TIDMSURE
RNS Number : 3421X
Sure Ventures PLC
20 December 2023
Sure Ventures plc
Unaudited Interim Report and Financial Statements
For the six months ended 30 September 2023
Company Number: 10829500
Table of Contents
1 Chairman's Statement
2 Investment Manager's Report6
3 Interim Management Report11
4 Alternative Performance Measures ("APMs") 3
5 Financial Statements 15
Condensed Statement of Comprehensive Income 16
Condensed Statement of Financial Position
Condensed Statement of Changes in Equity
Condensed Statement of Cash Flows
Notes to the Condensed Interim Financial Statements
1 Chairman's Statement
Chairman's Statement
Dear Shareholders,
On behalf of my fellow Directors, I am delighted to present Sure
Ventures plc's (the "Company") interim results for the six months
ended 30 September 2023.
FINANCIAL PERFORMANCE
For the six-month period to 30 September 2023, the Company
reported a net asset value ("NAV") total return per share of -6.66%
(30 September 2022: -3.73%), broadly in line with our expectations.
The performance for this period remained largely unchanged,
providing a similar return to the full year results to 31 March
2023 (-6.86%). This result was due to limited changes in the
valuation of our portfolio of unlisted investee companies.
Since our incorporation in 2017, we have created a balanced
portfolio of early-stage technology companies in rapidly evolving
sectors of Artificial Intelligence ("AI"), Augmented Reality ("AR")
Virtual Reality ("VR"), the Internet of Things ("IoT") , and
Cybersecurity. In the current economic climate, our portfolio
investments in AI have shown resilience, benefitting from the
corporate need for cost savings. Goldman Sachs estimates up to 300
million full-time jobs could be impacted by generative AI and
Microsoft continues to make substantial investments in this space,
evident in its $10bn partnership with OpenAI, creators of ChatGPT.
In cybersecurity, we are seeing an increased use of generative AI
for more complex threat identification.
In AR and VR, major developments such as the expected launch of
Apple's Apple Vision Pro headset in March 2024 are poised to change
the landscape. This product could bring AR/VR into mainstream
consumer use. UBS and Bank of America predict the new Apple headset
will generate significant revenue in 2024, which should positively
impact our AR/VR focused investee companies within the portfolio.
Additionally, a joint venture between Samsung, Google, and Qualcomm
is set to release a mixed reality headset in 2024, expected to be a
strong competitor to the Apple version.
The Company is confident that its portfolio is well positioned
to realise further gains in all of its investment themes. During
2023 we have seen further geopolitical tensions that have impacted
valuations in public and private markets. Higher interest rates
restrict available debt financing and has led to fewer leveraged
acquisitions in 2023.
The investment portfolio for Fund I (as further defined below)
is now complete, and no new investments will be made, with the
remaining capital allocated to follow-on rounds of the fourteen
investee companies in the portfolio. By contrast, Fund II (also
defined below) is in the early stages of investment origination,
and to date investments have been made in just three companies.
In the period to 30 September 2023, the Company's NAV
attributable to shareholders declined by GBP30k to GBP7.94m through
a combination of NAV performance and new subscriptions.
In common with the current market trend of listed trusts, the
Company's share price now trades at a discount to its last
published NAV, currently around 30%. However, in May 2023 and
August 2023, the Company was able to validate its share price by
raising new subscriptions through private placements at the
mid-market share price.
PORTFOLIO UPDATE FUND I
The Company's first fund investment in Sure Valley Ventures
Sub-Fund of Suir Valley Funds ICAV ("Fund I") is a substantial part
of our investment strategy. We ensured our investments in Fund I
were not diluted by making a total commitment of EUR7m. As at 30
September 2023, EUR6,594,579 has been drawn down against this
commitment.
The Company holds two direct investments outside of Funds I
& II in VividQ Limited, a pioneering company in AR and VR
holography and a small residual holding in Let's Explore Group
(formerly Immotion Group plc). The portfolio of Fund I also
includes two listed entities; ENGAGE XR Holdings plc, a developer
of VR software and immersive experiences focusing on education, and
Smarttech247, a leader in security operations utilizing AI and
cybersecurity cloud technologies. Both companies closed broadly
flat in the six months to 30 September 2023.
As at 30 September 2023, the Company, through its investment in
Fund I, has a further twelve privately held companies in the AR,
VR, IoT and AI space. In 2019, the Company achieved its first
successful portfolio company exit via the Fund I exit of Artomatix
for x5 return of the Company's original investment.
PORTFOLIO UPDATE FUND I (continued)
The first write downs since inception occurred in the year ended
31 March 2023, for Buymie and NDRC@Arclabs. Buymie was acquired in
the year ended 31 March 2023 and the Company took the prudent
approach to the transaction to write the investment down to zero.
The investment in NDRC was an incubator and accelerator programme
that had concluded and was the rationale behind writing off the
full value of this investment.
PORTFOLIO UPDATE FUND II
In March 2022, the Company announced its commitment of GBP5m to
the Sure Valley Ventures Enterprise Capital LP (Fund II), a GBP95m
UK software technology fund. Fund II focuses on AR, VR, the
Metaverse, AI, IoT, and cybersecurity. The British Business Bank is
the GBP50m cornerstone investor through its Enterprise Capital
Funds program. Fund II aims to invest in up to 25 software
companies during its investment period.
As at 30 September 2023, the first portfolio investments of Fund
II have been made. These include Retinize, a Belfast-based creative
tech company developing animotive software for VR technology.
Investments were also made in Jaid, a technology company offering
AI-powered human communication solutions, and Captur, a
London-based company that has built an enterprise AI platform for
real-time, rules-based image recognition.
COMMITMENTS AND FUNDING
In 2019, the Company increased its subscription to Fund I by
EUR2.5m, raising its total commitment to EUR7m. This increase
enhanced our share in Fund I from 21.6% to 25.9%, with
approximately EUR405k remaining to be funded. We continue to
believe in the potential for further uplifts in valuations from our
initial investments.
