REG - Calculus VCT - Annual Financial Report & Change in Year-End date

Calculus VCTAnnouncement

30/06/2023 14:30

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RNS Number : 6017E  Calculus VCT PLC  30 June 2023

Calculus VCT Plc  (the 'Company')

Legal Entity Identifier: 2138005SMDWLMMNPVA90

Final results for the year ended 28 February 2023

 

For the full annual financial report, please refer to the Investor Information
section on
https://calculuscapital.com/investment-opportunities/calculus-vct/investor-information/
(https://calculuscapital.com/investment-opportunities/calculus-vct/investor-information/)

 

The Annual Report and Financial Statements ("Annual Report and Accounts") for
the year ended 28 February 2023 and the Notice of Annual General Meeting will
be posted to shareholders shortly and will be available for inspection at 12
Conduit Street, London, W1S 2XH, the Company's registered office, and will be
available in electronic format for download on
www.calculuscapital.com/calculus-vct/
(http://www.calculuscapital.com/calculus-vct/) , a website maintained by the
Company's Investment Manager, Calculus Capital Limited. A copy of the Annual
Report and Accounts will also be submitted shortly to the National Storage
Mechanism ("NSM") and will be available for inspection at the NSM, which is
situated at:
https://www.fca.org.uk/markets/primary-markets/regulatory-disclosures/national-storage-mechanism
(https://www.fca.org.uk/markets/primary-markets/regulatory-disclosures/national-storage-mechanism)

 

Page numbers and cross-references in the announcement below refer to page
numbers and cross-references in the PDF of the Annual Report and Accounts.

 

Financial Highlights

 

                            Year to 28 February 2023  Year to 28 February 2022

 Net Asset Value per share  65.63p                    67.90p
 Final dividend proposed    2.95p                     3.06p
 Annual yield*              4.50%                     4.50%
 Total return per share*    1.30p                     4.83p
 Share price                62.50p                    55.00p

 

Key Dates

 

· Annual General Meeting:  21 August 2023
· Dividend reinvestment scheme application deadline:  11 August 2023
· Final dividend payment date: 25 August 2023
· Company's half year end: 31 August 2023
· Unaudited half yearly results: to be announced October 2023
· Annual results for thirteen month period to 31 March 2024: to be announced July 2024

 

Change of accounting reference date

 

The Board of Calculus VCT plc ("the Company") announces that for operational
efficiency, it is changing its accounting reference date, with immediate
effect, from 28 February to 31 March.

 

Accordingly, the Company will look to report as follows:

·      Unaudited half-yearly results for the six-month period ending 31
August 2023 and

·      Audited results for the 13 months ending 31 March 2024

 

Following the change of its accounting reference date, subject to the
shareholders' approval at the AGM in 2024, the Company will aim to pay the
dividend for the period ending 31 March 2024 in August 2024.

 

 

Chairman's Statement

 

I am pleased to present Calculus VCT plc's (the Company) results for the year
ended 28 February 2023. It has been another year of progress for the Company
with five new investments and £5.7 million worth of new Ordinary shares
allotted. The venture capital portfolio of qualifying investments grew in
value by £1.9 million, excluding the effects of new and follow-on investments
and exits. This portfolio growth was driven by the strong performance of a
number of investee companies. The Company's net asset value per share at the
end of the financial year was 65.63 pence per share. In addition, it paid a
dividend of 3.06 pence per share, giving a total return to shareholders for
the year (NAV plus total dividends paid in the year) of 68.69 pence per share.

 

Venture Capital Investments

Calculus Capital Limited manages the portfolio of VCT qualifying investments
made by the Company.

The Company invested £3.2 million in five new investments and £2.1 million
in six follow-on investments during the year ended 28 February 2023.

 

Issue of new Ordinary shares

The Company issued 8.7 million shares in the financial year to 28 February
2023 at an average issue price of 65.7 pence per share. Of these shares
issued, 7.0 million shares were issued under the offer that launched on 13
September 2021 and closed on 31 August 2022.

The Company launched a further offer on 21 September 2022, and issued 1.4
million shares under this offer in the financial year under review.

Since the year end, the Company has issued a further 3.9 million shares on 15
March 2023 at an average price of 64.9 pence per share and a further 2.8
million shares on 5 April 2023 at an average price of 64.7 pence per share.

