Mobeus I&g Regulatory News (MIX)

Mobeus Income & Growth VCT plc (the "Company") today announces its final results for the year ended 31 December 2019. These results were approved by the Board of Directors on 6 April 2020.

You may, in due course, view the Annual Report & Financial Statements, comprising the statutory accounts of the Company by visiting www.migvct.co.uk.

Financial Highlights

As at 31 December 2019:

Net assets: £71.89 million

Net asset value ("NAV") per share: 68.78 pence

-

Net asset value ("NAV") total return per share for the year was 13.6%.

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Share price total return per share was 20.5% for the year.

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Dividends paid and declared in respect of the year total 10.00 pence per share. The cumulative dividends paid to shareholders in respect of the past five years is 57.50 pence per share.

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The Company received a total of £11.77 million from the sale of investments or repayment of loans, a realised gain in the year of £3.35 million.

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The Company invested a total of £5.85 million into five new growth capital investments and one follow-on investment during the year.

*

Definitions of key terms and alternative performance measures shown above and throughout this report are shown in the Glossary of terms in the Annual Report.

PERFORMANCE SUMMARY

Cumulative NAV Total return performance over the last 3, 5 and 10 years is 24.2%, 30.0% and 112.8% respectively.

The table below shows the recent cumulative performance since launch as at the end of each of the last five years.

1

Source: Panmure Gordon & Co (mid-market price). The discount on the Company's shares at 31 December 2019 was 5.0%, as the share price was based on the NAV per share at 30 September 2019 of 66.96 pence per share, having been adjusted for dividends paid up until 31 December 2019. In prior years the discount was 10.0%.

2

The share price has been adjusted for a 4.00 pence dividend paid after the year end on 8 January 2020 which was ex-div at 31 December 2019.

3

The figure of 10.00 pence includes the third interim dividend of 4.00 pence referred to below. Payment of this dividend will reduce the net asset value per share at 31 December 2019 of 68.78 pence by the amount of the dividend and increase cumulative dividends paid to 128.80 pence per share.

Dividends paid post year end in respect of the year ended 31 December 2019

A third interim dividend of 4.00 pence per share (all capital) was paid to Shareholders on 8 January 2020.

Detailed performance data for all fundraising rounds and for former Matrix Income & Growth 3 VCT shareholders are shown in the Performance Data section towards the end of the Annual Report.

CHAIRMAN'S STATEMENT

I am pleased to present the annual results of Mobeus Income & Growth VCT plc for the year ended 31 December 2019.

Overview

This has been a year of excellent performance by the Company. New investments, successful realisations of investments and increases in the value of the existing portfolio have all contributed to this.

The Company has made investments into five new companies, provided follow-on funding to one existing portfolio company and has realised its investment in three portfolio companies, including the Company's first profitable exit of a younger, growth capital, investment. Furthermore, after the year end, the Company achieved its most successful exit to date, Auction Technology Group.

At the time of writing there remains significant uncertainty with regard to the lasting effects on the world economy of COVID-19 although it is clear that UK economic growth will reduce this year. Further information is contained within the Outlook section of my statement, the Investment Adviser's review and Note 10- Post Balance Sheet Events.

We are delighted with the strong support from investors for our 2019/20 fundraising launched on 25 October 2019, which was fully subscribed some three months' ahead of the scheduled close date of 31 March 2020. This liquidity also means that the Company is well placed to support its investments should they require further funding in the coming year. The Board appreciates the continued support from existing Shareholders and extends a warm welcome to new Shareholders.

Performance

As explained more fully within the Strategic Report of the Annual Report, the Company's NAV total return per share for the year ended 31 December 2019 was an exceptional 13.6% (2018: 4.9%) (being the closing NAV plus dividends paid in the year, divided by the opening NAV) while the share price total return was 20.5% (2018: 6.3%) enhanced by the reduction during the year from 10% to 5% (approximately) in the discount to the net asset value at which the shares trade (see Share buybacks section below). As a result of this performance, the NAV cumulative total return per share (being the closing NAV plus total dividends paid to date since launch in 2004) rose during the year by 5.2% from 184.05 pence to 193.58 pence.

This NAV total return for the year was primarily attributable to strong gains in the value of the portfolio of investee companies held at the year end and profitable exits of more mature investments, The Plastic Surgeon and ASL, as well as the maiden profitable exit of a younger growth capital investment, Redline Worldwide.

After the year end, the Company realised its holding in Pattern Analytics Limited (trading as Biosite), generating an overall return of 1.5x the original cost.

Shortly afterwards, Turner Topco Limited (trading as Auction Technology Group), a mature portfolio company, was realised, generating a return of 4.5x the original cost. In isolation and after allowing for tax on the income portion of proceeds, this would result in an uplift of 2.71 pence per share over the 31 December 2019 NAV of 68.78 pence.

