Mobeus I&g 4 Regulatory News (MIG4)

Mobeus Income & Growth 4 VCT plc, ("MIG4", the "Company", or the "Fund") is a Venture Capital Trust ("VCT") advised by Mobeus Equity Partners LLP ("Mobeus"), investing primarily in established, unquoted companies.

Company Objective

The Objective of the Company is to provide investors with a regular income stream by way of tax-free dividends and to generate capital growth through portfolio realisations which can be distributed by way of additional tax-free dividends, while continuing at all times to qualify as a VCT.

Financial Highlights

Results for the six months ended 30 June 2018

Net assets: £57.21 million

Net Asset Value("NAV") per share: 83.12 pence

-Net Asset Value ("NAV") Total Return per share of 0.6% for the half-year.

-Shareholders received an interim dividend of 4.00 pence per share on 19 June 2018, in respect of the year ending 31 December 2018. Cumulative dividends paid to shareholders since inception are now 105.20 pence per share.

-Investments totalling £3.06 million have been made into Proactive Investors, Super Carers and Hemmels, together with further investments into existing portfolio companies MPB Group, Tapas Revolution, and My Tutor.

-Fully subscribed Offer for Subscription which closed in March 2018, having raised £15 million since launch in September 2017.

Cumulative total shareholder return per share (NAV basis)*

The net asset value (NAV) per share as at 30 June 2018 was 83.12 pence.

The longer term trend of performance on this measure is shown in the chart below:

*Cumulative total shareholder return (NAV basis) is net asset value plus cumulative dividends paid since 1999 to date.

The chart above shows the recent past performance of the original funds raised in 1999. The original subscription price was 200p per share before the benefit of income tax relief. Subscription prices from subsequent fundraisings and historic performance data from 2008 are shown in the Investor Performance Schedule on the Company's website at: www.mig4vct.co.uk, where they can be accessed by clicking on "table" under "Reviewing the performance of your investment" on the home page.

On 31 July 2006, Mobeus became sole Investment Adviser to the Company. The cumulative NAV total return at this date was 122.51 pence.

Chairman's Statement

I am pleased to present the Half-Year Report for Mobeus Income & Growth 4 VCT plc ("MIG4") covering the six month period ended 30 June 2018.

Overview

The six month period has resulted in continued portfolio progress. In addition the fundraising was successfully completed, raising the £15 million target.

Three new growth capital investments and three further investments into existing growth portfolio companies were completed in the period. Further details of these investments are included under 'Investment Portfolio' below and in the Investment Review.

These investments have been made in accordance with the revised Investment Policy approved by shareholders in 2016. This is focussed on providing growth capital to younger and smaller companies. By way of reminder, this revised Policy was required to comply with the VCT measures introduced by the Finance (No. 2) Act 2015 in November of that year.

More recently, the enactment of the Finance Act 2018 on 15 March 2018 has resulted in further changes to the VCT Scheme. These most recent changes are in response to the Patient Capital Review which was conducted by Her Majesty's Treasury during the course of 2017, further details of which can be found under the 'Industry and regulatory developments' section of my Statement below and in the 'Summary of VCT Regulation'.

Performance

At 30 June 2018, your Company was ranked 18th out of 40 VCTs, over the last five years, in the Association of Investment Companies' ("AIC") analysis of NAV Total Return.

The Net Asset Value ("NAV") Total Return was 0.6% for the period (compared with 5.2% for the same period last year).

Fundraising

On 6 September 2017, the Company launched an Offer for Subscription to raise up to £15 million in aggregate. Demand for the Offer was strong and the Company raised the full amount by 13 March 2018 (£1.00 million of net funds were raised in the current period). The Board would like to thank all new investors and shareholders, their advisers and intermediaries, for their support.

Dividends

The Board declared an interim capital dividend of 4.00 pence per share which was paid on 19 June 2018. This brings cumulative dividends paid per share since the launch of the Company to 105.20 pence per share.

Investment Portfolio

The portfolio achieved a gain of £0.26 million (0.8% of the opening value) during the first half of the year 2017: £2.45 million: 6.3% of the opening value) and was valued at £34.38 million at the period end (30 June 2017: £37.93 million). The six month period experienced notable increases in the valuations of EOTH, MPB Group and CGI Creative Graphics, but the portfolio saw significant valuation declines over the period for Wetsuit Outlet, Motorclean and Veritek Global.