Share Buybacks

During the year, 846,270 shares were bought back for cancellation at no more
than 5 per cent discount to the latest published NAV. In keeping with its
policy of returning funds to shareholders, the Company will continue to
consider opportunities for buybacks in the coming year. The total shares
bought back represented 1.62 per cent of the weighted average number of shares
in issue during the year ended 28 February 2023. The Company have agreed to
continue to make timely and consistent buybacks to ensure shareholders can
liquidate their holdings throughout the year and to manage the level of
discount to share price.

Dividend

The Directors are pleased to announce a final dividend of 2.95 pence per
Ordinary share to be paid to all Ordinary shareholders.

Subject to shareholder approval, the Ordinary share dividend will be paid on
25 August 2023 to shareholders on the register on 28 July 2023. The deadline
for the Scheme Administrator to receive any applications under the dividend
reinvestment scheme is 11 August 2023.

 

Developments since the year end

In March 2023, the Company made a £499k loan note investment in WheelRight
Limited. WheelRight designs and manufactures unique drive-over tyre pressure
and tread depth measuring equipment. WheelRight has developed a drive-over
sensor plate to measure the pressure of all of a vehicle's tyres (as well as
axle weight), together with a strobe-based camera array to measure each tyre's
tread depth and identify external defects. Following this, the Company
proceeded to invest a further £63k and £28k in the form of ordinary shares
in May and June 2023 respectively and £472k in convertible loan notes in June
2023.

In March 2023, the Company also made a follow-on investment in Quai
Administration Services Limited ("Quai"). Quai provides platform technology
combined with back-office administration services for the high-volume personal
savings industry. Quai's platform allows it to administer many thousands of
individual savings plans at a fraction of the cost incurred by established
insurance companies and wealth managers. In March 2023, Quai raised £530k of
new equity and £260k of additional capital through the issue of a convertible
loan note. The Calculus VCT invested £250k in the convertible loan note as
part of this offering.

In the same month, the Company made a £350k loan note investment in existing
portfolio company, Blu Wireless Technology Limited ("Blu Wireless"). Blu
Wireless provides the technology to allow data to be transmitted wirelessly at
very high, fibre-like speeds. Blu Wireless is currently focused on providing
reliable fibre-like connectivity on high-speed transport, perimeter security
and secure high-speed vehicle to vehicle applications for the defence and
security industries.

As mentioned above, since the year end the Company has made a further
allotment of Ordinary shares. On 15 March, 3.9 million shares were allotted at
an average price of 64.9 pence per share and on 5 April 2023, a further 2.8
million Ordinary shares were allotted at an average price of 64.7 pence per
share.

 

 

Manager's Review

 

The Company, through its Investment Manager, Calculus Capital, invests in a
diverse portfolio of established UK growth companies. The investments aim to
support those companies to grow, innovate and scale while simultaneously
achieving long-term returns. Calculus Capital's success is underpinned by a
disciplined investment process, strong risk management and very close
monitoring of and partnerships with the portfolio companies.

 

 

Results for the year

 

There has been a strong performance across a broad range of the Company's
qualifying investments, which is particularly encouraging given challenging
market conditions.

 

Performance

 

Despite the ongoing global tensions in Eastern Europe causing inflation
uncertainty and disruption in global supply chains, we are pleased with the
growth in the Company's portfolio and the uplifts in the valuations of several
of portfolio companies.

 

The most substantial movement in the qualifying portfolio was the £0.7m value
increase of Oxford Biotherapeutics Limited ("OBT"). OBT has a robust pipeline
of immuno-oncology therapies, which are used to re-engage and recruit the
body's immune system to attack cancer cells, therefore providing targeted
treatment strategies to patients most in need. OBT's clinical and pre-clinical
pipeline of novel immunotherapies is balanced between internal programs,
focused on Antibody Drug Conjugate's ("ADC") and checkpoint regulators, and
externally partnered programs with large pharma companies such as Boehringer
Ingelheim. OBT will receive development and regulatory milestone payments as
well as royalties on any future product sales.

