BC12.L Regulatory News (BC12)

1 December 2017

BETTER CAPITAL PCC LIMITED

(the "Company")

INTERIM RESULTS UPDATE

Better Capital PCC Limited announces its 2017 interim results for both the 2009 Cell and the 2012 Cell.

2009 Cell Interim Results

· NAV at 30 September 2017: £40.4 million, NAV at 31 March 2017: £260.3 million, NAV at 30 September 2016: £240.0 million

· £210.0 million total capital raised

· £203.8 million net proceeds invested in Fund I

· £288.8 million/137.5 per cent. cumulative distributions to date

· 60.55 per cent. return from NAV growth and distributions since inception

· 9 total platform investments

· 10 follow-on investments

· 4 good realisations - Gardner, Santia, ATH Coal, Calyx Managed Services

· 2 poor realisations - Reader's Digest, Fairline

· 3 remaining assets - m-hance, Omnico, SPOT2

· 6.0 years average holding period of remaining portfolio companies

· £1.1 million3 net debt across Fund I portfolio companies

1 Based on the weighted average issue price of ordinary shares and net of share issue costs, since inception.

2 SPOT, a minority holding in Fund I

3 SPOT net debt (£34.1m) excluded from net debt figure

2012 Cell Interim Results

· NAV at 30 September 2017: £144.3 million, NAV at 31 March 2017: £172.3 million, NAV at 30 September 2016: £211.9 million

· £355.5 million total capital raised

· £347.4 million net proceeds invested in Fund II

· £48.4 million/13.6 per cent. cumulative distributions to date

· 9.0 per cent. Better Capital 2012 Shares held by Fund II

· 39.7 per cent. value decline combined NAV and distributions since inception1

· 6 total platform investments

· 1 follow-on investment

· 1 good realisation -iNTERTAIN

· 2 partial losses - City Link, Jaeger

· 3 remaining assets - Everest, SPOT, Northern Aerospace

· 3.8 years average holding period of portfolio companies

· £26.5 million2 net debt across Fund II portfolio companies

1 Based on the weighted average issue price of ordinary shares and net of share issue costs, since inception.

2 Including total net debt of SPOT (£34.1m).

http://www.rns-pdf.londonstockexchange.com/rns/0583Y_-2017-11-30.pdf

Chairman's Statement

Better Capital PCC Limited, including its two cells, the 2009 Cell and the 2012 Cell, today issues its Interim Report for the six month period ended 30 September 2017.

The sale of Gardner dominated activities in the earlier part of the review period culminating in a successful exit in June 2017. With the departure of Gardner from Fund I, the 2009 Cell is now greatly reduced in size. With the Board's blessing, the Fund I GP has been working with the Consultant to explore strategies available to Fund I with a view to maximising total returns to the 2009 Cell Shareholders. This is discussed further below.

The 2012 Cell with its interest in Fund II has experienced a further write down at the period end, but the Fund II GP believes it is clearly capable of further improvements. The Board has discussed at length with the Fund II GP regarding the strategies available; we remain wholly supportive of the Fund II GP's effort and commitment to Fund II and the 2012 Cell Shareholders.

Better Capital 2009 Cell

The 2009 Cell NAV summary is set out below.

1 Includes £225,000 of estimated net proceeds from the Fairline administration. £200,000 was received in May 2017.

2 Includes £150,000 of estimated net proceeds from the Fairline administration at 30 September 2017. This was received in full in November 2017.

3 Carried interest obligation of £29.6 million was paid to Better Capital SLP LP on 14 June 2017.

The Fund I portfolio value declined by £252.3 million over the review period principally due to the sale of Gardner. The disposal enabled the return of £222.0 million to the 2009 Cell Shareholders by way of a pro-rata redemption of the 2009 Shares. The 2009 Cell NAV, including accumulated distributions of £288.8 million is broadly flat at £329.2 million (0.6 per cent. improvement in the period).

Year to date performance in m-hance has been mixed. Whilst there has been strong growth in the CRM business with significant contract wins, mainly in the NfP sector, there has been contraction in the ERP business. In addition, NetSuite opportunities have taken longer than planned to convert.

