REG - Maven IncGwth VCT 3 - Half-year Report
18/07/2024 17:30
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RNS Number : 0089X Maven Income and Growth VCT 3 PLC 18 July 2024
Maven Income and Growth VCT 3 PLC
Interim Results for the Six Months Ended 31 May 2024
Highlights
• NAV total return at 31 May 2024 of 151.16p per share
• NAV at 31 May 2024 of 51.44p per share
• Interim dividend of 1.00p per share
• Offer for Subscription closed, raising £5.2 million
• Four new private companies added to the portfolio
• Exit achieved from GradTouch, generating a total return of 1.5x cost
• Post period end, final exit achieved from Quorum Cyber generating a
total return of 8.2x cost
Interim Review
Overview
In the six months to 31 May 2024, your Company has made further positive
progress and it is pleasing to report a modest increase in NAV total return.
Since the year end, your Company has closed its most recent Offer for
Subscription, completed four new private company investments and achieved
three profitable private company realisations, including the final exit from
Quorum Cyber, which generated a total return of 8.2x cost over a holding
period of less than four years. In general, the portfolio of investee
companies continues to deliver a resilient performance and remains well placed
to achieve further growth. In recognition of the exit activity and the
commitment to make regular tax free distributions, an interim dividend of
1.00p per share has been declared for payment in September 2024.
Following a prolonged period of macroeconomic uncertainty, it is encouraging
to note that market conditions are improving. With inflation significantly
reduced, energy prices in decline and interest rates predicted to fall later
in the year, the outlook is more stable than it has been for several years.
Whilst it may take time for all of these improvements to filter through the
economy, the Manager is cautiously optimistic in the outlook for the remainder
of the financial year and believes that economic growth will continue to
strengthen in 2025.
Your Company continues to make further progress in line with its long term
growth strategy, which is focused on constructing a large and diverse
portfolio of innovative companies that will scale and ultimately become
attractive to a wide range of acquirers. During the reporting period, there
was a good level of investment with the addition of four new private companies
to the portfolio, alongside the provision of follow-on funding to support the
further development of 15 existing portfolio holdings, resulting in the
deployment of £3 million. The investment strategy continues to focus on
identifying entrepreneurial companies that operate in disruptive or high
growth markets, where there is an opportunity to achieve scale over the medium
term. Maven retains a strong preference for investing in companies that
operate in dynamic sectors such as cyber security, software, niche
manufacturing, data analytics, healthtech and training, where growth is less
sensitive to consumer or discretionary spending and the revenue model tends to
be recurring in nature, which provides good visibility on the growth
trajectory of each portfolio company. To ensure the business plan can be
delivered, Maven also spends time assessing the calibre of management and
their track record, recognising that ambitious and cohesive teams are crucial
to the success of early stage businesses.
In April 2024, your Company closed its most recent top-up Offer having raised
a total of £5.2 million for the 2023/24 and 2024/25 tax years. These funds
will enable your Company to progress its investment strategy which, over the
past four years, has provided development capital to more than 40 private
companies, many of which are delivering strong growth and achieving a leading
position in their respective markets. As the portfolio develops, it is
becoming evident that there are a number of high performing companies, which
have the capability of achieving superior returns at exit.
Over recent months, there has been an increase in the level of acquisition
interest across the portfolio, with approaches to acquire or invest in several
investee companies, particularly from US investors, who are interested in the
UK technology sector. This is demonstrated by the recent successful exit from
cyber security specialist Quorum Cyber, which completed in early June. Your
Company first invested in Quorum Cyber in 2020, backing an experienced team
that had quickly established a leading position in a high growth market.
Following a period of rapid expansion, the investment was partially realised
through a sale to UK private equity house, Livingbridge, in January 2022,
generating an initial return of 6.5x cost over an 18 month holding period. The
transaction provided Quorum Cyber with additional capital to support the next
phase of its strategic development and, in recognition of its continuing
potential, the Maven VCTs retained a minority equity interest in the business
in order to participate in future growth. It is pleasing to report that in
June this year, a final exit from this investment was achieved through a sale
of the business to US private equity firm, Charlesbank Capital Partners,
taking the total proceeds to 8.2x cost.
Whilst achieving profitable exits, in pursuit of Shareholder returns, remains
a key priority, this has to be balanced against selling a business too early
before its value has been optimised. In cases like Quorum Cyber, where a
business is performing strongly and has the potential to become a large and
valuable asset, the Manager will seek, where possible, to retain an economic
interest when structuring an exit. This approach will allow your Company to
generate an initial cash return from a secondary transaction or partial sale,
to help support the dividend programme, whilst retaining an ongoing equity
interest in the business, which offers the potential for a further return in
the future.
Dividend Policy
The Board and the Manager recognise the importance of tax free distributions
to Shareholders and will seek, as a guide, to pay an annual dividend that
represents 5% of the NAV per share at the immediately preceding year end.
Decisions on distributions take into consideration a number of factors,
including the realisation of capital gains, the adequacy of distributable
reserves, the availability of surplus revenue and the VCT qualifying level,
all of which are kept under close and regular review. As the portfolio
continues to expand and a greater proportion of holdings are invested in
younger companies with high growth potential, the timing of distributions will
be more closely linked to realisation activity, whilst also reflecting the
Company's requirement to maintain its VCT qualifying level.
Interim Dividend
In respect of the year ending 30 November 2024, an interim dividend of 1.00p
per share will be paid on 6 September 2024 to Shareholders who are on the
register at 9 August 2024. Since the Company's launch, and after receipt of
this interim dividend, a total of 100.72p per share will have been paid in tax
free Shareholder distributions. It should be noted that the payment of a
dividend reduces the NAV of the Company by the total amount of the
distribution.
Dividend Investment Scheme (DIS)
Your Company operates a DIS, through which Shareholders can, at any time,
elect to have their dividend payments utilised to subscribe for new Ordinary
Shares issued by the Company under the standing authority requested from
Shareholders at Annual General Meetings. Shares issued under the DIS should
qualify for VCT tax relief applicable for the tax year in which they are
allotted, subject to an individual Shareholder's particular circumstances.
Shareholders can elect to participate in the DIS in respect of future
dividends by completing a DIS mandate form and returning it to the Registrar
(The City Partnership). In order for the DIS to apply to the 2024 interim
dividend, the mandate form must be received before 23 August 2024, this being
the relevant dividend election date. The mandate form, terms & conditions
and full details of the scheme (including tax considerations) are available
from the Company's webpages at: mavencp.com/migvct3. Election to participate
in the DIS can also be made through the Registrar's online investor hub at:
maven-cp.cityhub.uk.com/login.
If a Shareholder is in any doubt about the merits of participating in the DIS,
or their own tax status, they should seek advice from a suitably qualified
adviser.
Fund raising
The most recent Offer for Subscription closed to new applications on 26 April
2024, with your Company raising a total of £5.2 million for the 2023/24 and
2024/25 tax years. All new shares in relation to this Offer have now been
allotted, with four allotments for the 2023/24 tax year and one allotment for
the 2024/25 tax year.
This additional liquidity will facilitate the further expansion and
development of the portfolio in line with the investment strategy. The funds
raised will also allow your Company to maintain its share buy-back policy,
whilst also spreading costs over a wider asset base, with the objective of
maintaining a competitive ongoing charges ratio for the benefit of all
Shareholders.
As announced on 18 June 2024, the Directors have elected to launch a new Offer
for Subscription, which will run alongside Offers by the other Maven managed
VCTs. Full details will be included in the Prospectus, which is expected to be
published in Autumn 2024.
Portfolio Developments
It is encouraging to report on the progress that has been achieved across the
private company portfolio, where most companies have continued to meet
operational and financial targets as part of their business plans. Notably,
many of the earlier stage growth companies are now achieving scale and
establishing strong positions in their respective markets, and in recognition
of the progress achieved the valuations of certain holdings have been
uplifted.
Carbon reduction software specialist Manufacture 2030 has delivered strong
revenue growth over the past year with annual recurring revenue (ARR)
increasing by over 75%. The business provides a disruptive software solution
that helps multinationals achieve Scope 3 carbon reduction targets by
measuring, managing and reducing carbon emissions across their supply chain.
The business is gaining commercial traction in a high growth market, where its
proposition is aligned with various carbon reduction initiatives including,
the United Nations Sustainable Development Goals. Manufacture 2030 partners
with a wide range of blue chip clients including Asda, Co-op, GSK, Toyota and
Unilever, and has received a number of awards as a technology pioneer within
this evolving market. The near term objective is to expand its presence in
North America, which is viewed as a key market.
Specialist electronics manufacturer CB Technology delivered a strong
performance in its latest financial year, which was supported by a record
forward orderbook that continues to provide good visibility for the year
ahead. CB Technology has also secured a number of new clients, as part of a
successful diversification strategy, with the objective of reducing the
reliance on oil & gas customers.
Cyber security specialist CYSIAM has made further commercial progress with
revenues increasing by more than 200% since your Company first invested. The
business is building a strong reputation as a leading provider of Managed
Detection and Response (MDR) security services for protection against,
detection of and response to cyber attacks. CYSIAM is a recognised expert in
its field and, as an accredited member of the National Cyber Security Centre's
Cyber Incident Response scheme, it can provide direct support to a range of
organisations when they become victims of cyber attacks. CYSIAM operates in a
dynamic, high growth market and the near term strategic objective remains to
further pivot the business towards a Software as a Service (SaaS) model, which
will result in an increased level of recurring revenue.
In 2021, your Company invested in Guru Systems, a supplier of hardware,
software and data analytics designed to improve the performance and cost
effectiveness of heat networks. Since investment, the business has gained
commercial traction in an emerging sector that has positive ESG credentials.
Heat networks are an important part of the government's decarbonisation
strategy and are increasingly required to be included as part of the design of
any new residential or commercial property development. Given the strong
growth potential of this market, Guru is well placed to achieve scale over the
medium term.
During the period under review, digital archiving specialist MirrorWeb has
continued to deliver impressive revenue growth and add new clients. Following
the relocation of the CEO to the US to lead the international expansion
strategy, the business has continued to scale rapidly, particularly within the
financial services sector, where regulatory changes now require all digital
communications to be archived. MirrorWeb has also focused on developing a new
platform with enhancements and additional product functionality, which
provides good upselling potential within the existing client base.
Automotive ecommerce software specialist Rockar, continues to grow market
share and is now a leading provider of a white label disruptive solution for
buying and selling new and used cars online. The business has developed good
relationships with various high profile automotive manufacturers such as BMW,
Jaguar Land Rover, Toyota Motor Group and Volvo UK, with development work
ongoing with several others. Rockar's new operating platform, Evolution, is
gaining traction amongst clients, with a number already using or committed to
migrating across to the new operating system. The business continues to
deliver strong revenue growth and remains focused on building relationships
with global automotive manufacturers that will enable the company to achieve
further scale.
Digital payments software provider QikServe has continued to make encouraging
commercial progress and is capitalising on the shift within the hospitality
sector towards mobile ordering and pay-at-table technology. The business
continues to expand its market presence in targeted sectors, which include
restaurants, international coffee chains and transportation hubs. QikServe has
a growing estate with more than 8,000 sites in over 40 countries and a healthy
pipeline of near term opportunities, particularly in the US.
Contract software specialist Summize continues to make positive commercial
progress, with ARR growing by almost 200% since the investment first completed
in October 2022. Summize has developed an AI-powered digital contracting
software solution that simplifies and streamlines the process for writing and
renewing contracts, helping to drive operational efficiencies for customers.
Since inception in 2018, Summize has secured numerous industry awards for its
innovation and entrepreneurialism. Having established a strong foothold in the
UK, the next phase of growth for the business is to expand into the US, where
there is the potential to exploit a significant market opportunity.
As may be expected with a large portfolio, there are a small number of
investee companies that have not achieved commercial targets and are trading
behind plan. Protective provisions have, therefore, been taken against the
cost of certain holdings. The performance of fintech specialist Delio has been
impacted by slower than expected sales cycles and although corrective measures
have been taken, the business continues to trade behind plan. Challenging
market conditions have impacted the growth rate of creative marketing agency
TC Communications. It is disappointing to report that the small investment in
marketing technology business Drovo has been written down in full.
Treasury Management
Your Company maintains a proactive approach to treasury management, where the
objective remains to optimise the income generated from cash held prior to
investment in VCT qualifying companies, whilst meeting the requirements of the
Nature of Income condition. This is a mandatory part of the VCT legislation,
which stipulates that not less than 70% of a VCT's income must be derived from
shares or securities. During 2023, the rise in interest rates required the
Board and the Manager to revise its approach and, following a whole of market
review, the composition of the treasury management portfolio was expanded to
include holdings in leading money market funds and open-ended investment
companies (OEIC), alongside carefully selected London Stock Exchange listed
investment trusts. This approach enables your Company to maintain compliance
with the Nature of Income condition, whilst also generating a healthy new
stream of income from the portfolio of treasury management holdings and cash.
In line with the liquidity requirements of your Company, there have been
several new investments and realisations within this portfolio, details of
which can be found in the Interim Report.
New Investments
During the reporting period, four new private companies were added to the
portfolio:
• Alderley Lighthouse Labs is a provider of clinical diagnostic
testing services, specialising in the analysis of human samples such as blood,
urine and cells, with the objective of improving healthcare outcomes. The
business was initially established as a COVID-19 facility, as part of the
Government supported "Test and Trace" programme. As pandemic related testing
subsided, the business evolved into a laboratory-based testing facility
providing blood science and molecular diagnostics to a wide range of clients.
The healthcare diagnostics and testing market continues to experience high
growth, and Alderley is well placed to leverage its existing position, with
scope to achieve considerable scale. The funding from the Maven VCTs provides
capital that will enable the business to invest in product development, expand
its current suite of services and grow monthly revenues.
• McKenzie Intelligence Services (MIS) is an insurtech business that
provides insurers with geospatial data and analysis to accelerate responses to
catastrophic events, helping to drive disaster relief and economic recovery.
Its proprietary data-led intelligence platform, Global Events Observer, uses
real time information, machine learning and expert analysis to provide
detailed and actionable intelligence to help decision makers manage risk,
escalate relief and promote economic recovery in scenarios of extreme weather,
natural disasters and geopolitical conflict. Since 2017, MIS has been Lloyds
of London's catastrophic claims partner and has provided data and assistance
following several high profile incidents, including the 2023 wildfires in
Hawaii. The funding from the Maven VCTs is being used to further develop the
technology platform and to launch new products that offer unique insight into
future potential risks.
• Metrion Biosciences is a specialist contract research organisation
that provides drug discovery services to pharma and biotech customers. Its
highly specialised service is required in the development of drugs that
intentionally or unintentionally act on an important group of protein
structures within the body known as ion channels, which are one of the fastest
growing areas of innovation in drug discovery. Metrion is aiming to become the
outsourcing partner of choice for ion services in the global pharma and
biotech industry. The funding from the Maven VCTs is being used to invest in
new equipment and to create additional laboratory space, which will enable
Metrion to achieve scale in this growing market.
• Zing is a specialist services provider operating in the
cloud-communications sector. It is a leading partner of global cloud
communication platform business Twilio, providing consultancy and managed
services. Zing was a spin out from CRM provider ProspectSoft, a previous Maven
portfolio company, which was successfully exited in 2022. The funding from the
Maven VCTs will enable the business to capitalise on the growth opportunities
in the Communications Platform as a Service (CPaaS) market. Since becoming an
independent business, Zing has made encouraging progress and strengthened its
relationship with Twilio. The next stage of development is focused on
expanding into the US, developing a new AI proposition and enhancing the
management team through new strategic hires.
The following investments were completed during the reporting period:
Investments Date Sector £'000
New unlisted
Alderley Lighthouse Labs Limited(1) April & May 2024 Pharmaceuticals, biotechnology & healthcare 249
McKenzie Intelligence Services Limited December 2023 Business services 159
Metrion Biosciences Limited December 2023 Pharmaceuticals, biotechnology & healthcare 597
Zing TopCo Limited April & May 2024 Business services 185
(trading as Zing)(1)
Total new unlisted 1,190
Follow-on unlisted
Bud Systems Limited May 2024 Learning & development/ recruitment technology 116
Delio Limited February 2024 Software & technology 125
Draper & Dash Limited (trading as RwHealth)(1) April & May 2024 Pharmaceuticals, biotechnology & healthcare 51
Enpal Limited December 2023 Software & technology 200
(trading as Guru Systems)
Hublsoft Group Limited April 2024 Software & technology 56
Liftango Group Limited March 2024 Software & technology 265
mypura.com Group Limited March 2024 Business services 193
(trading as Pura)
Shortbite Limited April 2024 Software & technology 38
(trading as Fixtuur)
Snappy Shopper Limited April 2024 Software & technology 11
Turnkey Group (UK) Holdings Limited(2) December 2023, January, February & Software & technology 240
April 2024
Whiterock Group Limited December 2024 Software & technology 149
XR Games Limited(1) December 2023 & Software & technology 148
February 2024
Zinc Digital Business Solutions Limited(1) March & May 2024 Software & technology 233
Total follow-on unlisted 1,825
Total unlisted 3,015
Follow-on AIM quoted
GENinCode PLC January 2024 Pharmaceuticals, biotechnology & healthcare 160
RUA Life Sciences PLC December 2023 Pharmaceuticals, biotechnology & healthcare 33
Total follow-on AIM quoted 193
Money market funds(3)
Aviva Investors Sterling Liquidity Fund (Class 3) March 2024 Money market fund 1,000
Fidelity Institutional Liquidity Sterling Fund (Class F) April 2024 Money market fund 500
HSBC Sterling Liquidity Fund (Class A) March 2024 Money market fund 1,000
Total money market funds 2,500
Total investments 5,708
(1) Follow-on investment completed in two tranches.
