REG - Mercia Asset Mgt PLC - Interim Results
Today 07:00
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RNS Number : 7780J Mercia Asset Management PLC 02 December 2025
2 December 2025
Mercia Asset Management PLC
("Mercia" or the "Group" or the "Company")
Interim results for the six months ended 30 September 2025
14% EBITDA growth and EBITDA margin expansion supports a 5% increase in the
interim dividend
Mercia Asset Management PLC (AIM: MERC), the regionally focused, private
capital asset manager with £2.0billion of assets under management ("AuM"), is
pleased to announce its interim results for the six months ended 30 September
2025.
Mark Payton, Chief Executive Officer of Mercia, commented:
"Mercia has delivered a robust first half performance with our increased
economies of scale driving both EBITDA and EBITDA margin growth."
Unaudited Unaudited Audited
30 September 30 September 31 March
2025 2024 2025
Statutory results
Revenue £17.2m £17.9m £35.2m
Operating profit £1.8m £1.3m £2.8m
Profit before taxation £2.5m £2.4m £5.4m
Basic earnings per share 0.39p 0.41p 0.80p
Interim(1)/total dividend per share 0.39p 0.37p 0.95p
Cash and cash equivalents £34.5m £46.2m £40.1m
Net assets £187.1m £187.4m £187.9m
Alternative performance measures
AuM (2) £2,000m £1,837m £1,988m
EBITDA (3) £4.2m £3.7m £7.6m
EBITDA margin (4) 24.6% 20.8% 22.1%
Net assets per share 43.4p 43.4p 43.6p
1 The interim dividend will be paid on 14 January 2026 to shareholders
on the register at the close of business on 12 December 2025.
2 AuM is defined as the value of funds under management from which the
Group earns revenues, plus the Group's consolidated net assets.
3 EBITDA is defined as operating profit/(loss) excluding performance
fees net of attributable costs, depreciation, realised fair value (loss)/gain
on the sale of direct investments, unrealised fair value movement in direct
investments, share-based payments charge, amortisation of intangible assets
and movement in fair value of deferred consideration.
4 EBITDA margin is defined as EBITDA divided by revenue (excluding
performance fees net of attributable costs).
Managed fund movements
· Third-party funds under management ("FuM") increased by c.1% compared
to the corresponding period end to c.£1,813million (H1 2025:
c.£1,650million; FY 2025: c.£1,800million), with no redemptions
o Venture FuM of c.£959million (H1 2025: c.£952million; FY 2025:
c.£928million)
§ £34.8million successfully raised by the three Northern Venture Capital
Trusts ("VCTs") in April 2025, in addition to £1.3million of shareholder
dividend reinvestment inflows
§ Final dividends totalling £10.1million paid out by the three Northern
VCTs in addition to shares repurchased and cancelled totalling £9.9million
§ Two Enterprise Investment Scheme ("EIS") funds closed raising a total of
£10.6million
§ £5.0million additional equity allocation under the Northern Powerhouse
Investment Fund I
o Development capital FuM of c.£454million (H1 2025 c.£388million; FY
2025: c.£472million)
§ FDC Debt fund, now in its realisation phase, returned c.£18million to
investors in the period
o Property finance FuM of c.£400million (H1 2025: c.£310million; FY 2025:
c.£400million)
Direct investment portfolio movements
· Direct investment portfolio fair value of £131.1million (H1 2025:
£120.9million; FY 2025: £126.0million)
· £5.5million net invested into five portfolio companies (H1 2025:
£3.9million net invested into four portfolio companies)
Post-period end developments
· First share allotment, totalling c.£38million of the Northern VCT's
current £50.0million fundraise, completed in November
· Launch of £35.0million North East Accelerate Fund in October 2025,
investing across Tyne & Wear, Northumberland and County Durham
· Dr Jonathan Pell retires from the Board today and is succeeded by
Janine Nicholls as Chair of the Audit and Risk Committee
This announcement contains inside information for the purposes of article 7 of
the Market Abuse Regulation (EU) 596/2014 as it forms part of domestic law in
the United Kingdom by virtue of the European Union (Withdrawal) Act 2018 and
as amended by regulation 11 of the Market Abuse (Amendment) (EU Exit)
Regulations 2019/310. With the publication of this announcement, this
information is now considered to be in the public domain.
For further information, please contact:
Mercia Asset Management PLC +44 (0)330 223 1430
Mark Payton, Chief Executive Officer
Martin Glanfield, Chief Financial Officer
www.mercia.co.uk (http://www.mercia.co.uk/)
Canaccord Genuity Limited (NOMAD and Joint Broker) +44 (0)20 7523 8000
Simon Bridges, Andrew Potts, Harry Rees
Singer Capital Markets (Joint Broker) +44 (0)20 7496 3000
Charles Leigh-Pemberton
FTI Consulting +44 (0)20 3727 1051
Tom Blackwell, Thomas Lodge
mercia@fticonsulting.com (mailto:mercia@fticonsulting.com)
Investor presentation
Mercia will provide a live management presentation and Q&A via the
Investor Meet Company platform at 3.00pm today. Registration details for the
online investor presentation can be accessed via:
https://www.investormeetcompany.com/mercia-asset-management-plc/register
(https://www.investormeetcompany.com/mercia-asset-management-plc/register)
About Mercia Asset Management PLC
Mercia is a private capital asset manager focused on supporting regional SMEs
to achieve their growth aspirations. Mercia provides capital across its four
asset classes of venture, debt, private equity and proprietary capital: the
Group's 'Complete Connected Capital'.
The Group has a strong UK footprint through its 11 regional offices, extensive
local adviser and personal networks, and university partnerships, providing it
with access to high-quality deal flow.
Mercia Asset Management PLC is quoted on AIM with the EPIC "MERC".
Chief Executive Officer's review
Stronger, resilient and focused on delivering sustainable value for the long
term
Overview
Despite macroeconomic and political uncertainty, Mercia continues to
demonstrate resilience through the breadth of our platform, regional focus,
disciplined investment approach and growing operational efficiency.
Originally founded in 2010, Mercia, via its differentiated model, has built
brand recognition as a major national operator with a leading regional
presence. As a specialist alternative asset manager solely operating in the
private markets, we are well placed to benefit from capital inflows from fund
investors (retail, institutional or public sector) seeking a place-based
domestic fund manager with a strong track record of returns and differentiated
access to regional UK investment opportunities.
The first half of this financial year has been a period of measured progress
and solid financial performance for Mercia. Despite subdued investment and
exit activity across UK private markets, we delivered increased profitability,
a modest number of full and partial exits within the funds' portfolio
(including the successful IPO of The Beauty Tech Group, a company from the
Northern VCTs' portfolio, post-period end) and saw continued interest in new
funds. However, a market perception from across the Group is one of observed
caution, with capital deployment generally taking longer than in recent years.
Mercia's strategic objectives remain unchanged: to become the leading UK
specialist in regional private markets - providing capital to ambitious
businesses and through this, generating sustainable long-term returns for our
shareholders and fund investors. At this mid-point in Mercia '27, we remain
confident of achieving in our three-year goals of growing AuM to £3.0billion,
EBITDA to £10.0million, and EBITDA margin to 26% by 31 March 2027. Growth for
this three-year plan, and into the future, is underpinned by the pragmatic
divestiture of our balance sheet direct investments.
As others pause or retrench, we continue to invest - in talent, in innovation
and in the UK regions that will power the next generation of growth, as we
look to benefit from the tail winds within private markets.
