TIDMSUPP
RNS Number : 3781M
Schroder UK Public Private Tst plc
21 September 2021
Half Year Report
Schroder UK Public Private Trust plc hereby submits its Half
Year Report for the six months ended 30 June 2021 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/3781M_1-2021-9-20.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:
Gareth Faith
Schroder Investment Management Limited
Tel: 020 7658 5264
Schroder UK Public Private Trust plc
Half Year Report and Accounts for the six months ended 30 June
2021
Key Highlights
-- Strong investment performance during the period as the Net Asset Value increased by 16.1%.
-- Post-period end the Company's largest holding, Oxford
Nanopore, announced its expected intention to float on the London
Stock Exchange.
-- Portfolio rebalancing continues following a number of
positive liquidity events during the period.
-- Financial position of the Company significantly strengthened
during the period. Gearing was reduced to zero, and the Company had
net current assets at GBP27.4m at 30 June 2021.
-- New private investments in Tessian and Revolut and one public
investment in Johnson Matthey during the period.
-- Changes to the team managing public equities within
Schroders. Ben Wicks to be succeeded by Roger Doig supported by
Jack Dempsey and the wider Schroders public equity team.
-- Valuation reporting frequency to revert to daily basis no later than 1 January 2022.
-- Webinar for retail investors to be held on 1 October 2021 at 3.00pm.
Chairman's Statement
Introduction
I am pleased to present my first report as Chairman following
the retirement of Susan Searle from the Board at the AGM in June
2021.
My Board colleagues and I would like to thank Susan Searle for
her six years of service to the Company as Chair, which dates back
to the launch of the Company and included the change of Portfolio
Manager to Schroders, as well as overseeing the refreshing of the
Board and the renegotiation of the debt. We wish her well for the
future.
Performance and valuation
During the six month period to 30 June 2021, the net asset value
("NAV") per share increased 16.1% from 35.00p per share to 40.65p
per share. The share price also increased by 7.9% from 31.00p to
33.45p in the same period.
The recovery in the NAV so far this year, driven by a number of
positive developments within the Company's portfolio, is
encouraging. These developments, previously announced to the
market, include the sale of businesses such as Inivata and Kuur
Therapeutics and the IPO of Immunocore. The valuation of Oxford
Nanopore has seen a significant rerating as recent funding rounds
have increased the company's valuation materially ahead of its
anticipated IPO later this year.
Progress on rebalancing portfolio
Further strategic progress was made during the period on moving
towards a more balanced portfolio. Several transactions have
allowed the Company to reduce its gearing as well as make progress
against its target of making new investments into two public and
two private companies in 2021.
Thanks to the proceeds from the basket of sales to Rosetta
Capital in March 2021 and Sanofi's acquisition of Kymab, our
Portfolio Manager has for the first time been able to make new
private investments and we were delighted to report two investments
made into exciting opportunities in Tessian and Revolut. Further
details of these new private investments may be found in the
Portfolio Manager's Review.
On the public side the Portfolio Manager has made one new
investment during the period. In June 2021 the Company made an
initial investment into Johnson Matthey, a leading global chemicals
company based in the UK which is developing cutting edge innovative
applied materials and solutions. This increase in the portfolio's
listed exposure has the additional benefit of improving the
liquidity profile of the Company.
Following these developments the portfolio ends the period with
34 holdings, 25 of which are unquoted and 9 of which are quoted. I
look forward to being able to report further new investments to
shareholders over the next 6 months, and in the years to come.
Detailed analysis of changes in valuation and an update on
holdings may be found in the Portfolio Manager's Review.
Reduction of gearing and modified Policy
Since assuming management of the portfolio, Schroders has worked
closely with the Board to reduce the level of gearing in the
Company's portfolio and I am pleased to report that in the six
months to 30 June 2021, the Company's gearing was reduced to zero
and net current assets stood at GBP27.4 million by the end of the
period under review. The effort involved and the scale of
achievement this represents, given the situation two years ago,
should not be underestimated.
The term loan was replaced with a revolving credit facility upon
the balance reducing to GBP60 million and then completely repaid
thereafter. The Board expects to reduce the size of this facility
from GBP55 million to GBP40 million as this amount better reflects
the Board's and Schroders' anticipated prudent use of gearing and
will meaningfully reduce the cost of the facility.
The revolving credit facility will be used on a short-term basis
in future and only when there is visibility on the ability to pay
down debt within a 12 month period. The Portfolio Manager will seek
to utilise the facility when market conditions and the investment
case of a company matches the portfolio managers' criteria for
making leveraged investments.
Discount management
Whilst the Company's NAV per share increased in the six months
to 30 June 2021, the share price discount to NAV per share widened
from 11.4% to 17.7%. Volatility in the Company's share price has,
however, abated and whilst the Board did not use the buyback
authority renewed on 4 June 2021, it considers buybacks a useful
mechanism for discount management and will consider buybacks when
appropriate.
Change of joint portfolio manager
Schroders employs a collaborative, team-based approach to
investment, combining skill, experience and research resources
across both public and private equity.
The Company's private investments are managed by Schroders'
specialist private equity team, Schroders Capital, which has over
20 years' experience successfully investing in companies, both
directly via direct co-investment and through funds. The private
portion of the Company's portfolio is managed by Tim Creed,
Schroders Capital's Head of Private Equity Investments. Tim is a
member of the firm's Global Investment Committee and he is
supported by a sizable team of private equity investment
professionals that are committing a substantial amount of their
time to the portfolio.
On the public equity side, Schroders leverages stock selection
expertise from across their public equities teams. Since the
appointment of Schroders, Ben Wicks has been responsible for the
Company's public equity investments and has drawn on the wide
experience of Schroders' public equity analysts and fund managers
globally. Ben will shortly take a leave of absence from Schroders
for a period of paternity leave and, on his return, will focus on
his roles as Head of Research Innovation and Co-Leadership of
Schroders' Data Insights Unit. In accordance with a succession plan
agreed by the Board, Roger Doig will take on responsibility for the
public equity investments with immediate effect.
Roger has been a senior analyst in Schroders' pan-European
equity research team since 2014, prior to which he was a member of
Schroders' European credit research team. He has been working
closely with Ben and the wider Schroders equity investment team
since soon after Schroders took over the management of the Company,
researching and developing a pipeline of potential investment
opportunities.
Roger will be supported by Jack Dempsey. Jack's investment
experience began when he joined Schroders in 2016. He has strong
experience in the UK markets having worked on a number of
strategies focused on UK & European companies in the past, with
a particular focus on small and mid-cap names and is currently the
lead portfolio manager of the Schroder ISF Italian Equity fund.
Jack has been working with the wider SUPP team since June 2021.
Schroders will continue to leverage its stock selection
expertise from across their public equities teams, as well as its
wider investment capabilities in its Data Insights and
Sustainability units, in pursuit of identifying leading businesses
of the decades ahead.