 

Home Team Content Limited was founded in April 2020 by experienced producers
Dominic Buchanan and Bennett McGhee. Dominic and Bennett have drawn on their
existing slates and talent relationships to compile a development slate of
projects with a mix of scale and budget level as well as commercial and
international reach, with a focus on representing people of colour. Home Team
also enjoyed an uplift in value since February 2022, increasing the NAV by
£0.34 million. In October 2022, the company agreed a 'first look' deal with
Universal International Studios (UIS). Home Team will develop and produce
premium television projects with UIS for the UK and global market, focusing on
championing underrepresented creatives and new voices.

Brouhaha Entertainment was founded by experienced producers, Gabrielle Tana,
Troy Lum, and Andrew Mason in 2021. Gabrielle Tana, who was Oscar-nominated
for Philomena, and whose other productions include The Duchess, The Dig and
Thirteen Lives', is based in London. Troy Lum and Andrew Mason are based in
Sydney. After a successful first period of operation to March 2022, Brouhaha
saw five projects go into production in the year to March 2023. The company's
film Firebrand, starring Jude Law and Alicia Vikander, is one of the official
selections for the Cannes Film Festival. Brouhaha is in post-production on a
limited series for Netflix entitled Boy Swallow Universe. Brouhaha's NAV
increased by £0.5m in the year to March 2023.

 

AIM listed Scancell Holdings' technology develops novel immunotherapies for
the treatment of cancer based on its proprietary technology platforms.
Scancell saw its share price rise resulting in an increase of £0.1 million on
the NAV. In October 2022, Scancell signed a licensing agreement with Genmab
for its anti-glycan antibody, which could earn Scancell up to US$624m if all
modalities are developed and commercialised.

 

Wazoku Limited is an idea management company whose collaborative idea
management platform helps organisations transform raw ideas generated by the
workforce into actionable innovation. The company continues to grow well with
approximately 25% growth in Annual Recurring Revenue ("ARR") since March 2022
and successfully closed an £8.3 million equity funding in September 2022 of
which Calculus VCT invested £0.3m.

 

Rotageek provides a workforce management solution, creating staff schedules
using cloud-based technology to effectively manage and engage staff.
Rotageek's proprietary solution assesses five years of historic business data
before forecasting future customer demand to a 15-minute segment level, by
location, staff skill or product. Since Calculus' investment in April 2022,
expansion into the global workforce management market has been strong. The
company continues to expand its customer base, signing 19 new customers in
2022. The effects of these promising developments have produced a £0.1m
increase on the Company's NAV.

 

IPV Limited is a provider of media asset management software to the global
broadcast, corporate and sports industries. IPV is well placed in a world that
increasingly uses video to deliver key messages.  The company has deep roots
in the broadcast industry which provides strong validation for their software.
The greatest area of opportunity is in the non-broadcast area. IPV performed
well in the year with recognised revenue growing by over 30% which supported a
£29k increase in the Company's NAV.

 

Fiscaltec Group Limited, Riff Raff Entertainment and Open Energy Market
Limited also saw their valuations increase over the year along with several
other investee companies. These three valuation improvements added a further
£0.1 million to the Company's NAV.

 

Conversely, during the year, we have reduced the valuations for several
companies, including eConsult Health, AnTech, Blu Wireless and Essentia
Analytics, as their performance is currently behind our expectations. The
route to profitability has been slower than anticipated for some of these
companies, resulting in a total reduction in value of £0.4m.

Unfavourable market movements also resulted in negative performance of the
Company's listed holdings, C4X Discovery and Arecor Therapeutics, where
valuations were reduced by £0.3m and £0.5m, respectively.

 

 

Exits

 

In August 2022, the Company received a capital distribution from Park Street
Shipping Limited. The distribution came from the sale of the MV Nordic, Park
Street's only asset, back in October 2021. The payment represents a 1.68X
return on cost. Since then, Park Street has been put in members' voluntary
liquidation and a further small capital distribution will be made when the
liquidation is finalised.

The Board of Arcis Biotechnology Holdings appointed the MacDonald Partnership
(TMP) to formally manage its administration process in September 2022. The
company has experienced a reduction in the demand for its services as the
country exited the covid pandemic, thus leading to its insolvency. The
realised loss to the Company from this investment was £712k of which £662k
was provided for in the prior year.

