MavIncGroVCT4 - Annual Financial Report
02/04/2025 17:58
RNS Number : 4274D Maven Income & Growth VCT 4 PLC 02 April 2025 Maven Income and Growth VCT 4 PLC Final results for the year ended 31 December 2024 The Directors report the Company's financial results for the year ended 31 December 2024. Highlights • NAV total return at the year end of 154.32p per Ordinary Share (2023: 152.81p) • NAV at the year end of 59.47p per Ordinary Share (2023: 61.71p) • Seven profitable private company realisations completed, generating total returns of up to 8.2x cost and £12 million in cash proceeds • Annual dividend target increased to 6% of NAV per Ordinary Share • Final dividend of 1.75p per Ordinary Share proposed for payment in May 2025 • £4.9 million deployed in new and follow-on investments • Offer for Subscription launched in September 2024 and closed fully subscribed in April 2025 Strategic Report Chairman's Statement On behalf of your Board, I am pleased to present the Annual Report for the year to 31 December 2024. Against a mixed economic backdrop your Company has made further positive progress, and it is encouraging to report an increase in NAV total return during the year. A key feature of the reporting period was the high level of exit activity across the private company portfolio, which resulted in the completion of seven profitable realisations. Several of these exits achieved a premium over carrying value, which has helped drive the growth in NAV total return. These exits also generated a significant inflow of cash, which has enabled the Directors to enhance the annual dividend policy by increasing the target yield from 5% to 6% of NAV per Ordinary Share. On this basis, your Board is proposing that a final dividend of 1.75p per Ordinary Share be paid in May 2025, taking the dividend yield for the financial year to 6.1%. During the period under review, the economic and geopolitical outlook has remained uncertain. Whilst domestic inflation has significantly reduced from the previous peaks it remains unpredictable and, consequently, interest rate cuts have been slower and more gradual than originally anticipated. Notwithstanding these ongoing challenges, your Company has made encouraging progress and your Board is pleased to report on the resilient performance that has been achieved during the year. Since the change to the VCT rules in 2015, your Company has consistently applied an investment strategy focused on constructing a large and broadly based portfolio of predominantly private companies with high growth potential that operate across diverse sectors with limited direct exposure to discretionary or consumer spending. Following several years of active investment, your Company's portfolio has increased steadily in size and scale and now includes over 100 growth focused private and AIM quoted companies, providing access to a wide range of dynamic and emerging sectors such as cyber security, healthtech, software, regtech and specialist manufacturing. The recent high level of realisation activity demonstrates that this strategy and sector focus is bearing fruit, with the completion of seven profitable exits to a range of UK and international trade and private equity buyers, including three sales to strategic US acquirers. Importantly, several of these realisations achieved exit valuations that were ahead of the carrying value at the previous year end, which has supported the uplift in NAV total return. In addition, the cash proceeds generated from the exits has underpinned the Board's decision to increase the annual target yield. This year has been your Company's most successful period for exits from the growth portfolio. In May 2024, the exit from graduate recruitment specialist GradTouch completed, generating a total return of 1.5x cost. In June 2024, the final exit from cyber security specialist Quorum Cyber completed, through a sale of the residual holding, generating a total return of 8.2x cost across two separate exit transactions. The partial sale of digital archiving specialist MirrorWeb completed in August 2024, generating a total return of 3.8x cost, comprising an initial cash return in tandem with a retained equity stake. In early September 2024, the partial exit from regtech specialist Novatus Global also completed, generating a total return of 4.7x cost consisting of an initial cash return alongside a retained equity stake. In September 2024, specialist electronics contract manufacturer CB Technology and digital payments software provider QikServe were both sold to trade acquirers in all cash transactions, generating total returns of 2.8x cost and 1.3x cost respectively. Finally, in October 2024, the exit from Maven Capital (Marlow) completed, generating a total return of 1.8x cost. The partial exit from Quorum Cyber in 2021 was the first transaction where the Manager negotiated a sale that consisted of an initial cash return together with a retained equity stake in the business, which allowed your Company