Last checked at 
8 Sep 2017 07:00
Maven Income and Growth VCT 4 PLC
Interim Results for the Six Months Ended 30 June 2017 (Unaudited)
The Directors announce the unaudited interim results for the six months ended 30 June 2017
Highlights
• NAV total return of 143.80p per share at 30 June 2017, compared to 143.40p at 31 December 2016
• NAV at 30 June 2017 of 96.35p per share after payment of the final dividend of 3.05p per share
• First interim dividend of 3.36p per share paid on 14 July 2017
• Second interim dividend declared of 3.70p, to be paid on 15 September 2017
• Three new VCT qualifying private company holdings added to the portfolio, with a further one completed post the period end
• Large pipeline of VCT qualifying investments, with a number in advanced process
Overview
During the reporting period, your Company has completed three new VCT qualifying investments in private companies operating across a diverse range of sectors, with another completed after the period end. The majority of the businesses in the investee portfolio have continued to trade well, with the result being a slight increase in NAV total return to 143.80p per share.
The Directors and the Manager recognise the importance of tax-free distributions to Shareholders and the Board was pleased to declare interim dividends totalling 7.06p per share.
In the first half of the financial year, Maven continued to focus on sourcing attractive qualifying investment opportunities that meet the requirements of the revised VCT legislation, as detailed in the 2016 Annual Report. Since the introduction of the new VCT rules in 2015, Maven has provided development capital to ten qualifying private companies, demonstrating its flexible approach and ability to adapt to the requirements of the revised legislation. It has, however, become apparent that new transactions are taking considerably longer to complete, due to the requirement to secure Advance Assurance tax clearance from HM Revenue & Customs (HMRC) for each new investment.
Given the complexity of the new rules, Maven maintains a cautious approach and continues to work closely with a specialist VCT adviser, engaged by the Company, to assist with the VCT tax clearance process, only completing investments once Advance Assurance has been secured. The investment team continues to progress all other aspects of live transactions in order to facilitate a swift completion once approval is granted. On this basis, there are a number of active new transactions which are well-progressed and it is anticipated that there will be a good rate of new investment activity through the second half of the financial year.
Dividends
As highlighted by the Board in the 2016 Annual Report, Shareholders should be aware that the move to support younger and earlier stage businesses may result in less predictable capital gains and income flows. As a result, compared to previous periods, there could be variation in the quantum and timing of future dividend payments. Due to a number of recent profitable realisations and in order to ensure your Company's ongoing compliance with the VCT regulations, on 15 June 2017 the Directors considered it appropriate to declare the early payment of a first interim dividend, and a second interim dividend was announced on 10 August 2017.
The first interim dividend in respect of the year ending 31 December 2017, of 3.36p per Ordinary Share and comprising 0.60p of revenue and 2.76p of capital, was paid on 14 July 2017 to Shareholders on the register at close of business on 23 June 2017. The second interim dividend of 3.70p per Ordinary Share, comprising all capital, will be paid on 15 September 2017 to Shareholders on the register at close of business on 18 August 2017. Since the Company's launch, and after receipt of both interim dividends, Shareholders will have received 54.51p per share in tax-free dividends. The effect of paying these dividends will be to reduce the NAV of the Company by the total cost of the distributions.
Decisions on future distributions will take into consideration the availability of surplus revenue, the proceeds from any further realisations and the VCT qualifying levels of the portfolio. While these two interim dividends will represent an aggregate amount in excess of any previous financial year, it is the Board's intention to maintain distributions for subsequent years at a similar level to that of the year ended 31 December 2016, although this will be dependent on realisations.
Portfolio Developments
The portfolio of private company holdings has generally performed well, resulting in the valuations of a number of investee companies being increased. It is reassuring to note that despite the political and economic uncertainty resulting from the recent General Election and the UK's intended exit from the European Union (EU), there is, to date, no discernible impact to report, aside from the short term benefit that a number of exporters have experienced following the devaluation of Sterling in June 2016.
