Final Results
22/03/2024 07:00
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RNS Number : 8717H Macaulay Capital PLC 22 March 2024
22 March 2024
Macaulay Capital PLC
("Macaulay Capital" or the "Company")
Final Results
Macaulay Capital PLC (AQSE: MCAP), which was formed to originate and manage
corporate transactions, raise funds from third parties, invest its own funds
alongside those of external investors and to manage its investment portfolio
with the aim of maximising its value, announces its final results for the year
ended 31 December 2023.
Copies of the annual report will be sent today to shareholders along with the
Notice of the Company's Annual General Meeting which will take place on Friday
26 April 2024 at noon at 11 Laura Place, Bath, BA2 4BL.
This announcement contains inside information for the purposes of
the UK Market Abuse Regulation and the Directors of the Company are
responsible for the release of this announcement.
Enquiries:
Macaulay Capital PLC
Clive Milner +44 (0)20 3946 5980
Cairn Financial Advisers LLP (AQSE Corporate Adviser)
James Caithie +44 (0)20 7213 0880
Louise O'Driscoll
Emily Staples
Oberon Capital (Broker)
Chris Crawford +44 (0)20 3179 5304
For more information please visit: www.macaulaycapital.com
(http://www.macaulaycapital.com/)
Chairman's Statement
Introduction
These accounts are the Company's first full year accounts since its admission
to trading on the Aquis Stock Exchange Growth Market (AQSE) in July 2022, when
we raised a total of £2 million before costs, at 20p per share.
As at 31 December 2023, the Group's net assets stood at £1,361,811, which
included investments valued at £900,000 and cash of £338,484. In the year
to 31 December 2023, our revenues were £539,225, on which we incurred losses
of £76,195. Both our revenue and losses were better than budget,
principally due to performance fees we received on the successful exit of one
of our portfolio companies, Qualification Check Limited ("QCL"), to which I
will return later. Although we expect to incur losses while we build our
business, we intend that, as a trading business, we will in due course break
even and then become profitable.
The Horner Family increased its stake during the year through a purchase of
200,000 shares at 22.5p per share in the market and remains the largest
shareholder block with a total of 2.3 million shares (23% of the Company's
issued share capital), which will increase by August 2024 by up to a further 6
million shares, to 8.3 million shares (51.9%), through the exercise of
warrants priced at 25p per share.
Strategy
Our strategy is to build an investment origination business focused on
unquoted companies, generating fees (transactions and ongoing) and investing
alongside external investors and management. We believe that private companies
represent an attractive asset class and, as the chart below shows, the
performance of private companies, as measured by the ten-year time weighted
rate of return, has been consistently stronger and less volatile than that of
public companies.
We target smaller private companies with an enterprise value of £2-10
million, with proven businesses which have established niches or developed
other defensible qualities that enable them to maintain and grow their
activities over an extended period of time. We are thus different from many
private equity funds which seek to invest in larger companies, in high growth
sectors often with novel or disruptive business models.
In addition, because the sector that we target is of less interest to many
investors and thus less competitive, we are able to structure investments at
attractive valuations, typically in a combination of redeemable loan stock and
equity. This means that investors can expect a yield on their investment,
and for most of their capital to be repaid over time, together with an equity
interest in the investee company. Also, because shares in private companies
benefit from Business Relief, investors will be able to transfer their shares
free of inheritance tax.
Our target market can be illustrated as shown below:
Together with our co-investors, we provide a combination of growth and
replacement capital to investee companies, which helps them to finance their
future development as well as facilitating partial exits for founder investors
and incentivising ongoing management through equity ownership. We believe it
important that, where we can, we co-invest alongside the investors we
introduce as this not only demonstrates our belief in the investee companies
but also aligns our interests with our co-investors and the investee
companies.
Portfolio companies
We now have seven portfolio companies which includes four previously managed
by Chelverton Asset Management ("CAM", the "Legacy Portfolio"). We
identified the other three portfolio companies - Vale Foods Holdings Limited,
New Star Industries Limited and Kelda Showers Limited and helped to agree the
terms and structure of the transactions as well as arranging some or all of
the investments.