to participate in its future growth in value. Where an investee company is performing strongly and achieving scale, often a large secondary funding round at a premium valuation will help it to accelerate growth. This can also provide the ability to achieve a partial exit, and healthy initial cash return, whilst retaining an equity stake in the business. This is a model that the Manager has subsequently replicated with the partial exits from MirrorWeb and Novatus Global, where both businesses made rapid commercial progress following your Company's initial investment and attracted the attention of US based private equity funds who provided substantial new capital. This additional funding will support the delivery of ambitious growth objectives, with your Company retaining a minority equity interest to participate in future growth. During the year, there has been further expansion and development of the portfolio with £4.9 million deployed in new and follow-on funding. Five private company investments completed adding further sectoral diversity to the portfolio, and follow-on funding was provided to 17 existing portfolio companies, with two small AIM transactions also completing. The Investment Manager's Review in the Annual Report contains further details of the investments and realisations that have been completed during the year, as well as a summary of the key developments across the portfolio. It is encouraging to note that most of the companies in the private equity portfolio continue to deliver revenue growth and achieve their strategic objectives, which has resulted in the valuations of certain holdings being uplifted. Conversely, there are a small number of companies that are performing behind plan, or which ceased to trade, where provisions have been taken. In line with your Company's long term growth objective, and with the "sunset clause" for VCT and EIS schemes now extended until 2035, in late September 2024 the Board was pleased to launch a new Offer for Subscription, alongside Offers by the other Maven managed VCTs for the 2024/25 and 2025/26 tax years. Your Company had a target raise of £10 million, including an over-allotment facility of up to £5 million and, on 1 April 2025, the Offer closed early, fully subscribed. Treasury Management During the year, your Company has maintained a proactive approach to treasury management, where the objective remains to optimise the income from cash reserves held prior to investment in VCT qualifying companies by building a diversified portfolio of high yielding securities. For several years, your Company has held a focused portfolio of permitted, non-qualifying holdings in carefully selected investment trusts with strong fundamentals and attractive income characteristics, with the remaining cash held on deposit across several UK banks. This approach also ensured ongoing compliance with the VCT legislation, which states that not less than 70% of a VCT's income must be derived from shares or securities. The rapid rise in interest rates during 2023 resulted in a significant increase in the level of interest income generated from the uninvested cash held on deposit, requiring the Board and the Manager to revise its approach to treasury management. After conducting a detailed whole of market review, a broadly based portfolio of listed securities was constructed, including holdings in money market funds (MMFs) and open-ended investment companies (OEICs), alongside carefully selected London Stock Exchange listed investment trusts diversified across private equity, infrastructure and other classes, with the remaining cash held on deposit with several UK banks to minimise counterparty risk. This strategy has ensured ongoing compliance with the Nature of Income condition and also provides your Company with a significant new stream of income that currently generates a blended annualised yield of 4% across the treasury management portfolio and uninvested cash. It is worthwhile highlighting that this is a dynamic portfolio, which will vary in size depending on your Company's rate of investment, investee company realisations and overall liquidity levels. Full details of the holdings in this portfolio can be found in the Investment Portfolio Summary in the Annual Report. Enhanced Dividend Policy Your Board recognises the importance to Shareholders of regular tax free distributions and, further to the completion of several profitable realisations, has elected to enhance the dividend policy. From the year to 31 December 2024 onwards, your Company has increased its target annual dividend from 5% to 6% of the NAV per Ordinary Share at the immediately preceding year end. Shareholders should be aware that this remains a target and that 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 the proportion of younger, growth companies increases, the timing of distributions will be more closely linked to realisation activity, whilst also reflecting the requirement to maintain the VCT qualifying