During the period three new investments and three further investments were made at a total cost of £3.06 million (details within Note 10). These were:

· Proactive Investors - a provider of investor media services and research.

· Super Carers - an online care platform connecting people seeking care.

· Hemmels - a classic car restoration business.

· MPB Group (further investment) - an online marketplace for used camera and video equipment.

· Tapas Revolution (further investment) - a leading Spanish restaurant chain in the casual dining sector.

· My Tutor (further investment) - a digital marketplace connecting people seeking online tutoring.

After the period end, a new investment of £0.44 million was made into Rota Geek, a provider of workforce management software.

The Company received cash proceeds of £0.43 million during the period, mostly being loan stock repayments from investee companies, but also deferred consideration arising from realisations in a previous year.

Further information on the portfolio can be found under the Investment Review and Investment Portfolio Summary.

Industry and regulatory developments

As mentioned in my Overview above, a number of additional changes to the VCT Scheme were introduced with the enactment of the Finance Act 2018 on 15 March 2018. These changes were designed to exclude tax-motivated investments where capital is not at risk (that is, principally seeking to preserve investors' capital) and to encourage VCTs to put their money to work faster. While some of these changes (detailed further under "Summary of VCT Regulation") place further restrictions on the way investments may be structured, the Board currently has no reason to believe they will materially affect the Company's Investment Policy.

Share buybacks

During the period, the Company bought back a total of 613,330 Ordinary shares for cancellation, amounting to 0.9% of its issued share capital at the start of the year. These shares were bought back at an approximate 10% discount to the Company's latest announced NAV, in accordance with the Company's share buyback policy.

Dividend Investment Scheme

A total of 788,503 new Ordinary shares were issued under the Dividend Investment Scheme during the period at a price of 74.00 pence.

The Company's Dividend Investment Scheme ("the Scheme") has historically been a practical and cost effective way for the Company to retain cash for investment and operating purposes. Given the Company's recent successful fundraising and current relatively high cash position, the Board has taken the decision to suspend the Scheme until further notice. This means that those shareholders who had opted into the Scheme will now receive cash in respect of any dividends paid by the Company while the scheme is suspended.  Allowing high levels of liquidity to persist can dilute returns to shareholders. Furthermore, as a result of the changes in the Finance Act 2018, funds raised under the Scheme would have an additional impact on the VCT's qualification status conditions, commencing in respect of the Company's 2019 financial year. From the start of that year, 30% of all funds raised (including under the Scheme) have to be invested in qualifying investments, within a year of the financial year-end in which shares under the Scheme are allotted. This would have placed a further compliance hurdle on top of the Company's existing investment obligations.

Your Board will continue to keep the operation of the Scheme under review and will provide shareholders with advanced notice of any future decision to reintroduce, modify or cancel the Scheme.

Liquidity

The cash or near cash resources held by the Company as at 30 June 2018, including the liquidity held by companies preparing to trade, was £24.37 million or 42.6% of net assets. While liquidity is high, the Investment Adviser has an active pipeline of investment opportunities under review, and so this is expected to reduce over time.

The VCT continues to hold its cash in a selection of money market funds with AAA credit ratings and in a number of deposit accounts, diversified among well-known financial institutions across a range of maturities.

Shareholder event

The Investment Adviser held its eighth annual shareholder event on 30 January 2018. As in previous years, the event was well attended and generated an active shareholder response. The next event is to be held on 5 February 2019, again at the Royal Institute of British Architects in central London. The programme will contain highlights from the performance of the Mobeus VCTs as well as presentations by representatives of portfolio companies. Recently, shareholders have received further details and an invitation to the event with their copy of the Mobeus VCT Newsletter.

Outlook

Your Board continues to feel that Mobeus are adapting well to the new investment parameters for VCTs. They have expanded their management team and have been active in sourcing suitable growth capital investments. The fund has exposure to some exciting businesses, which are higher risk but, if they can survive and scale up, could become very valuable. As previously warned however, shareholders should expect returns to be more volatile and entry prices are not cheap.

Externally there are a number of factors which could affect stock markets including trade and tariff wars and the protracted and indecisive execution of the Brexit negotiations.

The recent successful fundraising will provide the Company with sufficient funds to meet its cash needs and to continue the current investment rate in the medium term.

Finally, I would like to thank all of our shareholders for their continuing support.

Christopher Moore

Chairman

14 August 2018

Investment Policy

The Investment Policy is designed to meet the Company's objective.