Valuation Reporting Frequency
In March 2020 the Board moved from daily portfolio valuations to
quarterly, given the predominantly private nature of the portfolio
at that time. Given the ongoing strategy of rebalancing the
portfolio and the increase in the Company's exposure to listed
holdings, the Board intends to move valuation reporting frequency
back to a daily basis should the public equities in the portfolio
come to represent around 40% or more of the overall portfolio, but
probably not later than 1 January 2022.
Private investments will continue to undergo a rigorous
quarterly valuation process and retrospective valuations covering
these private investments will be released either in the full year
accounts, the interim report or the quarterly updates. The Board
will update shareholders on this change in due course.
Outlook
The Board is pleased with the strong absolute progress made by
the Company in the six months ended 30 June. The reduction in debt
leaves the Company in a stronger financial position to make
additional investments and weather any future head winds should
they arise. The Board will continue to work with the Portfolio
Manager to implement its strategy of rebalancing the portfolio.
The announcement by Oxford Nanopore, post period-end, of their
intention to float should enable the Company to make further
progress on diversifying its portfolio through a partial
realisation of its largest holding should the IPO succeed. The
prospect of further such liquidity events within the portfolio
should continue to provide the Portfolio Manager with the ability
to make further new investments in addition to the three new
investments already made in 2021.
Corporate Governance
The Board is pleased to announce that the Annual General Meeting
of the Company was held at 1 London Wall Place, London EC2Y 5AU on
Friday, 4 June 2021. All resolutions as set out in the Notice of
Meeting were duly passed with overwhelming shareholder support.
Web Conference - Update from Schroders
Please join the portfolio managers for a webinar in which they
will report on the half year ended 30 June 2021 and outline their
thoughts on the future direction of the portfolio. The presentation
will be followed by a live Q&A session. The webinar will take
place on 1 October 2021 at 3.00pm. Register for the event at
https://registration.duuzra.com/form/suppinterims2021
Tim Edwards
Chairman
21 September 2021
Portfolio Manager's Review
Summary
-- NAV of 40.65p per share as of 30 June 2021, an increase of
1.6% relative to the NAV as of 31 March 2021 (40.00p per share) and
16.1% as of 31 December 2020 (35.00p per share).
-- This performance is driven by several positive developments
within the portfolio including Oxford Nanopore's funding round at
an uplifted valuation, Immunocore's initial public offering ("IPO")
and the sales of Inivata and Kuur Therapeutics.
-- Considerable progress achieved in rebalancing the portfolio,
including two notable private sales transactions, contributing
towards total realisations of GBP120.6 million during the half year
period. (1)
-- Financial position has been significantly strengthened with
full repayment of the bank loan and net current assets now standing
at GBP27.4 million.
-- First two new investments completed since the appointment of
Schroders as Portfolio Manager, private cyber-security company,
Tessian, and publicly listed applied materials chemistry innovator,
Johnson Matthey.
-- Since the period end, the Company also completed its second
new private equity investment in leading global neobank,
Revolut.
-- The Company is now very well-placed to capitalise on
developments within its portfolio, for example the potential
initial public offering of Oxford Nanopore Technologies (ONT), and
new opportunities in both the public and private equity
markets.
(1) Excludes proceeds from the sale of Inivata which were
received after the period end.
Introduction
Economic backdrop
Equities rebounded over the first half of 2021 as vaccination
programmes were rolled out, social distancing measures relaxed, and
economic activity recovered. Many lowly-valued and economically
sensitive areas of the market outperformed in anticipation of a
very strong global recovery. There was, however, a rotation back
towards more defensive areas of the market over Q2 due to a
combination of factors, including that expectations growth may have
peaked. Central banks remained committed to ultra-loose monetary
policy as they judged a pick-up in inflation to be largely
transitory in nature.
Five years on from the UK's vote to leave the European Union it
appears that investors are endorsing the prospects for UK equities
again. The removal of the Brexit overhang, the low interest rate
environment, strong economic data and growth forecasts, and a
vaccination rollout programme that has been executed without major
disruption, have all seemingly combined to fuel more positive
investor sentiment around UK equities. Global fund managers are
overweight UK equities for the first time since 2014, according to
Bank of America Merrill Lynch's June 2021 Global Fund Manager
Survey. However, the valuation discount of UK equities to global
peers remains extended in a historical context. This opportunity
has been underlined by the recent flurry of M&A interest and
activity regarding UK companies. In the first six months of 2021,
13 UK-listed companies were subject to buyout bids from private
equity - the highest figure since 1999 and compared to just 4 in
each of the first halves of 2019 and 2020. It also serves to
highlight the opportunity for us as active managers, both in the
public and private areas of the UK equity market.
Objectives and progress
Within the Company's portfolio, the first half of 2021 has been
a period during which much of the hard work undertaken during 2020
has started to bear fruit. Key developments in the first quarter
included:
-- Agreement to extend the term of the credit facility for 24 months to 30 January 2023.
-- Immunocore completed its initial public offering ("IPO").
-- Sale of a basket of holdings to Rosetta Capital.
-- Partial repayment of the bank loan.
-- Oxford Nanopore announced its intention to IPO on the London
Stock Exchange in the second half of 2021.
The positive trend continued in the second quarter with further
developments including:
-- Sale of Kymab to Sanofi.
-- Full repayment of the bank loan.
-- The announcement of the acquisition of Inivata by NeoGenomics.
-- Oxford Nanopore completed a fundraise resulting in a material
revaluation (to represent 26.5% of the portfolio as of 30 June
2021).
-- Sale of Kuur Therapeutics to Athenex, Inc.
-- First new private equity investment, Tessian Limited ("Tessian").
-- First new public equity investment, Johnson Matthey.
After the period end, the Company also completed its second new
private equity investment in UK-founded, leading global neobank,
Revolut Limited ("Revolut").
Overall, these events represent a considerable leap forward in
the repositioning of the portfolio. The Company has significantly
bolstered its financial position, fully repaid the outstanding debt
which stood at GBP107 million as of 31 December 2020 and has made
its first new investments since our appointment as Portfolio
Manager.
Portfolio composition and valuation reviews
As of 31 December 2020, the Company had 38 portfolio holdings(1)
including 8 quoted holdings and 30 unquoted holdings. During the
period, the number and composition of holdings was impacted by the
following events:
-- Immunocore completed its initial public offering ("IPO").
-- Sale of four holdings and three partial holdings to Rosetta Capital.
-- Lignia Wood entered administration resulting in its fair value being reduced to zero.
-- Sale of Kymab (with the remaining contingent payments still
held in the portfolio based on a probability weighted expected
return of GBP5.6 million).
-- Sale of Inivata.
-- Sale of Kuur Therapeutics to publicly listed Athenex, Inc
("Athenex") which remains in the portfolio as a quoted holding.
