |||
| AIM/NEX | 12 | 1,290 | 6.2 |
| Listed | 9 | 901 | 4.4 |
| Total quoted | 21 | 2,191 | 10.6 |
| Total unlisted and quoted | 69 | 20,723 | 100.0 |
1 The Finance (No. 2) Act 2015 introduced new qualifying rules governing the types of investment that VCTs can make.
| Income Statement | 19 |
|---|---|
| Statement of Changes in Equity | 20 |
| Balance Sheet | 21 |
| Cash Flow Statement | 22 |
| Notes to the Financial Statements | 23 |
For the Six Months Ended 30 June 2018
| Six months ended 30 June 2018 | (unaudited) | Six months ended 30 June 2017 (unaudited) |
Year ended 31 December 2017 (audited) |
||||||
|---|---|---|---|---|---|---|---|---|---|
| Revenue £'000 |
Capital £'000 |
Total £'000 |
Revenue £'000 |
Capital £'000 |
Total £'000 |
Revenue £'000 |
Capital £'000 |
Total £'000 |
|
| Gains on investments | - | 390 | 390 | - | 173 | 173 | - | 984 | 984 |
| Income from investments | 325 | - | 325 | 469 | - | 469 | 1,182 | - | 1,182 |
| Other income | 9 | - | 9 | 5 | - | 5 | 11 | - | 11 |
| Investment management fees |
(92) | (367) | (459) | (85) | (339) | (424) | (201) | (806) | (1,007) |
| Other expenses | (124) | - | (124) | (116) | - | (116) | (283) | - | (283) |
| Net return on ordinary activities before taxation |
118 | 23 | 141 | 273 | (166) | 107 | 709 | 178 | 887 |
| Tax on ordinary activities | 9 | 9 | - | (23) | 23 | - | (128) | 128 | - |
| Return attributable to Equity Shareholders |
109 | 32 | 141 | 250 | (143) | 107 | 581 | 306 | 887 |
| Earnings per share (pence) | 0.23 | 0.07 | 0.30 | 0.76 | (0.44) | 0.32 | 1.75 | 0.92 | 2.67 |
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 earnings per share figures are relevant. The basic and diluted earnings per share are, therefore, identical.
For the Six Months Ended 30 June 2018
| Six months ended 30 June 2018 (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 31 December 2017 | 3,708 | 22,745 | (2,111) | (1,825) | 8,271 | 384 | 702 | 31,874 |
| Net return | - | - | (166) | 198 | - | - | 109 | 141 |
| Dividends paid | - | - | (6,545) | - | - | - | - | (6,545) |
| Repurchase and cancellation of shares | (25) | - | - | - | (189) | 25 | - | (189) |
| Net proceeds of share issue | 2,023 | 13,947 | - | - | - | - | - | 15,970 |
| Net proceeds of DIS issue | 67 | 424 | - | - | - | - | - | 491 |
| At 30 June 2018 | 5,773 | 37,116 | (8,822) | (1,627) | 8,082 | 409 | 811 | 41,742 |
| Six months ended 30 June 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 31 December 2016 | 3,290 | 19,449 | (1,571) | 1,874 | 8,528 | 354 | 644 | 32,568 |
| Net return | - | - | (13) | (130) | - | - | 250 | 107 |
| Dividends paid | - | - | (934) | - | - | - | (66) | (1,000) |
| Repurchase and cancellation of shares | (23) | - | - | - | (204) | 23 | - | (204) |
| At 30 June 2017 | 3,267 | 19,449 | (2,518) | 1,744 | 8,324 | 377 | 828 | 31,471 |
| Year ended 31 December 2017 (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 31 December 2016 | 3,290 | 19,449 | (1,571) | 1,874 | 8,528 | 354 | 644 | 32,568 |
| Net return | - | - | 4,005 | (3,699) | - | - | 581 | 887 |
| Dividends paid | - | - | (4,545) | - | - | - | (523) | (5,068) |
| Repurchase and cancellation of shares | (30) | - | - | - | (257) | 30 | - | (257) |
| Net proceeds of share issue | 437 | 3,211 | - | - | - | - | - | 3,648 |
| Net proceeds of DIS issue | 11 | 85 | - | - | - | - | - | 96 |
| At 31 December 2017 | 3,708 | 22,745 | (2,111) | (1,825) | 8,271 | 384 | 702 | 31,874 |
As at 30 June 2018
| 30 June 2018 (unaudited) £'000 |
30 June 2017 (unaudited) £'000 |
31 December 2017 (audited) £'000 |
|
|---|---|---|---|
| Fixed assets | |||
| Investments at fair value through profit or loss | 20,723 | 28,942 | 20,081 |
| Current assets | |||
| Debtors | 939 | 422 | 456 |
| Cash | 20,385 | 2,151 | 11,587 |
| 21,324 | 2,573 | 12,043 | |
| Creditors | |||
| Amounts falling due within one year | (305) | (44) | (250) |
| Net current assets | 21,019 | 2,529 | 11,793 |
| Net assets | 41,742 | 31,471 | 31,874 |
| Capital and reserves | |||
| Called up share capital | 5,773 | 3,267 | 3,708 |
| Share premium account | 37,116 | 19,449 | 22,745 |
| Capital reserve - realised | (8,822) | (2,518) | (2,111) |
| Capital reserve - unrealised | (1,627) | 1,744 | (1,825) |
| Special distributable reserve | 8,082 | 8,324 | 8,271 |
| Capital redemption reserve | 409 | 377 | 384 |
| Revenue reserve | 811 | 828 | 702 |
| Net assets attributable to Ordinary Shareholders | 41,742 | 31,471 | 31,874 |
| Net asset value per Ordinary Share (pence) | 72.31 | 96.35 | 85.97 |
The Financial Statements were approved by the Board of Directors on 14 September 2018 and were signed on its behalf by:
Ian Cormack Director
For the Six Months Ended 30 June 2018
| Six months ended 30 June 2018 (unaudited) £'000 |
Six months ended 30 June 2017 (unaudited) £'000 |
Year ended 31 December 2017 (audited) £'000 |
|
|---|---|---|---|
| Net cash flows from operating activities | (777) | (783) | (1,320) |
| Cash flows from investing activities | |||
| Investment income received | 277 | 400 | 1,072 |
| Deposit interest received | 9 | 5 | 11 |
| Purchase of investments | (1,766) | (964) | (2,615) |
| Sale of investments | 1,413 | 303 | 11,626 |
| Net cash flows from investing activities | (67) | (256) | 10,094 |
| Cash flows from financing activities | |||
| Equity dividends paid | (6,545) | (1,000) | (5,068) |
| Issue of Ordinary Shares | 16,376 | - | 3,744 |
| Repurchase of Ordinary Shares | (189) | (204) | (257) |
| Net cash flows from financing activities | 9,642 | (1,204) | (1,581) |
| Net increase/(decrease) in cash | 8,798 | (2,243) | 7,193 |
| Cash at beginning of period | 11,587 | 4,394 | 4,394 |
| Cash at end of period | 20,385 | 2,151 | 11,587 |
The financial information for the six months ended 30 June 2018 and the six months ended 30 June 2017 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 31 December 2017, 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 account.