Vale Foods Holdings Limited, which trades as Devonvale, is a manufacturer of
flapjacks, cakes and cereal bars based in Honiton, Devon, and was our first
investee company. In May 2022, ahead of joining AQSE, we raised £1 million
in a combination of ordinary shares (£86,000 for 40% of the equity) and
unsecured loan notes (£914,000). Of the £1 million, we invested £200,000,
which includes an 8% equity interest. On 18 December 2023 we announced that we
had provided Devonvale with £125,000 of a £275,000 bridging loan that it
took on in order to finance new premises required to accommodate increased
demand for its products. We intend to refinance this loan by the end of
December 2024.
In March 2023 we undertook our second transaction. New Star Industries
Limited, which trades as Camloc, is an established Midlands based precision
engineering business which manufactures compression struts and dampers. We
invested £700,000 out of a total fund raising of £1.55 million, giving us a
23.8% equity interest in the secondary buy-out from a private equity fund.
Whilst we intend to sell down £500,000 of this investment to other investors
in due course, 96.6% of it comprises 8% loan notes, which means that while we
continue to hold these loan notes we are earning a significant revenue return
on the investment.
In June 2023 we completed a transaction in relation to Kelda Showers Limited
("Kelda"), a company which has developed a disruptive water and energy-saving
solution for the shower market. We raised £940,000 from investors,
including Kelda's management and existing shareholders, but, on this occasion,
the Group did not itself invest as the investment was entirely in ordinary
shares that were expected to be eligible for EIS relief, for which the Group
is not eligible. The Group received an arrangement fee of £47,000 in respect
of the transaction however and continues to receive an annual management fee
from Kelda.
In addition to the above three companies, during the year we managed an
investment portfolio of five private companies, (now four following the QCL
exit), previously managed by CAM. Under the agreements with the relevant
companies, we are responsible for monitoring their performance on behalf of
investors previously introduced by CAM. This includes a board position, for
which we are entitled to monthly management fees and potential performance
fees on exit.
QCL
QCL is a leading provider of global qualification verification services. In
August 2023, we announced that a trade buyer had acquired all of the shares
held by the B Share Investors in QCL, who had been introduced by CAM. For
those who invested in February 2017, the sale price was a gross money multiple
return of 7.3 times, taking into account EIS relief, and the gain is free of
CGT. For those who invested in March 2021, the sale price was a gross money
multiple return of 3.8 times, before CGT, and before management and
performance fees payable on the exit. The management and performance fees
were shared by Macaulay and CAM with the net amount received by Macaulay being
£211,751.
Investors
We believe that the area of the market that we target for investment is
underserved. This gives us the opportunity to generate good returns for
investors by identifying established private companies at attractive
valuations: the QCL exit is an excellent example of what we are seeking to
achieve.
Whilst we believe it important that investors invest across a range of our
opportunities to reduce their investment risk, we are confident that the
potential for significant capital returns and the fact that the equity is
transferable free of inheritance tax, should mean that our offering is of
great interest to High-Net-Worth individuals and Family Offices.
Accordingly, and as we have said previously, a business imperative is to look
for ways to broaden the pool of potential investors for the investment
opportunities that we identify. This is where we are focusing our marketing
efforts.
Outlook
Whilst we did not introduce any new investments to our investors in the second
half of 2023, we have a number of highly promising investment opportunities in
our pipeline. Our investment process is rigorous and time-consuming, and we
are highly selective, but we hope to bring some of these opportunities to
fruition in the first half of 2024.
Overall, we believe that we are on track and are pleased with the progress
that we have made to date and look forward to the remainder of 2024.
Finally, and on behalf of the Board, I would like to thank our Shareholders,
employees, advisers and our co-investors for their support.
Lindsay Mair
Chairman
21 March 2024
Consolidated Statement of Comprehensive Income
for the Year Ended 31 December 2023
Year ended Period ended
31 December 31 December
2023 2022
Notes
Income 4 539,225 118,737
Other expenses 5/6 (613,501) (502,827)
Loss on ordinary activities before interest and taxation (74,276) (384,090)
Interest (1,919) (904)
Loss on ordinary activities before taxation (76,195) (384,994)
Taxation 7 - -
(76,195) (384,994)
Loss on ordinary activities after taxation
Loss per Ordinary share in pence 9 (3.85)p
(0.76)p
The notes form part of these financial statements.
