Mercia Asset Management Plc · LSE:MERC
Mercia Asset Management — Mercia Technologies — Investor Day (October 2018)
97 slides from Mercia Asset Management's investor day presentation, Oct 18, 2018
Slide 1: Capital Markets Day London 18 October 2018
Realising Value | &mercia ou technologies is Capital Markets Day. Londong
Slide 2: Important notice
Important notice This document has been prepared by and is the sole responsibility of Mercia Technologies (the “Company”), comprises these presentation slides for the sole use at a presentation and any question and answer session and any document or material distributed at or in connection with the
Slide 3: Susan Searle
Susan Searle Non-executive Chair
Slide 4: Mark Payton
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Slide 5: Cash returns, not just IRR
Cash returns, not just IRR … Above industry cash returns through proactive local delivery of the right capital, to the right companies, at the right time 5
Slide 6: Mercia; the challenge and opportunity
Mercia; the challenge and opportunity 5.6m SMEs in the UK, of these: ~13 and ~10 years Median time from Regional university research income > Oxford, London, seed to trade sale/IPO Cambridge combined ~80% of venture • ~4% of SMEs reach £1m t/o deployed is in High growth/ scale- • ~0.4% of SMEs reach
Slide 7: Growing venture capital concentration
Growing venture capital concentration Source: Beauhurst, ONS and British Business bank calculations Equity Deals (Q4 2016-Q3 2017) Equity Investment (Q4 2016-Q3 2017) HGFs 2014 2015 2016 2017 London: £0.7bn £1bn £1.2bn £2.5bn Rest of UK/UK regions: £0.3bn £0.6bn £0.4bn £0.5bn * Taken from Pitc
Slide 8: Mercia's fit in the venture industry
Mercia’s fit in the venture industry Exits ‘Group’ annual investment rates (funds and balance sheet): - In 2016/17: ~£20million - In 2017/18: ~£50million - In 2018/19: ~£60million+ 8
Slide 9: National business, regional presence
National business, regional presence Regional: - 9 offices, over 80 employees - £400m of regional third party fund mandates - Circa £230m of free cash to invest over the next 4-5 years Scale up capital: - Net assets, as of March 2018, of £123m - Circa £40m of balance sheet capital available to inves
Slide 10: The business model
The business model •Early access to UK-based disruptive tech businesses •Revenue model through fund AMF, service fees, fund carry and investment returns •Provides highly capital efficient and robust financial model •Risk-mitigated, balanced portfolio of ~20 direct assets •Co-investment opportunities
Slide 11: Our journey
Our journey: in just over three years to March 2018 … £10.2million turnover ~£500million AuM: • ~£400m FuM (~190 tech. venture companies) • ~£66.1million portfolio valuation (~20 direct investments) • ~£49.4million unrestricted cash 3 balance sheet cash realisations 9 offices in the UK 80 employees
Slide 12: Starting to deliver both balance sheet and funds' value
Starting to deliver both balance sheet and funds’ value • 15% IRR on balance sheet (December 2014 – March 2018) • RSGF (oldest VC managed fund, 2002) ~18% IRR and 4.5x DPI • North of England/Leeds • Midlands/University of • North of England (Fund University Warwick investment, RSGF) • Sold in March
Slide 13: A share in Mercia; sum of the parts
A share in Mercia; sum of the parts Goodwill, intangible assets & £4.5m (1.5p/share) NAV: 40.7p/share MFM: 9.0p/share net working capital 3.1% Mercia Fund Managers (MFM) Cash £27.3m (9.0p/share) Direct investments 18.5% £66.1m (21.7p/share) 44.9% £52.9m (17.5p/share) 33.5% 13
Slide 14: Board and Team
Board and Team (~24% shareholding) The Board Dr Mark Payton Martin Glanfield Julian Viggars Susan Searle Ian Metcalfe Ray Chamberlain Dr Jonathan Pell Caroline Plumb OBE CEO CFO CIO Non-executive Snr Independent Non-executive Non-executive Non-executive Chair Director Director Director Director Sect
Slide 15: Martin Glanfield
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Slide 16: Summary financial information
Summary financial information Year to Year to 31 March 2018 31 March 2017 £’000 £’000 Income statement - key items Revenue 10,197 6,660 Administrative expenses (10,633) (9,143) Net expenses (436) (2,483) Realised gains on disposal of investments 871 839 Fair value movements in investments 2,823 4,26
Slide 17: Direct investment holdings
Direct investment holdings Net investment Investment Fair value Net investment Percentage 99.3% of portfolio value Net cash invested realisations movements value held As at Year to Year to Year to As at As at value represented by 1 April 31 March 31 March 31 March 31 March 31 March 2017 2018 2018 20
Slide 18: Valuation policy and portfolio summary
Valuation policy and portfolio summary • All £66.1million of investments are held at fair values based on IPEVCV Guidelines • Early-stage companies often have no Listed bid price: 2% current/short-term future earnings or positive cash flows Price of recent round: 68% • Consequently, the most app
Slide 19: Julian Viggars
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Slide 20: Balance sheet: Focused balance sheet investment
Balance sheet: Focused balance sheet investment Software & the Digital & Digital Portfolio composition Internet Entertainment • Artificial intelligence • Virtual reality (values above £1.0million) • Cybersecurity • Augmented reality • Software as a service • Gaming/content • Analytical tools • Serio