Omnico's software and services provision is growing from strength to strength. The business achieved a number of milestones during 2017, including the rollout of a major software upgrade (V6) and new products such as omniEnable. A key focus in 2018 is to leverage on the work already done and accelerate top line growth on the back of a strong pipeline.

SPOT, which is a minority interest in Fund I, is discussed further below. Comprehensive details on Fund I's investment activities, portfolio companies and valuation are set out in the Fund I GP's report below.

Better Capital 2012 Cell

The 2012 Cell NAV summary is set out below.

The 2012 Cell NAV, including accumulated distributions of £48.4 million (13.6 per cent. of funds raised) declined by £19.7 million to £192.7 million (-9.3 per cent. in the period), principally due to write downs in Everest and to a lesser extent in SPOT. This is offset by an improvement in the mark-to-market value of the 2012 Shares (£1.8 million) and a rebate from the Fund II GP of management fees due of £0.5 million. During the period the 2012 Cell Shareholders received distributions of £8.3 million, following the realisation of the debt instruments in Jaeger.

Everest has not done well in 2017. Sales have been constrained by an inadequate installation operation for much of the year and marketing has been expensive in a competitive market. The drop in valuation reflects this but Everest remains profitable and has no external debt. Energetic improvement efforts are in train.

SPOT experienced a marked downturn in the summer, having enjoyed a good first half of 2017. Recent performance has seen improvement. It is performing well operationally and both Spicers and OfficeTeam are making significant new wins; however, both divisions are seeing lower volumes and downward pressure on margins.

Northern Aerospace has generally performed to expectations in 2017. However, sales to its largest customer seem likely to cease from the end of 2018. New business from new customers has been won and the business is hopeful of more wins which together with substantial planned business improvements gives the prospect of a reliable future.

Further details on Fund II's investment activities, portfolio companies and valuation are set out in the Fund II GP's report below.

1 Includes proceeds in escrow payable pending the resolution of legacy matters recorded as a fund receivable

2 28,548,277 2012 Shares at the closing price of 34.00p per share on 30 September 2017

3 Average cost per remaining share, 40.84p. Includes commission and levy

4 At 30 September 2017, the estimated remaining net receivable from the City Link administration is £100,000 (at 31 March 2017: £200,000). This is after accounting for receipts of £250,000 in September 2017 and a £150,000 improvement to the overall estimated outcome.

Strategic direction

The Fund I GP, through the Consultant, has been working with the Board on a range of strategies to dissolve Fund I in an orderly manner. In respect of Omnico, the Fund I GP has informed the Board that optimal value is unlikely to be attained in the short term and, rather than seek a premature exit, the Fund I GP is exploring the option of an introduction of the business to AIM, with 2009 Cell Shareholders expected to receive an in specie distribution of quoted Omnico shares. In respect of m-hance, a review of the optimal timescale for M&A activity is being considered. The Fund I GP is also seeking independent advice in respect of finding an exit route for Fund I's 9.9 per cent. holding in SPOT - which is majority owned by Fund II.

The past two years have seen a steady cutback to the team at Better Capital reflecting the Funds' lifecycles. This is set to continue over the coming months and its functions will be increasingly assumed by the General Partners of both Funds.

The Fund II GP has reiterated its commitment in respect of Fund II. To assist in this next stage, a recruitment drive is now underway to place active Chairs into certain of the Fund II businesses. Greater use of specialist external consultants is also being employed to address specific challenges within the organisations.

Richard Crowder

Chairman

30 November 2017

Statement of Responsibility and Other Information

Responsibility Statement

The Directors confirm that to the best of their knowledge:

· the condensed set of financial statements has been prepared in accordance with IAS 34 'Interim Financial Reporting' as adopted by the European Union; and

· the Interim Financial Report meets the requirements of an interim management report (as defined below), and includes a fair review of the information required by:

a) DTR 4.2.7R of the Disclosure Guidance and Transparency Rules, being an indication of important events that have occurred during the first period of the financial year; and their impact on the condensed set of financial statements; and a description of the principal risks and uncertainties of the remaining six months of the year; and

b) DTR 4.2.8R of the Disclosure Guidance and Transparency Rules, being related party transactions that have taken place in the first period of the current financial year and that have materially affected the financial position or performance of the entity during that period; and any changes in the related party transactions described in the audited financial statements that could do so.