Further information on performance during the year is contained in the Investment Adviser's Review on and the Strategic Report within the Annual Report.

Dividends

The dividends paid in respect of the year ended 31 December 2019 total 10.00 pence (2018: 7.00 pence) per share, comprising of:

4.00 pence per share paid on 20 September 2019 comprising 2.50 pence from capital and 1.50 pence from income;

2.00 pence per share paid on 6 December 2019 from capital; and

4.00 pence per share paid on 8 January 2020 from capital.

The cumulative dividends paid since inception in 2004 are 128.80 pence (2018:118.80 pence) per share.

The Company's target of paying a dividend of at least 4.00 pence per share in respect of each financial year has been achieved and often exceeded. Whilst the Board still believes this dividend target is attainable, it should be noted that the gradual move of the portfolio to a larger share of younger growth capital investments will lead to a reduction in dividends and interest received from portfolio companies. In turn, dividends in any given year will increasingly depend upon realised profits on sales of portfolio companies, bolstered by any distributions of special reserves, which is likely to result in a greater volatility of dividends.

 To the extent that dividends are paid other than out of income or from gains on investments, for instance out of special distributable reserves, Shareholders should note this will result in a reduction in NAV over the period. Total dividends paid and payable in respect of the year are 10.00 pence per share comprising 1.50 pence (income) and 8.50 pence per share (capital) from special distributable reserves.

A full dividend history is contained in the Performance Data appendix in the Annual Report and on the Company's website. www.mobeus.co.uk/investor-area/ vct-investors

On 2 April 2020, the Board declared a 6.00 pence per share Interim dividend in respect of the year ending 31 December 2020 which will be payable on 7 May 2020 to Shareholders on the Register on 14 April 2020.

Investment portfolio

The portfolio was valued at £51.70 million (2018: £48.20 million) at the year-end representing 116.9% of cost (2018: 103.1%).

Nineteen new growth capital investments totalling £22.15 million have been completed since the change in the VCT rules introduced in 2015. At the year end 45.2% (2018: 34.3%) of the portfolio was held in younger growth capital investments, while 54.8% (2018: 65.7%) of the value of the investment portfolio was held in more mature investments made before the rules changed.

During the year, £5.85 million was invested in five new growth capital investments and one existing portfolio company (analysed in the Investment Adviser's Review and explained within Note 8 to the Financial Statements).

The new growth capital investments totalling £5.27 million were made into the following companies:

●● Arkk Consulting, a regulatory and reporting requirement service provider;

●● Parsley Box, a supplier of home delivered ambient ready meals for the elderly;

●● Active Navigation, a provider of enterprise-level file analysis software;

●● IPV, a developer of media asset management software; and

●● Bleach, an established and trusted brand in the hair colourants market.

In addition, one follow-on growth investment of £0.58 million was made into:

●● MPB Group, an online marketplace for used camera and video equipment.

We expect follow-on investments to continue to be a feature of the growth capital investments as they seek to achieve scale.

Cash proceeds totalling £11.77 million for the year were received from portfolio companies that were either sold, repaid loans or settled other capital proceeds. Of this total, £8.88 million was received as cash proceeds from the sales of The Plastic Surgeon, ASL and Redline (the first growth capital investment to be profitably realised). Proceeds of £1.09 million were received from consideration proceeds relating to Entanet, an investment sold in a previous year, and from the partial realisation of Master Removers Group. A further £1.80 million was received as loan repayments.

For the year under review, the portfolio generated a net gain of £3.35 million on these realised investments. Within this, the principal gains were from The Plastic Surgeon, ASL and Redline sales (which were realised at a profit over opening valuations of £0.63 million, £1.64 million and £0.70 million respectively). Further gains of £0.38 million for the year were achieved by receipts of consideration from the sale of Entanet realised in a prior year as well as the partial exit from Master Removers Group.

The portfolio also achieved a net increase of £5.79 million on investments still held at the year-end, with positive increases from Auction Technology Group (subsequently realised as noted below), MPB Group and Proactive partially offset by valuation falls at Wetsuit Outlet, Supercarers and Master Removers Group.

After the year end, the Company realised its holding in Pattern Analytics Limited (trading as Biosite), another of its growth capital investments. The Company received £2.45 million in cash over the life of the investment and generated a return on original cost of 1.5x in the three years that this investment was held. These proceeds were the same as the year-end valuation of this investment.

Also after the year-end, the Company achieved a substantial gain over cost upon the sale of Auction Technology Group, receiving capital proceeds of £6.84 million compared to a value at the year-end of £4.96 million. This further appreciation in capital value of £1.88 million upon sale reflects the strategic premium paid by the acquirer of the business. The Company also received interest owed on completion of £1.78 million that has not been recognised in these 2019 accounts. Over the 11½ year life of the investment, total proceeds of £14.77 million have been received, an overall multiple over cost of 4.5x and an IRR of 29%.

