TIDMSUPP
RNS Number : 2593B
Schroder UK Public Private Tst plc
30 September 2022
Half Year Report
Schroder UK Public Private Trust plc hereby submits its Half
Year Report for the six months ended 30 June 2022 as required by
the Financial Conduct Authority's Disclosure Guidance and
Transparency Rule 4.2.
The Half Year Report is also available to download from the
Company's webpage. Please click on the following link to view the
document:
http://www.rns-pdf.londonstockexchange.com/rns/2593B_1-2022-9-29.pdf
The Company has submitted a copy of its Half Year Report to the
National Storage Mechanism and it will shortly be available for
inspection at
https://data.fca.org.uk/#/nsm/nationalstoragemechanism
Enquiries:
Schroder Investment Management Limited
Andrew Pearce (Press) 0207 658 2203
John Spedding 0207 658 3206
Schroder UK Public Private Trust plc
Half Year Report and Accounts for the six months ended 30 June
2022
Chairman's Statement
Introduction
I am pleased to present my second report as Chairman covering
the six month period ending 30 June 2022.
Performance and valuation
During the six month period to 30 June 2022, the net asset value
("NAV") per share decreased by 31.8% from 48.08 pence per share to
32.80 pence per share. The share price decreased by 36.1% from
33.10p to 21.15p in the same period.
The majority of the decline in NAV was a consequence of weakness
in the Company's public market holdings in a very challenging
period for equity markets. Against a global backdrop of elevated
energy costs, disrupted supply chains, sustained inflation and
rising interest rates, investor sentiment towards 'growth' stocks
fell sharply in the first half of the year. The Company's listed
holdings were not immune to these pressures.
The Company's private equity holdings were more resilient
against this volatile backdrop, with the exception of Rutherford
Health which was fully written off in June 2022. This was
previously announced to the market and incorporated into the daily
NAV on 6 June 2022.
The decline in the share price of BenevolentAI since the end of
June 2022, details of which may be found in note 10 to the
accounts, has now been well publicised. On 20 September 2022, the
Board announced the discovery of an administrative error by the
Company's outgoing AIFM which resulted in the valuation of this
holding in the daily indicative unaudited NAV being mis-stated. I
would like to assure shareholders that the Board has engaged with
all service providers so that this unfortunate incident is not
repeated.
More details on performance, valuation and portfolio activity
can be found in the Portfolio Manager's Review.
Change of AIFM, Custodian, Fund Administrator and Depositary
The Company announced on 11 July 2022 that, subject to
regulatory approvals, Schroder Unit Trusts Limited would replace
Link Fund Solutions Limited as Alternative Investment Fund Manager.
We are pleased to confirm that regulatory approval has now been
received and that this change is effective from 1 October 2022. In
addition, the Board has appointed HSBC as Custodian and Depositary,
to replace Northern Trust, also effective from 1 October 2022.
Discount management
The share price discount to NAV per share widened from 31.2% to
35.5% during the period.
In the last Annual Report the Board stated that the Company was
in a position to consider buying back shares following the
repayment of outstanding debt. Given the share price performance
and widening discount during the period the Board has been buying
back shares since 9 May 2022 and a total of 770,000 shares were
bought back for cancellation at a cost of GBP170,000 across 12
transactions during the period. Since the end of the period, the
Company has purchased an additional 1,575,000 shares at a cost of
GBP307,000 across 21 trades and will continue to be active in the
market.
Outlook
It is now over two and a half years since the former Portfolio
Manager of the Company resigned and the Board appointed Schroders
as Portfolio Manager. While performance has been challenging during
this time, significant progress has been made in reducing the
prohibitive levels of debt on the balance sheet and rebalancing the
portfolio. Through a combination of selective realisations from the
legacy portfolio and a number of new investments the Portfolio
Manager has stabilised the Company's balance sheet, improved the
quality and diversification of the portfolio and ensured its
ongoing viability.
The Portfolio Manager has now made eight new private equity
investments since taking over management of the Company which
includes two investments made post-period. The Portfolio Manager
continues to reshape the portfolio and align it with its strategy
of aiming to invest in best in class global private companies, at
either the venture or growth stage. Importantly the Portfolio
Manager also continues to focus on extracting the highest possible
value from the positions it inherited and to manage stock-specific
issues, working closely with management teams to navigate the
current environment.
The recent expansion of the investment mandate has resulted in a
global, and thus a wider, pipeline of opportunities. The Company is
now in a better position to take advantage of the international
deal sourcing capability of Schroders and its encouraging long-term
performance record. The Company remains well capitalised and ready
to exploit the most attractive of these opportunities.
Despite the unsettled macroeconomic environment, the Portfolio
Manager remains optimistic about the long-term prospects for the
portfolio. While many areas of private equity will continue to face
significant short-term challenges, other areas are likely to be
more resilient. This resilience is being shown in a number of our
private equity holdings of late. Despite the reasonably short
period of time that many of these investments have been held, the
Portfolio Manager is encouraged by the operational robustness these
businesses are demonstrating despite the prevailing headwinds.
The Board believes that while the period under review has been
challenging, the Company is well placed to produce long-term growth
in future and to provide a compelling vehicle for both
institutional and private investors to gain access to private
equity markets.
Tim Edwards
Chairman
30 September 2022
Portfolio Manager's Review
Summary
-- The Company reported a net asset value ("NAV") of 32.80p per
share as of 30 June 2022, a decrease of 31.8% relative to the NAV
as of 31 December 2021 (48.08p per share) and 17.1% relative to the
NAV as of 31 March 2021 (39.57p per share).
-- The largest detractor to performance was gene sequencing
company Oxford Nanopore, the Company's largest holding, which
declined by 61.8%, generating a market value loss of GBP100.6
million over the half year period (72% of the NAV loss over the
period). Since the end of June, the share price has been relatively
more stable and the company's operational progress has been
encouraging.
-- The Company completed its fifth and sixth new private equity
investments in the leading, dedicated renewed technology
marketplace, Back Market, and in innovative developer of
immunoglobulin E antibodies to treat cancer, Epsilogen, as part of
our strategy to invest in ground-breaking companies.
-- As of 30 June 2022, we believe the Company is well placed to
benefit from the current depressed valuation environment when
making new investments with more than GBP6.7m in cash, an
unutilised loan facility, GBP127.7m in public equity investments
and a healthy pipeline of global venture/growth stage
companies.
Introduction
Economic and market backdrop
The first half of 2022 saw the MSCI All Country World Index's
biggest H1 fall since its inception in 1990. The war in Ukraine has
exacerbated already present inflationary forces. Europe is facing
an acute crisis with energy supplies from Russia under threat.
Interest rates around the world have risen as central banks have
admitted that inflation is more ingrained, rather than just a
series of transient shocks. Incomes are being squeezed; consumer
confidence indicators have fallen; and fears of a recession have
increased. Meanwhile, global IPO activity almost halved in volume
in the first half of 2022.