Investments

The Company invests primarily in a diverse portfolio of UK unquoted companies. Investments are made selectively across a number of sectors, principally in established companies. Investments are usually structured as part loan stock and part equity in order to produce a regular income stream and to generate capital gains from realisations.

There are a number of conditions within the VCT legislation which need to be met by the Company and which may change from time to time. The Company will seek to make investments in accordance with the requirements of prevailing VCT legislation.

Asset allocation and risk diversification policies, including the size and type of investments the Company makes, are determined in part by the requirements of prevailing VCT legislation. No single investment may represent more than 15% (by VCT tax value) of the Company's total investments at the date of investment.

Liquidity

The Company's cash and liquid funds are held in a portfolio of readily realisable interest bearing investments, deposit and current accounts, of varying maturities, subject to the overriding criterion that the risk of loss of capital be minimised.

Borrowing

The Company's articles of association permit borrowings of amounts up to 10% of the adjusted capital and reserves (as defined therein). However, the Company has never borrowed and the Board would only consider doing so in exceptional circumstances.

Summary of VCT Regulation

To assist shareholders, the following table contains a summary of the most important rules that determine VCT approval.

Investment Review

New investments in the period

A total of £1.42 million was invested into three companies during the six months under review, comprising new investments into Proactive Investors, Super Carers and Hemmels as detailed below:

Further investments in existing portfolio companies in the period

The Company made further investments totalling £1.64 million into three existing portfolio companies during the period under review, as detailed below:

New investments post period-end

Realisations in the period

There have been no realisations during the period under review. £0.14 million was received as deferred consideration arising from the realisations of Gro-Group and Tessella in previous years.

Loan stock repayments

Loan stock repayments totalled £0.29 million from The Plastic Surgeon Holdings (formerly TPSFF Holdings) and MPB Group during the period under review.

Mobeus Equity Partners LLP

Investment Adviser

14 August 2018

Investment Portfolio Summary

at 30 June 2018

Statements of the Directors' Responsibilities

Responsibility Statement

In accordance with Disclosure and Transparency Rule (DTR) 4.2.10, Christopher Moore (Chairman), Andrew Robson (Chairman of the Audit Committee and Nomination and Remuneration Committee) and Helen Sinclair (Chairman of the Investment Committee), being the Directors of the Company confirm that to the best of their knowledge:

(a) the condensed set of financial statements, which has been prepared in accordance with Financial Reporting Standard 104 "Interim Financial Reporting" gives a true and fair view of the assets, liabilities, financial position and profit of the Company, as required by DTR 4.2.10;

(b) the Half-Year Management Report which comprises the Chairman's Statement, Investment Policy, Investment Review and the Investment Portfolio Summary includes a fair review of the information required by DTR 4.2.7, being an indication of the important events that have occurred during the first six months of the financial year and their impact on the condensed set of financial statements;

(c) a description of the principal risks and uncertainties facing the Company for the remaining six months is set out below, in accordance with DTR 4.2.7; and

(d) there were no related party transactions in the first six months of the current financial year that are required to be disclosed, in accordance with DTR 4.2.8.

Principal Risks and Uncertainties

In accordance with DTR 4.2.7, the Board confirms that the principal risks and uncertainties facing the Company have not materially changed from those identified in the Annual Report and Accounts for the year ended 31 December 2017 ("the Annual Report").

The principal risks faced by the Company are:

• economic risk;

• loss of approval as a Venture Capital Trust;

• investment risk;

• regulatory risk;

• financial and operating risk;

• market risk;

• asset liquidity risk;

• market liquidity risk; and

• counterparty risk.

A detailed explanation of the principal risks can be found in the Annual Report on page 23 and in Note 15 on pages 57 - 63 of the Annual Report and Accounts for the year ended 31 December 2017, copies of which are available on the Investment Adviser's website, www.mobeusequity.co.uk or by going directly to the VCT's website, www.mig4vct.co.uk.

Going Concern

The Board has assessed the Company's operation as a going concern. The Company's business activities, together with the factors likely to affect its future development, performance and position are set out in the Half-Year Management Report. The Directors have satisfied themselves that the Company continues to maintain a significant cash position. The majority of companies in the portfolio continue to trade profitably and the portfolio taken as a whole remains resilient and well-diversified. The major cash outflows of the Company (namely investments, buybacks and dividends) are within the Company's control.

