REG - Duke Capital - Final Results for the year ended 31 March 2025
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RNS Number : 2595O Duke Capital Limited 25 June 2025
25 June 2025
Duke Capital Limited
("Duke Capital", "Duke" or the "Company")
Final Results for the year ended 31 March 2025
Results reflect disciplined execution while building future value
Duke Capital Limited (AIM: DUKE), a leading provider of hybrid capital
solutions for SME business owners in Europe and North America, is pleased to
announce its audited results for the 12 months ended 31 March 2025 ("FY25").
Financial Highlights:
· Recurring cash revenue* of £25.8 million (2024: £24.3
million), an increase of 6%
· Total cash revenue of £26.6 million (2024: £30.3
million), a decrease of 12% and reflective of the lack of investment exits in
FY25 (2024: three exits)
· Free cash flow** of £12.6 million (2024: £17.9
million), a decrease of 30%, reflecting lack of exits
· Free cash flow per share of 2.83 pence per share (2024:
4.34 pence)
· Net income of £2.0 million (FY24: £11.6 million),
down 83% reflecting the non-cash reduction in fair value of the portfolio
· Adjusted earnings of £15.4 million, (FY24: £20.0
million), a decrease of 23%
· Dividend of 2.80 pence per share (2024: 2.80 pence)
· The cash position ended FY25 at £19.8m. With £10m
still available on the credit line with Fairfax, Duke's liquidity position at
31 March 2025 was a robust £29.8m
Operational Highlights:
· Over £24 million deployed into existing capital
partners
· Increased equity stakes in six current partners
· Completed an oversubscribed £23.5 million equity raise
in November 2024 to provide additional capital to current partners to support
M&A activity and allow flexibility on the timing of Duke's third-party,
non-dilutive funding strategy
Post-Period End Highlights:
· £6.6 million of recurring cash revenue expected in Q1
FY26, representing a 4% year-on-year increase (Q1 FY25: £6.3 million)
· In April 2025, invested £3.3 million into New Path
Fire and Security Limited to further its acquisitive growth strategy. Duke
purchased additional equity in New Path, increasing our ownership from 15.0%
to 20.9%
· In June 2025, invested £2.0m into Tristone Healthcare
Limited to complete the acquisition of Serenity Care Homes Limited. As part of
the deal, Duke invested £500k of additional equity in Tristone, increasing
our ownership stake from 21.3% to 28.4%.
* Recurring cash revenue excludes exit premiums and cash gains from the sale
of equity investments
** Free cash flow is defined as net cash inflows from operations plus cash
gains from the sale of equity investments less net transaction costs less
interest paid on borrowings
Nigel Birrell, Chairman of Duke Capital, said: "Despite a persistently
challenging global and UK macroeconomic environment, Duke Capital delivered
solid results in FY25. Duke Capital has once again maintained a stable and
reliable dividend, underlining the resilience of our income-generating model
and our disciplined approach to capital allocation.
"Duke's investment philosophy for some time has been to "stay in for longer"
with its investments and to attract higher EBITDA multiples upon exit as the
portfolio matures. We announced five follow-on investments into our existing
capital partners during 2025, all of whom are operating buy and build models.
The proceeds were used by these partners to acquire long standing, profitable
businesses. The operating performance from all these new portfolio investments
has been positive which underlines the strict criteria and extensive due
diligence that is undertaken prior to any transaction closing.
"Looking ahead, there are some positive signs emerging with inflationary
pressures beginning to ease and interest rates expected to decline further.
Our business model and attractiveness to investors improves in times of lower
interest rates. Duke Capital will continue to work with its longstanding,
private, profitable partners to ensure that we are able to deliver our
operational and financial objectives to the benefit of our shareholders."
Investor Presentation
CEO Neil Johnson and CFO Hugo Evans will provide a live investor presentation
relating to the FY25 results via the Investor Meet Company platform on Monday
30 June 2025 at 12:45 p.m. BST.
The presentation is open to all existing and potential shareholders. Questions
can be submitted via the Investor Meet Company dashboard up until 9 a.m. the
day before the meeting or at any time during the live presentation.
Investors can sign up to Investor Meet Company for free and add to meet Duke
Capital via:
https://www.investormeetcompany.com/duke-capital-limited/register-investor
(https://www.investormeetcompany.com/duke-capital-limited/register-investor)
Investors who already follow Duke Capital on the Investor Meet Company
platform will automatically be invited.
This announcement contains inside information.
For further information, please visit https://dukecapital.com/
(https://dukecapital.com/) or contact:
Duke Capital Limited Neil Johnson / Charles Cannon Brookes / Hugo Evans +44 (0) 1481 231 816
Cavendish Capital Markets Limited (Nominated Adviser and Joint Broker) Stephen Keys / Callum Davidson / Michael Johnson +44 (0) 207 220 0500
Canaccord Genuity Limited Adam James / Harry Rees +44 (0) 207 523 8000
(Joint Broker)
SEC Newgate (Financial Communications) Robin Tozer / Alice Cho / Gwen Samuel +44 (0) 20 3757 6882 dukecapital@secnewgate.co.uk
Duke Capital Portfolio
A full list of Duke's current partners is included for reference on the
Partners page of the Company's website: www.dukecapital.com/partners
(http://www.dukecapital.com/partners) .
About Duke Capital
Duke is a leading provider of hybrid capital solutions for SME business owners
in Europe and North America, combining the best features of both equity and
debt.
Since 2017, Duke has provided unique long-term financing which eliminates
re-financing risk and necessity for a short-term exit by providing a unique
'corporate mortgage' while also aligning its returns to grow with the success
of the business.
Duke is focused on generating attractive risk-adjusted returns for
shareholders and has a track record of achieving this across market cycles.
It's three investment pillars are capital preservation, attractive dividend
yield, and to provide upside upon exits.
Duke is listed on the AIM market under the ticker DUKE and is headquartered in
Guernsey.
Chairman's Statement
I am pleased to present Duke Capital's annual statements for the financial
year ending 31 March 2025, a year in which we demonstrated strategic
resilience, operational discipline, and consistent value delivery to our
shareholders amidst a challenging global and UK macroeconomic backdrop.
The UK economy continues to suffer from slow growth with the IMF recently
forecasting the UK's expected GDP growth rate in 2025 to be 1.2% which, while
an improvement on the 1.1% reported in 2024 and the 0.3% in 2023, reflects an
extended period of below average growth. In addition to slow growth and low
levels of consumer demand, businesses are now facing other new challenges,
particularly from increased employment costs while increased uncertainty
surrounding global trade and geopolitical tensions continue to impact general
risk appetite.
I am pleased to be able to report that in the face of this challenging
economic backdrop, Duke Capital has once again been able to deliver solid
results in FY25. There are some positive signs emerging with inflationary
pressures beginning to ease and interest rates, which were trimmed further to
4.25% in May, expected to decline further in the second half of the year as
inflation cools and the UK government attempts to stimulate domestic growth.
Duke Capital's business model and attractiveness to investors improves in
times of lower interest rates so we look forward to an easing of the interest
rate cycle.
At the heart of our investment philosophy is the goal of delivering
consistent, long-term value. I am pleased to report that Duke Capital has once
again maintained a stable and reliable dividend, underlining the resilience of
our income-generating model and our disciplined approach to capital
allocation. In an environment where income certainty is increasingly valued by
investors, our ability to support a steady and covered dividend payout
reaffirms the strength of our portfolio and the robustness of our recurring
revenue streams. This policy remains a cornerstone of our commitment to
shareholder returns.
As reported in my Interim FY25 chairman's statement, Duke's investment
philosophy for some time has been to "stay in for longer" with its investments
and to attract higher EBITDA multiples upon exit as the portfolio matures.
With this in mind, Duke announced five follow-on investments into our existing
capital partners during 2025, all of whom are operating buy and build models.
The proceeds were used by these partners to acquire long standing, profitable
businesses. I am pleased to report that the operating performance from all
these new portfolio investments has been positive which underlines the strict
criteria and extensive due diligence that is undertaken prior to any
transaction closing.
As previously reported, during H2 FY25 Duke closed a £23.5m equity fundraise
by way of a Placing, Subscription, Retail Offer and Broker Option. While it is
always difficult to raise new equity capital at a discount to the Company's
underlying NAV, the decision reflected the near-term investment opportunities
and requirements from inside the Company's existing portfolio specifically in
relation to Duke's buy and build platforms. The proceeds enabled us to provide
additional capital to our current partners, delivering bolt-on M&A and
increasing their EBITDA while increasing our equity participation where
possible. I believe shareholders will see the benefits of this decision in the
coming periods and I am pleased to report that Duke Capital's cash position
ended FY25 at £19.8m. With £10m still available on the credit line with
Fairfax, Duke's liquidity position at 31 March 2025 was a robust £29.8m.
Outlook
During FY25, Duke Capital stayed true to its core purpose in difficult market
conditions: delivering reliable returns and distributing a large percentage of
its free cashflow to its shareholders in the form of covered dividends. As we
enter FY26, the global economy has been shaken by tariffs, wars and divisive
political rhetoric which has led to extreme movements in global public equity
markets. Despite this volatile backdrop, Duke Capital will continue to work
with its longstanding, private, profitable partners to ensure that we are able
to deliver our operational and financial objectives to the benefit of our
shareholders.
I would like to thank our management team, our investee partners, and you, our
shareholders, for your continued trust and support. Together, we look to the
future with confidence.
Yours faithfully,
Nigel Birrell
Chairman
CEO's Statement
FY25 marked our first full year operating as Duke Capital. I'm pleased to
report results that reflect disciplined execution while building future value.
Recurring cash revenue rose to £6.5 million in Q4 FY25, up 13% year-on-year.
For the full year, recurring revenue reached £25.8 million, demonstrating
consistent growth and the resilience of our hybrid capital model.