Despite this challenging backdrop, we remain steadfast in our
long-term investment strategy and believe exciting opportunities
will continue to present themselves, but at better valuations.
Portfolio composition and valuation reviews
As of 31 December 2021, the Company had 35 portfolio holdings(1)
including 11 quoted holdings and 24 unquoted holdings. During the
period, the number and composition of holdings was impacted by the
following events:
-- New investment in leading, dedicated renewed technology
marketplace, Back Market (incorporated as Jung S.A.S).
-- New investment in innovative developer of immunoglobulin E
antibodies to treat cancer, Epsilogen Ltd ("Epsilogen").
-- Rutherford Health plc ("Rutherford Health") announced the
withdrawal of its shares from trading on the AQSE Growth Market.
Subsequently, the company was revalued to no value after its Board
resolved to wind-up the company. The Schroders' investment team
spent a considerable amount of time working with the company to
improve its financial situation and operational performance and
explore alternatives but the wind-up could not be avoided.
-- Sale of Seedrs Ltd ("Seedrs").
-- BenevolentAI completed its business combination with Odyssey
Acquisition S.A. ("Odyssey"), a Euronext Amsterdam-listed
investment company.
As of 30 June 2022, the Company ended the period with 34
holdings(2) including 11 quoted holdings and 23 unquoted holdings.
All the Company's quoted holdings were valued using unadjusted
quoted prices. For the unquoted holdings, Link Fund Solutions
Limited ("LFS"), the Company's Alternative Investment Fund Manager
(AIFM), conducted a full valuation review to determine the fair
value of the portfolio as of 30 June 2022.
(1) Excluding 9 holdings with no value. (2) Excluding 11
holdings with no value.
Recent developments
Since 30 June 2022, volatility in the performance of its earlier
stage, loss-making public companies has continued, including Oxford
Nanopore (-7.5%(1) ), BenevolentAI (-47.5%(1) ), Immunocore
(+16.9%(1) ) and IDEX Biometrics (-40.7%(1) ). The Company's more
mature public equity holdings have been more stable, including
Spirent Communications (+5.6%(1) ) and Johnson Matthey (-3.1%(1)
).
The decline in the share price of BenevolentAI since the end of
June 2022, details of which may be found in note 10 to the
accounts, has now been well publicised. The Portfolio Management
team is supporting the Board so that the administrative error by
the Company's outgoing AIFM, which caused the daily indicative
unaudited NAV to be mis-stated, will not be repeated following the
transition of the AIFM role to Schroder Unit Trusts Limited.
In August, the Company completed two further new private equity
life sciences investments, representing combined commitments of
GBP3.7 million. Further details of these new investments are
expected to be disclosed shortly. These two new companies, combined
with the earlier investment in Epsilogen, form the first three
investments of our dedicated life sciences sub-strategy. Our aim is
to build a diversified portfolio of 6-8 healthcare therapeutics
companies addressing key unmet medical needs with a focus on
oncology and the treatment of solid tumours. We plan to make small
initial investments (up to GBP3 million), build a diversified
portfolio, implement prudent capital reserving (up to an additional
GBP3 million) and target an aggregated portfolio to represent 10%
of total investments. We believe this approach balances the
risk-return trade-off of this high potential, yet high risk,
sector.
(1) Share price performance between 30 June 2022 and 23
September 2022.
Financial Performance
Attribution Net
Analysis Public Private (debt)/
(GBPm) equity equity cash Other NAV
Value at 31.12.21 243.3 197.6 (2.9) (1.1) 436.9
+ Investments - 13.9 (13.9) - -
- Realisations
at
value (12.2) (13.6) 25.8 - -
+/- Fair value
gains/
(losses) (116.3) (28.5) - - (144.8)
+/- FX gains/
(losses) 1.5 6.2 - - 7.7
+/- Reclassified
holdings 11.4 (11.4) - - -
+/- Costs and other
movements - - (2.3) 0.3 (2.0)
Value at 30.06.22 127.7 164.2 6.7 (0.8) 297.8
Source: Link Fund Solutions, the Company's AIFM, as of 30 June
2022.
The NAV as of 30 June 2022 was GBP297.8 million or 32.80p per
share, a decrease of 31.8% compared with the NAV as of 31 December
2021 and of 17.1% compared with 31 March 2022.
The half year NAV decrease of -31.8% comprised:
-- Public equity holdings: -26.6%
-- Private equity holdings: -6.5%
-- Foreign exchange: +1.8%
-- Costs and other movements: -0.5%
The Company's public equity holdings saw a decrease in value of
47.8% contributing -26.6% to the half year decrease in NAV. The
largest negative contributor was Oxford Nanopore Technology. The
company's share price declined 61.8% over the half year period,
43.0% and 33.1% over the first and second quarters respectively,
resulting in a total loss of GBP100.6 million. Factors affecting
the stock included a broader sectoral rotation from growth to value
stocks and fears of a potential stock overhang following the expiry
of the post-IPO lockup period at the end of March. From an
operational perspective the company continued to expand its
commercialisation capabilities. Revenue guidance for the core
business of GBP145-160m for 2022 and GBP190-220m for 2023 was
reiterated in September 2022, demonstrating board and management
confidence in continued commercial momentum.
The share price of IDEX Biometrics, the Norwegian developer of
biometric cards, declined 59.2% over the period, a loss of GBP7.0
million. IDEX has continued to deliver on their commercial plans
with three commercial launches of bank cards utilising its
biosensor technology in H1, with a further 8-10 launches expected
over the course of 2022. However, the revenue growth arising from
these launches has been slower than anticipated, and the company
remains unprofitable, so the stock has been affected by the wider
market rotation from growth to value.
The Company's private equity holdings saw a decrease in value of
14.4% contributing -6.5% to the half year decrease in NAV. The
largest negative contributor to unquoted performance was Rutherford
Health, which was fully written-off in June 2022 following news
that the company's Board had resolved to wind-up the company and
appoint the official receiver as liquidator. The revaluation
resulted in a fair value loss of GBP23.6 million. The company is
reported as an unquoted holding following withdrawal of its shares
from trading on the AQSE Growth Market on 24 January 2022. Since
assuming portfolio management of the Company, the Schroders
investment team had spent a considerable amount of time working
with Rutherford to improve its financial situation and operational
performance but the wind-up could not be avoided. A number of
factors contributed to Rutherford's failure, but the flawed
expansion strategy pursued by the company in the initial
development phase from 2015 to 2019 laid the ground for an
unsustainable funding need.
The largest positive contributor to performance was
BenevolentAI, which was revalued following completion of its
business combination with Odyssey Acquisition S.A. ("Odyssey"), a
Euronext Amsterdam-listed investment company. As of 30 June 2022,
the Company's holding in BenevolentAI was valued at GBP32.7 million
based on a share price of EUR8.00, an increase of GBP4.3 million
relative to the holding value of as of 31 December 2021 (GBP28.5
million). However, since the period end, BenevolentAI's share price
has declined 47.5% to EUR4.20 per share, as of 23 September
2022.