-- Sale of the residual holding in Netscientific.
-- Small upwards revaluation of Drayson Technologies from no value.
-- New investment in Tessian.
-- New investment in Johnson Matthey.
As of 30 June 2021, the Company ended the period with 34
holdings (1) including 9 quoted holdings and 25 unquoted holdings.
All the Company's quoted holdings were valued using unadjusted
quoted prices except Rutherford Health which continues to be fair
value priced by Link Fund Solutions Limited ("LFS"), the Company's
AIFM. For the unquoted holdings, the AIFM conducted a full
valuation review to determine the fair value of the portfolio as of
30 June 2021.
(1) Excluding 7 holdings with no value.
Financial Performance
Attribution
Analysis Net (debt)
(GBPm) Quoted Unquoted cash Other NAV
Value at 31.12.20 66.6 354.6 (100.7) (2.4) 318.1
------------------------------- ------- -------- ------------ ------ ------
+ Investments 3.5 11.3 (14.8) - -
------------------------------- ------- -------- ------------ ------ ------
- Realisations (8.5) (140.0) 120.6 27.9 -
------------------------------- ------- -------- ------------ ------ ------
+/- Fair value gains/(losses) (4.1) 60.7 - - 56.6
------------------------------- ------- -------- ------------ ------ ------
+/- FX gains/(losses) (0.4) (1.7) - (0.1) (2.2)
------------------------------- ------- -------- ------------ ------ ------
+/- Reclassified holdings 30.7 (30.7) - - -
------------------------------- ------- -------- ------------ ------ ------
+/- Costs and other movements - - (3.8) 0.7 (3.1)
------------------------------- ------- -------- ------------ ------ ------
Value at 30.06.21 87.8 254.2 1.3 26.1 369.4
------------------------------- ------- -------- ------------ ------ ------
Source: AIFM, Link Fund Solutions Limited, as of 30 June
2021.
The NAV as of 30 June 2021 was GBP369.4 million or 40.65p per
share reflecting an increase of 16.1% compared with the NAV as of
31 December 2020.
The half year NAV return of 16.1% comprised:
-- Quoted holdings: -1.3%
-- Unquoted holdings: +19.1%
-- Foreign exchange: -0.7%
-- Costs and other movements: -1.0%
Portfolio
The Company's quoted holdings saw a decline in value of 6.2%
contributing -1.3% to the half year NAV return. The largest
negative contributors were IDEX Biometrics ASA ("Idex") and Autolus
Therapeutics ("Autolus") which declined 29% and 25% respectively.
Autolus was weakest in the first quarter declining 35% but
recovered moderately in the second quarter increasing 16%. The
other quoted holdings did not materially impact the portfolio.
The Company's unquoted holdings saw an increase in value of
17.1% contributing 19.1% to the half year NAV return. As reported
in the first quarter NAV announcement, the largest positive
contributor was Oxford Nanopore Technologies ("ONT") which had its
fair value uplifted by GBP22.0 million or 32.1% to reflect the
pricing of the external funding round completed in May 2021. As of
30 June 2021, Oxford Nanopore is now the largest holding within the
portfolio representing 26.5% of total investments. After accounting
for its partial sale to Rosetta Capital, the second largest
positive contributor was Inivata. The fair value of the holding was
increased by GBP15.1 million prior to its acquisition by
NeoGenomics, Inc. ("NeoGenomics").
It should be noted that the quoted performance excludes
Immunocore which, despite completing an IPO, started the period as
an unquoted company. Within the unquoted holdings, Immunocore was
the third largest contributor with its share price increasing 49%
between listing on Nasdaq in February 2021 and 30 June 2021.
The fourth largest positive contributor was Kuur Therapeutics
("Kuur"). The holding's fair value increased GBP6.2 million
reflecting both its sale to publicly listed Athenex and the
performance of Athenex common stock post-closing.
Elsewhere across the portfolio, there were several other small
but positive contributors including OcuTerra Therapeutics
(previously Scifluor Life Sciences) which completed a Series B
funding round, Atom Bank which was marginally revalued due to an
improvement in trading comparables and HP Environmental
Technologies Fund ("HPET") which reported the sale of two portfolio
companies. As of 30 June 2021, HPET is valued at GBP8.4 million,
representing a fair value increase of GBP4.4 million relative to
the GBP4.0 million holding value implied by the acquisition price
of Ombu Group in December 2020.
There were no unquoted holdings that detracted from performance
by more than GBP2.0 million.
Foreign Exchange
The fair value of investments denominated in all other global
currencies were negatively impacted by the appreciation of GBP.
Cash, debt, and net current assets
The Company fully repaid its outstanding bank loan which stood
at GBP107.0 million as of 31 December 2020, improving its net
current assets/(liabilities) by GBP130.5 million from - GBP103.1
million as of 31 December 2020 to GBP27.4m as of 30 June 2021. The
net current assets include GBP1.3m of cash and GBP26.1m of net
debtors principally related to proceeds from the sale of Inivata
received after the period end.
Investment Activity
Realisations
The first half of 2021 has been a period of significant activity
building on the progress achieved through 2020. Amongst the various
rebalancing activities ongoing, the Company completed two notable
private sale transactions and exited one small residual public
holding generating total realisations of GBP120.6 million
including:
1. In March 2021, the sale of a basket of assets (1) to Rosetta
Capital generating initial proceeds of GBP52.9 million (2) .
2. In April 2021, the sale of Kymab to Sanofi generating initial
proceeds of $87 million (GBP63.6 million) with the potential for
additional contingent payments of up to $33 million subject to a
deferred purchase price release and Kymab achieving certain
development and regulatory milestones.
The total realisations for the period exclude the sale of
Inivata to NeoGenomics, which despite being announced in June 2021,
the proceeds of $38.6 million (GBP28.0 million) were not received
until after the period end.
In addition, in May 2021, the Company sold its holding in Kuur
Therapeutics to publicly listed Athenex in return for Athenex
common stock valued at $9.6 million (GBP7.0 million) as of 30 June
2021.
Investments
In January 2021, the Company made certain follow-on investments
of GBP2.9 million in companies contained within the basket of
assets sold to Rosetta Capital which was immediately reimbursed
upon the successful sale.
Later in the first quarter, the Company completed two small
follow-on investments in unquoted holdings with a combined value of
just under GBP0.6 million. The first investment was in Mafic as
part of an internal funding round structured to resolve legacy
governance issues and marginally extend the cash runway. The second
investment was in CeQur, the Company exercised pre-emption rights
to acquire additional shares at a discount to the valuation implied
by its $115m funding round.
In the second quarter, bolstered by the proceeds from the
successful sales, the Company completed its first two new
investments since the appointment of Schroder Investment Management
Ltd as Portfolio Manager, and a third investment which completed
after the period end.