Financial and operational performance
· AuM of £2.0billion (FY 2025: £2.0billion)
· EBITDA increased by c.14% to £4.2million (H1 2025:
£3.7million)
· EBITDA margin strengthened to 24.6% (H1 2025: 20.8%; FY
2025: 22.1%), reflecting operational efficiencies and the benefits of
technology adoption
· Balance sheet direct investment portfolio fair value of
c.£131million (FY 2025: c.£126million)
· Cash and cash equivalents of c.£35million (FY 2025:
c.£40million), supporting continued growth in the direct investment
portfolio, the ongoing share buyback and dividends.
Our financial performance continues to demonstrate the resilience of our model
and reinforces Mercia having established a track record of delivery, by being
in the right place, at the right time, doing the right things. This is a
central differentiating theme, as institutional capital redeployment points
increasingly toward the domestic private markets, seeking place-based fund
managers with a track record of delivery.
Private markets momentum and alternative assets appeal
Fundraising conditions remained challenging during the period for EIS, while
our VCTs are on track to deliver strong capital raisings supported by wealth
manager relationships and an increasingly strong investment performance track
record. Institutional appetite for UK private assets remains positive, with
growing capital commitments from government institutions. Initiatives, such as
the Mansion House Reform and Accord and a renewed focus on the UK industrial
strategy (IS-8), are reinforcing the role of private markets in supporting UK
economic growth. Local Government Pension Scheme pooling and consolidation is
also progressing with increased emphasis on place-based investment. Overall,
the policy environment and investor sentiment remain supportive of long-term
allocations to private assets and we are well positioned to capture this
opportunity. The table below summarises our FuM by investor type and our
current organic new fund raising targets/pipeline through to 31 March 2027.
As at FuM target/
30 September 2025 pipeline
Investor type £'m £'m
Retail 522 130
Public sector 1,081 200
Institutional 210 550
Total 1,813 880
Investment highlights
We manage capital across three broad investor categories of retail (EIS and
VCT), public sector (local authorities and British Business Bank) and
institutional capital (pension funds) - all three pools are increasingly
seeking proven managers with a track record of delivery and returns in the
private markets.
Despite a relatively subdued investment climate, we still completed 83
investments during the first six months of this financial year (H1 2025: 86),
including 39 new investments and 44 follow-ons across our venture, development
capital and property finance asset classes. Our c.£95million deployment
compares with c.£133million for the same period last year.
Capital invested across the Group regionally during the six months to 30
September 2025 was as follows:
South (including London) Midlands North (including Scotland) Total
Asset class £'m £'m £'m £'m
Venture 14 13 16 43
Development capital 7 15 11 33
Property finance - 19 - 19
21 47 27 95
Assets under management
A total of c.£47million of new capital was raised by our EIS and Northern
VCTs during the six-month period, in addition to a further £5.0million
awarded under the Northern Powerhouse Investment Fund I equity mandate.
Valuations across our managed funds broadly increased during the first six
months, whilst c.£56million of distributions were made to both fund investors
and Mercia shareholders, including dividends paid to VCT shareholders and
Mercia's latest share buyback.
1 April Inflows Performance Distributions 30 September Post-period
2025 2025 end inflows
Asset class £'m £'m £'m £'m £'m £'m
Venture 928 52 8 (29) 959 38
Development capital 472 - 6 (24) 454 -
Property finance 400 - - - 400 -
Total FuM 1,800 52 14 (53) 1,813 38
Proprietary capital 188 - 2 (3) 187 -
Total AuM 1,988 52 16 (56) 2,000 38
Liquidity
We continue to maintain strong liquidity across our asset classes.
Liquidity Liquidity
30 September 31 March
2025 2025
Asset class £'m £'m
Venture 339 347
Development capital 61 87
Property finance 169 166
Total FuM 569 600
Proprietary capital 35 40
Total AuM 604 640
Balance sheet direct investments
Our direct investment portfolio continues to mature, with several companies
having appointed advisers as we, and they, look to consider opportunities for
potential realisation events. Global events and the stock market declines
(seen particularly for tech growth businesses), reached a low point in
December 2022. Data collected across 2023, 2024 and into 2025 suggests that
tech company multiples, particularly software/SaaS, have started to tick
upwards again.
The International Private Equity and Venture Capital Valuation Guidelines
December 2018, updated in December 2022 ("IPEV" or the "Guidelines"), are
based on the application of Fair Value ("FV"), described as "the price that
would be received to sell an asset or paid to transfer a liability in an
orderly transaction between market participants at the measurement date". Our
direct investments are valued at Fair Value in accordance with these
Guidelines. For venture investments, we take the price of last round
calibrated or third-party indicators (quoted prices/third-party valuation
exercises or market events) as the first estimate of FV and then calibrate by
way of a comparable exit view to support this third-party derived price or
cost. We also seek to verify carrying value, potentially using revenue/EBIT
multiples as adjusted for the current segment performance, use the comparable
exit values to support the current value, or benchmark against a recent market
event, an offer of finance or acquisition. This can result in either upward or
downward fair values. For quoted investments, available market bid prices will
be the exclusive basis for the measurement of Fair Value for identical
instruments.
In respect of material FV movements in the period, post-period end Medherant
completed its latest investment round following a positive clinical trial, and
therefore we have included the positive impact on our holding value by
recognising the preference rights in the share capital table. Both Netacea and
VirtTrade have modest impairments as revenue growth has not progressed as
quickly as forecast. sureCore has continued to materially underperform, and,
as a consequence, we have now fully impaired our valuation of this investment.
Year of Net Net cash Fair value Net
first investment invested movement investment Percentage
direct investment value as at six months to six months to value as at held as at
1 April
30 Sept
2025
30 Sept 30 Sept 30 Sept
2025
£'000
2025 2025 2025
£'000
£'000 £'000 %
Netacea Group Ltd 2022 16,661 1,100 (996) 16,765 33.6
Voxpopme Ltd 2018 15,874 - - 15,874 20.2
Medherant Ltd 2016 11,521 - 3,472 14,993 36.2
Warwick Acoustics Ltd 2014 11,934 1,000 - 12,934 31.7
VirtTrade Ltd * 2015 11,547 1,500 (1,639) 11,408 61.4
Eyoto Group Ltd 2017 9,642 750 - 10,392 24.7
Invincibles Studio Ltd 2015 9,317 - - 9,317 35.5
Locate Bio Ltd 2018 7,837 - - 7,837 19.4
Ton UK Ltd ** 2015 6,609 - - 6,609 40.4
Aonic Founder SCS 2023 5,700 - (165) 5,535 1.3
Axis Spine Technologies Ltd 2022 4,000 1,009 - 5,009 15.2
Pimberly Ltd 2021 2,728 - 117 2,845 4.9
Tozaro Ltd 2020 2,734 - - 2,734 11.2
Nova Pangaea (Holdings) Ltd 2022 2,250 - - 2,250 -
Forensic Analytics Ltd 2021 1,750 - - 1,750 6.7
Uniphy Ltd 2022 727 - 270 997 3.2
Fortis Frontier PLC (formerly MyHealthChecked PLC) 2016 952 - (272) 680 13.1
sureCore Ltd 2016 1,398 - (1,398) - 20.0
Impression Technologies Ltd 2015 - (350) 350 - 65.1
Akamis Bio Ltd 2015 - - - - 0.2
Other direct investments n/a 2,779 471 (79) 3,171 n/a
Total 125,960 5,480 (340) 131,100 n/a
* Trading as Avid Games.
