Half-year Report
18/09/2024 07:00
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RNS Number : 5916E Macaulay Capital PLC 18 September 2024
18 September 2024
Macaulay Capital PLC
("Macaulay Capital" or the "Company")
Interim 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 interim results for the
six months ended 30 June 2024. A copy of these results is available on the
Company's website.
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.
ENDS
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
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
Trading activities
Our business is the provision of growth and replacement capital to established
private companies, both directly and from investors whom we introduce. This
helps these companies to finance their future development and facilitates
partial exits for founder investors, as well as incentivising their management
teams through equity ownership.
We generally structure investments as a combination of redeemable loan stock
and equity. This gives investors the ability to have much of their capital
repaid over time, whilst retaining an equity interest in the investee
company. We also arrange EIS investments in private companies where EIS
relief is available.
Our aim is to provide investors with a good return on their investment and,
because shares in qualifying private companies benefit from Business Relief,
they can be transferred free of inheritance tax.
During the six months to 30 June 2024, we agreed terms and largely completed
due diligence on two excellent investment opportunities. However, neither
completed - in the case of one, because the company was unable to get
confirmation from HMRC that EIS relief would be available, and in the case of
the other, because of the size of the investment required. As a result, we
did not arrange any new investments in the period.
This meant that our revenues were lower than in the six months to 30 June 2023
(when we completed two investments) at £126,601 (2023: £213,946). Our
expenses, which are largely fixed, were similar to those in the six months to
30 June 2024 at £316,367 (2023: £319,593). Overall, therefore, we incurred
losses of £189,766 in the period (2023: £107,566).
We also incurred abort costs of an estimated £125,000 plus VAT and
disbursements, which are referred to in note 5 to the accounts and which will
be recognised in the second half of the financial year.
Turning to the balance sheet, our cash at 30 June 2024 was £121,337 (2023:
£368,453) and the value of our investments £900,000 (at cost) (2023:
£900,000). In addition to our investments, we have a loan to one of our
investee companies (Devonvale) of £125,000, to facilitate a move to new
premises.
After the period end and as announced on 26 July 2024, the Company agreed to
extend the date by which the unconditional founder warrants held by David
Horner's two sons (6,000,000 warrants exercisable at 25p per share) must be
exercised, from 29 July 2024 to 31 December 2024. At the same time, David
Horner lent the Company £500,000 for working capital and other purposes.
The Horner Family remains the largest shareholder block with a total of 2.1
million shares (21.0%).
Our Portfolio
We continue to have seven portfolio companies. Three of the companies -
Devonvale, Camloc and Kelda Showers - were identified by us and we helped to
structure the investment, agree terms and arrange the investment.
The other four portfolio companies are from the legacy portfolio of companies
previously monitored by Chelverton Asset Management.
Investors
We believe that the area of the market that we target for investment is
underserved, which will enable us to create value for investors through the
identification of opportunities to invest in established companies at
attractive valuations. We believe that our offering should be of great
interest to High-Net-Worth individuals and family offices, particularly in a
time of rising inheritance tax assessments.
We believe that it is important that we broaden the pool of potential
investors for the investment opportunities that we create, and this is where
we are focusing our marketing efforts.
Outlook
We continue to see interesting investment opportunities and undertake due
diligence on those that appear attractive. As we have said before, our
investment process is rigorous and time-consuming and because we are highly
selective, often unrewarding. However, we believe that this robust selection
process is essential to achieve good returns for us and our fellow
investors.
Finally, and on behalf of the Board, I would like to thank our Shareholders,
employees, and advisers for their support.
Lindsay Mair
Chairman
17 September 2024
Condensed Consolidated Statement of Comprehensive Income
for the six months ended 30 June 2024
Six months Six months Year
ended ended ended
30 June 2024 30 June 2023 31 December 2023
(unaudited) (unaudited) (audited)
Notes £ £ £
Income 126,601 213,946 539,225
Other expenses (316,367) (319,593) (613,501)
Loss on ordinary activities before interest and taxation (189,766) (105,647) (74,276)
Loan interest - (1,919) (1,919)
Loss on ordinary activities before taxation (189,766) (107,566) (76,195)
Taxation - - -
(189,766) (107,566) (76,195)
Loss on ordinary activities after taxation
Loss per Ordinary share in pence 3 (1.90)p (1.08)p
(0.76)p
Condensed Consolidated Balance Sheet
At 30 June 2024
As at As at As at
30 June 2024 30 June 2023 31 December 2023
(unaudited) (unaudited) (audited)
£ £
Fixed assets
Tangible assets 2,110 3,517 2,813
Investments at fair value through profit or loss 900,000 900,000 900,000
902,110 903,517 902,813
Current assets
Debtors: amounts falling due within one year 207,016 90,612 175,503
Cash at bank and in hand 121,337 368,453 338,484
328,353 459,065 513,987
Creditors: amounts falling due within one year
(58,418) (32,142) (54,989)
Other creditors and accruals
269,935 426,923 458,998
Net current assets
1,172,045 1,330,440 1,361,811
Net assets
Capital and reserves
Called up share capital 1,000,000 1,000,000 1,000,000
Share premium account 823,000 823,000 823,000
Profit and loss account (650,955) (492,560) (461,189)
Shareholders' funds 1,172,045 1,330,440 1,361,811
Condensed Consolidated Statement of Changes in Equity
for the six months ended 30 June 2024
Called up Share premium Profit and loss account Total
share capital account equity