The Company's commitment to Fund II is GBP5m over Fund II's
investment period. The forecast capital calls throughout the
investment period were a key consideration before making this
commitment. The Company believes it has sufficient access to
funding to meet its remaining commitments to both Fund I and Fund
II. This confidence is supported by our available cash, liquid
investments, anticipated subscriptions, and access to loans and
equity subscription facilities.
INVESTMENT ENVIRONMENT
The Company is confident and pleased with the investments in
Fund I and their potential for delivering higher valuations and
negotiated exits in the next one to two years. The pace of
technological change is rapid, and our diverse portfolio is
well-positioned to benefit from these developments. The initial
investments for Fund II and the varied deal pipeline are also
promising.
DIVID
During the six months ending 30 September 2023, the Company did
not declare a dividend (30 September 2022: GBPnil). In line with
our dividend policy, we focus on achieving shareholder returns
through capital growth rather than income. The Company does not
expect to receive significant dividends or other income from its
investments. While the Company does not anticipate paying an annual
dividend, there may be potential for the payment of one-off
dividends at the Directors' discretion, should the circumstances
and liquidity allow.
GEARING
The Company may use gearing of up to 20% of NAV to enhance
returns and for liquidity, capital flexibility, and efficient
portfolio management. Our primary form of gearing includes bank
borrowings but may also involve the use of derivative instruments
and other methods as determined by the Directors. As at 30
September 2023, the Company had borrowings of GBP200,000 drawn from
a GBP1,000,000 loan facility with Shard Merchant Capital Limited.
After this period, on 9 November 2023, the Company borrowed an
additional GBP200,000 under the loan facility, bringing total
borrowings to GBP400,000. The Directors, in conjunction with the
Investment Manager, regularly review the Company's borrowing in
line with our overall cash management and investment strategy.
CAPITAL RAISING
On 5 May 2023, the Company announced a placing of 200,000
ordinary shares on the Specialist Fund Segment of the London Stock
Exchange. A further placing of 205,128 ordinary shares was
announced on 21 August 2023, under the existing ISIN: GB00BYWYZ460.
This increased our total shares in admission to 7,051,600. The
Investment Manager's Report that follows this statement provides
more details on the Company's operations and prospects. The
Directors remain confident in the long-term prospects of the
Company in achieving its investment objectives.
OUTLOOK
The portfolio construction of Fund I is complete and is now at
the realisation stage. Several companies are attracting interest
from potential acquirers, with some engaged in ongoing discussions
for several months. Others are preparing for follow-on funding
rounds, with the potential for higher valuations. Fund II is in the
early stages of the investment cycle, and the investment team is
encouraged by the quality of its initial investments and the
developing deal pipeline.
The Company's performance has been stable in a challenging
economic environment, marked by higher inflation, higher interest
rates, and geopolitical tensions. These factors continue to impact
public and private markets and have slowed private market deal
activity. However, the Company believes its investment portfolio is
well positioned for significant returns in breakthrough technology
sectors. The Investment Manager will be actively exploring exits
for Fund I in 2024.
Perry Wilson,
Chairman
12 December 2023
2 Investment Manager's Report
Investment Manager's Report
The company
Sure Ventures plc (the "Company") was established to enable
investors to gain access to early-stage technology companies in the
four exciting and expansive market verticals of Augmented Reality
and Virtual Reality (AR/VR), Artificial Intelligence (AI),
Cybersecurity and the Internet of Things (IoT).
The Company gains access to deal flow ordinarily reserved for
venture capital funds and ultra-high net worth angel investors,
establishing a diversified software-centric portfolio with a clear
strategy. Listing the Company on the London Stock Exchange offers
investors:
-- Relative liquidity
-- A quoted share price
-- A high level of corporate governance
It is often too expensive, too risky and too labour-intensive
for investors to build a portfolio of this nature themselves. We
are leveraging the diverse skillsets of an experienced management
team who have the industry network to gain access to quality deal
flow, the expertise to complete extensive due diligence in target
markets and the entrepreneurial skills to help these companies to
mature successfully. Those investing in the Company will get
exposure to Sure Valley Ventures which in turn makes direct
investments in the above sectors in the UK and Ireland.
Augmented Reality and Virtual Reality
The Immersive Technologies market has had a significant growth
boost during the COVID-19 pandemic, with people looking for new
ways to connect and entertain themselves. In 2022, the Global AR/VR
market size surpassed $22.53 billion and by 2030, it is projected
to reach $134.18 billion, registering a Compound Annual Growth Rate
(CAGR) of 22.46%. There are a number of factors driving the growth
of the AR/VR market. One is the growth of the mobile gaming
industry. Mobile gaming is a major driver of AR/VR adoption, as it
allows users to experience immersive games and experiences without
having to purchase expensive hardware. Another factor driving the
growth of the AR/VR market is the increase in internet
connectivity. As internet speeds and availability improve, AR/VR
applications become more feasible. This is leading to increased
adoption of AR/VR in a variety of industries, including education,
healthcare, and manufacturing.
The increasing use of consumer electronic devices is also
driving the growth of the AR/VR market. As more and more people own
smartphones, tablets, and other devices that can be used to access
AR/VR content, the market for AR/VR headsets and other hardware is
expected to grow.
Some recent developments in the AR/VR market include:
-- Meta launching their new Meta Quest 3 headset at their Meta
Connect event on 27 September 2023, with the product hosting a
number of significant improvements in comparison to its predecessor
such as screen resolution and stronger processing power .
-- Apple continuing with the development of the Vision Pro,
maintaining the view that it will be likely be released in early
2024 at a price point of $3,500.
-- The European council publishing their strategy for web 4.0
strengthening the viewpoint that the shift towards the virtual
world is further becoming a reality and must be prepared for.
-- Further rumours surrounding Google future VR Headset have
emerged, suggesting that their device, supposedly being created in
partnership with Samsung and Qualcomm, is due to be released in
Summer 2024 to compete with the Vision Pro.