The Board's assessment of liquidity risk and details of the Company's policies for managing its financial and capital risks are shown in Notes 15 and 16 on pages 57 - 64 of the Annual Report and Accounts for the year ended 31 December 2017. Accordingly, the Directors continue to adopt the going concern basis of accounting in preparing the half-year report and annual financial statements.

Cautionary Statement

This report may contain forward looking statements with regards to the financial condition and results of the Company, which are made in the light of current economic and business circumstances. Nothing in this report should be construed as a profit forecast.

On behalf of the Board

Christopher Moore

Chairman

14 August 2018

Unaudited Condensed Income Statement

for the six months ended 30 June 2018

The revenue column of the Income Statement includes all income and expenses. The capital column accounts for the unrealised gains/(losses) and realised gains on investments and the proportion of the Investment Adviser's fee charged to capital.

The total column is the Statement of Total Comprehensive Income of the Company prepared in accordance with Financial Reporting Standards ("FRS").  In order to better reflect the activities of a VCT and in accordance with the 2014 Statement of Recommended Practice ("SORP") issued by the Association of Investment Companies ("AIC") and updated in January 2017, supplementary information which analyses the Income Statement between items of a revenue and capital nature has been presented alongside the Income Statement. The revenue column of profit attributable to equity shareholders is the measure the Directors believe appropriate in assessing the Company's compliance with certain requirements set out in Section 274 Income Tax Act 2007.

All the items in the above statement derive from continuing operations of the Company. No operations were acquired or discontinued in the period.

Unaudited Condensed Balance Sheet

as at 30 June 2018

The financial information for the six months ended 30 June 2018 and the six months ended 30 June 2017 has not been audited.

Unaudited Condensed Statement of Changes in Equity

for the six months ended 30 June 2018

Notes:

a): The cancellation of the share premium reserve and capital redemption reserve in past years has increased the Company's special distributable reserve. The purpose of this reserve is to fund market purchases of the Company's own shares, write off any existing and future losses and for any other corporate purpose. All of this reserve arose from shares issued before 5 April 2014.

b): The Realised capital reserve and the Revenue reserve together comprise the Profit and Loss Account of the Company.

c): Under the 2017/18 Offer, 1,186,253 shares were allotted during the period, raising net funds of £1,004,581 for the Company. This figure is net of issue costs of £37,920. Having raised the full amount of funds sought, the Offer was closed on 13 March 2018.

d): During the period, the Company repurchased 613,330 of its own shares at the prevailing market price for a total cost (including stamp duty) of £464,370, which were subsequently cancelled. This is less than the figure shown in the Condensed Statement of Cash Flows by £255,539, which was included in creditors at the previous year-end.

Unaudited Condensed Statement of Changes in Equity

for the six months ended 30 June 2017

The composition of each of these reserves is explained below:

Called up share capital - The nominal value of shares originally issued and increased for subsequent share issues either via an Offer for Subscription or Dividend Investment Scheme or reduced due to shares bought back by the Company.

Capital redemption reserve - The nominal value of shares bought back and cancelled is held in this reserve, so that the Company's capital is maintained.

Share premium reserve - This reserve contains the excess of gross proceeds less issue costs over the nominal value of shares allotted under recent Offers for Subscription and the Company's Dividend Investment Scheme.

Revaluation reserve - Increases and decreases in the valuation of investments held at the period-end are accounted for in this reserve, except to the extent that the diminution is deemed permanent.

In accordance with stating all investments at fair value through profit and loss, all such movements through both revaluation and realised capital reserves are shown within the Income Statement for the period.

Special distributable reserve - The cost of share buybacks is charged to this reserve. In addition, any realised losses on the sale or impairment of investments (excluding transaction costs), and 75% of the Investment Adviser fee expense, and the related tax effect, are transferred from the realised capital reserve to this reserve. The cost of any IFA facilitation fee payable as part of the Offer for Subscription is also charged to this reserve.

Realised capital reserve - The following are accounted for in this reserve:

• Gains and losses on realisation of investments;

• Permanent diminution in value of investments;

• Transaction costs incurred in the acquisition of investments;

• 75% of the Investment Adviser fee expense and 100% of any performance incentive fee payable, together with the related tax effect to this reserve in accordance with the policies; and

• Capital dividends paid.

Revenue reserve - Income and expenses that are revenue in nature are accounted for in this reserve together with the related tax effect, as well as income dividends paid that are classified as revenue in nature.