level. Proposed Final Dividend In line with the enhanced dividend policy, the Directors propose that a final dividend of 1.75p per Ordinary Share, in respect of the year ended 31 December 2024, be paid on 16 May 2025 to Shareholders who are on the register at 11 April 2025. This will bring the annual dividend to 3.75p per Ordinary Share, representing a yield of 6.1% based on the NAV per Ordinary Share at the immediately preceding year end. Since the Company's launch, and after receipt of the proposed final dividend, a total of 96.60p per Ordinary Share will have been paid in tax free distributions. It should be noted that payment of a dividend reduces the NAV of the Company by the total amount of the distribution. The Board wishes to take this opportunity to remind Shareholders that it is their responsibility to ensure that the Company's Registrar (The City Partnership) has correct contact and bank account details to allow for the timely payment of dividends. Dividend tax vouchers are available to download from the Registrar's investor hub at: maven-cp.cityhub.uk.com/login, with hard copies being posted to those Shareholders who have not opted to receive communications from the Company electronically. 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 under the standing authority requested from Shareholders at Annual General Meetings. Ordinary Shares issued under the DIS are free from dealing costs and should benefit from the tax reliefs available on new Ordinary Shares issued by a VCT in 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 City Partnership. In order for the DIS to apply to the 2024 final dividend to be paid on 16 May 2025, the mandate form must be received by the Registrar before 2 May 2025, 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 webpage at: mavencp.com/migvct4. Election to participate in the DIS can also be made through the Registrar's online investor hub. 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 In April 2024, your Company closed the Offer for Subscription that was launched in October 2023, having raised a total of £5.8 million. Details regarding the new Ordinary Shares issued in relation to this Offer can be found in Note 12 to the Financial Statements in the Annual Report. On 27 September 2024, a new Offer for Subscription was launched, alongside Offers by the other Maven managed VCTs, accepting applications for the 2024/25 and 2025/26 tax years. Your Company had a target raise of £10 million, including an over-allotment facility of up to £5 million and, on 1 April 2025, the Offer closed early, fully subscribed. Consistent with the objective of making regular allotments of new Ordinary Shares, the first allotment for the 2024/25 tax year completed on 28 January 2025, with further allotments taking place on 19 February and 27 March 2025. A final allotment for the 2024/25 tax year will take place on 4 April 2025 and an allotment for the 2025/26 tax year will take place as soon as practicable after 5 April 2025. The Directors are confident that Maven's regionally based team of investment executives has the capability to continue to source attractive investment opportunities in VCT qualifying companies across a range of sectors, and that the additional liquidity provided by this fundraising will facilitate further expansion and development of the portfolio in line with the investment strategy. In addition, the funds raised will allow your Company to maintain its active share buy-back policy, whilst also spreading costs over a wider asset base, with the objective of maintaining a competitive ongoing charges ratio (OCR) for the benefit of all Shareholders. Share Buy-backs The Directors acknowledge the need to maintain an orderly market in the Company's shares and have delegated authority to the Manager to enable the Company to buy back its own 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 Ordinary Share. Any purchase of the Company's own shares will be subject to various factors including market conditions, available liquidity and the maintenance of the Company's VCT qualifying status. It should, however, be noted that buy backs are prohibited whilst the Company is in a closed period, which is the time from the end of a reporting period until either 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. Shareholders should note that neither the Company nor the Manager can execute a transaction in the Company's shares. Any instruction by a Shareholder to buy or sell shares on the secondary market must be directed through a stockbroker of their choice. To discuss a transaction, the Shareholder's broker should contact the Company's stockbroker, Shore Capital Stockbrokers, on 020 7647 8132. VCT Regulatory Developments During the year, there were no further amendments to the rules governing VCTs and your Company remains fully compliant with the complex conditions and requirements of the scheme. On 3 September 2024, HM Treasury approved the regulations required to