These transactions and valuation movements are explained further in the Investment Adviser's Review.

Review of longer-term performance

The Board also regularly reviews the Company's total (income and capital) return performance on both a NAV and Share Price basis compared to its peer group. Based on the statistics prepared by Morningstar at 31 December 2019 over the last five years, the Company was ranked 8th on a NAV total return basis and 1st on a Share Price total return basis out of 38 generalist VCTs, both assuming dividends are reinvested (source: AIC). Additionally, the Company was ranked 2nd on a NAV total return basis and 3rd on a Share Price total return basis, out of 31 generalist VCTs, assuming dividends are reinvested, over the last ten years. The Board believes this to be a commendable performance.

Shareholders who invested in 2004 at the launch of the Company have seen a NAV cumulative total return of 193.58 pence per share compared with their initial investment cost of 100 pence per share, or a net cost of 60 pence per share (after initial income tax relief of 40 pence of their investment). As part of this return, 124.80 pence per share has been paid to Shareholders in dividends up to the year end. This represents an average annual yield on the initial 100 pence investment of 8.2% and 13.6% on the adjusted investment cost of 60 pence. The balance of the total return is the December 2019 NAV of 68.78 pence per share.

Industry and regulatory developments

Although no further changes have emerged in the year, a previous change, already announced, whereby 80% of the Company's total investments must be in qualifying investments, applies to the Company from 1st January 2020. The Board has therefore ensured that this requirement has been met at this year-end.

Fundraising

On 25 October 2019, the Company launched an offer for subscription of £10 million with an over-allotment facility of an additional £5 million, alongside offers from the other Mobeus advised VCTs. I am pleased to report that the Offer experienced strong demand such that the Company received subscriptions amounting to the full amount sought shortly after the Company's year-end in January 2020. In accordance with the Offer's prospectus, the first allotment under the Offer took place on 8 January 2020, which included all applications received up to 20 December 2019 totalling £12.70 million. The balance of subscriptions of £2.30 million will be allotted before the end of the tax year on 2 April 2020.

Share buybacks

On 1 August 2019, the Board changed its share buyback policy objective of maintaining the discount to NAV at which the Company's shares may trade in the market from approximately 10% or less, to approximately 5% or less. This change will have contributed to the share price total return of 20.5%.

During the year, the Company made five purchases of its shares, buying back a total of 2,375,656 shares, allowing Shareholders who wanted to sell their shares to do so. The buybacks represented 2.2% (2018: 1.8%) of the issued share capital of the Company at the beginning of the year. Further details are included in the Strategic Report within the Annual Report. The shares bought back were subsequently cancelled.

Shareholder Event

This year's annual Shareholder Event was held on Tuesday, 4 February 2020 at the National Gallery in Central London. Separate day time and evening session included presentations on the Mobeus advised VCTs' investment activity and performance. We have received positive feedback from many of the circa 400 people who attended this year's event and were pleased to hear that overall they found the day informative and worthwhile.

Fraud Warning

Boiler Room fraud and unsolicited communications to shareholders.

We have been made aware of an increase in the number of Shareholders being contacted in connection with sophisticated but fraudulent financial scams which purport to come from the Company or to be authorised by it. This is often by a phone call or an email usually originating from outside of the UK, often claiming or appearing to be from a corporate finance firm and typically offering to buy your VCT shares at an inflated price.

Further information on boiler room scams and fraud advice plus who to contact, can be found first in the answer to a question "What should I do if I receive an unsolicited offer for my shares?" within the section "A guide to VCTs" itself within the VCT Investor area of the Investment Adviser's website: www.mobeus.co.uk/investor-area and secondly, a link to the FCA's ScamSmart site: www.fca.org.uk/scamsmart

We strongly recommend that you seek financial advice before taking any action if you remain in any doubt. You can also contact the Investment Adviser on 0207 024 7600, or email info@mobeus.co.uk to check whether any claims are genuine.

Shareholders are also encouraged to ensure their personal data is always held securely and that data held by the Registrars of the Company is up to date, to avoid cases of identity fraud.