Consolidated Balance Sheet
as at 31 December 2023
2023 2022
Notes £ £
Fixed assets
Tangible assets 10 2,813 4,219
Investments at fair value through profit or loss 11 900,000 200,000
902,813 204,219
Current assets
Debtors: amounts falling due within one year 13 175,503 104,962
Cash at bank and in 338,484 1,189,219
hand
513,987 1,294,181
Creditors: amounts falling due within one year
14 (54,989) (60,394)
Other creditors and accruals
458,998 1,233,787
Net current assets
1,361,811 1,438,006
Net assets
Capital and reserves
Called up share capital 15 1,000,000 1,000,000
Share premium account 2.17 823,000 823,000
Profit and loss account (461,189) (384,994)
Shareholders' funds 1,361,811 1,438,006
The financial statements were approved and authorised for issue by the Board
and were signed on its behalf on 21 March 2024.
Lindsay
Mair
Director
The notes form part of these financial statements.
Company Balance Sheet
as at 31 December 2023
2023 2022
Notes £ £
Fixed assets
Investments in subsidiary 12 1,000,000 1,000,000
1,000,000 1,000,000
Current assets
Debtors: amounts falling due within one year 13 323,408 28,517
Cash at bank and in hand 259,873 1,082,652
583,281 1,111,169
Creditors: amounts falling due within one year
14 (34,944) (390,814)
Other creditors and accruals
548,337 720,355
Net current assets
1,548,337 1,720,355
Net assets
Capital and reserves
Called up share capital 15 1,000,000 1,000,000
Share premium account 823,000 823,000
Profit and loss account (274,663) (102,645)
Equity Shareholders' funds 1,548,337 1,720,355
The financial statements were approved and authorised for issue by the Board
on 21 March 2024 and were signed on its behalf by
Lindsay Mair
Director
The notes form part of these financial statements.
Consolidated Statement of Changes in Equity
for the Year Ended 31 December 2023
Called up Share premium Profit and loss account Total
share capital account Equity
Shareholders'
Funds
£ £ £ £
At 1 January 2023 1,000,000 823,000 (384,994) 1,438,006
Total comprehensive income for the period:
Loss for the period - - (76,195) (76,195)
At 31 December 2023 1,000,000 823,000 (461,189) 1,361,811
Called up Share premium Profit and loss account Total
share capital account Equity
Shareholders'
Funds
£ £ £ £
At 13 May 2022 - - - -
Total comprehensive income for the period:
Loss for the period - - (384,994) (384,994)
Transactions with Shareholders
recorded directly to equity:
Issue of Ordinary shares 1,000,000 1,000,000 - 2,000,000
Expenses of share issue - (175,000) - (175,000)
- (2,000) - (2,000)
Irrecoverable VAT on share issue expenses
At 31 December 2022 1,000,000 823,000 (384,994) 1,438,006
The notes form part of these financial statements.
Company Statement of Changes in Equity
for the Year Ended 31 December 2023
Called up Share premium Profit and loss account Total
share capital account Equity
Shareholders'
Funds
£ £ £ £
At 1 January 2023 1,000,000 823,000 (102,645) 1,720,355
Total comprehensive income for the period:
Loss for the period - - (172,018) (172,018)
At 31 December 2023 1,000,000 823,000 (274,663) 1,548,337
Called up Share premium Profit and loss account Total
share account Equity
capital Shareholders'
Funds
£ £ £ £
At 13 May 2022 - - - -
Total comprehensive income for
the period:
Loss for the period - - (102,645) (102,645)
Transactions with Shareholders
recorded directly to equity:
Issue of Ordinary shares 1,000,000 1,000,000 - 2,000,000
Expenses of share issue - (175,000) - (175,000)
Irrecoverable VAT on share issue expenses - (2,000) - (2,000)
At 31 December 2022 1,000,000 823,000 (102,645) 1,720,355
The notes form part of these financial statements.
