REG - Literacy Capital PLC - Quarterly trading update and NAV announcement

Literacy CapitalAnnouncement

28/04/2025 07:00

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RNS Number : 3270G  Literacy Capital PLC  28 April 2025

The information contained in this announcement is restricted and is not for
publication, release or distribution in the United States of America, any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.

 

 

28 April 2025

Literacy Capital plc

 

Quarterly trading update and NAV announcement for Q1 2025

 

BOOK recycles capital into new investments and delivers positive NAV growth
for Q1

 

Literacy Capital plc ("Literacy", "BOOK" or the "Company"), a listed
investment trust primarily focused on investing directly into private
businesses based in the UK, today announces its quarterly trading and NAV
update for the three months ending 31 March 2025.

 

Q1 Highlights:

 

 ●    Q1'25 net asset value ("NAV") of £307.8m, equating to NAV of 511.5 pence per
      share. This equates to a 3.8% increase in NAV per share in the quarter.
 ●    Velociti was the largest contributor for the third consecutive quarter and
      became BOOK's second largest holding due to its strong trading performance.
      This momentum is expected to continue for the remainder of 2025. Halsbury
      Travel also contributed positively, resulting in it rejoining Literacy's top
      ten holdings.
 ●    BOOK deployed £7.4m of capital in Q1'25. This included the majority
      investment in Trinitatum, a test automation business in the energy and
      financial trading markets, announced in March.
 ●    There remains a focus on actively managing and recycling capital from the
      portfolio to maximise returns. The refinancing of two portfolio companies
      completed in Q1'25, returning £5.6m to BOOK. Both of these companies are
      demonstrating strong growth in revenue and profitability. Further refinancings
      are expected in the next six months, with cash inflows expected to remain
      healthy in 2025.
 ●    Total charitable donations since the inception of Literacy Capital now amount
      to £11.6m, including a charitable donation provision of £387k in Q1'25.

 

Commenting on the Q1 performance, CEO of BOOK's investment manager, Richard
Pindar, said:

 

"We are pleased with the Q1 NAV return (+3.8%), driven by positive trading
across the portfolio. This is particularly encouraging set against the recent
market instability.

 

One upside of this backdrop is an increase in the opportunities to invest in
resilient businesses, with relatively little competition from other investors,
that offer the potential for strong returns for the fund. We believe that the
two new deals completed in 2025 firmly meet these criteria.

 

Whilst there are clear benefits when investing capital, the lack of certainty
does make selling assets more challenging. Notably, it has been reported that
(https://www.spglobal.com/market-intelligence/en/news-insights/articles/2025/4/private-equity-exits-fall-to-2year-low-in-q1-2025-88524467#:~:text=Private%20equity%20firms%20recorded%20473,the%20first%20quarter%20of%202023.)
Q1 2025 saw the fewest PE exits completed since Q1 2023(1), with buyers being
more cautious before deploying capital. Unfortunately, many investors are
being very tentative and slow moving, given the changeable political and
market environment.

 

We are disappointed by the share price return in 2025 to date, which we do not
feel is reflective of the Company's progress. The two new investments that
were completed recently were an attractive use of BOOK's capital, whilst
liquidity also has to be retained to support portfolio companies as required.
However, buybacks remain an option, if additional marketing efforts do not
reduce the current discount and this is considered the best use of the
Company's capital."

 

 1  S&P Global, Private equity exits fall to 2-year low in Q1 2025, April
2025

 

Net Asset Value

The Company announces that, as at 31 March 2025, the NAV per ordinary share
was 511.5 pence. This represents a 3.8%, or 18.7p per share increase since 31
December 2024, when NAV per ordinary share was 492.8p.

                                 At 31 Mar 25  At 31 Dec 24  At 31 Mar 24
 Net asset value (£m)            307.8         296.6         306.2
 NAV per ordinary share (pence)  511.5         492.8         510.4

 

The above NAV calculation is based on the Company's issued ordinary share
capital as at 31 March 2025 of 60,175,000 ordinary shares of £0.001 each.
This NAV calculation includes the cost to ordinary shareholders of the 647,500
warrants in issue. This cost is accrued on a straight-line basis over the
vesting period of the warrants.

 

Portfolio company performance

 

At a portfolio company level, year-on-year revenue and EBITDA growth improved
modestly compared to three months earlier. This is encouraging given the
recent political turbulence in the US and relatively weak UK growth. None of
BOOK's portfolio companies experienced a noticeable deterioration in market
conditions or trading performance during the period.

 

Velociti was the standout performer in Q1, with Halsbury Travel also
contributing well. The former was marked up to reflect the business'
successful delivery of revenue growth and stronger profitability. Halsbury's
contribution was driven by a combination of the bolt-on acquisitions made in
the quarter, as well as strong current trading in the core business. Both
continue to demonstrate progress and are expected to deliver further growth in
the remainder of 2025.

 

There was a modest reduction in the carrying values of RCI and Grayce, which
were small relative to the size of these holdings and not a concern looking
ahead to Q2.