Annual General Meeting

The next Annual General Meeting ("AGM") of the Company will be held at 2:00 pm on Tuesday, 12 May 2020 at The Clubhouse, 8 St James's Square, London SW1Y 4JU. Shareholders should note that it is likely that the Stay at Home Measures will still be in place at the time of the AGM and therefore gatherings of two people or more will not be permitted and Shareholders not allowed to attend the AGM meeting in person. The Board encourages Shareholders to submit their vote by proxy either by completing and returning the form enclosed or proxy votes may also be submitted electronically via Computershare's Investor Centre at: https://www. computershare.com/uk/individuals/im-a-shareholder/manage-your-shareholdings-online

If the meeting cannot be held, the Company will make an RNS announcement advising of the changes, which will also be added to the Company's website: www.migvct.co.uk to which Shareholders should refer. The Notice of the meeting is included at the end of the Annual Report and an explanation of the resolutions to be proposed can be found in the Directors' Report of the Annual Report

Outlook

While the effects of the COVID-19 outbreak and its recent impact on world economies generally are uncertain, I draw Shareholders' attention to the announcement of an unaudited NAV at 24 March 2020 of 58.95p per share (further details are contained within the Annual Report). The outbreak is already an event of major significance for all economic activity. In conjunction with the Investment Adviser, we will continue to assess the consequences carefully and work to address issues as they arise.

While the short-term outlook for the UK economy is unpredictable, your Board considers that your Company is well positioned, with a portfolio still including relatively mature investments providing an income return, and an increasing proportion of younger, growth capital companies seeking to achieve scale. The strong results achieved for the year reflect the growth and valuation increases in both elements of the portfolio, underpinned by successful realisations. It is particularly pleasing to report the Company's realisations of two growth capital investments, Redline and Pattern Analytics (trading as Biosite), made since the VCT rule change in 2015.

Your Board again cautions that investing in younger growth capital investments involves increased risk and that returns from them may take longer to emerge and may be more volatile. Shareholders should expect these companies to take time to achieve their desired objectives and scale, but there also exists the potential for significant gains in some cases. although this will hopefully be more than offset by significant longer-term gains in some cases.

The Company still retains a significant portfolio of investments made before the rule change in 2015, many of which have the potential to be realised at a significant profit. The sale of Auction Technology Group after the year end is a particularly strong example. Shareholders are reminded that the Company's investments remain relatively high risk and their returns may remain volatile.

As I referred to in my Overview above, the impact of COVID-19 on the valuation of, and outlook for, companies in the portfolio is yet to be fully determined but, in conjunction with the Investment Adviser, we will be working to address issues as they arise.

The successful fundraising in 2019/20 provides the Company with adequate funds to meet its cash needs (bolstered now by the sales of Biosite and Auction Technology Group) and to continue to make growth investments as and when markets stabilise.

Finally, I would like to take this opportunity once again to thank all Shareholders for their continued support.

Clive Boothman

Chairman

INVESTMENT POLICY

The Company's policy is to invest primarily in a diverse portfolio of UK unquoted companies. Investments are generally structured as part loan and part equity in order to receive regular income, to generate capital gain upon sale and to reduce the risk of high exposure to equities. To spread the risk further, investments are made in a number of businesses across different industry sectors.

The Company's cash and liquid resources are held in a range of investments which can be of varying maturities, subject to the overriding criterion that the risk of loss of capital be minimised.

The Company seeks to make investments in accordance with the requirements of VCT regulation.

The full text of the Company's Investment Policy is available in Key Policies in the Strategic Report within the Annual Report.

Investment ADVISER'S Review

COVID-19 update after the year end

After the year end, the world has been in the midst of a COVID-19 pandemic. Many of the VCTs' portfolio companies are encountering very challenging trading conditions, the full extent and impact of which will emerge only over time. The Investment Adviser has reviewed and evaluated the impact of COVID-19 on each sector exposure and upon the value of the portfolio. As mentioned in the Chairman's Statement, an initial evaluation of the impact of COVID-19 on the valuation of the portfolio companies resulted in an unaudited NAV of 58.95 pence per share as at 24 March 2020. The Investment Adviser is fully engaged with the portfolio companies to ensure that all steps are being taken to assist each to trade through this crisis and restore and grow value thereafter. As part of this, Mobeus is reviewing the implications for new and follow-on investments with the recent fundraising and relatively high liquidity levels providing a solid foundation for such assessments.

Portfolio review

The portfolio's activity in the year is summarised as follows:

1 - These figures, for both tables, have been adjusted due to £0.28 million of consideration recognised as a debtor at the prior year-end, but received in this year. See Note 8 to the Financial Statements for further details.

This has been a year of further solid progress building the growth capital portfolio with five investments into new growth businesses totalling £5.27 million and one existing growth portfolio company receiving follow-on funding totalling £0.58 million.

Net cash proceeds of £11.77 million were received, primarily from three realisations. After the end of the year, two further disposals have occurred, realising a further £10.96 million, the latter of which has delivered an exceptionally large return and profit over the life of that investment. This means five significant disposals have been achieved in nine months, which is unlikely to be repeated, in the near-term at least. Details of these movements for each investee company are provided at the end of this Investment Review.

Since the change in the VCT rules in 2015, the Company has invested £22.15 million in younger growth capital investments, bringing the proportion of the portfolio held in growth capital investments made after the rule change in 2015 to 45.2% by value at the year end.

