RNS Number : 8590I

Mobeus Income & Growth VCT PLC

13 August 2019

MOBEUS INCOME & GROWTH VCT PLC

HALF YEAR RESULTS FOR THE SIX MONTHS ENDED 30 JUNE 2019

Mobeus Income & Growth VCT plc ("the Company") today announces its half-year results for the six months ended 30 June 2019.

As at 30 June 2019:

Net assets: £77.13 million

Net asset value ("NAV") per share: 73.00 pence

Financial Highlights

Results for the six months ended 30 June 2019

·      Net asset value total return per share was 11.0% for the six months. 

·      Share price total return per share was 7.3% for the six months.

·      The Company has declared an interim dividend in respect of the current year of 4.00 pence per share to be paid to shareholders on 20 September 2019.

·     The Company realised investments for a total of £10.08 million, a gain of £2.33 million for the six months.

·      The Company invested £2.30 million into two new growth capital investments.

Performance summary

The table below shows the recent past performance of the original fundraising launched in 2004. Performance data for all fundraising rounds and for former Matrix Income & Growth 3 VCT plc ("MIG3 VCT") shareholders are shown in an appendix to the published Half-Year Report and will be available on the Company's website.

Reporting date	Net assets	NAV per Share	Share  Price  (mid-market price)1	Cumulative dividends paid per share	Cumulative total return per share to shareholders2		Dividends per share declared in respect of the period
					(NAV basis)	(Share price basis)
As at	(£m)	(p)	(p)	(p)	(p)	(p)	(p)
30 June 2019	77.13	73.00	61.50	118.80	191.80	180.30	4.003
31 December 2018	75.08	70.25	62.00	113.80	184.05	175.80	7.00
30 June 2018	75.38	69.69	62.00	111.80	181.49	173.80	2.00

1	Source: Panmure Gordon (mid-price).
2	Cumulative total return per share comprises either the NAV per share (NAV basis) or the mid-market price per share (share price basis), plus cumulative dividends paid since launch in 2004.
3	The Directors have declared an interim dividend of 4.00 pence per share in respect of the six months ended 30 June 2019. The dividend will be paid to shareholders on 20 September 2019.

Chairman's Statement

I am pleased to present the Company's Half-Year Report for the six months ended 30 June 2019.

Overview

The half-year has again seen good progress and a very positive return for the period.  This is detailed in the Performance and the Investment Portfolio sections of my statement below.

During the period under review, the Company achieved two profitable realisations and made two new growth capital investments.  Sixteen growth capital investments have now been completed since the 2015 VCT Rule change totalling £18.60 million.

The Investment Adviser continues to report an interesting pipeline of growth capital opportunities.  Meanwhile, the existing more mature portfolio constructed under the previous rules continues to provide a healthy income yield.

As detailed in the Summary of VCT regulation in the Half Year Report, for accounting periods beginning on or after 1 January 2020 the percentage in VCT qualifying holdings which the Company is required to meet will increase from 70% to 80%.  The Board is confident that this higher threshold requirement will be met through a combination of new qualifying investments and further dividends to shareholders.

Performance

The Company's NAV total return per share was 11.0% for the six months to 30 June 2019 (2018:1.3%), which principally reflects a strong underlying performance by the investment portfolio.  The total share price return was 7.3% (2018: 3.2%).  At 30 June 2019, and before taking into account this half year result, your Company was ranked 11th out of 40 generalist VCTs, over the last five years, in the Association of Investment Companies' ("AIC") analysis of NAV Cumulative Total Return, which is considered to be a creditable performance.

Dividends

On 17 May 2019, following shareholder approval at the annual general meeting, the Company paid a final dividend of 5.00 pence per ordinary share, in respect of the financial year ended 31 December 2018.

The Board has declared an interim dividend of 4.00 pence per share in respect of the current financial year, payable to shareholders, whose names appear on the register on 23 August 2019, on 20 September 2019.

Although the Board has achieved the 4.00 pence per share annual dividend target in respect of the current financial year, the gradual move of the portfolio to growth capital investments may make it more difficult to achieve in future financial years without recourse to the Company's reserves.

Investment portfolio

The portfolio achieved a net increase of £5.26 million in unrealised gains and £2.33 million in realised gains over the six-month period. The portfolio was valued at £48.30 million at the period end (31 December 2018: £48.20 million), of which £27.23 million relates to investments made prior to the 2015 rule change and £21.07 million relates to investments made afterwards.

During the six-months under review, the Company invested a total of £2.30 million, (2018: £3.66 million) into two (2018: six) investments. These investments were: Arkk Consulting, a regulatory and reporting requirement service provider; and Parsley Box, a supplier of home delivered ambient ready meals for the elderly. Shortly after the period end, a follow-on investment of £0.58 million was made into existing portfolio company MPB Group, which is a leading online marketplace for used camera and video equipment. The investment was part of a £9.00 million funding round led by Acton Capital at a higher valuation which reflects the considerable growth already achieved by this business as well as its future growth potential.

The Company also realised its investments in Plastic Surgeon and ASL Technology during the six months under review.  £2.23 million was received from the realisation of Plastic Surgeon, generating a gain in the period of £0.63 million and contributing to a multiple on cost of 5.6x over the life of the investment. £5.18 million was received from the realisation of ASL Technology, generating a gain in the period of £1.64 million and a multiple on cost of 2.2x.

The Company also received cash proceeds of £2.67 million during the period, comprising a part disposal of Master Removers Group generating £0.46 million, loan stock repayments from investee companies of £1.80 million, deferred consideration of £0.31 million arising from realisations which occurred in a previous year, and preference share repurchases of £0.10 million.

Details of this investment activity and the performance of the portfolio are contained in the Investment Review and the Investment Portfolio Summary.

Revenue account

The results for the period are set out in the Unaudited Condensed Income Statement and show a revenue return (after tax) of 0.92 pence per share (2018: 0.83 pence per share). The revenue return for the period of £0.98 million has increased from last year's comparable figure of £0.87 million. This is mainly due to an increase in income receivable from loans made to new investee companies as well as some investee companies resuming interest payments.

Planned fundraising

As announced recently, the Board intends to launch an offer for subscription for new ordinary shares in the 2019/20 tax year.  The Board expects to convene a general meeting of shareholders to seek the necessary authority to allot shares and disapply pre-emption rights in connection with the fundraising and will send shareholders a circular in September confirming the amount to be raised and the purposes for which the funds will be used in advance of that meeting for consideration.

If shareholder approval is obtained, the Board expects to be in a position to launch the offer for subscription in October, full details of which will be contained in the prospectus that will be sent to all registered shareholders.

Share buybacks

During the six months under review, the Company bought back and cancelled 1,245,237 of its own shares, representing 1.2% (2018: 0.4%) of the shares in issue at the beginning of the period, at a total cost of £0.76 million (2018: £0.26 million) inclusive of expenses.

After the period end, with effect from 1 August 2019, the Board changed its share buyback policy objective of maintaining the discount to NAV at which the Company's shares may trade in the market from approximately 10% or less, to approximately 5% or less.