Interim management report

· Important events of the interim period

The important events that have occurred during the interim period and the key factors influencing the financial statements are all set out in this report, comprising: the Chairman's Statement, Fund I General Partner's Report, Investment Report of Fund I, Fund II General Partner's Report, Investment Report of Fund II and the Financial Statement sections.

· Principal risks

There are a number of risks that could have a material impact on the performance of the Company over the remaining six months of the financial year, thereby causing actual performance to differ materially from expectations.

The Board considers that the principal risks and uncertainties have not materially altered from those published in the Annual Report for the year ended 31 March 2017. The Company's principal risk relates to the financial and operational performance of the Fund I and Fund II portfolios. The Board has considered the impact of Brexit in light of each portfolio company valuation.

The Company's principal risk factors are fully discussed in the Company's prospectuses, available on the Company's website www.bettercapital.gg.

The Directors of the Company are listed below and have been directors throughout the period.

By order of the Board

Richard Crowder

Chairman

30 November 2017

Independent Review Report to Better Capital PCC Limited

Introduction

We have been engaged by the Company to review the condensed set of financial statements of the Company in the interim financial report for the period ended 30 September 2017 which comprises the Company Condensed Statement of Financial Position, Company Condensed Statement of Comprehensive Income, Company Condensed Statement of Changes in Equity, Company Condensed Statement of Cash Flows and Company related notes.

We have read the other information contained in the interim financial report and considered whether it contains any apparent misstatements or material inconsistencies with the information in the condensed set of financial statements.

Directors' responsibilities

The interim financial report is the responsibility of, and has been approved by, the Directors. The Directors are responsible for preparing the interim financial report in accordance with the Disclosure Guidance and Transparency Rules of the United Kingdom's Financial Conduct Authority.

As disclosed in Note 2, the annual financial statements of the Company are prepared in accordance with IFRS as adopted by the European Union. The Company's condensed set of financial statements included in this interim financial report have been prepared in accordance with International Accounting Standard 34, 'Interim Financial Reporting' as adopted by the European Union.

Our responsibility

Our responsibility is to express to the Company a conclusion on the Company's condensed set of financial statements in the interim financial report based on our review.

Our report has been prepared in accordance with the terms of our engagement to assist the Company in meeting its responsibilities in respect of interim financial reporting in accordance with the Disclosure Guidance and Transparency Rules of the Financial Conduct Authority and for no other purpose. No person is entitled to rely on this report unless such a person is entitled to rely upon this report by virtue of and for the purpose of our terms of engagement or has been expressly authorised to do so by our prior written consent. Save as above, we do not accept responsibility for this report to any other person or for any other purpose and we hereby expressly disclaim any and all such liability.

Scope of review

We conducted our review in accordance with International Standard on Review Engagements (UK and Ireland) 2410, 'Review of Interim Financial Information Performed by the Independent Auditor of the Entity' issued by the Auditing Practices Board for use in the United Kingdom. A review of interim financial information consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK and Ireland) and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Conclusion

Based on our review, nothing has come to our attention that causes us to believe that the Company's condensed set of financial statements in the interim financial report for the six months ended 30 September 2017 is not prepared, in all material respects, in accordance with International Accounting Standard 34 as adopted by the European Union and the Disclosure Guidance and Transparency Rules of the United Kingdom's Financial Conduct Authority.

BDO LimitedChartered AccountantsPlace du Pré, Rue du Pré, St Peter Port, Guernsey

30 November 2017

Condensed Statement of Financial Position

As at 30 September 2017

The unaudited condensed interim financial statements of the Company were approved and authorised for issue by the Board of Directors on 30 November 2017 and signed on their behalf by:

Richard Crowder Richard Battey

Chairman Director

The notes below form an integral part of the Company's condensed interim financial statements.