As mentioned in the Chairman's Statement, investing in younger growth capital investments does involve increased risk. Returns from these companies are expected to take longer to materialise and may be more volatile.

The portfolio's contribution to the overall results of the Company is summarised below:

1 - These figures have been adjusted due to £0.28 million of consideration recognised as a debtor at the prior year-end, but received in this year. See Note 8 to the Financial Statements for further details.

Valuation changes of portfolio investments still held

Within the valuation increases of £8.07 million, the principal contributors were: Auction Technology Group - £2.90 million, MPB Group - £1.09 million and Proactive Group - £1.03 million. Auction Technology Group, which the Company part realised in 2014, traded well above budget in 2019 with growth showing in all areas of its business. The sale of this business after the year end concluded an 11½ year partnership with the Company. MPB Group has grown its revenues substantially. In July it secured £9.00 million of further investment at a higher valuation, of which the Company contributed £0.58 million and a total of £2.00 million was provided by the Mobeus VCTs.

A small number of new growth investments (such as Proactive Group) have shown initial uplifts from cost, due in large part to the structure of the Company's investment, but, in some cases, also due to the underlying investee company performance. Proactive Group has made consistent positive progress in all its markets since investment. The principal driver of the value increase over the period however is the preference structure of the investment which allocates a greater share of economic value to the Company at the current stage of the business's development.

Within total valuation decreases of £(2.28) million, the main reductions were: Wetsuit Outlet - £(0.75) million, Supercarers - £(0.44) million and Master Removers Group - £(0.34) million. Wetsuit Outlet continues to disappoint post investment, although it is anticipated that measures recently implemented to restore margins will soon begin to improve profitability. Supercarers is performing well behind plan and is undertaking a restructure of its cost base. Finally, whilst Master Removers Group remains very profitable and cash generative, a slowdown in the London and South East property market over the last few months has impacted recent performance.

Growth capital investing involves companies which often have not achieved profitability, and as a result, have to be measured on other metrics. The table below shows the proportion of the portfolio that is represented by high growth but yet to be profitable companies (often valued by reference to revenue or gross profit multiple), compared with more mature, established companies with a history of profitability and which can therefore be valued on an earnings multiple:

Realised gains and losses from sales of investments

The Company achieved net realised gains on the sale of investments of £3.35 million during the year mainly comprising three significant and profitable exits.

In May, the Company realised its long held investment in The Plastic Surgeon generating a gain in the year of £0.63 million which contributed to total proceeds over the life of the investment of 5.6x the cost of the investment.

Shortly afterwards, in June, ASL Technology Group was sold generating a gain in the year of £1.64 million and, including all proceeds received since investment, a multiple of cost of 2.2x.

In December, the Company realised its first growth capital investment made under the new VCT rules, Redline Worldwide, generating a gain of £0.70 million in the year. Over the life that this investment was held, a multiple of 1.6x cost has been achieved to date with further proceeds potentially receivable in due course. £0.10 million of these proceeds were received following the year end, bringing the multiple on cost achieved to 1.7x

Finally, the Company achieved a further gain of £0.34 million arising from the disposal of Entanet in 2017, increasing the final return on cost to 2.8x, while the partial realisation of Master Removers Group during the year generated a gain of £0.04 million.

After the year end, in February, the Company exited investments held in Pattern Analytics (trading as Biosite) and Auction Technology Group ("ATG"). Pattern Analytics (trading as Biosite) was realised generating proceeds of £2.45 million over the life of the investment and contributed to a gain over original cost of 1.5x and ATG generated proceeds over the life of the investment of £14.77 million compared to an original cost of £3.27 million, a multiple on cost of 4.5x over the 11 ½ years this investment was held - an exceptional return for Shareholders.

Investment portfolio yield and capital repayments

During the year under review, the Company received the following amounts in loan interest and dividend income:

1 Total portfolio income in the year is generated solely from investee companies within the portfolio. See Note 3 of the Financial Statements for all income receivable by the Company.

The Company also received loan stock repayments of £1.80 million, at cost.

New investment in the year

A total of £5.27 million was invested into five new investments during the year as detailed below:

Company

Business

Date of investment

Amount of new investment (£m)

Parsley Box

Home delivered, ambient ready meals for the elderly

May 2019

0.85

Arkk Consulting

Regulatory and reporting requirement service provider

May 2019

1.45

Arkk Consulting (trading as Arkk Solutions) provides services and software to enable organisations to remain compliant with regulatory reporting requirements. Arkk was established in 2009 and currently has over 800 clients across 20 countries. These include more than 80 of the FTSE 350, and half of the largest 20 accountancy firms in the UK. The investment will build on Arkk's reputation and customer base, to target the cloud-based period end reporting market by building the sales and marketing team. The company's audited accounts for the year ended 31 December 2018 show turnover of £3.36 million and a loss before interest, tax and amortisation of goodwill of £(0.34) million.