Cursor Controls, a global leader in the design and niche manufacture of trackballs for cursor movement used in industrial applications, has performed well since Maven clients invested in July 2015. The business continues to deliver good levels of organic growth and performance was further enhanced by the acquisition, in April 2016, of Belgian based distributor of trackballs and other associated products, NSI. The acquisition formed part of Maven's investment proposal and is expected to be significantly earnings enhancing, with a number of commercial and operational synergies identified to help drive the growth and profitability of the enlarged group. The management team is encouraged by the integration process to date, with NSI trading to plan and the core Cursor business continuing to deliver organic growth.
Manufacturer and supplier of technical plastic components and interior parts for the global automotive industry, John McGavigan, continues to exceed expectations. The year to 31 December 2016 saw a significant increase in profitability across its operations in China and Scotland, which was achieved through top line growth enhanced by the benefits of a number of productivity improvement projects implemented earlier in the year. This strong momentum has continued in the current year, with the company continuing to grow and exceed budget. The order book remains strong, with a number of significant contracts secured in recent months, increasing the visibility of the future prospects for the business. Given the growth achieved, and forecast projections, the management team has decided to move its Chinese premises in anticipation of capacity constraints in the region, and work is progressing to advance this.
Maven clients invested in Attraction World, a leading provider of worldwide theme park and attraction tickets, in 2010, supporting the incumbent executive team through a management buy-out. Since investment, the company has made steady progress, and the core business continues to perform well. In March 2016, the business enhanced its operating platform through the complementary acquisition of Day Out With The Kids (www.dayoutwiththekids.co.uk), an e-commerce site that focuses on UK attraction information. The development of the new acquisition is progressing to plan and the management team believes that, over time, it will prove to be a valuable addition to the business.
Crawford Scientific, the UK's leading independent provider of outsourced chromatography consumable products and services to the laboratory research and testing sectors, continues to trade ahead of plan. The business leverages its world-class technical expertise to offer end-to-end solutions for users of chromatography instruments and techniques. Crawford has consistently outperformed since the initial investment by Maven clients in August 2014, including the successful acquisition and integration of analytical services company Hall Analytical Laboratories during 2015. The business continues to make good progress across all divisions and is on track to deliver further growth in the current year.
The UK's largest provider of promotional merchandise, SPS (EU), has achieved excellent growth under private equity ownership since Maven clients invested in February 2014. Operational improvements have enhanced profitability following the successful implementation of a new enterprise resource planning system. The complementary acquisitions of HPP and TEC, completed during the year to 31 December 2015, have been successfully integrated within the group and are both delivering a positive profit contribution. The company has invested in sales resource to help penetrate the European market, and this region is starting to contribute significantly to group performance. The balance sheet remains healthy and the business continues to reduce its core term debt.
DPP provides mechanical and electrical maintenance and installation services mainly to the leisure, hospitality and retail sectors in the south of England and in Wales. The company differentiates itself by operating through an employed and managed team of engineers, as opposed to engaging with a network of subcontractors. The business has made considerable progress over the past twelve months by enhancing operational procedures and reducing costs, which has led to a significant improvement in profitability. A number of new contracts were secured during the year and the outlook is positive, which is highly encouraging given the challenges experienced during 2014 when DPP lost a key customer.
In light of current trading, the valuations of the investments in CHS Engineering Services, Claven, Flexlife and Lambert Contracts have been protectively reduced.
The Manager maintains a close working relationship with investee companies operating within the oil & gas sector and it is encouraging to report that the majority of these assets are seeing early signs of improving market conditions which, after three years of steady decline, appear to have stabilised. Following extensive cost cutting, the Maven portfolio companies are operating with lean structures and have limited or no external debt. As such, they are relatively well positioned to benefit from a market recovery. The majority of Maven's investee companies in this market are focused on operational expenditure, particularly related to health and safety. Although budgets have been set conservatively, there is evidence of growing confidence, with order books and workshops recording higher activity levels. The Board will continue to monitor the performance of investee companies in this sector, maintaining a conservative approach to valuations until there is evidence of a sustained recovery.
The recent new investments in private equity investment trusts and real estate investment trusts have performed well over the period, generating valuable capital growth and income through dividend payments. The Board and the Manager are encouraged by this contribution and believe that these investments will provide a steady and reliable source of income for your Company. This is particularly important in light of the restrictions introduced in the March 2016 Budget Statement, which prevent VCTs investing in traditional instruments such as treasury bills or other government securities for liquidity management purposes.
