TIDMCLC
RNS Number : 4769N
Calculus VCT PLC
31 May 2022
Calculus VCT Plc (the 'Company')
Legal Entity Identifier: 2138005SMDWLMMNPVA90
Final results for the year ended 28 February 2022
For the full annual financial report, please refer to the
Investor Information section on
https://calculuscapital.com/investment-opportunities/calculus-vct/investor-information/
The Annual Report and Financial Statements ("Annual Report and
Accounts") for the year ended 28 February 2022 and the Notice of
Annual General Meeting will be posted to shareholders shortly and
will be available for inspection at 12 Conduit Street, London, W1S
2XH, the Company's registered office, and will be available in
electronic format for download on
www.calculuscapital.com/calculus-vct/ , a website maintained by the
Company's Investment Manager, Calculus Capital Limited. A copy of
the Annual Report and Accounts will also be submitted shortly to
the National Storage Mechanism ("NSM") and will be available for
inspection at the NSM, which is situated at:
https://www.fca.org.uk/markets/primary-markets/regulatory-disclosures/national-storage-mechanism
Page numbers and cross-references in the announcement below
refer to page numbers and cross-references in the PDF of the Annual
Report and Accounts.
Financial Highlights
Year to 28 February Year to 28 February
2022 2021
Net Asset Value per
share 67.90p 67.08p
Final dividend proposed 3.06p 3.02p
Annual yield* 4.50% 4.50%
Total return per share* 4.83p 0.98p
Share price 55.00p 60.00p
Chairmans Update
I am pleased to present Calculus VCT plc's (the Company) results
for the year ended 28 February 2022. The Company has shown robust
financial performance, which included five successful exits during
the financial year. It has been a year of progress for the Company
with five new investments and GBP8.6 million worth of new Ordinary
shares allotted. The venture capital portfolio of qualifying
investments grew in value by GBP2.5 million, excluding the effects
of new and follow-on investments and exits. This portfolio growth
represents a growth of 16% of the average value of the portfolio
and was driven by the strong performance of a number of investee
companies.
Manager's Review
There has been a strong performance across a broad range of the
Company's qualifying investments, which is particularly encouraging
given the challenging market conditions. The Company completed
seven exits during the year, five of which were successful,
including three companies that assisted towards the fight against
Covid.
Exits
The Company's remaining holding in Genedrive, a molecular
diagnostics company which developed the Genedrive 96 SARS-COV-2
Kit, was sold in March 2021. The total sale resulted in a 2.8x
return overall and a 4.0x return on the shares acquired from the
Neptune-Calculus Income and Growth VCT plc in September 2017.
Open Orphan plc, a world leader in the testing of vaccines and
antivirals using human challenge clinical trials was sold in May
2021 for a total return of 1.8x. Open Orphan worked in
collaboration with US biotech Codagenix to conduct a Phase 1 study
of a needle free, intranasal Covid vaccine, COVI-VAC.
In July 2021, the Company divested its holdings in Mologic
Limited, a world leading innovator in lateral flow and rapid
diagnostic technologies. The sale generated a 3.6x return on the
equity investment since the initial investment in 2018 together
with repayment of loan notes and associated interest. In addition,
further consideration is payable in the event of strong sales of
certain Mologic products.
CloudTrade Limited, a platform which automatically processes and
interprets electronic documents, was acquired by Advanced, a
leading provider of business software, delivering a 4x return to
Calculus VCT investors in just over 3 years. The Company invested
in July 2018, having been impressed by the patented technology,
strong management team and large addressable market. During the
investment period the company's revenues have grown significantly,
and multiple new partnerships and contracts have been won. The
acquisition by Advance was completed in October 2021.
The Company's holding in Maze Theory Limited, a digital
entertainment studio focusing on the creation and development of
immersive entertainment experience, was realised in December 2021.
The sale resulted in a 1.3x return to the Company.
In addition, the following exits occurred during the year which
had less successful outcomes.