extend the "sunset clause" for VCT and EIS schemes until 2035. This provides greater certainty to Shareholders, as well as SMEs seeking growth capital, that VCTs will remain a central component of the UK's funding infrastructure. Furthermore, and as expected, the new Government's first Budget Statement in October 2024 did not introduce changes to tax reliefs for VCT and EIS schemes. As part of the growth agenda, the Chancellor confirmed that the Government would continue to work with entrepreneurs and venture capital firms to support investment to grow the UK economy by ensuring that policies provide a positive environment for entrepreneurship. The Venture Capital Trust Association (VCTA), of which the Manager is a founding member, and the Association of Investment Companies (AIC), of which the Company is a member, will continue to work with HM Treasury to build on this positive relationship, which recognises the important role of VCTs in supporting Britain's brightest entrepreneurs and creating regional employment opportunities. The October 2024 Budget did, however, introduce a widely expected change to the tax regime for AIM quoted shares with the announcement that with effect from 6 April 2026, business relief, which applies to shares that do not trade on recognised stock exchanges such as AIM and AQSE, will be reduced to 50% from the current 100%. As Shareholders will be aware, the performance of AIM over the past few years has been disappointing, with depressed valuations and limited high quality new investment opportunities. Against this backdrop, the value and size of your Company's AIM portfolio has gradually declined and as at 31 December 2024 accounted for 3.2% of NAV. Throughout the year, your Company has maintained a cautious approach to AIM and has only completed two small AIM investments, one of which was a follow-on. Whilst the Board and Manager recognise the beneficial liquidity characteristics of listed shares, it is not anticipated that there will be a significant increase in the number of new AIM investments. It is also likely that certain legacy AIM holdings will be liquidated where, based on operational performance and market dynamics, there is limited expectation of a near term share price recovery or M&A activity. Environmental, Social and Governance (ESG) Considerations Whilst your Company's investment policy does not incorporate specific ESG objectives, the Board and the Manager recognise the importance of considering and understanding ESG matters as an integral part of the investment process. Maven has established an ESG and Responsible Investment Policy which ensures that all related ESG risks and opportunities are identified during pre-investment due diligence, and can be carefully considered as part of the investment process. Maven's ESG framework for companies post investment then provides a structure for regular engagement with the Manager, which ensures that ESG metrics can be monitored annually throughout the period of investment. In addition, Maven has an ESG steering group, which comprises members from all areas of the business, bringing a diverse range of skills, experience and perspective. The core objective is to develop and embed effective ESG principles throughout Maven's business. The scope of the steering group includes setting the strategy for the collation and assessment of ESG data, consideration of regulatory reporting requirements, promoting ESG aims amongst Maven employees and portfolio companies, and oversight of reporting to stakeholders. The Manager continues to be an active member of the United Nations Principles of Responsible Investment and submitted its first public investor report in July 2024. This allows Maven to re-establish its commitment to include ESG as integral part of the investment process. Over the past year, the Manager has become increasingly involved with social initiatives that focus on diversity supporting schemes such as Future Asset, the Investing in Women Code, Lifted Project and the 10,000 Interns Foundation, as it considers the early introduction of females and ethnic minorities to the investment sector as crucial to reducing the disparities that still exist. During the year, Maven also launched a Female Founder Workshop programme that has increased introductions to female led businesses. Valuation Methodology 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, and the most recent update (December 2022) incorporates the special guidance, issued post COVID-19 and the Ukraine war, which expands on the concept of and impact on valuations of distressed markets, as well as looking at ESG factors as part of the valuation methodology. 