In pursuing this policy, the Board's priority will remain to ensure that it is acting prudently and in the interests of the remaining shareholders of the Company.  Share buybacks will continue to be entirely at the Board's discretion and will be subject to the Company having sufficient funds and distributable reserves available for such a purpose.  They will also continue to be subject to the Listing Rules and any applicable law and regulatory restrictions at the relevant time.  Shares bought back in the market will ordinarily be cancelled.

Liquidity

Cash or near cash resources held by the Company as at 30 June 2019 was £28.98 million or 37.6% of net assets.  After the period end, following the investment into MPB and the payment of the interim dividend in September 2019, the pro forma level of liquidity will be £24.17 million or 33.2% of net assets.

Shareholder communications

May I remind you that the Company has its own website which is available at www.migvct.co.uk.

The Investment Adviser held its most recent annual Shareholder Event in February 2019 which, from the feedback submitted, was well received by Shareholders. The event included presentations on the investment activity and performance of all the Mobeus VCTs. I would like to thank those shareholders who attended for helping to make it a success. The next event will take place in February 2020 and shareholders will be sent an invitation.

Outlook

Your Board considers that your Company is well positioned, with the portfolio being comprised of a strong foundation of more mature investments providing an income return, and a younger, growth capital portfolio seeking to achieve scale.  The strong result achieved during the period reflects growth and valuation increases in both elements of the portfolio, underpinned by two profitable realisations. 

While the demand for growth capital investment is strong,  the amount of capital available for investment in the sector is substantial. This is causing increased competition and higher entry valuations for the most attractive investment opportunities. 

The Board and Investment Adviser have carried out an analysis of the possible impact of Brexit on the investment portfolio. The portfolio as a whole is predominantly UK-centric and the greatest risk from Brexit is from the broader impact on the UK economy.  Some value impact is possible over time, but Mobeus believes that the portfolio companies have appropriate plans in place and are as well prepared for Brexit as they can be at this point. 

Finally, I would like to take this opportunity once again to thank all shareholders for their continued support.

Clive Boothman

Chairman

13 August 2019

Investment Policy

The Investment Policy is designed to meet the Company's objective.

Investments

The Company invests primarily in a diverse portfolio of UK unquoted companies. Investments are made selectively across a number of sectors, principally in established companies. Investments are usually structured as part loan stock and part equity in order to produce a regular income stream and to generate capital gains from realisations.

There are a number of conditions within the VCT legislation which need to be met by the Company and which may change from time to time. The Company will seek to make investments in accordance with the requirements of prevailing VCT legislation.

Asset allocation and risk diversification policies, including the size and type of investments the Company makes, are determined in part by the requirements of prevailing VCT legislation. No single investment may represent more than 15% (by VCT tax value) of the Company's total investments at the date of investment.

Liquidity

The Company's cash and liquid funds are held in a portfolio of readily realisable interest bearing investments, deposit and current accounts, of varying maturities, subject to the overriding criterion that the risk of loss of capital be minimised.

Borrowing

The Company's articles of association permit borrowings of amounts up to 10% of the adjusted capital and reserves (as defined therein). However, the Company has never borrowed and the Board would only consider doing so in exceptional circumstances.

Investment Review

Demand for growth capital investment remains strong and there is a significant pipeline of investment opportunities. It is expected that the current pace and quantum of new and follow-on investments will continue in the short to medium-term.

Portfolio review

The portfolio's activity in the six months to 30 June 2019 is summarised as follows:

	2019 £m	2018 £m
Opening portfolio value	48.49*	41.52
New and follow-on investments	2.30	3.66
Disposal proceeds	(10.08)	(0.61)
Net realised gains	2.33	0.60
Valuation movements	5.26	0.18
Portfolio value at 30 June	48.30	45.35

*- Adjusted for deferred consideration recognised in a previous period.

The six months to 30 June 2019 has seen further good progress. The Company made two new growth capital investments of £1.45 million into Arkk Consulting and £0.85 million into Parsley Box during the period.  Arkk Consulting is a regulatory and reporting requirement service and product provider and Parsley Box is a supplier of home delivered ambient ready meals for the elderly. 

The Company also realised its investments in Plastic Surgeon and ASL Technology during the period, receiving a total of £7.41 million in proceeds from these realisations, which contributed to total receipts of £10.08 million during the period.

The investment and divestment activity during the period has increased the proportion of the portfolio comprised of investments made since the 2015 VCT rule change to 43.6% by value at the period end (31 December 2018: 34.3%).

After the period end, the Company invested £0.58 million into MPB Group, an existing portfolio company.  MPB is Europe's leading online marketplace for used camera and video equipment and has more than doubled revenue every year since your Company invested in 2016. This brings the total invested in those growth capital investments made since the introduction of the new VCT regulations in 2015 to £19.18 million.

The portfolio's contribution to the overall results of the VCT is summarised as follows:

Investment Portfolio Capital Movement	2019 £m	2018 £m
Increase in the value of unrealised investments	6.54	3.83
Decrease in the value of unrealised investments	(1.28)	(3.23)
Net increase in the value of unrealised investments	5.26	0.60
Realised gains	2.33	0.18
Realised losses	-	-
Net realised gains in the period	2.33	0.18
Net investment portfolio movement in the period	7.59	0.78

Valuation changes of portfolio investments still held

The principal contributors to the valuation increases of £6.54 million were Auction Technology Group: £1.76 million; MPB Group: £1.15 million; and Proactive Group: £1.03 million.

Auction Technology Group, which the VCT part realised in 2014, is trading well ahead of budget with growth showing in all areas of its business.  MPB Group has grown its revenues substantially and, in July, secured a £9.0 million further investment at a higher valuation, of which £2.0 million was provided by the Mobeus advised VCTs. 

A small number of new growth investments, including Proactive Group, have shown initial uplifts from cost, due in large part to the structure of the Company's investment, but, in some cases, also due to the underlying investee company performance. 

The main reductions within total valuation decreases of (£1.28) million, were Wetsuit Outlet £(0.44) million; SuperCarers £(0.29) million and Virgin Wines £(0.20) million. Wetsuit Outlet continues to have a disappointing period post investment, although it is anticipated that measures recently implemented to restore margins will soon begin to improve profitability.  SuperCarers is performing behind plan and in response is undertaking a restructure of its cost base.  Finally, Virgin Wines is trading on budget, but a reduction in the benchmark sector in which it operates has impacted its valuation for the quarter.

Realised gains and deferred consideration receipts

The Company realised its investments in ASL Technology and Plastic Surgeon during the period under review, generating gains in the period of £1.64 million and £0.63 million respectively from these realisations.  These contributed to a multiple of cost of 2.2x for ASL Technology and 5.6x for Plastic Surgeon over the life of the investments.  The Company also made a part disposal of Master Removers Group realising £0.46 million proceeds and a gain of £0.03 million.  Finally, the Company received a gain of £0.03 million from deferred consideration receipts of £0.31 million arising from disposals in a previous year.