Active Navigation

File analysis software

November 2019

1.41

Data Discovery Solutions, trading as Active Navigation, is a fi le analysis software solution which makes it easier for companies to clean up network drives, respond to new data protection laws and dispose of redundant and out dated documents. Active Navigation's solution is used by significant blue chip customers, particularly those in highly regulated industries such as energy and professional services, as well as government entities in the USA, Canada, Australia and the UK. Active Navigation will seek to drive continued growth from its fi le analysis platform with the recruitment of experienced sales and professional services staff. The company's audited accounts for the year ended 30 June 2018 show revenues of £5.02 million and a profit before interest, tax and amortisation of goodwill of £1.45 million.

IPV

Media Asset Software

November 2019

0.89

IPV Limited ("IPV") has developed a media asset management software product called 'Curator', enabling enterprise level customers to receive and search hours of video footage, edit into multiple short clips and broadcast to online video platforms (such as YouTube) and company intranets, in a very short time. IPV's impressive list of blue-chip clients, such as Turner Sports, NASA and Sky, are looking to improve efficiency in managing their video content. The company has built an impressive senior management team of proven operators and is targeting a media asset management market in the US and UK worth an estimated £1 billion per annum. The investment will be used to build out a sales and marketing team and to fund lead generation for new direct and partner channels as well as supporting the existing partner network. The company's audited accounts for the year ended 31 December 2018 show revenues of £2.25 million and a loss before interest, tax and amortisation of goodwill of £(1.28) million.

Bleach

Hair colourants brand

December 2019

0.67

The Company made a further investment totalling £0.58 million into one existing portfolio company during the year under review, as detailed below:

Company

Business

Date of investment

Amount of new investment (£m)

MPB Group

Online marketplace for used camera and video equipment

July 2019

0.58

MPB is Europe's leading online marketplace for used camera and video equipment. Based in Brighton, its custom-designed pricing technology enables MPB to offer both buy and sell services through the same platform and offers a one-stop shop for all its customers. Having expanded into the US (opening a New York offi ce) and German markets as part of the initial VCT investment round, this follow-on investment, alongside funds provided by the Proven VCTs, is to support its continued growth plan. Having more than doubled its sales over the last two years, this investment will help drive the company's objective to create a £100m+ turnover internationally diverse and profitable re-commerce business. The company's audited accounts for the year ended 31 March 2019 show turnover of £31.91 million and a loss before interest, tax and amortisation of goodwill of £(1.73) million.

The Company realised its investments in The Plastic Surgeon, ASL and Redline, during the year, generating an aggregate net realised gain for the year of £2.97 million. Net cash proceeds received from the sale of these investments totalled £8.88 million, as detailed below:

Company

Business

Period of investment

Total cash proceeds over the life of the investment/Multiple over cost

The Plastic Surgeon

Supplier of snagging and finishing services to the property sector

April 2008 to May 2019

£4.15 million

5.6 x cost

The Company sold its remaining investment in The Plastic Surgeon to Polygon Group for £2.32 million (realised gain in the year: £0.63 million), including a preference share repayment of £0.09 million in January 2019. Over the eleven years this investment was held, it generated proceeds of £4.15 million compared to an original investment cost of £0.74 million which is a multiple on cost of 5.6x and an IRR of 20.5%.

ASL

Printer and photocopier services

December 2019 to June 2019

£6.42 million

2.2 x cost

The Company sold its investment in ASL Technology for £5.18 million (realised gain in the year of £1.64 million). Over the eight and a half years this investment was held, it generated proceeds of £6.42 million compared to an original investment cost of £2.94 million, which is a multiple on cost of 2.2x and an IRR of 12.6%.

Redline

Provider of security services to the aviation industry and other sectors

February 2016 to December 2019

£1.78 million

1.6 x cost

The Company sold its investment in Redline Worldwide for £1.38 million (realised gain in the year of £0.70 million). Since investment in 2016, the investment has generated proceeds to date of £1.78 million compared to an original investment cost of £1.10 million, which is a multiple on cost to date of 1.6x and an IRR of 16.0%. Further proceeds may be receivable in due course.

There was a partial realisation of Master Removers Group ("MRG") which generated proceeds of £0.46 million and a realised gain of £0.04 million in the year. This occurred following a reorganisation of MRG's share capital resulting in the Company increasing its equity share in MRG from 5.7% to 8.6%.

Loan stock repayments and other receipts

The Company also received loan repayments totalling £1.80 million, most notably Hollydale Management Limited (£0.59 million), and consideration proceeds from an investment realised in a previous year of £0.63 million.

