Macaulay Capital PLC - Half-year Report
Announcement provided by
Macaulay Capital PLC · MCAP04/09/2023 07:00
4 September 2023
Macaulay Capital PLC
("Macaulay Capital" or the "Company")
Interim Results
Macaulay Capital PLC (AQSE: MCAP), which was formed to originate and manage corporate transactions, raise funds from third parties, invest its own funds alongside those of external investors and to manage its investment portfolio with the aim of maximising its value, announces its interim results for the six months ended 30 June 2023. A copy of these results is available on the Company's website.
This announcement contains inside information for the purposes of the
ENDS
Enquiries:
Macaulay Capital PLC |
|
Clive Milner |
+44 (0)20 3946 5980 |
|
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Cairn Financial Advisers LLP (AQSE Corporate Adviser) |
|
James Caithie
|
+44 (0)20 7213 0880 |
|
|
Oberon Capital (Broker) |
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Chris Crawford |
+44 (0)20 3179 5304 |
For more information please visit: www.macaulaycapital.com
Chairman's Statement
It is now just over a year since our admission to trading on the Aquis Stock Exchange Growth Market, when we raised a total of
By introducing investors and investing directly ourselves, the Company and its subsidiary, Macaulay Management Limited (together "the Group") provide a combination of growth and replacement capital to established private companies. This helps them to finance their future development as well as facilitating partial exits for founder investors and incentivising the management teams.
For our investors, we structure investments typically as a combination of redeemable loan stock and equity. This gives investors the ability to have much of their capital repaid over time, together with an equity interest in the investee company. We aim to provide investors with a good return on their investment and, because shares in qualifying private companies benefit from Business Relief, they can be transferred free of Inheritance Tax.
As at 30 June 2023, our cash was
The Horner Family remains the largest shareholder block with a total of 2.1 million shares (21.0%), which will by July 2024 increase by a further 6 million shares to 8.1 million shares (50.3%), through the exercise of warrants priced at 25p per share.
Trading Activities
On 13 March 2023 and as set out in our Aquis admission document, we announced that we had taken over the management of the investment portfolio (the "Legacy Portfolio") of five private companies from Chelverton Asset Management Limited ("CAM"). Under the agreements with the relevant companies, the Group is responsible for monitoring their performance, which usually includes taking a board position, for which we are entitled to monthly management fees and potential performance fees on exit.
On 23 March 2023 we announced the completion of the secondary management buy-out of Camloc Motion Control Limited, an established
On 5 June 2023 we announced the completion of a transaction where we raised
Post year end, on 21 August 2023 we announced that a trade buyer had acquired all of the shares held by the B Share Investors in Qualification Check Limited ("QCL"). QCL was one of the five companies in the Legacy Portfolio and is a leading provider of global qualification verification services. The B Share Investors were introduced by CAM and for those who invested in February 2017, the sale price is a gross money multiple return of 7.3 times, taking into account EIS relief, and the gain will be free of CGT; and for those who invested in March 2021, the sale price is a gross money multiple return of 3.8 times, before CGT, management and performance fees. These fees are to be shared by the Group and CAM with the net amount receivable by the Group being
Our Portfolio
We now have seven portfolio companies. Three of the companies - Devonvale (a manufacturer of flapjacks, cakes and cereal bars based in Honiton), Camloc and Kelda Showers - were identified by us and we helped to structure the investment, agreed terms and arranged the investment.
The other four portfolio companies are from the Legacy Portfolio. As noted above, we have recently arranged an exit by our investors from QCL.
Investors
A business imperative continues to be the broadening of the pool of potential investors for the investment opportunities that we create, and this is where we are focusing our marketing efforts.
We believe that the area of the market that we are targeting for investment is underserved, which will enable us to create shareholder value for our investors through the identification of opportunities to invest in established companies at attractive valuations. We believe that our offering should be of great interest to High Net Worth individuals and family offices, particularly in a time of rising Inheritance Tax assessments.
We also stress to potential investors the importance of investing across a range of our opportunities to reduce their investment risk.
Outlook
We continue to see a wide range of interesting investment opportunities to consider. Our investment process is rigorous and time-consuming, and because we are highly selective, often unrewarding. However, we believe that this robust selection process is essential to achieve good returns for us and our fellow investors.
We are pleased with the progress made to date and expect this to continue in the second half of the year.
Finally, and on behalf of the Board, I would like to thank our shareholders, employees, and advisers for their support.