 

 

 

New Investments

 Investments                      Date           Sector      Investment cost £'000   Website
 Destiny Pharma Plc               March 2022     Healthcare  500                     https://www.destinypharma.com/
 Riff Raff Entertainment Limited  June 2022      Media       424                     https://www.riffrafffilms.tv/
 Notify Technology Limited        June 2022      Healthcare  628                     https://www.notifytechnology.com/
 Optalitix Limited                July 2022      Technology  1,065                   https://www.optalitix.com/
 Arctic Shores Limited            December 2022  Technology  610                     https://www.arcticshores.com/

 

 

 

Destiny Pharma plc
Destiny Pharma is a clinical stage biotechnology company, dedicated to the
development and commercialisation of novel anti-infectives with a focus on
infection prevention. In March 2022, the Calculus VCT invested £500k as part
of a £6.45m fundraising. Recently, in February 2023, Sebela Pharmaceuticals,
a US gastroenterology specialist, signed an exclusive collaboration and
co-development agreement with Destiny Pharma for the North American rights of
NTCD-M3, a medicine developed to prevent C.difficile infection (CDI)
recurrence.

 

Riff Raff Entertainment Limited

Riff Raff Entertainment ("Riff Raff") is a production company founded by
Oscar-nominated actor and producer Jude Law and experienced producer Ben
Jackson. The company has made significant progress since receiving investment
from the Calculus VCT. Shooting for a TV series, Black Rabbit, which has been
commissioned by Netflix, is scheduled to go into physical production in
September 2023. The Order, a film starring Jude Law and Nicholas Hoult,
commenced production in late spring 2023. The company is developing a strong
slate with further films and TV series likely to go into production in 2024.

 

Notify Technology Limited

In June 2022, the Calculus VCT invested £0.6m in Notify Technology alongside
£1.2 million from Calculus EIS investors and £1.3m from other investors.
Notify provides an Environment, Health and Safety ("EHS") SaaS platform that
helps its clients create and maintain a safe working environment for its
employees. Founded in 2017 by Duncan Davies and Andy Dumbell, organisations
use Notify's mobile-first software platform and integrated modules to help
them deliver improvements to their safety, compliance wellbeing and
sustainability culture.  The platform allows individuals to digitally report
near misses and incidents, generate EHS audits and checklists and complete
various EHS tasks on their mobile phone or desktop.  Many organisations still
use locally stored databases, spreadsheets or even pen and paper to record
health and safety incidents. Notify has users in over 100 countries, capturing
30,000 safety events, audits, actions and risk assessments per month.

 

Optalitix Limited
Optalitix is a technology company that adds value to insurers and other
financial institutions, with a low code SaaS product allowing their customers
to embed existing excel pricing and other models in the cloud with resulting
improvements in governance and integration with other systems. The company
currently has two key products - Optalitix Models, which turns spreadsheets
into systems and Optalitix Quote, which is based on Models and creates a
digital underwriting platform for insurers. These products are transforming
the insurance sector as underwriters currently work with many models, which
are manually run without proper systems and governance. The software allows
the process to be streamlined and automated, saving companies thousands of
hours of system development time and data processing time and providing an
audit trail to improve governance. In August 2022, the Calculus VCT invested
£1.1m and Calculus EIS funds invested £1.4m as part of a £4.0m
fundraising.

 

Arctic Shores Limited

Arctic Shores provides psychometric assessments to help employers build the
diverse, successful workforce of tomorrow by enabling organisations to widen
their talent pools, unearthing high-quality candidates often overlooked by CV
screening and traditional tests. Arctic Shores has run more than three million
candidate assessments in over 40 countries. In December 2022, Calculus led a
£5.75m equity round into Arctic Shores, alongside Praetura Ventures and
existing investor Beringea with £0.6m coming from the Calculus VCT.

Follow-on Investments

 

 Investments                             Date            Sector        Investment cost  Website

                                                                       £'000
 Axol Bioscience /Censo Biotechnologies  March 2022      Healthcare    400              https://axolbio.com/
 Arcis Biotechnology Holdings            March 2022      Technology    50               https://arcisbio.com/
 Rota Geek Limited                       June 2022       Technology    750              https://www.rotageek.com/ (https://www.rotageek.com/)
 Thanksbox Limited                       August 2022     Technology    400              https://mo.work
 Wazoku Limited                          September 2022   Technology   300              https://www.wazoku.com/
 Wonderhood                              February 2023   Creative      166              https://wonderhoodstudios.com/ (https://wonderhoodstudios.com/)

 

Axol Bioscience Limited/Censo Biotechnologies Limited

Following the 2021 merger with Censo, Axol now focuses on manufacturing cell
lines (at the Edinburgh facility) as well as providing scientific services and
conducting its own research (in Cambridge). Axol supplies high quality human
cells, created using stem cell technology, to many of the world's biggest and
best-known pharma companies and research institutions. The cells, known as
induced pluripotent stem cells (iPSCs), are originally derived from healthy
adult donors and adult patients with specific disease backgrounds. The cells
are then used for medical research, disease modelling and drug development.
The company has earned an international reputation and has a strong pipeline
of services contracts for 2023.