** Trading as Intelligent Positioning/Pi Datametrics.
Investment market environment
While institutional sentiment towards them remains fundamentally positive, the
UK's private markets remain characterised by selective investor appetite and
constrained liquidity. For smaller businesses, particularly those based
outside of London, a funding gap persists creating both a challenge and an
opportunity. Mercia's regional model provides a crucial bridge - deploying
commercial capital across the South East, South West, East of England, the
North, Midlands and Scotland. We also continue to engage with HM Treasury and
the British Business Bank to advocate for policy refinements that could unlock
additional liquidity to meet the growing and ambitious opportunities across
the entire UK.
Venture
Currently, the domestic market provision of venture capital is greatly skewed
towards late stage (series E and onwards) - in large part tilted towards
FinTech and AI-centred initiatives. There is a growing under supply of capital
at the early end (seed to series A) for businesses seeking £0.5million to
£15.0million. Although this means now is an excellent time to build a
portfolio due to limited competition, it does mean that there are more limited
syndication options, which we would expect to return in time as per previous
venture cycles, with a recovering economy triggered in large part by returning
momentum in the public markets.
Whether the current bubble of AI, as a standalone investment class, bursts or
not (for instance, as witnessed with the e-commerce/dot com bubble over two
decades ago), AI as a disruptive innovation is here to stay. When AI combines
with quantum computing, we expect a real global game changer. Many of the
opportunities we see have AI-enablement as a default offering, with
applications in defence and space growing in number. Conversely, Clean tech
and green energy initiatives are struggling to raise syndicated capital, as
are certain capital-intensive life science plays.
Development capital (SME lending and Private equity)
Although many companies have been waiting for the outcome of this year's
Autumn Budget, deal flow has remained strong in the regional private credit
market with our focus on profitable businesses seeking capital for (i) changes
in ownership, (ii) growth funding requirements and (iii) financial
restructuring. Mercia's development capital portfolios are adapting to a new
reality of increased deal times and higher costs of operation. We have seen a
reduction in financing requirement in the market for M&A activity in
general, which has in part (although not materially impacting our part of the
market) attracted the return of banks, demonstrating an increased appetite for
alternative uses of their capital. Our investment performance continues to be
market-leading in this sector. There is a growing, if not cautious, optimism
about the potential favourable impact of the newly introduced UK Government
IS-8 strategy and devolved powers of the Mayoral Combined Authorities.
Property finance
As with other asset classes, for both residential and commercial properties,
uncertainty regarding the recent Autumn Budget and other new initiatives such
as the Building Safety Act, little improvement to the planning process, rent
review legislation, the Renters' Right Act, higher than expected interest
rates coupled with unchanged land prices has, at least temporarily, slowed
developer activities and with it, lending transactions.
Developers, as with investors, seek stability and we predict that the
industrial property sector will be one of the first to pick up again as they
do not have the same regulatory and planning issues that are seen in the
residential sector. We hope that once into 2026, with reducing interest
rates, market stability and improvements to the planning process, that the
residential development market will return too, particularly if there are new
incentives put in place for first time buyers.
Operational and cultural progress
During the period, we made tangible progress in deepening integration across
our regional offices and investment divisions - a key differentiator in terms
of both capital deployment and access to deal flow. Our #OneMercia teams
remain our greatest strength. We have continued to invest in talent
development, with a focus on leadership identification, ensuring we sustain a
culture of shared curiosity, accountability and team work.
Operations
Over the past six months, Mercia has focused on strengthening operational
resilience and enhancing our digital infrastructure. Currently, we have a
particular emphasis on unifying tools and processes, enabling digitisation and
automation of workflows as part of embracing a rapidly evolving digital
environment. The use of AI is starting to play a central role in transforming
internal workflows and external engagement. This has unlocked benefits in
efficient information gathering, data processing and the streamlining of tasks
toward scale-led operational efficiency.
ESG
We continue to strengthen our commitment to responsible investment across the
portfolios by enhancing our ESG due diligence, with all new funds now adopting
our materiality assessment tool. This considers material social and
environmental outcomes alongside financial return.
We don't just say, we do. Through Mercia Spirit, via our c.130 strong team
across 11 offices, we have organised three corporate volunteering days for
staff as well as multiple awareness initiatives such as World Menopause Day,
Macmillan Coffee Morning and World Mental Health Day. Rise & Thrive, our
initiative to improve diversity, equity and inclusion in funding, delivered
six founder events; four targeted at female founders. Together, these
initiatives engaged over 200 founders and stakeholders.
Outlook
The second half of FY26 is set to build on the strong operational and
financial momentum of the first. Fundraising activities remain robust, with a
growing pipeline across all capital pools that we manage.
We expect a strengthening domestic market through to the conclusion of our
Mercia '27 strategic plan, with recent successful IPOs signalling renewed
confidence. Historically, venture activity accelerates six to nine months
after public markets reopen and we're already seeing those early signs. We are
optimistic for continued progress in 2026 and beyond.
Including the interim dividend announced today, Mercia will have returned over
£25million to shareholders through dividends and share buybacks since the
start of the COVID pandemic. Our model continues to deliver; c.80% recurring
revenues, disciplined capital deployment and a maturing direct investment
portfolio with modest capital requirements.
With a growing EBITDA margin and c.£35million of cash on the balance sheet,
Mercia is in a strong position for continued organic and corporate growth.
Our purpose - to grow the prosperity of the UK's regions through responsible
investment - remains our guiding principle. To that end I would like to thank
our teams, valued fund investors, portfolio partners and shareholders for
their ongoing long-term commitment and trust.
Mercia is well positioned to deliver sustainable profitable growth and
long-term value creation in the years ahead.
Dr Mark Payton
Chief Executive Officer
Chief Financial Officer's review
Overall financial performance
During a relatively subdued six-month investment period, Mercia has
nevertheless continued to grow its EBITDA and EBITDA margin, by continuing to
focus on opportunities for greater operational efficiency, without restricting
our ability to deploy capital when suitable investment opportunities arise.
Interim dividend
The continued EBITDA growth of the Group has enabled Mercia's Board to declare
a c.5% increase in the interim dividend to 0.39 pence per share (H1
2025: 0.37 pence per share). This interim dividend will be paid on 14
January 2026 to shareholders on the register at close of business on 12
December 2025, with a total dividend payable of c.£1,675,000 (H1
2025: £1,596,000).
Share buyback
In July 2025, the Group announced commencement of a share buyback policy of up
to £3.0million per annum.
During the period to 30 September 2025, the Company purchased 2,951,393
Ordinary shares for cancellation, with an aggregate value of £1.0million.
Alternative performance measures ("APM")
The Directors believe that the reporting of EBITDA and EBITDA margin assist in
providing insightful measures of operating and cash generative performance for
businesses such as Mercia and are APMs of interest to both current and
potential shareholders.
EBITDA is defined as operating profit excluding performance fees net of
attributable costs, depreciation, realised fair value (losses)/gains on the
sale of direct investments, unrealised fair value movement in direct
investments, share-based payments charge, amortisation of intangible assets
and movement in the fair value of deferred consideration.
EBITDA margin is defined as EBITDA divided by revenue (excluding performance
fees net of attributable costs).
Results reported on an APM basis are denoted by ¹ throughout this review.