The only other private equity holding that experienced a fair
value gain or loss of greater than GBP5 million over the period was
Atom Bank. The Company's AIFM, Link Fund Solutions, revalued the
holding down to reflect deterioration in the U.K. economic and
public market backdrop.
Valuation of new investments
The subset of companies in the portfolio which represent the new
private equity holdings since our appointment as Portfolio Manager
saw a small decrease in value which was immaterial in the context
of the overall portfolio. The AIFM reduced the valuations of
Revolut and Back Market to reflect the performance of their
respective listed market peers which are used as the basis of the
Company's ongoing valuations. Despite what we see as a much-needed
correction in the valuation of high growth public companies, both
businesses are delivering operationally at an underlying level, and
we remain encouraged by their long-term operational and financial
outlook, which should far outweigh any contraction in value of
comparable businesses - a factor anticipated in our original
investment case.
Foreign exchange
Over the half year period, the fair value of investments
denominated in the United States Dollar (USD), Euro (EUD), Swiss
Franc (CHF) and Australian Dollar (AUD) benefited from the
depreciation in the value of the British pound sterling (GBP).
Whereas the investment in IDEX Biometrics, denominated in Norwegian
Krone (NOK), was marginally negatively impacted by the appreciation
of GBP. Overall, changes in foreign exchange rates contributed
+1.8% to the half year change in NAV.
Cash and debt
As of 30 June 2022, the Company held GBP6.7 million in cash with
no funds drawn from the loan facility.
Top 10 Holdings
The Company's top ten holdings as of 30 June 2022 compared with
the respective holding as of 31 December 2021.
Value % of Value % of
as of 31 total as of 30 total
December invest- June invest-
(GBP'000) ments (GBP'000) ments
Oxford Nanopore 162,641 36.9% 62,069 21.3%
Atom Bank 46,209 10.5% 38,090 13.1%
BenevolentAI 28,484 6.5% 32,734 11.2%
AMO Pharma 11,668 2.6% 16,151 5.5%
Reaction Engines 12,500 2.8% 12,500 4.3%
Federated Wireless 8,618 2.0% 12,481 4.3%
Ada Health 9,905 2.2% 10,155 3.5%
HP Environmental
Technologies Fund 10,667 2.4% 10,006 3.4%
Nexeon 7,788 1.8% 8,770 3.0%
Immunocore 21,044 4.8% 8,564 2.9%
Source: Link Fund Solutions, the Company's AIFM, as of 30 June
2022.
Oxford Nanopore
Technology company at the forefront of next generation DNA
sequencing instrumentation
Oxford Nanopore Technologies ("ONT") has developed a new
generation of nanopore-based electronic systems for the analysis of
single molecules, including DNA, RNA and proteins. The handheld
MinION(TM) device, the high-throughput PromethION(TM) and the
GridION(TM) system are used in scientific research, personalised
medicine, crop science, security and defence and environmental
applications.
-- Stock performance disappointed over the period reflecting
changes in the market backdrop including growth to value rotation,
aversion to negative free cashflow businesses, and weaker operating
performance reported at peers.
-- ONT reported its results for the six months to 30 June in
September with good underlying progress:
o Revenues for Life Science Research Tools ("LSRT", the main
business line) up 34% year-on-year to GBP70.6 million
o Gross margin for the LSRT business increased to 54.8%, a good
outturn given supply chain strains and increased component
costs
o Reiterated 2022 LSRT revenue guidance of GBP145-160 million,
representing 20% growth and a strengthening of mix, with slightly
reduced expectations for Covid related revenues, and stronger
growth from target customers
o Reiterated 2023 revenue guidance of GBP190-220 million
o Closing cash balance of greater than GBP600 million which
should be more than adequate to fund the business to
profitability
Atom Bank
Leading UK app-only challenger bank
Atom Bank is the UK's first bank built exclusively for mobile.
It is redefining what a bank should be, making things easier, more
transparent and better value in a world of finance. Atom currently
offers savings accounts, mortgages and business loans.
-- In July 2022, Atom released details of its operating
performance to 31st March 2022 detailing positive progress on
multiple fronts including:
o After recording its first month of operating profit in Q1
FY22, Atom has recorded operating profits for the remaining three
quarters of the year to 31st March 2022
o Net interest margin (NIM) rose significantly to 127bps
(compared to 54bps in 2021) driven by lending growth across the
residential and business portfolio
o Income grew by over 200%, with costs increasing by just 6%,
reflecting Atom's focus on automation and cost management, whilst
continuing to offer great rates to both savers and borrowers
o Growth in income is attributed to increases in the loan book
across both business and residential lending, with Atom's total
loan book reaching GBP3.3 billion (up from GBP2.7 billion in
FY21)
o Ended the financial year with a Trust Pilot score of 4.6/5, an
App Store rating of 4.7/5 and a customer Net Promoter Score of
+87
o Over six months on from the introduction of a four-day week
with no loss of pay in November 2021, employees are reporting being
happier and healthier, with increased employee engagement and
decreased sickness and attrition levels.
BenevolentAI
Healthcare technology company applying artificial intelligence
for drug discovery and development
BenevolentAI creates and applies artificial intelligence (AI)
and machine learning to transform the way medicines are discovered
and developed. Benevolent integrates its technology into every step
of the drug discovery process from hypothesis generation to
late-stage clinical development. The Benevolent Platform(R) is used
by scientists and technologists to find new ways to treat disease,
improve the efficacy and lower the development time and costs of
new treatments.
-- Expanded collaboration with AstraZeneca to four disease
areas, identifying three novel targets for their drug development
portfolio.
-- In-house pipeline grew to 13 named programmes identified by the Benevolent Platform.
-- Completed Business Combination with Odyssey Acquisition S.A.
on 22nd April 2022 raising gross proceeds of EUR225 million.
-- As at H1 2022, held sufficient cash on balance sheet to cover
costs to Q4 2024, without including any future capital from
licensing or collaboration agreements.
-- Listed stock trades on very thin volumes. Post-listing lock
ups expire in mid-October, and options for improving liquidity in
the stock are being explored.
AMO Pharma
Developer of drugs to treat rare or orphan diseases
AMO Pharma is a biopharmaceutical company working to identify
and advance promising therapies for the treatment of serious and
debilitating diseases in patient populations with significant areas
of unmet need, including rare, debilitating childhood onset
neurogenetic disorders with limited or no treatment options. The
company is developing AMO-02 for congenital myotonic dystrophy,
AMO-01 for Phelan McDermid Syndrome and AMO-04 for Rett Syndrome
and related disorders.