A Clear Investment Philosophy
While our name changed, our core investment philosophy remains the same. We
back profitable, long-established, non-PE-backed businesses - a model well
suited to MBOs and buy-and-build strategies. Our rebranding to hybrid capital
better captures our blend of private credit and equity, but our philosophy
remains to align our returns with the long-term success of our partners.
This repositioning alongside our move to IFRS 10, give us flexibility to
increase equity stakes beyond 30%, allowing us to stay invested longer.
Despite this, we maintain senior capital rights and remain aligned with
management teams.
Notably, our core product, investment criteria, and investing policy have not
changed, which allows us to report a solid set of results across our core cash
flow KPIs. A key focus in FY25 was increasing our equity stakes across the
portfolio, to maximize expected shareholder returns upon exit. We achieved
this in six companies, with management support, through a mix of minority and
majority holdings, aligning value creation with exit potential.
Portfolio Deployment and Support
The repositioning also enabled deeper support for existing partners. In FY25,
we deployed over £24 million of capital across the portfolio. Highlights
include:
· Total follow-on financing during the year into BPVA
(Ireland) Limited ("BPVA") of £6.8 million. This facilitated BPVA's
acquisition of three separate businesses as supporting the reconfiguration of
the shareholding structure of the BPVA entity. This investment took Duke's
overall investment in BPVA to over £20 million.
· A £3.0 million follow-on investment in United Glass
Group in September 2024 to support its latest acquisition.
· A £2.9 million into Step Investments Limited ("Step").
Duke's funds were used by Step to increase its shareholding from 34% to a 75%
controlling stake in the Dublin-based Group, Bay Broadcasting, which operates
three longstanding and profitable radio stations. This was followed by the
successful divestment by Step of its subsidiary, City Education & Learning
Group, for initial proceeds of €5.2 million. The sale has provided Step with
the liquidity to pursue further growth M&A in the media sector.
After the period-end, we made further investments:
· £3.3 million in April 2025 into New Path Fire and
Security Limited to further its acquisitive growth strategy. Duke purchased
additional equity in New Path, increasing our ownership from 15.0% to 20.9%.
· In June 2025, we invested £2.0 million into Tristone
Healthcare Limited to complete the acquisition of Serenity Care Homes Limited.
As part of the deal, Duke invested £500k of additional equity in Tristone,
increasing our ownership stake from 21.3% to 28.4%.
These actions reflect our conviction in the buy-and-build model and our
ability to compound value over time. Duke's most recent investment exemplifies
this. Announced at the end of the last financial year, Duke invested £14.5
million into Integrum Care Group which operates six elderly care homes across
the Kent and East Sussex. Integrum's performance since investment has been
encouraging and it is our intention to support Integrum's buy-and-build
strategy, recognising its strength as a platform and its impressive
management team which has a strong track record in the elderly care sector.
Strengthened Capital Position
In December, we completed an oversubscribed £23.5 million equity raise at
27.5p per share. We were supported by major investors and welcomed new
institutional and retail holders. Our message was clear: the hybrid capital
model is both differentiated and proven to reward shareholders and business
owners.
The capital from the fundraise is supporting further M&A activity within
our portfolio and allows flexibility on the timing of our third-party,
non-dilutive funding strategy. While deeper investment into existing partner
companies may extend exit timelines, we're confident that value accretion for
expected exits at higher EBITDA multiples will benefit shareholders over time.
We recognise the vote of confidence by shareholders in their support for the
fundraising.
We also remain committed to exploring third-party capital partnerships which
are accretive to shareholders. While current geopolitical and market
conditions have made it challenging to secure such partnerships on acceptable
terms, we continue to search for potential partners aligned with our long-term
vision. While sustainable growth is our goal to take advantage of economies of
scale, growth must serve long-term shareholder value - not growth for its own
sake.
Investment Strategy Guides Decision Making
Our investment pillars - capital preservation, yield through robust dividends,
and upside through exits - continues to guide our decision making amid global
geo-political uncertainty. With government transitions in our two core
countries, the UK and the United States, we remained cautious on adding new
partners. Indeed, at the time of our fundraising in financial year Q3, our
stated use of proceeds was to deploy the funds within our current portfolio.
Although no additional exits occurred in FY25, we received final full payments
from the exit of Fairmed and anticipate the final deferred consideration from
Fabrikat in FY26. Despite there being no new exits in FY25, we look at our
lifecycle of investments over multiple periods, and by design the exit timing
is not in our control. Regardless, we feel strongly that our strategy will be
validated in the fullness of time.
Finance Review
The financial results for FY25 demonstrate Duke's resilience in the face of
global macro uncertainty. I am pleased to report that the Group's recurring
cash revenue, which excludes the effects of any investment exits, reached
£25.8 million, a 6% increase over FY24.
The Group's total cash revenue decreased by 12% to £26.6 million. However,
this was the direct result of the lack of investment exits. In FY24, we
experienced two full exits and the partial exit of Fairmed Healthcare, which
delivered £6.0 million of non-recurring revenue. In FY25, Duke only received
the remaining £800k of premiums from the Fairmed exit.
Free cash flow, defined as net cash inflows from operations plus cash gains
from the sale of equity investments less net transaction costs less interest
paid on borrowings, decreased from £17.9 million to £12.6 million in the
year, again the result of the lack of investment exits.
Investment exits are part of Duke's investment model, but as discussed, we are
generally not in control of the exits. As a result, the timings of portfolio
exits are unpredictable and will lead to variability in our total cash
inflows. As demonstrated in the table below, our total cash revenue shows
year-on-year volatility, while our recurring remains on a steadier growth
trajectory.
2022 2023 2024 2025
£'000 £'000 £'000 £'000
Recurring cash revenue 14,941 21,767 24,321 25,761
Growth 70% 46% 12% 6%
Non-recurring cash revenue 3,466 114 5,965 837
Growth 55% (97%) 5128% (86%)
Total cash revenue 18,407 21,881 30,286 26,598
Growth 67% 19% 38% (12%)
Total income, which includes non-cash fair value movements on the Company's
investment portfolio, fell to £15.2 million in FY25, an 41% decrease over
FY24. This generated total earnings after tax of £2.0 million and earnings
per share of 0.45 pence against £11.6 million in FY24 and earnings per share
of 2.81 pence; the decrease was driven a material reduction in the non-cash
fair value movements of £14.1 million. Adjusted earnings, which strips out
the fair value movements decreased 23% from £20.0 million in FY24 to £15.4
million in FY25, again due to no new investment exits in FY25.
A metric which was kept under tight control was our fixed operating expenses,
which rose just 5% over FY24. This was achieved by holding headcount steady
while reducing expenses where feasible. For personnel costs, such as
discretionary compensation, there is a timing mismatch. Annual awards get
crystallised during the subsequent financial year. Consequently, we expect our
total operating expenses in FY26 to remain flat when compared to FY25.
Following the equity raise in December, Duke's liquidity remains strong, with
cash on the balance sheet standing at £19.8 million at 31 March 2025 and a
further £10 million remaining undrawn on Duke's facility with Fairfax. This
gives the Company close to £30 million of available liquidity at the
financial year end, allowing the Group to maintain its strategy of supporting
the current investment portfolio as we look to build value from within.
The investment portfolio continued to grow in FY25, with the fair value of the
investment portfolio reaching £244 million, split across hybrid credit, term
credit and equity investments.
2022 2023 2024 2025
£'000 £'000 £'000 £'000
Hybrid credit investments 160,479 191,334 210,948 225,684
Term credit investments 4,172 4,652 5,382 2,322
Equity investment 10,820 13,529 15,904 15,812
Total investment portfolio 175,471 209,515 232,234 243,818
Dividend
I am pleased to report Duke maintained a 0.70 pence quarterly dividend
throughout FY25, equating to an annualised dividend of 2.80 pence, in line
with FY24. We are confident that we will cover our dividend through FY26 and
beyond.
Outlook - Confident in our ability to deliver long-term shareholder value
As we closed FY25, we assessed the impact of global tariffs and supply chain
pressures. While our portfolio companies are largely regional or national in
scope, indirect effects, such as delayed purchasing decisions and input cost
volatility, have introduced some uncertainty. Nonetheless, we believe these
challenges remain manageable.
With our investment pillars in mind, Duke maintained a covered dividend
throughout the year by ensuring our portfolio delivers current yield for
shareholders. Our focus on capital preservation has resulted in a broadly
stable total asset value, while individual portfolio positions change with
altering growth rates and their knock-on effects on equity valuations.
Following through on our repositioning to Duke Capital, we directed our energy
to seeking increased equity stakes, to maximize our ability to generate
upsides from exits which we expect our shareholders to benefit from in the
future.
We have a positive outlook as growth returns at a macro level while central
banks start easing interest rates, which we believe benefits our partners and
shareholders. With a diversified and resilient portfolio, a strong balance
sheet, and a clear strategic direction, we are confident in our ability to
deliver long-term value to shareholders.