These developments are expected to help accelerate growth in the
AR/VR market even further.
In addition, the AR/VR market is expected to be further boosted
by the development of the metaverse. The metaverse is a virtual
world that is created by the convergence of AR, VR, and other
technologies. It is expected to be a major driver of growth in the
AR/VR market, as it will provide a new platform for gaming,
entertainment, education, and work. The metaverse is still in its
early stages of development, but it has the potential to be a major
disruptive force in the tech industry. As it continues to develop,
it is likely to have a significant impact on the AR/VR market.
Internet of Things
The IoT market is expected to grow significantly in the coming
years. According to a report by Fortune Business Insights, the
global IoT market size is predicted to grow from $662.21 billion in
2023 and to reach $3,352.97 billion by 2030, exhibiting a CAGR of
26.1% during the forecast period (2023-2030). The growth of the IoT
market is being driven by a number of factors, including the
increasing demand for connected devices, the growth of the cloud
computing market, and the development of new IoT technologies. The
increasing demand for connected devices is one of the key drivers
of the IoT market. Connected devices are used in a variety of
applications, including smart homes, smart cities, and industrial
automation.
Internet of Things (continued)
The growth of the cloud computing market is also contributing to
the growth of the IoT market. Cloud computing provides a platform
for storing and processing data from IoT devices. Furthermore, the
development of new IoT technologies is also contributing to the
growth of the market. These new technologies include 5G, AI, and
machine learning. 5G will enable faster and more reliable
connections between IoT devices. AI and machine learning will be
used to analyse data from IoT devices and make predictions.
Cybersecurity
The global AI in cybersecurity market size is valued at $22.4
billion in 2023 and is expected to hit around $60.6 billion by
2028, growing at a CAGR of 21.9% from 2023-2028. The growth of the
cyber security market is being driven by a number of factors,
including the increasing number of cyber-attacks, the growing
adoption of cloud computing, and the increasing use of IoT devices.
Cyber-attacks are becoming more sophisticated and targeted, and
they are causing significant financial and reputational damage to
organisations. The growing adoption of cloud computing is also
contributing to the growth of the cyber security market. Cloud
computing provides a new attack surface for cyber criminals, and it
is important for organisations to have the right security measures
in place to protect their data. The increasing use of IoT devices
is also contributing to the growth of the market. IoT devices are
often connected to the internet, which makes them vulnerable to
cyber-attacks. It is important for organisations to secure their
IoT devices to protect their data and systems. The future
prediction for growth of the cyber security market is very
positive. The market is expected to continue to grow at a
significant rate in the coming years. This growth will be driven by
the increasing number of cyber-attacks, the growing adoption of
cloud computing, and the increasing use of IoT devices.
Artificial Intelligence
The global AI market size was valued at $428.00 billion in 2022.
The market is projected to grow from $515.31 billion in 2023 to
$2,025.12 billion by 2030, exhibiting a CAGR of 21.6% during the
forecast period. AI is the simulation of human intelligence
processes using various machines by means of creating intelligent
software and hardware capable of replicating human behaviour such
as learning and problem-solving. The report covers Al-based
solutions such as AWS Chatbots, OpenAl Codex, Azure Al, and others.
The global market is set to grow drastically with the surge in AI
applications, increased number of relevant partnerships and
collaborations, rise in small-scale Al providers, changing
complexities of business structure, and hyper-personalised service
demands. Additionally, government initiatives and investments in Al
technologies for enterprises and end users create benefits.
Recent developments within the AI Space include:
-- Open AI announcing a plethora of future new features within
their August and September blog updates, suggesting that voice
conversations and unique customizability features will be arriving
imminently onto their platform.
-- Mid journey introducing "Vary Region", the companies unique
answer to Adobe Photoshop, allowing for users to edit specific
parts of an image with AI prompts and for specific editing solely
through describing any desired changes via text box.
-- Google allowing early access to their conversational AI
software Gemini, for a small number of companies. This marks the
beginning of Google intention to compete directly with Open AI's
GPT-4, which has seen significant attention over recent months.
Similar to Open AI's offering, at launch Gemini is likely to be
able to read, summarise and generate original text, as well as help
users perform actions like generating images or writing code.
The benefit of investing in companies in these four key sectors
at a seed stage are that:
-- Sure Valley Ventures can invest in these companies at
attractive valuations of between GBP2m to GBP8m and get up to 20%
of the company for initial investment amounts of between GBP0.75m
to GBP1.25m.
-- The investment sectors (AR/VR, IoT, AI, and Cybersecurity)
have massive growth potential ahead of them which creates a
tailwind behind the companies that are creating these new
markets.
-- These sectors are also ones that have the potential of
creating the next big European companies and building on Europe's
existing technological strengths.
-- These companies have the potential to get to exponential
growth and of achieving an IPO or being acquired by one of the
Silicon Valley giants who are all investing in these sectors.
-- The Sure Valley Ventures Platform and Network can help
fast-track the development of these companies across the chasm to
the Series A investment round, which in turn increases the
potential for an outsized return and also reduces the risk of the
failure of a portfolio company.
In summary, Sure Ventures plc can gain exposure to all of these
benefits through its participation in Sure Valley Ventures, as
further outlined overleaf.
PORTFOLIO BREAKDOWN
On 6 February 2018, the Company entered into a EUR4.5m
commitment to Sure Valley Ventures ("Fund I"), the sole sub-fund of
Suir Valley Funds ICAV and its investment was equalised into Fund I
at that date. On 31 August 2019, a further EUR2.5m was committed to
Fund I, taking the total investment in Sure Valley Ventures to
EUR7m. The first drawdown was made on 5 March 2018 and as at 30
September 2023, a total of EUR6,594,579 had been drawn down against
this commitment.
On 26 April 2019, the Company made a direct investment of
GBP500,000 into VividQ Limited, a deep tech start-up with world
leading expertise in 3D holography. VividQ Limited completed an
additional funding round in May 2021 which saw the valuation of
this investment rise to GBP794k, representing a 59% unrealised
gain.
