REG - Literacy Capital PLC - FY23 Interim Report and Accounts

Literacy CapitalAnnouncement

11/09/2023 07:00

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RNS Number : 9137L  Literacy Capital PLC  11 September 2023

The information contained in this announcement is restricted and is not for
publication, release or distribution in the United States of America, any
member state of the European Economic Area, Canada, Australia, Japan or the
Republic of South Africa.

 

 

11 September 2023

 

Literacy Capital plc ("Literacy Capital" or the "Company")

 

Literacy Capital FY23 Interim Results

 

Focus on helping to build great businesses to generate superior returns

 

Literacy Capital, the listed investment trust, is pleased to report its
unaudited interim results for the six months ended 30 June 2023.

 

A PDF copy of the results can be viewed at:
www.literacycapital.com/investors/reports-and-results
(http://www.literacycapital.com/investors/reports-and-results)

 

Performance highlights

 

w NAV per ordinary share of 488.5p(1)

o  Net assets of £293.1m(1), an increase in net assets of 16.1% in the six
months to 30 June 2023

o  Over the same period, the FTSE Investment Company Index declined 2.7%, and
FTSE All-Share increased 2.6%, compared to a 27.2% increase in BOOK's share
price

 

w Portfolio companies maturing and gaining interest from potential acquirors,
resulting in uplifts and increasing cash inflows

o  £21.3m of cash received in H1 2023, higher than any previous six-month
period. This is expected to be exceeded again in H2 2023, following receipt of
the proceeds from Butternut Box

o  Two significant sales announced so far in 2023, both delivering
approximately 50% uplifts to carrying value

 

w Portfolio companies continue to show strong growth, with the Literacy
Capital team providing input to improve performance and optimise the
composition of the portfolio

o  Portfolio companies focused on maximising long-term growth and value
creation, with average revenue growth of 69% amongst the fund's ten largest
holdings

o  BOOK has focused on buyout investments, rather than earlier stage growth
capital investments, for the last three years. Following the successful sale
of the fund's stake in Butternut Box, growth capital investments will equate
to less than 0.5% of net assets (down from 15% in 2021)

 

w Significant activity and value creation initiatives across the portfolio
companies

o  Completed two new platform investments in the period, as well as five
small bolt-on acquisitions. Investment activity is expected to continue
similarly in the second half of the year

o  Helped to build and strengthen the management teams of portfolio companies
with several senior hires

 

w Increasing charitable donations, helping disadvantaged children across the
UK get a fair chance

o  £1,334k of charitable donations provided for in H1 2023, up 42% on the
same period in 2022, in line with growth in NAV

o  Total donations now amount to £7.1m since inception of Literacy Capital

 

Performance to 30 June 2023

 

 % total return                 6 months  1 year  Since Admission(2)  3 years  Since Inception(3)
 BOOK net asset value           +16.1%    +41.3%  +204.1%             +302.9%  +442.8%
 BOOK share price               +27.2%    +17.0%  +192.5%             n/a      n/a
 FTSE Investment Company Index  (2.7)%    +0.2%   (14.1)%             +11.8%   +27.2%
 FTSE All-Share Index           +2.6%     +7.9%   +8.2%               +33.2%   +19.6%

 

 

Comparison to prior periods

 

                         At 30 June 2023  At 31 December 2022
 Net asset value         £293.1m(1)       £252.4m(1)
 NAV per ordinary share  488.5p(1)        420.6p(1)

 

                                Six months to 30 June 2023  Six months to 30 June 2022
 Capital invested               £19.4m                      £10.7m
 Cash realised                  £21.3m                      £6.1m
 Charitable donation provision  £1,334k                     £942k

 

(1) The NAV and NAV per share figures include the impact of the warrants in
issue. The calculation is shown on page 32 of the interim accounts

(2) BOOK was admitted to the London Stock Exchange on 25 June 2021

(3) Inception date treated as 30 April 2018. £54 million of capital raised

 

 

Richard Pindar, CEO of the Investment Manager and Director of Literacy Capital
plc, commented:

"We are pleased that BOOK and its portfolio has continued to show good
progress, evidenced by the 16% uplift in NAV in the six month period and
strong performance for shareholders (+27% in the six months to 30 June 2023).