Tessian
In May 2021, the Company made a $6.75m investment into leading
UK-founded private cybersecurity company, Tessian, as part of its
$65m Series C funding round. The round was led by March Capital, a
U.S.-based venture growth firm, with participation from existing
shareholders including Sequoia Capital, Accel, Balderton Capital
and Latitude.
Tessian is pioneering a new approach to cybersecurity and is
defining a new category of security software called Human Layer
Security. To overcome the so-called "people problem" in security,
Tessian uses machine learning to stop security threats and data
breaches caused by people, without disrupting their workflow. It
builds Behavioral Intelligence Models, tailored to every employee,
by understanding each individual's communication patterns and
behaviours online. Tessian uses the models to automatically detect
security threats and prevent them from turning into breaches by
notifying the employee in-the-moment. Over time, these alerts help
employees improve their security behaviours. Today, Tessian secures
people on email and automatically prevents threats such as
phishing, business email compromise, data exfiltration and
accidental data loss.
In the last year, Tessian has tripled its Fortune 500-level
customer base and now has 350 customers around the world across the
legal, financial services, healthcare and technology sectors
including Affirm, Investec and Schroders. With the new funding,
Tessian will continue to expand its platform's capabilities and
plans to secure other interfaces like messaging, web and
collaboration platforms. Tessian will also use the funding to
triple its rapidly growing employee base, with a particular focus
on growing its sales team.
Johnson Matthey
In June 2021, the Company made a GBP3.5m investment into
publicly listed Johnson Matthey, and post-period end has increased
this to bring the total investment to GBP7.5m. Johnson Matthey is a
global leader in the applied materials chemistry, producing
materials that are used in a wide range of industrial processes
from automotive exhaust catalysts to the production of industrial
gases.
Johnson Matthey is set to be an important facilitator of the
process of decarbonisation over the coming decade, with its
materials being critical to the production of hydrogen, and the
emerging use of hydrogen as a clean energy fuel. It is also
developing high energy density cathode materials for use in
Electric Vehicle batteries. Existing emission control catalysts
used in transport are likely to continue to be in demand as
regulations and standards tighten across the world and revenues
from this activity will provide a valuable source of funding for
the development of new technologies.
The investment fits with SUPP's philosophy of supporting
innovative, world leading technologies, that showcase the best of
British entrepreneurial spirit and will help positively impact
society and the planet.
Revolut
Post period-end, in August 2021, the Company completed a further
private investment of $13.7m in the leading disruptive global
neobank, Revolut Limited ("Revolut") alongside its $800m Series E
funding round led by new investors, SoftBank Vision Fund 2 and
Tiger Global Management, valuing the business at $33 billion.
Revolut, the ambitious neobank with more than 16 million
customers worldwide, plans to use the significant primary
investment to further its growth plans, in particular its ongoing
product innovation aimed at meeting customers' everyday financial
needs and aspirations, from quick and easy global transfers, to
managing everything from savings to insurance, to democratising
wealth and trading activities. It will also support the expansion
of Revolut's offering to US customers and its entry to India and
other international markets.
(1) The entire holdings in Carrick Therapeutics, Mission
Therapeutics, PsiOxus Therapeutics and Mereo BioPharma and partial
holdings in Inivata, Immunocore and ReNeuron.
(2) After accounting the value of GBP2.9m follow-on investments
made by the Company with respect to holdings contained in the Sale
Portfolio during January 2021.
Company Updates
Oxford Nanopore: Started preparing for an IPO and completed a
funding round
In March 2021, Oxford Nanopore Technologies ("ONT") notified
shareholders that it had started the process of preparing for a
potential IPO. Whilst the timing of a potential IPO is dependent on
market conditions and other matters not fully within its control,
Oxford Nanopore expects the IPO to occur in the second half of 2021
on the London Stock Exchange.
In May 2021, ONT also announced that it had raised GBP195
million in new capital including GBP125 million from new investors
Temasek, Wellington Management, M&G Investments and Nikon.
Atom Bank: Completed a funding round
In April 2021, Atom Bank ("Atom") announced that it had raised a
further GBP40 million from existing shareholders and guided towards
profitability from its mortgage and business lending within a year,
and to IPO the year after. Atom disclosed that it is on course to
achieve 100bps of Net Interest Margin by the end March 2021 with
lending to SMEs on its balance sheet having grown to over GBP700
million, a tripling of business loans in the last 12 months. This
growth has been achieved both within the Coronavirus Business
Interruption Loan Scheme and independent of government schemes.
The latest funding round took place at a price of 60p per share,
which is significantly below the 2019 funding round price. This
funding round price impacted the holding fair value as of 31
December 2020 which has marginally uplifted as of 30 June 2021.
In May 2021, Atom Bank announced a lending partnership with
Funding Circle, the UK's largest small business loan platform, to
provide GBP300m of new funding to small businesses. Atom will
harness Funding Circle's technology and distribution platform to
deploy new funding to approximately 4,000 UK small businesses,
continuing Atom's support for UK SMEs.
Rutherford Health: Agreed a secured infrastructure investment,
announced a Placing and agreed an acquisition
In February 2021, Rutherford Health ("Rutherford") provided an
update on its funding situation which highlighted the approaching
need for financing during the first quarter of 2021. As such, in
March 2021, Rutherford announced that it had agreed an
infrastructure investment of GBP40 million with Equitix Investment
Management Ltd. The proceeds from the investment are being used to
repay the company's current debt of GBP18.6 million, for further
investment in its infrastructure and for mid-term working capital
purposes. The investment is backed by the freehold transfer of the
Rutherford Cancer Centre South Wales and supported by other
security to be put in place over the company's other centres. The
agreement is for 25 years, and the company will have the option to
repurchase the freehold of the South Wales centre for an agreed
nominal sum at expiry.
In August 2021, Rutherford announced a Placing of 19 million new
Ordinary shares with SDI Holding Limited at a price of 65p per
share raising gross proceeds of GBP12.35 million. In addition,
Rutherford also announced its intention to acquire Proton Partners
International Health Care Investments LLC, a UAE company, in
consideration for the issue of 64 million new Ordinary shares,
conditional on the achievement of certain events including full
mutual due diligence. Upon completion of these two transactions,
SUPP's shareholding would be diluted to 18% of the equity.
Immunocore: Completed its IPO on Nasdaq
In January 2021, Immunocore announced the completion of its $75
million Series C financing round. A precursor to its ultimate IPO
on Nasdaq in February 2021 raising gross proceeds of $312
million.
In March and May 2021, Immunocore provided business updates
highlighting the continued progression of the ImmTAC (Immune
mobilizing monoclonal T-cell receptors Against Cancer) clinical
portfolio for multiple tumour types and the grant of Breakthrough
Therapy Designation by the FDA for Tebentafusp in unresectable or
metastatic uveal melanoma, with the company anticipating completion
of the submission of a Biologics License Application in the third
quarter of 2021.