Investment portfolio yield and capital repayments

In the period under review, the Company received the following amounts in interest and dividend income:

Investment Portfolio Yield	2019 £m	2018 £m
Loan interest received in the period	1.20	1.06
Dividends received in the period	0.26	0.28
Total portfolio income in the period1	1.46	1.34
Portfolio Value at 30 June	48.30	45.35
Portfolio Income Yield (Income as a % of Portfolio value at 30 June)	3.0%	3.0%

¹Total portfolio income in the period is generated solely from investee companies within the portfolio. See Note 4 of the Financial Statements for all income receivable by the Company.

In addition to realisation proceeds and deferred consideration receipts outlined earlier, the Company also received loan stock repayments of £1.80 million (as the investments in the five companies preparing to trade repaid the final loan stock sums still payable), and preference share repurchases of £0.10 million, both at cost.

New investments in the half year

The Company made two new investments totalling £2.30 million during the period, as detailed below:

Company	Business	Date of Investment	Amount of new investment (£m)
Arkk Consulting	Regulatory and reporting requirements service provider	May 2019	1.45
Arkk Consulting (trading as Arkk Solutions) provides services and software to enable organisations to remain compliant with regulatory reporting requirements. Arkk was established in 2009 and currently has over 800 clients across 20 countries.  These include more than 80 of the FTSE 350, and half of the largest 20 accountancy firms in the UK. The investment will build on Arkk's reputation and customer base, to target the cloud based period end reporting market by building the sales and marketing team. The company's audited accounts for the year ended 31 December 2017 show turnover of £3.18 million and a profit before interest, tax and amortisation of goodwill of £0.52 million.
Parsley Box	Home delivered ambient ready meals for the elderly	May 2019	0.85
Parsley Box is a UK direct to consumer supplier of home delivered ambient ready meals for the elderly. Founded in 2017, Parsley Box has grown rapidly and has developed a unique meal delivery solution for its customers. The company supplies a diverse range of ambient meals via next day delivery which are easy to store and aim to contribute to a more independent and healthier lifestyle. The investment will scale the company's marketing strategy, enable it to process larger order volumes and continue to build out its team. The company's unaudited accounts for the period ended 31 March 2018 show revenues of £0.25 million and a loss before interest, tax and amortisation of goodwill of £(0.21) million.

Realisations in the half year

The Company realised two investments during the period, as detailed below:

Company	Business	Period of investment	Total cash proceeds over the life of the investment / Multiple over cost
Plastic Surgeon	Supplier of snagging and finishing services	April 2008 to May 2019	£4.15 million 5.6 times cost
The Company sold its remaining investment in Plastic Surgeon to Polygon Group for £2.23 million.  Over the eleven years this investment was held, it generated proceeds of £4.15 million compared to an original investment cost of £0.74 million, which is a multiple on cost of 5.6x and an IRR of 20.5%.
ASL Technology	Printer and photocopier services	December 2010 to June 2019	£6.42 million 2.2 times cost
The Company sold its investment in ASL Technology for £5.18 million.  Over the eight and a half years this investment was held, it generated proceeds of £6.42 million compared to an original investment cost of £2.94 million, which is a multiple on cost of 2.2x and an IRR of 12.6%.

Follow-on investment made after the period end

The Company made one follow-on investment of £0.58 million into an existing portfolio company during the period, as detailed below:

Company	Business	Date of investment	Amount of new investment (£m)
MPB Group	Online marketplace for used camera and video equipment	July 2019	0.58
MPB is Europe's leading online marketplace for used camera and video equipment. Based in Brighton, its custom-designed pricing technology enables MPB to offer both buy and sell services through the same platform and offers a one-stop shop for all its customers. Having expanded into the US (opening a New York office) and German markets as part of the initial VCT investment round, this follow-on investment, alongside funds provided by the Proven VCTs, is to support its continued growth plan. Having doubled its sales over the prior year, this investment will help drive the company's objective to create a £100m+ revenue, internationally diverse and profitable re-commerce business. The company's latest audited accounts for the year ended 31 March 2018 show turnover of £21.71 million and a loss before interest, tax and amortisation of goodwill of £(2.00) million.