£ £ £ £
Six months ended 30 June 2024 (unaudited)
At 1 January 2024 1,000,000 823,000 (461,189) 1,361,811
Total comprehensive income for the period:
Loss for the period - - (189,766) (189,766)
At 30 June 2024 1,000,000 823,000 (650,955) 1,172,045
Six months ended 30 June 2023 (unaudited)
At 1 January 2023 1,000,000 823,000 (384,994) 1,438,006
Total comprehensive income for the period:
Loss for the period - - (107,566) (107,566)
At 30 June 2023 1,000,000 823,000 (492,560) 1,330,440
Year to 31 December 2023
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
Condensed Consolidated Cash Flow
for the six months ended 30 June 2024
Six months ended Six months ended Year
ended
30 June 2024 30 June 2023 31 December 2023
(unaudited) (unaudited) (audited)
£ £ £
Cash flows used in operating activities:
Loss for the year (189,766) (107,566) (76,195)
Adjusted for:
Depreciation of assets 703 702 1,406
Interest paid - 1,919 1,919
(Increase)/decrease in debtors (31,513) 14,350 (70,541)
Increase/(decrease) in creditors 3,429 (28,252) (5,405)
Net cash used in operating activities (217,147) (118,847) (148,816)
Cash used in investing activities:
Purchase of investments - (700,000) (700,000)
Purchase of fixed assets - - -
Net cash used in investing activities - (700,000) (700,000)
Cash flows used in financing activities:
Interest paid - (1,919) (1,919)
Net cash used in financing activities - (1,919) (1,919)
Net decrease in cash and cash equivalents (217,147) (820,766) (850,735)
Reconciliation of net cash flow to movement in net cash:
Decrease in cash (217,147) (820,766) (850,735)
Net cash at start of period 338,484 1,189,219 1,189,219
Net cash at end of period 121,337 368,453 338,484
Notes to the Unaudited Financial Statements
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 interim financial statements of the Company and its
subsidiary for the six months ended 30 June 2024, which are unaudited, have
been prepared in accordance with UK Generally Accepted Accounting Practice
("UK GAAP").
The financial information contained in the Half Yearly report does not
constitute statutory accounts as defined in Section 435 of the Companies Act
2006. The financial information for the preceding statutory reporting period
is based on the statutory accounts for the year ended 31 December 2023 Those
accounts, upon which the auditors, Hazlewoods LLP, issued a report which was
unqualified, have been delivered to the Registrar of Companies.
The financial statements have been prepared in accordance with the
accounting policies set out in the statutory accounts for the period ended 31
December 2023.
The interim financial statements are presented in sterling.
2.2 Basis of consolidation
The consolidated financial statements incorporate the results of the Company
and its subsidiary MML, (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 six months to
30 June 2024 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 30 June 2024, the Group had cash balances of approximately £0.1 million
and had access to £1.5 million from the exercise of the unconditional founder
warrants held by David Horner's two sons. Having reviewed cash flow forecasts
for the period to June 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 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 Company's financial
statements.
3 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. Normal
and diluted returns per share are the same as the options granted on 29 April
2024 as detailed in note 4 below are not currently dilutive as they do not
vest until two years after the date of grant and exercise is subject to
performance conditions.
Six months ended Six months ended Year to
30 June 30 June 31 December
2024 2023 2023
(unaudited) (unaudited) (audited)
Loss after taxation attributable to Ordinary shareholders (£) (189,766) (107,566) (76,195)
Weighted average Ordinary shares in issue 10,000,000 10,000,000 10,000,000
Loss per Ordinary share - basic and diluted (pence) (1.90) (1.08) (0.76)
4 Grant of Share Options
On 29 April 2024, the Company announced that it had granted a total of
1,000,000 options over ordinary shares of 10p each in the Company ("Ordinary
Shares", "Options") to certain Directors and senior executives of the Company.
The Company's admission document published in July 2022 stated that the
Company may award share options to directors, employees and consultants (other
than David Horner) and that any awards would be subject to vesting and/or
performance conditions, and that the proportion of Ordinary Shares which would
be subject to share options would not exceed 20 per cent.
The Options granted do not vest for two years (except in certain exceptional
circumstances) and exercise is also subject to a number of performance
conditions. The exercise price of the Options is 21.5p, being the mid-market
price at the close of business on 26 April 2024, being the business day before
the date of grant. The Options represent 10 per cent. of the Company's
current issued share capital.
5 Post Balance Events
As set out in the Company's AQSE admission document dated 25 July 2022, Harry
and Tom Horner (the adult sons of David Horner) each hold 3,000,000 warrants
("Unconditional Founder Warrants") that were required to be exercised at a
subscription price of £0.25 per share by the date two years from the
Company's admission to trading on AQSE being 29 July 2024. As announced on 26
July 2024, the Company has agreed to extend the date by which the
Unconditional Founder Warrants must be exercised to 31 December 2024 ("Warrant
Extension").
In addition, David Horner lent the Company £500,000 for working capital and
other purposes. The Loan is unsecured and ranks alongside the Company's
ordinary shares, is interest free and is repayable on or before 31 December
2024 from the proceeds of the exercise of the Unconditional Founder Warrants.
As reported in the Chairman's statement, the Company was unable to complete
two potential investments, on which it had agreed terms and largely completed
due diligence. Both were expected to complete in the second half of the
financial year. Therefore, the Company incurred abort costs of an estimated
£125,000 plus VAT and disbursements, which will be recognised in the second
half of the financial year.
For more information please visit: www.macaulaycapital.com
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