Condensed Statement of Comprehensive Income

For the six months ended 30 September 2017

All activities derive from continuing operations.

The notes below form an integral part of the Company's condensed interim financial statements.

Condensed Statement of Changes in Equity

For the six months ended 30 September 2017

The notes below form an integral part of the Company's condensed interim financial statements.

Condensed Statement of Cash Flows

For the six months ended 30 September 2017

The notes below form an integral part of the Company's condensed interim financial statements.

Notes to the Condensed Interim Financial Statements

For the six months ended 30 September 2017

1. General information

Better Capital PCC Limited is a Closed-ended Investment Company incorporated in, and controlled from Guernsey as a Protected Cell Company. It has an unlimited life and is registered with the GFSC as a Registered Closed-ended Collective Investment Scheme pursuant to the POI Law.

The Company maintains a separate cell account for each class of shares, to which the capital proceeds of issue and the income arising from the investment of these proceeds in the respective Fund are credited, and against which the expenses allocated are charged. In any redemption, shareholders are only entitled to their proportion of the net assets held in the cell relating to the particular shares.

The Company has two cells: 2009 Cell and 2012 Cell. The financial results for each cell can be found below.

2. Accounting policies

Basis of preparation

The unaudited company condensed financial information included in the interim financial report for the six months ended 30 September 2017 has been prepared in accordance with the DTRs and Listing Rules of the UK's FCA and IAS 34, 'Interim Financial Reporting' as adopted by the EU.

The interim financial statements do not include all the information and disclosures required in the annual financial statements and should be read in conjunction with the Company's annual financial statements for the year to 31 March 2017, which are available on the Company's website www.bettercapital.gg. The annual financial statements have been prepared in accordance with EU adopted IFRS.

The Company does not operate in an industry where significant or cyclical variations, as a result of seasonal activity, are experienced during the financial period.

The same accounting policies and methods of computation are followed in the interim financial statements as in the annual financial statements for the year to 31 March 2017.

Standards, interpretations and amendments to published standards adopted in the period

There were no new standards applied during the period ended 30 September 2017.

New and revised standards

At the date of approval of these financial statements, the following standards and interpretations, which have not been applied in these financial statements, were issued but not yet effective (and in some cases had not yet been adopted by the EU) and are relevant to the financial statements of the Company and Cells:

• IFRS 9: Financial Instruments - IFRS 9 replaces IAS 39. The Company will adopt IFRS 9 from the effective date 1 January 2018.

• IFRS 15: Revenue from contracts with customers effective 1 January 2018.

The Directors anticipate that the adoption of these standards and interpretations in the period of initial application will not have a material impact on the financial statements. IFRS 9 is not anticipated to have an impact as all investments are currently carried at fair value.

The Company has not adopted early any standards, amendments or interpretations to existing standards that have been published and will be mandatory for the Company's accounting periods beginning after 1 April 2017 or later periods.

Going concern

After making appropriate enquiries, the Directors have a reasonable expectation that the Company, and in turn Funds I and II, have adequate resources to continue in operational existence for the foreseeable future and do not consider there to be any threat to the going concern status of the Company. For this reason, they continue to adopt the going concern basis in preparing these interim financial statements.

Critical accounting judgement and estimation uncertainty

Use of estimates and judgements

The preparation of financial statements requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses.

The critical accounting judgements and estimation uncertainties for the 2009 Cell and 2012 Cell are stated below.

Taxation

The Company and Cells are exempt from taxation in Guernsey.

3. Segmental reporting

For management purposes, the Company is organised into two main operating segments, being the 2009 Cell and the 2012 Cell. Full details of the 2009 Cell's and 2012 Cell's results are shown below.

4. Investment in Limited Partnerships

Total Investment:

The movement in fair value is derived from the fair value movements in the underlying investments held by Fund I and Fund II, net of income and expenses of Fund I and Fund II and their related special purpose vehicles.