Consolidated Cash Flow
for the Year Ended 31 December 2023
2023 2022
£ £
Cash flows used in operating activities:
Loss for the year (76,195) (384,994)
Adjusted for:
Depreciation of assets 1,406 1,407
Interest paid 1,919 904
Increase in debtors (70,541) (104,962)
(Decrease)/increase in creditors (5,405) 60,394
Net cash used in operating activities (148,816) (427,251)
Cash used in investing activities:
Purchase of investments (700,000) (200,000)
Purchase of fixed assets - (5,626)
Net cash used in investing activities (700,000) (205,626)
Cash flows (used in)/ generated from financing activities:
Issue of Ordinary shares - 2,000,000
Share issue expenses (including irrecoverable VAT) - (177,000)
Interest paid (1,919) (904)
Net cash (used in)/ generated from financing activities (1,919) 1,822,096
Net (decrease)/increase in cash and cash equivalents (850,735) 1,189,219
Reconciliation of net cash flow to movement in net cash:
(Decrease)/ increase in cash (850,735) 1,189,219
Net cash at start of period 1,189,219 -
Net cash at end of period 338,484 1,189,219
The notes form part of these financial statements.
.
Notes to the financial statements
Year ended 31 December 2023
1 General information
Macaulay Capital Plc was incorporated on 13 May 2022 for the
purpose of acquiring Macaulay Management Limited ("MML"). MML was incorporated
on 14 October 2021 and was formed to originate and manage corporate
transactions, raise funds from third parties, invest the Group's own funds
alongside those of external investors and to manage the Group's investment
portfolio with the aim of maximising its value. Macaulay Capital Plc acquired
the entire issued share capital of MML on 14 June 2022.
The Company is a public limited company, which is
incorporated and registered in England and Wales (Registered number:
14105915).
The registered office address is The Office Suite, Den
House, Den Promenade, Teignmouth, TQ14 8SY.
2 Accounting policies
2.1 Basis of preparation of financial statements
The financial statements have been prepared under the
historical cost convention unless otherwise specified within these accounting
policies and in accordance with Financial Reporting Standard 102, the
Financial Reporting Standard applicable in the UK and the Republic of Ireland
and the Companies Act 2006.
The Company has taken advantage of the exemption allowed
under section 408 of the Companies Act 2006 and has not presented its own
statement of comprehensive income in these financial statements.
The preparation of financial statements in compliance with
FRS 102 requires the use of certain critical accounting estimates. It also
requires management to exercise judgement in applying the Company's accounting
policies (see note 3).
The following principal accounting policies have been
applied:
2.2 Basis of consolidation
The consolidated financial statements incorporate the
results of the Company and its subsidiary MML, (together the Group), as if
they form a single entity using merger accounting. On the establishment of the
Company as the ultimate parent of the Group, no change in ownership occurred
and the entity was established for the purpose of acquiring MML. Therefore,
the requirements of purchase method accounting did not apply.
The financial statements of the subsidiary are prepared for
the year ended 31 December 2023 using consistent accounting policies. All
inter-company balances and transactions, including unrealised profits arising
from them are eliminated on consolidation.
2.3 Going concern
Company law requires the Directors to consider the appropriateness of the
going concern basis when preparing the financial statements. At 31 December
2023, the Group had cash balances of approximately £0.3 million and has
access to £1.5 million from the exercise of the Founder Warrants as detailed
in Note 15. Having reviewed cash flow forecasts for the period to 31 December
2025, the Directors confirm that they consider that the going concern basis is
appropriate. This review included consideration of the Group's financial
position in respect of its cash flows and investment commitments (of which
there are none of significance), the working arrangements of key service
providers, the impact of the conflicts in Ukraine and the Middle East and the
current economic environment. In addition, the Directors are not aware of any
material uncertainties that may cast significant doubt upon the Group's
ability to continue as a going concern.
The Directors believe that the Group has sufficient resources to continue in
operational existence for the foreseeable future. Thus, they have adopted the
going concern basis of accounting in preparing the annual financial
statements.
2.4 Revenue recognition
Income from arrangement fees is recognised when the investment has been
completed. Invoices for monitoring fees are raised in line with each
agreement. Fixed returns on debt securities are recognised on a
time-apportioned basis so as to reflect the effective yield. Interest income
is recognised in the consolidated profit and loss account using the effective
interest method.
2.5 Income
Income is attributable to the principal activities of the
Group which are to manage corporate transactions, raise funds from third
parties, invest the Group's own funds alongside those of external investors
and to manage the Group's investment portfolio.
All of the reported revenue and operational results for the
year derive from the Group's principal activities and its investments and are
recognised on an accruals basis. The Group is not reliant on any one customer.