Lindsay Mair
Chairman
4 September 2023
Condensed Consolidated Statement of Comprehensive Income
for the 6 months ended 30 June 2023
|
|
6 months to |
|
|
Period to |
|
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30 June 2023 |
|
|
31 December 2022 |
|
|
(unaudited) |
|
|
(audited) |
|
Notes |
£ |
|
|
£ |
|
|
|
|
|
|
Income |
|
213,946 |
|
|
118,737 |
Other expenses |
|
(319,593) |
|
|
(502,827) |
Loss on ordinary activities before interest and taxation |
|
(105,647) |
|
|
(384,090) |
|
|
|
|
|
|
Loan interest |
|
(1,919) |
|
|
(904) |
|
|
|
|
|
|
Loss on ordinary activities before taxation |
|
(107,566) |
|
|
(384,994) |
|
|
|
|
|
|
Taxation |
|
- |
|
|
- |
Loss on ordinary activities after taxation |
|
(107,566) |
|
|
(384,994) |
|
|
|
|
|
|
Loss per Ordinary share in pence |
3 |
(1.08) |
|
|
(3.85) |
Condensed Consolidated Balance Sheet at 30 June 2023
|
|
|
|
||
|
30 June 2023 |
|
31 December 2022 |
||
|
(unaudited) |
|
(audited) |
||
|
|
£ |
|
|
£ |
Fixed assets |
|
|
|
|
|
Tangible assets |
|
3,517 |
|
|
4,219 |
Investments at fair value through profit or loss |
|
900,000 |
|
|
200,000 |
|
|
903,517 |
|
|
204,219 |
Current assets |
|
|
|
|
|
Debtors: amounts falling due within one year |
90,612 |
|
|
104,962 |
|
Cash at bank and in hand |
368,453 |
|
|
1,189,219 |
|
|
459,065 |
|
|
1,294,181 |
|
Creditors: amounts falling due within one year |
|
|
|
|
|
Other creditors and accruals |
(32,142) |
|
|
(60,394) |
|
Net current assets |
|
426,923 |
|
|
1,233,787 |
Net assets |
|
1,330,440 |
|
|
1,438,006 |
|
|
|
|
|
|
Capital and reserves |
|
|
|
|
|
Called up share capital |
|
1,000,000 |
|
|
1,000,000 |
Share premium account |
|
823,000 |
|
|
823,000 |
Profit and loss account |
|
(492,560) |
|
|
(384,994) |
Shareholders' funds |
|
1,330,440 |
|
|
1,438,006 |
Condensed Consolidated Statement of Changes in Equity
for the 6 months ended 30 June 2023
|
Called up share capital |
Share premium account |
Profit and loss account |
Total equity |
£ |
£ |
£ |
£ |
|
Period to 31 December 2022 (audited) |
|
|
|
|
At 13 May 2022 |
- |
- |
- |
- |
Total comprehensive income for the period: |
|
|
|
|
Loss for the period |
- |
- |
(384,994) |
(384,994) |
Transactions with Shareholders recorded directly to equity: |
|
|
|
|
Issue of Ordinary shares |
1,000,000 |
1,000,000 |
- |
2,000,000 |
Share issue expenses (including irrecoverable VAT) |
- |
(177,000) |
- |
(177,000) |
At 31 December 2022 |
1,000,000 |
823,000 |
(384,994) |
1,438,006 |
Period to 30 June 2023 (unaudited) |
|
|
|
|
Total comprehensive income for the period: |
|
|
|
|
Loss for the period |
- |
- |
(107,566) |
(107,566) |
At 30 June 2023 |
1,000,000 |
823,000 |
(492,560) |
1,330,440 |
Condensed Consolidated Cash Flow for the 6 months ended 30 June 2023
|
6 months to |
|
Period ended |
|
30 June 2023 |
|
31 December 2022 |
|
(unaudited) |
|
(audited) |
|
£ |
|
£ |
Cash flows used in operating activities: |
|
|
|
Loss for the year |
(107,566) |
|
(384,994) |
Adjusted for: |
|
|
|
Depreciation of assets |
702 |
|
1,407 |
Interest paid |
1,919 |
|
904 |
Decrease/(increase) in debtors |
14,350 |
|
(104,962) |
(Decrease)/increase in creditors |
(28,252) |
|
60,394 |
Net cash used in operating activities |
(118,847) |
|
(427,251) |
|
|
|
|
Cash used in investing activities: |
|
|
|
Purchase of investments |
(700,000) |
|
(200,000) |
Purchase of fixed assets |
- |
|
(5,626) |
Net cash used in investing activities |
(700,000) |
|
(205,626) |
|
|
|
|
Cash flows (used in)/generated from financing activities: |
|
|
|
Issue of Ordinary shares |
- |
|
2,000,000 |
Share issue expenses (including irrecoverable VAT) |
- |
|
(177,000) |
Interest paid |
(1,919) |
|
(904) |
Net cash (used in)/generated from financing activities |
(1,919) |
|
1,822,096 |
|
|
|
|
Net (decrease)/increase in cash and cash equivalents |
(820,766) |
|
1,189,219 |
|
|
|
|
Reconciliation of net cash flow to movement in net cash: |
|
|
|
(Decrease)/increase in cash |
(820,766) |
|
1,189,219 |
Net cash at start of period |
1,189,219 |
|
- |
Net cash at end of period |
368,453 |
|
1,189,219 |