Unaudited Unaudited Audited
Six months ended Six months ended Year
30 September 30 September ended
2025 2024 31 March
£'000 £'000 2025
£'000
Revenue(1) 17,201 17,908 34,416
Administrative expenses(1) (12,977) (14,192) (26,808)
EBITDA(1) 4,224 3,716 7,608
Performance fees - - 785
Variable compensation attributable to performance fees - - (628)
EBITDA(1) including performance fees net of costs 4,224 3,716 7,765
Depreciation (287) (302) (598)
Realised fair value loss on sale of a direct investment - - (278)
Unrealised fair value movement in direct investments (340) 185 274
Share-based payments charge (329) (478) (938)
Amortisation of intangible assets (1,495) (1,495) (2,989)
Movement in fair value of deferred consideration - (295) (454)
Operating profit 1,773 1,331 2,782
Net finance income 687 1,102 2,570
Profit before taxation 2,460 2,433 5,352
Taxation (781) (657) (1,897)
Profit and total comprehensive income 1,679 1,776 3,455
A reconciliation of these results prepared in accordance with International
Financial Reporting Standards ("IFRS") to those presented on an APM basis is
as follows:
Six months ended 30 September 2025
IFRS as reported Depreciation APM basis(1)
£'000 £'000 £'000
Administrative expenses (13,264) 287 (12,977)
Depreciation - (287) (287)
Six months ended 30 September 2024
IFRS as reported Depreciation APM basis(1)
£'000 £'000 £'000
Administrative expenses (14,494) 302 (14,192)
Depreciation - (302) (302)
Year ended 31 March 2025
IFRS as reported Performance fees Depreciation APM basis(1)
£'000 £'000 £'000 £'000
Revenue 35,201 (785) - 34,416
Administrative expenses (28,034) 628 598 (26,808)
Depreciation - - (598) (598)
Revenue (1)
Revenue decreased 3.9% compared to the corresponding period in 2024 to
£17,201,000 (H1 2025: £17,908,000), and comprised fund management related
fees, initial management fees from equity investment rounds, arrangement fees
from loans, investment director monitoring fees, sundry business services
income and VCT share offer related fees.
The majority of the relatively small reduction in revenue was due to lower
capital deployment and the associated transaction related fees.
Administrative expenses (1)
Administrative expenses, excluding depreciation, decreased 8.6% to
£12,977,000 (H1 2025: £14,192,000) and comprised predominantly
staff-related, office, marketing, professional adviser and VCT share offer
related costs.
The reduction was largely due to lower staff headcount and recruitment costs
than during the corresponding period in 2024, when there had been a material
hiring increase following significant new fund mandate wins.
EBITDA
EBITDA increased 13.7% to £4,224,000 (H1 2025: £3,716,000), equating to an
EBITDA margin of 24.6% (H1 2025: 20.8%; FY 2025: 22.1%), with the increase
largely achieved through operational efficiencies.
Net finance income
Total gross finance income of £729,000 (H1 2025: £1,128,000) arose almost
entirely from interest receivable on cash deposits (as shown in note 8 of the
summary financial information). Finance costs of £42,000 (H1 2025: £26,000)
comprised interest payable on office leases and the Group's staff electric car
scheme.
Unrealised fair value movement in direct investments
Unaudited Unaudited Audited
Six months ended Six months ended Year
30 September 30 September ended
2025 2024 31 March
£'000 £'000 2025
£'000
Investment movements excluding cash invested and realisations:
Unrealised gains on the revaluation of direct investments 4,261 424 2,378
Unrealised losses on the revaluation of direct investments (4,601) (239) (2,104)
Net unrealised fair value movement (340) 185 274
The net unrealised fair value movement in direct investments resulted in a
£340,000 decrease (H1 2025: £185,000 increase) and as at 30 September 2025,
the fair value of the Group's direct investment portfolio was £131,100,000
(FY 2025: £125,960,000).
Unrealised fair value gains arose in four (H1 2025: three) of the Group's
direct investments. The largest unrealised fair value gain was in respect of
Medherant Limited, which accounted for £3,472,000 of the total (H1 2025:
£93,000 unrealised fair value gain in respect of VirtTrade Limited).
There were five (H1 2025: two) unrealised fair value losses, the largest being
£1,639,000 which arose in respect of VirtTrade Limited (H1 2025: £65,000
unrealised fair value loss in respect of Impression Technologies Limited).
Share-based payments charge
The £329,000 non-cash charge (H1 2025: £478,000) arose from the total number
of both issued and vested share options held by employees throughout the
Group.
Amortisation of intangible assets
The amortisation charge for the period of £1,495,000 (H1 2025: £1,495,000)
represents the continuing amortisation of the acquired intangible assets of
FDC and the VCT fund management business.
Taxation
The components of the Group's tax charge are shown in note 9 of the summary
financial information. The overall tax charge for the period comprises a
corporation tax charge on taxable profits, partially offset by the continued
unwinding of the deferred tax liability in respect of the intangible assets
which arose on the acquisition of FDC and the VCT fund management business.
Profit and total comprehensive income for the period
Profit and total comprehensive income for the period is £1,679,000 (H1 2025:
£1,776,000), resulting in a basic earnings per Ordinary share of 0.39 pence
(H1 2025: 0.41 pence).
Summarised statement of financial position
Unaudited Unaudited Audited
As at As at As at
30 September 30 September 31 March
2025 2024 2025
£'000 £'000 £'000
Goodwill and intangible assets 31,811 34,801 33,307
Direct investment portfolio 131,100 120,932 125,960
Other non-current assets, trade and other receivables 4,507 4,285 4,129
Cash and cash equivalents 34,469 46,214 40,093
Total assets 201,887 206,232 203,489
Trade, other payables and lease liabilities (12,103) (12,883) (12,538)
Deferred consideration - (2,575) -
Deferred taxation (2,671) (3,419) (3,044)
Total liabilities (14,774) (18,877) (15,582)
Net assets 187,113 187,355 187,907
Net assets per share (pence) * 43.4p 43.4p 43.6p
* 431,317,067 Ordinary shares, excluding those held in treasury, has been
used as the denominator for calculating net assets per share as at 30
September 2025. 431,292,375 Ordinary shares, excluding those held in treasury,
has been used as the denominator for calculating the comparative net assets
per share as at 30 September 2024. 431,336,370 Ordinary shares, excluding
those held in treasury, has been used as the denominator for calculating the
comparative net assets per share as at 31 March 2025.
Intangible assets
The Group's intangible assets consist of acquired goodwill and the intangible
assets recognised on the acquisition of FDC and the VCT fund management
business.
Direct investment portfolio
During the period, Mercia's direct investment portfolio increased from
£125,960,000 as at 31 March 2025 (H1 2025: £116,861,000 as at 31 March 2024)
to £131,100,000 as at 30 September 2025 (H1 2025: £120,932,000 as at 30
September 2024), a 4.1% increase (H1 2025: 3.5% increase).
The Group invested £5,480,000 net (H1 2025: £3,886,000 net; FY 2025:
£9,704,000 net) into five direct investments (H1 2025: four direct
investments; FY 2025: seven direct investments).
Cash and cash equivalents
At the period end, Mercia had cash and cash equivalents totalling
£34.5million (H1 2025: £46.2million; FY 2025: £40.1million).
The Group continues to have limited working capital needs due to the nature of
its business and during the period cash generated from operating activities
totalled £1.5million (H1 2025: £4.0million; FY 2025: £9.4million).