The Board and the Manager remain highly cognisant of the importance of maintaining an effective liquidity management policy and will continue to consider a range of other permitted income generating investment options.
New Investments
During the period, your Company provided development capital to three private companies operating across a range of sectors:
• ebb3 is a technology company that develops mobile workspace solutions, addressing the need for seamless and secure access to apps, files and services on any device, in any location. The technology is specifically targeted at high-end 3D computer graphics users within the automotive (Formula 1), construction, oil & gas and education sectors, where there is a requirement for data-intensive applications that can service geographically dispersed, multi-disciplinary teams. ebb3 has high profile partnership agreements with providers such as Cisco, NetApp and NVidia, and the investment will enable the business to pursue its growth strategy in this niche part of the growing supercomputing market.
• Horizon Cremation plans to develop and operate a portfolio of next generation crematoria across the UK, where existing facilities are either under-invested or in short supply. Horizon is seeking to build contemporary facilities that are environmentally and technologically advanced, offering enhanced professional service and care levels for families. The investment will provide capital to source and secure subsequent development sites, whilst supporting the operational expenditure and overheads of the first crematorium in North Ayrshire, Scotland, where construction commenced in May 2017.
• ITS Technology is a leading alternative network provider that owns and maintains fibre networks, providing faster and more reliable broadband connectivity, and related services, to customers, particularly in areas that are not well serviced by the existing infrastructure. The business currently has twelve fibre broadband networks in operation, with a further five under construction. The investment will help to fund growth within the existing networks, build a stable recurring revenue base and also support expansion through the addition of new networks.
The following investments have been completed during the reporting period:
Date |
Sector | Investment cost £'000 |
Website | |
Unlisted | ||||
ebb3 Limited | May 2017 | Software & | 150 | www.ebb3.com |
computer services | ||||
Horizon Cremation Limited | May 2017 | Support services | 416 | horizoncremation.co.uk |
ITS Technology Group Limited | June 2017 | Telecommunication | 398 | www.itstechnologygroup.com |
services | ||||
Total unlisted | 964 | |||
Total investments | 964 |
At the period end, the portfolio stood at 76 unlisted and quoted investments, at a total cost of £27.20 million.
Realisations
During the period, deferred consideration was received in respect of the exits from Lab M and Nenplas, which completed in previous periods. In addition, recovery proceeds were released for Space Student Living and Cyclotech.
The table below gives details of all realisations achieved, and deferred considerations received, during the reporting period:
Year first invested |
Complete/ partial exit | Cost of shares disposed of £'000 | Value at 31 December 2016 £'000 |
Sales proceeds £'000 |
Realised gain/(loss) £'000 | Gain/(loss) over 31 December 2016 value £'000 | |
Unlisted | |||||||
Cyclotech Limited | 2007 | Complete | - | - | 49 | 49 | 49 |
Lab M Holdings Limited | 1998 | Complete | - | - | 158 | 158 | 158 |
Nenplas Holdings Limited | 2013 | Complete | - | - | 29 | 29 | 29 |
Space Student Living Limited | 2011 | Partial | - | 67 | 67 | 67 | - |
Total unlisted | - | 67 | 303 | 303 | 236 | ||
- | |||||||
Total disposals | 67 | 303 | 303 | 236 |
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.
Material Developments Since the Period End
Since 30 June 2017, one new private company asset has been added to the portfolio.
Contego Fraud Solutions is a provider of a complex, multi-source compliance and fraud detection software platform for public and private sector clients including property, banking and financial services companies. The application performs a vast number of screening, verification and vetting assessments including Know Your Customer and Anti-Money Laundering, to fulfil both real-time customer on-boarding and on-going monitoring of regulatory requirements. The investment will support the continued growth of the business, facilitating the hiring of additional sales resources, further product development and expansion into new markets.
Principal Risks and Uncertainties
The principal risks and uncertainties facing the Company were set out in full in the Strategic Report contained within the 2016 Annual Report, and are the risks associated with investment in small and medium sized unlisted and AIM/NEX quoted companies which, by their nature, carry a higher level of risk and are subject to lower liquidity than investments in large quoted companies. The valuation of investee companies may be affected by economic conditions, the credit environment and other risks including legislation, regulation, adherence to VCT qualifying rules and the effectiveness of the internal controls operated by the Company and the Manager. These risks and procedures are reviewed regularly by the Audit 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.