-- Announced additional investment from existing shareholders to
progress the REACH-CDM study, a double-blind, placebo-controlled,
randomized clinical trial to assess the efficacy and safety of
AMO-02 (tideglusib) for the treatment of congenital myotonic
dystrophy.
-- I n December 2021, AMO Pharma announced activation of
additional clinical trial sites in Australia and New Zealand for
the REACH-CDM trial and confirmed that more than two-thirds of
patients had been enrolled in the trial. The REACH-CDM trial will
enroll a total of 56 patients. Upon completion of the trial,
patients will have the opportunity to transition to the REACH-CDM X
study, a 52-week open-label study designed to evaluate the
long-term safety and efficacy of AMO-02.
Reaction Engines
Developer of high-performance engine technologies to enable
space and hypersonic travel
Reaction Engines is developing a Synergistic Air Breathing
Rocket Engines (SABRE) to enable a step-change in space and
hypersonic travel through advancements in performance and
efficiency. Multiple applications are being spun off from this core
vision across an array of commercial industries.
-- Reaction Engines, Rolls-Royce, the Royal Air Force's Rapid
Capabilities Office (RCO), the UK Government's Defence Science and
Technology Laboratory (Dstl) and the UK's National Security
Strategic Investment Fund (NSSIF) have announced new details of
their joint programme to deliver significant enhancements to UK
defence capabilities through the development of innovative
hypersonic technologies
-- Started a new testing campaign to expand the performance
envelope of the high-Mach enabling technology through the Foreign
Comparative Testing (FCT) Program at the Department of Defense,
supported by the Air Force Research Laboratory (AFRL)
-- Awarded the Technology and Innovation Award at the
rescheduled 2021 Motorsport Industry Association Awards at the
Energy Efficient Motorsport Show in Birmingham in recognition of
the company's innovative adaptation of SABRE technology for the
motorsport industry.
-- Honeywell (NASDAQ: HON) and Reaction Engines signed a
memorandum of understanding to collaborate on the development of
thermal management technologies as a critical enabler to reduce
aircraft emissions, regardless of the fuel type used in the
aircraft.
Investment Activity
Realisations
During the six-months to 30 June 2022, the Company made
realisations totalling GBP25.8 million.
The Company completed the sale of its holding in Seedrs Limited
("Seedrs") to a global institutional investment management firm in
March receiving cash proceeds of GBP12.0 million. For further
information regarding the transaction, investors can refer to the
original announcement made by the Company on the 1st December
2021.
The Company received its first distribution of GBP1.5 million
from the HP Environmental Technologies Fund following the
acquisition of portfolio company, Driivz, by Vontier Corporation, a
global industrial technology company focused on transportation and
mobility solutions.
As Portfolio Manager, we also trimmed the Company's public
equity holdings in Immunocore and Plenti Group to fund new private
equity investments and repayment of the bank overdraft.
New Investments
During the six-month period to 30 June 2022, the Company made
two new private equity investments totalling GBP11.5 million.
Back Market
In January 2022, the Company invested EUR12.0 million (GBP10.0
million) in Back Market (incorporated as Jung S.A.S.), as part of
its $510 million Series E funding round. The round was led by
Sprints Capital, together with Eurazeo Growth, Aglaé Ventures,
General Atlantic, and Generation Investment Management. The Company
invested alongside its co-investment partner, Sprints Capital, via
a single asset fund, Sprints Capital Ellison LP.
Launched in 2014, Back Market is the leading dedicated renewed
technology marketplace. The company brings high-quality
professionally refurbished electronic devices and appliances to
customers in 16 countries including the United Kingdom, the United
States, France, Germany, Italy, Spain, Belgium, Austria, the
Netherlands, and more recently, Portugal, Japan, Finland, Ireland,
Greece, Slovakia, and Sweden. The Series E round underpins Back
Market's ambitious vision and allows the company to build on its
position as the leading marketplace exclusively dedicated to the
sale of expertly refurbished electronics. Back Market is determined
to make circular technology mainstream by delivering an experience
even better than buying new.
Epsilogen
In March 2022, the Company committed GBP3.0 million to
innovative developer of immunoglobulin E antibodies to treat
cancer, Epsilogen, as part of its GBP30.75 million Series B funding
round. The round was led by a new investor, Novartis Venture Fund,
and joined by new investors 3B Future Health Fund, British Patient
Capital and Caribou Property. The new syndicate joins founding
Series A investor Epidarex Capital and Series A investor ALSA
Ventures both of whom also committed further capital in the Series
B fundraising.
Epsilogen is an innovative developer of immunoglobulin E (IgE)
antibodies to treat cancer. IgE's natural function is to provide
immunological defence against certain parasites. This functionality
makes it an ideal treatment of solid tumours due to its strong
potency, enhanced tumour access and long tissue half-life.
Epsilogen's lead product candidate, MOv18 IgE, is the first
therapeutic IgE antibody to enter the clinic and encouraging data
from a phase I trial demonstrated MOv18 IgE to be safe and well
tolerated with early signs of clinical activity also seen.
Epsilogen is also developing a proprietary IGEGTM antibody platform
combining elements from both IgE and IgG antibodies into novel and
proprietary antibody molecules with enhanced functionality.
As of 30 June 2022, the Company had invested GBP1.5 million of
its total commitment of GBP3.0 million. The undrawn commitment of
GBP1.5 million is expected to be called in two subsequent tranches
in the first quarter of 2023 and in the first quarter of 2024.
Follow-on investments
During the period, the Company made two small follow-investments
in its existing private equity holdings, totalling GBP2.4
million.
The Company invested a small amount in Rutherford Health to
extend its runway while in the process of trying to secure
long-term funding. This investment formed part of a restructuring
plan which included the recruitment of a new leadership team to
preserve some value of the significant historical investment made
by the Company into Rutherford over the preceding years. While the
new leadership team vigorously pursued multiple options over the
last months to save the business, it could ultimately not correct
the inherited severe underlying challenges in the business.
In January 2022, the Company invested GBP0.1 million in Freevolt
Group Limited ("Freevolt") as part of an internal funding round
designed to extend runway to the point that commercial revenues
begin to build. Freevolt was previously known as Drayson Holdco 2
Limited.
Source: Portfolio companies including information disclosed
publicly on their websites.
Strategy and portfolio construction
The portfolio of new private equity investments has started to
take shape with eight investments(1) completed across all three of
our core sub-strategies: venture, growth and life sciences,
outlined below.
The Company's investment strategy is focused on pursuing
investment opportunities in private companies at the venture and
growth-stage with the potential to deliver 2x to 5x returns over
the medium term. We are targeting companies with best-in-class
products or services, with high disruption potential, poised for
significant growth, managed by world class management teams and
backed by high-quality, value-add co-investors with a track record
of building great businesses. The investment team source deals both
directly and as co-investments alongside the world's leading
venture capital firms, benefitting from Schroders Capital's 25-year
history of investing in venture capital funds in the US, Europe and
Asia, which has delivered an "indirect" portfolio of over 5,000
venture and growth companies globally.