The outstanding loans do not incur interest. The loans are expected to be repaid by way of distributions from the Funds. The Company is not entitled to demand repayment of the outstanding loans, however, the General Partner may, upon request by the Company, repay to the Company any amount of the outstanding loan. During the period £137 million was repaid to the Company by Fund I (Six months to 30 September 2016: £5.2 million, Year to 31 March 2017: £5.5 million) and £7.5 million by Fund II (Six months to 30 September 2016: £nil, Year to 31 March 2017: £43.6 million).

No distributions receivable from the Funds in relation to the current or comparative periods have been allocated as income based on discretionary allocation powers of the respective General Partners of the Funds as set out in the respective Limited Partnership Agreements. At the period end an aggregate £0.8 million (Six months to 30 September 2016: £1.6 million, Year to 31 March 2017: £1.6 million) remained outstanding.

In the financial statements of the Company, the fair value of the investments in Limited Partnerships are adjusted to reflect the fair value of the Cells' attributable valuation of net assets within Fund I and Fund II, as seen in more detail in Note 6.

5. Trade and other receivables

Full details of the 2012 Cell's trade and other receivables are shown below. 

6. Fair value

The level in the fair value hierarchy within which the financial assets or financial liabilities are categorised is determined on the basis of the lowest level of input that is significant to the fair value measurement.

Financial assets and financial liabilities are classified in their entirety into only one of the three levels.

The fair value hierarchy has the following levels:

- Level 1 - quoted prices (unadjusted) in active markets for identical assets or liabilities.

- Level 2 - inputs other than quoted prices included within Level 1 that are observable for the assets or liabilities, either directly (i.e. as prices) or indirectly (i.e. derived from prices).

- Level 3 - inputs for the assets or liabilities that are not based on observable market data (unobservable inputs).

The only financial instruments carried at fair value are the investments in Fund I and Fund II which are fair valued at each reporting date.

The Company's investments in Fund I and Fund II have been classified within Level 3 as they have unobservable inputs and are not traded. Amounts classified as Level 3 for the period are £40.1 million for Fund I (30 September 2016: £239.9 million, 31 March 2017: £260.1 million) and £143.3 million for Fund II (30 September 2016: £208.5 million, 31 March 2017: £170.2 million).

Transfers during the period

There have been no transfers between levels during the period.

Valuation techniques

The value of the Cells' investments in the Funds is based on the value of each Cell's limited partner capital and loan accounts within each Fund. This is based on the components within the Funds, principally the value of the underlying investee companies. Any fluctuation in the value of the underlying investee companies will directly impact on the value of the Company's investment in the Funds.

When valuing the underlying investee companies, the GPs of each Fund review information provided by the underlying investee companies and other business partners and apply IPEV methodologies to estimate a fair value that is in adherence to the requirements of IFRS 13 'Fair Value Measurement' as at the reporting date.

Initially acquisitions were valued at price of recent investment. Once maintainable earnings can be identified, or reasonably estimated, the preferred method of valuation is the earnings multiple valuation technique, where a multiple that is an appropriate and reasonable indicator of value (given the size, risk profile and earnings growth prospects of the underlying company) is applied to the maintainable earnings of the company. Occasionally other methods, as deemed suitable by the GPs, may be used, such as revenue multiple, net assets, break-up value or discounted cash flows. The techniques used in determining the fair value of the Cells' investments are selected on an investment by investment basis so as to maximise the use of market based observable inputs.

Fund II's investment in the shares of the 2012 Cell are valued at the quoted price.

The Board reviews and considers the fair value arrived at by the GPs before incorporating into the fair value of the investment adopted by the Company. The variety of valuation bases adopted, quality of management information provided by the underlying investee companies and the lack of liquid markets for the investments mean that there are inherent difficulties in determining the fair value of these investments that cannot be eliminated. Therefore the amounts realised on the disposal of investments may differ from the fair values reflected in these interim financial statements and the differences may be significant.