As at 30 September 2025, the Group's cash and cash equivalents were spread
across four leading United Kingdom banks and a BlackRock Sterling money market
fund, earning an average overall yield of c.4%.
The summarised movements in the Group's cash and cash equivalents during the
period are shown below.
Unaudited Unaudited Audited
Six months ended Six months ended Year
30 September 30 September ended
2025 2024 31 March
£'000 £'000 2025
£'000
Opening cash and cash equivalents 40,093 46,940 46,940
Cash generated from operating activities 1,474 3,995 9,409
Corporation tax (paid)/receipt (1,527) 162 (690)
Net cash used in direct investment activities (5,470) (3,886) (8,516)
Deferred consideration paid in respect of acquisitions - - (2,733)
Cash inflow from other investing activities 466 1,030 1,935
Purchase of Ordinary shares into treasury - (1,834) (1,836)
Purchase of Ordinary shares for cancellation (965) - -
Net cash generated from/(used in) other financing activities 398 (193) (4,416)
Closing cash and cash equivalents 34,469 46,214 40,093
Outlook
The Group's first-half performance continues to demonstrate Mercia's robust
fundamentals with growth in EBITDA and EBITDA margin. This continued growth,
alongside the cash generative nature of Mercia's fund management activities,
supports a c.5% increase in the interim dividend to 0.39 pence per share.
We remain confident that the current momentum will continue during the second
half of this financial year.
Martin Glanfield
Chief Financial Officer
Summary Financial Information
Consolidated statement of comprehensive income
For the six months ended 30 September 2025
Note Unaudited Unaudited Audited
Six months ended Six months ended Year
30 September 30 September ended
2025 2024 31 March
£'000 £'000 2025
£'000
Revenue 5 17,201 17,908 35,201
Administrative expenses 7 (13,264) (14,494) (28,034)
Realised fair value gain on sale of a direct investment 6 - - (278)
Unrealised fair value movement in direct investments 6 (340) 185 274
Share-based payments charge (329) (478) (938)
Amortisation of intangible assets (1,495) (1,495) (2,989)
Movement in fair value of deferred consideration - (295) (454)
Operating profit 1,773 1,331 2,782
Finance income 8 729 1,128 2,626
Finance expense (42) (26) (56)
Profit before taxation 2,460 2,433 5,352
Taxation 9 (781) (657) (1,897)
Profit and total comprehensive income 1,679 1,776 3,455
Basic earnings per Ordinary share (pence) 10 0.39 0.41 0.80
Diluted earnings per Ordinary share (pence) 10 0.38 0.40 0.80
All results derive from continuing operations.
Consolidated statement of financial position
As at 30 September 2025
Note Unaudited Unaudited Audited
As at As at As at
30 September 30 September 31 March
2025 2024 2025
£'000 £'000 £'000
Assets
Non-current assets
Goodwill 21,126 21,126 21,126
Intangible assets 10,685 13,675 12,181
Property, plant and equipment 323 183 153
Right-of-use assets 1,101 871 727
Investments 12 131,100 120,932 125,960
Total non-current assets 164,335 156,787 160,147
Current assets
Trade and other receivables 3,083 3,231 3,249
Cash and cash equivalents 13 34,469 46,214 40,093
Total current assets 37,552 49,445 43,342
Total assets 201,887 206,232 203,489
Current liabilities
Trade and other payables 14 (10,949) (12,035) (11,780)
Lease liabilities (516) (403) (425)
Deferred consideration - (2,575) -
Total current liabilities (11,465) (15,013) (12,205)
Non-current liabilities
Lease liabilities (638) (445) (333)
Deferred taxation 15 (2,671) (3,419) (3,044)
Total non-current liabilities (3,309) (3,864) (3,377)
Total liabilities (14,774) (18,877) (15,582)
Net assets 187,113 187,355 187,907
Equity
Issued share capital 16 4 4 4
Share premium 83,775 83,775 83,775
Treasury reserve 17 (3,956) (4,925) (4,911)
Other distributable reserve 18 51,902 56,966 55,370
Retained earnings 48,890 45,532 47,211
Share-based payments reserve 6,498 6,003 6,458
Total equity 187,113 187,355 187,907
The accompanying notes are an integral part of these condensed consolidated
interim financial statements.
The condensed consolidated interim financial statements of Mercia Asset
Management PLC were approved by the Board of Directors on 1 December 2025 and
authorised for issue. They were signed on its behalf by:
Dr Mark Payton
Martin Glanfield
Chief Executive Officer
Chief
Financial Officer
Consolidated statement of cash flows
For the six months ended 30 September 2025
Note Unaudited Unaudited Audited
Six months ended Six months ended Year
30 September 30 September ended
2025 2024 31 March
£'000 £'000 2025
£'000
Cash flows from operating activities:
Operating profit 1,773 1,331 2,782
Adjustments to reconcile operating profit to cash generated from operating
activities:
Depreciation of property, plant and equipment 55 50 103
Depreciation of right-of-use assets 232 252 495
Realised fair value loss on sale of a direct investment 6 - - 278
Unrealised fair value movement in direct investments 6 340 (185) (274)
Share-based payments charge 329 478 938
Amortisation of intangible assets 1,495 1,495 2,989
Movement in fair value of deferred consideration - 295 454
Working capital adjustments:
Decrease/(increase) in trade and other receivables 166 740 (26)
(Decrease)/increase in trade and other payables (2,916) (461) 1,670
Cash generated from operating activities 1,474 3,995 9,409
Corporation tax (paid)/received (1,527) 162 (690)
Net cash (used in)/generated from operating activities (53) 4,157 8,719
Cash flows from direct investment activities:
Sale of direct investments 12 - - 601
Purchase of direct investments 12 (5,830) (3,886) (9,704)
Investee company loan repayment 12 350 - -
Investee company loan interest received 8 10 - 587
Net cash used in direct investment activities (5,470) (3,886) (8,516)
Cash flows from other investing activities:
Interest received from cash and cash equivalents 691 1,135 2,063
Purchase of property, plant and equipment (225) (105) (128)
Deferred consideration paid in respect of acquisitions - - (2,733)
Net cash generated from/(used in) other investing activities 466 1,030 (798)
Net cash used in total investing activities (5,004) (2,856) (9,314)
Cash flows from financing activities:
Dividends paid 11 - - (3,968)
Purchase of Ordinary shares into treasury - (1,834) (1,836)
Purchase of Ordinary shares for cancellation (965) - -
Proceeds received from the exercise of employee share options 666 66 73
Interest paid (42) (26) (56)
Payment of lease liabilities (226) (233) (465)
Net cash used in financing activities (567) (2,027) (6,252)
Net decrease in cash and cash equivalents (5,624) (726) (6,847)
Cash and cash equivalents at the beginning of the period 40,093 46,940 46,940
Cash and cash equivalents at the end of the period 13 34,469 46,214 40,093
Consolidated statement of changes in equity
For the six months ended 30 September 2025
Issued share Share Treasury Other distributable Retained Share-based payments
capital premium Reserve reserve earnings reserve Total
£'000 £'000 £'000 £'000 £'000 £'000 £'000
As at 1 April 2024 (audited) 4 83,775 (3,188) 59,338 43,756 5,556 189,241
Profit and total comprehensive income for the period - - - - 1,776 - 1,776
Purchase of Ordinary shares into treasury - - (1,834) - - - (1,834)
Final dividend - - - (2,372) - - (2,372)
Exercise of share options - - 97 - - (31) 66
Share-based payments charge - - - - - 478 478
As at 30 September 2024 (unaudited) 4 83,775 (4,925) 56,966 45,532 6,003 187,355
Profit and total comprehensive income for the period - - - - 1,679 - 1,679
Interim dividend - - - (1,596) - - (1,596)
Exercise of share options - - 14 - - (5) 9
Share-based payments charge - - - - - 460 460
As at 31 March 2025 (audited) 4 83,775 (4,911) 55,370 47,211 6,458 187,907
Profit and total comprehensive income for the period - - - - 1,679 - 1,679
Purchase of Ordinary shares for cancellation - - - (967) - - (967)
Final dividend - - - (2,501) - - (2,501)
Exercise of share options - - 955 - - (289) 666
Share-based payments charge - - - - - 329 329
As at 30 September 2025 (unaudited) 4 83,775 (3,956) 51,902 48,890 6,498 187,113
1. General information
Mercia Asset Management PLC (the "Group", "Mercia") is a public limited
company, incorporated and domiciled in England, United Kingdom and registered
in England and Wales with registered number 09223445. Its Ordinary shares are
admitted to trading on the AIM market of the London Stock Exchange. The
registered office address is Mercia Asset Management PLC, Forward House, 17
High Street, Henley-in-Arden, Warwickshire B95 5AA.