BenevolentAI: Completed first dosing for its trial in Atopic
Dermatitis
In February 2021, BenevolentAI announced dosing of the first
patient in its randomised first-in-human clinical trial for
BEN-2293, a molecule designed and developed to treat Atopic
Dermatitis. A development which sees a novel multi-target drug
developed using BenevolentAI's scientific and technical expertise
entering human clinical trials. BEN-2293 is designed for topical
administration with low systemic exposure to deliver the optimal
safety and efficacy profile in the treatment of itch and
inflammation associated with Atopic Dermatitis. In this initial
trial, BEN-2293 will be studied in adult patients with mild to
moderate disease.
In April 2021, BenevolentAI reported that AstraZeneca had
selected a novel chronic kidney disease ("CKD") target to advance
to its drug development portfolio, a major milestone since
formation of the strategic collaboration in 2019 to discover new
drugs for CKD and idiopathic pulmonary fibrosis. The collaboration
combines AstraZeneca's scientific expertise and rich datasets with
BenevolentAI's target identification platform and biomedical
knowledge graph to understand these two complex diseases'
underlying mechanisms and identify new and more efficacious drug
targets.
Reaction Engines: Completed further validation of SABRE
technology
In February 2021, Reaction Engines announced that it had
completed the testing of two vital sub-systems of SABRE; the HX3
heat exchanger and the advanced hydrogen preburner. These
sub-systems supply heat energy and air to the air-breathing core of
the engine. These experiments yielded high levels of insight and
represent the latest in a wider series designed to validate SABRE
technology.
In July 2021, Reaction Engines secured a GBP3.9 million grant
from the UK Space Agency to support the development of its
technology, enabling low-carbon air-breathing space access
propulsion technology to be applied more widely in the space sector
and beyond. At the time of announcement, Science Minister Amanda
Solloway and Transport Minister Rachel Maclean visited Reaction
Engines at its site in Culham, Oxfordshire, to discuss how the
funding will help keep the UK ahead of the game in sustainable
space exploration. This investment builds on earlier government
backing for Reaction Engines' revolutionary SABRE technology, which
promises exciting new developments both in space with potential for
other technology spin-out areas including sustainable aviation
fuels, unlocking atmospheric high-speed flight, and prolonging
electric vehicle battery life through innovative thermal management
technology.
IDEX Biometrics: Completed a placing
In February 2021, Idex Biometrics ASA ("Idex") completed a
placing of NOK 229m which is expected to fund the business through
to breakeven in H2 2022. Across the first half of the year, Idex
continued to reach milestones on the path to full commercialisation
of its biometric sensors integrated into payment cards, as a major
card manufacturer began to market a card featuring Idex's
TrustedBio sensors to card issuers. Once final certification for
this card is completed in the second half of 2021, it will be ready
for issuers to begin rolling it out to customers. Idex also
expanded its collaborations with key partners involved in the
People's Bank of China's digital currency initiative, which
promises to be an attractive route to market for Idex.
Autolus Therapeutics: Announced promising results in its AUTO1
trial
In June 2021, Autolus Therapeutics announced promising interim
results of Obe-cel (AUTO1) in a cohort of patients from a trial of
one of its principal programmes with 100% remission rates and a
manageable safety profile to date. This programme is moving forward
to a pivotal study, the results of which are expected in 2022.
Additionally, in H1 2022, interim Phase 1 data is expected from
AUTO4 and several other preclinical programmes are expected to
begin Phase 1 studies.
Genomics: Completed a $30m funding round
In March 2021, Genomics plc ("Genomics") announced that it had
successfully completed a $30m funding round with participation from
new investors including Foresite Capital and F-Prime Capital, plus
existing shareholders Oxford Sciences Innovation and Lansdowne
Partners. Genomics intends to use the funding to expand its work,
building a patient-centric, population health platform that unlocks
a more proactive, precise, and personalised form of healthcare.
Genomics is a leader in the new area of genomic prevention: a
paradigm-changing approach to sustainable healthcare. For the first
time, it allows reliable and personalised estimates of risk for
common diseases, well ahead of disease manifestation. This allows
targeted interventions and tailored screening to either prevent
disease entirely, or to catch it early when outcomes remain
favourable. Genomics' population health management services and
clinical decision support tools are designed to bring greater,
earlier, and more accurate understanding about an individual's risk
for all the common chronic diseases and cancers to doctors and
their patients. The company also uses insights from genomic
variation to accelerate the discovery and development of new
medicines.
HP Environmental Technologies Fund: Completed two portfolio
company sales
In June 2021, Mueller Water Products, Inc. announced that it had
acquired i2O Water, Ltd. ("i2O Water"), a provider of pressure
management solutions for approximately $20 million in cash. Founded
in 2005, and headquartered in Southampton, UK, with operations in
Malaysia and Colombia, i2O Water delivers intelligent water
networks to more than 100 water companies in over 45 countries
around the world and first received investment from Ombu Group in
2014.
In July 2021, bp announced that it had acquired UK-based digital
energy business Open Energi. Open Energi will join the bp Launchpad
portfolio, seeking opportunities to further scale the business
globally, and building on its strong commercial growth over recent
years. bp will also explore how Open Energi, which is currently
focused on the UK market, can work internationally across its
trading & shipping business and low-carbon portfolio, both of
which play an important role for its net zero ambition. The
financial details of the transaction have not been disclosed
publicly.
Cequr: Completed a $115m funding round
In April 2021, CeQur announced the close of a $115 million
equity financing to advance commercial plans for CeQur
Simplicity(TM), including market development activities, a phased
commercial launch strategy that includes a limited market release
in 2021, and the scale-up of high-volume manufacturing. Credit
Suisse Entrepreneur Capital Ltd. and Endeavour Vision led the
financing with participation from new investors, including Tandem
Diabetes Care, Inc. (NASDAQ: TNDM), Ypsomed Group (SWX: YPSN),
Federated Hermes Kaufmann Funds, Kingdon Capital, and GMS Capital,
as well as existing investors.
CeQur Simplicity is a simple, three-day, wearable insulin device
for discreet, convenient, and injection-free bolus dosing. One
Simplicity patch holds up to 200 units of rapid-acting insulin
administered in two-unit increments and replaces, on average, nine
mealtime injections over three days. Clinical research has shown
that nearly 90% of patients using CeQur Simplicity reported
following their insulin regimen better as compared to multiple
daily injections. The device is clinically proven to improve
glycaemic control, with patients achieving significantly improved
HbA1C and time-in-range goals. CeQur Simplicity is both FDA cleared
and CE-marked.
Tessian: Completed a Series C extension
Following its Series C fundraise in May 2021, Tessian announced
that it had received strategic investment from Okta Ventures, Citi
Ventures and Sozo Ventures as part of a Series C extension. With
the additional funding, Tessian will be accelerating its growth
plans.