Sure Ventures plc also holds a direct investment in a UK-based
immersive entertainment group; Let's Explore Group, Inc (formerly
Immotion Group plc), as announced on 24 April 2018. In May 2023,
Let's Explore Group, Inc announced it had entered into a
conditional sale and purchase agreement, for the sale of its
Location Based Entertainment business (collectively; Immotion
Studios Limited, Immotion VR Limited and C.2K Entertainment Inc.),
to LBE BidCo, Inc. for an enterprise value of $25,211,739 on a cash
free/debt free basis. Further to this news, a tender offer for 65%
of shares held was made by the acquirer at 4.75p a share, which the
Shard Capital AIFM LLP team took up. In addition to this, due to
the unknown nature of the acquirer, the decision was made to sell
down the remaining 35% of the holding, as liquidity in the share
permitted. As at 30 September 2023, Sure Ventures plc has sold the
majority of its holding in this listed entity, with only a small
residual position remaining.
On 25 February 2022, Sure Ventures plc committed to investing
GBP5m into the second fund of Sure Valley Ventures ("Fund II").
Fund II completed an GBP85m first close of a GBP95m UK software
technology fund, which aims to increase the supply of equity
capital to high-potential, early-stage UK companies. The first
drawdown was made on 23 February 2022 and as at 30 September 2023,
a total of GBP445,500 had been drawn down against this
commitment.
As detailed in the Condensed Statement of Financial Position
included in the following financial statements, these two Sure
Valley Ventures investments alongside the two direct investments,
represent the entire portfolio of Sure Ventures plc as at 30
September 2023.
On 5 May 2023, the Company announced a placing of 200,000
ordinary shares, followed by a further placing of 205,128 ordinary
shares, announced on 21 August 2023. The ordinary shares were
admitted to trading on the Specialist Fund Segment of the London
Stock Exchange on 12 May 2023 and 25 August 2023 respectively,
under the existing ISIN: GB00BYWYZ460, taking the total shares in
admission as at 30 September 2023 to 7,051,600.
SUIR VALLEY FUNDS ICAV
Suir Valley Funds ICAV (the "ICAV") is a closed-ended Irish
Collective Asset-management Vehicle with segregated liability
between sub-funds incorporated in Ireland pursuant to the Irish
Collective Asset-management Vehicles Act 2015 to 2021 and
constituted as an umbrella fund insofar as the share capital of the
ICAV is divided into different series with each series representing
a portfolio of assets comprising a separate sub-fund.
The ICAV was registered on 18 October 2016 and authorised by the
Central Bank of Ireland as a qualifying investor alternative
investment fund ("QIAIF") on 10 January 2017. The initial sub-fund
of the ICAV is Sure Valley Ventures, or Fund I, which had an
initial closing date of 1 March 2017. Fund I invests in a broad
range of software companies with a focus on companies in the AR/VR,
AI and IoT sectors.
As at 31 March 2023, Fund I had commitments totaling EUR27m and
had made 17 direct investments into companies spanning the AR/VR,
AI and IoT sectors. One of these investments was sold in 2019,
giving Fund I its first realised gain on exit of around 5X return
on investment. On 12 March 2018, Immersive VR Education Limited,
Fund I's first investment, completed a flotation on the London
Stock Exchange (AIM) and the Dublin Stock Exchange (ESM). The
public company is now called ENGAGE XR Holdings plc - ticker EXR
(Formally VR Education Holdings plc - VRE). EXR was the first
software company to list on the ESM since that market's inception.
In July 2020, following an improvement in share price, Fund I
decided to sell sufficient shares to recover its initial
investment. This resulted in a realised gain of EUR73k being
payable to Sure Ventures plc, along with its share of the initial
investment, and some escrow funds from the aforementioned exit. The
final escrow payment from the sale was settled in July 2021, seeing
another EUR151k flowing to Sure Ventures plc. Total distributions
from Fund I to Sure Ventures plc as at 30 September 2023 were
EUR1,759,630.
SURE VALLEY VENTURES ENTERPRISE CAPITAL LP
Sure Valley Ventures Enterprise Capital LP is a closed-ended UK
based GP/LP Fund which completed its first close on 1 March 2022.
The total commitments for this first close were GBP85m, with the
potential for a further GBP10m to be raised in a secondary close.
The British Business Bank are the cornerstone investor of Sure
Valley Ventures Enterprise Capital LP, committing GBP50m of the
initial GBP85m, with Sure Ventures plc committing a total of
GBP5m.
Fund II has a similar investment strategy to the first Fund,
being a seed capital investor in high growth software companies
that are focused on bringing a disruptive innovation to market. It
plans to invest into 25 software companies from across the UK
through its new fund. As well as being based in London, Dublin, and
Cambridge, the Sure Valley team has recently opened an office in
Manchester to help access deals in the significant and exciting
innovation clusters that have developed around creative
technologies in the North of England and in the metaverse and AI
opportunities in cities such as Manchester, Leeds, Sheffield and
Newcastle.
As at 30 September 2023, Sure Valley Ventures Enterprise Capital
LP had drawn down a total of GBP7.53m and has made its first three
investments into a Belfast based company called Retinize, for an
amount of GBP1m in March 2022; a London based company called Jaid
(t/a Opsmatix Limited) for GBP1m in November 2022 plus a further
GBP350k in May 2023; and finally a London based company called
Captur, which Sure Valley Ventures Enterprise Capital LP invested
GBP1.5m in September 2023. The total invested capital to date for
Sure Ventures plc was GBP445,500.