2.6 Tangible fixed assets
Tangible fixed assets are stated at historical cost less accumulated
depreciation and any accumulated impairment losses. Historical cost includes
expenditure that is directly attributable to bringing the asset to the
location and condition necessary for it to be capable of operating in the
manner intended by management.
Depreciation is charged so as to allocate the cost of assets less their
residual value over their estimated useful lives, using the methods below:
Computer equipment - 4 years straight line.
2.7 Investment in subsidiaries
Investments in subsidiaries are measured at cost less any accumulated
impairment in value.
2.8 Financial instruments
The Group only enters into basic financial instruments and transactions that
result in the recognition of financial assets and liabilities such as trade
debtors, investments and debt instruments and other debtors and creditors. The
Company has adopted section 11 of FRS 102 on the recognition and measurement
of financial instruments.
Financial assets that are measured at cost and amortised cost are assessed at
the end of each reporting period for objective evidence of impairment. If
objective evidence of impairment is found, an impairment loss is recognised in
the statement of comprehensive income.
2.9 Investments
Investments are measured initially at cost and at subsequent reporting dates
at fair value and derecognised at the trade date. Accordingly, as permitted by
FRS 102, investments in shares and loan notes upon their initial recognition
are designated as investments at fair value through profit or loss on the
basis that they qualify as a group of assets managed, and whose performance is
evaluated, on a fair value basis in accordance with a documented investment
strategy. Investments at fair value through profit or loss are measured
initially at transaction price (not adjusted for transaction costs) and at
subsequent reporting dates at fair value. The changes in fair value of
investments are recognised in profit or loss and are treated as unrealised
holding gains or losses. Purchases and sales of investments are recognised
in the financial statements at the date of the transaction (trade date).
2.10 Debtors
Short-term debtors are measured at transaction price, less any impairment.
2.11 Cash and cash equivalents
Cash comprises cash at bank and demand deposits. Cash equivalents are
short-term, highly liquid investments that are readily convertible to known
amounts of cash and which are subject to insignificant risk of changes in
value.
For the purpose of the Cash Flow Statement, cash and cash equivalents consist
of cash and cash equivalents as defined above.
2.12 Creditors
Short-term creditors are measured at the transaction price. Other financial
liabilities, should they arise, will be measured initially at fair value net
of transaction costs, and will be measured subsequently at amortised cost
using the effective interest method.
2.13 Pensions - contributory pension plan
The Group previously operated a contributory plan for its employees. Once the
contributions have been paid the Group has no further payment obligations.
In the previous period the contributions were recognised as an expense in the
profit and loss account when they fell due. The current employees have opted
out of the Scheme and hence there is no charge in the profit and loss account.
2.14 Earnings per share
Basic earnings per share is calculated by dividing the profit or loss
attributable to ordinary equity holders of the Company by the weighted average
number of ordinary shares outstanding during the year.
Diluted earnings per share is calculated by adjusting the earnings and number
of shares for the effects of dilutive options and other dilutive potential
ordinary shares.
2.15 Dividend policy
The Company expects that returns to Shareholders will be
delivered primarily through an appreciation in the price of the Ordinary
Shares rather than by capital distribution through regular dividends.
2.16 Current and deferred taxation
The tax expense for the year comprises current and deferred
tax. Tax is recognised in profit or loss except that a charge attributable to
an item of income and expense recognised as other comprehensive income or to
an item recognised directly in equity is also recognised in other
comprehensive income or directly in equity respectively.
The current income tax charge is calculated on the basis of
tax rates and laws that have been enacted or substantively enacted by the
balance sheet date in the countries where the Company operates and generates
income.
Deferred tax balances are recognised in respect of all timing differences that
have originated but not reversed by the balance sheet date, except that:
• The recognition of deferred tax assets is limited to the extent that
it is probable that they will be recovered against the reversal of deferred
tax liabilities or other future taxable profits;
• Where they relate to timing differences in respect of interests in
subsidiaries and the Group can control the reversal of the timing differences
and such reversal is not considered probable in the foreseeable future.
Deferred tax balances are not recognised in respect of
permanent differences except in respect of business combinations, when
deferred tax is recognised on the differences between the fair values of
assets acquired and the future tax deductions available for them and the
differences between the fair values of liabilities acquired and the amount
that will be assessed for tax. Deferred tax is determined using tax rates and
laws that have been enacted or substantively enacted by the balance sheet
date.