Source: Portfolio companies including information disclosed
publicly on their websites.
Outlook
The first half of this financial year has been transformative
for the Company's prospects. The Company sits in a strong financial
position with net current assets standing at GBP27.4 million before
accounting for the additional liquidity available through the
revolving credit facility. As Portfolio Manager, we now have more
firepower to capitalise on the opportunities ahead, both within the
existing portfolio but also in accelerating the portfolio
rebalancing and sourcing new high-quality investments. As
communicated at the time of the 2020 Annual Report and Accounts, it
was our intention to invest in two new private companies and two
new public companies during 2021. However, following the sale of
Inivata and our increasing confidence in the outlook of the
existing portfolio these plans have since accelerated. As such, at
the time of this report, we have already announced two new private
equity investments, Tessian and Revolut, and one new public equity
investment, Johnson Matthey. We could not be more excited about the
value creation potential that these new holdings bring to the
portfolio and look forward to reporting on their progress in coming
quarters.
Although we have come a long way, there is still a significant
amount of work to do as part of the plan communicated at the time
of our appointment. Our focus will be on continuing to actively
support the portfolio companies, investigating further portfolio
rebalancing opportunities, working to reduce the discount to NAV
and sourcing new high-quality investments. With capital available
to deploy, further positive developments anticipated through 2021,
including the potential IPO of ONT, the Company's largest holding,
we are optimistic about the portfolio's prospects.
Schroder Investment Management Limited
21 September 2021
Securities named are for illustrative purposes only and should
not be viewed as a recommendation to buy or sell.
Investment Portfolio
as at 30 June 2020
The 20 largest investments account for 90.8% of total
investments by value (30 June 2019: 83.0% and 31 December 2019:
88.7%).
Total
Quoted/ Industry Fair value investments
Holding unquoted Sector GBP'000 %
------------------------------- ---------- ------------- ----------- -----------
Oxford Nanopore Unquoted Health Care 90,745 26.5
------------------------------- ---------- ------------- ----------- -----------
Atom Bank Unquoted Financials 40,004 11.7
------------------------------- ---------- ------------- ----------- -----------
Rutherford Health Quoted Health Care 33,889 9.9
------------------------------- ---------- ------------- ----------- -----------
Immunocore Quoted Health Care 23,410 6.8
------------------------------- ---------- ------------- ----------- -----------
Benevolent Al Unquoted Health Care 22,390 6.5
------------------------------- ---------- ------------- ----------- -----------
Reaction Engines Unquoted Industrials 12,500 3.7
------------------------------- ---------- ------------- ----------- -----------
AMO Pharma Unquoted Health Care 11,291 3.3
------------------------------- ---------- ------------- ----------- -----------
Seedrs Unquoted Financials 9,075 2.7
------------------------------- ---------- ------------- ----------- -----------
Genomics Unquoted Health Care 8,578 2.5
------------------------------- ---------- ------------- ----------- -----------
Federated Wireless Unquoted Technology 8,449 2.5
------------------------------- ---------- ------------- ----------- -----------
HP Environmental Technologies
Fund Unquoted Industrials 8,350 2.4
------------------------------- ---------- ------------- ----------- -----------
Autolus Therapeutics Quoted Health Care 8,040 2.4
------------------------------- ---------- ------------- ----------- -----------
IDEX Biometrics ASA Quoted Technology 8,008 2.3
------------------------------- ---------- ------------- ----------- -----------
Athenex Quoted Health Care 6,960 2.0
------------------------------- ---------- ------------- ----------- -----------
Mafic Unquoted Industrials 6,317 1.8
------------------------------- ---------- ------------- ----------- -----------
Nexeon Unquoted Industrials 6,160 1.8
------------------------------- ---------- ------------- ----------- -----------
Kymab Unquoted Health Care 5,628 1.6
------------------------------- ---------- ------------- ----------- -----------
Cequr Unquoted Health Care 5,134 1.5
------------------------------- ---------- ------------- ----------- -----------
Tessian Unquoted Technology 4,886 1.4
------------------------------- ---------- ------------- ----------- -----------
OcuTerra Unquoted Health Care 4,582 1.3
------------------------------- ---------- ------------- ----------- -----------
Industrial Heat Unquoted Industrials 3,953 1.2
------------------------------- ---------- ------------- ----------- -----------
Johnson Matthey Quoted Chemicals 3,564 1.0
------------------------------- ---------- ------------- ----------- -----------
American Financial Exchange Unquoted Financials 2,706 0.8
------------------------------- ---------- ------------- ----------- -----------
ReNeuron Group Quoted Health Care 2,161 0.6
------------------------------- ---------- ------------- ----------- -----------
Plenti Group Quoted Financials 1,036 0.3
------------------------------- ---------- ------------- ----------- -----------
Econic Unquoted Industrials 1,033 0.3
------------------------------- ---------- ------------- ----------- -----------
Xeros Technology Quoted Industrials 774 0.3
------------------------------- ---------- ------------- ----------- -----------
Novabiotics Unquoted Health Care 745 0.3
------------------------------- ---------- ------------- ----------- -----------
Bodle Technologies Unquoted Technology 681 0.2
------------------------------- ---------- ------------- ----------- -----------
Origin Unquoted Health Care 439 0.2
------------------------------- ---------- ------------- ----------- -----------
Metaboards Unquoted Technology 259 0.2
------------------------------- ---------- ------------- ----------- -----------
Spin Memory Unquoted Technology 107 -
------------------------------- ---------- ------------- ----------- -----------
RM2 International Unquoted Industrials 62 -
------------------------------- ---------- ------------- ----------- -----------
Drayson Unquoted Technology 37 -
------------------------------- ---------- ------------- ----------- -----------
Lignia Wood Unquoted Industrials - -
------------------------------- ---------- ------------- ----------- -----------
Mereo BioPharma Group Quoted Health Care - -
------------------------------- ---------- ------------- ----------- -----------
Sphere Medical Unquoted Health Care - -
------------------------------- ---------- ------------- ----------- -----------
Halosource Unquoted Industrials - -
------------------------------- ---------- ------------- ----------- -----------
Kind Consumer Unquoted Consumer - -
Staples
------------------------------- ---------- ------------- ----------- -----------
Metalysis Unquoted Industrials - -
------------------------------- ---------- ------------- ----------- -----------
Oxsybio Unquoted Health Care - -
------------------------------- ---------- ------------- ----------- -----------
Total investments (1) 341,953 100.0
---------------------------------------------------------- ----------- -----------
(1) Total investments comprise:
GBP'000 %
------------------------------------------------ -------- ------
Unquoted 254,111 74.3
------------------------------------------------ -------- ------
Listed on a recognised stock exchange overseas 47,454 13.9
------------------------------------------------ -------- ------
Quoted on Acquis Stock Exchange 33,889 9.9
------------------------------------------------ -------- ------
Listed on the London Stock Exchange 6,499 1.9
------------------------------------------------ -------- ------
Total 341,953 100.0
------------------------------------------------ -------- ------
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. Additionally, the Board identified COVID-19 related
risks and those existing risks that were likely exacerbated by the
pandemic. These risks are set out on pages 26 to 30 of the Annual
Report and Accounts for the year ended 31 December 2020.