The significant unobservable inputs in the 2009 Cell and in the 2012 Cell are shown below.

7. Share capital

Core shares

Period ended 30 September 2017

Period ended 30 September 2016

Year ended 31 March 2017

Cell shares

Authorised:

The Cells are authorised to issue an unlimited amount of ordinary shares at £1 par value.

Period ended 30 September 2017

Period ended 30 September 2016

Year ended 31 March 2017

The five cumulative distributions to date for the 2009 Cell total £288.8 million, being 137.5 per cent. of funds raised.

The three cumulative distributions to date for the 2012 Cell totalled £48.4 million, being 13.6 per cent. of funds raised.

8. Related party transactions

The Company has four non-executive Directors. Mr Jon Moulton is a director and the sole shareholder of BECAP GP Limited, the general partner of the Fund I GP and BECAP12 GP Limited, the general partner of the Fund II GP.

Annual remuneration for each Director is as follows: the Chairman receives £70,000, the Chairman of the audit committee receives £62,500, the Chairman of the management engagement, nomination and remuneration committee receives £60,000 and the other non-executive Director receives £45,000.

Directors' fees and expenses for the period to 30 September 2017 amounted to £165,000 (31 March 2017: £241,000, 30 September 2016: £120,000), of which £59,000 (31 March 2017: £59,000, 30 September 2016: £59,000) remained outstanding at the period end.

9. Earnings per share and net asset value per share

The earnings per share, net asset value per share and adjusted net asset value per share for the 2009 Cell and 2012 Cell are shown below.

10. Subsequent events

Subsequent events for 2009 Cell and 2012 Cell are detailed below.

Better Capital 2009 Cell

Investment policy summary

Better Capital 2009 Cell has invested in a portfolio of businesses which, when purchased, had significant operating issues and associated financial distress, and which have significant activities within the United Kingdom.

The 2009 Cell Investment policy is set out in the Company's prospectus, available on the Company's website www.bettercapital.gg.

General Partner's Report

Fund I is now much smaller with the successful sale of Gardner over the summer. The key focus is to examine and execute options available to ensure an orderly disposal of the remaining assets in Fund I whilst maximising total returns to the 2009 Cell Shareholders. Options under consideration include seeking an introduction for Omnico on AIM, or similar, possibly during the course of next year.

Portfolio update

There has been mixed performance across m-hance's various product streams in the current FY17 financial year ending 31 December. This has resulted in a deterioration of revenue and profitability against YTD budget plans.

The ERP and development offerings are not faring as planned due to delays and uncertainty in the Microsoft product roadmap which have seen the traditional Microsoft Dynamics and development business significantly less buoyant. NetSuite has continued to make progress this year but this has been well behind the pace we would have liked.

On a positive note, m-hance's cloud based CRM services have seen marked year-on-year growth of 32 per cent. with excellent blue chip wins especially in the NfP sector where m-hance is the clear market leader. During the year the business was successful in signing up large contracts with four charities; furthermore, it is in negotiations on a preferred supplier basis with two other charities and has a healthy pipeline. This has, however, put some strain on delivery resource and necessitated additional contractor based staff to supplement the core delivery team. The significant sales wins are in part driven by GDPR but also reflect the attributes of the Microsoft product, m-hance's internally developed IP and a highly competent team. We anticipate further growth in this area as more charities look to adopt new solutions, rather than enhance existing ones to enable compliance with GDPR. In order to address the lower end of the market where similar requirements exist, NfP Essentials was launched in early November. NfP Essentials is based on the same Microsoft Dynamics cloud based platform as NfP 365 but is much more prescriptive in how it is implemented and hence can be offered at a lower cost.

The management team are constantly reviewing how best to allocate resources to support the changing market and some efficiency initiatives are planned which will further underpin FY18 performance.

The valuation for m-hance is unchanged at £10.5 million. This has been derived using an earnings approach (range of EV/EBITDA: 7.6 times to 11.8 times) on the business's maintainable earnings, supported by a revenue approach. Maintainable earnings is derived as the outturn of FY17 adjusted for planned savings under the efficiency initiatives. At 30 September 2017, the business had net debt of £0.7 million.