In addition to net realised gains for the year on the three disposals above of £2.97 million, there were also consideration gains of £0.34 million from an investment realised in a prior year and MRG's realised gain of £0.04 million, to equal the total realised gains for the year of £3.35 million.

Realisations after the year end

After the year end, the Company realised its investments in Biosite and Turner Topco Limited (trading as Auction Technology Group).

Mobeus Equity Partners LLP

Investment Adviser

Market

Date of

Total

Valuation

Like for

% value

% of equity

sector

investment

book

like

of net

held by

cost

valuation

assets

funds

increase/

advised by

£'000

£'000

(decrease)

Mobeus2

Qualifying investments

over year1

Unquoted investments

Tovey Management Limited (trading

Electronic and

Oct-15

2,979

4,435

27.6%

6.1%

43.4%

as Access IS)

electrical

Provider of data capture and scanning

equipment

hardware

MPB Group Limited

General retailers

Jun-16

1,900

3,465

60.7%

4.7%

23.6%

Online marketplace for used

photographic and video equipment

Virgin Wines Holding Company

General retailers

Nov-13

2,439

3,128

4.4%

4.4%

42.0%

Limited

Online wine retailer

Vectair Holdings Limited

Support services

Jan-06

139

2,926

45.0%

4.1%

24.0%

Designer and distributor of washroom

products

Preservica Limited

Software and

Dec-15

2,099

2,705

(1.9)%

3.8%

48.4%

Seller of proprietary digital archiving

computer services

software

EOTH Limited (trading as Equip

General retailers

Oct-11

1,000

2,607

23.5%

3.6%

8.0%

Outdoor Technologies)

Branded outdoor equipment and

clothing

Pattern Analytics Limited (trading as

Software and

Nov-16

1,583

2,341

-

3.3%

23.9%

Biosite)

computer services

Workforce management and security

services for the construction industry

Proactive Group Holdings Inc

General financial

Jan-18

927

2,331

79.1%

3.2%

11.4%

Provider of media services and

investor conferences for companies

primarily listed on secondary public

markets

Vian Marketing Limited (trading as

Leisure goods

Jul-15

1,189

1,768

(3.0)%

2.5%

31.5%

Red Paddle Co)

Design, manufacture and sale

of stand-up paddleboards and

windsurfing sails

CGI Creative Graphics International

General industrials

Jun-14

1,808

1,677

(6.6)%

2.3%

26.9%

Limited

Vinyl graphics to global automotive, recreational vehicle and aerospace

markets

Market

Date of

Total

Valuation

Like for

% value

% of equity

sector

investment

book

like

of net

held by

cost

valuation

assets

funds

increase/

advised by

£'000

£'000

(decrease)

Mobeus2

over year1

My TutorWeb Limited

Support services

May-17

1,534

1,534

-

2.1%

30.8%

Digital marketplace connecting

school pupils seeking one-to-one

online tutoring

Ibericos Etc. Limited (trading as

Travel & Leisure

Jan-17

1,245

1,519

12.3%

2.1%

25.0%

Tapas Revolution)

Spanish restaurant chain

Arkk Consulting Limited

Software and

May-19

1,446

1,477

2.1%3

2.1%

33.6%

Provider of services and software

computer services

to enable organisations to remain

compliant with regulatory reporting

requirements

Data Discovery Solutions Limited

Software and

Nov-19

1,413

1,413

New

2.0%

28.5%

(trading as Active Navigation)

computer services

investment

Provides the global market leading

file analysis software for information

governance, security and compliance

Media Business Insight Holdings

Media

Jan-15

2,518

1,407

65.4%

2.0%

67.5%

Limited

A publishing and events business

focused on the creative production

industries

Tharstern Group Limited

Software and

Jul-14

1,377

1,395

3.3%

1.9%

52.5%

Software based management

computer services

information systems

Buster and Punch Holdings Limited

General retailers

Mar-17

668

1,166

34.7%

1.6%

20.0%

Industrial inspired lighting and

interiors retailer

Rota Geek Limited

Support services

Aug-18

571

1,067

19.2%

1.5%

17.1%

Workforce management software

Blaze Signs Holdings Limited

Support services

Apr-06

492

1,054

1.4%

1.5%

52.5%

Manufacturer and installer of signs

Master Removers Group 2019

Support services

Dec-14

418

943

(44.9)%

1.3%

30.5%

Limited (formerly Master Removers

Group Limited) (trading as Anthony

Ward Thomas, Bishopsgate and

Aussie Man & Van)