Except with respect to the degree of uncertainty relating to
gearing risk, which has reduced considerably given the Company's
net cash position, the Company's principal risk and uncertainties,
and their mitigation, have not materially changed during the six
months ended 30 June 2021 or since the Annual Report was published
on 24 April 2021.
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 2021.
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 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 2021 (unaudited)
(Unaudited) (Unaudited) (Audited)
For the six months For the six months For the year
ended 30 June 2021 ended 30 June 2020 ended 31 December
2020
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
Gains/(losses)
on investments
held at fair
value through
profit or
loss - 54,554 54,554 - (34,134) (34,134) - (126,095) (126,095)
(Losses)/gains
on foreign
exchange - (120) (120) - 18 18 - (193) (193)
Income from
investments 57 - 57 - - - - - -
--------------------- ------- ------- ------- ------- -------- -------- ------- --------- ---------
Gross return/(loss) 57 54,434 54,491 - (34,116) (34,116) - (126,288) (126,288)
Portfolio
management
fee (1,537) - (1,537) (669) - (669) (1,923) - (1,923)
Administrative
expenses (784) - (784) (703) - (703) (1,240) - (1,240)
--------------------- ------- ------- ------- ------- -------- -------- ------- --------- ---------
Net (loss)/return
before finance
costs and
taxation (2,264) 54,434 52,170 (1,372) (34,116) (35,488) (3,163) (126,288) (129,451)
Finance costs (863) - (863) (1,076) - (1,076) (1,909) - (1,909)
--------------------- ------- ------- ------- ------- -------- -------- ------- --------- ---------
Net (loss)/return
before taxation (3,127) 54,434 51,307 (2,448) (34,116) (36,564) (5,072) (126,288) (131,360)
Taxation - - - - - - - - -
--------------------- ------- ------- ------- ------- -------- -------- ------- --------- ---------
Net (loss)/return
after taxation (3,127) 54,434 51,307 (2,448) (34,116) (36,564) (5,072) (126,288) (131,360)
--------------------- ------- ------- ------- ------- -------- -------- ------- --------- ---------
(Loss)/return
per share
(note 3) (0.34)p 5.99p 5.65p (0.27)p (3.75)p (4.02)p (0.56)p (13.90)p (14.46)p
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 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 2021 (unaudited)
For the six months ended 30 June 2021 (unaudited)
Called-up
share Share Capital Revenue
capital premium reserves reserve Total
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 six months ended 30 June 2020 (unaudited)
Called-up
share Share Capital Revenue
capital premium reserves reserve Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
At 31 December 2019 9,086 891,017 (436,934) (13,740) 449,429
Net loss after taxation - - (34,116) (2,448) (36,564)
------------------------ --------- ------- --------- -------- --------
At 30 June 2020 9,086 891,017 (471,050) (16,188) 412,865
------------------------ --------- ------- --------- -------- --------
For the year ended 31 December 2020 (audited)
Called-up
share Share Capital Revenue
capital premium reserves reserve Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
At 31 December 2019 9,086 891,017 (436,934) (13,740) 449,429
Net loss after taxation - - (126,288) (5,072) (131,360)
------------------------ --------- ------- --------- -------- ---------
At 31 December 2020 9,086 891,017 (563,222) (18,812) 318,069
------------------------ --------- ------- --------- -------- ---------
Statement of Financial Position
at 30 June 2021 (unaudited)
(Unaudited) (Unaudited) (Audited)
30 June 30 June 31 December
2021 2020 2020
GBP'000 GBP'000 GBP'000
Fixed Assets
--------------------------------------- ----------- ----------- -----------
Investments held at fair value through
profit or loss (note 4) 341,953 516,997 421,152
--------------------------------------- ----------- ----------- -----------
Current Assets
Debtors 28,002 606 26
Cash at bank and in hand 1,291 3,577 6,379
--------------------------------------- ----------- ----------- -----------
29,293 4,183 6,405
--------------------------------------- ----------- ----------- -----------
Current liabilities
Creditors: amounts falling due within
one year (note 5) (1,870) (108,315) (109,488)
--------------------------------------- ----------- ----------- -----------
Net current assets/(liabilities) 27,423 (104,132) (103,083)
--------------------------------------- ----------- ----------- -----------
Total assets less current liabilities 369,376 412,865 318,069
--------------------------------------- ----------- ----------- -----------
Net assets 369,376 412,865 318,069
--------------------------------------- ----------- ----------- -----------
Capital and reserves
Called-up share capital (note 6) 9,086 9,086 9,086
Share premium 891,017 891,017 891,017
Capital reserves (508,788) (471,050) (563,222)
Revenue reserve (21,939) (16,188) (18,812)
--------------------------------------- ----------- ----------- -----------
Total equity shareholders' funds 369,376 412,865 318,069
--------------------------------------- ----------- ----------- -----------
Net asset value per share (note 7) 40.65p 45.44p 35.00p
Cash Flow Statement
for the six months ended 30 June 2021 (unaudited)
(Unaudited) (Unaudited) (Audited)
For the six For the six For the
months ended months ended year ended
30 June 30 June 31 December
2021 2020 2020
GBP'000 GBP'000 GBP'000
Cash flows from operating activities
Return/(loss) before finance costs
and taxation 52,170 (35,488) (129,451)
Adjustments for:
(Gains)/losses on investments held
at fair value through profit or
loss (54,554) 34,134 126,095
Net movement in foreign exchange 120 (18) -
(Increase)/decrease in debtors (33) (20) 4
(Decrease)/increase in creditors (614) 263 1,430
----------------------------------------- ------------ ------------ -----------
Net cash flow from operating activities (2,911) (1,129) (1,922)
----------------------------------------- ------------ ------------ -----------
Cash flows from investment activities
Purchases of investments (14,774) (2,012) (6,859)
Proceeds from sales of investments 120,584 11,440 20,727
----------------------------------------- ------------ ------------ -----------
Net cash flow from investment activities 105,810 9,428 13,868
----------------------------------------- ------------ ------------ -----------
Cash flows from financing activities
Finance costs (835) (1,106) (1,933)
Repayment of loan (107,032) (5,868) (5,868)
----------------------------------------- ------------ ------------ -----------
Net cash flow from financing activities (107,867) (6,974) (7,801)
----------------------------------------- ------------ ------------ -----------
Net (decrease)/increase in cash
and cash equivalents (4,968) 1,325 4,145
Effect of foreign exchange (120) 18 -
----------------------------------------- ------------ ------------ -----------
Change in cash and cash equivalents (5,088) 1,343 4,145
Cash and cash equivalents at the
beginning of the period 6,379 2,234 2,234
----------------------------------------- ------------ ------------ -----------
Cash and cash equivalents at the
end of the period 1,291 3,577 6,379
----------------------------------------- ------------ ------------ -----------
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 2020 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 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
2020. 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 2020, presented on pages 62 and 63 of the
annual report.