Mobeus Equity Partners LLP

Investment Adviser

13 August 2019

Investment Portfolio Summary

as at 30 June 2019

	Market sector	Date of investment	Total book cost	Valuation	Like for like valuation increase/ (decrease) over period1	% value of net assets
Qualifying investments			£'000	£'000
Tovey Management Limited (trading as Access IS) Provider of data capture and scanning hardware	Electronics & electrical equipment	Oct-15	2,979	3,664	(0.9)%	4.8%
Preservica Limited Seller of proprietary digital archiving software	Software and Computer Services	Dec-15	2,099	3,125	13.4%	4.1%
MPB Group Limited Online marketplace for used photographic and video equipment	General retailers	Jun-16	1,324	2,944	63.7%	3.8%
Virgin Wines Holding Company Limited Online wine retailer	General retailers	Nov-13	2,439	2,798	(6.6)%	3.6%
EOTH Limited (trading as Equip Outdoor Technologies) Branded outdoor equipment and clothing	General retailers	Oct-11	1,000	2,479	3.9%	3.2%
Pattern Analytics Limited (trading as Biosite) Workforce management and security services for the construction industry	Software and Computer Services	Nov-16	1,584	2,434	4.0%	3.2%
Vectair Holdings Limited Designer and distributor of washroom products	Support services	Jan-06	138	2,362	17.0%	3.1%
Proactive Group Holdings Inc Provider of media services and investor conferences for companies primarily listed on secondary public markets	General financial	Jan-18	926	2,331	79.2%	3.0%
Vian Marketing Limited (trading as Red Paddle Co) Design, manufacture and sale of stand-up paddleboards and windsurfing sails	Leisure goods	Jul-15	1,189	1,997	9.5%	2.6%
CGI Creative Graphics International Limited Vinyl graphics to global automotive, recreational vehicle and aerospace markets	General Industrials	Jun-14	1,808	1,795	-	2.3%
Master Removers Group 2019 Limited (formerly Master Removers Group) (trading as Anthony Ward Thomas, Bishopsgate and Aussie Man & Van) A specialist logistics, storage and removals business	Support services	Dec-14	419	1,588	19.9%	2.1%
Media Business Insight Holdings Limited A publishing and events business focused on the creative production industries	Media	Jan-15	2,518	1,586	7.1%	2.1%
My Tutorweb Limited Digital marketplace connecting school pupils seeking one-to-one online tutoring	Support services	May-17	1,534	1,534	-	2.0%
Tharstern Group Limited Software based management information systems	Software and computer services	Jul-14	1,377	1,452	7.6%	1.9%
Arkk Consulting Limited Provider of services and software to enable organisations to remain compliant with regulatory reporting requirements	Software and computer services	May-19	1,447	1,447	New investment	1.8%
Ibericos Etc. Limited (trading as Tapas Revolution) Spanish restaurant chain	Travel & Leisure	Jan-17	1,245	1,195	(11.7)%	1.5%
Manufacturing Services Investment Limited (trading as Wetsuit Outlet) Online retailer in the water sports market	General retailers	Jul-17	2,174	933	(22.6)%	1.2%
Buster and Punch Holdings Limited Industrial inspired lighting and interiors retailer	General retailers	Mar-17	668	1,081	24.8%	1.4%
Blaze Signs Holdings Limited Manufacturer and installer of signs	Support services	Apr-06	492	1,016	(2.3)%	1.3%
Rota Geek Limited Workforce management software	Support services	Aug-18	571	903	0.9%	1.2%
RDL Corporation Limited Recruitment consultants for the pharmaceutical, business intelligence and IT industries	Support services	Oct-10	1,558	900	20.6%	1.2%
Parsley Box Limited Supplier of home delivered ambient ready meals for the elderly	General retailers	May-19	854	854	New investment	1.1%
Kudos Innovations Limited Online platform that provides and promotes research dissemination	Support services	Nov-18	421	841	100.0%	1.1%
Redline Worldwide Limited Provider of security services to the aviation industry and other sectors	Support services	Feb-16	1,088	541	(20.1)%	0.7%
BookingTek Limited Direct booking software for hotel groups	Software and computer services	Oct-16	771	193	-	0.3%
Veritek Global Holdings Limited Maintenance of imaging equipment	Support services	Jul-13	2,045	168	1192.3%	0.2%
Jablite Holdings Limited Manufacturer of expanded polystyrene products	Construction and materials	Apr-15	502	163	-	0.2%
Super Carers Limited Online platform that connects people seeking home care from experienced independent carers	Support services	Mar-18	580	145	(66.7)%	0.2%
Racoon International Group Limited Supplier of hair extensions, hair care products and training	Personal goods	Dec-06	350	-	-	0.0%
CB Imports Group Limited (trading as Country Baskets) Importer and distributor of artificial flowers and floral sundries	General retailers	Dec-09	1,213	-	-	0.0%
Total qualifying investments			37,313	42,469		55.2%
Non-qualifying investments
Turner Topco Limited (trading as Auction Technology Group) Saas based online auction marketplace platform	Media	Oct-08	2,501	3,817	85.9%	4.9%
Media Business Insight Limited A publishing and events business focused on the creative production industries	Media	Jan-15	765	830	7.1%	1.1%
Manufacturing Services Investment Limited (trading as Wetsuit Outlet) Online retailer in the water sports market	General retailers	Jul-17	571	571	-	0.7%
EOTH Limited (trading as Equip Outdoor Technologies) Branded outdoor equipment and clothing	General retailers	Oct-11	298	324	-	0.4%
Tovey Management Limited (trading as Access IS) Provider of data capture and scanning hardware	Electronics and electronic equipment	Oct-15	285	285	-	0.4%
Hollydale Management Limited2 Company seeking to carry on a business in the food sector	Company preparing to trade	Mar-15	586	-	-	0.0%
Backhouse Management Limited2 Company seeking to carry on a business in the motor sector	Company preparing to trade	Apr-15	605	-	-	0.0%
Barham Consulting Limited2 Company seeking to carry on a business in the catering sector	Company preparing to trade	Apr-15	605	-	-	0.0%
Creasy Marketing Services Limited2 Company seeking to carry on a business in the textile sector	Company preparing to trade	Apr-15	605	-	-	0.0%
McGrigor Management Limited2 Company seeking to carry on a business in the pharmaceutical sector	Company preparing to trade	Apr-15	605	-	-	0.0%
H Realisations (2018) Limited (formerly Hemmels Limited) (In administration) Company that specialised in the sourcing, restoration, selling and servicing of high price, classic cars	Automobiles and parts	Mar-18	27	-	-	0.0%
Total non-qualifying investments			7,453	5,827		7.5%
Total investment portfolio			44,766	48,296		62.7%
Current asset investments and Cash at bank and in hand3				28,977		37.6%
Total investments			44,766	77,273		100.3%
Other assets				243		0.3%
Current liabilities				(387)		(0.6)%
Net assets				77,129		100.0%
Portfolio split by type:
Investments made prior to 2015 VCT rule change			26,882	27,223		56.4%
Investments made after 2015 VCT rule change			17,884	21,073		43.6%
			44,766	48,296		100.0%

¹ - This percentage change in 'like for like' valuations is a comparison of the 30 June 2019 valuations with the 31 December 2018 valuations having adjusted for partial disposals, loan stock repayments or new investments in the period.

² - An application to strike off each of these companies from the Register of Companies has been submitted, as each has been unable to identify suitable opportunities in which to invest.

³ - Disclosed as Current asset investments and Cash at bank and in hand within Current assets in the Balance Sheet.

Statement of the Directors' Responsibilities 

Responsibility statements

In accordance with Disclosure and Transparency Rule (DTR) 4.2.10, Clive Boothman (Chairman), Bridget Guérin (Chairman of the Nomination & Remuneration and Management Engagement Committees), and Catherine Wall (Chairman of the Audit Committee), being the Directors of the Company, confirm that, to the best of their knowledge:

a)   the condensed set of financial statements, which has been prepared in accordance with Financial Reporting Standard 104 "Interim Financial Reporting" gives a true and fair view of the assets, liabilities, financial position and profit of the Company, as required by DTR 4.2.10;

b)   the Half-Year Management Report which comprises the Chairman's Statement, Investment Policy, Investment Review and Investment Portfolio Summary includes a fair review of the information required by DTR 4.2.7, being an indication of the important events that have occurred during the first six months of the financial year and their impact on the condensed set of financial statements;

c)   a description of the principal risks and uncertainties facing the Company for the remaining six months is set out below, in accordance with DTR 4.2.7; and

d)   there were no related party transactions in the first six months of the current financial year that are required to be disclosed in accordance with DTR 4.2.8.

Principal risks and uncertainties

In accordance with DTR 4.2.7, the Board confirms that the principal risks and uncertainties facing the Company have not changed materially since the publication of the Annual Report and Financial Statements for the year ended 31 December 2018. The Board acknowledges that there is regulatory risk and continues to manage the Company's affairs in such a manner as to comply with section 274 of the Income Tax Act 2007.

The principal risks faced by the Company are:

·      Economic;

·      Loss of approval as a Venture Capital Trust;

·      Investment and strategic;

·      Regulatory;

·      Financial and operating;

·      Market;

·      Asset liquidity;

·      Market liquidity;

·      Counterparty; and

·      Key staff.

A detailed explanation of these risks can be found in the Strategic Report on pages 24 to 25 and in Note 15 on pages 60 - 66 of the Annual Report and Financial Statements for the year ended 31 December 2018, copies of which can be viewed or downloaded from the Company's website: www.migvct.co.uk.

Going concern

The Board has assessed the Company's operation as a going concern. The Company's business activities, together with the factors likely to affect its future development, performance and position are set out in the Half-Year Management Report. The Directors have satisfied themselves that the Company continues to maintain an adequate cash position. The portfolio taken as a whole remains resilient and well-diversified. The major cash outflows of the Company (namely investments, buy-backs and dividends) are within the Company's control.