2.17 Reserves
Share premium account
The share premium account represents the accumulated premium
paid for shares issued in previous periods above their nominal value less
issue expenses. This is a reserve forming part of non-distributable reserves.
The following items are taken to this reserve:
• costs associated with the issue of equity; and
• premium on the issue of shares.
Profit and loss account
This reserve holds the accumulation of profits and losses reduced by any
dividends paid to Shareholders.
3. Judgements in applying accounting policies and key sources of
estimation uncertainty
The preparation of the financial statements requires the Board to make
judgements and estimates regarding the application of policies and affecting
the reported amounts of assets, liabilities, income and expenses. Estimates
and assumptions mainly relate to the fair valuation of the fixed asset
investments particularly unquoted investments. Estimates are based on
historical experience and other assumptions that are considered reasonable
under the circumstances. The estimates and the assumptions are under
continuous review with particular attention paid to the carrying value of the
investments.
Investments at fair value through profit or loss are regularly reviewed to
ensure that the fair values are appropriately stated. Unquoted investments in
shares and loan notes are valued in accordance with current International
Private Equity and Venture Capital Valuation (IPEVC) Valuation Guidelines,
which can be found on their website at www.privateequityvaluation.com
(http://www.privateequityvaluation.com) , although this does rely on
subjective estimates such as appropriate sector earnings or revenue multiples,
forecast results of investee companies, asset values of investee companies and
liquidity or marketability of the investments held.
4 Income
Year to Period to
31 December 2023 31 December 2022
£ £
Arrangement fees 102,168 35,000
Monitoring fees 157,352 74,722
Loan note interest 56,717 9,015
Performance fees received 211,751 -
Interest received 11,237 -
539,225 118,737
5 Other expenses
Year to Period to
31 December 2023 31 December 2022
£ £
Administration and secretarial services 29,700 10,417
Auditor's remuneration for:
- Audit services 18,000 15,000
- Non-audit services - 6,319
Data and IT support 31,774 47,969
Legal & professional fees 73,606 67,701
Irrecoverable VAT 24,709 15,897
Other expenses 84,152 51,658
261,941 214,961
The Audit fee paid by the Company was £9,500 (2022: £9,500).
6 Directors' remuneration and employee costs
Year ended
Period to
31 December 2023 31 December 2022
£ £
Directors' fees 165,666 88,449
Director's healthcare 8,618 459
Staff salaries 140,001 172,975
Pension contributions - 2,345
Employer's national insurance 37,275 23,638
351,560 287,866
The average number of employees for the Group was 4 (2022: 4).
7 Taxation
Year to Period to
31 December 2023 31 December 2022
£ £
Analysis of charge in year
Current tax - -
- -
Factors affecting current tax charge for the year
The tax assessed for the year is lower than the standard rate of corporation
tax in the UK of 25% (2022:19%). The differences are explained below:
Year to Period to
31 December 2023 31 December 2022
£ £
Loss on ordinary activities (76,195) (384,994)
Theoretical tax at UK corporation tax rate of 23.52% (2022:19%)
Corporation tax (17,921) (73,149)
Ineligible depreciation 331 267
Expenses not deductible for tax purposes - -
Excess expenses for the year 17,590 72,882
Current tax charge for the year - -
Factors that may affect future tax charges
At 31 December 2023 the Company had surplus management expenses of £458,376
(2022: 383,587).
8 Parent company loss for the year
The Company has taken advantage of the exemption allowed under section 408 of
the Companies Act 2006 and has not presented its own profit and loss account
in these financial statements. The loss after tax of the parent company for
the year was £172,018 (2022: £102,645).
9 Loss per share
The calculation of basic return per share is based on the return after tax and
on a weighted average number of ordinary shares in issue in the period. Basic
and diluted returns per share are the same as there are no dilutive elements
on share capital.