A specialist logistics, storage and

removals business

Parsley Box Limited

General retailers

May-19

854

900

5.4%3

1.3%

22.0%

Supplier of home delivered, ambient

ready meals for the elderly

IPV Limited

Software and

Nov-19

890

890

New

1.2%

26.6%

Provider of media asset software

computer services

investment

Bleach London Holdings Limited

General retailers

Dec-19

674

674

New

0.9%

15.6%

Hair colourants brand

investment

Kudos Innovations Limited

Software and

Nov-18

421

660

56.7%

0.9%

14.6%

Online platform that provides and

computer services

promotes academic research

dissemination

Manufacturing Services Investment

General retailers

Jul-17

2,174

624

(12.9)%

0.9%

27.5%

Limited (trading as Wetsuit Outlet)

Online retailer in the water sports

market

Market

Date of

Total

Valuation

Like for

% value

% of equity

sector

investment

book

like

of net

held by

cost

valuation

assets

funds

increase/

advised by

£'000

£'000

(decrease)

Mobeus2

over year1

RDL Corporation Limited

Support services

Oct-10

1,558

458

(38.6)%

0.6%

45.2%

Recruitment consultant for the

pharmaceutical, business intelligence

and IT industries

Jablite Holdings Limited

Construction and

Apr-15

502

126

(23.2)%

0.2%

40.1%

Manufacturer of expanded

materials

polystyrene products

Veritek Global Holdings Limited

Support services

Jul-13

2,045

-

(100.0)%

0.0%

50.8%

Maintenance of imaging equipment

Racoon International Group Limited

Personal goods

Dec-06

1,213

-

-

0.0%

36.0%

Supplier of hair extensions, hair care

products and training

BookingTek Limited

Software and

Oct-16

771

-

(100.0)%

0.0%

14.9%

Direct booking software for hotels

computer services

Super Carers Limited

Support services

Mar-18

580

-

(100.0)%

0.0%

18.7%

Online platform that connects people

seeking care home from experienced

independent carers

CB Imports Group Limited (trading

General retailers

Dec-09

350

-

-

0.0%

23.2%

as Country Baskets)

Importer and distributor of artificial

flowers and floral sundries

Total qualifying investments

39,777

44,690

62.1%3

Non-qualifying investments

Turner Topco Limited (trading as

Media

Oct-08

2,501

4,957

141.4%

6.9%

15.5%

Auction Technology Group)

SaaS based online auction

marketplace platform

Media Business Insight Limited

Media

Jan-15

764

876

-

1.2%

67.5%

A publishing and events business

focused on the creative production

industries

Manufacturing Services Investment

General retailers

Jul-17

571

571

-

0.8%

27.5%

Limited (trading as Wetsuit Outlet)

Online retailer in the water sports

market

EOTH Limited (trading as Equip

General retailers

Oct-11

298

324

-

0.5%

8.0%

Outdoor Technologies)

Branded outdoor equipment and

clothing (Rab and Lowe Alpine)

Market

Date of

Total

Valuation

Like for

% value

% of equity

sector

investment

book

like

of net

held by

cost

valuation

assets

funds

increase/

advised by

£'000

£'000

(decrease)

Mobeus2

over year1

Electronic and

Oct-15

285

285

(100.0)%

0.4%

43.4%

Tovey Management Limited

(trading as Access IS)

electrical

Provider of data capture and

equipment

scanning hardware

H Realisations (2018) Limited

General retailers

Mar-18

27

-

-

0.0%

0.0%

(formerly Hemmels Limited)

Company specialising in sourcing,

selling and servicing of high price

classic cars

Total non-qualifying investments

4,446

7,013

9.8%

Total investment portfolio

44,223

51,703

71.9%

Current asset investments and cash

20,175

20,175

28.1%

at bank3

Total investments

64,398

71,878

100.0%

Other assets

226

0.3%

Current liabilities

(216)

(0.3)%

Net assets

71,888

100.0%

Portfolio split by type

Investment made prior to 2015 VCT rule change

23,875

28,366

54.8%

Investment made after 2015 VCT rule change

20,348

23,337

45.2%

44,223

51,703

100.0%

1 This percentage change in 'like for like' valuations is a comparison of the 31 December 2019 valuations with the 31 December 2018 valuations (or where a new investment has been made in the year, the investment amount), having adjusted for any partial disposals, loan stock repayments or new investments in the year.

2 The other funds advised by Mobeus include Mobeus Income & Growth 2 VCT plc, Mobeus Income & Growth 4 VCT plc and The Income & Growth VCT plc. Details are contained in Note 9 to the accounts.

3 New investment in year.

4 Disclosed as urrent asset investments and Cash at bank within Current assets in the Balance sheet.

PRINCIPAL RISKS, management and regulatory environment

The Directors acknowledge the Board's responsibilities for the Company's internal control systems and have instigated systems and procedures for identifying, evaluating and managing the significant risks faced by the Company. The Board's risk appetite is cognitive of the risks and rewards of investing in small unquoted companies. A key risk management review takes place at each quarterly Board meeting. The principal risks identified by the Board, a description of the possible consequences of each risk and how the Board manages each risk are set out below: