| RNS | 28 November 2023 |
Mercia Asset Management PLC
("Mercia" or the "Group" or the "Company")
Interim results for the six months ended 30 September 2023
Continuing profitable progress and a strong balance sheet, underpins a 6% increase in the interim dividend and a share buyback of up to £5.0million
Mercia Asset Management PLC (AIM: MERC), the proactive regionally focused, profitable specialist asset manager with c.£1.5billion of assets under management ("AuM"), is pleased to announce its interim results for the six months ended 30 September 2023.
Mark Payton, Chief Executive Officer of Mercia, commented:
"Mercia has never been financially stronger. The first six months of FY24 have witnessed record revenues derived predominantly from Mercia's profitable and cash generative third-party fund management operations. Mercia is now firmly established as a leading provider of private capital across venture, debt and private equity in the UK within the £0.5million to £20million range, with further attractive growth prospects across all of these discrete strategic asset classes.
"The Group's recent successful exit from its largest direct investment, nDreams, has materially increased Mercia's debt-free liquidity position to c.£60million today. We are therefore pleased to announce a share buyback of up to £5.0million."
Highlights
· Group AuM of £1,461.8million (H1 2023: £979.4million; FY 2023: £1,437.3million); an increase of 1.7% with no redemptions
· Revenue up c.23% to £15.0million (H1 2023: £12.2million)
· EBITDA up c.33% to £2.8million (H1 2023: £2.1million)
· Adjusted operating profit up c.54% to £5.5million (H1 2023: £3.6million)
· Direct investment portfolio fair value of £142.5million (FY 2023: £136.6million)
· Profit before taxation of £1.4million (H1 2023: £7.4million)
· Interim dividend up c.6% to 0.35 pence per share (H1 2023: 0.33 pence per share)
· Strong balance sheet with cash, cash equivalents and short-term liquidity investments of £36.5million as at 30 September 2023 (H1 2023: £56.1million; FY 2023: £37.8million), increased post period end to c.£60million following the sale of nDreams
· Net assets per share of 45.3 pence (H1 2023: 46.8 pence; FY 2023: 45.4 pence)
Financial results
| | | Unaudited 30 September 2023 | Unaudited 30 September 2022 | Audited 31 March 2023 |
| ||
| Statutory results | | | | ||||
| | Revenue | £15.0m | £12.2m | £25.9m |
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| | Fair value movement in direct investments | £(1.6)m | £5.6m | £1.2m |
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| | Profit before taxation | £1.4m | £7.4m | £2.4m |
| ||
| | Basic earnings per share | 0.30p | 1.59p | 0.64p |
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| | Interim dividend per share 1 | 0.35p | 0.33p | 0.33p |
| ||
| | |
| | |
| ||
| | Cash, cash equivalents and short-term liquidity investments | £36.5m | £56.1m | £37.8m |
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| | Net assets | £202.4m | £206.0m | £202.9m |
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|
Alternative performance measures | | | | ||||
| | AuM 2 | £1,461.8m | £979.4m | £1,437.3m |
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| | EBITDA 3 | £2.8m | £2.1m | £5.2m |
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| | Adjusted operating profit 4 | £5.5m | £3.6m | £7.6m |
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| | Net assets per share | 45.3p | 46.8p | 45.4p |
| ||
1 The interim dividend will be paid on 10 January 2024 to shareholders on the register at the close of business on 8 December 2023.
2 AuM is defined as the value of funds under management from which the Group earns fund management revenues, plus the Group's consolidated net assets.
3 EBITDA is defined as operating profit/(loss) before exceptional item, depreciation, realised gains/(losses) on the sale of direct investments, fair value movement in direct investments, share-based payments charge, amortisation of intangible assets and movement in fair value of deferred consideration.
4 Adjusted operating profit is defined as EBITDA plus net finance income.
Managed fund movements
· Third-party funds under management ("FuM") of c.£1,260million (H1 2023: c.£773million; FY 2023: c.£1,234million), with no redemptions
o Venture FuM of c.£660million (H1 2023: c.£611million; FY 2023: c.£630million)
§ £18.0million successfully raised by the three Northern Venture Capital Trusts ("VCTs") in April 2023, in addition to £1.4million of shareholder dividend reinvestment inflows
§ £15.0million additional allocation under the Northern Powerhouse Investment Fund Equity, with a further £5.1million allocated to the North East Venture Capital fund mandate
§ One Enterprise Investment Scheme fund ("EIS") raised a total of £5.7million
§ Final dividends totalling £9.2million paid out by the three Northern VCTs
o Debt FuM of c.£552million (H1 2023: c.£116million; FY 2023 c.£556million)
o Private equity FuM of c.£48million (H1 2023: c.£46million; FY 2023: c.£48million)
Direct investment portfolio movements
· Direct investment portfolio fair value of £142.5million (H1 2023: £131.5million; FY 2023: £136.6million), up c.4% from 31 March 2023
· £7.5million net invested into eight portfolio companies (H1 2023: £6.4million net invested into six portfolio companies)
· £1.6million net fair value decrease in the portfolio during the six-month period (H1 2023: £5.6million increase)
Post period end developments
· Profitable realisation of the Group's equity holding in nDreams Limited ("nDreams") in November 2023 for a total consideration of £30.2million; comprising £26.4million in cash and £3.8million re-invested into Aonic
· In the period from 1 April 2020 to 30 September 2023, including the impact of the nDreams realisation, Mercia has generated sale related cash receipts from its direct investment portfolio of c.£87million
· Commencement of a share buyback of up to £5.0million, reflecting strong cash position of the Group and confidence in the business
· Netacea Group Limited completed a £4.4million funding round, achieved across two tranches in July and October 2023, supporting its UK and international growth plans as a leading provider of defensive AI software
· £5.0million additional allocation from British Business Bank ("BBB") under the Midlands Engine Investment Proof-of-Concept Fund
· The Northern VCTs have received applications totalling £28.3million as of 24 November 2023, as part of their current fundraise of up to £60.0million
This announcement contains inside information for the purposes of Article 7 of the Market Abuse Regulation (EU) 596/2014 which is part of UK law by virtue of the European Union (Withdrawal) Act 2018. Upon publication of this announcement, this inside information is now considered to be in the public domain.
-Ends-
For further information, please contact:
| Mercia Asset Management PLC Mark Payton, Chief Executive Officer Martin Glanfield, Chief Financial Officer
| +44 (0)330 223 1430
|
| Canaccord Genuity Limited (NOMAD and Joint Broker) | +44 (0)20 7523 8000 |
| Simon Bridges, Emma Gabriel | |
| | |
| Singer Capital Markets (Joint Broker) | +44 (0)20 7496 3000 |
| Harry Gooden, James Moat
| |
| | |
| FTI Consulting | +44 (0)20 3727 1051 |
| Tom Blackwell, Jenny Boyd | |
| |
Analyst briefing
An analyst webcast will be given by Dr Mark Payton, Chief Executive Officer, Martin Glanfield, Chief Financial Officer, and Julian Viggars, Chief Investment Officer, at 9.30am today, 28 November 2023. Analysts wishing to register are asked to contact mercia@fticonsulting.com. An audio webcast of this briefing will subsequently be available later in the day via Mercia's website.
Investor presentation
In addition, as part of its continuing commitment to appropriate and open communication with all shareholders and its wider stakeholder community, Mercia will provide a live management presentation and Q&A via the Investor Meet Company ("IMC") platform at 3.00pm today. Registration details can be accessed via:
https://www.investormeetcompany.com/mercia-asset-management-plc/register-investor
About Mercia Asset Management PLC
Mercia is a proactive, specialist asset manager focused on supporting regional SMEs to achieve their growth aspirations. Mercia provides capital across its four asset classes of venture, private equity, debt and proprietary capital: the Group's 'Complete Connected Capital'. The Group initially nurtures businesses via its third-party funds under management, then over time Mercia can provide further funding to the most promising companies, by deploying direct investment follow-on capital from its own balance sheet.
The Group has a strong UK footprint through its regional offices, university partnerships and extensive personal networks, providing it with access to high-quality deal flow.
Mercia Asset Management PLC is quoted on AIM with the EPIC "MERC".
Chief Executive Officer's Review
Introduction
Mercia's competitive advantage comprises its people, geographic footprint, long-term investment performance, supportive stakeholders and broad capital deployment capabilities in the private markets, which continue to experience a healthy level of capital availability, in contrast to the public markets. Challenges in the private markets do exist however and relate to the cyclical nature of venture investing, based on sector and business stage. The domestic UK venture market, which accounts for c.59% of Mercia's assets under management, historically saw annual domestic growth of c.10% in respect of capital deployment. In 2021 and 2022 this ballooned by over 100%, mainly driven by large, late-stage venture investments (outside of Mercia's investment focus). An October 2023 report by HSBC Innovation Banking and Dealroom highlighted a stabilisation to 2020 levels, with a significant reduction in later stage deals and larger investment rounds. In addition, syndicated funding rounds are now more challenging and taking longer for some sectors, but for the best investment opportunities with increasing commercial traction, funding remains available. We anticipate these trends will continue for the remainder of this financial year and potentially into the next.
Mercia's business model of supporting businesses with relatively modest capital needs (typically £0.5m to £20m) in part protects us from a major Venture correction, as we can often mitigate syndication risk, via our substantial available pools of managed fund capital. Nonetheless, we are now taking a more cautionary approach to direct investing. Reflecting this caution, we have paused adding new companies to our direct investment portfolio, although we will continue to support the existing portfolio. In parallel, we will concentrate on accelerating the growth of our managed funds' operation, both organically and via very selective acquisitions, by utilising some of the proceeds from direct asset realisations, such as the post period end profitable exit from nDreams.
Strong AuM growth prospects with continued tail winds
At the heart of Mercia's investment approach is diversification by regions, sectors, stages of businesses and investor types (retail, public sector and institutional). With an active portfolio of 539 companies split 255 in venture, 277 in debt and seven in private equity, Mercia is one of the UK's most active investors.
During the period under review, Mercia has also solidified its reputation as a trusted impact investor and partner delivering connected capital and support across the UK via our wide network of regional offices. This enables Mercia to continue to scale our managed funds operation and deal flow opportunities. As we look ahead, we see potential growth opportunities across all three pools of the private funds capital that we manage: retail (via EIS and the VCTs), institutional regional pension funds that typically invest via their impact allocations and public sector (predominantly via the British Business Bank).
Overview of H1 FY24
The first half of FY24 underscores the profitable sustainability of Mercia's growing third-party managed funds operation. We also benefit from the fact that many of our funds are structured on a long-term basis, giving us confidence in the 'stickiness' of our FuM and their associated revenues - no redemptions were experienced in the period, as none of our managed funds are 'open-ended'.
Mercia has delivered robust trading results across the Group for the first six months of the current financial year. We achieved EBITDA of £2.8million (H1 2023: £2.1million) from revenues of £15.0million (H1 2023: £12.2million), equating to an EBITDA margin of 18.4% (H1 2023: 17.1%). Last year's acquisition, Frontier Development Capital Limited, is continuing to perform well and is fully integrated within Mercia. Our continued growth in cash generative profitable trading supports our declaration of an interim dividend of 0.35 pence per share, an increase of c.6% on the prior year's interim dividend of 0.33 pence per share and the commencement of a share buyback.
During the period, the Group invested c.£111million of capital from both the balance sheet and its managed funds into 83 companies, 40 of which were new to Mercia. It is pleasing to report that c.£52million in investment realisations was also achieved from 19 exits.
Progress towards 'Mercia 20:20'
In April 2021, Mercia set out its three-year 20:20 vision aiming to grow, on average, AuM by 20% per annum from c.£959million to c.£1.6billion, and to achieve average Profit Before Taxation ("PBT") of £20million per annum.
AuM growth
We have continued to make progress against the average growth target of 20% per annum as we look to reach £1.6billion of AuM by 31 March 2024. As at 30 September 2023, Mercia has c.£1.5billion of AuM (of which c.£1.3billion is via third-party managed funds) which have grown over the six-month period by 1.7%, via retail net inflows totalling £25.0million and public sector net inflows of £20.1million. We remain focused on achieving the £1.6billion AuM target by year end. More details on the net inflows and the spread of Mercia's AuM can be read in Julian Viggars' CIO review.
PBT growth
This target comprises two main drivers; adjusted operating profit, which is largely driven by Mercia's profitable third-party fund management operation, and fair value movements and/or profitable realisations stemming from the direct investment portfolio. In respect of the latter, given the current economic and technology sector climate, we have decided to make provisions against two of our direct investment portfolio assets; Impression Technologies Limited and Eyoto Group Limited. The rest of the direct investment portfolio continues to show positive momentum, supported post period end by the profitable exit from nDreams, which was sold for an enterprise value 17.5% higher that its carrying value as at 31 March 2023. The overall direct investment portfolio fair value movement for the period is a reduction of £1.6million.
In the period from 1 April 2020 to 30 September 2023, including the impact of the nDreams realisation, Mercia has generated sale related cash receipts from its direct investment portfolio of c.£87million. Full commentary on the direct investment portfolio and the broader Group's investment performance can also be found in the Julian Viggars' CIO review.
With six months of Mercia's current three-year strategic plan still to run, the cumulative PBT stands at £31.2million. Given the prevailing investment climate, particularly for technology investing, it is unlikely that the cumulative three-year target of £60million will be achieved.
Fund raising in H2
Mercia is currently engaged in fundraising initiatives across all three of its discrete pools of private capital. We anticipate reporting on further organic growth in our FuM by this financial year end.
Commitment to impactful investing
Our impact investment philosophy is deeply rooted in sustainable financial growth and responsible investment. We are signatories to the United Nations supported Principles for Responsible Investing. In the first half of the year, we launched several initiatives that highlight our commitment to creating a more balanced entrepreneurial ecosystem. Our 'Rise & Thrive' programme demonstrates Mercia's dedication to diversity, equity and inclusion. Through a series of workshops funded by Mercia, we support women entrepreneurs, aiming to create a more level playing field in investment. Additionally, we offer up to four half days per year for each Mercia employee to contribute to charitable causes, reflecting our community-oriented ethos. Since April, Mercia team members have attended five external events across the UK as volunteers, and separately have raised c.£45,000 as part of external fundraising teams for a range of good causes, including our Mercia-nominated charity, Cancer Research UK.
Our team and shared values
Mercia benefits from wide ranging equity investing and lending capabilities, unified by our shared ethos and values. In the first half of the year, we welcomed four new team members to Mercia, resulting in our current full time equivalent headcount being 140 employees. 40% of our Group are women - testament to our commitment to the Investment in Women Code. Within our investment team, women represent 33%, compared to the industry average of 25%, as reported in the latest BVCA statistics. We also remain committed to investing in diverse senior talent and systems to strengthen Mercia's operational capabilities and to sustain the Group's long-term growth. This commitment is evident with the addition of Jocelyne Bath to the Executive team as Chief Operating Officer, who in turn will focus on productivity and efficiency as we continue to scale Mercia.
Outlook
There currently exists strong growth potential in Mercia's managed funds' operation across all three pools of private capital. With our focus on scaling the profitable delivery of our fund management operations, we anticipate continued momentum through the remainder of the current financial year and beyond.
Consistent with recent years, we continue to build a sustainable growing business whilst maintaining a strong cash position at all times. As at 30 September 2023, Mercia had Group-wide unrestricted cash of c.£383million, including £36.5million of Group cash and short-term liquidity investments. Following the recent profitable sale of nDreams, Mercia's cash position has increased to c.£60million. Alongside our progressive dividend policy, it has always been one of our ambitions to be in a position to return capital to shareholders, if we felt that we had sufficient cash from direct investment exits to do so. The successful nDreams exit is that trigger point and we are therefore pleased to announce an up to £5.0million share buyback, full details of which are given in our share buyback announcement this morning.
Given the heightened emphasis by fund investors and the UK Government on regional businesses and impact investment, we are confident that Mercia is well placed for continued growth for the foreseeable future.
With a fully aligned team located from Bristol to Newcastle, Mercia prides itself on being an enduring partner to entrepreneurs and trusted to deliver for all our stakeholders - time and time again. I remain sincerely grateful to all at Mercia for their continued efforts in making a positive difference and to our supportive fund investors and shareholders, without whom Mercia would not exist.
Dr Mark Payton
Chief Executive Officer
Chief Investment Officer's review
Investment activity
During the six months to 30 September 2023, we invested c.£111million into 83 businesses across our funds and balance sheet, including 40 new companies. We also achieved c.£52million in investment realisations from 19 exits, as referenced below. Overall, AuM increased 1.7% to c.£1.5billion, with no redemptions. At the end of the period, we had c.£383million of liquidity to support our future investment activities.
Investment realisations
In the six-month period to 30 September 2023, our investors benefitted from 19 full and partial equity funds exits (H1 2023: 14). These realised c.£52million at a combined return of 1.5x. The standout exit was Evotix, which generated a 4.6x return for our VCT investors. The figures also include the exit from ParkCloud Holdings from within our private equity portfolio generating a 1.6x return, which is pleasing for a business that was particularly impacted for its airport parking services during COVID-19.
Post period end, we achieved the profitable realisation of the Group's direct equity holding in nDreams. In the period from 1 April 2020 to 30 September 2023, including the impact of the nDreams realisation, Mercia has generated sale related cash receipts from its direct investment portfolio of c.£87million.
Proprietary capital
As at 30 September 2023, our direct investment portfolio was fair valued at £142.5million (H1 2023: £131.5million; FY 2023: £136.6million) with 22 active companies (H1 2023: 22; FY 2023: 21).
Including converted loan interest, we invested £7.5million net into the direct investment portfolio in the first six months of the current financial year (H1 2023: £6.4million). Our investment efforts were focused on supporting our existing portfolio with further investment into Voxpopme, Netacea, VirtTrade (trading as Avid Games), Impression Technologies, Ton UK (trading as Intelligent Positioning) and Eyoto.
The table below lists Mercia's top 20 direct investments by fair value as at 30 September 2023, including the net cash invested, fair value movement and the fully diluted equity percentage held.
| | Year of first direct investment | Net investment value as at £'000 | Net cash invested six months to 2023 £'000 | Fair value movement six months to 30 September 2023 £'000 | Net investment value as at 30 September 2023 £'000 |
Percentage held as at 30 September 2023 % |
| nDreams Ltd | 2014 | 25,761 | - | 4,450 | 30,211 | 33.2 |
| Voxpopme Ltd | 2018 | 11,015 | 861 | 3,973 | 15,849 | 20.4 |
| Netacea Group Ltd | 2022 | 11,693 | 1,500 | - | 13,193 | 24.1 |
| VirtTrade Ltd * | 2015 | 10,082 | 1,530 | - | 11,612 | 62.6 |
| Medherant Ltd | 2016 | 10,934 | - | - | 10,934 | 38.4 |
| Warwick Acoustics Ltd | 2014 | 9,695 | - | - | 9,695 | 40.3 |
| Invincibles Studio Ltd | 2015 | 8,697 | - | (116) | 8,581 | 35.5 |
| Impression Technologies Ltd | 2015 | 15,260 | 1,198 | (8,909) | 7,549 | 65.1 |
| Ton UK Ltd ** | 2015 | 5,382 | 746 | 455 | 6,583 | 40.4 |
| Locate Bio Ltd | 2018 | 4,858 | - | - | 4,858 | 18.1 |
| Eyoto Group Ltd | 2017 | 5,487 | 1,527 | (2,322) | 4,692 | 24.7 |
| Axis Spine Technologies Ltd | 2022 | 3,000 | - | - | 3,000 | 9.4 |
| sureCore Ltd | 2016 | 2,417 | - | - | 2,417 | 22.0 |
| Nova Pangaea (Holdings) Ltd | 2022 | 2,250 | - | - | 2,250 | - |
| Forensic Analytics Ltd | 2021 | 1,750 | - | 344 | 2,094 | 7.4 |
| Akamis Bio Ltd | 2015 | 1,780 | - | - | 1,780 | 1.3 |
| Pimberly Ltd | 2021 | 1,375 | - | 332 | 1,707 | 5.7 |
| MIP Discovery Ltd | 2020 | 1,449 | - | - | 1,449 | 10.2 |
| MyHealthChecked PLC | 2016 | 969 | - | (153) | 816 | 13.1 |
| Uniphy Ltd | 2022 | 550 | 40 | 137 | 727 | 4.5 |
| Other direct investments | n/a | 2,146 | 121 | 190 | 2,457 | n/a |
| Total | | 136,550 | 7,523 | (1,619) | 142,454 | n/a |
* Trading as Avid Games
** Trading as Intelligent Positioning
The period under review saw positive fair value movements of £10.2million across eight assets offset by downward movements of £11.8million on four assets, giving a net fair value decrease of £1.6million. Significant upward movements in nDreams and Voxpopme, alongside smaller uplifts in software businesses Pimberley, Forensic Analytics and Intelligent Positioning, were balanced principally by reduced enterprise values at Impression Technologies and Eyoto.
nDreams was sold post period end to Aonic AB, the diversified video gaming investment group, which had been a co-investor. The 17.5% uplift in fair value of £4.4million at 30 September 2023 reflects the value of Mercia's direct investment at exit in November 2023. Mercia held a 33.2% fully diluted direct stake in nDreams, resulting in total consideration of £30.2million, split £26.4million in cash proceeds and £3.8million re-invested into Aonic itself. This exit results in a 2.7x return on invested capital and an 18.4% IRR.
The structure of Voxpopme's April 2023 funding round favourably improved our holding position and, alongside solid trading, resulted in a £4.0million uplift.
Impression Technologies has been running a dual sale/fundraising process; the preferred buyer, whose offer was at a level that supported the 31 March 2023 carrying value, has recently asked for a lengthy extension to the sale process, which has been rejected. We have therefore impaired the value to reflect increased uncertainty for now.
Eyoto had been in consultation with the US Food and Drug Administration ("FDA") around approval for its slit lamp product, with customer orders awaiting approval; unfortunately, additional trials are now required delaying the US launch by a year. In the near term, the company intends to refocus its efforts on Europe where it already has approval. We have therefore recognised this setback in an impairment to its carrying value.
Our top 10 direct investment holdings represent c.84% of the total value of our portfolio at 30 September 2023. There has been steady progress across a number of our larger investments by fair value, as summarised in the sectorial review below.
Digital Entertainment; c.36% by value of the portfolio at 30 September 2023
VirtTrade: 62.6% fully diluted direct investment stake with a further 2.6% fully diluted stake held by Mercia's managed funds.
VirtTrade's mobile game 'CUE Cards' (Cards, the Universe and Everything) launched in December 2019 and is a card collecting and battling game. It now has over 250,000 regular monthly active users from territories across the globe and is managing a steady growth profile.
Invincibles Studio: 35.5% fully diluted direct investment stake with a further 13.2% fully diluted stake held by Mercia's managed funds.
The team at Invincibles Studio continue to make good progress. The latest iteration of its Soccer Manager 2024 game, launched in late September, shows record user numbers, engagement time per user and revenues. Its two new games 'Ultimate Soccer League' and 'Worlds XI' will be launched during 2024, after significant upgrades to the visual engine that controls player movement graphics. It has renewed its licence deal with Arsenal Football Club manager Mikel Arteta as the face of the game and added the social media rights to Manchester City, alongside existing FIFPro licences.
Software; c.28% by value of the portfolio at 30 September 2023
Voxpopme: 20.4% fully diluted direct investment stake with a further 13.5% fully diluted stake held by Mercia's managed funds.
Voxpopme is a software business based jointly in Birmingham, UK and Colorado, USA that provides video analytics software to firms in the market research, customer experience and the recruitment and HR markets. In the early part of 2023, the company experienced some levels of customer churn, however this has since reversed, and the company has grown to c.$9million annual recurring revenue.
Netacea: 24.1% fully diluted direct investment stake with a further 26.5% fully diluted stake held by Mercia's managed funds.
Manchester-based Netacea sells enterprise server-side bot management solutions that protect websites, mobile apps and APIs from automated threats, using an intelligent detection engine. The agentless technology focuses on understanding the traffic's intent rather than just distinguishing between human and malicious bots. The business has raised further growth capital and also strengthened its leadership.
Deep Technology ("Deep Tech"); c.16% by value of the portfolio at 30 September 2023
Warwick Acoustics: 40.3% fully diluted direct investment stake with a further 1.3% fully diluted stake held by Mercia's managed funds.
Midlands-based Warwick Acoustics creates highly innovative audio products for both the automotive and the high-end personal and studio headphone market. Commercial traction has been impressive, with a first original equipment manufacturer ("OEM") nomination signed and ongoing projects with other global automotive OEMs.
Impression Technologies ("ITL"): 65.1% fully diluted direct investment stake with a further 0.9% fully diluted stake held by Mercia's managed funds.
Since 2016, ITL has been advancing its exclusive aluminium lightweight technology, HFQ™, supported by its own pressing facility in Coventry. In collaboration with FEV Group GmbH, a leading automotive technology group, ITL has developed an innovative exoskeleton battery box design. This minimises the need for internal support structures in the battery box, thereby enlarging the available space for battery cells. Achievable solely through HFQ technology, this concept was unveiled at the HFQ Partner Network Conference in September 2023 and later showcased at the Euro Body Car Conference in October. Additionally, ITL has recently ventured into the aerospace sector with its first licensing agreement. The company is now shifting its focus towards a lower-burn manufacturing strategy.
Life Sciences; c.20% by value of the portfolio at 30 September 2023
Medherant: 38.4% fully diluted direct investment stake with a further 15.3% fully diluted stake held by Mercia's managed funds.
Midlands-based Medherant is a University of Warwick spinout commercialising a platform of proprietary patch adhesive technology for medical applications. The company's leading external collaboration has successfully cleared the initial two evaluation stages, leading to expanded research and pre-clinical development work. This product represents a potential multi-billion market opportunity. Medherant's other in-house development program is also advancing, with trials underway aiming for a potential product launch in 2024. The management team has been bolstered by the appointment of a new Medical Director and a Non-executive Director.
Locate Bio: 18.1% fully diluted direct investment stake with a further 24.6% fully diluted stake held by Mercia's managed funds.
Nottingham-based Locate Bio is developing a range of OrthoBiologics. Its products are designed to aid orthopaedic surgeons to accelerate the natural repair of bone and cartilage. The company reports continued good progress, having completed all animal trials with positive results for its lead bone graft solution. Additionally, Locate Bio has engaged with the FDA and finalised the protocol for a pilot clinical study for which ethics' approval has been submitted in Australia. Currently, the company is concentrating on completing all necessary tests for FDA submission and is in the process of recruiting Clinical Investigators for a 40 patient trial in Australia, with three already in the contracting stage.
Assets under management
AuM increased by 1.7% to c.£1.5billion, with c.£45million of new capital raised by our Enterprise Investment Schemes ("EIS") and Northern Venture Capital Trusts ("VCT") alongside top-ups to existing regional funds during the six-month period. Valuations across the business have remained largely flat, whilst c.£15million of distributions have been returned to fund investors and dividends paid to VCT shareholders.
| | 1 April 2023 | Investor inflows | Performance | Distributions | 30 September 2023 | Post period end inflows |
| Asset class | £'m | £'m | £'m | £'m | £'m | £'m |
| Venture | 630 | 45 | (3) | (12) | 660 | 10 |
| Debt | 556 | - | (1) | (3) | 552 | - |
| Private equity | 48 | - | - | - | 48 | - |
| Total FuM | 1,234 | 45 | (4) | (15) | 1,260 | 10 |
| Proprietary capital | 203 | - | 1 | (2) | 202 | - |
| Total AuM | 1,437 | 45 | (3) | (17) | 1,462 | 10 |
Third-party managed funds
As at 30 September 2023, we were managing c.£1.3billion of third-party funds (H1 2023: c.£773million; FY 2023: c.£1.2billion). Across those funds we had c.£346million of liquidity (H1 2023: c.£240million; FY 2023: c.£341million), which enables us to fully support our portfolio companies and transact new deals in the future.
In April 2023, we added a further c.£25million of organic FuM following successful EIS and Northern VCT fundraises, and we have received a further £15.0million allocation from the British Business Bank in relation to our Northern Powerhouse Investment Fund, as well as an additional £5.1million allocation under our North East Venture Capital fund mandate.
During the six-month period ended 30 September 2023, we invested c.£103million across the multiple funds which we manage as follows:
|
Asset class | FuM 30 September 2023 £'m |
Companies in portfolio No. |
Amount invested £'m |
Company exits No. |
| EIS | 97 | 84 | 17.2 | 4 |
| VCT | 336 | 58 | 15.0 | 4 |
| Regional venture | 227 | 88 | 16.6 | 10 |
| Debt | 552 | 277 | 54.0 | 23 |
| Private equity | 48 | 7 | 0.4 | 1 |
| Totals | 1,260 | 514 | 103.2 | 42 |
Managed funds' portfolios
Venture
The 18 full and partial exits returned £44.7million in the six months to 30 September 2023, at a combined return of 1.4x. The standout exit was Evotix, which we sold in June to SAI360 Inc, generating proceeds of £35.6million, equating to a return of 4.6x for our VCT investors.
Debt
Mercia's northern Debt funds' team saw an increase in activity during the period, supporting 30 businesses, lending a total of £11.8million. We continue to support small and medium-sized enterprises by deploying the Government-backed Recovery Loan Scheme via the Northern Powerhouse Investment Fund. Mercia SME Loans has also benefitted from an increase in the volume of transactions (management buy outs, acquisitions) taking place.
Frontier Development Capital continues to perform well, lending £42.2million to 8 businesses.
Private equity ("PE")
The value of our PE funds increased marginally during the six months to 30 September 2023, with strong trading seen across two assets, iMail and UK Landscapes, plus the exit from ParkCloud Holdings. We expect to see further realisations during 2024.
Summary
Our progress continues with c.£111million invested in the first half, matched favourably with c.£52million of realisations across our equity portfolios. The post period end realisation of nDreams is a fantastic result for us, transacted at a 17.5% uplift to the 31 March 2023 carrying value, returning £26.4million of cash to the Group's balance sheet whilst enabling us to continue to have an interest in the ongoing success of the company and the augmented reality ("AR")/Virtual Reality ("VR") market, with £3.8million of the total proceeds reinvested into an equity holding in Aonic itself, which we believe has excellent prospects with its strong position in VR and AR. We look forward to nDreams continuing its exciting journey within a larger gaming group and wish CEO Patrick O'Luanaigh and his team continuing success.
We are clearly disappointed with the downward fair value movements that we felt were necessary at Impression Technologies and Eyoto, and these do negatively impact the achievement of our 'Mercia 20:20' profit before tax target. However, seen in the context of a very challenging external environment since the start of 2022, our portfolio is holding up well. Overall, our direct asset portfolio is in good health and we have ample liquidity to support it.
The following table summarises our proprietary capital performance since 1 April 2020, including the post period end sale of nDreams. With total sale related cash receipts of £86.8million, from companies such as OXGENE™, Faradion, Intechnica and nDreams, c.50% greater than the total net cash invested and with cumulative unrealised fair value gains also comfortably ahead of realised and unrealised fair value losses across our portfolio, I believe we continue to demonstrate the significant progress made and the potential value contained therein.
|
|
| |
| Proprietary capital performance 1 April 2020 to 30 Sept 2023 * | £'m |
|
| Sale related cash receipts | 86.8 | |
| Net cash invested ** | (57.6) |
|
| Realised gains | 36.4 |
|
| Realised losses | (5.3) |
|
| Unrealised fair value gains *** | 42.6 |
|
| Unrealised fair value losses *** | (23.3) |
|
* Including the post period end impact of the nDreams realisation.
** Excluding convertible loan interest reinvested into an equity holding.
*** Excluding the impact of the Intechnica and Netacea demerger in FY23.
It appears that as a global society we are rolling from one crisis to the next, with the events in Israel and Palestine just recently being the latest. This political and economic uncertainty is unnerving and we are seeing the effects, as both individuals and corporates are tending to make more prudent investment decisions involving less risk. We have asked our investees to stay focused on their own strategies, with the benefit of sufficient cash reserves and support, and focus on what they can control, running their businesses in the most efficient manner. This is what we are doing at Mercia. As always, I would like to thank all our dedicated staff for their efforts during the past six months.
Julian Viggars
Chief Investment Officer
Chief Financial Officer's review
Overall financial performance
From a fund management profitability perspective, during the six months to 30 September 2023, Mercia was able to maintain its prior year momentum and absorb the inflationary challenges affecting the UK economy in general, and more specifically the financial services sector.
This is the first reporting period fully incorporating the results of FDC since its acquisition on 5 December 2022. The company is fully integrated into the Group and continuing to perform well.
Interim dividend
The Board adopted Mercia's progressive dividend policy in December 2020, and since then has announced interim dividends of 0.10 pence per share in December 2020, 0.30 pence per share in December 2021 and 0.33 pence per share in December 2022.
Given the Group's twin sources of profitability and cash inflow, being regionally focused proactive specialist asset management, plus direct investment with periodic cash realisations, the Group's dividend policy does not need to be anchored to one or other source of liquidity, hence the Board's intention to grow total dividends year on year.
The continuing positive overall trajectory of the Group has enabled Mercia's Board to declare an interim dividend of 0.35 pence per share (H1 2023: 0.33 pence per share). The interim dividend will be paid on 10 January 2024 to shareholders on the register at close of business on 8 December 2023, with the total dividend payable being £1,563,000 (H1 2023: £1,452,500).
Share buyback
Although relatively recent share buybacks in the specialist asset management sector have done little to positively affect share price performance and a resultant reduction in discounts to net asset value, Mercia has always said that if it enjoyed a significant cash realisation it would consider how best to distribute a proportion of those proceeds to shareholders. Given that as at the date of this announcement, following the post period end realisation of its direct investment in nDreams Limited, the Group now has significant cash balances totalling c.£60million and no debt, Mercia is pleased to announce up to a £5.0million share buyback.
Alternative performance measures ("APM")
The Directors believe that the reporting of both EBITDA and adjusted operating profit assist in providing insightful measures of operating performance for businesses such as Mercia, and are important APMs of interest to both current and potential shareholders.
EBITDA is defined as operating profit/(loss) before exceptional item, depreciation, realised gains/(losses) on the sale of direct investments, fair value movement in direct investments, share-based payments charge, amortisation of intangible assets and movement in fair value of deferred consideration.
Adjusted operating profit is defined as EBITDA plus net finance income.
Results reported on an APM basis are denoted by ¹ throughout this review.
| | Unaudited Six months ended 30 September 2023 £'000 | Unaudited Six months ended 30 September 2022 £'000 | Audited Year ended 31 March 2023 £'000 |
| Revenue | 15,040 | 12,181 | 25,881 |
| Administrative expenses | (12,266) | (10,102) | (20,692) |
| EBITDA | 2,774 | 2,079 | 5,189 |
| Net finance income | 2,690 | 1,480 | 2,397 |
| Adjusted operating profit | 5,464 | 3,559 | 7,586 |
| Depreciation | (236) | (120) | (309) |
| Net finance income | (2,690) | (1,480) | (2,397) |
| Realised loss on sale of direct investment | - | - | (849) |
| Fair value movement in direct investments | (1,619) | 5,595 | 1,201 |
| Share-based payments charge | (509) | (592) | (1,049) |
| Amortisation of intangible assets | (1,495) | (1,017) | (2,337) |
| Movement in fair value of deferred consideration | (218) | - | (1,462) |
| Operating (loss)/profit before exceptional item | (1,303) | 5,945 | 384 |
| Exceptional item | - | - | (372) |
| Operating (loss)/profit | (1,303) | 5,945 | 12 |
| Net finance income | 2,690 | 1,480 | 2,397 |
| Profit before taxation | 1,387 | 7,425 | 2,409 |
| Taxation | (38) | (422) | 427 |
| Profit and total comprehensive income for the period | 1,349 | 7,003 | 2,836 |
A reconciliation of these interim results prepared in accordance with International Financial Reporting Standards ("IFRS") to those presented on an APM basis are as follows:
|
| Six months ended 30 September 2023 | ||
|
| IFRS as reported | Depreciation | APM basis1 |
|
| £'000 | £'000 | £'000 |
| Administrative expenses | (12,502) | 236 | (12,266) |
| Depreciation | - | (236) | (236) |
|
| Six months ended 30 September 2022 | ||
|
| IFRS as reported | Depreciation | APM basis1 |
|
| £'000 | £'000 | £'000 |
| Administrative expenses | (10,222) | 120 | (10,102) |
| Depreciation | - | (120) | (120) |
|
| Year ended 31 March 2023 | ||
|
| IFRS as reported | Depreciation | APM basis1 |
|
| £'000 | £'000 | £'000 |
| Administrative expenses | (21,001) | 309 | (20,692) |
| Depreciation | - | (309) | (309) |
Revenue
Revenue increased 23.5% to £15,040,000 (H1 2023: £12,181,000) and comprised fund management related fees, initial management fees from investment rounds, investment director monitoring fees, sundry business services income and VCT share offer fees.
Administrative expenses1
Administrative expenses, excluding depreciation and share-based payments charge, increased 21.4% to £12,266,000 (H1 2023: £10,102,000) and comprised predominantly staff-related, office, marketing, professional adviser and share offer costs incurred as part of VCT share offers.
Mercia anticipates that the financial benefits of operational leverage will continue to be realised as its funds under management increase, by both its future organic and inorganic initiatives.
EBITDA
EBITDA increased 33.4% to £2,774,000 (H1 2023: £2,079,000), equating to an EBITDA margin of 18.4% (H1 2023: 17.1%), demonstrating the Group's increasing economies of scale, including a positive contribution from FDC, despite the inflationary backdrop during the reporting period.
Net finance income
Total gross finance income of £2,720,000 (H1 2023: £1,488,000) arose from a material increase in interest receivable on cash deposits (as shown in note 8) following continued Bank of England base rate rises during the period, together with the crystallisation of convertible loan interest within the direct portfolio. Finance costs of £30,000 (H1 2023: £8,000) comprised interest payable on office leases and the Group's staff electric car scheme.
Fair value movement in direct investments
| | Unaudited Six months ended 30 September 2023 £'000 | Unaudited Six months ended 30 September 2022 £'000 | Audited Year ended 31 March 2023 £'000 |
| Investment movements excluding cash invested and realisations: | | | |
| Unrealised gains on the revaluation of direct investments* | 10,171 | 7,578 | 11,324 |
| Unrealised losses on the revaluation of direct investments* | (11,790) | (1,983) | (10,123) |
| Net fair value movement in direct investments | (1,619) | 5,595 | 1,201 |
* Excluding the impact of the demerger of Netacea Limited from Intechnica Holdings Limited in the six months ended 30 September 2022 and year ended 31 March 2023.
The net fair value movement in direct investments resulted in a £1,619,000 decrease (H1 2023: £5,595,000 increase) and as at 30 September 2023, the fair value of the Group's direct investment portfolio was £142,454,000 (H1 2023: £131,545,000; FY 2023: £136,550,000).
Unrealised fair value gains arose in eight (H1 2023: four*) of the Group's direct investments. The largest fair value gain was in respect of nDreams Limited, which accounted for £4,450,000 of the total (H1 2023: £4,003,000 fair value gain in respect of VirtTrade Limited).
There were four (H1 2023: three*) fair value decreases, the largest being £8,909,000 which arose in respect of Impression Technologies Limited (H1 2023: £883,000 fair value decrease in Edge Case Games Limited).
Share-based payments charge
The £509,000 non-cash charge (H1 2023: £592,000) arises from the total number of issued and vested share options held by all employees throughout the Group, ranging from 28 January 2020 to 30 September 2023.
Amortisation of intangible assets
The amortisation charge for the period of £1,495,000 (H1 2023: £1,017,000) represents amortisation of the acquired intangible assets of FDC and the VCT fund management business.
Movement in fair value of deferred consideration
The purchase price of FDC in December 2022 included an element of contingent deferred consideration which is subject to a number of targets being met. Movement in the fair value of this contingent deferred consideration during the six-month period to 30 September 2023 has resulted in a charge to the income statement of £218,000.
Taxation
The components of the Group's tax charge are shown in note 9. The overall tax charge for the period comprises a corporation tax charge on taxable profits, offset by the continued unwinding of the deferred tax liability in respect of the intangible assets arising on the acquisition of FDC and the VCT fund management business.
Profit and total comprehensive income for the period
The adjusted operating profit, less the net fair value decrease for the period and other non-cash charges, lead to a consolidated total comprehensive income of £1,349,000 (H1 2023: £7,003,000). This has resulted in basic earnings per Ordinary share of 0.30 pence (H1 2023: 1.59 pence).
Summarised statement of financial position and cash flows
| | Unaudited As at 30 September 2023 £'000 | Unaudited As at 30 September 2022 £'000 | Audited As at 31 March 2023 £'000 |
| Goodwill and intangible assets | 37,556 | 31,338 | 39,051 |
| Direct investment portfolio | 142,454 | 131,545 | 136,550 |
| Other non-current assets, trade and other receivables | 3,497 | 1,626 | 4,751 |
| Cash and short-term liquidity investments | 36,482 | 56,112 | 37,834 |
| Total assets | 219,989 | 220,621 | 218,186 |
| Trade, other payables and lease liabilities | (10,165) | (8,092) | (7,720) |
| Deferred consideration | (3,223) | (2,869) | (3,005) |
| Deferred taxation | (4,168) | (3,676) | (4,540) |
| Total liabilities | (17,556) | (14,637) | (15,265) |
| Net assets | 202,433 | 205,984 | 202,921 |
| Net assets per share (pence) ** | 45.3p | 46.8p | 45.4p |
** 446,679,523 Ordinary shares were in issue as at 30 September 2023 and used as the denominator for calculating net assets per share as at 30 September 2023. 446,581,202 and 440,109,707 Ordinary shares were in issue as at 31 March 2023 and 30 September 2022, and therefore used as the denominator for calculating the respective net assets per share.
The reduction in net assets per share of 0.1 pence from 31 March 2023 to 30 September 2023 arises from recognition of the FY23 final dividend of 0.53 pence per share, approved at the Group's AGM on 21 September 2023, partially offset by the profit and total comprehensive income, less the share-based payment charge, for the six-month period.
Intangible assets
The Group's intangible assets consist of goodwill and the intangible assets recognised on the acquisition of FDC and the VCT fund management business.
Direct investment portfolio
During the period, Mercia's direct investment portfolio grew from £136,550,000 as at 1 April 2023 (H1 2023: £119,558,000 as at 1 April 2022) to £142,454,000 as at 30 September 2023 (H1 2023: £131,545,000 as at 30 September 2022), a c.4% increase (H1 2023: c.10% increase).
The Group invested £7,523,000 net (H1 2023: £6,403,000 net) into seven existing and one new direct investment (H1 2023: five existing and one new direct investment), with the top 20 direct investments representing 98.3% of the total direct investment portfolio value (H1 2023: 97.4%; FY 2023: 98.4%).
Cash, cash equivalents and short-term liquidity investments
At the period end, Mercia had cash, cash equivalents and short-term liquidity totalling £36,482,000 (H1 2023: £56,112,000; FY 2023: £37,834,000). This is comprised of cash and cash equivalents of £36,198,000 (H1 2023: £50,864,000; FY 2023: £37,555,000) and short-term liquidity investments of £284,000 (H1 2023: £5,248,000; FY 2023: £279,000).
The Group continues to have limited working capital needs due to the nature of its business and during the six-month period generated operating cash inflow of £3.5million (H1 2023: £0.5million inflow).
As at 30 September 2023, the Group's cash, cash equivalents and short-term liquidity investments were spread across four leading United Kingdom banks and a BlackRock Sterling money market fund, earning an average overall yield by period end of c.5%.
The summarised movements in the Group's cash and cash equivalents during the period are shown below.
| | Unaudited Six months ended 30 September 2023 £'000 | Unaudited Six months ended 30 September 2022 £'000 | Audited Year ended 31 March 2023 £'000 |
| Opening cash and cash equivalents | 37,555 | 56,049 | 56,049 |
| Cash generated from operating activities | 3,533 | 544 | 3,019 |
| Corporation tax paid | - | (705) | (1,819) |
| Net cash used in direct investment activities | (5,312) | (5,021) | (14,930) |
| Acquisition of Frontier Development Capital Limited | - | - | (6,951) |
| Cash acquired with Frontier Development Capital Limited | - | - | 2,882 |
| Purchase of VCT fund management business (deferred consideration) | - | - | (2,100) |
| Cash inflow from other investing activities | 646 | 84 | 5,327 |
| Net cash used in financing activities | (224) | (87) | (3,922) |
| Closing cash and cash equivalents | 36,198 | 50,864 | 37,555 |
Outlook
Whilst the impairment of Mercia's direct investment in Impression Technologies, following its recently aborted sale, is frustrating, the successful exit from nDreams above carrying value, aptly demonstrates the ups and downs of venture investing. Overall however, since the advent of COVID-19 in March 2020, Mercia has realised cash proceeds from direct investment disposals of £86.8million, compared to realised losses totalling £5.3million.
The profitability of the Group's fund management operations, together with opportunities for future growth, underpin the Group's progressive dividend policy, whilst the recent significant cash realisation of its direct investment in nDreams has swelled the Group's cash balances to c.£60million post period end. This balance, representing c.30% of the Group's current net asset value, and c.49% of its current market capitalisation, now enables the Group to offer shareholders a managed reduction in their shareholding should they so wish, via a share buyback of up to £5.0million.
The remainder of the Group's cash will be primarily directed towards further growth opportunities in its fund management operations, whilst continuing to support its existing direct investment portfolio through to further cash exits.
Overall, Mercia has never been financially stronger and for this we remain grateful to our excellent staff for their continuing efforts and our many supportive stakeholders. Mercia looks forward to the remainder of the current financial year from a debt-free position of considerable financial strength, coupled with continuing growth prospects for its profitable fund management operations.
Martin Glanfield
Chief Financial Officer
Summary Financial Information
Condensed consolidated statement of comprehensive income
For the six months ended 30 September 2023
| | Note | Unaudited Six months ended 30 September 2023 £'000 | Unaudited Six months ended 30 September 2022 £'000 | Audited Year ended 31 March 2023 £'000 |
| Revenue | 5 | 15,040 | 12,181 | 25,881 |
| Administrative expenses | 7 | (12,502) | (10,222) | (21,001) |
| Realised loss on sale of direct investment | | - | - | (849) |
| Fair value movement in direct investments | 12 | (1,619) | 5,595 | 1,201 |
| Share-based payments charge | | (509) | (592) | (1,049) |
| Amortisation of intangible assets | | (1,495) | (1,017) | (2,337) |
| Movement in fair value of deferred consideration | | (218) | - | (1,462) |
| Operating (loss)/profit before exceptional item | | (1,303) | 5,945 | 384 |
| Exceptional item | | - | - | (372) |
| Operating (loss)/profit | | (1,303) | 5,945 | 12 |
| Finance income | 8 | 2,720 | 1,488 | 2,428 |
| Finance expense | | (30) | (8) | (31) |
| Profit before taxation | | 1,387 | 7,425 | 2,409 |
| Taxation | 9 | (38) | (422) | 427 |
| Profit and total comprehensive income for the period | | 1,349 | 7,003 | 2,836 |
| Basic earnings per Ordinary share (pence) | 10 | 0.30 | 1.59 | 0.64 |
| Diluted earnings per Ordinary share (pence) | 10 | 0.30 | 1.57 | 0.63 |
All results derive from continuing operations.
Condensed consolidated statement of financial position
As at 30 September 2023
| | Note | Unaudited As at 30 September 2023 £'000 | Unaudited As at 30 September 2022 £'000 | Audited As at 31 March 2023 £'000 |
| Assets | |
| | |
| Non-current assets | |
| | |
| Goodwill | | 20,892 | 16,642 | 20,892 |
| Intangible assets | | 16,664 | 14,696 | 18,159 |
| Property, plant and equipment | | 137 | 101 | 122 |
| Right-of-use assets | | 790 | 367 | 842 |
| Investments | 12 | 142,454 | 131,545 | 136,550 |
| Total non-current assets | | 180,937 | 163,351 | 176,565 |
| Current assets | |
| | |
| Trade and other receivables | | 2,570 | 1,158 | 3,787 |
| Short-term liquidity investments | 13 | 284 | 5,248 | 279 |
| Cash and cash equivalents | 13 | 36,198 | 50,864 | 37,555 |
| Total current assets | | 39,052 | 57,270 | 41,621 |
| Total assets | | 219,989 | 220,621 | 218,186 |
| Current liabilities | |
| | |
| Trade and other payables | | (9,296) | (7,683) | (6,813) |
| Lease liabilities | | (420) | (168) | (333) |
| Deferred consideration | 14 | (1,316) | (2,869) | (1,227) |
| Total current liabilities | | (11,032) | (10,720) | (8,373) |
| Non-current liabilities | |
| | |
| Lease liabilities | | (449) | (241) | (574) |
| Deferred consideration | 14 | (1,907) | - | (1,778) |
| Deferred taxation | 15 | (4,168) | (3,676) | (4,540) |
| Total non-current liabilities | | (6,524) | (3,917) | (6,892) |
| Total liabilities | | (17,556) | (14,637) | (15,265) |
| Net assets | | 202,433 | 205,984 | 202,921 |
| Equity | |
| | |
| Issued share capital | 16 | 4 | 4 | 4 |
| Share premium | 17 | 83,775 | 81,644 | 83,744 |
| Other distributable reserve | 18 | 60,899 | 64,719 | 63,266 |
| Retained earnings | | 52,690 | 55,508 | 51,341 |
| Share-based payments reserve | | 5,065 | 4,109 | 4,566 |
| Total equity | | 202,433 | 205,984 | 202,921 |
The accompanying notes are an integral part of these condensed consolidated interim financial statements.
The condensed consolidated interim financial statements of Mercia Asset Management PLC were approved by the Board of Directors on 27 November 2023 and authorised for issue. They were signed on its behalf by:
Dr Mark Payton Martin Glanfield
Chief Executive Officer Chief Financial Officer
Condensed consolidated statement of cash flows
For the six months ended 30 September 2023
| | Note | Unaudited Six months ended 30 September 2023 £'000 | Unaudited Six months ended 30 September 2022 £'000 | Audited Year ended 31 March 2023 £'000 |
| Cash flows from operating activities: | |
| | |
| Operating (loss)/profit | | (1,303) | 5,945 | 12 |
| Adjustments to reconcile operating (loss)/profit to cash generated from operating activities: | |
| | |
| Depreciation of property, plant and equipment | | 50 | 32 | 68 |
| Depreciation of right-of-use assets | | 186 | 88 | 239 |
| Loss on sale of direct investment | | - | - | 849 |
| Fair value movement in direct investments | 12 | 1,619 | (5,595) | (1,201) |
| Share-based payments charge | | 509 | 592 | 1,049 |
| Amortisation of intangible assets | | 1,495 | 1,017 | 2,337 |
| Movement in fair value of contingent consideration | | 218 | - | 1,462 |
| Working capital adjustments: | |
| | |
| Decrease/(increase) in trade and other receivables | | 621 | (84) | (1,087) |
| Increase/(decrease) in trade and other payables | | 138 | (1,451) | (709) |
| Cash generated from operating activities | | 3,533 | 544 | 3,019 |
| Corporation tax paid | | - | (705) | (1,819) |
| Net cash generated from/(used in) operating activities | | 3,533 | (161) | 1,200 |
| Cash flows from direct investment activities: | |
| | |
| Sale of direct investments | | 269 | 11 | 3,744 |
| Purchase of direct investments | 12 | (7,523) | (6,403) | (20,778) |
| Investee company loan repayment | 12 | - | - | 125 |
| Investee company loan redemption premium and interest received | 8 | 1,942 | 1,371 | 1,979 |
| Net cash used in from direct investment activities | | (5,312) | (5,021) | (14,930) |
| Cash flows from other investing activities: | |
| | |
| Interest received from cash deposits | | 711 | 104 | 404 |
| Purchase of property, plant and equipment | | (65) | (20) | (77) |
| Acquisition of a subsidiary undertaking | | - | - | (6,951) |
| Cash acquired with purchase of a subsidiary undertaking | | - | - | 2,882 |
| Purchase of VCT fund management business | | - | - | (2,100) |
| Decrease in short-term liquidity investments | | - | - | 5,000 |
| Net cash generated from/(used in) other investing activities |
| 646 | 84 | (842) |
| Net cash used in total investing activities |
| (4,666) | (4,937) | (15,772) |
| Cash flows from financing activities: | |
| | |
| Dividends paid | | - | - | (3,653) |
| Interest paid | | (30) | (8) | (31) |
| Payment of lease liabilities | | (194) | (79) | (238) |
| Net cash used in financing activities | | (224) | (87) | (3,922) |
| Net decrease in cash and cash equivalents | | (1,357) | (5,185) | (18,494) |
| Cash and cash equivalents at the beginning of the period | | 37,555 | 56,049 | 56,049 |
| Cash and cash equivalents at the end of the period | 13 | 36,198 | 50,864 | 37,555 |
Condensed consolidated statement of changes in equity
For the six months ended 30 September 2023
|
| Issued share capital £'000 | Share premium £'000 | Other distributable reserve £'000 | Retained earnings £'000 | Share-based payments reserve £'000 | Total £'000 |
| As at 1 April 2022 (audited) | 4 | 81,644 | 66,919 | 48,505 | 3,517 | 200,589 |
| Profit and total comprehensive income for the period | - | - | - | 7,003 | - | 7,003 |
| Final dividend | - | - | (2,200) | - | - | (2,200) |
| Share-based payments charge | - | - | - | - | 592 | 592 |
| As at 30 September 2022 (unaudited) | 4 | 81,644 | 64,719 | 55,508 | 4,109 | 205,984 |
| Issue of share capital | - | 2,100 | - | - | - | 2,100 |
| Loss and total comprehensive expense for the period | - | - | - | (4,167) | - | (4,167) |
| Interim dividend | - | - | (1,453) | - | - | (1,453) |
| Share-based payments charge | - | - | - | - | 457 | 457 |
| As at 31 March 2023 (audited) | 4 | 83,744 | 63,266 | 51,341 | 4,566 | 202,921 |
| Issue of share capital | - | 31 | - | - | - | 31 |
| Profit and total comprehensive income for the period | - | - | - | 1,349 | - | 1,349 |
| Final dividend | - | - | (2,367) | - | - | (2,367) |
| Exercise of share options | - | - | - | - | (10) | (10) |
| Share-based payments charge | - | - | - | - | 509 | 509 |
| As at 30 September 2023 (unaudited) | 4 | 83,775 | 60,899 | 52,690 | 5,065 | 202,433 |
1. General information
Mercia Asset Management PLC is a public limited company incorporated and domiciled in England, United Kingdom and registered in England and Wales with registered number 09223445. Its Ordinary shares are admitted to trading on the Alternative Investment Market ("AIM") of the London Stock Exchange. The registered office address is Mercia Asset Management PLC, Forward House, 17 High Street, Henley-in-Arden B95 5AA.
2. Basis of preparation
The financial information presented in these condensed consolidated interim financial statements constitutes the condensed consolidated financial statements of Mercia Asset Management PLC and its subsidiaries for the six months ended 30 September 2023. These condensed consolidated interim financial statements should be read in conjunction with the Group's Annual Report and consolidated financial statements for the year ended 31 March 2023, which have been prepared in accordance with international accounting standards in conformity with the requirements of the Companies Act 2006, International Financial Reporting Standards ("IFRS") and the applicable legal requirements of the Companies Act 2006.
These condensed consolidated interim financial statements and the comparative financial information presented in these condensed consolidated interim financial statements for the period ended 30 September 2023 do not constitute full statutory accounts within the meaning of Section 434 of the Companies Act 2006. The Group's Annual Report and consolidated financial statements for the year ended 31 March 2023 were approved by the Board on 3 July 2023 and have been delivered to the Registrar of Companies. The Group's independent auditor's report on those accounts was unqualified, did not contain an emphasis of matter paragraph and did not contain any statement under section 498 of the Companies Act 2006.
These condensed consolidated interim financial statements have been prepared in accordance with International Accounting Standard ("IAS") 34 'Interim Financial Reporting', as adopted for use in the UK.
No new or revised standards or interpretations that have become effective during the period ended 30 September 2023 have had a material effect on the financial statements of the Group.
Although not required by statute or regulation, the financial information contained in these condensed consolidated interim financial statements, which were approved by the Board on 27 November 2023 and authorised for issue, have been reviewed by the Group's independent auditor.
3. Going concern
Based on the overall strength of the Group's financial position, including not only its strong liquidity at the period end, which has been significantly enhanced post period end by the exit cash proceeds received from nDreams, together with its forecast future operating and investment activities and, having considered the ongoing UK macroeconomic backdrop and geopolitical instability on the Group's operations and portfolio, the Directors have a reasonable expectation that the Group is well placed to manage business risks in the current economic environment and has adequate financial resources to continue in operational existence for the foreseeable future. Accordingly, the Directors continue to adopt the going concern basis in preparing these condensed consolidated interim financial statements.
4. Significant accounting policies
In the application of the Group's accounting policies, the Directors are required to make judgements, estimates and assumptions about the carrying amounts of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates. The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period, or in the period of the revision and future periods, if the revision affects both current and future periods.
The principal accounting policies applied in the presentation of the condensed consolidated interim financial statements of Mercia Asset Management PLC (the "Group", "Mercia" or the "Company"), including the critical accounting judgements made by the Directors and the key sources of estimation, are consistent with those followed in the preparation of the Group's Annual Report and consolidated financial statements for the year ended 31 March 2023 and have been consistently applied throughout the period ended 30 September 2023.
5. Segmental reporting
The Group's revenue and profits are derived from its principal activity within the United Kingdom.
IFRS 8 Operating Segments defines operating segments as those activities of an entity about which separate financial information is available and which are evaluated by the Chief Operating Decision Maker to assess performance and determine the allocation of resources. The Chief Operating Decision Maker has been identified as the Board of Directors. The Directors are of the opinion that under IFRS 8 Operating Segments the Group has only one operating segment, being proactive specialist asset management, because the results of the Group are monitored on a Groupwide basis. The Board of Directors assesses the performance of the operating segment using financial information which is measured and presented in a consistent manner.
An analysis of the Group's revenue is as follows:
| | Unaudited Six months ended 30 September 2023 £'000 | Unaudited Six months ended 30 September 2022 £'000 | Audited Year ended 31 March 2023 £'000 |
| Fund management fees | 9,958 | 8,469 | 17,593 |
| Initial management fees | 2,369 | 890 | 3,680 |
| Portfolio directors' fees | 1,926 | 1,351 | 2,934 |
| Other revenue | 158 | 140 | 343 |
| VCTs share offer fees | 629 | 1,331 | 1,331 |
| | 15,040 | 12,181 | 25,881 |
6. Fair value movement in direct investments
| | Unaudited Six months ended 30 September 2023 £'000 | Unaudited Six months ended 30 September 2022 £'000 | Audited Year ended 31 March 2023 £'000 |
| Net fair value movement in direct investments (note 12) | (1,619) | 5,595 | 1,201 |
7. Operating (loss)/profit
Operating (loss)/profit is stated after charging:
| | Unaudited Six months ended 30 September 2023 £'000 | Unaudited Six months ended 30 September 2022 £'000 | Audited Year ended 31 March 2023 £'000 |
| Staff costs | 8,578 | 6,743 | 14,366 |
| Other administrative expenses | 3,924 | 3,479 | 6,635 |
| Total administrative expenses | 12,502 | 10,222 | 21,001 |
8. Finance income
Finance income is derived from:
| | Unaudited Six months ended 30 September 2023 £'000 | Unaudited Six months ended 30 September 2022 £'000 | Audited Year ended 31 March 2023 £'000 |
| Cash deposits | 773 | 104 | 404 |
| Short-term liquidity investments | 5 | 13 | 45 |
| Investee company loans (interest and redemption premium) | 1,942 | 1,371 | 1,979 |
| Total finance income | 2,720 | 1,488 | 2,428 |
9. Taxation
| | Unaudited Six months ended 30 September 2023 £'000 | Unaudited Six months ended 30 September 2022 £'000 | Audited Year ended 31 March 2023 £'000 |
| Current tax |
|
| |
| UK Corporation tax | (410) | (674) | (157) |
| Deferred tax |
|
| |
| Origination and reversal of temporary timing differences | 372 | 252 | 584 |
| Total tax (charge)/credit | (38) | (422) | 427 |
The current UK standard rate of corporation tax is 25% (H1 2023: 19%). The deferred tax credit of £372,000 (H1 2023: £252,000) represents the unwinding of the deferred tax liability recognised in respect of the intangible assets arising on the acquisition of Frontier Development Capital Limited and the VCT fund management business.
10. Earnings per share
Basic earnings per share is calculated by dividing the profit for the financial period by the weighted average number of Ordinary shares in issue during the period. Diluted earnings per share is calculated by dividing the profit for the financial period by the weighted average number of Ordinary shares outstanding and, when dilutive, adjusted for the effect of all potentially dilutive shares including share options on an as-if-converted basis. The potential dilutive shares are included in diluted earnings per share calculations on a weighted average basis for the period. The profit and weighted average number of shares used in the calculations are set out below:
| | Unaudited Six months ended 30 September 2023 | Unaudited Six months ended 30 September 2022 | Audited Year ended 31 March 2023 |
| Profit for the financial period (£'000) | 1,349 | 7,003 | 2,836 |
| Basic weighted average number of Ordinary shares ('000) | 446,582 | 440,110 | 441,156 |
| Basic earnings per Ordinary share (pence) | 0.30 | 1.59 | 0.64 |
| Diluted weighted average number of Ordinary shares ('000) | 454,800 | 447,216 | 449,348 |
| Diluted earnings per Ordinary share (pence) | 0.30 | 1.57 | 0.63 |
The calculation of basic and diluted earnings per share is based on the following weighted average number of Ordinary shares:
| | Unaudited Six months ended 30 September 2023 | Unaudited Six months ended 30 September 2022 | Audited Year ended 31 March 2023 |
| Weighted average number of shares | | | |
| Basic | 446,582 | 440,110 | 441,156 |
| Dilutive impact of Ordinary shares issued | 8,218 | 7,106 | 8,192 |
| Diluted weighted average number of Ordinary shares | 454,800 | 447,216 | 449,348 |
11. Dividends
An interim dividend for the year ending 31 March 2024 of 0.35 pence per share, totalling £1,563,000, has been declared after the reporting period end and as such has not been included as a liability in these condensed consolidated financial statements, in accordance with IAS 10.
Details of the dividends declared and paid in the comparative periods are set out in the Group's consolidated financial statements for the year ended 31 March 2023.
12. Investments
The net change in the value of direct investments for the six-month period is an increase of £5,904,000 (H1 2023: £11,987,000). The table below reconciles the opening to closing fair value of investments.
| | Level 1 financial assets | Level 3 financial assets | Total financial assets |
| | £'000 | £'000 | £'000 |
| As at 1 April 2022 (audited) | 1,632 | 117,926 | 119,558 |
| Investments made during the period | - | 6,403 | 6,403 |
| Disposal | - | (11) | (11) |
| Unrealised fair value gains on investments* | 102 | 7,476 | 7,578 |
| Unrealised fair value losses on investments* | - | (1,983) | (1,983) |
| As at 30 September 2022 (unaudited) | 1,734 | 129,811 | 131,545 |
| Investments made during the period | - | 14,333 | 14,333 |
| Acquired investments | - | 42 | 42 |
| Investee company loan repayment | - | (125) | (125) |
| Disposal | - | (4,851) | (4,851) |
| Unrealised fair value gains on investments | - | 3,746 | 3,746 |
| Unrealised fair value losses on investments | (765) | (7,375) | (8,140) |
| As at 31 March 2023 (audited) | 969 | 135,581 | 136,550 |
| Investments made during the period | - | 7,523 | 7,523 |
| Unrealised fair value gains on investments | - | 10,171 | 10,171 |
| Unrealised fair value losses on investments | (153) | (11,637) | (11,790) |
| As at 30 September 2023 (unaudited) | 816 | 141,638 | 142,454 |
* Excluding the demerger of Netacea Limited from Intechnica Holdings Limited in the period.
The measurement basis for determining the fair value of investments held is as follows:
| | Unaudited As at 30 September 2023 £'000 | Unaudited As at 30 September 2022 £'000 | Audited As at 31 March 2023 £'000 |
| Quoted investment | 816 | 1,734 | 969 |
| Price of last investment round | 55,401 | 69,284 | 79,522 |
| Enterprise value | 83,097 | 53,106 | 52,912 |
| Cost | 3,140 | 300 | 3,147 |
| Impaired value 1 | - | 7,121 | - |
|
| 142,454 | 131,545 | 136,550 |
1 Valued using methodologies consistent with the Group's accounting policy.
13. Cash, cash equivalents and short-term liquidity investments
|
| Unaudited As at 30 September 2023 £'000 | Unaudited As at 30 September 2022 £'000 | Audited As at 31 March 2023 £'000 |
| Cash and cash equivalents | 36,198 | 50,864 | 37,555 |
| Short-term liquidity investments | 284 | 5,248 | 279 |
14. Deferred consideration
| | Unaudited As at 30 September 2023 £'000 | Unaudited As at 30 September 2022 £'000 | Audited As at 31 March 2023 £'000 |
| Payable within one year | 1,316 | 2,869 | 1,227 |
| Payable within two to five years | 1,907 | - | 1,778 |
|
| 3,223 | 2,869 | 3,005 |
Details of the deferred consideration which arose on the acquisition of Frontier Development Capital Limited in December 2022 are set out in the Group's consolidated financial statements for the year ended 31 March 2023.
15. Deferred taxation
| | Unaudited As at 30 September 2023 £'000 | Unaudited As at 30 September 2023 £'000 | Audited As at 31 March 2023 £'000 |
| Deferred tax liability | 4,168 | 3,676 | 4,540 |
Under IAS 12 Income Taxes, provision is made for the deferred tax liability associated with the recognition of the intangible asset arising on the acquisition of Frontier Development Capital Limited and the VCT fund management business. As at 30 September 2023 the deferred tax liability has been calculated using the tax rate of 25%.