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. Further details on your Company's approach to valuing portfolio companies can be found in the Business Report and in Note 1 to the Financial Statements in the Annual Report. The principal Key Performance Indicators (KPIs) are outlined in the Business Report and a summary of the Alternative Performance Measures (APMs) is included in the Financial Highlights in the Annual Report, with definitions of terms contained in the Glossary in the Annual Report. Constitution of the Board Further to the announcement of his appointment on 1 April 2025, I am pleased to welcome Daniel Bittner to the Board as a Non-executive Director. Daniel has an MBA from the University of St Gallen and over 30 years' experience in the financial services sector, having worked for some of the world's largest investment banks before moving into direct investment and entrepreneurial support as founding partner and CEO of Arsago Capital Partners AG. Further details can be found in his biography in the Annual Report. Daniel will stand for election at the forthcoming Annual General Meeting. Also, as announced on 1 April 2025, Steven Scott has informed the Board of his decision to retire as a Non-executive Director following the conclusion of the AGM in May 2025, and will not stand for re-election. Steven has served on the Board and as Chair of the Audit Committee for a number of years and, during his tenure, has helped to oversee the significant growth of your Company through several major fundraisings and three successful mergers, as well as overseeing the gradual transition of the portfolio towards one focused on younger companies with high growth potential. On behalf of my fellow Directors and the Manager, I wish to extend my thanks to Steven for his valuable contribution and we wish him all the best for the future. Further to discussion, and recommendation by the Nomination Committee, the Board confirms that, following Steven's retirement, Brian Colquhoun will be appointed as Chair of the Audit Committee. Annual General Meeting (AGM) The 2025 AGM will be held on 8 May 2025 in Maven's London office, at 6th Floor, Saddlers House, 44 Gutter Lane, London, EC2V 6BR. The AGM will commence at 12.00 noon and the Notice of Annual General Meeting can be found in the Annual Report. The Future Following a quieter year for exits in 2023, the key highlight during the reporting period was the resurgence in M&A activity across the private equity portfolio, which demonstrates the strength of your Company's investment strategy and its ability to deliver growth in Shareholder value. In the year ahead the Board and the Manager will continue to focus on implementing this strategy by further expanding the portfolio through the additional of fast growing businesses that operate in dynamic markets where there is evidence of buyer demand to support the enhanced dividend policy. Fraser Gray Chairman 2 April 2025 Business Report This Business Report is intended to provide an overview of the strategy and business model of the Company, as well as the key measures used by the Directors in overseeing its management. The Company is a VCT and invests in accordance with the investment objective set out below. Investment Objective Under an investment policy approved by the Directors, the Company aims to achieve long-term capital appreciation and generate income for Shareholders. Business Model and Investment Policy The Company intends to achieve its objective by: • investing the majority of its funds in a diversified portfolio of shares and securities in smaller, unquoted UK companies and AIM quoted companies that meet the criteria for VCT qualifying investments and have strong growth potential; • investing no more than £1.25 million in any company in one year and no more than 15% of the Company's assets by cost in one business at any time; and • borrowing up to 15% of net asset value, if required and only on a selective basis, in pursuit of its investment strategy. Principal and Emerging Risks The Board and the Risk Committee have an ongoing process for identifying, evaluating and monitoring the principal and emerging risks facing the Company. The risk register and dashboard form key parts of the Company's risk management framework used to carry out a robust assessment of the risks, including a significant focus on the controls in place to mitigate them. The current principal and emerging risks facing the Company are considered to be as follows:
| Principal risk | Root cause | Control measures |
| Investment risk | · The majority of investments are in small and medium sized unquoted UK companies and AIM quoted companies, which carry a higher level of risk and lower liquidity relative to investments in larger quoted companies. | · The Company appoints an FCA authorised investment manager with the appropriate skills, experience and resources required to achieve the Investment Objective. · The Board ensures that a robust and structured selection, monitoring and realisation process is applied by the Manager to all investments, and regularly reviews the investment portfolio with the Manager. · The Company's investment portfolio is diversified across a large number of companies and a range of economic sectors, and is actively and closely monitored. |