Performance
In the period to 30 September 2023, the Company's performance
remained strong, in a backdrop of economic uncertainty, as it
returned a Net Asset Value ("NAV") of GBP1.13/unit, representing a
6.66% decline from the audited March 2023 NAV of GBP1.20p. The NAV
remains largely unchanged as a result of minimal fluctuations in
valuation of any of the portfolio companies from the year end,
against a backdrop of the usual cost base. Regarding the two direct
investments, Let's Explore Group, Inc which has been acquired,
closed the period at 2.7p, down from 3.6p at the year end;
indicative of a tough few months in the public markets and wider
economy. However, as mentioned above, Sure Ventures plc has
materially exited this position at higher levels than the current
share price. VividQ Limited remains unchanged, having closed a new
funding round to give Sure Ventures plc an unrealised gain of 59%
on its initial holding in the previous financial year. Given the
lack of revenue to support the ongoing operational costs of Sure
Ventures plc, these unrealised gains are key to maintaining a
steady NAV, until the point that we see more exits and realised
gains.
FutuRe Investment OUTLOOK
Fund I has achieved one very positive realised gain, recovered
its full investment in its listed portfolio company, as well as
seeing number a of unrealised gains across the portfolio. The
portfolio of current investments is continuing to mature, with more
companies completing Series A funding rounds, which has started to
provide the NAV growth that was set out to achieve from inception.
As the investment period of Fund I has now closed, there are no
more new investments to be made, with all remaining capital being
allocated to follow-on funding of existing investments, as these
companies continue to grow and provide Fund I with opportunities to
exit.
In addition to this, having more exposure to the UK market for
early-stage high growth software companies through the commitment
into the Sure Valley Ventures Enterprise Capital LP will yield
exciting opportunities as Sure Valley Ventures Enterprise Capital
LP continues to deploy capital across the landscape with a view to
generating significant returns for investors throughout its
lifecycle.
We remain confident in the future outlook of the Company for the
rest of the financial year, particularly with the launch of Sure
Valley Ventures Enterprise Capital LP and the increasing maturity
of the Sure Valley Ventures portfolio. Whilst the Funds provide
great exposure to a wealth of expertise and a larger suite of
portfolio companies, we also reserve the right to make further
direct investments provided there is sufficient working capital to
do so.
Shard Capital AIFM LLP
Investment Manager
22 November 2023
3 Interim Management Report
Interim Management Report
The report below together with the Chairman's Statement,
Investment Manager's Report, and related party disclosures in the
notes to the financial statements constitute the Interim Management
Report of Sure Ventures plc (the "Company") for the six months
ended 30 September 2023.
Principal risks and uncertainties
The principal risks and uncertainties associated with the
Company's business are divided into the following main areas:
-- Operational risks, including risks associated with reliance
on third party service providers, reliance on key individuals at
the Investment Manager and fluctuations in the market price of the
Company's shares;
-- Investment risks, including risks associated with the
investment objective, borrowing and liquidity of investments;
and
-- Regulatory risks, including risks associated with maintenance
of investment trust status and compliance with applicable
legislative obligations.
The above risks are described further in the Company's Annual
Report for the year ended 31 March 2023 together with measures that
have been put in place to mitigate and manage those risks.
In the view of the Directors, the principal risks and
uncertainties reported in the latest Annual Report for the year
ended 31 March 2023 remain unchanged and will be applicable to the
remaining six months of the financial year.
Going concern
The Board of Directors and the Investment Manager believe that
the operational viability and going concern status of the Company
remains intact and will continue for the next financial 12 months
ahead and foreseeable future. The Board of Directors has no
concerns in regard to the ongoing existence of the Company.
The Board of Directors is also satisfied that the key service
providers have the ability to continue to operate efficiently in a
remote or virtual working environment.
Statement of Directors' Responsibilities
The Directors confirm that, to the best of their knowledge
that:
a) the condensed set of unaudited financial statements contained
within the half-yearly financial report have been prepared in
accordance with International Accounting Standard ("IAS") 34,
Interim Financial Reporting as required by the Disclosure and
Transparency Rule 4.2.4R, and give a true and fair view of the
assets, liabilities, and financial position of the Company;
b) the Interim Management Report includes a fair review, as
required by Disclosure and Transparency Rule 4.2.7R, of important
events that have occurred during the first six months of the
financial year, their impact on the condensed set of unaudited
financial statements, and a description of the principal risks and
perceived uncertainties for the remaining six months of the
financial year; and
c) the Interim Management Report includes a fair review of the
information concerning related parties' transactions as required by
Disclosure and Transparency Rule 4.2.8R.
For and on behalf of the board of directors
Perry Wilson
Chairman
12 December 2023
4 Alternative Performance Measures ("APMs")
Alternative Performance Measures ("APMs")
APMs are often used to describe the performance of investment
companies although they are not specifically defined under
UK-adopted international accounting standards. Calculations for
APMs used by the Company are shown below.
ONGOING CHARGES
A measure expressed as a percentage of average Net Asset Value
("NAV"), of the regular, recurring annual costs of running an
investment company, calculated in accordance with the Association
of Investment Companies ("AIC") methodology.
For the six months ended 30
September 2023
Average NAV (GBP'000) a GBP7,922
----- ---------
Recurring costs (GBP'000) b GBP364
----- ---------
b/a 4.60%
----------------------------------- ---------
PREMIUM/DISCOUNT
The amount, expressed as a percentage, by which the share price
is more than the NAV per ordinary share.
As at 30 September 2023
NAV per ordinary share a 112.67p
--------- ---------
Share price b 94p
--------- ---------
(b-a)/a (16.57%)
----------------------------------- ---------
TOTAL RETURN
A measure of performance that includes both income and capital
returns. This takes into account capital gains and reinvestment of
any dividends paid out by the Company, with reinvestment on
ex-dividend date.