 

Transactions and investments

 

£7.4m was invested by BOOK during Q4, which included one new platform
investment. This involved Literacy taking a majority stake in Trinitatum, a
provider of test automation software and services to the energy and financial
trading markets. The rest of this capital investment was injected into the
existing portfolio. The largest recipients of additional capital were
Halsbury, Alufold and Oxygen, in order to support their growth.

 

Cash & liquidity

 

Cash inflows amounted to £5.7m in Q1. These receipts related almost
exclusively to the two refinancings completed in the quarter (£5.6m), with
the balance (£0.1m) received courtesy of a distribution from our third-party
fund investments.

 

Literacy's RCF was £32.7m drawn as at 31 March 2025 (£30.1m drawn on 31
December 2024). During the quarter, the fund extended its committed portion of
the facility with OakNorth Bank plc to £40m, on the same three-year term
(expiring in September 2027).

 

The combination of good growth rates and low leverage at a portfolio company
level mean that several assets are likely to be refinanced or sold in 2025,
which would generate healthy cash inflows and release additional capital for
BOOK.

 

Activity since the period end

 

Whilst not being events that impact Q1 NAV, BOOK completed a platform
investment for a significant minority stake in Langford's, shortly after the
end of Q1. In early April, BOOK also further increased the limit of its RCF
facility from £40m to £50m to provide BOOK with additional flexibility to
support its portfolio.

 

Factsheet

 

The Company's factsheet for the three months to 31 March 2025 is now available
on the Company's website: www.literacycapital.com/investors
(https://protect.checkpoint.com/v2/___http:/www.literacycapital.com/investors___.bXQtcHJvZC1jcC1ldXcyLTE6bmV4dDE1OmM6bzphNjUwYWQxZDUwODhlOWQ3MmI2NDdhYTkzOTJmNjA0Mzo2OmM0NWE6MTBkZjJiZmU3NGNhNmQwYTc2ZTQ2YjBlNjM2OGJlNTk0N2MyMDZmNzFhNzcxY2ZhOTcxMDVhNGEzNjgwYjhhYjpwOlQ6Tg)
.

 

Investor Meet Company presentation

 

Paul Pindar (Chair) and Richard Pindar (CEO) of Literacy's Investment Manager
will provide a live presentation and update on BOOK's recent investment
activity and performance, as well as the outlook for 2025, on 29 April 2025 at
10:30 BST. The presentation is open to all existing and potential
shareholders, and investors can sign up at the following link:

https://www.investormeetcompany.com/companies/literacy-capital-plc
(https://www.investormeetcompany.com/companies/literacy-capital-plc) .

 

-ENDS-

 

For further information, please contact:

 

Literacy Capital plc / Book Asset Management LLP

Richard Pindar / Aasha Tailor

+44 (0) 20 3960 0280

 

MHP Group

Reg Hoare / Ollie Hoare / Matthew Taylor

book@mhpgroup.com

+44 (0) 7817 458 804

 

Singer Capital Markets Securities Limited

Alaina Wong

+44 (0) 20 7496 3000

 

About Literacy Capital plc

 

Literacy Capital (BOOK.L) is a closed-end investment company that was
co-founded by Paul Pindar and Richard Pindar in 2017 with £54m of capital.
Literacy listed on the London Stock Exchange in June 2021, before gaining
Investment Trust status on 1 April 2022. The Company focuses on opportunities
to invest for the long-term in growing private businesses where a clear route
to creating additional value can be seen with its support.

 

It also has a unique charitable objective, to donate 0.5% of annual NAV to
charities focused on improving UK literacy in children. £11.6 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
(https://protect.checkpoint.com/v2/___http:/www.literacycapital.com___.bXQtcHJvZC1jcC1ldXcyLTE6bmV4dDE1OmM6bzphNjUwYWQxZDUwODhlOWQ3MmI2NDdhYTkzOTJmNjA0Mzo2OmViNjk6ZTY1ZGRjZjU4MjE2YTJmMjU5YmYzMWZjOTYwMDBjMTI4MzY0YTIxYzQ1YzZkODczYzMwNzQ1YzM1YzI0NTg5YTpwOlQ6Tg)
.

 

A copy of this announcement will be available on the Company's website at
www.literacycapital.com
(https://protect.checkpoint.com/v2/___http:/www.literacycapital.com___.bXQtcHJvZC1jcC1ldXcyLTE6bmV4dDE1OmM6bzphNjUwYWQxZDUwODhlOWQ3MmI2NDdhYTkzOTJmNjA0Mzo2OmViNjk6ZTY1ZGRjZjU4MjE2YTJmMjU5YmYzMWZjOTYwMDBjMTI4MzY0YTIxYzQ1YzZkODczYzMwNzQ1YzM1YzI0NTg5YTpwOlQ6Tg)
.

 

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. The information contained
herein is unaudited.

 

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.

 

LEI: 2549006P3DFN5HLFGR54

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