| Operational risk | · Failure of a significant outsourcer to perform duties and responsibilities in accordance with service level agreements. | · All outsourcers are selected following the completion of appropriate due diligence, with the Manager carrying out an annual review of key outsourcers. · The Manager and Custodian are FCA authorised and subject to FCA Rules requiring the maintenance of adequate financial resources, including enabling an orderly wind-down. |
| VCT qualifying status risk | · Failure to meet VCT qualifying status could result in Shareholders losing the income tax relief on initial investment and loss of tax relief on any tax free income or capital gains received. Failure to meet the qualifying requirement could result in a loss of listing of the shares. | · The Board works closely with the Manager to ensure compliance with all applicable and upcoming legislation, such that VCT qualifying status is maintained. · Further information on the management of this risk is detailed under other headings in this Business Report. |
| IT and Cyber Security risk | · Heightened cyber security risk and potential IT failure, which could cause a third party to fail to perform its duties and responsibilities or experience financial difficulties such that it is unable to carry on trading and cannot provide services to the Company. | · The Board closely monitors the systems and controls in place to prevent or mitigate against a systems or data security failure. · The Board reviews control and compliance reports from the Manager, which includes oversight of third party cyber security arrangements, to ensure these adequately address systems and data security risks. · The ability of third parties to operate effective business continuity plan (BCP) arrangements has been validated. |
| Legislative and regulatory risk | · Breaches of regulations including, but not limited to, the Companies Act 2006, the FCA Listing Rules, the FCA Disclosure Guidance and Transparency Rules, the General Data Protection Regulation (GDPR), or the Alternative Investment Fund Managers Directive (AIFMD) by the Company could lead to a number of detrimental outcomes and reputational damage. | · The Board strives to maintain a good understanding of the changing regulatory landscape and consider emerging issues so that appropriate changes can be developed and implemented in good time. · The Board and the Manager continue to make representations where appropriate, either directly or through relevant industry bodies such as the AIC, the British Private Equity and Venture Capital Association (BVCA) and the Venture Capital Trust Association (VCTA) in relation to any changes in legislation. |
| Political risk | · Political changes leading to uncertainty in markets, legislation and the economy. | · The Board regularly reviews the political situation, together with any associated changes to the economic, regulatory and legislative environment. |
| Emerging risk | Root cause | Control measures |
| Global conflict and political instability | · Escalating global conflict and political instability resulting in the potential for escalating prices, disruption to supply chains and general market uncertainty. | · The Board regularly reviews the investment portfolio with the Manager. Maven works closely with portfolio companies to identify, and support, the management of any challenges resulting from global conflict and political instability. · The Board and the Manager are monitoring this risk closely and, whilst it cannot be obviated entirely, the Company's investment portfolio is diversified across a large number of investee companies and a range of economic sectors. |
| Form of engagement | Influence on Board decision making |
| Shareholders Shareholders are encouraged to attend and vote at the AGM and have the opportunity to ask questions and engage with the Directors and the Manager. The Company reports formally to Shareholders by publishing Annual and Interim Reports. In the instance of a corporate action taking place, the Board will communicate with Shareholders through the issue of a Circular and, if required, a Prospectus. In addition, significant matters or reporting obligations are disseminated to Shareholders by way of announcements to the London Stock Exchange. The Secretary acts as a key point of contact for the Directors and communications received from Shareholders are circulated to the whole Board. The Manager also publishes its bi-annual newsletter, which is available on the Manager's website, mavencp.com, and provides regular portfolio updates by email. | The Board recognises the importance of tax-free dividends to Shareholders and takes this into consideration when making decisions to pay interim and propose final dividends for each year. During the year under review, after taking into account the interests of Shareholders and strategies employed by the other VCTs in its peer group, the Directors agreed an enhancement to the dividend