3. Net (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
2021 2020 2020
GBP'000 GBP'000 GBP'000
Revenue loss (3,127) (2,448) (5,072)
Capital return/(loss) 54,434 (34,116) (126,288)
-------------------------------------- ------------ ------------ -----------
Total return/(loss) 51,307 (36,564) (131,360)
-------------------------------------- ------------ ------------ -----------
Weighted average number of shares in
issue during the period 908,639,238 908,639,238 908,639,238
Revenue loss per share (0.34)p (0.27)p (0.56)p
Capital return/(loss) per share 5.99p (3.75)p (13.90)p
-------------------------------------- ------------ ------------ -----------
Total basic and diluted return/(loss)
per share 5.65p (4.02)p (14.46)p
-------------------------------------- ------------ ------------ -----------
The basic and diluted loss 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
2021 2020 2020
GBP'000 GBP'000 GBP'000
Opening book cost 759,715 820,226 820,226
Opening investment holding losses (338,563) (259,111) (259,111)
-------------------------------------- ------------ ------------ -----------
Opening fair value 421,152 561,115 561,115
Purchases at cost 42,255 2,012 11,855
Sales proceeds (176,008) (11,996) (25,723)
Gains/(losses) on investments held
at fair value through profit or loss 54,554 (34,134) (126,095)
-------------------------------------- ------------ ------------ -----------
Closing fair value 341,953 516,997 421,152
-------------------------------------- ------------ ------------ -----------
Closing book cost 615,744 809,139 759,715
Closing investment holding losses (273,791) (292,142) (338,563)
-------------------------------------- ------------ ------------ -----------
Closing fair value 341,953 516,997 421,152
-------------------------------------- ------------ ------------ -----------
The Company received GBP176,008,000 (30 June 2020:
GBP11,996,000; 31 December 2020: GBP25,723,000) from investments
sold in the period. The book cost of the investments when they were
purchased was GBP186,226,000 (30 June 2020: GBP13,099,000; 31
December 2020: GBP72,366,000). 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 include non-cash transactions
in relation to Athenex and Kuur (30 June 2020: none; 31 December
2020: Ombu and Ratesetter).
(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
2020 (1) adjustment 2021
Investment GBP'000 GBP'000 GBP'000
Oxford Nanopore 68,707 22,038 90,745
---------------- ----------- ---------- ---------
(1) Based on the closing holding at opening prices.
Material disposals of unquoted investments during the period
(unaudited)
Gain/(loss)
based on
Carrying carrying
value at value at
31 December Sale 31 December
Book cost 2020 Proceeds 2020
GBP'000 GBP'000 GBP'000 GBP'000
Inivata 21,428 26,137 36,924 10,787
Carrick Therapeutics 20,492 11,155 16,643 5,488
Mission Therapeutics 13,553 4,488 8,945 4,457
Kymab 17,888 69,580 63,648(1) (5,932)
---------------------- --------- ----------- ---------- -----------
(1) Excludes potential contingency payment.
5. Creditors: amounts falling due within one year
(Unaudited) (Unaudited) (Audited)
30 June 30 June 31 December
2021 2020 2020
GBP'000 GBP'000 GBP'000
Bank loan - 107,032 107,032
Other creditors and accruals 1,870 1,283 2,456
------------------------------ ------------ ------------ -----------
1,870 108,315 109,488
------------------------------ ------------ ------------ -----------
The Company arranged a new, amended loan facility agreement with
The Northern Trust Company, effective from 15 January 2021, and
fully paid down the amount outstanding out of the proceeds of sales
transactions. Under the terms of the new loan facility agreement,
following the above repayment, the arrangement changes to a
revolving credit facility, and the principal terms of this are as
follows:
- The facility limit is reduced to GBP55 million;
- The termination date is 30 January 2023;
- Interest on any drawings will accrue daily and will be
calculated at the aggregate of The Bank of England Base Rate, a 2%
margin; and
- Drawings on the facility are secured on all of the Company's assets.
The facility was undrawn at the period end.
The Directors consider that the carrying amount of creditors
falling due within one year approximates to their fair value.
6. Called-up share capital
(Audited)
(Unaudited) (Unaudited)
For the six For the six For the
months ended months ended year ended
31 December
30 June 2021 30 June 2020 2020
GBP'000 GBP'000 GBP'000
Ordinary shares allotted, called up
and fully paid:
908,639,238 (30 June 2020 and 31 December
2020: same) ordinary shares of 1p each 9,086 9,086 9,086
------------------------------------------ ------------ ------------ ------------
7. Net asset value per share
(Unaudited) (Unaudited) (Audited)
30 June 30 June 31 December
2021 2020 2020
Net assets attributable to shareholders
(GBP'000) 369,376 412,865 318,069
Shares in issue at the period end 908,639,238 908,639,238 908,639,238
---------------------------------------- ----------- ----------- -----------
Net asset value per share 40.65p 45.44p 35.00p
---------------------------------------- ----------- ----------- -----------
8. 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 and
derivative financial instruments.
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 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 and derivative financial
instruments were categorised as follows:
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
--------------------------- -------- -------- -------- --------
30 June 2020 (unaudited)
Level 1 Level 2 Level 3 Total
GBP'000 GBP'000 GBP'000 GBP'000
Investments in equities -
quoted 46,594 - 80,811 127,405
- unquoted - - 389,592 389,592
Total 46,594 - 470,403 516,997
--------------------------- -------- -------- -------- --------
31 December 2020 (audited)
Level 1 Level 2 Level 3 Total
GBP'000 GBP'000 GBP'000 GBP'000
Investments in equities -
quoted 32,697 - 33,889 66,586
- unquoted - - 354,566 354,566
--------------------------- -------- -------- -------- --------
Total 32,697 - 388,455 421,152
--------------------------- -------- -------- -------- --------
Immunocore GBP23,410 (30 June 2020: GBP26,980; 31 December 2020:
GBP25,570) transferred from Level 3 to Level 1 during the period
ended 30 June 2021 following its IPO on the NASDAQ on 5 February
2021. There were no transfers between Levels 1, 2 or 3 during the
period ended 30 June 2020 or the year ended 31 December 2020.
9. Events after the interim date that have not been reflected in
the financial statements for the interim period
The Directors have evaluated the period since the interim date
and have not noted any significant events which have not been
reflected in the financial statements.
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END
IR BIGDCIBDDGBG
(END) Dow Jones Newswires
September 21, 2021 02:00 ET (06:00 GMT)
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