Neil Johnson
Chief Executive Officer
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 MARCH 2025
Year to Year to
31-Mar-25 31-Mar-24
Note £'000 £'000
Cash flows from operating activities
Receipts from hybrid credit investments 9 25,000 27,267
Receipts of interest from term credit investments 10 158 453
Other operating receipts 1,419 195
Operating expenses paid (4,186) (4,015)
Payments for hybrid credit participation fees 12 (87) (130)
Tax paid (781) (673)
Net cash inflow from operating activities 21,523 23,097
Cash flows from investing activities
Hybrid credit investments advanced 9 (24,500) (42,012)
Hybrid credit investments repaid 9 3,987 17,636
Term credit investments advanced 10 (2,286) (750)
Equity investments purchased 11 (370) (3,799)
Equity investments sold 11 - 2,326
Equity dividends received 11 21 48
Receipt of deferred consideration 742 1,512
Investment costs paid (462) (1,344)
Net cash outflow from investing activities (22,868) (26,383)
Cash flows from financing activities
Proceeds from share issue 17 23,500 -
Share issue costs 17 (1,394) -
Dividends paid 20 (12,249) (11,524)
Proceeds from loans 15 17,000 15,000
Interest paid 15 (8,520) (6,222)
Other finance costs (4) -
Net cash inflow / (outflow) from financing activities 18,333 (2,746)
Net change in cash and cash equivalents 16,988 (6,032)
Cash and cash equivalents at beginning of year 2,896 8,939
Effect of foreign exchange on cash and cash equivalents (117) (11)
Cash and cash equivalents at the end of year 19,767 2,896
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 MARCH 2025
Note Year to Year to
31-Mar-25 31-Mar-24
£'000 £'000
Income
Net hybrid credit investment income 9 19,168 23,014
Term credit investment income 10 158 453
Net equity investment income 11 (5,849) 1,925
Other operating income 1,742 195
Total income 15,219 25,587
Investment costs
Transaction costs (171) (475)
Due diligence costs (87) (645)
Total investment costs (258) (1,120)
Operating costs
Administration and personnel 5 (3,509) (3,072)
Legal and professional (449) (533)
Other operating costs (381) (370)
Expected credit losses 10 78 14
Share-based payments 18 (409) (938)
Total operating costs (4,670) (4,899)
Operating profit 10.291 19,568
Net foreign currency movement (99) (22)
Finance costs 6 (9,454) (7,255)
Profit before tax 738 12,291
Taxation credit / (expense) 7 1,267 (683)
Profit after tax 2,005 11,608
Basic earnings per share (pence) 8 0.45 2.81
Diluted earnings per share (pence) 8 0.45 2.81
All income is attributable to the holders of the Ordinary Shares of the
Company. There is no other comprehensive income.
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 31 MARCH 2025
Note 31-Mar-25 31-Mar-24
£'000 £'000
Non-current assets
Goodwill 16 203 203
Hybrid credit finance investments 9 190,100 177,589
Term credit investments 10 2,322 5,382
Equity investments 11 15,812 15,904
Trade and other receivables 13 - 1,574
Deferred tax 21 2,877 408
211,314 201,060
Current assets
Hybrid credit finance investments 9 35,584 33,359
Trade and other receivables 13 1,936 843
Cash and cash equivalents 19,767 2,896
Current tax asset - 155
57,287 37,253
Total assets 268,601 238,313
Current liabilities
Hybrid credit debt liabilities 12 140 170
Trade and other payables 14 444 461
Borrowings 15 723 632
Current tax liability 266 -
1,573 1,263
Non-current liabilities
Hybrid credit debt liabilities 12 898 934
Trade and other payables 14 967 1,063
Borrowings 15 87,611 69,772
89,476 71,769
Net assets 177,552 165,281
Equity
Share capital 17 195,045 172,939
Share-based payment reserve 18 4,794 4,385
Warrant reserve 18 3,036 3,036
Retained losses 19 (25,323) (15,079)
Total equity 177,552 165,281
The Consolidated Financial Statements were approved and authorised for issue
by the Board of Directors on 24 June 2025 and were signed on its behalf by
Directors Maree Wilms and Matthew Wrigley.
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 MARCH 2025
Share-based
Shares payment Warrant Retained Total
Note issued reserve reserve losses equity
£'000 £'000 £'000 £'000 £'000
At 1 April 2023 172,939 3,447 3,036 (15,163) 164,259
Total comprehensive income for the year - - - 11,608 11,608
Transactions with owners
Share-based payments 18 - 938 - - 938
Dividends 20 - - - (11,524) (11,524)
Total transactions with owners - 938 - (11,524) (10,586)
At 31 March 2024 172,939 4,385 3,036 (15,079) 165,281
Total comprehensive loss for the year - - - 2,005 2,005
Transactions with owners
Shares issued for cash 17 23,500 - - - 23,500
Share issuance costs 17 (1,394) - - - (1,394)
Share-based payments 18 - 409 - - 409
Dividends 20 - - - (12,249) (12,249)
Total transactions with owners 22,106 409 - (12,249) 10,266
At 31 March 2025 195,045 4,794 3,036 (25,323) 177,552
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2025
1. General Information
Duke Capital Limited ("Duke Capital" or the "Company") is a company limited by
shares, incorporated in Guernsey under the Companies (Guernsey) Law, 2008. Its
shares are traded on the AIM market of the London Stock Exchange. The
Company's registered office is shown on page 70.
Throughout the year, the "Group" comprised Duke Capital Limited and its wholly
owned subsidiaries; Duke Capital UK Credit Limited (formerly Duke Royalty UK
Limited), Duke Capital Employee Benefit Trust and Duke Capital US GH Holdings,
Inc.
The Group's investing policy is to invest in a diversified portfolio of hybrid
credit finance and related opportunities.
2. Material accounting policy information
2.1 Basis of preparation
The Consolidated Financial Statements of the Group have been prepared in
accordance with UK adopted international accounting standards, and applicable
Guernsey law, and reflect the following policies, which have been adopted and
applied consistently.
The Group has adopted IFRS 10 Consolidated Financial Statements. IFRS 10
requires entities that meet the definition of an investment entity within the
standard to account for those controlled entities within the Group's direct
investment portfolio as held at fair value through profit or loss ("FVTPL")
and to not be consolidated into the financial statements.
Subsidiaries that provide investment-related services or engage in permitted
investment-related activities with investees, continue to be consolidated
unless they are also investment entities.
An investment entity is one which:
- obtains funds from investors for the purpose of providing them with
investment management services;
- invests funds solely for returns from capital
appreciation/investment income; and
- measures and evaluates the performance of substantially all of its
investment on a fair value basis.
In accordance with IFRS 10 the Consolidated Financial Statements include the
financial statements of the Company and service entities controlled by the
Company made up to the reporting date. Control is achieved where the Company
has the power over the potential investee as a result of voting or other
rights, has rights to positive or negative variable returns from its
involvement with the investee and has the ability to use its power over the
investee to affect significantly the amount of its returns.
The following subsidiaries are deemed service entities and are consolidated in
the group financial statements:
- Duke Capital UK Credit Limited (formerly Duke Royalty UK
Limited)
- Duke Capital Employee Benefit Trust
Under IFRS 12 paragraph 19A, the following subsidiaries have classified as
investment entities under IFRS 10 and therefore not consolidated:
Subsidiary Name Place of business % ownership
Duke Capital US GH Holdings, Inc. USA 100%
United Glass Group UK 73.8%
Integrum Care Group UK 50.0%
Creo-tech Industrial Group Canada 99.9%
Intec Business Solutions UK 100%
MQL (formerly Miriad Products) UK 49.9%
Trimite Global Coatings UK 100%
The Consolidated Financial Statements have been prepared on a going concern
basis and under the historical cost basis, except for the following:
· Hybrid credit investments - measured at FVTPL;
· Equity investments - measured at FVTPL;
· Hybrid credit participation liabilities - measured at
FVTPL.
Presentation of statement of cash flows
The Board considers cash flow to be the most important measure of the Group's
performance and subsequently has presented its Consolidated Statement of Cash
Flows before the Consolidated Statement of Comprehensive Income and
Consolidated Statement of Financial Position.
There have been no changes to the classification of any of the cash flows or
to the overall cash movements.
Presentation of statement of comprehensive income
In order to better reflect the activities of a hybrid credit financing
company, the Consolidated Statement of Comprehensive Income includes
additional analysis, splitting the Group's income by investment type.
2.2 New accounting standards, interpretations and amendments from 1 January 2024 adopted by the Group
In the current period, the Company has considered and adopted all relevant new
standards, interpretations and amendments to existing standards that are
effective as at year-end.
Their adoption has not had any impact on the amounts reported or disclosed in
the financial statements
Standard:
Amendments to IAS 1: Classification of Liabilities as Current or Non-current
-1 Jan 2024
Amendments to IAS 1: Classification of debt with covenants- 1 Jan 2024
Amendments to IFRS 16: Leases -1 Jan 2024
Amendments to IAS 7: Statement of Cash Flows- 1 Jan 2024
The Company has not early adopted nor plans to early adopt any of the above.
2.3 New Accounting Standards, interpretations and amendments issued but not yet effective
At the date of authorisation of these Consolidated Financial Statements,
certain standards and interpretations were in issue but not yet effective and
have not been applied in these Consolidated Financial Statements. These
include:
Amendments to IFRS 9 and IFRS 7: Classification and Measurement of Financial
Statements -1 Jan 2026.
Amends to IAS 21 Lack of Exchangeability-1 Jan 2025
Amendments to IFRS 18: Presentation and Disclosure in Financial Statements -
not yet adopted by UK endorsement board
Amendments to IFRS 19: Subsidiaries without Public Accountability: Disclosures
- not yet adopted by UK endorsement board
With the exception of IFRS 18, these will not have a material impact on
operations or financial statements of the company. IFRS 18 - Presentation and
Disclosures in Financial Statements which will be applied from its mandatory
effective date and since retrospective application is required, the
comparative information for the financial year ending 31 December 2026 will be
restated accordingly.
2.4 Going concern
The financial statements have been prepared on a going concern basis, which
assumes that the Company will be able to continue its operations for the
foreseeable future and realise its assets and discharge its liabilities in the
normal course of business.
In assessing the appropriateness of the going concern basis, the Board and
management have considered the Company's financial position, liquidity, and
cash flow forecasts, as well as the current and expected impacts of
macroeconomic conditions, including continuing inflationary pressures, global
tariffs and global economic uncertainty.