The Company will target an approximate 75% allocation to private
equity in the portfolio, with around 25% in public equities. Most
public holdings will be a consequence of private holdings having
gone on to IPO, which will enable the Company to capture the full
lifetime value of portfolio companies and avoid the need to sell at
this offering stage.
While several unlisted stock specific situations still remain
from the inherited portfolio and we continue to focus on maximising
return potential from these for shareholders, the Company is now in
a far more stable position. We have capital available to continue
to make investments as we continue to rebalance the portfolio. We
are excited about the prospects for the future now that the hard
work put in by the team since taking over management of the Company
is beginning to bear fruit.
(1) Including two new investments completed in August 2022.
Outlook
The global economy has faced an increasing number of headwinds
since the start of this year, including the war in Ukraine, the
energy crisis, rising inflation, rising interest rates, record debt
levels and supply chain shortages to name but a few. The
consequence of which has been a significant correction in global
stock markets and contraction in M&A activity. Schroders'
economists are expecting the US, UK and eurozone economies to go
into recession and the outlook for the global economy is
gloomy.
Despite this challenging backdrop, we believe the Company is
well-placed to capitalise on new investment opportunities in the
private markets with its new global strategy. The extended
geographical focus allows us to leverage our network and invest in
the best opportunities, when viewed on a risk return basis, no
matter where they are in the world. While we recognise that private
equity is not immune to the forces which are buffeting all
financial assets at present, we believe that some parts of the
market are likely to face more difficult times, while others are
likely to be more resilient, even with opportunities to thrive.
With the firepower available, we believe we are well placed to
make new investments and benefit from the current depressed
valuation environment. As of 30 June 2022, the Company had GBP6.7
million in cash, an unutilised loan facility (up to GBP40 million)
and GBP127.7 million in public equity investments from which to
make new investments. We also have a healthy pipeline of global
venture/growth stage companies from which to consider potential
investment.
Schroder Investment Management Limited
30 September 2022
Past performance is not a guide to future performance and may
not be repeated. The value of investments and the income from them
may go down as well as up and investors may not get back the
amounts originally invested. The securities shown above are for
illustrative purposes only and are not to be considered a
recommendation to buy or sell.
Investment Portfolio
As at 30 June 2022
The 20 largest investments account for 92.9% of total
investments by value (31 December 2021: 93.6%).
Total
Fair value investments
Holding Quoted/unquoted Industry sector GBP'000 %
------------------------------ ---------------- ------------------ ---------- -----------
Oxford Nanopore Quoted Health Care 62,069 21.3
------------------------------ ---------------- ------------------ ---------- -----------
Atom Bank Unquoted Financials 38,090 13.1
------------------------------ ---------------- ------------------ ---------- -----------
BenevolentAl Quoted Health Care 32,734 11.2
------------------------------ ---------------- ------------------ ---------- -----------
AMO Pharma Unquoted Health Care 16,151 5.5
------------------------------ ---------------- ------------------ ---------- -----------
Reaction Engines Unquoted Industrials 12,500 4.3
------------------------------ ---------------- ------------------ ---------- -----------
Federated Wireless Unquoted Technology 12,481 4.3
------------------------------ ---------------- ------------------ ---------- -----------
Ada Health Unquoted Health Care 10,155 3.5
------------------------------ ---------------- ------------------ ---------- -----------
HP Environmental Technologies
Fund Unquoted Industrials 10,006 3.4
------------------------------ ---------------- ------------------ ---------- -----------
Nexeon Unquoted Industrials 8,770 3.0
------------------------------ ---------------- ------------------ ---------- -----------
Immunocore Quoted Health Care 8,564 2.9
------------------------------ ---------------- ------------------ ---------- -----------
Sprints Capital Ellison Unquoted Technology 8,098 2.8
------------------------------ ---------------- ------------------ ---------- -----------
Genomics Unquoted Health Care 8,018 2.7
------------------------------ ---------------- ------------------ ---------- -----------
Revolut LLP Unquoted Financials 6,843 2.3
------------------------------ ---------------- ------------------ ---------- -----------
Spirent Communications Quoted Technology 5,918 2.0
------------------------------ ---------------- ------------------ ---------- -----------
Attest Technologies Unquoted Business Services 5,748 2.0
------------------------------ ---------------- ------------------ ---------- -----------
Tessian Unquoted Technology 5,543 1.9
------------------------------ ---------------- ------------------ ---------- -----------
OcuTerra Unquoted Health Care 4,985 1.7
------------------------------ ---------------- ------------------ ---------- -----------
Cequr Unquoted Health Care 4,951 1.7
------------------------------ ---------------- ------------------ ---------- -----------
IDEX Biometrics ASA Quoted Technology 4,810 1.7
------------------------------ ---------------- ------------------ ---------- -----------
Johnson Matthey Quoted Industrials 4,634 1.6
------------------------------ ---------------- ------------------ ---------- -----------
Kymab Unquoted Health Care 4,566 1.6
------------------------------ ---------------- ------------------ ---------- -----------
Petershill Partners Quoted Financials 4,390 1.5
------------------------------ ---------------- ------------------ ---------- -----------
Autolus Therapeutics Quoted Health Care 3,777 1.3
------------------------------ ---------------- ------------------ ---------- -----------
Industrial Heat Unquoted Industrials 2,030 0.7
------------------------------ ---------------- ------------------ ---------- -----------
American Financial Exchange Unquoted Financials 1,864 0.7
------------------------------ ---------------- ------------------ ---------- -----------
Epsilogen Unquoted Health Care 1,464 0.5
------------------------------ ---------------- ------------------ ---------- -----------
Mafic Unquoted Industrials 983 0.3
------------------------------ ---------------- ------------------ ---------- -----------
Novabiotics Unquoted Health Care 605 0.2
------------------------------ ---------------- ------------------ ---------- -----------
ReNeuron Group Quoted Health Care 556 0.2
------------------------------ ---------------- ------------------ ---------- -----------
Plenti Group Quoted Financials 150 0.1
------------------------------ ---------------- ------------------ ---------- -----------
Xeros Technology Quoted Industrials 139 -
------------------------------ ---------------- ------------------ ---------- -----------
RM2 International Unquoted Industrials 133 -
------------------------------ ---------------- ------------------ ---------- -----------
Freevolt (formerly Drayson) Unquoted Technology 85 -
------------------------------ ---------------- ------------------ ---------- -----------
Econic Unquoted Industrials 47 -
------------------------------ ---------------- ------------------ ---------- -----------
Metaboards Unquoted Technology - -
------------------------------ ---------------- ------------------ ---------- -----------
Sphere Medical Unquoted Health Care - -
------------------------------ ---------------- ------------------ ---------- -----------
Mereo BioPharma Group Quoted Health Care - -
------------------------------ ---------------- ------------------ ---------- -----------
Halosource Unquoted Industrials - -
------------------------------ ---------------- ------------------ ---------- -----------
Bodle Technologies Unquoted Technology - -
------------------------------ ---------------- ------------------ ---------- -----------
Origin Unquoted Health Care - -
------------------------------ ---------------- ------------------ ---------- -----------
Rutherford Health Unquoted Health Care - -
------------------------------ ---------------- ------------------ ---------- -----------
Lignia Wood Unquoted Industrials - -
------------------------------ ---------------- ------------------ ---------- -----------
Oxsybio Unquoted Health Care - -
------------------------------ ---------------- ------------------ ---------- -----------
Spin Memory Unquoted Technology - -
------------------------------ ---------------- ------------------ ---------- -----------
Kind Consumer Unquoted Consumer Staples - -
------------------------------ ---------------- ------------------ ---------- -----------
Total investments(1) 291,857 100.0
-------------------------------------------------------------------- ---------- -----------
(1) Total investments
comprise:
GBP'000 %
------------------------------ ---------------- ------------------ ---------- -----------
Unquoted 164,116 56.2
-------------------------------------------------------------------- ---------- -----------
Listed on the London Stock Exchange 77,011 26.4
-------------------------------------------------------------------- ---------- -----------
Listed on a recognised stock exchange overseas 50,035 17.2
-------------------------------------------------------------------- ---------- -----------
Quoted on AIM 695 0.2
-------------------------------------------------------------------- ---------- -----------
Total 291,857 100.0
-------------------------------------------------------------------- ---------- -----------
Half Year Report
Principal Risks and Uncertainties
The Board has determined that the key risks for the Company are
general economic and market risk, portfolio concentration risk,
performance risk, general and specific portfolio valuation risk,
investee company specific risk, gearing risk, portfolio manager and
key man risk, outsourced service provider risk, currency risk and
cyber risk. These risks are set out on pages 29 to 33 of the Annual
Report and Accounts for the year ended 31 December 2021.