For the six months ended 30 NAV Share price
September 2023
Opening as at 31 March 2023
(p) a 119.81 95
----------- -------- ------------
Closing as at 30 September
2023 (p) b 112.67 94
----------- -------- ------------
Dividend reinvestment factor c 1 1
----------- -------- ------------
Adjusted closing (d = b x
c) d 112.67 94
----------- -------- ------------
Total return (d-a) / a (5.96%) (1.05%)
----------- -------- ------------
5 Financial Statements
Condensed Statement of Comprehensive Income
For the six months ended 30 September 2023 (unaudited)
Note Revenue Capital Total
GBP GBP GBP
===== ========== ==========
Income
================================= ===== ========== ========== ==========
Loss on sale of investments 7 - (83,570) (83,570)
================================= ===== ========== ========== ==========
Other net changes in fair value
on financial assets at fair
value through profit or loss 7 - (136,107) (136,107)
================================= ===== ========== ========== ==========
Rebate management fee 9 49,456 - 49,456
================================= ===== ========== ========== ==========
Other Income 10 - 10
================================= ===== ========== ========== ==========
Total net income/(loss) 49,466 (219,677) (170,211)
================================= ===== ========== ========== ==========
Expenses
================================= ===== ========== ========== ==========
Management fee 9 (74,456) - (74,456)
================================= ===== ========== ========== ==========
Custodian, secretarial and
administration fees (57,494) - (57,494)
================================= ===== ========== ========== ==========
Other expenses (91,284) - (91,284)
================================= ===== ========== ========== ==========
Total operating expenses (223,234) - (223,234)
================================= ===== ========== ========== ==========
Finance costs
================================= ===== ========== ========== ==========
Interest expense (7,978) - (7,978)
================================= ===== ========== ========== ==========
Total finance costs (7,978) - (7,978)
================================= ===== ========== ========== ==========
Loss before taxation and after
finance costs (181,746) (219,677) (401,423)
================================= ===== ========== ========== ==========
Taxation - - -
================================= ===== ========== ========== ==========
Loss after taxation (181,746) (219,677) (401,423)
================================= ===== ========== ========== ==========
Deficit per share 6 (2.66) (3.22) (5.88)
================================= ===== ========== ========== ==========
For the six months ended 30 September 2022 (unaudited)
Revenue Capital Total
GBP GBP GBP
========== =========
Income
=========================================== ========== ========= ==========
Other net changes in fair value
on financial assets at fair
value through profit or loss - (12,816) (12,816)
============================================ ========== ========= ==========
Rebate management fee 50,694 - 50,694
============================================ ========== ========= ==========
Total net income/(loss) 50,694 (12,816) 37,878
============================================ ========== ========= ==========
Expenses
=========================================== ========== ========= ==========
Management fee (50,628) (66) (50,694)
============================================ ========== ========= ==========
Custodian, secretarial and administration
fees (54,714) - (54,714)
============================================ ========== ========= ==========
Other expenses (125,036) - (125,036)
============================================ ========== ========= ==========
(230,444
Total operating expenses (230,378) (66) )
============================================ ========== ========= ==========
Loss before taxation and after
finance costs (179,684) (12,882) (192,566)
============================================ ========== ========= ==========
Taxation - - -
=========================================== ========== ========= ==========
Loss after taxation (179,684) (12,882) (192,566)
============================================ ========== ========= ==========
Deficit per share (2.87) (0.21) (3.08)
============================================ ========== ========= ==========
The total comprehensive income and expense for the period is
attributable to shareholders of the Company. The accompanying notes
on pages 20 to 22 form part of these condensed interim financial
statements.
Condensed Statement of Financial Position
As at 30 September 2023
Note 30 September 31 March 2023
2023
(unaudited) (audited)
GBP GBP
===== =============
Non-current assets
================================ ===== ============= ==============
Investments held at fair value
through profit or loss 7 8,266,919 8,196,153
================================ ===== ============= ==============
8,266,919 8,196,153
================================ ===== ============= ==============
Current assets
================================ ===== ============= ==============
Receivables 218 2,240
================================ ===== ============= ==============
Subscription receivable 1,000 -
================================ ===== ============= ==============
Cash and cash equivalents 75,520 36,697
================================ ===== ============= ==============
76,738 38,937
================================ ===== ============= ==============
Total assets 8,343,657 8,235,090
================================ ===== ============= ==============
Non-current liabilities
================================ ===== ============= ==============
Interest payable (15,123) (7,145)
================================ ===== ============= ==============
Loans payable (200,000) (200,000)
================================ ===== ============= ==============
(215,123) (207,145)
================================ ===== ============= ==============
Current liabilities
================================ ===== ============= ==============
Capital call payable 9 (117,500) -
================================ ===== ============= ==============
Other payables (66,250) (64,738)
================================ ===== ============= ==============
(183,750) (64,738)
================================ ===== ============= ==============
Total liabilities (398,873) (64,738)
================================ ===== ============= ==============
Total net assets 7,944,784 7,963,207
================================ ===== ============= ==============
Shareholders' funds
================================ ===== ============= ==============
Ordinary share capital 8 70,515 66,464
================================ ===== ============= ==============
Share premium 6,782,646 6,403,697
================================ ===== ============= ==============
Revenue reserves (1,826,824) (1,645,078)
================================ ===== ============= ==============
Capital reserves 2,918,447 3,138,124
================================ ===== ============= ==============
Total shareholders' funds 7,944,784 7,963,207
================================ ===== ============= ==============
Net asset value per share 112.67p 119.81p
================================ ===== ============= ==============
The accompanying notes on pages 20 to 22 form part of these
condensed interim financial statements.
The financial statements on pages 16 to 19 were approved by the
Board of Directors and authorised for issue on 12 December 2023.
