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

Literacy CapitalAnnouncement

Tue 07:00

For best results when printing this announcement, please click on link below:
https://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20250729:nRSc8893Sa&default-theme=true

RNS Number : 8893S  Literacy Capital PLC  29 July 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The information contained in this announcement is restricted and is not for
publication, release or distribution in the United States of America, any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.

 

 

29 July 2025

Literacy Capital plc

 

Quarterly trading update and NAV announcement for Q2 2025

 

BOOK announces significant premium on transaction involving its second

largest asset and delivers positive NAV growth for Q2

 

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 30 June 2025 (Q2'25).

 

Q2 Highlights:

 

 ●    Q2'25 net asset value ("NAV") of £312.6m, equating to NAV of 519.5 pence per
      share. This equates to a 1.6% increase in NAV per share in the quarter from
      511.5p.

 ●    The NAV included the benefit of the sale and reinvestment into BOOK's second
      largest holding, Velociti, at a 52% premium to carrying value as at 31 March
      2025 and delivering a 14.8x MoM (70% IRR) return.

 ●    The two new investments completed earlier in 2025, Red Sky and Trinitatum,
      also contributed positively and are showing encouraging early signs.

 ●    BOOK deployed £3.4m of capital in Q2'25. This primarily consisted of the
      investment to fund Red Sky's first acquisition, Langford's, a leading
      manufacturer and supplier of award-winning premium meat products.

 ●    The Company remains focused on actively managing and recycling capital from
      the portfolio to maximise returns. Further refinancings are expected in the
      next six months, with healthy cash inflows expected in H2 2025.

 ●    Total charitable donations since the inception of Literacy Capital now amount
      to £12.0m, including a charitable donation provision of £403k in Q2'25.

 

Commenting on the Q2 performance, CEO of BOOK's investment manager, Richard
Pindar, said:

 

"We were delighted to announce yesterday the sale and reinvestment into
Velociti at a 52% premium to carrying value. The Velociti journey over the
last five and a half years illustrates how Literacy's proactive support and
management can add significant value, sustainable growth and drive strong
returns.

 

While M&A activity in the UK and globally has been extremely muted in
recent quarters, it is pleasing to again be able to sell an interest at over a
50% premium to BOOK's most recent carrying value. This is almost identical to
the premia achieved on the sales of Kernel Global and Butternut Box in 2023.
Achieving a MoM return of nearly 15x and an IRR of 70% illustrates the value
that BOOK's strategy can deliver to shareholders.

 

Our focus remains on generating strong NAV returns for BOOK's shareholders, as
well as generating cash from the portfolio. These objectives have been more
difficult to achieve in the past 12 to 18 months given the macroeconomic and
political backdrop, which has subdued M&A activity. However, there are
signs that deal volumes and confidence are improving, which would be positive
for NAV growth and share price performance. We remain optimistic that BOOK's
strategy can outperform benchmark indices over the long-term for patient
investors, with the outcome in relation to Velociti adding support to this."

 

Net Asset Value

 

The Company announces that, as at 30 June 2025, the NAV per ordinary share was
519.5 pence. This represents a 1.6%, or 8.0p per share increase since 31 March
2025, when NAV per ordinary share was 511.5p.

                                 At 30 Jun 25  At 31 Mar 25  At 30 Jun 24
 Net asset value (£m)            312.6         307.8         313.6
 NAV per ordinary share (pence)  519.5         511.5         522.6

 

The above NAV calculation is based on the Company's issued ordinary share
capital as at 30 June 2025 of 60,175,000 ordinary shares of £0.001 each. This
NAV calculation includes the cost to ordinary shareholders of the 597,500
warrants in issue. This cost is accrued on a straight-line basis over the
vesting period of the warrants.

 

Portfolio company performance

 

Velociti was the strongest contributor again in Q2, with its valuation being
increased to reflect the terms of the transaction that was announced
yesterday, more than mitigating negative movements elsewhere in the portfolio.
Oxygen was the largest short-term detractor, with the prolonged period of
exceptionally warm and dry weather having an impact on trading across the
indoor leisure sector.