Unaudited Condensed Statement of Cash Flows

for the six months ended 30 June 2018

Notes to the Unaudited Condensed Financial Statements

for the six months ended 30 June 2018

1. Company information

Mobeus Income and Growth 4 VCT plc is a public limited company incorporated in England, registration number 03707697. The registered office is 30 Haymarket, London, SW1Y 4EX.

2. Basis of preparation of the Financial Statements

These Financial Statements have been prepared in accordance with accounting policies consistent with Financial Reporting Standard 102 ("FRS102"), Financial Reporting Standard 104 ("FRS104") - Interim Financial Reporting, with the Companies Act 2006 and the 2014 Statement of Recommended Practice, 'Financial Statements of Investment Trust Companies and Venture Capital Trusts' ('the SORP') (updated in January 2017) issued by the Association of Investment Companies. The Financial Statements have been prepared on the historical cost basis except for the modification to a fair value basis for certain financial instruments as specified in Note 10.

The Half-Year Report has not been audited, nor has it been reviewed by the auditor pursuant to the Financial Reporting Council's (FRC) guidance on Review of Interim Financial Information.

3. Principal accounting policies

The accounting policies have been applied consistently throughout the period. Full details of principal accounting policies will be disclosed in the Annual Report, while the policy in respect of investments is included within an outlined box at the top of Note 10 on investments.

4. Income

5. Investment Adviser's fees and performance fees

25% of the Investment Adviser's fees are charged to the revenue column of the Income Statement, while 75% is charged against the capital column of the Income Statement. This is in line with the Board's expected long-term split of returns from the investment portfolio of the Company. 100% of any performance incentive fee payable for the year would be charged against the capital column of the Income Statement, as it is based upon the achievement of capital growth.

With effect from 1 April 2018, the Investment Adviser's fee upon the net funds raised from the use of the over-allotment facility of £5 million under the recent Offer has been reduced to 1% from 2%, for one year.

6. Taxation

7. Basic and diluted earnings per share

The basic earnings, revenue earnings and capital earnings per share shown below for each period are respectively based on numerators i)-iii), each divided by the weighted average number of shares in issue in the period - see iv) below:

Notes:

a): Basic earnings per share is total earnings after taxation divided by the weighted average number of shares in issue.

b): Basic revenue earnings per share is the revenue earnings after taxation divided by the weighted average number of shares in issue.

c): Basic capital earnings per share is the capital earnings after taxation divided by the weighted average number of shares in issue.

8. Dividends paid

* - £2,734,345 (30 June 2017: £3,433,037; 31 December 2017: £14,403,818) disclosed above differs to that shown in the Condensed Statement of Cash Flows of £2,150,853 (30 June 2017: £2,797,512; 31 December 2017: £11,584,256) due to £583,492 (30 June 2017: £635,525; 31 December 2017: £2,819,562) of new shares issued under the Company's Dividend Investment Scheme ("DIS").

** - These dividends were paid out of the Company's special distributable reserve.

Shareholders should note that the Board has decided to suspend the operation of the DIS scheme until further notice, as explained in the Chairman's Statement.

9. Net asset value per share

10. Summary of movement on investments during the period

Sales proceeds above of £425,065 are less than that shown in the Condensed Statement of Cash Flows of £3,183,830 by £2,758,765. This amount is cash proceeds received in the current period arising from the disposal of Gro-Group that occurred in the previous year.

There has been no significant change in the risk analysis as disclosed in Note 15 of the Financial Statements in the Company's Annual Report. The decrease in unrealised valuations of the loan stock investments above reflect the changes in the entitlement to loan premiums, and/or in the underlying enterprise value of the investee company. The decrease does not arise from assessments of credit or market risk upon these instruments.

Level 3 unquoted equity and loan investments are valued in accordance with IPEV guidelines as follows:

11. Current asset investments and Cash at bank

12. Post balance sheet events

On 13 August 2018, the Company made a new investment of £0.44 million into Rota Geek.

13. Financial statements for the year ended 31 December 2017

The financial information for the period ended 30 June 2018 does not comprise statutory accounts within the meaning of Section 434 of the Companies Act 2006. The financial statements for the year ended 31 December 2017 have been filed with the Registrar of Companies. The auditor has reported on the Financial Statements for the year ended 31 December 2017 and that report was unqualified and did not contain a statement under section 498(2) or (3) of the Companies Act 2006.