The financial statements were signed on its behalf by:
Perry Wilson
Chairman
Condensed Statement of Changes in Equity
For the six months ended 30 September 2023 (unaudited)
Ordinary Share Revenue Capital Total Total
Share Premium Reserves Reserves Reserves Equity
Capital
GBP GBP GBP GBP GBP GBP
========= ============ ============= ============ ============
As at 31 March
2023 66,464 6,403,697 (1,645,078) 3,138,124 1,493,046 7,963,207
===================== ========= ============ ============= ============ ============ ============
Ordinary shares
issued 4,051 395,949 - - - 400,000
===================== ========= ============ ============= ============ ============ ============
Ordinary shares
issue costs - (17,000) - - - (17,000)
===================== ========= ============ ============= ============ ============ ============
Loss after taxation - - (181,746) (219,677) (401,423) (401,423)
===================== ========= ============ ============= ============ ============ ============
Dividends paid
in the period - - - - - -
===================== ========= ============ ============= ============ ============ ============
Balance as at
30 September
2023 70,515 6,782,646 (1,826,824) 2,918,447 1,091,623 7,944,784
===================== ========= ============ ============= ============ ============ ============
For the six months ended 30 September 2022 (unaudited)
Ordinary Share Revenue Capital Total Total
Share Premium Reserves Reserves Reserves Equity
Capital
GBP GBP GBP GBP GBP GBP
========= =========== ============= =========== ===========
As at 31 March
2022 60,132 5,768,780 (1,315,688) 3,238,372 1,922,684 7,751,596
===================== ========= =========== ============= =========== =========== ===========
Ordinary shares
issued 4,750 470,250 - - - 475,000
===================== ========= =========== ============= =========== =========== ===========
Ordinary shares
issue costs - (23,750) - - - (23,750)
===================== ========= =========== ============= =========== =========== ===========
Loss after taxation - - (179,684) (12,882) (192,566) (192,566)
===================== ========= =========== ============= =========== =========== ===========
Dividends paid
in the period - - - - - -
===================== ========= =========== ============= =========== =========== ===========
Balance as at
30 September
2022 64,882 6,215,280 (1,495,372) 3,225,490 1,730,118 8,010,280
===================== ========= =========== ============= =========== =========== ===========
The accompanying notes on pages 20 to 22 form part of these
condensed interim financial statements.
Condensed Statement of Cash Flows
For the six months ended 30 September 2023
Note 30 September 30 September
2023 2022
(unaudited) (unaudited)
GBP GBP
===== =============
Cash flows from operating activities:
========================================= ===== ============= =============
Loss after taxation (401,423) (192,566)
========================================= ===== ============= =============
Adjustments for:
========================================= ===== ============= =============
Decrease in receivables 2,022 1,600
========================================= ===== ============= =============
Increase in payables 1,512 24,456
========================================= ===== ============= =============
Increase in capital call payable 9 117,500 -
========================================= ===== ============= =============
Loss on sale of investment 7 83,570 -
========================================= ===== ============= =============
Unrealised loss/(profit) on foreign
exchange 7 79,953 (200,393)
========================================= ===== ============= =============
Net changes in fair value on financial
assets at fair value through profit
or loss 7 56,154 213,208
========================================= ===== ============= =============
Net cash (outflow) from operating
activities (60,712) (153,695)
========================================= ===== ============= =============
Cash flows from investing activities:
========================================= ===== ============= =============
Purchase of investments 7 (441,990) (496,335)
========================================= ===== ============= =============
Sale of investments 7 151,547 -
========================================= ===== ============= =============
Net cash (outflow) from investing
activities (290,443) (496,335)
========================================= ===== ============= =============
Cash flows from financing activities:
========================================= ===== ============= =============
Proceeds from issue of ordinary
shares 399,000 475,000
========================================= ===== ============= =============
Interest expense 7,978 -
========================================= ===== ============= =============
Ordinary share issue costs (17,000) (23,750)
========================================= ===== ============= =============
Net cash inflow from financing
activities 389,978 451,250
========================================= ===== ============= =============
Net change in cash and cash equivalents 38,823 (198,780)
========================================= ===== ============= =============
Cash and cash equivalents at the
beginning of the period 36,697 282,178
========================================= ===== ============= =============
Net cash and cash equivalents 75,520 83,398
========================================= ===== ============= =============
The accompanying notes on pages 20 to 22 form part of these
condensed interim financial statements.
Notes to the Condensed Interim Financial Statements
1) General information
Sure Ventures plc (the "Company") is a company incorporated in
England and Wales (registration number: 10829500) on 21 June 2017
and commencing trading on 19 January 2018 upon listing. The
registered office of the Company is International House, 36-38
Cornhill, London, EC3V 3NG, United Kingdom.
The Company is an investment company within the meaning of
section 833 of the Companies Act 2006.
The Company operates as an investment trust in accordance with
Chapter 4 of Part 24 of the Corporation Tax Act 2010 and the
Investment Trust (Approved Company) (Tax) Regulations 2011. In the
opinion of the Directors, the Company has conducted its affairs so
that it is able to maintain its status as an investment trust.
Approval of the Company's application for approval as an investment
trust was received from Her Majesty's Revenue and Customs ("HMRC")
on 22 November 2018, applicable from the accounting period
commencing 1 April 2018.
The Company is an externally managed closed-ended investment
company with an unlimited life and has no employees.
The information set out in these unaudited condensed interim
financial statements for the period ended 30 September 2023 does
not constitute statutory accounts as defined in section 435 of
Companies Act 2006. The Statement of Financial Position comparative
figures and the comparative figures stated in the notes to the
condensed interim financial statements as at 31 March 2023 are
derived from the audited financial statements for that year. The
financial statements for the year ended 31 March 2023 have been
delivered to the Registrar of Companies and contain an unqualified
audit report and did not contain a statement under emphasis of
matter or statements under section 498(2) or (3) of the Companies
Act 2006. The financial statements of the Company for the year
ended 31 March 2023 are available upon request from the Company's
registered office.
2) Basis of accounting
The financial statements of the Company have been prepared in
accordance with UK-adopted international accounting standards in
accordance with the requirements of the Companies Act 2006. They do
not include all the information required for the full annual
financial statements and should be read in conjunction with the
annual financial statements of the Company for the year ended 31
March 2023. The principal accounting policies adopted in the
preparation of the financial information in these unaudited
condensed interim financial statements are unchanged from those
used in the Company's financial statements for the year ended 31
March 2023. This report does not itself contain sufficient
information to comply with IFRS.
