Mercia Asset Management PLC – Preliminary Results

Mercia Asset Management PLC – Preliminary Results

Mercia Asset Management PLC (AIM: MERC) (formerly Mercia Technologies PLC), the proactive, regionally focused specialist asset manager, is pleased to announce its preliminary results for the year ended 31 March 2019.

Name change

·    Company renamed Mercia Asset Management PLC to reflect the evolution of the Group’s core competencies as a proactive, regionally focused specialist asset manager

·    Group’s new domain and website is www.mercia.co.uk

Direct investment portfolio highlights

·    £19.4million invested into 17 portfolio companies during the year including two new direct investments, W2 Global Data Solutions and Locate Bio

·    Net fair value increase of £3.9million (2018: £2.8million)

·    Direct investment portfolio increased to £87.7million (2018: £66.1million)

·    £6.5million syndicated investment into Oxford Genetics

·    Significant commercial progress made by a number of portfolio companies including nDreams, the Group’s largest direct investment

Managed fund developments

·    Third-party funds under management (“FuM”) totalling c.£381million (2018: c.£400million); contributing £9.6million in revenue

FuM reduction reflects the winding down of the RisingStars Growth Fund including returning c.£17million of capital to fund investors

·    Venture FuM £224.1million. RisingStars Growth Fund fully unwound in March 2019, generating IRR of 15% and a total value to paid-in capital (“TVPI”) of 528% for investors

·    Private equity FuM £61.2million. Coalfields Growth Fund has to date generated IRR of 19% and a TVPI of 236% for investors

·    Debt FuM £96.0million. Finance Yorkshire Small Loans Fund winding down generating a 107% return on original fund commitments

Financial highlights

·    Revenue increased 4.7% to £10.7million (2018: £10.2million)

·    Net expenses £1.4million (2018: £0.4million)*

·    Operating profit £2.0million (2018: £1.3million)

·    Profit after tax for the financial year increased to £2.6million (2018: £1.7million)

·    Earnings per share increased to 0.86 pence (2018: 0.55 pence)

·    Net assets £126.1million (2018: £123.5million)

·    Net assets per share grew to 41.6 pence (2018: 40.7 pence)

·    Unrestricted cash and short-term liquidity investments £29.8million (2018: £49.4million)

 

* 2018 revenue included one-off performance-related fund management fees totalling £1.2million

Post year end developments

·    Further funding rounds into Voxpopme, Medherant and Locate Bio, investing £1.3million, £1.5million and £1.8million respectively

·    £0.8million investment into MyLotus developer, Concepta, as part of a £2.3million placing in April 2019

·    £0.5million invested into new direct investment Clear Review, a fast-growing software-as-a-service (“SaaS”) business providing HR management tools 

·    nDreams announced its partnership with global technology company Oculus; developing its first title Phantom: Covert Ops, which has already gained significant industry recognition and won the Game Critics Award for the best VR/AR game at the recent E3 gaming industry Expo in Los Angeles

·    Susan Searle stepped down as Non-executive Chair to focus on her other non-executive roles

·    Ian Metcalfe, Mercia’s Senior Independent Director, appointed Non-executive Chair. An additional Non-executive Director with specialist asset management experience will be appointed in due course

Mark Payton, Chief Executive Officer of Mercia, commented:

“These results mark the acceleration of Mercia’s evolution towards becoming a profitable, proactive and regionally focused specialist asset manager. Across our four asset classes of balance sheet, venture, private equity and debt capital, we recorded our strongest level of deal completions and investments to date.

“We remain focused on progressing the top balance sheet direct investments and the pace and scale at which these are being developed. Since 2014 funds under management have grown from c.£22million to c.£381million, highlighting our track record and ongoing commitment to delivering balance sheet and fund value. With over £500million of assets under management, we are well resourced and have the team in place for our next stage of growth.”

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