(2) Follow-on investment completed in four tranches.
(3) Investments completed as part of the treasury management strategy.
At the period end, the portfolio comprised of 114 unlisted and quoted
investments, at a total cost of £51.3 million.
Realisations
In December 2023, the exit from Glacier Energy Services completed, through a
sale to a private equity buyer, which generated a total return of 1.05x cost
over the life of the investment. Glacier was one of the more mature holdings
in the portfolio and the exit helps further reduce your Company's exposure to
the energy services sector.
In May 2024, the exit from graduate recruitment specialist GradTouch
completed. Your Company first invested in GradTouch in November 2019, backing
a team with a strategic plan to build a market leading position in the
graduate recruitment market. Throughout the period of ownership, the company
achieved steady organic growth alongside a series of self funded,
complementary acquisitions which helped transform the business. During the
period under review, an offer to acquire the business was received from UK
private equity house Pelican Capital, with the exit generating a total return
of 1.5x cost, inclusive of a small deferred consideration.
The table below gives details of the realisations completed during the
reporting period:
Realisations Cost of shares Sales proceeds Gain/(loss) over 30
Year first Complete/ disposed Value at 30 £'000 Realised November 2023 value
invested partial exit of November gain/(loss) £'000
£'000 2023 £'000
£'000
Unlisted
Glacier Energy Services Holdings Limited 2011 Complete 686 544 519 (167) (25)
GradTouch Limited 2019 Complete 400 585 605 205 20
Others - - 3 3 3
Total unlisted 1,086 1,129 1,127 41 (2)
AIM quoted
Oncimmune Holdings PLC 2021 Complete 100 14 13 (87) (1)
RUA Life Sciences PLC 2020 Complete 133 76 42 (91) (34)
Total AIM quoted 233 90 55 (178) (35)
Money market funds(1)
Aviva Investors Sterling Government Liquidity Fund 2023 Complete 1,000 1,000 1,000 - -
BlackRock Institutional Sterling Liquidity Fund (Core) 2023 Complete 1,000 1,000 1,000 - -
Fidelity Institutional Liquidity Sterling Fund (Class F) 2023 Partial 1,000 1,000 1,000 - -
Goldman Sachs Sterling Liquid Reserves (Institutional) 2023 Complete 1,000 1,000 1,000 - -
HSBC Sterling Liquidity Fund (Class A) 2023 Partial 1,000 1,000 1,000 - -
Total money market funds 5,000 5,000 5,000 - -
Total sales 6,319 6,219 6,182 (137) (37)
(1) Realisations were completed as part of the treasury management strategy.
During the year, one private company was struck off the Register of Companies,
resulting in a total realised loss of £249,000 (cost £249,000). This had no
effect on the NAV of the Company as a full provision had been taken against
the value of the holding in a previous period.
Principal and Emerging Risks and Uncertainties
The principal and emerging risks and uncertainties facing the Company were set
out in full in the Strategic Report contained within the 2023 Annual Report,
and are the risks associated with investment in small and medium sized
unlisted and AIM quoted companies which, by their nature, carry a higher level
of risk and are subject to lower liquidity than investments in larger quoted
companies. The valuation of investee companies may be affected by economic
conditions, the credit environment and other risks including legislation,
regulation, adherence to VCT qualifying rules and the effectiveness of the
internal controls operated by the Company and the Manager. These risks and
procedures are reviewed regularly by the Audit & Risk Committee and
reported to your Board. The Board has confirmed that all tests, including the
criteria for VCT qualifying status, continue to be monitored and met.
Global conflict and political instability was added to the Risk Register as an
emerging risk during a previous period, as the Directors were not only aware
of the heightened cyber security risk but were mindful of the impact that any
change in the underlying economic conditions could have on the valuation of
investment companies. These included fluctuating interest rates, increased
fuel and energy costs, and the availability of bank finance, all of which
could be impacted during times of geopolitical uncertainty and volatile
markets. The Board and the Manager continue to monitor the impact of
geopolitical, and wider market conditions, on portfolio companies.
Share Buy-backs
In order to maintain an orderly market in the Company's shares, the Directors
have delegated authority to the Manager to enable the Company to buy back
shares in the secondary market for cancellation or to be held in treasury,
subject always to such transactions being in the best interests of
Shareholders.
It is intended that the Company will seek to buy back shares with a view to
maintaining a share price that is at a discount of approximately 5% to the
latest published NAV per share, subject to market conditions, available
liquidity and the maintenance of the Company's VCT qualifying status. During
the period under review, 1,250,126 shares were bought back at a total cost of
£617,000.
Shareholders should note that neither the Company nor the Manager can execute
a transaction in the Company's shares and an instruction to buy or sell shares
on the secondary market must be directed through a stockbroker. If a
Shareholder wishes to discuss a transaction, they or their broker can contact
the Company's stockbroker, Shore Capital Stockbrokers on 020 7647 8132. Such
transactions are, however, prohibited whilst the Company is in a closed
period, which is the time from the end of a reporting period until the
announcement of the relevant results, or the release of an unaudited NAV.
Additionally, a closed period may be introduced if the Directors and Manager
are in possession of price sensitive information.
VCT Regulatory Update
During the period under review, there were no further amendments to the rules
governing VCTs, and your Company remains fully compliant with the complex
conditions and requirements as set out by HMRC.
Although the precise details of the new government's economic and fiscal
policy are currently unknown, the Manager has, through the VCT Association
(VCTA), been actively involved in positive cross party dialogue to promote and
reinforce the important role that VCTs play in supporting some of Britain's
brightest and most entrepreneurial smaller companies, whilst also assisting in
job creation across the regions. The announcement in the 2023 Autumn Statement
that the "sunset clause" for VCT and EIS schemes would be extended until 2035
helps to ensure that VCTs remain an important component of the UK's funding
infrastructure.