Except with respect to a degree of uncertainty relating to
continued geo-political and market volatility and heightened
service provider risk as AIFM, Depositary and Administrator
services transition across to the new providers, the Company's
principal risks and uncertainties, and their mitigation, have not
materially changed during the six months to 30 June 2022 or since
the Annual Report was published on 21 April 2022.
Going concern
The Board has considered the Company's principal risks and
uncertainties (including whether there are any emerging risks); has
scrutinised the detailed cash flow forecast prepared by the
Portfolio Manager; and considered their assessment of the
likelihood and quantum of funds which could be raised from sales of
investments. As a result, the Board is comfortable that the Company
will have sufficient liquid funds to pay operating expenses.
The Board has also considered the provisions in the revolving
credit facility, and have taken into account that the loan was
undrawn as at the date of these financial statements. On this
basis, the Board considers it appropriate to adopt the going
concern basis of accounting in preparing the Company's
accounts.
Related party transactions
There have been no transactions with related parties that have
materially affected the financial position or the performance of
the Company during the six months ended 30 June 2022.
Directors' responsibility statement
The Directors confirm that, to the best of their knowledge, this
set of condensed financial statements has been prepared in
accordance with United Kingdom Generally Accepted Accounting
Practice, in particular with Financial Reporting Standard 104
"Interim Financial Reporting" and with the Statement of Recommended
Practice, "Financial Statements of Investment Companies and Venture
Capital Trusts" issued in April 2021 and that this Interim
Management Report includes a fair review of the information
required by 4.2.7R and 4.2.8R of the Financial Conduct Authority's
Disclosure Guidance and Transparency Rules.
Income Statement
for the six months ended 30 June 2022 (unaudited)
(Unaudited) (Unaudited) (Audited)
For the six months For the six months For the year
ended 30 June 2022 ended 30 June 2021 ended 31 December
2021
Revenue Capital Total Revenue Capital Total Revenue Capital Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
(Losses)/gains
on investments
held at fair
value through
profit or loss - (137,192) (137,192) - 54,554 54,554 - 124,583 124,583
Gains/(losses)
on foreign exchange - 72 72 - (120) (120) - (466) (466)
Income from
investments 258 - 258 57 - 57 112 - 112
--------------------- ------- --------- --------- ------- ------- ------- ------- ------- -------
Gross return/(loss) 258 (137,120) (136,862) 57 54,434 54,491 112 124,117 124,229
Portfolio management
fee (1,175) - (1,175) (1,537) - (1,537) (3,019) - (3,019)
Administrative
expenses (647) - (647) (784) - (784) (1,448) - (1,448)
--------------------- ------- --------- --------- ------- ------- ------- ------- ------- -------
Net (loss)/return
before finance
costs and taxation (1,564) (137,120) (138,684) (2,264) 54,434 52,170 (4,355) 124,117 119,762
Finance costs (202) - (202) (863) - (863) (960) - (960)
--------------------- ------- --------- --------- ------- ------- ------- ------- ------- -------
Net (loss)/return
before taxation (1,766) (137,120) (138,886) (3,127) 54,434 51,307 (5,315) 124,117 118,802
Taxation - - - - - - - - -
--------------------- ------- --------- --------- ------- ------- ------- ------- ------- -------
Net (loss)/return
after taxation (1,766) (137,120) (138,886) (3,127) 54,434 51,307 (5,315) 124,117 118,802
--------------------- ------- --------- --------- ------- ------- ------- ------- ------- -------
(Loss)/return
per share (0.20)p (15.09)p (15.29)p (0.34)p 5.99p 5.65p (0.58)p 13.66p 13.08p
The "Total" column of this statement is the profit and loss
account of the Company. The "Revenue" and "Capital" columns
represent supplementary information prepared under guidance issued
by The Association of Investment Companies. The Company has no
other items of other comprehensive income, and therefore the net
(loss)/return on ordinary activities after taxation is also the
total comprehensive (loss)/return for the period.
All revenue and capital items in the above statement derive from
continuing operations. No operations were acquired or discontinued
in the period.