policy and now target an annual dividend of 6% of the NAV per Ordinary Share at the immediately preceding year end. Further details regarding dividends for the year under review can be found in the Chairman's Statement. The Directors recognise the importance to Shareholders of the Company maintaining an active buy-back policy, with the intention that share buy backs will be conducted with a view to maintaining a share price that is at a discount of approximately 5% to the latest published NAV per share. Further details can be found in the Chairman's Statement, and in the Directors' Report in the Annual Report. In making the decision to launch the current Offer for Subscription, the Directors considered that it would be in the interest of Shareholders to continue to expand the portfolio and make investments across a diverse range of sectors. By growing the Company, as certain costs are fixed, these costs are spread over a wider asset base, which helps to promote a competitive ongoing charges ratio and is in the interests of Shareholders. In addition, the increased liquidity helps support the buy-back policy referred to above. Further details regarding the latest Offer for Subscription can be found in the Chairman's Statement. |
| Environment and society The Directors and the Manager take account of the social, environmental and ethical factors impacted by the Company and the investments that it makes. | The Directors and the Manager are aware of their duty to act in the interests of the Company and acknowledge that there are risks associated with investment in companies that fail to conduct business in a socially responsible manner. The Manager's ESG assessment of investee companies focuses heavily on their impact on the environment, as well as broader social themes such as the companies' approach to diversity and inclusion in the workplace, and their work with charities. Further details can be found in the Chairman's Statement, the Investment Manager's Review, and in the Statement of Corporate Governance in the Annual Report. |
| Portfolio companies At quarterly Board Meetings, the Manager reports to the Board on the portfolio companies and the Directors challenge the Manager where they feel it is appropriate. The Manager communicates directly with each private investee company, normally through the Maven representative who sits on its board. From time to time, the management teams of investee companies give presentations to the Board. | Through the Manager, the Directors encourage portfolio companies to adopt best practice corporate governance, exercising voting rights where needed. The Board has delegated the responsibility for monitoring the portfolio companies to the Manager and has given it discretion to vote in respect of the Company's holdings in the investment portfolio, in a way that reflects the concerns and key governance matters discussed by the Directors. The Board is also mindful that, as the portfolio expands and the proportion of early stage investments increases, follow-on funding will represent an important part of the Company's investment strategy and this forms a key part of the Directors' discussions in relation to valuations, risk management and fundraising. Meeting with the management teams of private companies gives the Board a better understanding of the investee business. |
| Manager The Manager attends the quarterly Board Meeting, presenting a detailed portfolio analysis and reports on key issues such as VCT compliance, investment pipeline, utilisation of any new monies raised, share liquidity and peer group performance. | The Board ensures that the Manager implements the investment objective and strategy, in accordance with the terms of the Management and Administration Deed, and in compliance with the VCT, and other, regulations. On an annual basis, as part of its decision on the re-appointment of the Manager, the Board conducts a review of the Manager's performance and management fee. Information provided by the Manager supports the Board's policies regarding dividends and share buy-backs, and the decisions made on fundraising. The Board has an active treasury management policy, which has the objective of generating income from the cash held prior to investment. As detailed in the Chairman's Statement and in the Investment Manager's Report in the Annual Report, during the year under review, several new permitted non-qualifying investments were completed for treasury management purposes. After conducting a detailed whole of market review, the composition of the treasury management portfolio was refined to include holdings in MMFs and OEICs, alongside listed investment trusts diversified across private equity, infrastructure and other classes, with the remaining cash held on deposit with a range of UK banks. |
| Registrar Annual review meetings and control reports. | Through review and discussion of reports from the Manager, the Directors consider the performance of all third party service providers on an annual basis, including ensuring compliance with GDPR. |