Unaudited full year sales and EBITDA for Omnico's FY17 financial year ended 30 September showed broadly flat growth in revenues at £26.0 million (audited FY16 continuing operations: £26.4 million) but a 77 per cent. growth in reported EBITDA at £2.3 million (audited FY16 continuing operations: £1.3 million). The business continues to improve, with the focus solely on software and services. Significantly, core software and services revenues increased by 11 per cent. to £23.9 million whilst hardware revenue declined by 56 per cent. to £2.1 million.

Growth in software revenues came as a result of Omnico expanding from its traditional retail market to the destinations and theme park sectors, with the business already working with seven out of the top 11 worldwide destination resorts. During FY17 major software upgrades were sold to the largest three, resulting in new software and services orders of circa £5 million. In addition, agreements were signed to provide managed services to a large UK caterer, valued at over £2 million and software upgrades to a large retailer in the Americas, valued at over USD1 million. Omnico's order book at FY17 stood at £13.0 million (FY16: £7.6 million).

During FY17 Omnico successfully launched and delivered new products, including omniEnable which allows easy migration from traditional fixed Point of Sale ("PoS") systems, to the various mobile and digital technologies now more favoured by consumers. Omnico's unique proposition provides a single, seamless platform across retail, food and beverage as well as loyalty, entitlements and stock fulfilment products that enhance the consumer's overall experience.

The main thrust of the Omnico strategy for FY18 is to substantially complete the transition from bespoke software offering to customisable products that lend to easier resale, either directly or via the business's global channel partners. A highly defined development roadmap is in place to capture the opportunities. Furthermore, the completion of the deployment of Omnico's integrated PoS software across all Dubai Parks and Resorts various retail and hospitality sites provides reference-ability for Omnico in the Middle East and the Asian destinations market.

The business also benefitted from additional investment of £750,000 from Fund I to support short term working capital and on-going product development.

Omnico has been written up by £2.0 million to £22.0 million, reflecting the cash injection during the period and improvement in the business's underlying performance. This is supported using an earnings approach to valuation, applying the FY17 EBITDA outturn. At 30 September, the business had net debt of £0.4 million.

An update on SPOT, a portfolio company 9.9 per cent. owned by Fund I, is provided in the Fund II General Partner's Report below. Fund I's interest in SPOT has been written down by £0.2 million due to the below budget performance in the financial year to 31 December 2017.

Sale of Gardner and the redemption of the 2009 Shares

On 12 June 2017, Fund I completed the sale of Gardner to SLMR for £326.0 million on an Enterprise Value basis. The sale realised net proceeds to the 2009 Fund of £254.1 million, recording an IRR of 35.3 per cent. and 7 times money multiple on total investment of £41.0 million.

£222.4 million was returned to the 2009 Cell. Accordingly, this enabled the Company to effect a pro rata redemption of the 2009 Shares in July 2017 and return £222.0 million (equivalent to 107.35 pence per share) to the 2009 Cell Shareholders.

Total distributions from the 2009 Cell to investors stand at £288.8 million, a multiple of 1.4 times money raised.

Portfolio carrying value

The overall portfolio carrying value declined by £252.3 million between 1 April 2017 and 30 September 2017 due to the disposal of Gardner in June 2017. On a like-for-like basis, the portfolio carrying value grew by £1.8 million (5.1 per cent.) in the period principally due to a £2.0 million write up in Omnico, offset by a write down in SPOT of £0.2 million.

Closing remarks

We are pleased to have delivered the sale of Gardner during the period - this was a highly complex cross-border transaction and the timing was fortuitous. However, our focus has long since moved onto the remaining constituents of the now not very large Fund I. If we are successful in our efforts, Fund I will be dissolved well within the life of the fund (i.e. 31 December 2019), through multiple options currently available with the aim of maximising total returns. My team and I remain encouraged and motivated to do so.