2. Basis of preparation
The financial information presented in these condensed consolidated interim
financial statements constitutes the condensed consolidated financial
statements of Mercia Asset Management PLC and its subsidiaries for the six
months ended 30 September 2025. These condensed consolidated interim financial
statements should be read in conjunction with the Group's Annual Report and
consolidated financial statements for the year ended 31 March 2025, which have
been prepared in accordance with international accounting standards in
conformity with the requirements of the Companies Act 2006, International
Financial Reporting Standards ("IFRS") and the applicable legal requirements
of the Companies Act 2006.
These condensed consolidated interim financial statements and the comparative
financial information presented in these condensed consolidated interim
financial statements for the period ended 30 September 2025 do not constitute
full statutory accounts within the meaning of Section 434 of the Companies Act
2006. The Group's Annual Report and consolidated financial statements for the
year ended 31 March 2025 were approved by the Board on 1 July 2025 and have
been delivered to the Registrar of Companies. The Group's independent
auditor's report on those accounts was unqualified, did not contain an
emphasis of matter paragraph and did not contain any statement under section
498 of the Companies Act 2006.
These condensed consolidated interim financial statements have been prepared
in accordance with International Accounting Standard ("IAS") 34 Interim
Financial Reporting, as adopted for use in the UK.
No new or revised standards or interpretations that have become effective
during the period ended 30 September 2025 have had a material effect on the
financial statements of the Group.
Although not required by statute or regulation, the financial information
contained in these condensed consolidated interim financial statements, which
were approved by the Board on 1 December 2025 and authorised for issue, has
been reviewed by the Group's independent auditor.
3. Going concern
Based on the Group's balance sheet, including its liquidity position at the
period end and its forecast future operating and investment activities, the
Directors have a reasonable expectation that the Group has adequate financial
resources to manage business risks in the current economic environment and
continue in operational existence, for a period of at least 12 months from the
date of this announcement. Accordingly, the Directors continue to adopt the
going concern basis in preparing these condensed consolidated interim
financial statements.
4. Material accounting policies
In the application of the Group's accounting policies, the Directors are
required to make judgements, estimates and assumptions about the carrying
amounts of assets and liabilities that are not readily apparent from other
sources. The estimates and associated assumptions are based on historical
experience and other factors that are considered to be relevant. Actual
results may differ from these estimates. The estimates and underlying
assumptions are reviewed on an ongoing basis. Revisions to accounting
estimates are recognised in the period in which the estimate is revised if the
revision affects only that period, or in the period of the revision and future
periods, if the revision affects both current and future periods.
The principal accounting policies applied in the presentation of the condensed
consolidated interim financial statements of Mercia Asset Management PLC (the
"Group", "Mercia" or the "Company"), including the critical accounting
judgements made by the Directors and the key sources of estimation, are
consistent with those followed in the preparation of the Group's Annual Report
and consolidated financial statements for the year ended 31 March 2025 and
have been consistently applied throughout the period ended 30 September 2025.
5. Segmental reporting
The Group's revenue and profits are derived from its principal activity within
the United Kingdom.
IFRS 8 Operating Segments defines operating segments as those activities of an
entity about which separate financial information is available and which are
evaluated by the Chief Operating Decision Maker to assess performance and
determine the allocation of resources. The Chief Operating Decision Maker has
been identified as the Board of Directors. The Directors are of the opinion
that under IFRS 8 Operating Segments the Group has only one operating segment,
being specialist alternative asset management, because the results of the
Group are monitored on a Group-wide basis. The Board of Directors assesses the
performance of the operating segment using financial information which is
measured and presented in a consistent manner.
An analysis of the Group's revenue is as follows:
Unaudited Unaudited Audited
Six months ended Six months ended Year
30 September 30 September ended
2025 2024 31 March
£'000 £'000 2025
£'000
Fund management fees 12,193 12,362 23,861
Initial management/arrangement fees 1,847 2,524 5,294
Portfolio directors' fees 2,104 2,092 4,162
Other revenue 228 130 299
VCTs share offer fees 829 800 800
VCTs performance fees - - 785
17,201 17,908 35,201
6. Realised fair value loss and unrealised fair value movement in direct
investments
Unaudited Unaudited Audited
Six months ended Six months ended Year
30 September 30 September ended
2025 2024 31 March
£'000 £'000 2025
£'000
Realised fair value loss on sale of a direct investment (note 12) - - (278)
Net unrealised fair value movements in direct investments (note 12) (340) 185 274
(340) 185 (4)
7. Operating profit
Operating profit is stated after charging:
Unaudited Unaudited Audited
Six months ended Six months ended Year
30 September 30 September ended
2025 2024 31 March
£'000 £'000 2025
£'000
Staff costs 9,433 9,747 20,343
Other administrative expenses 3,831 4,747 7,691
Total administrative expenses 13,264 14,494 28,034
8. Finance income
Finance income is derived from:
Unaudited Unaudited Audited
Six months ended Six months ended Year
30 September 30 September ended
2025 2024 31 March
£'000 £'000 2025
£'000
Cash deposits 719 1,128 2,039
Investee company loan interest 10 - 587
Total interest income 729 1,128 2,626
9. Taxation
Unaudited Unaudited Audited
Six months ended Six months ended Year
30 September 30 September ended
2025 2024 31 March
£'000 £'000 2025
£'000
Current tax
UK corporation tax (1,154) (1,030) (2,645)
Deferred tax
Origination and reversal of temporary timing differences 373 373 748
Total tax charge (781) (657) (1,897)
The UK standard rate of corporation tax is 25% (H1 2025: 25%). The deferred
tax credit of £373,000 (H1 2025: £373,000) represents the unwinding of the
deferred tax liabilities which arose in respect of the intangible assets
recognised on the acquisition of Frontier Development Capital Limited and the
VCT fund management business.
10. Earnings per share
Basic earnings per share is calculated by dividing the profit for the
financial period by the weighted average number of Ordinary shares in issue
during the period. Diluted earnings per share is calculated by dividing the
profit for the financial period by the weighted average number of Ordinary
shares outstanding and, when dilutive, adjusted for the effect of all
potentially dilutive shares, including share options, on an as-if-converted
basis. The potential dilutive shares are included in diluted earnings per
share calculations on a weighted average basis for the period. The profit and
weighted average number of shares used in the calculations are set out below:
Unaudited Unaudited Audited
Six months ended Six months ended Year
30 September 30 September ended
2025 2024 31 March
2025
Profit for the financial period (£'000) 1,679 1,776 3,455
Basic weighted average number of Ordinary shares ('000) 431,482 431,850 431,586
Basic earnings per Ordinary share (pence) 0.39 0.41 0.80
Diluted weighted average number of Ordinary shares ('000) 442,496 445,310 434,201
Diluted earnings per Ordinary share (pence) 0.38 0.40 0.80
The calculation of basic and diluted earnings per share is based on the
following weighted average number of Ordinary shares:
Unaudited Unaudited Audited
Six months ended Six months ended Year
30 September 30 September ended
2025 2024 31 March
'000 '000 2025
'000
Weighted average number of shares
Basic 431,482 431,850 431,586
Dilutive impact of employee share options 11,014 13,460 2,615
Diluted weighted average number of Ordinary shares 442,496 445,310 434,201
11. Dividends
An interim dividend for the year ending 31 March 2026 of 0.39 pence per share,
totalling £1,682,000, has been declared after the reporting period end and as
such, has not been included as a liability in these condensed consolidated
financial statements, in accordance with IAS 10.
Details of the dividends declared and paid in the comparative periods are set
out in the Group's consolidated financial statements for the year ended 31
March 2025.
12. Investments
The net change in the value of the direct investment portfolio for the period
is an increase of £5,140,000 (H1 2025: increase of £4,071,000). The table
below reconciles the opening to closing value of investments for both the
current and comparative periods.
Level 1 Level 3 Total financial assets
financial financial
assets assets
£'000 £'000 £'000
As at 1 April 2024 (audited) 782 116,079 116,861
Investments made during the period - 3,886 3,886
Unrealised fair value gains on investments 68 356 424
Unrealised fair value losses on investments - (239) (239)
As at 30 September 2024 (unaudited) 850 120,082 120,932
Investments made during the period - 5,818 5,818
Disposal - (601) (601)
Realised loss on sale of direct investment - (278) (278)
Unrealised fair value gains on investments 102 1,852 1,954
Unrealised fair value losses on investments - (1,865) (1,865)
As at 31 March 2025 (audited) 952 125,008 125,960
Investments made during the period - 5,830 5,830
Investee company loan repayment - (350) (350)
Unrealised fair value gains on investments - 4,261 4,261
Unrealised fair value losses on investments (272) (4,329) (4,601)
As at 30 September 2025 (unaudited) 680 130,420 131,100
Investments held in the Group's direct investment portfolio are carried at
fair value in accordance with IFRS 10 Investment Entity exemption.
The measurement basis for determining the fair value of investments held at
each period end is as follows:
Unaudited Unaudited Audited
As at As at As at
30 September 30 September 31 March
2025 2024 2025
£'000 £'000 £'000
Quoted investment 680 850 952
Cost - price of initial investment 2,250 3,116 2,250
Net asset value 8,704 6,187 8,475
Market based multiple 48,694 46,679 48,613
Price of last investment round 70,772 64,100 65,670
131,100 120,932 125,960
Valuation inputs and sensitivities
The following table summarises quantitative information about the significant
unobservable inputs used in Level 3 fair value measurements as at 30 September
2025 and 31 March 2025.
Valuation technique Significant input Fair value Sensitivity on significant input Fair value impact of sensitivity Fair value impact of sensitivity
as at (+10%) (-10%)
30 September £'000 £'000
2025
£'000
Market based multiple Revenue - multiples are applied to historic or forecast revenues of the 48,694 10% sensitivity applied to the historic or forecast revenue of the portfolio 52,272 44,946
portfolio company, with adjustments made where these revenues are impacted by
company.
one-off or known events, using the latest financial information.
(31 March 2025: 48,613) (31 March 2025: 52,631) (31 March 2025: 44,593)
Calibrated price of last investment round Calibrated enterprise value. 70,722 10% applied to the price of last investment round. 76,202 65,297
(31 March 2025: 65,670) (31 March 2025: 71,022) (31 March 2025: 60,266)
NAV of the underlying fund Reported net asset values of the funds/partnership which the Group holds an 8,704 10% sensitivity applied to the NAV of the funds/partnership. 9,574 7,833
interest in.
(31 March 2025: 8,475) (31 March 2025: 9,325) (31 March 2025: 7,629)
13. Cash and cash equivalents
Unaudited Unaudited Audited
As at As at As at
30 September 30 September 31 March
2025 2024 2025
£'000 £'000 £'000
Total cash and cash equivalents 34,469 46,214 40,093
14. Trade and other payables
Unaudited Unaudited Audited
As at As at As at
30 September 30 September 31 March
2025 2024 2025
£'000 £'000 £'000
Trade payables 218 190 246
Accruals and deferred income 5,905 6,842 8,384
Corporation tax 26 - 399
Dividend payable 2,501 2,372 -
Other payables 1,814 1,928 2,262
Other taxation and social security 485 703 489
10,949 12,035 11,780
15. Deferred taxation
Unaudited Unaudited Audited
As at As at As at
30 September 30 September 31 March
2025 2024 2025
£'000 £'000 £'000
Deferred tax liability 2,671 3,419 3,044
Under IAS 12 Income Taxes, provision is made for the deferred tax liability
associated with the recognition of intangible assets arising as part of the
acquisitions of Frontier Development Capital Limited and the VCT fund
management contracts.
As at 30 September 2025, the deferred tax liability has been calculated using
the tax rate of 25%.
16. Issued share capital
Unaudited Unaudited Audited
Six months ended Six months ended Year ended
30 September 2025 30 September 2024 31 March 2025
Number £'000 Number £'000 Number £'000
Allotted and fully paid
As at the beginning of the period 446,679,523 4 446,679,523 4 446,679,523 4
Ordinary shares cancelled during the period (2,951,393) - - - - -
As at the end of the period 443,728,130 4 446,679,523 4 446,679,523 4
During the period, 2,951,393 Ordinary shares were repurchased and cancelled in
accordance with the Group's new annual share buyback policy; see note 18. The
outstanding Ordinary shares as at 30 September 2025, being 431,317,067, are
entitled to one vote each and have equal rights as to dividends. The Ordinary
shares are not redeemable.
17. Treasury reserve
Unaudited Unaudited Audited
30 September 2025 30 September 2024 31 March 2025
Number £'000 Number £'000 Number £'000
As at the beginning of the period 15,343,153 4,911 10,359,708 3,188 10,359,708 3,188
Purchase of Ordinary shares into treasury - - 5,326,380 1,834 5,326,380 1,836
Satisfaction of employee share options (2,932,090) (955) (298,940) (97) (342,935) (113)
As at the end of the period 12,411,063 3,956 15,387,148 4,925 15,343,153 4,911
18. Other distributable reserve
Unaudited Unaudited Audited
Six months ended Six months ended Year ended
30 September 30 September 31 March
2025 2024 2025
£'000 £'000 £'000
As at the beginning of the period 55,370 59,338 59,338
Dividends (2,501) (2,372) (3,968)
Purchase of Ordinary shares for cancellation (967) - -
As at the end of the period 51,902 56,966 55,370
19. Fair value measurements
The fair values of the Group's financial assets and liabilities are considered
a reasonable approximation to the carrying values shown in the consolidated
statement of financial position. Subsequent to their initial recognition at
fair value, measurements of movements in fair values of financial instruments
are grouped into Levels 1 to 3, based on the degree to which the fair value is
observable. The fair value hierarchy used is outlined in more detail in note 2
to these condensed consolidated financial statements.
The following table gives information about how the fair values of these
financial assets and financial liabilities are determined and presents the
Group's assets measured at fair value as at 30 September 2025. There have been
no movements in financial assets or financial liabilities between levels
during the current or comparative periods. The table in note 12 sets out the
movement in the Level 1 and 3 financial assets from the start to the end of
the period.
Unaudited Unaudited Audited
As at As at As at
30 September 30 September 31 March
2025 2024 2025
£'000 £'000 £'000
Assets:
Financial assets at fair value through profit or loss - direct investment
portfolio
Level 1 680 850 952
Level 2 - - -
Level 3 130,420 120,082 125,008
131,100 120,932 125,960
Unaudited Unaudited Audited
As at As at As at
30 September 30 September 31 March
2025 2024 2025
£'000 £'000 £'000
Liabilities:
Financial liabilities at fair value through profit or loss - deferred
consideration
Level 1 - - -
Level 2 - - -
Level 3 - 2,575 -
- 2,575 -
The Directors consider that the carrying amounts of financial assets and
financial liabilities recorded at amortised cost in the financial statements
approximate to their fair values.
Financial instruments in Level 1
The Group had one direct investment quoted on the AIM market of the London
Stock Exchange, MyHealthChecked PLC, which is valued using the closing bid
price as at 30 September 2025.
Financial instruments in Level 3
If one or more of the significant inputs required to fair value an instrument
is not based on observable market data, the instrument is included in Level 3.
Apart from the one investment classified in Level 1, all other investments
held in the Group's direct investment portfolio have been classified in Level
3 of the fair value hierarchy and the individual valuations for each of the
companies have been arrived at using appropriate valuation techniques.
The Group has adopted the International Private Equity and Venture Capital
Valuation Guidelines for determining its valuation techniques, which specify
that the price of a recent investment represents one of a number of inputs
used to arrive at fair value and uses a single classification for all Level 3
investments. Note 2 of the Group's consolidated financial statements for the
year ended 31 March 2025 provides further information on the Group's valuation
methodology, including a detailed explanation of the valuation techniques used
for Level 3 financial instruments.
A reconciliation of the movement in Level 1 and 3 financial assets is
disclosed in note 12.
INDEPENDENT REVIEW REPORT TO MERCIA ASSET MANAGEMENT PLC
Conclusion
Based on our review, nothing has come to our attention that causes us to
believe that the condensed set of financial statements in the half-yearly
financial report for the six months ended 30 September 2025 is not prepared,
in all material respects, in accordance with UK adopted International
Accounting Standard 34 and the London Stock Exchange AIM Rules for Companies.
We have been engaged by the company to review the condensed set of financial
statements in the half-yearly financial report for the six months ended 30
September 2025 which comprises the consolidated statement of comprehensive
income, consolidated statement of financial position, consolidated cashflow
statement, consolidated statement of changes in equity and notes to the
interim financial statements.
Basis for conclusion
We conducted our review in accordance with the International Standard on
Review Engagements (UK) 2410, "Review of Interim Financial Information
Performed by the Independent Auditor of the Entity" ("ISRE (UK) 2410"). A
review of interim financial information consists of making enquiries,
primarily of persons responsible for financial and accounting matters, and
applying analytical and other review procedures. A review is substantially
less in scope than an audit conducted in accordance with International
Standards on Auditing (UK) and consequently does not enable us to obtain
assurance that we would become aware of all significant matters that might be
identified in an audit. Accordingly, we do not express an audit opinion.
As disclosed in note 2, the annual financial statements of the group are
prepared in accordance with UK adopted international accounting standards. The
condensed set of financial statements included in this half-yearly financial
report has been prepared in accordance with UK adopted International
Accounting Standard 34, "Interim Financial Reporting.
Conclusions relating to going concern
Based on our review procedures, which are less extensive than those performed
in an audit as described in the Basis for conclusion section of this report,
nothing has come to our attention to suggest that the directors have
inappropriately adopted the going concern basis of accounting or that the
directors have identified material uncertainties relating to going concern
that are not appropriately disclosed.
This conclusion is based on the review procedures performed in accordance with
ISRE (UK) 2410, however future events or conditions may cause the Group to
cease to continue as a going concern.
Responsibilities of directors
The directors are responsible for preparing the half-yearly financial report
in accordance with the London Stock Exchange AIM Rules for Companies which
require that the half-yearly report be presented and prepared in a form
consistent with that which will be adopted in the Company's annual accounts
having regard to the accounting standards applicable to such annual accounts.
In preparing the half-yearly financial report, the directors are responsible
for assessing the company's ability to continue as a going concern,
disclosing, as applicable, matters related to going concern and using the
going concern basis of accounting unless the directors either intend to
liquidate the company or to cease operations, or have no realistic alternative
but to do so.
Auditor's responsibilities for the review of the financial information
In reviewing the half-yearly report, we are responsible for expressing to the
Company a conclusion on the condensed set of financial statement in the
half-yearly financial report. Our conclusion, including our Conclusions
Relating to Going Concern, are based on procedures that are less extensive
than audit procedures, as described in the Basis for Conclusion paragraph of
this report.
Use of our report
Our report has been prepared in accordance with the terms of our engagement to
assist the Company in meeting the requirements of the rules of the London
Stock Exchange AIM Rules for Companies for no other purpose. No person is
entitled to rely on this report unless such a person is a person entitled to
rely upon this report by virtue of and for the purpose of our terms of
engagement or has been expressly authorised to do so by our prior written
consent. Save as above, we do not accept responsibility for this report to any
other person or for any other purpose and we hereby expressly disclaim any and
all such liability.
BDO LLP
Chartered Accountants
London, UK
1 December 2025
BDO LLP is a limited liability partnership registered in England and Wales (with registered number OC305127).
Directors, secretary and advisers
Directors
Ian Metcalfe OBE
DL
(Non-executive Chair)
Dr Mark
Payton
(Chief Executive Officer)
Martin
Glanfield
(Chief Financial Officer)
Diane Seymour-Williams
(Senior Independent Director)
Janine
Nicholls
(Non-executive Director)
Company secretary Company registration number
Sarah-Louise Anne Williams 09223445
Company website Company registrar
www.mercia.co.uk Equiniti Ltd
Highdown House
Registered office Yeoman Way
Forward House Worthing
17 High Street West Sussex BN99 3HH
Henley-in-Arden
Warwickshire B95 5AA Solicitors
Gowling WLG (UK) LLP
Independent auditor 4 More London Riverside
BDO LLP London SE1 2AU
55 Baker Street
Marylebone Nominated adviser and joint broker
London W1U 7EU Canaccord Genuity Ltd
88 Wood Street
Principal bankers London EC2V 7QR
Barclays Bank PLC
One Snowhill Joint broker
Snow Hill Queensway Singer Capital Markets Advisory LLP
Birmingham B4 6GN 1 Bartholomew Lane
London EC2N 2AX
Lloyds Bank plc
125 Colmore Row Investor relations adviser
Birmingham B3 3SD FTI Consulting Ltd
200 Aldersgate
London EC2A 4HD
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