16. Issued share capital
| | Unaudited Six months ended 30 September 2023 |
| Unaudited Six months ended 30 September 2022 | | Audited Year ended 31 March 2023 | |||
| | Number | £'000 |
| Number | £'000 | | Number | £'000 |
| Allotted and fully paid | | | | | | | | |
| As at the beginning of the period | 446,581,202 | 4 |
| 440,109,707 | 4 | | 440,109,707 | 4 |
| Issue of share capital during the period | 98,321 | - |
| - | - | | 6,471,495 | - |
| As at the end of the period | 446,679,523 | 4 |
| 440,109,707 | 4 | | 446,581,202 | 4 |
On 29 September 2023, 98,321 new Ordinary shares were issued in respect of the exercise of share options held by certain employees. These new shares were admitted to trading on the AIM market of the London Stock Exchange on 5 October 2023.
Each Ordinary share is entitled to one vote and has equal rights as to dividends. The Ordinary shares are not redeemable.
17. Share premium
| | Unaudited Six months ended 30 September 2023 £'000 | Unaudited Six months ended 30 September 2022 £'000 | Audited Year ended 31 March 2023 £'000 |
| As at the beginning of the period | 83,744 | 81,644 | 81,644 |
| Premium arising on the issue of Ordinary shares | 31 | - | 2,100 |
| As at the end of the period | 83,775 | 81,644 | 83,744 |
On 29 September 2023, a premium on the issue of Ordinary shares arose from 98,321 new Ordinary shares of £0.00001 each, issued at a price of 21.50 pence per share, following the exercise of share options held by certain employees.
18. Other distributable reserve
| | Unaudited Six months ended 30 September 2023 £'000 | Unaudited Six months ended 30 September 2022 £'000 | Audited Year ended 31 March 2023 £'000 |
| As at the beginning of the period | 63,266 | 66,919 | 66,919 |
| Dividends (note 11) | (2,367) | (2,200) | (3,653) |
| As at the end of the period | 60,899 | 64,719 | 63,266 |
19. Fair value measurements
The fair values of the Group's financial assets and liabilities are considered a reasonable approximation to the carrying values shown in the consolidated statement of financial position. Subsequent to their initial recognition at fair value, measurements of movements in fair values of financial instruments are grouped into Levels 1 to 3, based on the degree to which the fair value is observable.
The following table gives information about how the fair values of these financial assets and financial liabilities are determined and presents the Group's assets that are measured at fair value. There have been no movements in financial assets or financial liabilities between levels during the current or prior periods. The table in note 12 sets out the movement in the Level 1 and 3 financial assets during the period.
| | Unaudited As at 30 September 2023 £'000 | Unaudited As at 30 September 2022 £'000 | Audited As at 31 March 2023 £'000 |
| Assets: |
|
| |
| Financial assets at fair value through profit or loss - direct investment portfolio |
|
| |
| Level 1 | 816 | 1,734 | 969 |
| Level 2 | - | - | - |
| Level 3 | 141,638 | 129,811 | 135,581 |
|
| 142,454 | 131,545 | 136,550 |
| | | | Unaudited As at 30 September 2023 £'000 | Unaudited As at 30 September 2022 £'000 | Audited As at 31 March 2023 £'000 | ||
| Liabilities: | | |
|
| | ||
| Financial liabilities at fair value through profit or loss - deferred consideration |
|
| | ||||
| Level 1 | | | - | - | - | ||
| Level 2 | | | - | - | - | ||
| Level 3 | | | 3,223 | 2,869 | 3,005 | ||
|
|
|
| 3,223 | 2,869 | 3,005 | ||
The Directors consider that the carrying amounts of financial assets and financial liabilities recorded at amortised cost in the consolidated financial statements approximate to their fair values.
Financial instruments in Level 1
The Group had one direct investment quoted on AIM, MyHealthChecked PLC, which is fair valued using the closing bid price as at 30 September 2023, 30 September 2022 and 31 March 2023 respectively.
Financial instruments in Level 3
If one or more of the significant inputs required to fair value an instrument is not based on observable market data, the instrument is included in Level 3. Apart from the one investment classified in Level 1, all other investments held in the Group's direct investment portfolio have been classified in Level 3 of the fair value hierarchy and the individual valuations for each of the companies has been arrived at using appropriate valuation techniques.
The Group has adopted the International Private Equity and Venture Capital Valuation Guidelines for determining its valuation techniques, which specify that the price of a recent investment represents one of a number of inputs used to arrive at fair value and uses a single classification for all Level 3 investments.
Note 2 of the Group's consolidated financial statements for the year ended 31 March 2023 provides further information on the Group's valuation methodology, including a detailed explanation of the valuation techniques used for Level 3 financial instruments.
20. Post balance sheet event
On 17 November 2023, the Group sold its investment in nDreams Limited to Aonic AB for a total consideration of £30.2million, split between £26.4million in cash and £3.8million re-invested into Aonic.
INDEPENDENT REVIEW REPORT TO MERCIA ASSET MANAGEMENT PLC
Conclusion
Based on our review, nothing has come to our attention that causes us to believe that the condensed set of financial statements in the half-yearly financial report for the six months ended 30 September 2023 is not prepared, in all material respects, in accordance with UK adopted International Accounting Standard 34 and the London Stock Exchange AIM Rules for Companies.
We have been engaged by the Group to review the condensed set of financial statements in the half-yearly financial report for the six months ended 30 September 2023 which comprises the condensed consolidated statement of comprehensive income, condensed consolidated statement of financial position, condensed consolidated cash flow statement, condensed consolidated statement of changes in equity and notes to the interim financial statements.
Basis for conclusion
We conducted our review in accordance with International Standard on Review Engagements (UK) 2410, "Review of Interim Financial Information Performed by the Independent Auditor of the Entity" ("ISRE (UK) 2410"). A review of interim financial information consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK) and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.
As disclosed in note 2, the annual financial statements of the group are prepared in accordance with UK adopted international accounting standards. The condensed set of financial statements included in this half-yearly financial report has been prepared in accordance with UK adopted International Accounting Standard 34, "Interim Financial Reporting.
Conclusions relating to going concern
Based on our review procedures, which are less extensive than those performed in an audit as described in the Basis for conclusion section of this report, nothing has come to our attention to suggest that the directors have inappropriately adopted the going concern basis of accounting or that the directors have identified material uncertainties relating to going concern that are not appropriately disclosed.
This conclusion is based on the review procedures performed in accordance with ISRE (UK) 2410, however future events or conditions may cause the group to cease to continue as a going concern.
Responsibilities of directors
The directors are responsible for preparing the half-yearly financial report in accordance with the London Stock Exchange AIM Rules for Companies which require that the half-yearly report be presented and prepared in a form consistent with that which will be adopted in the Company's annual accounts having regard to the accounting standards applicable to such annual accounts.
In preparing the half-yearly financial report, the directors are responsible for assessing the group's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the parent company or to cease operations, or have no realistic alternative but to do so.
Auditor's responsibilities for the review of the financial information
In reviewing the half-yearly report, we are responsible for expressing to the Group a conclusion on the condensed set of financial statement in the half-yearly financial report. Our conclusion, including our Conclusions relating to going concern, are based on procedures that are less extensive than audit procedures, as described in the Basis for Conclusion paragraph of this report.
Use of our report
Our report has been prepared in accordance with the terms of our engagement to assist the Company in meeting the requirements of the rules of the London Stock Exchange AIM Rules for Companies and for no other purpose. No person is entitled to rely on this report unless such a person is a person entitled to rely upon this report by virtue of and for the purpose of our terms of engagement or has been expressly authorised to do so by our prior written consent. Save as above, we do not accept responsibility for this report to any other person or for any other purpose and we hereby expressly disclaim any and all such liability.
BDO LLP
Chartered Accountants
London, UK
Date: 27 November 2023
BDO LLP is a limited liability partnership registered in England and Wales (with registered number OC305127).
Directors, secretary and advisers
Directors
Ian Roland Metcalfe OBE (Non-executive Chair)
Dr Mark Andrew Payton (Chief Executive Officer)
Martin James Glanfield (Chief Financial Officer)
Julian George Viggars (Chief Investment Officer)
Diane Seymour-Williams (Senior Independent Director)
Raymond Kenneth Chamberlain (Non-executive Director)
Dr Jonathan David Pell (Non-executive Director)
Caroline Bayantai Plumb OBE (Non-executive Director)
| Company secretary | Company registration number |
| Sarah-Louise Anne Williams | 09223445 |
| | |
| Company website | Company registrar |
| www.mercia.co.uk | Equiniti |
| | Aspect House |
| Registered office | Spencer Road |
| Forward House | Lancing |
| 17 High Street | West Sussex BN99 6DA |
| Henley-in-Arden | |
| Warwickshire B95 5AA | Solicitors |
| | Gowling WLG (UK) LLP |
| Independent auditor | 4 More London Riverside |
| BDO LLP | London SE1 2AU |
| 55 Baker Street | |
| Marylebone | Nominated adviser and joint broker |
| London W1U 7EU | Canaccord Genuity Ltd |
| | 88 Wood Street |
| Principal bankers | London EC2V 7QR |
| Barclays Bank PLC | |
| One Snowhill | Joint broker |
| Snow Hill Queensway | Singer Capital Markets Advisory LLP |
| Birmingham B4 6GN | 1 Bartholomew Lane |
| | London EC2N 2AX |
| Lloyds Bank plc | |
| 125 Colmore Row | Investor relations adviser |
| Birmingham B3 3SD | FTI Consulting Ltd |
| | 200 Aldersgate |
| | London EC2A 4HD |
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