Share Buy-backs
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 be bought back at prices representing a discount of up to 15% of the prevailing NAV per share. During the period under review, 233,000 shares were bought back at a total cost of £204,000.
Regulatory Developments
The Chancellor's March 2017 Budget Statement did not introduce any further amendments to the legislation governing VCTs, but reiterated the announcements made in the 2016 Autumn Statement. The most noteworthy of these was that the Government will no longer be initiating a review of the provision to allow replacement capital in certain new VCT transactions, suggesting that this may be reviewed at some point in the future. Whilst the Board and the Manager were disappointed by this announcement, as the ability to include replacement capital was viewed as an important capability under the new rules, it does not impact the Company's investment strategy, which has already adapted to meet the requirements of the new rules.
In addition, in response to the increased volume of VCT applications submitted and the resultant delays experienced in obtaining clearance for proposed investments, a consultation was launched into the options to streamline the Advance Assurance service provided by HMRC. The summary responses of this consultation were released in late March 2017 and a further detailed report and analysis is expected in due course.
Offers for Subscription
On 19 July 2017 the Directors of your Company, together with those of Maven Income and Growth VCT 3 PLC, announced their intention to raise up to £30 million, in aggregate, by way of Offers for Subscription of new Ordinary Shares, with over- allotment facilities of up to, in aggregate, £10 million. It is anticipated that shares will be issued in the 2017/18 and 2018/19 tax years.
The Board of your Company is confident that, given the strength of the current pipeline of private company introductions, the Manager will continue to be able to identify and complete VCT qualifying transactions in line with the investment strategy.
A Prospectus, containing full details of the Offers, is intended for publication in September 2017.
Dividend Investment Scheme
The Directors have also resolved to re-introduce the Dividend Investment Scheme (DIS), which was suspended on 24 August 2015 due to the restrictions imposed by the Government's summer 2015 Budget. Now that there is more clarity regarding the investment criteria that apply to VCTs, and with the Company having stated its intention to launch an Offer for Subscription, the DIS has been reinstated, as announced on 10 August 2017.
This means that, unless Shareholders advise otherwise, those Shareholders who had previously elected to participate in the DIS will revert to receiving new shares with effect from 15 September 2017, being the payment date of the second interim dividend. Shares issued under the DIS qualify for the VCT tax reliefs applicable for the tax year in which they are allotted. Full details of the scheme, together with a mandate form, are available from the Company's website. Shareholders who had not previously applied to participate in the DIS and who wish to do so for future dividends should ensure that a mandate form, or CREST instruction if appropriate, is submitted.
Outlook
The Manager is encouraged by the performance achieved during the reporting period. Notwithstanding the pressures of the uncertain economic and political backdrop following the UK's decision to leave the EU, and the more recent General Election, the portfolio of investee companies has generally continued to trade well with no discernible impact on performance as a consequence of the uncertainty. This demonstrates the strength and breadth of the underlying portfolio and its ability to continue to generate positive returns for Shareholders.
Whilst it is early days for a number of the new investee companies, initial indications suggest that they are performing to plan and should, over time, represent valuable additions to the portfolio. During the period Maven extended its nationwide presence through the opening of four new offices, expanding the network to ten locations across the UK. Maven's regional approach ensures that the investment team is well positioned to access potential opportunities through their local network of contacts. This geographic presence is delivering a strong pipeline of prospective new investments and, based on current momentum, it is anticipated that the rate of investment in the remainder of the financial year will be at a higher level compared to the previous year, subject to securing Advance Assurance from HMRC on a case by case basis.
On behalf of the Board
Maven Capital Partners UK LLP
Secretary
8 September 2017
Summary of Investment Changes
For the Six Months Ended 30 June 2017
Valuation 31 December 2016 £'000 % | Net investment/ (disinvestment) £'000 | Appreciation/ (depreciation) £'000 | Valuation 30 June 2017 £'000 % | |||
Unlisted investments | ||||||
Equities | 10,547 | 32.4 | 204 | 857 | 11,608 | 36.9 |
Loan stock | 15,701 | 48.2 | 457 | (869) | 15,289 | 48.6 |
26,248 | 80.6 | 661 | (12) | 26,897 | 85.5 | |
AIM/NEX investments | ||||||
Equities | 775 | 2.4 | - | 94 | 869 | 2.8 |
Listed investments | ||||||
Equities | 19 | 0.1 | - | 8 | 27 | 0.1 |
Investment trusts | 1,066 | 3.3 | - | 83 | 1,149 | 3.7 |
Total investments | 28,108 | 86.4 | 661 | 173 | 28,942 | 92.1 |
Other net assets |
4,460 |
13.6 |
(1,931) |
- |
2,529 |
7.9 |
Net assets | 32,568 | 100.0 | (1,270) | 173 | 31,471 | 100.0 |
Investment Portfolio Summary
As at 30 June 2017
Investment |
Valuation £'000 |
Cost £'000 |
% of total assets |
% of equity held | % of equity held by other clients¹ |
Unlisted | |||||
Lemac No. 1 Limited (trading as John McGavigan) | 2,190 | 698 | 7.0 | 9.1 | 27.7 |
Torridon (Gibraltar) Limited | 2,173 | 682 | 6.9 | 3.7 | 36.3 |
SPS (EU) Limited | 1,510 | 790 | 4.8 | 6.6 | 35.9 |
Crawford Scientific Holdings Limited | 1,276 | 470 | 4.1 | 7.2 | 41.0 |
Ensco 969 Limited (trading as DPP) | 1,060 | 1,060 | 3.4 | 4.6 | 29.9 |
Glacier Energy Services Holdings Limited | 957 | 957 | 3.0 | 3.7 | 23.9 |
Vodat Communications Group Limited | 819 | 592 | 2.6 | 6.9 | 34.9 |
Majenta Logistics Limited | 800 | 800 | 2.5 | 10.6 | 39.2 |
Onyx Logistics Limited | 800 | 800 | 2.5 | 10.6 | 39.2 |
Vectis Technology Limited | 800 | 800 | 2.5 | 10.6 | 39.2 |
CatTech International Limited | 780 | 498 | 2.5 | 4.8 | 25.3 |
Metropol Communications Limited | 730 | 730 | 2.3 | 10.6 | 39.2 |
JT Holdings (UK) Limited (trading as Just Trays) | 687 | 522 | 2.2 | 5.8 | 24.2 |
Fathom Systems Group Limited | 681 | 681 | 2.2 | 7.7 | 52.3 |
GEV Holdings Limited | 672 | 672 | 2.1 | 4.3 | 31.7 |
Maven Capital (Marlow) Limited | 650 | 650 | 2.1 | - | 100.0 |
HCS Control Systems Group Limited | 604 | 836 | 1.9 | 6.8 | 29.7 |
Flow UK Holdings Limited | 598 | 598 | 1.9 | 7.3 | 27.7 |
R&M Engineering Group Limited | 581 | 774 | 1.8 | 8.7 | 61.9 |
CB Technology Group Limited | 559 | 559 | 1.8 | 11.4 | 67.6 |
TC Communications Holdings Limited | 554 | 777 | 1.8 | 8.1 | 21.9 |
Constant Progress Limited | 500 | 500 | 1.6 | 9.8 | 40.0 |
Equator Capital Limited | 500 | 500 | 1.6 | 9.8 | 40.0 |
Toward Technology Limited | 500 | 500 | 1.6 | 9.8 | 40.0 |
RMEC Group Limited | 463 | 463 | 1.5 | 2.9 | 47.2 |
Horizon Cremation Limited | 416 | 416 | 1.3 | 13.9 | 69.8 |
Maven Co-invest Endeavour Limited Partnership | 414 | 360 | 1.3 | 7.0 | 93.0 |
(invested in Global Risk Partners)² | |||||
Castlegate 737 Limited (trading as Cursor Controls) | 401 | 299 | 1.3 | 3.0 | 44.5 |
Attraction World Holdings Limited | 400 | 98 | 1.3 | 6.2 | 32.2 |
ITS Technology Group Limited | 398 | 398 | 1.3 | 3.9 | 61.2 |
The GP Service (UK) Limited | 398 | 398 | 1.3 | 4.9 | 27.6 |
Rockar 2016 Limited (trading as Rockar) | 353 | 353 | 1.1 | 1.9 | 11.8 |
Flexlife Group Limited | 352 | 482 | 1.1 | 1.9 | 12.7 |
QikServe Limited | 348 | 348 | 1.1 | 3.5 | 16.5 |
Martel Instruments Holdings Limited | 311 | 347 | 1.0 | 4.2 | 40.0 |
Investment Portfolio Summary (continued)
As at 30 June 2017
Investment |
Valuation £'000 |
Cost £'000 |
% of total assets |
% of equity held | % of equity held by other clients¹ |
Unlisted (continued) | |||||
Lambert Contracts Holdings Limited | 292 | 821 | 0.9 | 12.3 | 52.4 |
Chic Lifestyle Limited (trading as Chic Retreats) | 254 | 254 | 0.8 | 7.6 | 39.3 |
Endura Limited2 | 229 | 229 | 0.7 | 0.7 | 5.2 |
ISN Solutions Group Limited | 207 | 327 | 0.7 | 4.6 | 50.4 |
Whiterock Group Limited | 159 | 159 | 0.5 | 3.5 | 21.5 |
ebb3 Limited | 150 | 150 | 0.5 | 3.5 | 21.0 |
Growth Capital Ventures Limited | 149 | 149 | 0.5 | 4.1 | 26.4 |
Lawrence Recycling and Waste Management Limited | 109 | 770 | 0.3 | 8.4 | 53.6 |
Space Student Living Limited | 67 | - | 0.2 | 10.6 | 69.4 |
Claven Holdings Limited | 46 | 170 | 0.1 | 9.6 | 40.4 |
Other unlisted investments | - | 1,673 | - | ||
Total unlisted | 26,897 | 25,110 | 85.5 | ||
Quoted | |||||
Ideagen PLC | 460 | 184 | 1.6 | 0.3 | 1.8 |
Oxford Metrics PLC (formerly OMG PLC) | 136 | 80 | 0.4 | 0.2 | - |
Vectura Group PLC | 125 | 100 | 0.4 | - | - |
Plastics Capital PLC | 100 | 85 | 0.3 | 0.2 | 1.2 |
Angle PLC | 33 | 27 | 0.1 | 0.1 | 0.4 |
esure Group PLC | 27 | - | 0.1 | - | - |
Deltex Medical Group PLC | 8 | 33 | - | 0.1 | - |
Work Group PLC | 5 | 151 | - | 0.7 | 2.5 |
Other quoted investments | 2 | 392 | - | ||
Total quoted | 896 | 1,052 | 2.9 | ||
Private equity investment trusts | |||||
HgCapital Trust PLC | 120 | 100 | 0.4 | - | 0.1 |
Princess Private Equity Holding Limited | 120 | 98 | 0.4 | - | 0.1 |
F&C Private Equity Investment Trust PLC | 119 | 103 | 0.4 | 0.1 | 0.3 |
Apax Global Alpha Limited | 116 | 99 | 0.3 | - | 0.1 |
Standard Life Private Equity Trust PLC | 55 | 43 | 0.2 | - | - |
Total private equity investment trusts | 530 | 443 | 1.7 |
Investment Portfolio Summary (continued)
As At 30 June 2017
Investment |
Valuation £'000 |
Cost £'000 |
% of total assets |
% of equity held | % of equity held by other clients¹ |
Real estate investment trusts | |||||
Schroder REIT Limited | 110 | 99 | 0.4 | - | 0.2 |
Custodian REIT PLC | 109 | 99 | 0.4 | - | 0.2 |
Target Healthcare REIT PLC | 102 | 98 | 0.3 | - | 0.2 |
Standard Life Investment Property Income Trust | 101 | 99 | 0.3 | - | 0.2 |
Limited | |||||
British Land Company PLC | 100 | 99 | 0.3 | - | - |
Regional REIT Limited | 97 | 99 | 0.3 | - | 0.2 |
Total real estate investment trusts | 619 | 593 | 2.0 | ||
Total investments | 28,942 | 27,198 | 92.1 |
¹ Other clients of Maven Capital Partners UK LLP
² These investments are managed by Penta Capital LLP of which a Director of the Company, Steven Scott, is a partner.