3) Estimates
The preparation of the unaudited condensed interim financial
statements requires management to make judgements, estimates and
assumptions that affect the application of accounting policies and
the reported amounts of assets and liabilities, income, and
expenses. Actual results may differ from these estimates.
In preparing these unaudited condensed interim financial
statements, the significant judgement made by management in
applying the Company's accounting policies and the key sources of
estimation were the same as those that applied to the Company
financial statements as at and for the year ended 31 March
2023.
4) Financial risk management
The Company's financial risk management objectives and policies
are consistent with those disclosed in the Company's financial
statements as at and for the year ended 31 March 2023.
5) Taxation
As an investment trust the Company is exempt from corporation
tax on capital gains. The Company's revenue income is subject to
tax, but offset by any interest distribution paid, which has the
effect of reducing that corporation tax to nil. This means the
interest distribution may be taxable in the hands of the Company's
shareholders.
6) Earnings per Share
For the six months period ended Revenue Capital Total
30 September 2023 (pence) (pence) (pence)
========= =========
Earnings per ordinary share (2.66p) (3.22p) (5.88p)
================================= ========= ========= =========
For the financial year ended 31 March 2023
Earnings per ordinary share (5.14p) (1.56p) (6.70p)
================================= ========= ========= =========
The calculation of the above is based on revenue returns of
(GBP181,746) (31 March 2023: (GBP329,390)), capital returns of
(GBP219,677) (31 March 2023: (GBP100,248)) and total returns of
(GBP401,423) (31 March 2023: (GBP427,988)) and weighted average
number of ordinary shares of 6,825,287 (31 March 2023: 6,413,341)
as at 30 September 2023.
7) INVESTMENTS AT FAIR VALUE THROUGH PROFIT OR LOSS
As at 30 September As at 31 March
2023 2023
GBP GBP
===================
Opening cost
============================================ =================== ===============
Opening fair value 8,196,153 7,516,667
============================================ =================== ===============
Purchases at cost 441,990 779,734
============================================ =================== ===============
Sales (151,547) -
============================================ =================== ===============
Realised loss (83,570) -
============================================ =================== ===============
Unrealised loss (56,154) (304,393)
============================================ =================== ===============
Unrealised (loss)/gain on foreign exchange (79,953) 204,145
============================================ =================== ===============
Closing fair value 8,266,919 8,196,153
============================================ =================== ===============
8) Ordinary Share Capital
The table below details the issued share capital of the Company
as at the date of the Financial Statements.
Issued and allotted Ordinary Ordinary
No. of No. of Share Capital Share Capital
shares shares 30 September 31 March
30 September 31 March 2023 2023
2023 2023 GBP GBP
============== ========== ===============
Ordinary shares of 1 penny
each 7,051,600 6,646,472 70,515 66,464
============================ ============== ========== =============== ===============
On incorporation, the issued share capital of the Company was
GBP0.01 represented by one ordinary share of GBP0.01. Redeemable
preference shares of 50,000 were also issued with a nominal value
of GBP1 each, of which 25% were paid. The redeemable shares were
issued to enable the Company to obtain a certificate of entitlement
to conduct business and to borrow under section 761 of the
Companies Act 2006. The redeemable shares were redeemed on listing
from the proceeds of the issue of the new ordinary shares upon
admission on 19 January 2018.
The following table details the subscription activity for the
period ended 30 September 2023.
30 September
2023 31 March 2023
=============
Opening balance as at 1 April 6,646,472 6,013,225
======================================= ============= ==============
Ordinary shares issued 405,128 633,247
======================================= ============= ==============
Closing balance as at period/year end 7,051,600 6,646,472
======================================= ============= ==============
During the period ended 30 September 2023, there was GBP1,000
subscription receivable (31 March 2023: all proceeds from this
issue were received).
9) Related Party Transactions and Transactions with the
Manager
Directors - There were no contracts subsisting during or at the
end of the period in which a Director of the Company is or was
interested in and which are or were significant in relation to the
Company's business. There were no other transactions during the
period with the Directors of the Company. The Directors do not hold
any ordinary shares of the Company.
As at 30 September 2023, there was GBP1,292 (31 March 2023:
GBP1,239) payable to HMRC for the taxes on the Directors' fees and
expenses.
Manager - Shard Capital AIFM LLP (the " Manager " ), a UK-based
company authorised and regulated by the Financial Conduct
Authority, has been appointed as the Company's manager and
authorised investment fund manager for the purposes of the
Alternative Investment Fund Managers Directive. Details of the
services provided by the Manager and the fees paid are given in the
Prospectus dated 17 November 2017.
During the period the Company incurred GBP 74,456 (30 September
2022; GBP50,628) of management fees and as at
30 September 2023, there was GBP25,000 (31 March 2023:
GBP12,500) payable to the Manager. During the period the Company
received a rebate of GBP49,456 (30 September 2022; GBP50,694) on
management fees.
During the period the Company paid GBP27,000 (30 September 2022:
GBP23,750) of placement fees to Shard Capital Partners LLP (the
"Placing Agent").
During the period the Company paid GBP3,280 (30 September 2022:
GBP6,110) (excluding VAT) of corporate broking retainer fees to the
Placing Agent.
The Company has an investment in Sure Valley Ventures Fund, the
sub-fund of Suir Valley Funds ICAV and Sure Valley Ventures
Enterprises Capital LP, amounting to GBP7,212,710 and GBP255,931 as
at 30 September 2023 (31 March 2023: GBP7,139,802 and GBP121,367)
respectively. These funds are also managed by the Manager.
Capital call payable as at 30 September 2023 of GBP117,500 (31
March 2023: GBPNil) relates to the Sure Valley Ventures Enterprises
Capital LP capital call on 21 September 2023.
10) SubsequENT EVENTS
There were no subsequent events which would require disclosure
in the financial statements.
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END
IR NKCBKNBDDBBD
(END) Dow Jones Newswires
December 20, 2023 02:00 ET (07:00 GMT)
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