Notes to the Unaudited Financial Statements
1 General information
Macaulay Capital Plc was incorporated on 13 May 2022 for the purpose of acquiring Macaulay Management Limited ("MML"). MML was incorporated on 14 October 2021 and was formed to originate and manage corporate transactions, raise funds from third parties, invest the Group's own funds alongside those of external investors and to manage the Group's investment portfolio with the aim of maximising its value. Macaulay Capital Plc acquired the entire issued share capital of MML on 14 June 2022.
The Company is a public limited company, which is incorporated and registered in England and Wales (Registered number: 14105915).
The registered office address is Suite 8, Bridge House, Courtenay Street, Newton Abbot, TQ12 2QS.
2 Accounting policies
2.1 Basis of preparation of financial statements
The interim financial statements of the Company and its subsidiary for the six months ended 30 June 2023, which are unaudited, have been prepared in accordance with UK Generally Accepted Accounting Practice ("UK GAAP").
The financial information contained in the Half Yearly report does not constitute statutory accounts as defined in Section 435 of the Companies Act 2006. The financial information for the preceding statutory reporting period is based on the statutory accounts for the period ended 31 December 2022. Those accounts, upon which the auditors, Hazlewoods LLP, issued a report which was unqualified, have been delivered to the Registrar of Companies.
The financial statements have been prepared in accordance with the accounting policies set out in the statutory accounts for the period ended 31 December 2022.
The interim financial statements are presented in sterling.
2.2 Basis of consolidation
The consolidated financial statements incorporate the results of the Company and its subsidiary MML, (the Group), as if they form a single entity using merger accounting. On the establishment of the Company as the ultimate parent of the Group, no change in ownership occurred and the entity was established for the purpose of acquiring MML. Therefore, the requirements of purchase method accounting did not apply.
The financial statements of the subsidiary are prepared for the 6 months to 30 June 2023 using consistent accounting policies. All inter-company balances and transactions, including unrealised profits arising from them, are eliminated on consolidation.
2.3 Going concern
Company law requires the Directors to consider the appropriateness of the going concern basis when preparing the financial statements. Having reviewed cash flow forecasts for the period to June 2024, the Directors confirm that they consider that the going concern basis is appropriate. This review included consideration of the Group's financial position in respect of its cash flows and investment commitments (of which there are none of significance), the working arrangements of key service providers, the impact of the conflict in Ukraine and the current economic environment. In addition, the Directors are not aware of any material uncertainties that may cast significant doubt upon the Group's ability to continue as a going concern.
The Directors believe that the Group has sufficient resources to continue in operational existence for the foreseeable future. Thus, they have adopted the going concern basis of accounting in preparing the annual financial statements.
3 Loss per share
The calculation of basic return per share is based on the return after tax and on a weighted average number of ordinary shares in issue in the period. Normal and diluted returns per share are the same as there are no dilutive elements on share capital.
|
|
|
|
|
6 months to |
|
Period to |
|
30 June 2023 |
|
31 December 2022 |
|
(unaudited) |
|
(audited) |
Loss after taxation attributable to Ordinary shareholders (£) |
(107,566) |
|
(384,994) |
Weighted average Ordinary shares in issue |
10,000,000 |
|
10,000,000 |
Loss per Ordinary share - basic and diluted (pence) |
(1.08) |
|
(3.85) |
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