Statement of Changes in Equity
for the six months ended 30 June 2022 (unaudited)
for the six months ended 30 June 2022 (unaudited)
Capital
Called-up Share Redemption Capital Revenue
share capital premium reserves reserves reserve Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
At 31 December 2021 9,086 891,017 - (439,105) (24,127) 436,871
Purchase of shares
for cancellation (8) - 8 (170) - (170)
Net loss after taxation - - - (137,120) (1,766) (138,886)
------------------------ ------------- ------- ---------- --------- -------- ---------
At 30 June 2022 9,078 891,017 8 (576,395) (25,893) 297,815
------------------------ ------------- ------- ---------- --------- -------- ---------
for the six months ended 30 June 2021 (unaudited)
Capital
Called-up Share Redemption Capital Revenue
share capital premium reserves reserves reserve Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
At 31 December 2020 9,086 891,017 - (563,222) (18,812) 318,069
Net return/(loss)
after taxation - - - 54,434 (3,127) 51,307
-------------------- ------------- ------- ---------- --------- -------- -------
At 30 June 2021 9,086 891,017 - (508,788) (21,939) 369,376
-------------------- ------------- ------- ---------- --------- -------- -------
for the year ended 31 December 2021 (audited)
Capital
Called-up Share Redemption Capital Revenue
share capital premium reserves reserves reserve Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
At 31 December 2020 9,086 891,017 - (563,222) (18,812) 318,069
Net return/(loss)
after taxation - - - 124,117 (5,315) 118,802
-------------------- ------------- ------- ---------- --------- -------- -------
At 31 December 2021 9,086 891,017 - (439,105) (24,127) 436,871
-------------------- ------------- ------- ---------- --------- -------- -------
Statement of Financial Position
at 30 June 2022 (unaudited)
(Unaudited) (Unaudited) (Audited)
30 June 30 June 31 December
2022 2021 2021
Note GBP'000 GBP'000 GBP'000
Fixed Assets
-------------------------------------- ---- ----------- ----------- -----------
Investments held at fair value
through profit or loss 4 291,857 341,953 440,899
-------------------------------------- ---- ----------- ----------- -----------
Current Assets
Debtors 247 28,002 171
Cash at bank and in hand 6,729 1,291 19,077
-------------------------------------- ---- ----------- ----------- -----------
6,976 29,293 19,248
-------------------------------------- ---- ----------- ----------- -----------
Current liabilities
Creditors: amounts falling due
within one year 5 (1,018) (1,870) (1,276)
-------------------------------------- ---- ----------- ----------- -----------
Net current assets 5,958 27,423 17,972
-------------------------------------- ---- ----------- ----------- -----------
Total assets less current liabilities 297,815 369,376 458,871
-------------------------------------- ---- ----------- ----------- -----------
Creditors: amounts falling due
after more than one year 6 - - (22,000)
-------------------------------------- ---- ----------- ----------- -----------
Net assets 297,815 369,376 436,871
-------------------------------------- ---- ----------- ----------- -----------
Capital and reserves
Called-up share capital 7 9,078 9,086 9,086
Share premium 891,017 891,017 891,017
Capital redemption reserves 8 - -
Capital reserves (576,395) (508,788) (439,105)
Revenue reserve (25,893) (21,939) (24,127)
-------------------------------------- ---- ----------- ----------- -----------
Total equity shareholders' funds 297,815 369,376 436,871
-------------------------------------- ---- ----------- ----------- -----------
Net asset value per share 8 32.80p 40.65p 48.08p
Cash Flow Statement
for the six months ended 30 June 2022 (unaudited)
(Unaudited) (Unaudited) (Audited)
For the six For the six For the
months ended months ended year ended
30 June 30 June 31 December
2022 2021 2021
GBP'000 GBP'000 GBP'000
Cash flows from operating activities
(Loss)/return before finance costs
and taxation (138,684) 52,170 119,762
Adjustments for:
Losses/(gains) on investments held
at fair value through profit or loss 137,192 (54,554) (124,583)
Increase in debtors (76) (33) (145)
Decrease in creditors (200) (614) (1,231)
------------------------------------------- ------------ ------------ -----------
Net cash flow from operating activities (1,768) (3,031) (6,197)
------------------------------------------- ------------ ------------ -----------
Cash flows from investment activities
Purchases of investments (13,853) (14,774) (61,199)
Proceeds from sales of investments 25,703 120,584 166,035
------------------------------------------- ------------ ------------ -----------
Net cash flow from investment activities 11,850 105,810 104,836
------------------------------------------- ------------ ------------ -----------
Cash flows from financing activities
Purchase of shares for cancellation (159) - -
Finance costs (271) (835) (909)
Bank loan drawn down - - 22,000
Repayment of bank loan (22,000) (107,032) (107,032)
------------------------------------------- ------------ ------------ -----------
Net cash flow from financing activities (22,430) (107,867) (85,941)
------------------------------------------- ------------ ------------ -----------
Change in cash and cash equivalents (12,348) (5,088) 12,698
Cash and cash equivalents at the beginning
of the period 19,077 6,379 6,379
------------------------------------------- ------------ ------------ -----------
Cash and cash equivalents at the end
of the period 6,729 1,291 19,077
------------------------------------------- ------------ ------------ -----------
Notes to the Accounts
1. Financial Statements
The information contained within the accounts in this half year
report has not been audited or reviewed by the Company's
independent auditor.
The figures and financial information for the year ended 31
December 2021 are extracted from the latest published accounts of
the Company and do not constitute statutory accounts for that year.
Those accounts have been delivered to the Registrar of Companies
and included the report of the auditor which was unqualified and
did not contain a statement under either section 498(2) or 498(3)
of the Companies Act 2006.
2. Accounting Policies
Basis of accounting
The accounts have been prepared in accordance with United
Kingdom Generally Accepted Accounting Practice, in particular with
Financial Reporting Standard 104 "Interim Financial Reporting" and
with the Statement of Recommend Practice "Financial Statements of
Investment Trust Companies and Venture Capital Trusts" issued by
the Association of Investment Companies in April 2021.
All of the Company's operations are of a continuing nature.
The accounting policies applied to these accounts are consistent
with those applied in the accounts for the year ended 31 December
2021. In particular, the policy on valuation of investments is
consistent with that detailed in note 1(b) to the accounts for the
year ended 31 December 2021, presented on pages 64 and 65 of the
annual report.
3. (Loss)/return per share
(Unaudited) (Unaudited) (Audited)
For the six For the six For the
months ended months ended year ended
30 June 30 June 31 December
2022 2021 2021
GBP'000 GBP'000 GBP'000
Revenue loss (1,766) (3,127) (5,315)
Capital (loss)/return (137,120) 54,434 124,117
-------------------------------------- ------------ ------------ -----------
Total (loss)/return (138,886) 51,307 118,802
-------------------------------------- ------------ ------------ -----------
Weighted average number of shares in
issue during the period 908,544,238 908,639,238 908,639,238
Revenue loss per share (0.20)p (0.34)p (0.58)p
Capital (loss)/return per share (15.09)p 5.99p 13.66p
-------------------------------------- ------------ ------------ -----------
Total basic and diluted (loss)/return
per share (15.29)p 5.65p 13.08p
-------------------------------------- ------------ ------------ -----------
The basic and diluted (loss)/return per share is the same
because there are no dilutive instruments in issue.