Jon Moulton

Chairman

BECAP GP Limited

30 November 2017

Investment Report of Fund I

m-hance

Business description

Implements, deploys and manages enterprise wide business management software solutions (www.m-hance.com) (www.highcloudsolutions.co.uk)

Investment details

The company received £0.4 million short term funding from Fund I in October 2017 to fund working capital.

Omnico Group

Business description

Provider of omni-channel software solutions and services to the retail, hospitality, entertainment and leisure sectors (www.omnicogroup.com)

Investment details

SPOT

Business description

Spicers is a leading office products and stationery wholesaler (www.spicers.co.uk)

OfficeTeam is a leading office products and services supplier (www.officeteam.co.uk)

Investment details

Portfolio summary

Summary income statement for the Partnership

1 Fund I holds its investments at cost in accordance with the terms of the Limited Partnership Agreement.

2 2009 Cell fair values its investment in Fund I in accordance with the accounting policies as set out in Note 2.

Cash Management

As at 30 September 2017, Fund I had placed a total of £3.1 million (31 March 2017: £1.4 million, 30 September 2016: £1.7 million) of cash on instant access deposit with one bank. Fund I has in place a strict cash management policy that limits counterparty credit risk whilst simultaneously seeking to maximise returns.

INDEPENDENT REVIEW REPORT TO BETTER CAPITAL PCC LIMITED IN RESPECT OF THE 2009 CELL

Introduction

We have been engaged by the Company to review the condensed set of financial statements of the 2009 Cell, a cell of Better Capital PCC Limited, for the period ended 30 September 2017 which comprises the 2009 Cell Condensed Statement of Financial Position, the 2009 Cell Condensed Statement of Comprehensive Income, the 2009 Cell Condensed Statement of Changes in Equity, the 2009 Cell Condensed Statement of Cash Flows, and the 2009 Cell related notes.

We have read the other information contained in the interim financial report and considered whether it contains any apparent misstatements or material inconsistencies with the information in the condensed set of financial statements.

Directors' responsibilities

The interim financial report is the responsibility of, and has been approved by, the Company's Directors. The Directors are responsible for preparing the interim financial report in accordance with the Disclosure Guidance and Transparency Rules of the United Kingdom's Financial Conduct Authority.

As disclosed in Note 2, the annual financial statements of the 2009 Cell are prepared in accordance with IFRS as adopted by the European Union. The 2009 Cell's condensed set of financial statements included in this interim financial report have been prepared in accordance with International Accounting Standard 34, 'Interim Financial Reporting' as adopted by the European Union.

Our responsibility

Our responsibility is to express to the Company a conclusion on the 2009 Cell's condensed set of financial statements in the interim financial report based on our review.

Our report, including the conclusion, has been prepared in accordance with the terms of our engagement to assist the 2009 Cell in meeting its responsibilities in respect of interim financial reporting in accordance with the Disclosure Guidance and Transparency Rules of the Financial Conduct Authority and for no other purpose. No person is entitled to rely on this report unless such a person is entitled to rely upon this report by virtue of and for the purpose of our terms of engagement or has been expressly authorised to do so by our prior written consent. Save as above, we do not accept responsibility for this report to any other person or for any other purpose and we hereby expressly disclaim any and all such liability. 

Scope of review

We conducted our review in accordance with International Standard on Review Engagements (UK and Ireland) 2410, 'Review of Interim Financial Information Performed by the Independent Auditor of the Entity' issued by the Auditing Practices Board for use in the United Kingdom. A review of interim financial information consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK and Ireland) and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Conclusion

Based on our review, nothing has come to our attention that causes us to believe that the 2009 Cell's condensed set of financial statements in the interim financial report for the six months ended 30 September 2017 is not prepared, in all material respects, in accordance with International Accounting Standard 34 as adopted by the European Union and the Disclosure Guidance and Transparency Rules of the United Kingdom's Financial Conduct Authority.

BDO LimitedChartered AccountantsPlace du Pré, Rue du Pré, St Peter Port, Guernsey

30 November 2017

Condensed Statement of Financial Position

As at 30 September 2017