In August 2021 the Company sold its holding in Cornerstone FS
Plc, a fintech company focusing on providing foreign exchange
trading services. Since April 2021, its share price had steadily
declined, and it was decided to divest the company yielding a
minimal 0.05x return.
In February 2022 the Company divested its stake in Money
Dashboard, a personal finance management web and mobile app.
Challenges arose from additional controls which the banks have
implemented to the open banking directive introduced by the
Government. For example, requiring external app users to
re-authenticate every 90 days. This has made scaling the Money
Dashboard user base more difficult than anticipated. The resulting
sale produced a 0.6x return to the Company.
Performance
The net asset value per Ordinary share at 28 February 2022 was
67.90 pence, compared to 67.08 pence as at 28 February 2021, this
is after paying a dividend during the year of 3.02 pence per share.
Despite the Covid Delta and Omicron variants causing disruption in
labour markets and supply chains, the Board is pleased with the
growth of the Company's portfolio and the positive uplifts in the
valuations of several of portfolio companies.
The most substantial movement in the qualifying portfolio was
the uplift of Arecor Therapeutics plc. Arecor, a biopharmaceutical
products company, announced its admission to trading on AIM, a
market operated by London Stock Exchange, on 3 June 2021. Admission
followed a successful oversubscribed placing by Panmure Gordon,
raising gross proceeds of GBP20 million at a price of 226 pence per
share. The Company decided to invest prior to the company's
successful IPO. Since then, the Company has seen its share value
increase which resulted in strengthening the NAV by GBP0.7
million.
Home Team Content Limited, a UK-based independent production
company also enjoyed an uplift in value since February 2021,
improving the NAV by GBP0.6 million. Home Team was co-founded by
experienced producers, Dominic Buchanan and Bennett McGhee, both of
whom have established reputations in the industry. Home Team will
harness the reputations of its two producers in identifying and
working with under-represented creatives and new voices through
interactive as well as traditional film and television platforms.
The company has numerous exciting projects on the development
slate.
Brouhaha Entertainment Limited, a production company founded by
Oscar nominated producer, Gabrielle Tana, Independent film industry
pioneer, Troy Lum, and producer, Andrew Mason saw the value of its
shares increase due to the company's exciting slate across both
film and television, not to mention strong progress with several
projects entering production. Brouhaha has two fully financed film
projects and a major television series for Netflix either in
production or due to go into production in 2022. The increase in
valuation resulted in a GBP0.4 million uplift on the NAV.
Wazoku Limited, an idea management company, whose collaborative
idea management platform helps organisations transform raw ideas
generated by the workforce into actionable innovation, saw its
value increase due to a significant number of new blue-chip
customers added on the roster and a strong year of growth across
its suite of products. Wazoku maintains an impressive client list
including the United Kingdom Ministry of Defence (MoD), Waitrose,
Microsoft and HSBC. The effect of Wazoku's performance produced a
GBP0.4 million increase on the Company's NAV.
Oxford Biotherapeutics, Wonderhood, Essentia Analytics, Maven
Screen Media, Park Street Shipping, Fiscaltec, Raindog Films and
Weedingtech also saw their valuation increase over the year along
with several other investee companies. Altogether these valuation
improvements added a further GBP1.4 million to the Company's
NAV.
Conversely, during the year, Arcis Biotechnology's portfolio of
technologies has not yet transitioned into material commercial
opportunities. As a result, the Company has prudently reduced its
valuation by GBP0.4 million.
Scancell plc, an immune-oncology company saw its share price
fall resulting in a decrease of GBP0.3 million on the NAV. Life
sciences shares and technology stocks have fallen in the last
quarter as it is felt that interest rate rises are negative for
these sectors. Scancell's valuation reduced despite having two
cancer drugs in clinical trials.