4. Investments held at fair value through profit or loss
(a) Movement in investments
(Unaudited) (Unaudited) (Audited)
For the six For the six For the
months ended months ended year ended
30 June 30 June 31 December
2022 2021 2021
GBP'000 GBP'000 GBP'000
Opening book cost 622,857 759,715 759,715
Opening investment holding losses (181,958) (338,563) (338,563)
-------------------------------------- ------------ ------------ -----------
Opening fair value 440,899 421,152 421,152
Purchases at cost 13,853 42,255 88,680
Sales proceeds (25,703) (176,008) (193,516)
(Losses)/gains on investments held
at fair value through profit or loss (137,192) 54,554 124,583
-------------------------------------- ------------ ------------ -----------
Closing fair value 291,857 341,953 440,899
-------------------------------------- ------------ ------------ -----------
Closing book cost 604,401 615,744 622,857
Closing investment holding losses (312,544) (273,791) (181,958)
-------------------------------------- ------------ ------------ -----------
Closing fair value 291,857 341,953 440,899
-------------------------------------- ------------ ------------ -----------
The Company received GBP25,703,000 (30 June 2021:
GBP176,008,000; 31 December 2021: GBP193,516,000) from investments
sold in the period. The book cost of the investments when they were
purchased was GBP32,309,000 (30 June 2021: GBP186,226,000; 31
December 2021: GBP225,538,000). These investments have been
revalued over time and, until they were sold, any unrealised
gains/losses were included in the fair value of the
investments.
Purchases and sales for the period ended 30 June 2021 and the
year ended 31 December 2021, include non-cash transactions in
relation to Athenex and Kuur.
(b) Unquoted investments, including investments quoted in inactive markets
Material revaluations of unquoted investments during the period
(unaudited)
Opening Closing
valuation valuation
at at
31 December Valuation 30 June
2021(1) adjustment 2022
GBP'000 GBP'000 GBP'000
Rutherford Health 21,312 (21,312) -
Atom Bank 46,209 (8,119) 38,090
------------------ ----------- ----------- ---------
(1) Based on the closing holding at opening prices.
Material disposals of unquoted investments during the period
Gain
based on
Carrying carrying
value at value at
31 December Sales 31 December
Book cost 2021 Proceeds 2021
GBP'000 GBP'000 GBP'000 GBP'000
Seedrs 10,470 11,271 12,000 729
------- --------- ----------- -------- -----------
5. Creditors: amounts falling due within one year
(Unaudited) (Unaudited) (Audited)
30 June 30 June 31 December
2022 2021 2021
GBP'000 GBP'000 GBP'000
Other creditors and accruals 1,018 1,870 1,276
----------------------------- ----------- ----------- -----------
1,018 1,870 1,276
----------------------------- ----------- ----------- -----------
The directors consider that the carrying amount of creditors
falling due within one year approximates to their fair value.
6. Creditors: amounts falling due after more than one year
(Unaudited) (Unaudited) (Audited)
30 June 30 June 31 December
2022 2021 2021
GBP'000 GBP'000 GBP'000
Bank loan - - 22,000
---------- ----------- ----------- -----------
- - 22,000
---------- ----------- ----------- -----------
The bank loan at 31 December 2021 was drawn on the Company's
facility with The Northern Trust Company, and was fully repaid
during the period.
7. Called-up share capital
(Unaudited) (Unaudited) (Audited)
For the six For the six For the
months ended months ended year ended
30 June 30 June 31 December
2022 2021 2021
GBP'000 GBP'000 GBP'000
Ordinary shares allotted, called
up and fully paid:
Ordinary shares of 1p each:
Opening balance of 908,639,238
(30 June 2021 and 31 December
2021: same) shares 9,086 9,086 9,086
770,000 (30 June 2021 and 31
December 2021: nil) shares bought
back and cancelled (8) - -
----------------------------------- ------------ ------------ -----------
Closing balance of 907,869,238
(30 June 2021 and 31 December
2021: 908,639,238) shares 9,078 9,086 9,086
----------------------------------- ------------ ------------ -----------
8. Net asset value per share
(Unaudited) (Unaudited) (Audited)
30 June 30 June 31 December
2022 2021 2021
Net assets attributable to shareholders
(GBP'000) 297,815 369,376 436,871
Shares in issue at the period
end 907,869,238 908,639,238 908,639,238
---------------------------------------- ----------- ----------- -----------
Net asset value per share 32.80p 40.65p 48.08p
---------------------------------------- ----------- ----------- -----------
9. Disclosures regarding financial instruments measured at fair value
The Company's financial instruments within the scope of FRS 102
that are held at fair value comprise its investment portfolio.
FRS 102 requires that financial instruments held at fair value
are categorised into a hierarchy consisting of the three levels
below. A fair value measurement is categorised in its entirety on
the basis of the lowest level input that is significant to the fair
value measurement.
Level 1 - valued using unadjusted quoted prices in active
markets for identical assets.
Level 2 - valued using observable inputs other than quoted
prices included within Level 1.
Level 3 - valued using inputs that are unobservable.
The Company's investment portfolio was categorised as
follows:
30 June 2022 (unaudited)
Level 1 Level 2 Level 3 Total
GBP'000 GBP'000 GBP'000 GBP'000
Investments in
equities - quoted 127,741 - - 127,741
- unquoted - - 164,116 164,116
------------ ------- ------- ------- -------
Total 127,741 - 164,116 291,857
---------------- ----------- ------- ------- ------- -------
During the period ended 30 June 2022, BenevolentAI GBP39,634,000
transferred from Level 3 to Level 1 following its IPO on Euronext
Amsterdam Stock Exchange.
30 June 2021 (unaudited)
Level 1 Level 2 Level 3 Total
GBP'000 GBP'000 GBP'000 GBP'000
Investments in
equities - quoted 53,953 - 33,889 87,842
- unquoted - - 254,111 254,111
--------------------------- ------- ------- ------- -------
Total 53,953 - 288,000 341,953
---------------------------- ------- ------- ------- -------
During the period ended 30 June 2021, Immunocore GBP23,410,000
transferred from Level 3 to Level 1 following its IPO on the
NASDAQ.
31 December 2021 (audited)
Level 1 Level 2 Level 3 Total
GBP'000 GBP'000 GBP'000 GBP'000
Investments in
equities - quoted 222,031 - 21,312 243,343
- unquoted - - 197,556 197,556
--------------------------- ------- ------- ------- -------
Total 222,031 - 218,868 440,899
---------------------------- ------- ------- ------- -------
During the year ended 31 December 2021, Immunocore GBP21,044,000
and Oxford Nanopore GBP162,641,000 transferred from Level 3 to
Level 1 following their IPOs on the NASDAQ and London Stock
Exchange respectively.
10. Events after the interim date that have not been reflected
in the financial statements for the interim period
There has been a sharp fall in the market price of BenevolentAI
after the interim date. At 27 September, the price had fallen to
Eur 4.18 per share, valuing the Company's holding at GBP17,740,000.
This is GBP14,994,000 lower than the valuation included in these
interim accounts and would reduce the Company's NAV per share by
1.65p.
The directors have evaluated the period since the interim date
and have not noted any other events which have not been reflected
in the financial statements.
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