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 as a dividend.
| 3. Return per Ordinary Share | Six months ended 30 June 2018 |
|---|---|
| The returns per share have been based on the following figures: | |
| Weighted average number of Ordinary Shares | 48,156,412 |
| Revenue return | £109,000 |
| Capital return | £32,000 |
| Total return | £141,000 |
Directors' Responsibility Statement 25 Glossary 26
The Directors confirm that, to the best of their knowledge:
By order of the Board Maven Capital Partners UK LLP Secretary
14 September 2018
General Information
| Alternative Performance Measures (APMs) |
Measures of performance that are in addition to the earnings reported in the Financial Statements. The APMs used by the Company are marked * in this Glossary. The table in the Financial Highlights section on page 5 shows the movement in net asset value and NAV total return per Ordinary Share over the past three financial periods, and shows the dividends declared in respect of each of the past three financial periods and on a cumulative basis since inception. |
|---|---|
| Cumulative dividends paid* | The total amount of both capital and income distributions paid since the launch of the Company. |
| Discount /premium to NAV* | A discount is the percentage by which the mid-market price of an investment is lower than the net asset value per Ordinary Share. A premium is the percentage by which the mid-market price per share of an investment exceeds the net asset value per Ordinary Share. |
| Distributable reserves | Comprises capital reserve (realised), revenue reserve and special distributable reserve. |
| Dividend per Ordinary Share | The total of all dividends per Ordinary Share paid by the Company in respect of the year. |
| Earnings per Ordinary Share (EPS) |
The net income after tax of the Company divided by the weighted average number of shares in issue during the year. In a venture capital trust this is made up of revenue EPS and capital EPS. |
| Ex-dividend date (XD date) | The date set by the London Stock Exchange, normally being the business day preceeding the record date. |
| Index or indices | A market index calculates the average performance of its constituents, normally on a weighted basis. It provides a means of assessing the overall state of the economy and provides a comparison against which the performance of individual investments can be assessed. |
| Investment income* | Income from investments as reported in the Income Statement. |
| NAV per Ordinary Share | Net assets divided by the number of Ordinary Shares in issue. |
| NAV total return per Ordinary Share* |
Net assets divided by the number of Ordinary Shares in issue, plus cumulative dividends paid to date. |
| Net assets attributable to Ordinary Shareholders or Shareholders' funds (NAV) |
Total assets less current and long-term liabilities. |
| Operational expenses* | The total of investment management fees and other expenses as reported in the Income Statement. |
| Realised gains/losses | The profit/loss on the sale of investments during the year. |
| Record date | The date on which an investor needs to be holding a share in order to qualify for a forthcoming dividend. |
| Revenue reserves | The total of undistributed revenue earnings from prior years. This is available for distribution to Shareholders by way of dividend payments. |
| Total return | The theoretical return including reinvesting each dividend in additional shares in the Company at the current mid-market price on the day that the shares go ex-dividend. The NAV total return involves investing the same net dividend at the NAV of the Company on the ex dividend date. |
| Unrealised gains/losses | The profit/loss on the revaluation of the investment portfolio at the end of the year. |
| Directors | Ian Cormack (Chairman) Malcolm Graham-Wood Bill Nixon Steven Scott |
|---|---|
| Manager, Secretary and Principal Place of Business |
Maven Capital Partners UK LLP Kintyre House 205 West George Street Glasgow G2 2LW Telephone: 0141 306 7400 E-mail: [email protected] |
| Registered Office | Kintyre House 205 West George Street Glasgow G2 2LW |
| Registered in Scotland | Company Registration Number: SC272568 Legal Entity Identifier: 213800WSH2TNL9NG5I06 TIDM: MAV4 ISIN: GB00B043QW84 |
| Website | www.mavencp.com/migvct4 |
| Registrar | Link Asset Services The Registry 34 Beckenham Road Beckenham Kent BR3 4TU |
| Website: www.linkassetservices.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 020 7647 8132 |
| VCT Adviser | Phillip Hare & Associates LLP |
Maven Capital Partners UK LLP Kintyre House 205 West George Street Glasgow G2 2LW
Authorised and Regulated by The Financial Conduct Authority
Tel: 0141 306 7400
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