The Board's assessment of liquidity risk and details of the Company's policies for managing its capital and financial risks are shown in Notes 15 and 16 on pages 60 - 67 of the Annual Report and Financial Statements for the year ended 31 December 2018. Accordingly, the Directors continue to adopt the going concern basis of accounting in preparing the half-year report and annual financial statements.

Cautionary statement

This report may contain forward looking statements with regards to the financial condition and results of the Company, which are made in the light of current economic and business circumstances. Nothing in this report should be construed as a profit forecast.

For and on behalf of the Board:

Clive Boothman

Chairman

13 August 2019

Unaudited Condensed Income Statement

for the six months ended 30 June 2019

		Six months ended 30 June 2019 (unaudited)			Six months ended 30 June 2018  (unaudited)
	Notes	Revenue	Capital	Total	Revenue	Capital	Total
		£	£	£	£	£	£
Unrealised gains on investments	9	-	5,262,037	5,262,037	-	599,601	599,601
Realised gains on investments	9	-	2,332,254	2,332,254	-	181,297	181,297
Income	4	1,561,649	-	1,561,649	1,410,023	-	1,410,023
Investment Adviser's fees	5	(201,020)	(603,058)	(804,078)	(197,296)	(591,886)	(789,182)
Other expenses	-	(205,390)	-	(205,390)	(206,876)	-	(206,876)
Profit on ordinary activities before taxation		1,155,239	6,991,233	8,146,472	1,005,851	189,012	1,194,863
Tax on profit on ordinary activities	6	(171,952)	114,581	(57,371)	(137,808)	112,458	(25,350)
Profit and total comprehensive income		983,287	7,105,814	8,089,101	868,043	301,470	1,169,513
Basic and diluted earnings per share	7	0.92p	6.69p	7.61p	0.83p	0.28p	1.11p

		Year ended 31 December 2018 (audited)
	Notes	Revenue	Capital	Total
		£	£	£
Unrealised gains on investments		-	2,796,306	2,796,306
Realised (losses) on investments		-	(129,014)	(129,014)
Income	4	3,219,294	-	3,219,294
Investment Adviser's fees	5	(390,531)	(1,171,593)	(1,562,124)
Other expenses		(387,232)	-	(387,232)
Profit on ordinary activities before taxation		2,441,531	1,495,699	3,937,230
Tax on profit on ordinary activities	6	(331,416)	222,603	(108,813)
Profit for the year and total comprehensive income		2,110,115	1,718,302	3,828,417
Basic and diluted earnings per share	7	1.98p	1.62p	3.60p

The revenue column of the Income Statement includes all income and expenses. The capital column accounts for the unrealised gains and realised gains/(losses) on investments and the proportion of the Investment Adviser's fee charged to capital.

The total column is the Statement of Total Comprehensive Income of the Company prepared in accordance with Financial Reporting Standards ("FRS"). In order to better reflect the activities of a VCT, and in accordance with the 2014 Statement of Recommended Practice ("SORP") updated in January 2017 by the Association of Investment Companies ("AIC"), supplementary information which analyses the Income Statement between items of a revenue and capital nature has been presented alongside the Income Statement. The revenue column of profit attributable to equity shareholders is the measure the Directors believe appropriate in assessing the Company's compliance with certain requirements set out in Section 274 Income Tax Act 2007.

All the items in the above statement derive from continuing operations of the Company. No operations were acquired or discontinued in the period.

Unaudited Condensed Balance Sheet

as at 30 June 2019

		As at 30 June 2019 (unaudited)		As at 30 June 2018 (unaudited)		As at 31 December 2018
							(audited)
	Notes	£		£			£
Fixed assets
Investments at fair value	9	48,296,028		45,346,808			48,195,051
Current assets
Debtors and prepayments		243,315		231,749			793,953
Current asset investments	10	19,902,109		26,933,900			23,310,315
Cash at bank and in hand	10	9,074,632		3,332,817			3,181,475
		29,220,056		30,498,466			27,285,743
Creditors: amounts falling due within one year		(387,090)		(466,012)			(402,812)
Net current assets		28,832,966		30,032,454			26,882,931
Net assets		77,128,994		75,379,262			75,077,982
Capital and reserves
Called up share capital		1,056,569		1,081,709			1,068,659
Capital redemption reserve		44,644		19,141			32,191
Share premium reserve		43,669,335		43,644,698			43,644,698
Revaluation reserve		7,777,490		3,259,646			5,285,632
Special distributable reserve		7,984,414		17,155,736			12,681,614
Realised capital reserve		13,920,908		7,913,691			8,818,475
Revenue reserve		2,675,634		2,304,641			3,546,713
Equity Shareholders' funds		77,128,994		75,379,262			75,077,982
Basic and diluted net asset value per share	11	73.00p		69.69p			70.25p

Unaudited Condensed Statement of Changes in Equity

for the six months ended 30 June 2019

	Non-distributable reserves				Distributable reserves			Total
	Called up share capital	Capital redemption reserve	Share premium reserve	Revaluation reserve	Special distributable reserve (Note a)	Realised capital reserve (Note b)	Revenue reserve (Note b)
	£	£	£	£	£	£	£	£
At 1 January 2019	1,068,659	32,191	43,644,698	5,285,632	12,681,614	8,818,475	3,546,713	75,077,982
Comprehensive income for the period
Profit for the period	-	-	-	5,262,037	-	1,843,777	983,287	8,089,101
Total comprehensive income for the period	-	-	-	5,262,037	-	1,843,777	983,287	8,089,101
Contributions by and distributions to owners
Shares issued pursuant to application (Note c)	363	-	24,637	-	-	-	-	25,000
Shares bought back (Note d)	(12,453)	12,453	-	-	(764,900)	-	-	(764,900)
Dividends paid	-	-	-	-	(3,443,823)	-	(1,854,366)	(5,298,189)
Total contributions by and distributions to owners	(12,090)	12,453	24,637	-	(4,208,723)	-	(1,854,366)	(6,038,089)
Other movements
Realised losses transferred to special reserve (Note a and e)	-	-	-	-	(488,477)	488,477	-	-
Realisation of previously unrealised gains	-	-	-	(2,770,179)	-	2,770,179	-	-
Total other movements	-	-	-	(2,770,179)	(488,477)	3,258,656	-	-
At 30 June 2019	1,056,569	44,644	43,669,335	7,777,490	7,984,414	13,920,908	2,675,634	77,128,994

Note a): The cancellation of the share premium reserve and capital redemption reserve (as approved at the annual general meeting held on 22 February 2014 and by order of the Court dated 12 March 2014) has increased the Company's special distributable reserve.  The purpose of this reserve is to fund market purchases of the Company's own shares, write off any existing and future losses and for any other corporate purpose, including dividend distributions.  All of this reserve arose from shares issued before 5 April 2014.

Note b): The Realised capital reserve and the Revenue reserve together comprise the Profit and Loss Account of the Company.

Note c): 36,295 shares were allotted during the period, raising net funds of £25,000 for the Company.

Note d): During the period, the Company repurchased 1,245,237 of its own shares at the prevailing market price for a total cost of £764,900, which were subsequently cancelled. This figure is greater than that shown in the Statement of Cash Flows of £887,442 by £122,542. This difference arises from a creditor held at the previous year end of £122,542, which was settled during the period.