Year to Period to
31 December 2023 31 December 2022
Loss after taxation attributable to Ordinary shareholders (£) (76,195) (384,994)
Weighted average Ordinary shares in issue 10,000,000 10,000,000
Loss per Ordinary share - basic and diluted (pence) (0.76) (3.85)
10 Tangible fixed assets
31 December 2023 31 December 2022
Group Group
Computer equipment Computer equipment
Cost or valuation £ £
At 1 January 2023 5,626 -
Additions - 5,626
At 31 December 2023 5,626 5,626
Depreciation
At 1 January 2023 1,407 -
Charge for the year 1,406 1,407
At 31 December 2023 2,813 1,407
Net book value at 31 December 2023 2,813 4,219
11 Investments
31 December 31 December
2023 2022
Investment in unlisted shares
Investment in loan notes
Total Total
£ £ £ £
Investments held at fair value through profit or loss
Opening book cost 182,800 17,200 200,000 -
Opening valuation 182,800 17,200 200,000 -
Movements in the year:
Purchases at cost 676,231 23,769 700,000 200,000
Closing valuation 859,031 40,969 900,000 200,000
Closing book cost 859,031 40,969 900,000 200,000
Closing valuation 859,031 40,969 900,000 200,000
On 20 May 2022, the Group invested in a company in the bakery industry by
purchasing 17,200 Ordinary B shares at £1 per share and issuing an
unsecured loan note of £182,800 with 8% interest. Interest is received as it
falls due every anniversary date and the principal is to be repaid in full on
20 May 2027.
On 23 March 2023, the Group invested in an engineering company by purchasing
23,769 Ordinary B shares at £1 per share and issuing an unsecured loan note
of £676,231 with 8% interest. Interest is received as it falls due every
anniversary date and the principal is to be repaid in full on 20 May 2028.
The fair value of the investments is established by using measures of value
such as the price of recent transactions, earnings or revenue multiples,
discounted cash flows and net assets. These are consistent with the IPEVC
Valuation Guidelines.
Investment in shares and loan notes were valued using recent EBITDA
information and relevant industry multiples, where value deemed reasonable as
compared to using industry EBITDA multiple and net assets value approach.
At 31 December 31, 2023, the fair market value of the investment in shares and
loan notes approximated to its carrying value.
12 Investment in subsidiary undertaking
31 December 31 December
2023 2022
Company Company
£ £
At 1 January 2023 1,000,000 -
Additions - 1,000,000
Carrying value at 31 December 2023 1,000,000 1,000,000
At 31 December 2023 the Company held interests in the following subsidiary
company
Country of incorporation % of capital held % share of voting rights Nature of business
Macaulay Management Limited England 100% 100% Investment company
The registered
address of the subsidiary is the same as the Company.
13 Debtors
Group Company
31 December 2023 31 December 2023
£ £
Due within one year:
Trade debtors 27,600 -
Other debtors 126,820 -
Amounts due from subsidiary - 314,316
Prepayments and accrued income 21,083 9,092
175,503 323,408
Group Company
31 December 2022 31 December 2022
£ £
Due within one year:
Trade debtors 58,781 -
Other debtors 31,920 23,949
Prepayments and accrued income 14,261 4,568
104,962 28,517
14 Creditors amounts falling due within one year
Group Company
31 December 2023 31 December 2023
£ £
Trade creditors 7,377 4,607
Other taxation and social security 11,389 6,624
Accruals and other creditors 36,223 23,713
54,989 34,944
Group Company
31 December 2022 31 December 2022
£ £
Amounts due to subsidiary - 350,908
Trade creditors 4,173 963
Other taxation and social security 12,155 7,391
Accruals and other creditors 44,066 31,552
60,394 390,814
15 Called up share capital
Group and Company
31 December 2022 & 2023
Issued, allotted and fully paid: Number £
Ordinary shares of 10p each 10,000,000 1,000,000
Ordinary shares have full voting rights with 1 vote per share, they are
entitled to dividends when proposed and are due a capital distribution on a
company exit event.
Share options
The Company may adopt a formal incentive plan under which it contemplates
awarding Share Options to Directors, employees and consultants pursuant to
share option and incentive schemes approved by the Board. It is intended that
any individual awards under any such scheme will be subject to vesting and/or
performance conditions. The proportion of Ordinary Shares which will be made
the subject of Share Options will not exceed 20 per cent. of the Company's
issued Ordinary Share capital from time to time without the prior approval of
the Shareholders and no Share Options are intended to be granted to David
Horner.
Founder Warrants
Unconditional Founder Warrants have been issued to subscribe for 6,000,000
Ordinary Shares exercisable at £0.25 per share and which the Founder Warrant
Holders have irrevocably undertaken to exercise in full within two years of
admission.