 

Arcis Biotechnology Holdings Limited

The Calculus VCT made a follow on investment of £50,000 in Arcis in March
2022. Following a decline in demand for its products as the country exited the
covid pandemic, Arcis entered into administration in September 2022.

 

Rotageek Limited

As described above, Rotageek provides a workforce management solution,
creating staff schedules using cloud-based technology to effectively manage
and engage staff. The company is led by the co-founder, and current CEO, Dr
Chris McCullough, who spent 16 years in the NHS and 8 years as an Emergency
Medicine Physician, at several London based hospitals, including St Mary's
Hospital. In June 2022, the Company invested £750k as part of a £2.75
million fundraising, alongside existing investors, as well as new investor.
The fundraise will be used to support the company's further expansion into the
global workforce management market, primarily across retail and healthcare
sectors.

 

Thanksbox Limited

Thanksbox Ltd trading as "Mo" provides a software platform which helps
organisations improve their culture, connect their people, and improve
employee engagement. Mo's core product, 'Moments', captures moments of
appreciation, recognition, inspiration and success, and helps build
connections between colleagues.  It is particularly relevant following the
pandemic as many businesses are building a new way of hybrid working where
employee engagement becomes an even greater challenge. In August 2022, the
Calculus VCT invested £400k in convertible VCT qualifying loan notes as part
of an £850k round alongside other shareholders.  Following that investment,
the company, with the support of the Calculus VCT, is conducting a strategic
review to determine the best route forward.

 

Wazoku Limited

As described above, Wazoku provides idea management and open innovation
software to enterprise customers. As an idea management software company, it
strives to not only capture ideas, but also collate, evaluate, select, and
transform ideas into actionable improvements. Its open innovation platform
allows challenges to be sent to Wazoku's network of over 400,000 solvers to
create innovative solutions ranging from those advancing aeronautics and space
research, to identifying disease targets for a new class of treatments and
even to providing fresh water to developing communities. Wazoku continues to
grow well and successfully closed an £8.3m equity funding in September 2022,
of which the Calculus VCT invested £0.3m.

 

Wonderhood Studios
Wonderhood Studios operates a unique multi-discipline business model which is
reconfiguring the model for a media business. The group comprises a
full-service advertising agency, a TV production business, a social media
content maker and a data insight unit that provides data-led intelligence to
support the other units. Wonderhood Studios is the only company to appear
simultaneously in the 2023 top thirty industry rankings for both the
television and advertising sectors in the UK. The Calculus VCT invested
£166,000, together with an investment of £390,000 by Calculus EIS funds, as
part of a £1.5 million total equity fundraising.

 

 

 

Outlook

The geopolitical and economic climate will likely continue to be challenging.
The economic effects of Russia's invasion of Ukraine, rising inflation,
interest rates and energy prices will clearly have an impact on consumer
spending and may impact both consumer and business confidence. Recent turmoil
in the banking sector is also likely to lead to a tightening credit
environment. The Investment Manager continues to assess any risks and
implement appropriate measures. The highly experienced team understands how to
invest during various economic cycles. The Company's focus on investment in
growth companies in the technology, life sciences and media sectors, all of
which are key expansion areas for the UK economy, will continue to provide
opportunities for profitable investment.

Despite the challenging market conditions, the Company ended the year strongly
with an uplift in total return to shareholders and several notable uplifts in
value within our current portfolio. We are pleased to announce that the VCT
has successfully fundraised over £5.7 million in the current financial year.
 VCTs provide a compelling opportunity for UK investors to provide funding
for businesses in a tax‑efficient way, and we look forward to continuing to
do so in the coming year.

Jan Ward

Chairman

30 June 2023

 

 

 

 

 

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