Spectral MD Holdings, a US based firm which produces predictive
analytics, proprietary AI algorithms and imaging systems to assist
with medical treatment, also saw its share price fall. This was due
to limited liquidity since it IPO'd on AIM resulting from delayed
"Regulation S" compliance - a series of rules which exempt
registration with the US Securities and Exchange Commission (SEC)
in order to be able to trade outside of the US. Because of this
issue, Spectral MD shares have been unable to trade via certain
distributors and platforms in the US or abroad. However, Spectral
MD will be fully compliant once it has completed one year of
trading which will be in June 2022. The fall in share price led to
a GBP0.2 million decrease on the NAV.
Due to a combination of Covid and Brexit, the DFID (Department
for International Development) was merged with the Foreign and
Commonwealth Office which resulted in reduced funding for
international development projects, and as a result Every 1 Mobile
Limited, was written down in full in August 2021. The impact was a
GBP0.2 million reduction on the NAV.
Factoring all other investee company valuation movements, the
total portfolio enjoyed a net GBP2.5 million uplift since the
beginning of the financial year.
New Investments
Investments Date Sector Investment Website
cost GBP'000
=========== =========== ==============
Invizius Limited March 2021 Healthcare 375 https://www.invizius.com/
=========== =========== ============== ==============================
Censo Biotechnologies April 2021 Healthcare 651 https://censobio.com/
Limited
=========== =========== ============== ==============================
Spectral MD June 2021 Healthcare 500 https://www.spectralmd.com/
Holdings Limited
=========== =========== ============== ==============================
Brouhaha Entertainment July 2021 Media 831 -
Limited & January
2022
=========== =========== ============== ==============================
Hinterview December Media 800 https://hello.hinterview.com/
Limited 2021
=========== =========== ============== ==============================
Follow-on Investments
Investments Date Sector Investment Website
cost '000
========= =========== ===========
Arcis Biotechnology April Healthcare 50 https://arcisbio.com/
Holdings Limited 2021
========= =========== =========== ========================
Arecor Therapeutics May 2021 Healthcare 200 https://arecor.com/
plc
========= =========== =========== ========================
Home Team Content October Media 138 -
Limited 2021
========= =========== =========== ========================
Fiscaltec Group January Technology 268 https://fiscaltec.com/
Limited 2022
========= =========== =========== ========================
MIP Diagnostics February Healthcare 482 https://www.mip-dx.com/
Limited 2022
========= =========== =========== ========================
Venture Capital Investments
Calculus Capital Limited manages the portfolio of VCT qualifying
investments made by the Company. The Company invested GBP3.2
million in five new investments and GBP1.1million in five follow-on
investments during the year ended 28 February 2022.
Issue of new Ordinary shares
The offer for subscription for Ordinary Shares that opened on 8
September 2020 and closed on 27 August 2021 received aggregate
subscriptions from the issue of Ordinary shares of GBP7.8
million.
On 13 September 2021, a new offer was launched. The Company had
issued shares for GBP1.9 million of subscriptions under this offer
by the end of the financial year. Of the GBP8.7 million total new
share issues in the year ended 28 February 2022, GBP6.8 million
took place under the offer that closed on 27 August 2021.
From September 2020 more than GBP10 million was raised in share
issues, funds generated have and will be used in the investment of
enterprises with growth potential. The current offer will close on
26 August 2022.
2.2 million shares were issued on the 22 March 2022 at an
average issue price of 65.9 pence per share, additionally on 5
April 2022 the Company issued a further 2.2 million shares at an
average issue price of 65.6 pence per share.
Share Buybacks
During the year, 241,611 shares at a consideration of GBP147,020
were bought back for cancellation. In keeping with its policy for
returning funds to shareholders, the Company will continue to
consider opportunities for buybacks in the coming year. The total
shares bought back represent 0.60 per cent of the weighted average
number of shares in issue during the year ended 28 February
2022.
Dividend
The Directors are pleased to announce a final dividend of 3.06
pence per Ordinary share to be paid to all Ordinary
shareholders.