Valuation Methodology
Consistent with industry best practice, the Board and the Manager continue to
apply the International Private Equity and Venture Capital Valuation (IPEV)
Guidelines as the central methodology for all private company valuations. The
IPEV Guidelines are the prevailing framework for fair value assessment in the
private equity and venture capital industry. The Directors and the Manager
continue to follow industry guidelines and adhere to the IPEV Guidelines in
all private company valuations. In accordance with normal market practice,
investments quoted on AIM, or another recognised stock exchange, are valued at
their closing bid price at the period end.
Environmental, Social and Governance (ESG)
Whilst the Manager continues to enhance its ESG framework, it should be noted
that your Company's investment policy does not incorporate specific ESG aims,
and portfolio companies are not required to meet any specific targets.
However, as a growth investor, Maven is well positioned to help each company
establish robust ESG practices at an early stage of its corporate development,
ensuring that they are ingrained in the culture as the business grows. The
Manager believes that strong core ESG credentials help to support responsible
growth and encourage positive social and environmental behaviours.
Your Company has multiple investments in companies with strong ESG credentials
that are achieving growth in expanding markets. The Manager is committed to
maintaining a responsible approach to new and existing investments and has
developed a framework for promoting ESG credentials by actively engaging with
portfolio companies, taking into consideration material issues at the point of
investment and monitoring progress annually. All potential investment
opportunities are required to complete an ESG assessment, which covers 10 key
areas and provides a comprehensive pre-investment evaluation of the business
with a focus on governance, board composition and culture, alongside
environmental and social considerations.
The Manager continues to be an active signatory to the UN Principles for
Responsible Investment (UNPRI) and Investing in Women Code. Alongside these
external initiatives, Maven has developed internal diversity initiatives,
including launching a Female Founder Funding programme, which aims to offer
mentorship and collaboration opportunities to female entrepreneurs across the
UK.
Outlook
With a small number of exceptions, the underlying portfolio of investee
companies has delivered a resilient performance over the past few years and it
is well positioned to achieve further growth. Whilst 2023 was a slow year for
exits across the private equity industry, there is clear evidence that M&A
activity is improving. In addition to the three profitable private company
exits completed in the year to date, the companies within the unlisted
portfolio continue to attract regular acquisition interest from a wide range
of credible UK and international acquirers. The completion of further
profitable exits remains a key objective and will continue to be a focus of
attention in the second half of the year, to help support your Company's
dividend programme.
Keith Pickering
Chair
18 July 2024
Summary Of Investment Changes
Six Months Ended 31 May 2024
Valuation Net investment/ (disinvestment) Appreciation/ (depreciation) Valuation
30 November 2023 £'000 £'000 31 May 2024
£'000 % £'000 %
Unlisted investments
Equities 31,703 53.4 1,993 1,151 34,847 55.3
Loan stock 7,930 13.4 (105) 39 7,864 12.5
39,633 66.8 1,888 1,190 42,711 67.8
AIM(1)
Equities 1,284 2.2 138 187 1,609 2.6
Other investments(2)
OEICs 2,027 3.4 - 1 2,028 3.2
MMFs 8,000 13.5 (2,500) - 5,500 8.7
Investment trusts 4,881 8.2 - 329 5,210 8.3
Total investments 55,825 94.1 (474) 1,707 57,058 90.6
Other net assets 3,512 5.9 2,410 - 5,922 9.4
Net assets 59,337 100.0 1,936 1,707 62,980 100.0
1 Shares traded on the Alternative Investment Market (AIM) and the Main Market
of the London Stock Exchange.
2 These holdings represent the treasury management portfolio, which has been
constructed from a range of carefully selected, permitted non-qualifying
holdings in investment trusts, open-ended investment companies (OEICs) and
money market funds (MMFs).
Investment Portfolio Summary
As At 31 May 2024
Investment Valuation Cost % of % of % of equity held by other clients(1)
£'000 £'000 total equity
assets held
Unlisted
Horizon Ceremonies Limited (trading as Horizon Cremation) 2,798 1,288 4.3 8.7 44.0
Bright Network (UK) Limited 2,338 1,139 3.7 7.1 32.0
MirrorWeb Limited 1,778 690 2.8 3.8 46.1
Rockar 2016 Limited (trading as Rockar) 1,630 971 2.6 4.3 15.1
Ensco 969 Limited (trading as DPP) 1,211 957 1.9 4.8 29.7
NorthRow Limited 1,115 1,115 1.8 8.9 23.9
HCS Control Systems Group Limited 1,099 746 1.7 6.1 30.4
CB Technology Group Limited 1,045 558 1.7 10.6 64.4
Project Falcon Topco Limited (trading as Quorum Cyber)(2) 1,005 335 1.6 0.8 2.1
Bud Systems Limited 953 762 1.5 4.1 13.5
CYSIAM Limited 944 448 1.5 5.8 22.0
Nano Interactive Group Limited 929 625 1.5 3.7 11.2
BioAscent Discovery Limited 898 199 1.4 5.0 35.0
Hublsoft Group Limited 882 705 1.4 5.5 18.2
Martel Instruments Holdings Limited 879 671 1.4 12.4 31.8
DiffusionData Limited 873 625 1.4 3.1 14.9
Vodat Communications Group (VCG) Holding Limited 852 567 1.4 5.0 26.9
Summize Limited 846 448 1.3 2.9 29.6
2degrees Limited (trading as Manufacture 2030) 831 598 1.3 2.1 9.0
Filtered Technologies Limited 816 750 1.3 7.6 17.8
QikServe Limited 801 658 1.3 3.0 12.8
Zinc Digital Business Solutions Limited 799 647 1.3 10.9 32.7
WaterBear Education Limited 767 370 1.2 7.7 31.1
Liftango Group Limited 763 763 1.2 5.0 35.7
Precursive Limited 750 750 1.2 5.5 29.0
Relative Insight Limited 700 700 1.1 2.7 28.6
Whiterock Group Limited 677 470 1.1 8.0 29.9
CODILINK UK Limited (trading as Coniq) 675 450 1.1 1.3 3.6
XR Games Limited 637 298 1.0 1.6 21.5
mypura.com Group Limited (trading as Pura) 608 409 1.0 1.6 21.2
Plyable Limited 597 597 0.9 6.8 19.8
Sensoteq Limited 597 597 0.9 5.6 18.0
Metrion Biosciences Limited 597 597 0.9 4.3 13.9
Enpal Limited (trading as Guru Systems) 581 581 0.9 3.2 18.4
Boomerang Commerce Inc (trading as CommerceIQ)(3) 580 773 0.9 0.1 0.3
Novatus Global Limited 562 562 0.9 3.5 15.2
The Algorithm People Limited (trading as Optimize) 558 420 0.9 6.1 10.2
Cat Tech International Limited 510 627 0.8 6.0 24.0
Laverock Therapeutics Limited 498 498 0.8 2.3 7.0
Delio Limited 485 833 0.8 5.0 13.4
TC Communications Holdings Limited 484 980 0.8 9.8 25.5
Draper & Dash Limited (trading as RwHealth) 479 479 0.8 6.3 42.6
Horizon Technologies Consultants Limited 466 448 0.7 3.1 14.1
ORCHA Health Limited 431 431 0.7 1.1 6.6
Flow UK Holdings Limited 420 597 0.7 7.0 28.0
Biorelate Limited 419 348 0.7 2.0 23.7
Turnkey Group (UK) Holdings Limited 412 783 0.7 6.9 31.9
ebb3 Limited 370 326 0.6 9.3 69.6
HiveHR Limited 346 346 0.5 4.4 40.2
Growth Capital Ventures Limited 331 319 0.5 5.8 41.6
Snappy Shopper Limited 309 309 0.5 0.4 1.3
AMufacture Limited 261 261 0.4 4.8 15.2
Alderley Lighthouse Labs Limited 249 249 0.4 6.7 46.9
Shortbite Limited (trading as Fixtuur) 248 560 0.4 7.0 63.9
iAM Compliant Limited 246 149 0.4 1.9 47.2
Zing TopCo Limited (trading as Zing) 185 185 0.3 4.9 42.8
McKenzie Intelligence Services Limited 159 159 0.3 1.6 4.8
Reed Thermoformed Packaging Limited (trading as iPac Packaging Innovations) 140 100 0.2 0.5 11.8
RevLifter Limited 100 100 0.2 1.0 25.6
Rico Developments Limited (trading as Adimo) 100 200 0.2 1.6 8.3
ISN Solutions Group Limited 84 321 0.1 4.5 50.5
Other unlisted investments 8 1,502 -
Total unlisted 42,711 34,949 67.8
AIM quoted(4)
GENinCode PLC 494 759 0.9 6.1 15.6
MaxCyte Inc 290 137 0.6 0.1 0.1
Diaceutics PLC 275 161 0.4 0.3 0.3
Kanabo Group PLC(5) 191 1,611 0.3 2.0 8.0
AFC Energy PLC 82 57 0.1 - -
C4X Discovery Holdings PLC 82 119 0.1 0.3 0.6
Eden Research PLC 58 83 0.1 0.3 1.3
Feedback PLC 41 121 0.1 0.4 1.2
Vianet Group PLC 27 31 - 0.1 1.3
Spectral AI 21 99 - - -
Crossword Cybersecurity PLC 16 122 - 0.4 1.7
ReNeuron Group PLC 13 278 - 0.7 1.4
Other quoted investments 19 889 -
Total AIM quoted 1,609 4,467 2.6
Private equity investment trusts(6)
HgCapital Trust PLC 778 420 1.2 - 0.1
Patria Private Equity Trust PLC (formerly abrdn Private Equity Opportunities 542 373 0.9 0.1 0.2
Trust PLC)
ICG Enterprise Trust PLC 491 379 0.8 0.1 0.1
NB Private Equity Partners Limited 360 371 0.6 0.1 0.2
CT Private Equity Trust PLC 332 253 0.5 0.1 0.3
Princess Private Equity Holding Limited 293 270 0.5 - 0.1
HarbourVest Global Private Equity Limited 281 167 0.4 - -
Apax Global Alpha Limited 233 219 0.4 - 0.1
Pantheon International PLC 216 138 0.3 - -
Total private equity investment trusts 3,526 2,590 5.6
Global equity investment trusts(6)
Alliance Trust PLC 180 149 0.3 - -
JPMorgan Global Growth & Income PLC 175 150 0.3 - -
Total global equity investment trusts 355 299 0.6
Real estate investment trust(6)
Impact Healthcare REIT PLC 197 220 0.3 0.1 0.1
Total real estate investment trust 197 220 0.3
Infrastructure investment trusts(6)
3i Infrastructure PLC 280 270 0.4 - -
BBGI Global Infrastructure SA 232 260 0.4 - 0.1
Pantheon Infrastructure PLC 221 251 0.4 0.1 0.2
International Public Partnerships Limited 203 235 0.3 - -
JLEN Environmental Assets Group Limited 196 270 0.3 - 0.1
Total infrastructure investment trusts 1,132 1,286 1.8
Open-ended investment companies(6)
Royal London Short Term Fixed Income Fund (Class Y Income) 1,024 1,020 1.6 0.1 0.2
Royal London Short Term Money Market Fund (Class Y Income) 1,004 1,012 1.6 - -
Total open-ended investment companies 2,028 2,032 3.2
Money-market funds(6)
Aberdeen Standard Liquidity Fund (Lux) - Sterling Fund (Class K3) 1,000 1,000 1.6 - -
Aviva Investors Sterling Liquidity Fund (Class 3) 1,000 1,000 1.6 - -
BlackRock Institutional Sterling Government Liquidity Fund (Core Dis) 1,000 1,000 1.6 - 0.1
Goldman Sachs Sterling Government Liquid Reserves Ireland (Institutional) 1,000 1,000 1.6 0.4 0.4
HSBC Sterling Liquidity Fund (Class A) 1,000 1,000 1.6 - -
Fidelity Institutional Liquidity Sterling Fund (Class F) 500 500 0.7 - 0.2
Total money market funds 5,500 5,500 8.7
Total investments 57,058 51,343 90.6
(1) Other clients of Maven Capital Partners UK LLP.
(2) Retained minority interest following the sale of Quorum Cyber Security
Limited in December 2021.
(3) This holding reflects the retained minority interest following the sale of
e.fundamentals (Group) Limited to CommerceIQ in July 2022.
(4) Investments are quoted on AIM with the exception of Kanabo Group PLC,
which is listed on the Main Market of the London Stock Exchange.
(5) The holding in this investment resulted from the sale of The GP Service
(UK) Limited, which completed in February 2022. The unlisted shares in Kanabo
GP Limited were, in accordance with the terms of the original transaction,
exchanged for shares in Kanabo Group PLC, which is listed on the Main Market
of the London Stock Exchange.
(6) Treasury management portfolio.
Shaded line indicates that the investment was completed pre November 2015
Income Statement
For the Six Months Ended 31 May 2024
Six months ended to Six months ended to Year ended
31 May 2024 (unaudited) 31 May 203 (unaudited) 30 November 2023 (audited)
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
Gain/(loss) on investments - 1,707 1,707 - (1,560) (1,560) - (1,985) (1,985)
Income from investments 580 - 580 323 - 323 917 - 917
Other income 72 - 72 147 - 147 240 - 240
Investment management fees (151) (605) (756) (154) (616) (770) (307) (1,228) (1,535)
Other expenses (202) - (202) (241) - (241) (452) - (452)
Net return on ordinary 299 1,102 1,401 75 (2,176) (2,101) 398 (3,213) (2,815)
activities before taxation
Tax on ordinary activities - - - - - - - - -
Return attributable to Equity Shareholders 299 1,102 1,401 75 (2,176) (2,101) 398 (3,213) (2,815)
Earnings per share (pence) 0.25 0.94 1.19 0.07 (1.99) (1.92) 0.36 (2.87) (2.51)
All gains and losses are recognised in the Income Statement.
The total column of this statement is the Profit & Loss Account of the
Company. The revenue and capital return columns are prepared in accordance
with the AIC SORP. All items in the above statement derive from continuing
operations. No operations were acquired or discontinued during the period.
There are no potentially dilutive capital instruments in issue and, therefore,
no diluted earnings per share figures are relevant. The basic and diluted
earnings per share are, therefore, identical.
The accompanying Notes are an integral part of the Financial Statements.
Statement of Changes in Equity
Six Months ended 31 May 2024
Six months ended 31 May 2024 (unaudited)
Non-distributable reserves Distributable reserves
Share capital Share Capital redemption Capital Capital Special Revenue reserve Total
£'000 premium reserve reserve reserve distributable £'000 £'000
account £'000 unrealised realised reserve
£'000 £'000 £'000 £'000
At 30 November 2023 11,307 25,518 719 5,489 998 14,134 1,172 59,337
Net return - - - 2,093 (386) (605) 299 1,401
Dividends paid - - - - - (2,220) (292) (2,512)
Repurchase and cancellation of shares (125) - 125 - - (617) - (617)
Net proceeds of share issue 1,008 4,114 - - - - - 5,122
Net proceeds of DIS issue* 53 195 - - - - - 248
At 31 May 2024 12,243 29,827 844 7,582 612 10,692 1,179 62,979
Six months ended 31 May 2023 (unaudited)
Non-distributable reserves Distributable reserves
Share capital Share Capital redemption Capital Capital Special Revenue reserve Total
£'000 premium reserve reserve reserve distributable £'000 £'000
account £'000 unrealised realised reserve
£'000 £'000 £'000 £'000
At 30 November 2022 10,457 19,920 346 7,422 1,050 19,974 774 59,943
Net return - - - (1,545) (15) (616) 75 (2,101)
Dividends paid - - - - - (2,112) - (2,112)
Repurchase and cancellation of shares (132) - 132 - - (708) - (708)
Net proceeds of share issue 1,024 4,801 - - - - - 5,825
Net proceeds of DIS issue* 42 193 - - - - - 235
At 31 May 2023 11,391 24,914 478 5,877 1,035 16,538 849 61,082
Year ended 30 November 2023 (audited)
Non-distributable reserves Distributable reserves
Share capital Share Capital redemption Capital Capital Special Revenue reserve Total
£'000 premium reserve reserve reserve distributable £'000 £'000
account £'000 unrealised realised reserve
£'000 £'000 £'000 £'000
At 30 November 2022 10,457 19,920 346 7,422 1,050 19,974 774 59,943
Net return - - - (1,933) (52) (1,228) 398 (2,815)
Dividends paid - - - - - (2,685) - (2,685)
Repurchase and cancellation of shares (373) - 373 - - (1,927) - (1,927)
Net proceeds of share issue 1,169 5,353 - - - - - 6,522
Net proceeds of DIS issue* 54 245 - - - - - 299
At 30 November 2023 11,307 25,518 719 5,489 998 14,134 1,172 59,337
*DIS represents the Dividend Investment Scheme as detailed in the Interim
Review.
The capital reserve unrealised is generally non-distributable other than the
part of the reserve relating to gains/(losses) attributable to readily
realisable quoted investments which are distributable.
Where all, or an element of the proceeds of sales have not been received in
cash or cash equivalent, and are not readily convertible to cash, they do not
qualify as realised gains for the purposes of distributable reserves
calculations and, therefore, do not form part of distributable reserves.
The accompanying Notes are an integral part of the Financial Statements.
Balance Sheet
As at 31 May 2024
31 May 2024 31 May 2023 30 November 2023
(unaudited) (unaudited) (audited)
£'000 £'000 £'000
Fixed assets
Investments at fair value through profit or loss 57,058 52,073 55,825
Current assets
Debtors 706 665 660
Cash 5,505 8,528 3,117
6,211 9,193 3,777
Creditors
Amounts falling due within one year (290) (184) (265)
Net current assets 5,921 9,009 3,512
Net assets 62,979 61,082 59,337
Capital and reserves
Called up share capital 12,243 11,391 11,307
Share premium account 29,827 24,914 25,518
Capital redemption reserve 844 478 719
Capital reserve - unrealised 7,582 5,877 5,489
Capital reserve - realised 612 1,035 998
Special distributable reserve 10,692 16,538 14,134
Revenue reserve 1,179 849 1,172
Net assets attributable to Ordinary Shareholders 62,979 61,082 59,337
Net asset value per Ordinary Share (pence) 51.44 53.62 52.48
The Financial Statements of Maven Income and Growth VCT 3 PLC, registered
number 04283350, were approved and authorised for issue by the Board of
Directors and were signed on its behalf by:
Keith Pickering
Chair
18 July 2024
The accompanying Notes are an integral part of the Financial Statements.
Cash Flow Statement
For the Six Months Ended 31 May 2024
Six months ended Six months ended 31 May 2023 Year ended
31 May 2024 (unaudited) 30 November 2023
(unaudited) £'000 (audited)
£'000 £'000
Net cash flows from operating activities (379) (556) (923)
Cash flows from investing activities
Purchase of investments (5,708) (13,295) (20,279)
Sale of investments 6,145 896 3,742
Net cash flows from investing activities 437 (12,399) (16,537)
Cash flows from financing activities
Equity dividends paid (2,512) (2,112) (2,685)
Issue of Ordinary Shares 5,459 6,042 6,928
Repurchase of Ordinary Shares (617) (708) (1,927)
Net cash flows from financing activities 2,330 3,222 2,316
Net increase/(decrease) 2,388 (9,733) (15,144)
Cash as at beginning of period 3,117 18,261 18,261
Cash at end of period 5,505 8,528 3,117
The accompanying Notes are an integral part of the Financial Statements.
Notes to the Financial Statements
1. Accounting Policies
The financial information for the six months ended 31 May 2024 and the six
months ended 31 May 2023 comprises non-statutory accounts within the meaning
of s435 of the Companies Act 2006. The financial information contained in this
report has been prepared on the basis of the accounting policies set out in
the Annual Report and Financial Statements for the year ended 30 November
2023, which have been filed at Companies House and contained an Auditor's
Report that was not qualified and did not contain a statement under s498(2) or
s498(3) of the Companies Act 2006.
2. Reserves
Share premium account
The share premium account represents the premium above nominal value received
by the Company on issuing shares net of issue costs, including £64,703
current period (cumulative £171,750) trail commission. This reserve is
non-distributable.
Capital redemption reserve
The nominal value of shares repurchased and cancelled is represented in the
capital redemption reserve. This reserve is non-distributable.
Capital reserve - unrealised
Increases and decreases in the fair value of investments are recognised in the
Income Statement and are then transferred to the capital reserve unrealised
account. This reserve is generally non-distributable other than the part of
the reserve relating to gains/(losses) attributable to readily realisable
quoted investments which are distributable.
Capital reserve - realised
Gains or losses on investments realised in the period that have been
recognised in the Income Statement are transferred to the capital reserve
realised account on disposal. Furthermore, any prior unrealised gains or
losses on such investments are transferred from the capital reserve unrealised
account to the capital reserve realised account on disposal. This reserve is
distributable.
Special distributable reserve
The total cost to the Company of the repurchase and cancellation of shares is
represented in the special distributable reserve account. The special
distributable reserve also represents capital dividends, capital investment
management fees and the tax effect of capital items. This reserve is
distributable.
Revenue reserve
The revenue reserve represents accumulated profits retained by the Company
that have not been distributed to Shareholders as a dividend. This reserve is
distributable.
3. Return per Ordinary Share
Six months ended 31 May 2024
The returns per share have been based on the following figures:
Weighted average number of Ordinary Shares 117,497,578
Revenue return £299,000
Capital return £1,102,000
Total return £1,401,000
Directors' Responsibility Statement
Each Director believes that, to the best of their knowledge:
· the Financial Statements for the six months ended 31 May 2024 have
been prepared in accordance with FRS 102, the Financial Reporting Standard
applicable in the UK and the Republic of Ireland;
· the Interim Management Report includes a fair review of the
information required by DTR 4.2.7R in relation to the indication of important
events during the first six months, and of the principal and emerging risks
and uncertainties facing the Company during the second six months, of the year
ending 30 November 2024; and
· the Interim Management Report includes adequate disclosure of the
information required by DTR 4.2.8R in relation to material related party
transactions and any changes therein.
Other information
The NAV per Ordinary Share has been calculated using the number of Ordinary
Shares in issue at 31 May 2024, which was 122,431,944. A Summary of Investment
Changes for the six months under review and an Investment Portfolio Summary as
at 31 May 2024 are included above. A full copy of the Interim Report and
Financial Statements will be printed and issued to Shareholders in due course.
Copies of this announcement will be available to the public at the office of
Maven Capital Partners UK LLP, Kintyre House, 205 West George Street, Glasgow,
G2 2LW; at the Registered office of the Company at 6th Floor, Saddlers House,
44 Gutter Lane, London EC2V 6BR; and on the Company's webpage at:
mavencp.com/migvct3 (http://www.mavencp.com/migvct3) .
Neither the content of the Company's webpages nor the contents of any website
accessible from hyperlinks on the Company's website (or any other website) is
incorporated into, or forms part of, this announcement.
On behalf of the Board
Maven Capital Partners UK LLP
Secretary
18 July 2024
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