Conditional Founder Warrants have been issued to subscribe for a further
5,000,000 Ordinary Shares, exercisable at the higher of £0.25 per share or
the mid- market price of an Ordinary Share at the time of exercise,
conditional on the exercise of Share Options and in numbers of up to a maximum
of (but not exceeding) the numbers of Ordinary Shares issued following the
exercise of such Share Options.
16 Capital commitments
At 31 December 2023 and 2022 there were no capital commitments outstanding and
no contingent liabilities.
17 Directors' interests and related party transactions (Group and
Company)
The Company has taken advantage of the exemption in section 33 of FRS 102 from
the requirement to disclose transactions with its wholly owned subsidiary on
the grounds that consolidated financial statements are prepared by the Parent
Company.
The Directors are considered to be the key management of the business. Their
remuneration for the year is disclosed in note 6 of these financial
statements.
The Directors and connected persons held the following interests in the voting
shares of the Company at 31 December 2023.
Number of shares % of total voting
rights
David
Horner
250,000 2.5%
Mary
Horner
50,000
0.5%
Lindsay
Mair
125,000
1.25%
For the purposes of the AQSE Growth Market Access Rulebook the parties
referred to below are related parties of the Company for the reasons set out
in those paragraphs.
David Horner is a related party of the Company because he is a Director of the
Company; and Mary Horner, who is David Horner's wife, is for that reason an
associate of David Horner and thereby a related party to the Company.
CAM, a company of which David Horner is a director and significant
shareholder, is a related party of the Company because CAM is an associate of
David Horner.
Each of Harry and Tom Horner is a related party of the Company for the
following two reasons:
each of them will be entitled to exercise, or to control the exercise of, 10
per cent or more of the votes able to be cast on all or substantially all
matters at general meetings of the Company; and each of them is a son of David
Horner and, as a result, an associate of his and therefore is a related party.
Others
MML has taken over the investment management of the unquoted investment
portfolio of CAM, which David Horner, a director of the Company, founded and
of which he is managing director. In line with its strategy, CAM's current and
future focus is on quoted companies, rather than unquoted businesses, and
therefore the unquoted portfolio is now insignificant, relative to CAM's
quoted company portfolio.
In the year the Company's operations manager has spent a proportion of his
time working with a private business owned by David Horner and his wife.
Under this agreement, the private business paid the Group £34,500 (2022:
£7,500), equivalent to the pro-rata cost of the operations manager's
employment to the Group.
18 Financial instruments
The Group's financial instruments comprise securities and other investments,
cash balances and debtors and creditors that arise from its operations, for
example, in respect of sales and purchases awaiting settlement and debtors for
accrued income.
The financial instruments of the Group fall into the following categories:
Group Assets at fair value through profit or loss Total
At amortised
cost
31 December 2023 £ £ £
Assets as per the Balance Sheet
Investments - 900,000 900,000
Debtors 152,600 - 152,600
Cash and cash equivalents 338,484 - 338,484
Total 491,084 900,000 1,391,084
Liabilities as per the Balance Sheet
Creditors 43,600 - 43,600
Total 43,600 - 43,600
Group Assets at fair value through profit or loss Total
At amortised
cost
31 December 2022 £ £ £
Assets as per the Balance Sheet
Investments - 200,000 200,000
Debtors 90,701 - 90,701
Cash and cash equivalents 1,189,219 - 1,189,219
Total 1,279,920 200,000 1,479,920
Liabilities as per the Balance Sheet
Creditors 48,239 - 48,239
Total 48,239 - 48,239
Company At amortised Assets at fair value through profit or loss Total
cost
31 December 2023 £ £ £
Assets as per the balance sheet
Amounts due from subsidiary 314,316 - 314,316
Cash and cash equivalents 259,873 - 259,873
Total 574,189 - 574,189
Liabilities as per the balance sheet
Creditors 28,320 - 28,320
Total 28,320 - 28,320
Company At amortised Assets at fair value through profit or loss Total
cost
31 December 2022 £ £ £
Assets as per the balance sheet
Other debtors 23,949 23,949
Cash and cash equivalents 1,082,652 - 1,082,652
Total 1,106,601 - 1,106,601
Liabilities as per the balance sheet
Creditors 383,423 - 383,423
Total 383,423 - 383,423
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