| Banks and Custodian Regular statements and control reports received, with all holdings and balances reconciled. | Through review and discussion of reports from the Manager, the Directors consider the performance of all third party service providers on an annual basis, including oversight of securing the Company's assets. |
| Year ended 31 December 2024 | Year ended 31 December 2023 | |||||
| Revenue £'000 | Capital £'000 | Total £'000 | Revenue £'000 | Capital £'000 | Total £'000 | |
| Gain / (loss) on investments | - | 3,107 | 3,107 | - | (2,989) | (2,989) |
| Income from investments | 1,522 | - | 1,522 | 1,262 | - | 1,262 |
| Other income | 227 | - | 227 | 299 | - | 299 |
| Investment management fees | (437) | (1,746) | (2,183) | (449) | (1,797) | (2,246) |
| Other expenses | (438) | - | (438) | (633) | - | (633) |
| Net return on ordinary activities before taxation | 874 | 1,361 | 2,235 | 479 | (4,786) | (4,307) |
| Tax on ordinary activities | - | - | - | - | - | - |
| Return attributable to Equity Shareholders | 874 | 1,361 | 2,235 | 479 | (4,786) | (4,307) |
| Earnings per share (pence) | 0.62 | 0.96 | 1.58 | 0.35 | (3.52) | (3.17) |
| Year ended 31 December 2024 | Non-distributable Reserves | Distributable Reserves | ||||||
| Share capital £'000 | Share premium account £'000 | Capital redemption reserve £'000 | Capital reserve unrealised £'000 | Capital reserve realised £'000 | Special distributable reserve £'000 | Revenue reserve £'000 | Total £'000 | |
| At31 December 2023 | 13,596 | 43,470 | 1,196 | 9,150 | 4,174 | 10,883 | 1,448 | 83,917 |
| Net return | - | - | - | (911) | 4,018 | (1,746) | 874 | 2,235 |
| Dividends paid | - | - | - | - | - | (4,782) | (570) | (5,352) |
| Repurchase and cancellation of shares | (438) | - | 438 | - | - | (2,556) | - | (2,556) |
| Net proceeds of share issue | 916 | 4,589 | - | - | - | - | - | 5,505 |
| Net proceeds of DIS issue* | 87 | 396 | - | - | - | - | - | 483 |
| At31 December 2024 | 14,161 | 48,455 | 1,634 | 8,239 | 8,192 | 1,799 | 1,752 | 84,232 |
| Year ended 31 December 2023 | Non-distributable Reserves | Distributable Reserves | ||||||
| Share capital £'000 | Share premium account £'000 | Capital redemption reserve £'000 | Capital reserve unrealised £'000 | Capital reserve realised £'000 | Special distributable reserve £'000 | Revenue reserve £'000 | Total £'000 | |
| At 31 December 2022 | 12,977 | 37,443 | 762 | 12,100 | 4,213 | 19,975 | 1,174 | 88,644 |
| Net return | - | - | - | (2,950) | (39) | (1,797) | 479 | (4,307) |
| Dividends paid | - | - | - | - | - | (4,580) | (205) | (4,785) |
| Repurchase and cancellation of shares | (434) | - | 434 | - | - | (2,715) | - | (2,715) |
| Net proceeds of share issue | 978 | 5,615 | - | - | - | - | - | 6,593 |
| Net proceeds of DIS issue* | 75 | 412 | - | - | - | - | - | 487 |
| At 31 December 2023 | 13,596 | 43,470 | 1,196 | 9,150 | 4,174 | 10,883 | 1,448 | 83,917 |
| 31 December 2024£'000 | 31 December 2023£'000 | ||
| Fixed assets | |||
| Investments at fair value through profit or loss | 74,130 | 77,237 | |
| Current assets | |||
| Debtors | 763 | 1,506 | |
| Cash | 9,670 | 5,458 | |
| 10,433 | 6,964 | ||
| Creditors | |||
| Amounts falling due within one year | (331) | (284) | |
| Net current assets | 10,102 | 6,680 | |
| Net assets | 84,232 | 83,917 | |
| Capital and reserves | |||
| Called up share capital | 14,161 | 13,596 | |
| Share premium account | 48,455 | 43,470 | |
| Capital redemption reserve | 1,634 | 1,196 | |
| Capital reserve - unrealised | 8,239 | 9,150 | |
| Capital reserve - realised | 8,192 | 4,174 | |
| Special distributable reserve | 1,799 | 10,883 | |
| Revenue reserve | 1,752 | 1,448 | |
| Net assets attributable to Ordinary Shareholders | 84,232 | 83,917 | |
| Net asset value per Ordinary Share (pence) | 59.47 | 61.71 | |
| Year ended 31 December 2024£'000 | Year ended 31 December 2023£'000 | ||
| Net cash flows from operating activities | (597) | (1,308) | |
| Cash flows from investing activities | |||
| Purchase of investments | (13,830) | (19,583) | |
| Sale of investments | 20,432 | 6,320 | |
| Net cash flows from investing activities | 6,602 | (13,263) | |
| Cash flows from financing activities | |||
| Equity dividends paid | (5,352) | (4,785) | |
| Net proceeds of share issue | 5,615 | 6,707 | |
| Net proceeds of DIS issue | 500 | 470 | |
| Repurchase of Ordinary Shares | (2,556) | (2,715) | |
| Net cash flows from financing activities | (1,793) | (323) | |
| Net increase/(decrease) in cash | 4,212 | (14,894) | |
| Cash at beginning of year | 5,458 | 20,352 | |
| Cash at end of year | 9,670 | 5,458 | |
| Year ended 31 December 2024 | Year ended 31 December 2023 | |
| The returns per share have been based on the following figures: Weighted average number of Ordinary Shares Revenue return Capital return | 141,840,449 £874,000 £1,361,000 | 136,002,183 £479,000 (£4,786,000) |
| Total return | £2,235,000 | (£4,307,000) |