Note e): The transfer of £488,477 to the special distributable reserve from the realised capital reserve above is the total of realised losses incurred by the Company this period.

Unaudited Condensed Statement of Changes in Equity

for the six months ended 30 June 2018

	Non-distributable reserves				Distributable reserves
	Called up share capital	Capital redemption reserve	Share premium reserve	Revaluation reserve	Special distributable reserve	Realised capital reserve	Revenue reserve	Total
	£	£	£	£	£	£	£	£
At 1 January 2018	974,257	15,040	35,856,430	2,786,782	19,058,094	8,147,387	3,061,787	69,899,777
Comprehensive income for the period
Profit/(loss) for the period	-	-	-	599,601	-	(298,131)	868,043	1,169,513
Total comprehensive income for the period	-	-	-	599,601	-	(298,131)	868,043	1,169,513
Contributions by and distributions to owners
Shares issued via Offer for Subscription	111,553	-	7,788,268	-	(82,001)	-	-	7,817,820
Shares bought back	(4,101)	4,101	-	-	(257,469)	-	-	(257,469)
Dividends paid	-	-	-	-	(1,083,460)	(541,730)	(1,625,189)	(3,250,379)
Total contributions by and distributions to owners	107,452	4,101	7,788,268	-	(1,422,930)	(541,730)	(1,625,189)	4,309,972
Other movements
Realised losses transferred to special reserve	-	-	-	-	(479,428)	479,428	-	-
Realisation of previously unrealised gains	-	-	-	(126,737)	-	126,737	-	-
Total other movements	-	-	-	(126,737)	(479,428)	606,165	-	-
At 30 June 2018	1,081,709	19,141	43,644,698	3,259,646	17,155,736	7,913,691	2,304,641	75,379,262

The composition of each of these reserves is explained below:

Called up share capital - The nominal value of shares originally issued increased for subsequent share issues either via an Offer for Subscription or reduced due to shares bought back by the Company.

Capital redemption reserve - The nominal value of shares bought back and cancelled is held in this reserve, so that the Company's capital is maintained.

Share premium reserve - This reserve contains the excess of gross proceeds less issue costs over the nominal value of shares allotted under recent Offers for Subscription.

Revaluation reserve - Increases and decreases in the valuation of investments held at the period-end are accounted for in this reserve, except to the extent that the diminution is deemed permanent.       

In accordance with stating all investments at fair value through profit and loss, all such movements through both revaluation and realised capital reserves are shown within the Income Statement for the period.

Special distributable reserve - The cost of share buybacks is charged to this reserve. In addition, any realised losses on the sale or impairment of investments (excluding transaction costs), and 75% of the Investment Adviser fee expense, and the related tax effect, are transferred from the realised capital reserve to this reserve. The cost of any IFA facilitation fee payable as part of the Offer for Subscription is also charged to this reserve.

Realised capital reserve - The following are accounted for in this reserve:

• Gains and losses on realisation of investments;

• Permanent diminution in value of investments;

• Transaction costs incurred in the acquisition of investments;

• 75% of the Investment Adviser fee expense and 100% of any performance incentive fee payable, together with the related tax effect to this reserve in accordance with the policies; and

• Capital dividends paid.

Revenue reserve - Income and expenses that are revenue in nature are accounted for in this reserve together with the related tax effect, as well as income dividends paid that are classified as revenue in nature.

Unaudited Condensed Statement of Cash Flows

for the six months ended 30 June 2019

	Notes	Six months ended 30 June 2019 (unaudited)	Six months ended 30 June 2018 (unaudited)	Year ended 31 December 2018 (audited)
		£	£	£
Cash flows from operating activities
Profit after tax for the financial period		8,089,101	1,169,513	3,828,417
Adjustments for:
Net unrealised gains on investments		(5,262,037)	(599,601)	(2,796,306)
Net (gains)/losses on realisations of investments		(2,332,254)	(181,297)	129,014
Tax charge for current period	6	57,371	25,350	108,813
Decrease in debtors		331,692	291,594	12,155
Increase/decrease in creditors		49,449	13,147	(14,106)
Net cash inflow from operations		933,322	718,706	1,267,987
Corporation tax paid		-	-	(190,374)
Net cash inflow from operating activities		933,322	718,706	1,077,613
Cash flows from investing activities
Purchases of investments	9	(2,300,908)	(3,656,065)	(7,238,337)
Disposals of investments	9	10,013,168	4,058,356	6,396,046
Decrease/(increase) in bank deposits with a maturity over three months		24	19	(130)
Net cash inflow/(outflow) from investing activities		(7,712,284)	402,310	(842,421)
Cash flows from financing activities
Shares issued net of costs as part of Offer for Subscription		25,000	7,817,820	7,817,820
Equity dividends paid	8	(5,298,189)	(3,250,379)	(5,409,897)
Share capital bought back		(887,442)	(252,716)	(982,450)
Net cash (outflow)/inflow from financing activities		(6,160,631)	4,314,725	1,425,473
Net increase in cash and cash equivalents		2,484,975	5,435,741	1,660,665
Cash and cash equivalents at start of period		25,486,108	23,825,443	23,825,443
Cash and cash equivalents at end of period		27,971,083	29,261,184	25,486,108
Cash and equivalents comprise:
Cash at bank and in hand	10	9,074,632	3,332,817	3,181,475
Cash equivalents	10	18,896,451	25,928,367	22,304,633

Notes to the Unaudited Condensed Financial Statements

for the six months ended 30 June 2019

1.

Company Information

Mobeus Income and Growth VCT plc is a public limited company incorporated in England, registration number 5153931. The registered office is 30 Haymarket, London, SW1Y 4EX.

2.

Basis of preparation of the Financial Statements

These Financial Statements prepared in accordance with accounting policies consistent with Financial Reporting Standard 102 ("FRS102"), Financial Reporting Standard 104 ("FRS104") - Interim Financial Reporting, with the Companies Act 2006 and the 2014 Statement of Recommended Practice, 'Financial Statements of Investment Trust Companies and Venture Capital Trusts' ('the SORP') (updated in January 2017) issued by the Association of Investment Companies. The Financial Statements have been prepared on the historical cost basis except for the modification to a fair value basis for certain financial instruments as specified in note 9.

The Half-Year Report has not been audited, nor has it been reviewed by the auditor pursuant to the Financial Reporting Council's (FRC) guidance on Review of Interim Financial Information.

3.

Principal accounting policies

The accounting policies have been applied consistently throughout the period. Full details of principal accounting policies will be disclosed in the Annual Report, while the policy in respect of investments is included within an outlined box at the top of note 9 on investments.

4.

Income

	Six months ended 30 June 2019 (unaudited)	Six months ended 30 June 2018 (unaudited)	Year ended 31 December 2018 (audited)
	£	£	£
Income
- Dividends	260,215	280,543	699,029
- Money-market funds	81,840	53,552	132,832
- Loan stock interest	1,196,940	1,064,680	2,321,462
- Bank deposit interest	15,776	11,248	23,663
- Interest on preference share dividend arrears	6,878	-	40,205
- Other income	-	-	2,103
Total Income	1,561,649	1,410,023	3,219,294

5.