Many of BOOK's earliest investments have matured and grown substantially since
Literacy originally invested. We are now seeing large and well-respected
investors taking an active interest in many of our businesses. We expected
cash inflows to be significant in 2023 and we expect this to continue in the
second half of the year and into 2024.

The recent sales of Kernel Global and Butternut Box have been clear examples
of the returns on capital that BOOK can generate from its investments and
converting interest in its assets from larger, institutional investors into
sales. Both sales realised very substantial premiums to the prior reported
carrying values, contributing to the uplift recorded in H1 and giving comfort
on the prudence of the portfolio's valuations.

We look forward to delivering further positive outcomes for BOOK's
shareholders, its portfolio companies and their employees, and communities
across the UK; including, improving outcomes for as many children from
disadvantaged backgrounds as possible."

 

 

Enquiries

For further information, please contact:

 

 Literacy Capital plc / Literacy Capital Asset Management LLP:

 Richard Pindar / Tom Vernon                                    +44 (0) 20 3960 0280

 MHP:

 Reg Hoare / Ollie Hoare / Matthew Taylor                       +44 (0) 20 3128 8276

 Singer Capital Markets Securities Limited:

 Robert Peel                                                    +44 (0) 20 7496 3000

 

About Literacy Capital:

 

Literacy Capital (BOOK.L) is a closed-end investment company launched in 2017
by Paul and Richard Pindar and listed on the London Stock Exchange's main
market in 2021. The Company focuses on opportunities to invest for the
long-term in growing private businesses where a clear route to creating
additional value. It also has a unique charitable objective to donate 0.9% of
annual NAV to charities focused on improving UK literacy in children. £7.1
million has been donated or reserved for donation to charities since the
trust's creation in 2017. For more information, please visit our website:
www.literacycapital.com (http://www.literacycapital.com) .

 

 

Website:

www.literacycapital.com (http://www.literacycapital.com)

 

LEI: 2549006P3DFN5HLFGR54

 

A copy of this announcement will be available on the Company's website at
www.literacycapital.com (http://www.literacycapital.com) .

 

The information contained in this announcement regarding the Company's
investments has been provided by the relevant underlying portfolio company and
has not been independently verified by the Company.

 

This announcement is for information purposes only and is not an offer to
invest. All investments are subject to risk. Past performance is no guarantee
of future returns. Prospective investors are advised to seek expert legal,
financial, tax and other professional advice before making any investment
decision. The value of investments may fluctuate. Results achieved in the past
are no guarantee of future results. Neither the content of the Company's
website, nor the content on any website accessible from hyperlinks on its
website for any other website, is incorporated into, or forms part of, this
announcement nor, unless previously published by means of a recognised
information service, should any such content be relied upon in reaching a
decision as to whether or not to acquire, continue to hold, or dispose of,
securities in the Company.

 

This announcement may include "forward-looking statements". All statements
other than statements of historical facts included in this announcement,
including, without limitation, those regarding the Company's financial
position, business strategy, plans and objectives of management for future
operations (including development plans and objectives relating to the
Company's products and services) are forward-looking statements.
Forward-looking statements are subject to risks and uncertainties and
accordingly the Company's actual future financial results and operational
performance may differ materially from the results and performance expressed
in, or implied by, the statements. These factors include but are not limited
to those described in the formal Prospectus. These forward-looking statements
speak only as at the date of this announcement. The Company expressly
disclaims any obligation or undertaking to update or revise any
forward-looking statements contained herein to reflect actual results or any
change in the assumptions, conditions or circumstances on which any such
statements are based unless required to do so by the Financial Services and
Markets Act 2000, the Listing Rules or Prospectus Regulation Rules made under
Part VI of the Financial Services and Markets Act 2000 of the Financial
Conduct Authority or other applicable laws, regulations or rules.

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