Stress testing and scenario analyses have been performed, which indicate that
the Company is able to withstand potential downside scenarios without
compromising operational capability.
Based on this assessment and bearing in mind the nature of the Group's
recurring revenue streams and after assessing the 12-month forecasts from date
of authorisation of the financial statements, combined with the available
headroom in terms of the refinanced debt facility in place should it be
required, the Directors consider that the Group has adequate resources to
continue in operational existence for the foreseeable future. For this reason,
they continue to adopt the going concern basis in preparing the Consolidated
Financial Statements.
In making the assessment, the Directors did not consider there to be any
material uncertainty relating to events or conditions that individually or
collectively may cast significant doubt on the Group's ability to continue as
a going concern.
2.5 Basis of consolidation
Where the Company has control over an investee, it is classified as a
subsidiary. The Company controls an investee if all three of the following
elements are present: power over the investee, exposure to variable returns
from the investee, and the ability of the investor to use its power to affect
those variable returns. Control is reassessed whenever facts and circumstances
indicate that there may be a change in any of these elements of control.
All intra-group transactions, balances, income and expenses are eliminated on
consolidation. Accounting policies of subsidiaries have been changed where
necessary to ensure consistency with the policies adopted across the Group.
The EBT has been consolidated on the basis that Duke Capital Limited exercises
control over the Trust.
2.6 Segmental reporting
Operating segments are reported in a manner consistent with the internal
reporting provided to the chief operating decision-maker. The chief operating
decision-maker, who is responsible for allocating resources and assessing
performance of the operating segments, has been identified as the Board of
Directors, as a whole. The key measure of performance used by the Board to
assess the Group's performance and to allocate resources is operating
cashflow, as calculated under IFRS, and therefore no reconciliation is
required between the measure of performance used by the Board and that
contained in these Consolidated Financial Statements.
For management purposes, the Group's investment objective is to focus on one
main operating segment and to invest in a diversified portfolio of hybrid
credit finance and related opportunities. At the end of the period the Group
has 14 (2024: 15) investments into this segment and has derived income from
them. Due to the Group's nature, it has no customers.
2.7 Foreign currency
Functional and presentation currency
Items included in the Consolidated Financial Statements of each of the Group's
entities are measured using the currency of the primary economic environment
in which the entity operates (the "functional currency"). The Consolidated
Financial Statements are presented in Pounds Sterling, which is also the
functional currency of the Company and its subsidiaries.
Transactions and balances
Foreign currency transactions are translated into the functional currency
using the exchange rates prevailing at the dates of the transactions. Monetary
foreign currency assets and liabilities are translated into the functional
currency using the exchange rate prevailing at the reporting date.
Foreign exchange gains and losses relating to the financial assets and
financial liabilities carried at fair value through profit or loss are
presented in the Consolidated Statement of Comprehensive Income within 'hybrid
credit investment', 'term credit investment income' and 'equity investment
income'.
Foreign exchange gains and losses relating to cash and cash equivalents are
presented in the Consolidated Statement of Comprehensive Income within 'net
foreign currency movement'. This has been presented below operating costs as
this best reflects the true nature of the balance.
2.8 Transaction costs
Transaction costs are costs incurred to acquire financial assets at fair value
through profit or loss. They include finders' fees, legal and due diligence
fees and other fees paid to agents and advisers. Transaction costs, when
incurred, are recognised immediately in profit or loss as an expense. Where
transaction costs are in respect of term credit investments (carried at
amortised cost), these are offset using the effective interest method.
Transaction costs are also incurred to acquire financial liabilities carried
at amortised cost; these are offset using the effective interest method.
2.9 Income tax
The income tax expense or credit for the period is the tax payable on the
current period's taxable income based on the applicable income tax rate for
each jurisdiction adjusted by changes in deferred tax assets and liabilities
attributable to temporary differences and to unused tax losses.
The current income tax charge is calculated on the basis of the tax laws
enacted or substantively enacted at the end of the reporting period in the
countries where the Company's subsidiaries operate and generate taxable
income. Management periodically evaluates positions taken in tax returns with
respect to situations in which applicable tax regulation is subject to
interpretation. It establishes provisions where appropriate on the basis of
amounts expected to be paid to the tax authorities.
Deferred income tax is provided in full, using the liability method, on
temporary differences arising between the tax bases of assets and liabilities
and their carrying amounts in the Consolidated Financial Statements. Deferred
income tax is determined using tax rates (and laws) that have been enacted or
substantively enacted by the end of the reporting period and are expected to
apply when the related deferred income tax asset is realised or the deferred
income tax liability is settled.
Deferred tax assets are recognised only if it is probable that future taxable
amounts will be available to utilise those temporary differences and losses.
Deferred tax assets and liabilities are offset when there is a legally
enforceable right to offset current tax assets and liabilities and when the
deferred tax balances relate to the same taxation authority. Current tax
assets and tax liabilities are offset where the entity has a legally
enforceable right to offset and intends either to settle on a net basis, or to
realise the asset and settle the liability simultaneously.
Current and deferred tax is recognised in profit or loss, except to the extent
that it relates to items recognised in other comprehensive income or directly
in equity. In this case, the tax is also recognised in other comprehensive
income or directly in equity, respectively.
2.10 Financial instruments
Financial assets and financial liabilities are recognised in the Consolidated
Statement of Financial Position when the Group becomes a party to the
contractual provisions of the instrument. Financial assets and financial
liabilities are only offset and the net amount reported in the Consolidated
Statement of Financial Position and Consolidated Statement of Comprehensive
Income when there is a currently enforceable legal right to offset the
recognised amounts, and the Group intends to settle on a net basis or realise
the asset and liability simultaneously.
a. Financial assets at FVTPL
Hybrid credit investments are debt instruments classified at FVTPL under IFRS
9. The return on these investments is linked to a fluctuating revenue stream
and thus, whilst the business model is to collect contractual cash flows, such
cash flows are not solely payments of principal and interest. Such assets are
recognised initially at fair value and remeasured at each reporting date. The
change in fair value is recognised in profit or loss and is presented within
'hybrid credit investment income' in the Consolidated Statement of
Comprehensive Income. The fair value of these financial instruments is
determined using discounted cash flow analysis. Further details of the methods
and assumptions used in determining the fair value can be found in note 23.
Investments in equity instruments are classified at FVTPL. The Group
subsequently measures all equity investments at fair value and the change in
fair value is recognised in profit or loss and is presented within the 'equity
investment income' in the Consolidated Statement of Comprehensive Income.
Dividends from such investments are recognised in profit or loss when the
Group's right to receive payments is established.
b. Financial liabilities at FVTPL
Financial liabilities at FVTPL comprise hybrid credit participation
liabilities. These liabilities arise under a contractual agreement between the
Group and a strategic partner for the provision of services in connection with
the Group's hybrid credit financing arrangements. Under this agreement
services are provided in exchange for a percentage of gross royalties'
receivable. These instruments are classified at FVTPL on the basis that the
liability is linked to the Group's hybrid credit investments. Such liabilities
are recognised initially at fair value with the costs being recorded
immediately in profit or loss as 'hybrid credit participation fees' and
remeasured at each reporting date in order to avoid an accounting mismatch.
The change in fair value is recognised in profit or loss and presented within
'hybrid credit investment income'. The fair value of these financial
instruments is determined using discounted cash flow analysis. Further details
of the methods and assumptions used in determining the fair value can be found
in note 23.
2.11 Share-based payments
The Group operates an equity-settled Share Option Plan and a Long-Term
Incentive Plan for its Directors and key staff members.
The fair value of awards granted under the above plans is recognised in profit
or loss with a corresponding increase in equity. The total amount to be
expensed is determined by reference to the fair value of the awards granted:
· including any market performance conditions (e.g., the
entity's share price);
· excluding the impact of any service and non-market
performance vesting conditions (e.g. increase in cash available for
distribution, remaining a director for a specified time period); and
· including the impact of any non-vesting conditions.
The total expense is recognised over the vesting period, which is the period
over which all of the specified vesting conditions are to be satisfied. At the
end of each reporting period, the Group revises its estimates of the number of
options that are expected to vest based on the non-market vesting and service
conditions. It recognises the impact of the revision to original estimates, if
any, in profit or loss, with a corresponding adjustment to equity.
The Group also settles a portion of expenses by way of share-based payments.
These expenses are settled based on the fair value of the service received as
an expense with the corresponding amount increasing equity. All expenses
recognised in the year in relation to the Group's Share Option and Long-Term
Incentive Plan schemes are recognised through the share-based payment reserve.
3. Critical accounting estimates
The preparation of the Consolidated Financial Statements in conformity with
IFRS requires management to make estimates and assumptions that affect the
application of policies and the reported amounts of assets and liabilities,
income and expenses. The estimates and associated assumptions are based on
historical experience and various other factors that are believed to be
reasonable under the circumstances, the results of which form the basis of the
carrying values of assets and liabilities that are not readily apparent from
other sources. 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 revision and future periods, if the revision affects both current
and future periods. The following estimates and assumptions that may cause a
material adjustment to the carrying amount of assets and liabilities are:
Fair value of hybrid credit investments
Hybrid credit investments are valued using a discounted cash flow analysis.
The discount rate used in these valuations has been estimated to take account
of market interest rates and the credit worthiness of the investee. Revenue
growth has been estimated by the Directors and is based on unobservable market
inputs.
Where the hybrid credit investment contains a buy-back clause, the Directors
have assessed the likelihood of this occurring. Where occurrence of the
buyback is deemed likely, the exit date is built into the discounted cash flow
at the appropriate point. At each reporting date, this exit date is reviewed
and amended if the buyback assumption has changed.