 

Official survey data indicates that UK growth and demand remain sluggish.
Thankfully, regardless of conditions, BOOK's portfolio companies are
relatively small, nimble and well-led, enabling them to adapt to differing
challenges and opportunities. Maintaining margins and managing cost has been a
focus across the portfolio, given cost pressures on businesses in recent
times. The data provided by the portfolio companies suggest this is being
well-managed.

 

The positive early signs and momentum from some of BOOK's most recent
investments is also very welcome. Whilst they are currently small holdings and
outside the top ten, several of these companies are showing encouraging
potential. Velociti was outside BOOK's ten largest holdings by value until
June 2024, demonstrating the possible upside and trajectory from well managed
smaller assets that are performing strongly.

 

Transactions and investments

 

£3.4m was invested by BOOK during Q2, which principally consisted of the new
platform investment into Langford's. This is a manufacturer and supplier of
premium meat products based in Wales. This acquisition marks the first
platform investment for Red Sky Food Group, which is considering further
M&A opportunities in the protein-focused food manufacturing sector. The
balance of funding was invested into the existing portfolio.

 

Cash & liquidity

 

Cash inflows were negligible in Q2 (approximately £0.1m). However, cash
inflows in Q3 will be larger than BOOK has received in any previous quarter,
due to the transaction involving Velociti, as well as other refinancings
expected to complete before the end of September.

 

Literacy's RCF was £37.9m drawn as at 30 June 2025 (£32.6m drawn on 31 March
2025), with £1.0m held in cash. During the quarter, the Company also extended
its limit on its facility with OakNorth Bank plc to £50m, on the same
three-year term (expiring in September 2027) to provide additional flexibility
and liquidity.

 

As a result of the cash being received during Q3 from the sale of Velociti,
the balance drawn on the RCF will be materially lower at the end of this
quarter, which will also substantially reduce financing costs for BOOK.

 

Activity since the period end

 

Following the end of Q2, as recently announced, BOOK completed the sale and
reinvestment into Velociti. This delivered a total 14.8x MoM return, with an
IRR of 70%. The 52% uplift achieved on this sale compared to the 31 March 2025
carrying value has been reflected within the Q2 NAV.

 

Factsheet

 

The Company's factsheet for the three months to 30 June 2025 is now available
on the Company's website: www.literacycapital.com/investors
(https://protect.checkpoint.com/v2/___http:/www.literacycapital.com/investors___.bXQtcHJvZC1jcC1ldXcyLTE6bmV4dDE1OmM6bzphNjUwYWQxZDUwODhlOWQ3MmI2NDdhYTkzOTJmNjA0Mzo2OmM0NWE6MTBkZjJiZmU3NGNhNmQwYTc2ZTQ2YjBlNjM2OGJlNTk0N2MyMDZmNzFhNzcxY2ZhOTcxMDVhNGEzNjgwYjhhYjpwOlQ6Tg)
.

 

QuotedData presentation

 

Richard Pindar (CEO) of Literacy's Investment Manager is a guest on
QuotedData's weekly news show on Friday 1 August 2025 at 11:00 BST with James
Carthew and Andrew McHattie.

 

The presentation is open to all existing and potential shareholders, and
investors can register here
(https://quoteddata.com/events/in-the-hotseat-andrew-mchattie-from-the-investment-trust-richard-pindar-from-literacy-capital/)
or use this link (https://www.youtube.com/live/R10UrCChNko) to watch live.

 

-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

Alaina Wong, Mark Bloomfield (Investment Banking)

Alan Geeves, James Waterlow, Sam Greatrex, William Gumpel (Sales)

+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. £12.0 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

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
 or visit
www.rns.com (http://www.rns.com/)
.

RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
.   END  TSTBVLLLEDLXBBL