Income Statement
For the Six Months Ended 30 June 2017
Six months ended 30 June 2017 (unaudited) | Six months ended 30 June 2016 (unaudited) | Year ended 31 December 2016 (audited) | ||||||||
Revenue £'000 | Capital £'000 | Total £'000 | Revenue £'000 | Capital £'000 | Total £'000 | Revenue £'000 | Capital £'000 | Total £'000 | ||
Gains on investments | - | 173 | 173 | - | 237 | 237 | - | 1,424 | 1,424 | |
Income from investments | 469 | - | 469 | 420 | - | 420 | 1,057 | - | 1,057 | |
Other income | 5 | - | 5 | 1 | - | 1 | 4 | - | 4 | |
Investment management | (85) | (339) | (424) | (89) | (354) | (443) | (215) | (862) | (1,077) | |
fees | ||||||||||
Other expenses | (116) | - | (116) | (124) | - | (124) | (400) | - | (400) | |
Net return on ordinary | 273 | (166) | 107 | 208 | (117) | 91 | 446 | 562 | 1,008 | |
activities before taxation | ||||||||||
Tax on ordinary activities |
(23) |
23 |
- |
(20) |
20 |
- |
(85) |
85 |
- | |
Return attributable to Equity Shareholders |
250 |
(143) |
107 |
188 |
(97) |
91 |
361 |
647 |
1,008 | |
Earnings per share (pence) |
0.76 |
(0.44) |
0.32 |
0.57 |
0.29 |
0.86 |
1.09 |
1.95 |
3.04 | |
All gains and losses are recognised in the Income Statement.
All items in the above statement are derived from continuing operations. The Company has only one class of business and one reportable segment, the results of which are set out in the Income Statement and Balance Sheet. The Company derives its income from investments made in shares, securities and bank deposits.
There are no potentially dilutive capital instruments in issue and, therefore, no diluted returns per share figures are relevant. The basic and diluted earnings per share are therefore identical.
The total column of this statement is the Profit and Loss Account of the Company.
The accompanying Notes are an integral part of the Financial Statements.
Statement of Changes in Equity
For the Six Months Ended 30 June 2017
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 |
For the Six Months Ended 30 June 2016
|
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 2015 | 3,354 | 19,449 | (697) | 1,401 | 9,096 | 290 | 983 | 33,876 | |
Net return | - | - | 199 | (296) | - | - | 188 | 91 | |
Dividends paid | - | - | (517) | - | - | - | (500) | (1,017) | |
Repurchase and cancellation of shares | (30) | - | - | - | (266) | 30 | - | (266) | |
At 30 June 2016 | 3,324 | 19,449 | (1,015) | 1,105 | 8,830 | 320 | 671 | 32,684 | |
For the Year Ended 31 December 2016
|
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 2015 | 3,354 | 19,449 | (697) | 1,401 | 9,096 | 290 | 983 | 33,876 |
Net return | - | - | 174 | 473 | - | - | 361 | 1,008 |
Dividends paid | - | - | (1,048) | - | - | - | (700) | (1,748) |
Repurchase and cancellation of shares | (64) | - | - | - | (568) | 64 | - | (568) |
At 31 December 2016 | 3,290 | 19,449 | (1,571) | 1,874 | 8,528 | 354 | 644 | 32,568 |
The accompanying Notes are an integral part of the Financial Statements.
Balance Sheet
As at 30 June 2017
30 June 2017 (unaudited) £'000 | 30 June 2016 (unaudited) £'000 | 31 December 2016 (audited) £'000 | |
Fixed assets | |||
Investments at fair value through profit or loss | 28,942 | 30,989 | 28,108 |
Current assets | |||
Debtors | 422 | 365 | 347 |
Cash | 2,151 | 1,373 | 4,394 |
2,573 | 1,738 | 4,741 | |
Creditors | |||
Amounts falling due within one year | (44) | (43) | (281) |
Net current assets | 2,529 | 1,695 | 4,460 |
Net assets | 31,471 | 32,684 | 32,568 |
Capital and reserves | |||
Called up share capital | 3,267 | 3,324 | 3,290 |
Share premium account | 19,449 | 19,449 | 19,449 |
Capital reserve - realised | (2,518) | (1,015) | (1,571) |
Capital reserve - unrealised | 1,744 | 1,105 | 1,874 |
Special distributable reserve | 8,324 | 8,830 | 8,528 |
Capital redemption reserve | 377 | 320 | 354 |
Revenue reserve | 828 | 671 | 644 |
Net assets attributable to Ordinary Shareholders | 31,471 | 32,684 | 32,568 |
Net asset value per Ordinary Share (pence) |
96.35 |
98.33 |
99.00 |
The Financial Statements were approved by the Board of Directors on 8 September 2017 and were signed on its behalf by:
Ian Cormack
Director
The accompanying Notes are an integral part of the Financial Statements.