These assumptions are reviewed semi-annually. The Directors believe that the
applied valuation techniques and assumptions used are appropriate in
determining the fair value of the hybrid credit investments and have made
adjustments to the discount rates and estimated revenue growth where
necessary. Further details of the carrying values, methods, assumptions and
sensitivities used in determining the fair value can be found in note 23.
Fair value of hybrid credit participation liabilities
The payments falling due under the Group's contract for hybrid credit
participation fees are directly linked to the Group's hybrid credit
investments and thus the same assumptions have been applied in arriving at the
fair value of these liabilities. The Directors have considered whether any
increase in discount rate is required to represent the Group's credit risk as
the payments are made by the Group rather than the investee and have concluded
that none is required since payment under the contract is only due once the
Group has received the gross amounts from the investee. Further details of the
methods, assumptions and sensitivities used in determining the fair value can
be found in note 23.
Fair value of equity investments
The Group's equity investments are not traded in an active market and thus the
fair value of the instruments is determined using valuation techniques. The
Group makes assumptions based on market conditions at the end of each
reporting period. The key estimates that the Directors have made in arriving
at the fair values are the price/earnings multiples to be applied to the
investee entities' profits. These multiples have been estimated based on
market information for similar types of companies. The carrying value of
equity investments is disclosed in note 11. Further details of the methods,
assumptions and sensitivities used in determining the fair value can be found
in note 23.
4. Auditor's remuneration
2025 2024
£'000 £'000
Audit of the Consolidated Financial Statements 107 106
5. Administration and personnel
2025 2024
£'000 £'000
Support services administration fees 735 633
Directors' fees 1,291 1,206
Investment Committee fees 108 108
Personnel costs 1,375 1,125
3,509 3,072
6. Finance costs
2025 2024
£'000 £'000
Interest payable on borrowings 8,611 6,413
Deferred finance costs released to P&L 843 842
9,454 7,255
7. Income tax
The Company has been granted exemption from Guernsey taxation. The Company's
subsidiaries in the UK are subject to taxation in accordance with relevant tax
legislation.
2025 2024
£'000 £'000
Current tax
Income tax expense 1,362 891
Deferred tax
Increase in deferred tax assets (2,629) (208)
Total deferred tax benefit (2,629) (208)
Income tax (credit) / expense (1,267) 683
Factors affecting income tax expense for the year
Profit on ordinary activities before tax 738 12,291
Guernsey taxation at 0% (2024: 0%) - -
UK withholding tax at 20% 1,042 794
Overseas tax charges at rate higher than 0% 320 97
Deferred tax benefit (2,629) (208)
Income tax expense (1,267) 683
8. Earnings per share
2025 2024
Total comprehensive income (£'000) 2,005 11,608
Weighted average number of Ordinary Shares in issue, excluding treasury shares 443,930 412,955
(000s)
Basic earnings per share (pence) 0.45 2.81
2025 2024
Total comprehensive income (£'000) 2,005 11,608
Diluted weighted average number of Ordinary Shares in issue, excluding 443,930 412,955
treasury shares (000s)
Diluted earnings per share (pence) 0.45 2.81
Basic earnings per share is calculated by dividing total comprehensive income
for the period by the weighted average number of shares in issue throughout
the period, excluding treasury shares (see note 17).
Diluted earnings per share represents the basic earnings per share adjusted
for the effect of dilutive potential shares issuable on exercise of share
options under the Company's share-based payment schemes, weighted for the
relevant period.
All share options, warrants and Long-Term Incentive Plan awards in issue are
not dilutive at the year-end as the exercise prices were above the average
share price for the period. However, these could become dilutive in future
periods.
Adjusted earnings per share
In addition to the GAAP Measures, we present adjusted EPS, a non-GAAP measure,
to provide investors with additional insight into our financial performance.
Adjusted earnings represent the Group's underlying performance from core
activities. Adjusted earnings is the total comprehensive income adjusted for
unrealised and non-core fair value movements, non-cash items and
transaction-related costs, including hybrid credit participation fees,
together with the tax effects thereon. Given the sensitivity of the inputs
used to determine the fair value of its investments, the Group believes that
adjusted earnings is a better reflection of its ongoing financial performance.
Valuation and other non-cash movements such as those outlined are not
considered by management in assessing the level of profit and cash generation
of the Group. Additionally, IFRS 9 requires transaction-related costs to be
expensed immediately whilst the income benefit is over the life of the asset.
As such, an adjusted earnings measure is used which reflects the underlying
contribution from the Group's core activities during the year.
2025 2024
£'000 £'000
Total comprehensive income for the year 2,005 11,608
Unrealised fair value movements 14,070 6,854
Expected credit loss (78) (14)
Share-based payments 409 938
Transactions costs net of costs reimbursed 257 1,120
Tax effect of the adjustments above at Group effective rate (1,223) (494)
Adjusted earnings 15,440 20,012
2025 2024
Adjusted earnings for the year (£'000) 15,440 20,012
Weighted average number of Ordinary Shares in issue, excluding treasury shares 443,930 412,955
(000s)
Adjusted earnings per share (pence) 3.48 4.85
2025 2024
Diluted adjusted earnings for the year (£'000) 15,440 20,012
Diluted weighted average number of Ordinary Shares in issue, excluding 443,930 412,955
treasury shares (000s)
Diluted adjusted earnings per share (pence) 3.48 4.85
9. Hybrid credit investments
Hybrid credit investments are financial assets held at FVTPL that relate to
the provision of hybrid credit capital to a diversified portfolio of
companies.
31-Mar-25 31-Mar-24
£'000 £'000
At 1 April 210,948 191,333
Additions - cash 24,500 42,012
Additions - refinancing of term credit investment (note 10) 3,250 -
Exits - cash (3,987) (17,636)
Settled via issue of equity investment (note 11) (848) -
Loss on financial assets at FVTPL (8,179) (4,761)
As at 31 March 225,684 210,948
Hybrid credit investments are comprised of:
31-Mar-25 31-Mar-24
£'000 £'000
Non-current 190,100 177,589
Current 35,584 33,359
225,684 210,948
Hybrid credit investment income on the face of the Consolidated Statement of
Comprehensive Income comprises:
2025 2024
£'000 £'000
Hybrid credit interest 24,184 23,689
Hybrid credit premiums 816 3,578
Total hybrid credit cash revenue 25,000 27,267
Hybrid credit equitised revenue 2,368 600
Loss on hybrid credit assets at FVTPL (8,179) (4,761)
Loss on hybrid credit liabilities at FVTPL (21) (92)
19,168 23,014
All financial assets held at FVTPL are mandatorily measured as such.
The Group's hybrid credit investment assets comprise hybrid credit financing
agreements with 14 (31 March 2024: 15) investees. Under the terms of these
agreements the Group advances funds in exchange for annualised hybrid credit
distributions. The distributions are adjusted based on the change in the
investees' revenues, subject to a floor and a cap. The financing is secured by
way of fixed and floating charges over certain of the investees' assets. The
investees are provided with buyback options, exercisable at certain stages of
the agreements.
During the year, £2,368,000 (2024: £600,000) of hybrid credit interest in
two investment partners was converted into ordinary share capital of the
respective partners.
10. Term credit investments
Term credit investments are financial assets held at amortised cost. The
impact of discounting is immaterial to the Consolidated Financial Statements.
The below table shows both the loans at amortised cost and fair value.
31-Mar-25 31-Mar-24
£'000 £'000
At 1 April 5,382 4,652
Additions 2,286 750
Refinanced via hybrid credit investment (note 9) (3,250) -
Settled via issue of equity investment (note 11) (2,192) -
ECL allowance 60 (20)
Foreign exchange movement 36
As at 31 March 2,322 5,382
The Group holds one term credit investment (31 March 2024: two) in connection
with the Group's hybrid credit investments. The terms include a floating rate
of interest payable on repayment of the investment and a maturity date on or
before 4 April 2026.
During the year, £2,193,000 (2024: £nil) of term credit investments were
converted into ordinary share capital in one investment partner.
The term credit investments mature as follows:
31-Mar-25 31-Mar-24
£'000 £'000
In less than one year - -
In one to two years 2,322 5.382
2,322 5.382
Term credit investment income on the face of the Consolidated Statement of
Comprehensive Income comprises:
2025 2024
£'000 £'000
Term credit interest charged 158 453
158 453
ECL analysis
The measurement of ECLs is primarily based on the product of the instrument's
probability of default ("PD"), loss given default ("LGD"), and exposure at
default ("EAD"). The Group analyses a range of factors to determine the credit
risk of each investment. These include, but are not limited to:
· liquidity and cash flows of the underlying businesses;
· security strength;
· covenant cover; and
· balance sheet strength.
If there is a material change in these factors, the weighting of either the
PD, LGD or EAD increases, thereby increasing the ECL impairment.
The disclosure below presents the gross and net carrying value of the Group's
credit investments by stage:
Gross carrying amount Allowance for ECLs Net
Carrying amount
As at 31 March 2025 £'000 £'000 £'000
Stage 1 2,322 - 2,322
Stage 2 - - -
Stage 3 - - -
2,322 - 2,322
Gross carrying amount Allowance for ECLs Net
Carrying amount
As at 31 March 2024 £'000 £'000 £'000
Stage 1 5,402 (20) 5,382
Stage 2 - - -
Stage 3 - - -
5,402 (20) 5,382
Under the ECL model introduced by IFRS 9, impairment provisions are driven by
changes in credit risk of instruments, with a provision for lifetime expected
credit losses recognised where the risk of default of an instrument has
increased significantly since initial recognition.
The credit risk profile of the investments has not increased materially and
they remain Stage 1 assets. Minor expected credit losses have been charged for
the Stage 1 assets.