Investment Adviser's fees

In accordance with the policy statement published under "Management and Administration" in the Company's prospectus dated 9 July 2014, the Directors have charged 75% of the Investment Adviser's fees to the capital reserve.  This is in line with the Board's expectation of the long-term split of returns from the investment portfolio of the Company.  For further details, see note 4a on page 50 of the 2018 Annual Report and Financial Statements.

Between 1 April 2018 and 31 March 2019, the Investment Adviser's fee upon the net funds raised from use of the over-allotment facility of £10 million under the 2017/18 Offer was reduced from 2% to 1% for one year.

6.

Taxation

There is a tax charge for the period as the Company has taxable income in excess of deductible expenses.

	Six months ended 30 June 2019 (unaudited)			Six months ended 30 June 2018 (unaudited)			Year ended 31 December 2018 (audited)
	Revenue	Capital	Total	Revenue	Capital	Total	Revenue	Capital	Total
	£	£	£	£	£	£	£	£	£
a)  Analysis of tax charge:
UK Corporation tax on profit for the period	171,952	(114,581)	57,371	137,808	(112,458)	25,350	331,416	(222,603)	108,813
Total current tax charge/(credit)	171,952	(114,581)	57,371	137,808	(112,458)	25,350	331,416	(222,603)	108,813
Corporation tax is based on a rate of 19.0%
b) Profit on ordinary activities before tax	1,155,239	6,991,233	8,146,472	1,005,851	189,012	1,194,863	2,441,531	1,495,699	3,937,230
Profit on ordinary activities multiplied by rate of corporation tax in the UK of 19.0%	219,495	1,328,334	1,547,829	191,112	35,912	227,024	463,892	284,182	748,074
Effect of:
UK dividends	(49,441)	-	(49,441)	(53,304)	-	(53,304)	(132,816)	-	(132,816)
Unrealised gains not taxable	-	(999,787)	(999,787)	-	(113,924)	(113,924)	-	(531,298)	531,298
Realised (gains)/losses not taxable/allowable	-	(443,128)	(443,128)	-	(34,446)	(34,446)	-	24,513	24,513
Unrelieved expenditure	1,898	-	1,898	-	-	-	9	-	9
Underprovision in prior period	-	-	-	-	-	-	331	-	331
Actual current tax charge	171,952	(114,581)	57,371	137,808	(112,458)	25,350	331,416	(222,603)	108,813

7.

Basic and diluted earnings per share

The basic and diluted earnings, revenue return and capital return per share shown below for each period are respectively based on numerators i)-iii), each divided by the weighted average number of share in issue in the period - see iv) below.

		Six months ended 30 June 2019 (unaudited)	Six months ended 30 June 2018 (unaudited)	Year ended31 December 2018 (audited)
		£	£	£
i)	Total earnings after taxation:	8,089,101	1,169,513	3,828,417
	Basic and diluted earnings per share (Note a)	7.61p	1.11p	3.60p
ii)	Revenue earnings from ordinary activities after taxation	983,287	868,043	2,110,115
	Basic and diluted revenue earnings per share (Note b)	0.92p	0.83p	1.98p
	Net unrealised capital gains on investments	5,262,037	599,601	2,796,306
	Net realised capital gains/(losses) on investments	2,332,254	181,297	(129,014)
	Capitalised Investment Adviser's fees less taxation	(488,477)	(479,428)	(948,990)
iii)	Total capital earnings	7,105,814	301,470	1,718,302
	Basic and diluted capital earnings per share (Note c)	6.69p	0.28p	1.62p
iv)	Weighted average number of shares in issue in the period
		106,355,772	104,969,255	106,350,801

Notes:

a)    Basic earnings per share is total earnings after taxation divided by the weighted average number of shares in issue.

b)    Basic revenue earnings per share is the revenue return after taxation divided by the weighted average number of shares in issue.

c)     Basic capital earnings per share is the total capital return after taxation divided by the weighted average number of shares in issue.

8.

Dividends paid

Dividend	Type	For the year ended 31 December	Pence per share	Date paid	Six months ended 30 June 2019 (unaudited) £	Six months ended 30 June 2018 (unaudited) £	Year ended 31 December 2018 (audited) £
Final	Income	2017	1.50p	17 May 2018	-	1,625,189	1,625,190
Final	Capital	2017	0.50p	17 May 2018	-	541,730	541,730
Final	Capital	2017	1.00p*	17 May 2018	-	1,083,460	1,083,459
Interim	Capital	2018	2.00p*	21 September 2018	-	-	2,159,518
Final	Income	2018	1.75p	17 May 2019	1,854,366	-	-
Final	Capital	2018	3.25p*	17 May 2019	3,443,823	-	-
					5,298,189	3,250,379	5,409,897

* - These dividends were paid out of the Company's special distributable reserve.

9.

Investments at fair value

The most critical estimates, assumptions and judgements relate to the determination of the carrying value of investments at "fair value through profit and loss" (FVTPL). All investments held by the Company are classified as FVTPL and measured in accordance with the International Private Equity and Venture Capital Valuation ("IPEV") guidelines, as updated in December 2018. This classification is followed as the Company's business is to invest in financial assets with a view to profiting from their total return in the form of capital growth and income.

Purchases and sales of unlisted investments are recognised when the contract for acquisition or sale becomes unconditional. For investments actively traded on organised financial markets, fair value is generally determined by reference to Stock Exchange market quoted bid prices at the close of business on the balance sheet date. Purchases and sales of quoted investments are recognised on the trade date where a contract of sale exists whose terms require delivery within a time frame determined by the relevant market where the terms of the disposal state that consideration may be received at some future date and, subject to the conditionality and materiality of the amount of deferred consideration, an estimate of the fair value, discounted for the true value of money, may be recognised through the Income Statement. In other cases, the proceeds will only be recognised once the right to receive payment is established and there is no reasonable doubt that payment will be received.

Unquoted investments are stated at fair value by the Directors at each measurement date in accordance with appropriate valuation techniques, which are consistent with the IPEV guidelines:

(i)  Each investment is considered as a whole on a 'unit of account' basis, i.e. that the value of each portfolio company is considered as a whole, alongside consideration of:

The price of new investments made, if deemed to be made as part of an orderly transaction, are considered to be at fair value at the date of the transaction. The inputs that derived the investment price are calibrated within individual valuation models and at subsequent measurement dates, are reconsidered for any changes in light of more recent events or changes in the market performance of the investee company such that the valuation bases used are the following:

-      a multiple basis. The shares may be valued by applying a suitable price-earnings ratio, revenue or gross profit multiple to that company's historic, current or forecast pre-tax earnings before interest and amortisation, or revenue, or gross profit (the ratio used being based on a comparable sector but the resulting value being adjusted to reflect points of difference identified by the Investment Adviser compared to the sector including, inter alia, a lack of marketability).

or:

-      where a company's underperformance against plan indicates a diminution in the value of the investment, provision against the price of a new investment is made, as appropriate.