Cash Flow Statement
For the Six Months Ended 30 June 2017
Six months ended 30 June 2017 (unaudited) £'000 | Six months ended 30 June 2016 (unaudited) £'000 | Year ended 31 December 2016 (audited) £'000 | |
Net cash flows from operating activities | (783) | (954) | (1,618) |
Cash flows from investing activities | |||
Investment income received | 400 | 459 | 1,106 |
Deposit interest received | 5 | 1 | 4 |
Purchase of investments | (964) | (4,141) | (6,441) |
Sale of investments | 303 | 6,529 | 12,897 |
Net cash flows from investing activities | (256) | 2,848 | 7,566 |
Cash flows from financing activities | |||
Equity dividends paid | (1,000) | (1,017) | (1,748) |
Repurchase of Ordinary Shares | (204) | (266) | (568) |
Net cash flows from financing activities | (1,204) | (1,283) | (2,316) |
Net (decrease)/increase in cash | (2,243) | 611 | 3,632 |
Cash at beginning of period |
4,394 |
762 |
762 |
Cash at end of period | 2,151 | 1,373 | 4,394 |
The accompanying Notes are an integral part of the Financial Statements.
NOTES TO THE FINANCIAL STATEMENTS
1. Accounting Policies
The financial information for the six months ended 30 June 2017 and the six months ended 30 June 2016 comprises non-statutory accounts within the meaning of S435 of the Companies Act 2006. The financial information contained in this report has been prepared on the basis of the accounting policies set out in the Annual Report and Financial Statements for the year ended 31 December 2016, which have been filed at Companies House and which contained an Auditor's Report which was not qualified and did not contain a statement under S498(2) or S498(3) of the Companies Act 2006.
2. Reserves
Share premium account
The share premium account represents the premium above nominal value received by the Company on issuing shares net of issue costs.
Capital reserves
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.
Special distributable reserve
The total cost to the Company of the repurchase and cancellation of shares is represented in the special distributable reserve account.
Capital redemption reserve
The nominal value of shares repurchased and cancelled is represented in the capital redemption reserve.
Revenue 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 2017 | |
The returns per share have been based on the following figures: | |
Weighted average number of Ordinary Shares | 32,804,662 |
Revenue return |
£250,000 |
Capital return | (£143,000) |
Total return | £107,000 |
Directors' Responsibility Statement
The Directors confirm that, to the best of their knowledge:
• the Financial Statements for the six months ended 30 June 2017 have been prepared in accordance with FRS 102, the Financial Reporting Standard applicable in the UK and the Republic of Ireland;
• the Interim Management Report includes a fair review of the information required by DTR 4.2.7R in relation to the indication of important events during the first six months, and of the principal risks and uncertainties facing the Company during the second six months, of the year ending 31 December 2017; and
• the Interim Management Report includes adequate disclosure of the information required by DTR 4.2.8R in relation to material related party transactions and any changes therein.
Other information
A full copy of the Interim Report and Financial Statements will be printed and issued to Shareholders. Copies of this announcement will be available to the public at the registered office of the Company at Kintyre House, 205 West George Street, Glasgow G2 2LW; at the office of the Manager, Maven Capital Partners UK LLP, 5th Floor, 1-2 Royal Exchange Buildings, London EC3V 3LF; and, in due course, on the Company's website at www.mavencp.com/migvct4.
Neither the content of the Company's website nor the contents of any website accessible from hyperlinks on the Company's website (or any other website) is incorporated into, or forms part of, this announcement.
By order of the Board
Maven Capital Partners UK LLP
Secretary
8 September 2017