Subject to shareholder approval, the Ordinary share dividend
will be paid on 29 July 2022 to shareholders on the register on 1
July 2022. The deadline for the Scheme Administrator to receive any
applications under the dividend reinvestment scheme is 14 July
2022.
Impact of Covid
The initial impact of the economic challenges caused by the
pandemic were mitigated due to several factors. The Company was
shielded to a certain degree by holding a significant portion of
its assets in cash, and although some portfolio companies were
adversely affected by the impact of Covid, the valuations in
several life sciences companies benefited from a general rerating
of the life sciences sector and, in some cases, developed products
and services to aid the fight against Covid. B2B SASS technology
companies were also largely unaffected as business continued to
function, albeit often remotely, during the pandemic. The Company's
investment in the media and entertainment sector also showed an
uplift. This arose both from progress by individual companies and
from a general rerating of the producers' premium content. This was
also stimulated by increased streamer subscriptions during
lock-downs and the entry of a number of new well-capitalised
streamers.
Developments since the year end
In March 2022, the Company made an investment in Destiny Pharma
plc. Destiny Pharma is a clinical phase biotechnology company
dedicated to the development of novel anti-infectives with a focus
on infection prevention. The company is developing novel
antimicrobial drugs from its "in-house" XF platform and from
recently acquired Biotherapeutic products that harness beneficial
components of the human microbiome.
Also in March 2022, the Company made a follow-on investment in
Arcis Biotechnology. Arcis completed the development of its new one
step RNA reagent formulation, designed to overcome the well-known
obstacles to the use of saliva in Covid testing. The investment was
part of a GBP300,000 funding round to assist in getting its
formulation to market. Currently, Arcis has agreements in place for
field evaluations of its formulation with three leading collection
device companies, one leading supplier of components in diagnostics
kits and a leading provider of molecular diagnostics products.
In the same month, the Company acquired additional holdings in
Censo Biotechnologies Limited (trading as Axol). Using stem cell
technology, Censo Biotechnologies supplies high quality adult human
cells to many of the biggest and best-known pharmaceutical
companies and research institutions.
As mentioned above, since the year end the Company has made a
further allotment of Ordinary shares. On 22 March 2.2 million
shares were allotted at an average price of 65.9 and on 5 April
2022, a further 2.2 million Ordinary shares were allotted at an
average price of 65.6 pence per share.
The most recent unaudited NAV available at the time of
publishing these accounts is 68.00 pence per share as at 30 April
2022.
Outlook
The strong recovery from Covid in the UK was driven by a bounce
back in household consumption, which until recently had been
expected to continue to drive economic growth. However, the rise in
geopolitical risk caused by the Russian conflict with Ukraine,
which has already resulted in sharp increases in inflation, rising
energy prices and increased exposure to cyber-attacks, could
contribute to renewed economic disruption. This would be amplified
by falling UK consumer confidence, which had weakened even before
the invasion due to the cost of living crisis and impact of the
Omicron variant. The Manager continues to assess the exposure for
these risk and appropriate measures, where applicable, will be
implemented.
At the time of writing, the Russian-Ukraine conflict is far from
resolved and the negative economic consequences are yet to be fully
transparent. However, with a set of diverse investments across
different sectors, primarily technology, healthcare and media, the
overall impact to the Company is expected not to be
significant.
Despite the often challenging market conditions, we ended the
year strongly with several notable successes in our current
portfolio and in the exits we have achieved. The Company is pleased
to announce that the VCT has successfully fund raised over GBP10
million since September 2020.
The Companys' Manager, Calculus Capital is a long-term investor,
actively identifying attractive investment opportunities. The
Manager will continue to deploy capital to proactively support
companies through difficult periods and to invest in selective new
opportunities which may arise.
Your Board is focused on consistently delivering value for
shareholders over the long-term by investing in high potential
businesses and building a well-diversified portfolio.
Jan Ward
Chairman
31 May 2022
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