The following table analyses the Group's provision for ECLs by stage:
Stage 1 Stage 2 Stage 3 Total
£'000 £'000 £'000 £'000
Carrying value at 1 April 2023 93 - - 93
Expected credit losses on credit investments in year 20 - - 20
Expected credit losses on other receivables in year (35) - - (35)
Carrying value at 31 March 2024 78 - - 78
Expected credit losses on credit investments in year (60) - - (60)
Expected credit losses on other receivables in year (18) - - (18)
Carrying value at 31 March 2025 - - - -
11. Equity investments
Equity investments are financial assets held at FVTPL.
31-Mar-25 31-Mar-24
£'000 £'000
At 1 April 15,904 13,529
Additions - cash 370 3,799
Additions - equitised revenue 2,368 600
Additions - receipt of equity as part settlement of hybrid credit investment 848
(note 9)
Additions - receipt of equity as part settlement of term credit investment 2,192 -
(note 10)
Disposals - (3)
Proceeds on sale - (2,323)
Proceeds on sale - deferred - (1,575)
(Loss) / gain on equity assets at FVTPL (5,870) 1,877
As at 31 March 15,812 15,904
The Group's net equity investments comprise unlisted shares in 12 capital
partners (31 March 2024: 13). During the year, the Company disposed of its
equity investment in Step Investments at nil cost.
During the year, £2,368,000 (2024: £600,000) of hybrid credit interest in
two investment partners was converted into ordinary share capital of the
respective partners.
During the year, £2,193,000 (2024: £nil) of term credit investments were
converted into ordinary share capital in one investment partner.
The Group has one (31 March 2024: two) unlisted investment in mining entities
from its previous investment objectives.
Equity investment income on the face of the Consolidated Statement of
Comprehensive Income comprises:
2025 2024
£'000 £'000
Unrealised gain on equity assets at FVTPL (5,870) 325
Realised gain on equity assets at FVTPL - 1,552
Dividend income 21 48
(5,849) 1,925
12. Hybrid credit debt liabilities
Hybrid credit debt liabilities are financial liabilities held at FVTPL.
31-Mar-25 31-Mar-24
£'000 £'000
At 1 April 1,104 1,142
Payments made (87) (130)
Gain on hybrid credit debt liabilities at FVTPL 21 92
As at 31 March 1,038 1,104
Hybrid credit debt liabilities are comprised of:
31-Mar-25 31-Mar-24
£'000 £'000
Non-current 898 934
Current 140 170
1,038 1,104
13. Trade and other receivables
31-Mar-25 31-Mar-24
£'000 £'000
Current
Prepayments and accrued income 362 101
Other receivables 1,574 742
1,936 843
Non-current
Other receivables - 1,574
1,936 2,417
14. Trade and other payables
31-Mar-25 31-Mar-24
£'000 £'000
Current
Trade payables 13 13
Transaction costs 241 342
Accruals and deferred income 190 106
444 461
Non-current
Transaction costs 967 1,063
1,411 1,524
15. Borrowings
31-Mar-25 31-Mar-24
£'000 £'000
Current - accrued interest 723 632
Non-current 87,611 69,772
88,334 70,404
In January 2023, the Group entered into a new credit facility agreement with
Fairfax Financial Holdings Limited and certain of its subsidiaries ("Fairfax")
and issued Fairfax 41,615,134 warrants. Refer to note 18 for details. The
facility amount is up to £100 million and has a five-year term, expiring in
January 2028, with a bullet repayment on expiry and no amortisation payments
during the five-year term. Furthermore, the interest rate is equal to SONIA
plus 5.00% per annum.
At 31 March 2025, £10,000,000 (31 March 2024: £27,000,000) was undrawn on
the facility.
At 31 March 2025, £2,336,000 (31 March 2024: £3,228,000) of unamortised
warrant costs and fees remained outstanding.
The table below sets out an analysis of net debt and the movements in net debt
for the year ended 31 March 2025 and prior year.
Interest Payable Borrowings
£'000 £'000
At 1 April 2024 632 69,772
Cash movements
Loan advanced - 17,000
Deferred finance costs paid - (4)
Interest paid (8,520) -
Non-cash movements
Deferred finance costs released to P&L - 843
Interest charged 8,611 -
At 31 March 2025 723 87,611
Interest Payable Borrowings
£'000 £'000
At 1 April 2023 441 53,930
Cash movements
Loan advanced - 15,000
Interest paid (6,222) -
Non-cash movements
Deferred finance costs released to P&L - 842
Interest charged 6,413 -
At 31 March 2024 632 69,772
16. Goodwill
Goodwill
£'000
Opening and closing net book value at 1 April 2023, 31 March 2024 and 31 March 203
2025.
The goodwill has not been assessed for impairment on the basis of materiality.
17. Share capital
External Shares Treasury Shares Total shares £'000
No. No. No.
Allotted, called up and fully paid
At 1 April 2024 415,427 6,063 421,490 172,939
Shares issued for cash during the year 85,455 - 85,455 23,500
Share issuance costs - - - (1,394)
PSA shares vested during year 1,316 (1,316) - -
Shares issued to Employee Benefit Trust during the year - 2,871 2,871 -
At 31 March 2025 502,198 7,618 509,816 195,045
External Shares Treasury Shares Total shares £'000
No. No. No.
Allotted, called up and fully paid
At 1 April 2023 407,762 9,773 417,535 172,939
PSA shares vested during year 7,665 (7,665) - -
Shares issued to Employee Benefit Trust during the period - 3,955 3,955 -
At 31 March 2024 415,427 6,063 421,490 172,939
There is a single class of shares. There are no restrictions on the
distribution of dividends and the repayment of capital with respect to
externally held shares. The shares held by the Duke Capital Employee Benefit
Trust are treated as treasury shares. The rights to dividends and voting
rights have been waived in respect of these shares.
18. Equity-settled share-based payments
Warrant reserve
The following table shows the movements in the warrant reserve during the
year:
Warrants
No. (000) £'000
At 1 April 2023, 31 March 2024 and 31 March 2025 43,990 3,036
The warrants expire in January 2028 and have an exercise price of 45 pence. A
total expense of £2,771,000 has been capitalised and will be amortised over
the life of the warrants. In the year to 31 March 2025, an expense of
£554,000 (2024: £554,000) was recognised through finance costs in relation
to the warrants.
18. Equity-settled share-based payments (continued)
At 31 March 2025, 43,990,000 (31 March 2024: 43,990,000) warrants were
outstanding and exercisable at a weighted average exercise price of 45 pence
(31 March 2024: 45 pence). The weighted average remaining contractual life of
the warrants outstanding was 2.8 years (31 March 2024: 3.5 years).
Share-based payment reserve
The following table shows the movements in the share-based payment reserve
during the year:
LTIP
£'000
At 1 April 2023 3,311
LTIP awards 938
At 31 March 2024 4,249
LTIP awards 409
At 31 March 2025 4,658
Share option scheme
The Group operates a share option scheme ("the Scheme"). The Scheme was
established to incentivise Directors, staff and key advisers and consultants
to deliver long-term value creation for shareholders.
Under the Scheme, the Board of the Company will award, at its sole discretion,
options to subscribe for Ordinary Shares of the Company on terms and at
exercise prices and with vesting and exercise periods to be determined at the
time. However, the Board of the Company has agreed not to grant options such
that the total number of unexercised options represents more than 4% of the
Company's Ordinary Shares in issue from time to time. Options vest immediately
and lapse five years from the date of grant.
There were nil options outstanding and exercisable at 31 March 2025 (31 March
2024: nil).
Long-Term Incentive Plan
Under the rules of the Long-Term Incentive Plan ("LTIP") the Remuneration
Committee may grant Performance Share Awards ("PSAs") which vest after a
period of three years and are subject to various performance conditions. The
LTIP awards will be subject to a performance condition based 50 per cent on
total shareholder return ("TSR") and 50% on total cash available for
distribution ("TCAD per share"). TSR can be defined as the returns generated
by shareholders based on the combined value of the dividends paid out by the
Company and the share price performance over the period in question. Upon
vesting the awards are issued fully paid.
The fair value of the LTIP awards consists of (a) the fair value of the TSR
portion; and (b) the fair value of the TCAD per share portion. Since no
consideration is paid for the awards, the fair value of the awards is based on
the share price at the date of grant, as adjusted for the probability of the
likely vesting of the performance conditions.
Since the performance condition in respect of the TSR portion is a market
condition, the probability of vesting is not revisited following the date of
grant. The probability of vesting of the TCAD per share portion, containing a
non-market condition, is reassessed at each reporting date. The resulting fair
values are recorded on a straight-line basis over the vesting period of the
awards.
The following table shows the movements in the PSAs in issue during the year.
2025 2024
000s 000s
At 1 April 9,726 13,728
PSAs issued during the year 6,226 3,663
PSAs vested during the year (1,318) (7,665)
PSAs lapsed during the year (790) -
At 31 March 13,844 9,726
At 31 March 2025, 13,844,000 (31 March 2024: 9,726,000) PSAs were outstanding.
The weighted average remaining vesting period of these awards outstanding was
1.5 years (31 March 2024: 1.3 years).
19. Distributable reserves
Pursuant to the Companies (Guernsey) Law, 2008 (as amended), all reserves
(including share capital) can be designated as distributable. However, in
accordance with the Admission Document, the Company shall not make any
distribution of capital profits or capital reserves except by means of
capitalisation issues in the form of fully paid Ordinary Shares or issue
securities by way of capitalisation of profits or reserves except fully paid
Ordinary Shares issued to the holders of its Ordinary Shares.