(ii)   Premiums, to the extent that they are considered capital in nature, and that they will be received upon repayment of loan stock investments are accrued at fair value when the Company receives the right to the premium and when considered recoverable.

(iii)   Where a multiple or the price of recent investment less impairment basis is not appropriate and overriding factors apply, a discounted cash flow, net asset valuation or realisation proceeds basis may be applied.

Capital gains and losses on investments, whether realised or unrealised, are dealt with in the profit and loss and revaluation reserves and movements in the period are shown in the Income Statement.

All investments are initially recognised and subsequently measured at fair value. Changes in fair value are recognised in the Income Statement.

A key judgement made in applying the above accounting policy relates to investments that are permanently impaired. Where the value of an investment has fallen permanently below the price of recent investment, the loss is treated as a permanent impairment and as a realised loss, even though the investment is still held. The Board assesses the portfolio for such investments and, after agreement with the Investment Adviser, will agree the values that represent the extent to which an investment loss has become realised. This is based upon an assessment of objective evidence of that investment's future prospects, to determine whether there is potential for the investment to recover in value.

Accounting standards classify methods of fair value measurement as Levels 1, 2 and 3.  This hierarchy is based upon the reliability of information used to determine the valuation.  All of the unquoted investments are Level 3, i.e. fair value is measured using techniques using inputs that are not based on observable market data.

Movements in investments during the period are summarised as follows:

	Unquoted	Unquoted	Unquoted	Total
	equity	preference	Loan
	shares	shares	stock
	Level 3	Level 3	Level 3
	£	£	£	£
Valuation at 1 January 2019	22,164,255	559,207	25,471,589	48,195,051
Purchases at cost	1,722,308	578,600	-	2,300,908
Sales -proceeds	(4,797,443)	(532,089)	(4,747,421)	(10,076,953)
- realised gains	1,613,454	-	718,800	2,332,254
Unrealised gains on investments in the period	4,616,317	302	928,149	5,544,768
Valuation at 30 June 2019	25,318,891	606,020	22,371,117	48,296,028
Book cost at 30 June 2019	22,576,852	605,708	21,583,721	44,766,281
Permanent impairment in value of investments	(4,220,833)	-	(26,910)	(4,247,743)
Unrealised gains at 30 June 2019	6,962,872	312	814,306	7,777,490
Valuation at 30 June 2019	25,318,891	606,020	22,371,117	48,296,028
Gains on investments
Net realised gains based on historical cost	3,320,484	531,534	1,250,415	5,102,433
Less amounts recognised as unrealised gains in previous years	(1,707,030)	(531,534)	(531,615)	(2,770,179)
Net realised gains based on carrying value at 31 December 2018	1,613,454	-	718,800	2,332,254
Net movement in unrealised gains in the period	4,616,317	302	928,149	5,544,768
Gains on investments for the six months ended 30 June 2019	6,229,771	302	1,646,949	7,877,022

Reconciliation to Condensed Statement of Cash Flows

Net unrealised gains above of £5,544,768 differ from that shown in the Income Statement of £5,262,037.  The difference of £282,731 is deferred consideration in relation to the sale of Entanet Holdings that was recognised in the previous year and was included as a debtor in those year end accounts.  It was subsequently received during this half year.  A further sum of £314,146 was received after the period end on 2 August 2019.  The conditions attached to this sum were not satisfied at the period end date and so this amount has not been recognised in the current period's financial statements.

Sales proceeds above of £10,076,953 are more than that shown in the Statement of Cash Flows od £10,013,168 by £63,785.  This amount is deferred cash proceeds arising from the partial realisation of Master Removers Group which is held within debtors at the period end.

There has been no significant change in the risk analysis as disclosed in Note 15 of the Financial Statements in the Company's 2018 Annual Report. The increase in unrealised valuations of the loan stock investments above reflect the changes in the entitlement to loan premiums, and/or in the underlying enterprise value of the investee company.  The increase does not arise from assessments of credit or market risk upon these instruments.

Level 3 unquoted equity and loan investments are valued in accordance with IPEV guidelines as follows:

	As at 30 June 2019	As at 30 June 2018	As at 31 December 2018
	(unaudited)	(unaudited)	(audited)
		£	£
Multiple of earnings, revenue, or gross margin, as appropriate	45,494,032	38,121,718	45,186,321
Recent investment price	2,300,908	6,393,397	2,217,600
Recent investment price (reviewed for impairment)	145,005	525,014	627,740
Net asset value	163,390	306,679	163,390
Estimated realisation proceeds	192,693	-	-
	48,296,028	45,346,808	48,195,051

10.

Current asset investments and Cash at bank

	As at 30 June 2019 (unaudited)	As at 30 June 2018 (unaudited)	As at  31 December 2018        (audited)
	£	£	£
OEIC Money market funds	18,896,451	25,928,367	22,304,633
Cash equivalents per Statement of Cash Flows	18,896,451	25,928,367	22,304,633
Bank deposits that mature after three months	1,005,658	1,005,533	1,005,682
Current asset investments	19,902,109	26,933,900	23,310,315
Cash at bank	9,074,632	3,332,817	3,181,475

11.

Basic and diluted net asset value per share

	As at 30 June 2019 (unaudited)	As at 30 June 2018 (unaudited)	As at 31 December 2018 (audited)
Net assets	£77,128,994	£75,379,262	£75,077,982
Number of shares in issue	105,656,926	108,170,944	106,865,868
Net asset value per share - basic and diluted	73.00p	69.69p	70.25p

12.

Post balance sheet events

On 10 July 2019, a further £0.58 million was invested into MPB Group Limited, an existing portfolio company.

On 30 July 2019, by the order of the Court at that date, the Company cancelled its share premium reserve and capital redemption reserve.  The balance on these reserves has been transferred to the Company's special reserve.

On 2 August 2019, £0.31 million of contingent consideration was received as part of the sale of Entanet Holdings in August 2017.

13.

Statutory information

The financial information contained in this Half-Year results announcement does not constitute statutory accounts as defined in Section 434 of the Companies Act 2006.  The Financial Statements for the year ended 31 December 2018 have been filed with the Registrar of Companies.  The auditor has reported on these Financial Statements and that report was unqualified and did not contain a statement under either Section 498(2) or 498(3) of the Companies Act 2006.

14.

Half-Year Report

This Half-Year Report will be sent to shareholders and will shortly be made available on the Company's website: www.migvct.co.uk. Further copies are available free of charge from the Company's registered office, 30 Haymarket, London, SW1Y 4EX.

Contact details for further enquiries:

Rob Brittain or Robert King at Mobeus Equity Partners LLP (the Company Secretary) on 020 7024 7600 or by e-mail to vcts@mobeusequity.co.uk

Mobeus Equity Partners LLP (the Investment Adviser) on 020 7024 7600 or by e-mail to info@mobeusequity.co.uk

DISCLAIMER

Neither the contents of the Company's website nor the contents of any website accessible from hyperlinks on the Company's website (or any other website) is incorporated into, or forms part of, this announcement.

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.

END

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