20. Dividends
The following interim dividends have been recorded in the years to 31 March
2024 and 31 March 2025:
Dividend per Dividends
share payable
pence/share £'000
Record date Payment date
31 March 2023 12 April 2023 0.70 2,854
23 June 2023 12 July 2023 0.70 2,854
29 September 2023 12 October 2023 0.70 2,908
29 December 2023 12 January 2024 0.70 2,908
Dividends paid for the period ended 31 March 2024 11,524
Payment date
2 April 2024 12 April 2024 0.70 2,908
28 June 2024 12 July 2024 0.70 2,908
27 September 2024 14 October 2024 0.70 2,918
27 December 2024 14 January 2025 0.70 3,515
Dividends paid for the period ended 31 March 2025 12,249
A further quarterly dividend was paid post year end and a second announced;
refer to note 25 for details.
Rights to dividends have been waived in respect of shares held by the Group's
Employee Benefit Trust (see note 17).
21. Deferred tax
The temporary differences for deferred tax are attributable to:
Hybrid credit investment Tax Total
losses
£'000 £'000 £'000
1 April 2023 199 - 199
(Charged) / credited to profit & loss (4) 211 207
At 31 March 2024 195 211 406
(Charged) / credited to profit & loss (5) 2,634 2,629
Utilised in year - (158) (158)
At 31 March 2025 190 2,687 2,877
A deferred tax asset has been recognised as it is expected that future taxable
profits will be available which the Group can use against the current year tax
losses.
22. Related parties
Directors' fees
The following fees were payable to the Directors during the year:
Basic fees Annual bonus Share-based payment Total Basic fees Annual bonus Share-based payment Total
2025 2025 2025 2025 2024 2024 2024 2024
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
Non-Executive
N Birrell 70 - - 70 60 - - 60
M Wilms 50 - - 50 45 - - 45
M Wrigley 50 - - 50 45 - - 45
Executive
N Johnson 330 216 122 668 300 240 243 783
C Cannon Brookes 330 216 116 662 300 216 221 737
830 432 238 1,500 750 456 464 1,670
The annual bonus paid in the current financial year to 31 March 2025 related
to Group's performance for the year to 31 March 2024.
Fees relating to Charles Cannon Brookes are paid to Arlington Group Asset
Management Limited.
Directors' fees include the following expenses relating to awards granted
under the Group's Long-Term Incentive Plan (see note 18):
2025 2024
£'000 £'000
N Johnson 122 243
C Cannon Brookes 116 221
238 464
At 31 March 2025, no Directors' fees were outstanding (2024: no fees
outstanding).
Investment Committee fees
The Group's Investment Committee assists in analysing and recommending
potential hybrid credit transactions and its members are considered to be key
management along with the Directors.
The following fees were payable to the members of the Investment Committee
during the year:
2025 2024
£'000 £'000
A Carragher 20 20
J Romeo 20 20
J Cochrane 20 20
J Webster 48 59
108 119
Investment Committee fees include the following expenses relating to awards
granted under the Group's Long-Term Incentive Plan (see note 18):
2025 2024
£'000 £'000
J Webster - 11
Support services administration fees
The following amounts were payable to related parties during the year in
respect of support services fees:
2025 2024
£'000 £'000
Abingdon Capital Corporation 635 533
Arlington Group Asset Management Limited 100 100
735 633
Support Service Agreements with Abingdon Capital Corporation ("Abingdon"), a
company of which Neil Johnson is a director, and Arlington Group Asset
Management Limited ("Arlington"), a company of which Charles Cannon Brookes is
a director, were signed on 16 June 2015. The services to be provided by both
Abingdon and Arlington include global deal origination, vertical partner
relationships, office rental and assisting the Board with the selection,
execution and monitoring of capital partners and investment performance.
Abingdon fees also include fees relating to remuneration of staff residing in
North America.
Share options and LTIP awards
The Group's related parties, either directly or beneficially, held share
options issued under the Group's Long-Term Incentive Plan as follows:
LTIP awards
2025 2024
No. No.
N Johnson 4,049 2,729
C Cannon Brookes 3,823 2,457
7,872 5,186
Dividends
The following dividends were paid to related parties:
2025 2024
£'000 £'000
N Johnson(1) 206 179
C Cannon Brookes(2) 296 257
N Birrell 40 37
M Wrigley 1 1
M Wilms 3 -
J Webster - 18
J Cochrane 28 28
A Carragher 15 15
J Romeo 5 5
594 540
(1) Includes dividends paid to Abinvest Corporation, a wholly owned subsidiary
of Abingdon
(2) Includes dividends paid to Arlington
23. Fair value measurements
Fair value hierarchy
IFRS 13 requires disclosure of fair value measurements by level of the
following fair value hierarchy:
Level 1: Inputs are quoted prices (unadjusted) in active markets for identical
assets and liabilities that the entity can readily observe.
Level 2: Inputs are inputs other than quoted prices included within level 1
that are observable for the asset, either directly or indirectly.
Level 3: Inputs that are not based on observable market data (unobservable
inputs).
The Group has classified its financial instruments into the three levels
prescribed as follows:
31-Mar-25 31-Mar-24
Level 3 Level 3
£'000 £'000
Financial assets
Financial assets at FVTPL
- Hybrid credit investments 225,684 210,948
- Equity investments 15,812 15,904
241,496 226,852
Financial assets at amortised cost
- Term credit investments 2,322 5,382
243,818 232,234
Financial liabilities
Financial liabilities at FVTPL
- Hybrid credit debt liabilities 1,038 1,104
Financial liabilities at amortised cost
- Borrowings 88,334 70,404
89,372 71,508
The fair value of the financial assets at amortised cost at 31 March 2025 is
£2,322,000 (2024: £5,382,00). The fair value of the financial liabilities at
amortised cost at 31 March 2025 is £89,861,000 (2024: £73,448,000)
The following table presents the changes in level 3 items for the years ended
31 March 2025 and 31 March 2024:
Financial Financial
assets liabilities Total
£'000 £'000 £'000
At 1 April 2024 232,234 (71,508) 160,726
Additions - hybrid credit 27,750 - 27,750
Additions - term credit 2,286 - 2,286
Additions - equity 5,778 - 5,778
Additions - borrowings - (17,000) (17,000)
Repayments - hybrid credit (4,835) - (4,835)
Repayments - term credit (5,442) - (5,443)
Hybrid credit participation liabilities paid - 87 87
Net change in FV - hybrid credit investment (8,179) - (8,179)
Net change in FV - equity (5,870) - (5,870)
Net change in interest - (91) (91)
ECL provision 60 - 61
Deferred finance costs - (839) (839)
Foreign currency movement 36 (21) 15
At 31 March 2025 243,818 (89,372) 154,446
23. Fair value measurements (continued)
Financial
Financial
assets liabilities Total
£'000 £'000 £'000
At 1 April 2023 209,514 (55,513) 154,001
Additions - hybrid credit 42,012 - 42,012
Additions - term credit 750 - 750
Additions - equity 4,399 - 4,399
Additions - borrowings - (15,000) (15,000)
Repayments - hybrid credit (17,636) - (17,636)
Repayments - term credit - - -
Repayments - equity (3,901) - (3,901)
Hybrid credit participation liabilities paid - 130 130
Net change in FV - hybrid credit investment (4,761) (92) (4,853)
Net change in FV - equity 1,877 - 1,877
Net change in interest - (191 (191)
ECL provision (20) - (20)
Deferred finance costs - (842) (842)
At 31 March 2024 232,234 (71,508) 160,726
Valuation techniques used to determine fair values
The fair value of the Group's hybrid credit financial instruments is
determined using discounted cash flow analysis and all the resulting fair
value estimates are included in level 3. The fair value of the equity
instruments is determined applying an EBITDA multiple to the underlying
businesses' forward-looking EBITDA. All resulting fair value estimates are
included in level 3.
Valuation processes
The main level 3 inputs used by the Group are derived and evaluated as
follows:
Annual adjustment factors for hybrid credit investments and hybrid credit
participation liabilities
These factors are estimated based upon the underlying past and projected
performance of the hybrid credit investee companies together with general
market conditions.
Discount rates for financial assets and financial liabilities
These are initially estimated based upon the projected internal rate of return
of the hybrid credit investment and subsequently adjusted to reflect changes
in credit risk determined by the Group's Investment Committee.
EBITDA multiples
These multiples are based on comparable market transactions.
Forward-looking EBITDA
These are estimated based on the projected underlying performance of the
hybrid credit investee companies together.
Changes in level 3 fair values are analysed at the end of each reporting
period and reasons for the fair value movements are documented.
Valuation inputs and relationships to fair value
The following summary outlines the quantitative information about the
significant unobservable inputs used in level 3 fair value measurements:
Hybrid credit investments
The unobservable inputs are the annual adjustment factor and the discount
rate. The range of annual adjustment factors used is -6.0% to 6.0% (2024:
-6.0%% to 6.0%) and the range of risk-adjusted discount rates is 7.2% to 17.7%
(2024: 14.7% to 17.7%).
An increase in the annual revenue growth rates (subject to the collars set
under the terms of the hybrid credit financing agreements) of 5% would
increase the fair value by £997,000 (2024: £1,160,000).
A decrease in the annual revenue growth rates (subject to the collars set
under the terms of the hybrid credit financing agreements) of 5% would
decrease the fair value by £995,000 (2024: £1,362,000).
An increase in the discount rate of 25 basis points would decrease the fair
value by £2,262,000 (2024: £2,616,000).
A reduction in the discount rate of 25 basis points would increase the fair
value by £2,312,000 (2024: £2,369,000).
Equity investments
The unobservable inputs are the EBITDA multiples and forward-looking EBITDA.
The range of EBITDA multiples used is 4.3x to 7.9x (2024: 4.2x to 8.0x).
An increase in the EBITDA multiple of 25 basis points would increase fair
value by £1,769,000 (2024: £1,687,000).
A decrease in the EBITDA multiple of 25 basis points would decrease fair value
by £1,769,000 (2024: £1,971,000).
An increase in the forward-looking EBITDA of 5% would increase the fair value
by £2,077,000 (2024: £2,086,000).
A decrease in the forward-looking EBITDA of 5% would decrease fair value by
£2,077,000 (2024: £2,406,000).
Hybrid credit participation instruments
The unobservable inputs are the annual adjustment factor and the discount rate
used in the fair value calculation of the hybrid credit investments. The range
of annual adjustment factors used is -6%% to +6%% (2024: -6.0% to 6.0%) and
the range of risk-adjusted discount rates is 16.3% to 17.7% (2024: 16.3% to
17.7%).
An increase in the annual adjustment factor (subject to the collars set under
the terms of the hybrid credit financing agreements) of 5% would increase the
fair value of the liability by £3,000 (2024: £5,000).
A decrease in the annual adjustment factor (subject to the collars set under
the terms of the hybrid credit financing agreements) of 5% would decrease the
fair value of the liability by £2,000 (2024: £9,000).
An increase in the discount rate of 25 basis points would decrease the fair
value of the liability by £10,000 (2024: £12,000).
A reduction in the discount rate of 25 basis points would increase the fair
value of the liability by £10,000 (2024: £12,000).
24. Financial risk management
The Group's hybrid credit financing activities expose it to various types of
risk that are associated with the investee companies to which it provides
hybrid credit finance. The most important types of financial risk to which the
Group is exposed are market risk, liquidity risk and credit risk. Market risk
includes other price risk, foreign currency risk and interest rate risk. The
Board of Directors has overall responsibility for risk management and the
policies adopted to minimise potential adverse effects on the Group's
financial performance.
Principal financial instruments
The principal financial instruments used by the Group from which financial
instrument risk arises, are as follows:
31-Mar-25 31-Mar-24
£'000 £'000
Financial assets held at FVTPL
Hybrid credit investments 225,684 210,948
Equity investments 15,812 15,904
Total financial assets held at FVTPL 241,496 226,852
Financial assets held at amortised cost
Term credit investments 2,322 5,382
Cash and cash equivalents 19,767 2,896
Trade and other receivables 1,936 2,316
Total financial assets held at amortised cost 24,025 10,594
Total financial assets 265,521 237,446
Financial liabilities held at amortised cost
Bank borrowings (88,334) (70,404)
Trade and other payables (1,411) (1,524)
Total financial liabilities held at amortised cost (89,745) (71,928)
Financial liabilities held at FVTPL (1,038) (1,104)
Total financial liabilities (90,783) (73,032)
The policies and processes for measuring and mitigating each of the main risks
are described below.
Market risk
Market risk comprises foreign exchange risk, interest rate risk and other
price risk.
Foreign exchange risk
Currency risk is the risk that the fair value or future cash flows of a
financial instrument will fluctuate because of changes in foreign currency
exchange rates.
The Group is exposed to foreign exchange risk arising from foreign currency
transactions, primarily with respect to the Euro. Foreign exchange risk arises
from future commercial transactions in recognised assets and liabilities
denominated in a currency that is not the functional currency of the Company
and its subsidiary.
The Board monitors foreign exchange risk on a regular basis. The Group's
exposure to this risk is outlined below.
The Group's exposure to foreign currency risk at the end of the reporting
period was as follows:
31-Mar-25 31-Mar-25 31-Mar-25 31-Mar-24 31-Mar-24 31-Mar-24
Euro US Dollar CAD Dollar Euro US Dollar CAD Dollar
£'000 £'000 £'000 £'000 £'000 £'000
Hybrid credit investment - 28,759 14,657 4,625 26,901 15,380
Equity investments 8,648 1,356 - 8,278 650 -
Cash and cash equivalents - 9 241 81 34 273
Trade and other receivables - - - 741 - -
Transaction costs payable - (1,209) - - (1,405) -
8,648 28,915 14,898 13,725 26,180 15,653
Sensitivity analysis has been performed by assessing the effect of a 5% (2024:
5%). movement in the exchange rate on the Group's assets and liabilities. 5%
appears reasonable given the low volatility in the exchange rate over the last
12 months. If Sterling strengthens by 5% against the Euro, the net
Euro-denominated assets would reduce by £412,000 (2024: £654,000).
Conversely, if Sterling weakens by 5% the assets would increase by £455,000
(2024: £722,000).
If Sterling strengthens by 5% against the US Dollar, the net US
Dollar-denominated assets would reduce by £1,377,000 (2024: £1,247,000).
Conversely, if Sterling weakens by 5% the assets would increase by £1,522,000
(2024: £1,378,000).
If Sterling strengthens by 5% against the Canadian Dollar, the net Canadian
Dollar-denominated assets would reduce by £709,000 (2024: £745,000).
Conversely, if Sterling weakens by 5% the assets would increase by £784,000
(2024: £824,000).
Interest rate risk
Interest rate risk is the risk that the fair value of future cash flows of a
financial asset will fluctuate because of changes in market interest rates.
The Group's main interest rate risks arise in relation to its hybrid credit
investments, which are carried at fair value through profit or loss, and its
borrowings, which are subject to an interest charge of one-month UK SONIA
+5.00%. The Group's hybrid credit investments have a fair value at the
reporting date of £224,850,000 (31 March 2024: £210,948,000). A sensitivity
analysis in respect of these assets is presented in note 23.
The Group only holds on term credit investment (2024:2), which is subject to a
floating interest rate. A movement of 100bps in the base rate impacts term
credit interest by £23,000 (2024: £33,000).
The Group's borrowings at the reporting date are £88,334,000 (31 March 2024:
£70,404,000); see note 15. A movement in the rate of SONIA of 100bps impacts
loan interest payable by £900,000 (31 March 2024: £697,000).
Other price risk
Other price risk is the risk that the fair value of future cash flows of a
financial asset will fluctuate because of changes in market prices (other than
those arising from interest rate risk or foreign exchange risk).
The fair value of the Group's hybrid credit investments fluctuates due to
changes in the expected annual adjustment factors applied to the hybrid credit
payments that are payable by each of the investee companies, which are based
upon the revenue growth of the investee company.
A sensitivity analysis in respect of the annual adjustment factors applied to
the hybrid credit investments is presented in note 23.
Credit risk
Credit risk is the risk that one party to a financial instrument will cause a
financial loss for the other party by failing to discharge an obligation.
The Group's maximum exposure to credit risk is as follows:
31-Mar-25 31-Mar-24
£'000 £'000
Hybrid credit investments 225,684 210,948
Term credit investments 2,322 5,382
Cash and cash equivalents 19,767 2,896
Trade and other receivables 1,936 2,316
249,709 221,542
Hybrid credit investments
The hybrid credit investments relate to the Group's 14 hybrid credit financing
agreements. At the reporting date, there was £4,628,000 of hybrid credit cash
payments outstanding (31 March 2024: £7,492,000) from three capital partners
(31 March 2024: five). Of this, £491,000 (31 March 2024: £58,000) was
received in the month post year-end. Payment plans are being agreed to recover
the £4,136,000 from all three capital partners over the next five years.
The Group monitors the credit worthiness of the investee companies on an
ongoing basis and receives regular financial reports from each investee
company. These reports are reviewed by the Board on a semi-annual basis. The
credit risk relating to these investments is taken into account in calculating
the fair value of the instruments.
The Group also has security in respect of the hybrid credit investments which
can be called upon if the counterparty is in default under the terms of the
agreement.
Term credit investments
The Group's term credit investments are held at amortised cost. All loans have
been reviewed by the directors. The Board considered the credit risk, both at
issue and at the year-end, and has determined that there have been no
significant movements. Consequently, any loss allowance is limited to 12
months' expected losses and such allowances are considered to be immaterial.
Cash and cash equivalents
The credit quality of the Group's cash and cash equivalents can be assessed by
reference to Moody's external credit ratings. All the Group's cash and cash
equivalents were assessed as A1 (31 March 2024: all A1).
The Group considers that the credit risk relating to cash and cash equivalents
is acceptable.
Liquidity risk
Liquidity risk is the risk that the Group will encounter difficulty in
realising assets or otherwise raising funds to meet financial commitments.
The Group maintains sufficient cash to pay accounts payable and accrued
expenses as they fall due. The Group's overall liquidity risks are monitored
on a quarterly basis by the Board.
At the year end the Group had access to an undrawn borrowing facility of
£10,000,000 (2024: £27,000,000); see note 15.
The table below analyses the Group's hybrid credit investments and financial
liabilities into relevant maturity groupings based on their undiscounted
contractual maturities.
Less than one year One to five Over five years Total
years
As at 31 March 2025 £'000 £'000 £'000 £'000
Hybrid credit investments 39,307 210,654 464,348 714,309
Hybrid credit liabilities (114) (606) (2,374) (3,094)
Trade and other payables (484) (790) (333) (1,607)
Borrowings (8,524) (105,903) - (114,427)
30,185 103,355 461,641 595,181
Less than one year One to five Over five years Total
years
As at 31 March 2024 £'000 £'000 £'000 £'000
Hybrid credit investments 33,898 136,474 769,167 939,539
Hybrid credit liabilities (153) (925) (2,535) (3,613)
Trade and other payables (402) (790) (333) (1,525)
Borrowings (632) (69,772) - (70,404)
32,711 64,987 766,299 863,997
Capital management
The Board manages the Company's capital with the objective of being able to
continue as a going concern while maximising the return to shareholders
through the capital appreciation of its investments. The capital structure of
the Company consists of equity as disclosed in the Consolidated Statement of
Financial Position.
25. Events after the financial reporting date
Dividends
On 14 April 2025 the Company paid a quarterly dividend of 0.70 pence per
share. On 19 June 2025, the Company announced a quarterly dividend of 0.70
pence per share, due to be paid on 14 July 2025.
New investments
On 2 April 2025, the Group announced a follow-on investment of £3.3m into its
existing capital partner, New Path Fire and Security Limited.
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