Slide 21: Balance sheet: Strong growth and commercial progress
Balance sheet: Strong growth and commercial progress Global co 21
Slide 22: Jeremy Gidlow
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Slide 23: Intechnica: London | Manchester
London | Manchester Increase enterprise value and reduce risk through technical excellence ITDD, VDD, Roadmap Assurance, Technical Value Creation Strategy, Technical and Digital Strategy, Technical Change Management, Technical Programme Acceleration and Rescue Mercia’s Capital Markets Day
Slide 24: Company founded from years of experience
Company founded from years of experience designing and building systems to manage peaks in demand Mercia’s Capital Markets Day
Slide 25: The answer is always people…
The answer is always people… Jeremy Gidlow – CEO Performance expert and Co-Founder of Intechnica. Seventeen years’ experience solving digital issues for leading companies. Trusted technology advisor to PE. Nick Baglin – General Manager Andy Still – CTO Nick has 18 years’ experience in cyber security
Slide 26: Successful delivery to 350 clients over 10 years
Successful delivery to 350 Clients over 10 years ITDD | VDD | Roadmap Assurance | Technical Value Creation Strategy | Technical and Digital Strategy | Technical Change Management | Technical Programme Acceleration and Rescue Mercia’s Capital Markets Day
Slide 27: Technology advisors to mid-market private equity firms
Intechnica are experienced technology advisors to mid-market private equity firms for M&As Acquisition Acquisition Acquisition Acquisition Acquisition Acquisition Sale Oaktree Advised Advised Advised Advised Advised Advised Advised ECI Partners ECI Partners Calculus ECI Partners Endless LLP LDC GCA
Slide 28: International growth plans
International growth plans Current offices Future offices Stockholm Berlin Portugal – Nearshore development Mercia’s Capital Markets Day
Slide 29: Netacea summary
NETACEA SUMMARY The World's Most Advanced Account Takeover, Bot Management and Virtual Waiting Room Solutions Mercia’s Capital Markets Day
Slide 30: How it works…
How it works… Mercia’s Capital Markets Day
Slide 31: Behavioural analysis machine learning
Behavioural analysis machine learning easily spots anomalous behaviour in a way that is extremely hard to defeat Malicious behaviour Suspicious behaviour Unusual behaviour Normal user behaviour Mercia’s Capital Markets Day
Slide 32: Leading international retailer case study – Account Takeover
Leading International retailer case study – Account Takeover MALICIOUS LOGINS PRE ATTACK (0) GLOBALLY DISTRIBUTED ACCOUNT TAKEOVER ATTACK 164k+ MALICIOUS LOGINS STOPPED GENERATED BY 1,862 MALICIOUS LOGINS DURING ATTACK DATA CENTRES SPREAD ACROSS 144+ COUNTRIES Mercia’s Capital Markets Day
Slide 33: Mission and goals
To create value and remove risk To harness the power of AI to protect and through technical excellence optimise the world’s biggest websites The World’s Most Advanced Bot Management Solution Expand internationally Become a recognised market leader in our space Lead the technology advisory market Con
Slide 34: Jonathan Watkins
Jonathan Watkins Impression Technologies
Slide 35: Impression Technologies Limited
Impression Technologies Limited The low cost solution for advanced aluminium light-weighting – a key cleantech enabling technology Impression Technologies Limited 36
Slide 36: Aluminium is a sustainable solution
Aluminium is a sustainable solution 2025 Fuel economy standards Light-weighting is easiest & Aluminium provides a demand new technologies most cost-effective option sustainable solution 11% CAGR Creating a dramatic growth But is held back by poor in aluminium sheet use formability of higher grades I
Slide 37: A new genre of aluminium forming
A new genre of aluminium forming Currently 25,000 parts pa 500 million parts pa run rate on production cars potential in auto alone Electric vehicles a major market opportunity Aluminium hot forming for Proven technology already €100bn+ market in auto, lightweight structures in commercial production
Slide 38: Meets needs of significant markets
Meets needs of significant markets typically kg 20-50% savings formability & recycling potential Makes high strength Al Significant OEM benefits for Uses current alloys & plant: competitive for mass market mass produced parts no major adoption barriers 16 parts on Aston Martin & Projects in EVs, SUV
Slide 39: Programmes with major global players
Programmes with major global players Volume Automotive Passenger Aircraft Major SUV OEM World’s largest World’s #1 Tier 1 World’s #4 aluminium stamping commercial aviation supplier to global supplier to global OEM auto OEMs auto OEMs Nacelles being converted from SPF to HFQ £9.6m ‘RACEForm’ project
Slide 40: Valued by light-weighting experts
Valued by light-weighting experts “I believe that we will see a significant increase in HFQ applications as the Automotive Industry looks for further weight savings to meet the emissions challenge going forward & also reduce the weight of Battery Electric Vehicles (BEVs) to increase performance & ra
Slide 41: A range of IP & protective barriers
A range of IP & protective barriers 6 patent families with 3 new … with know-how in alloy … encapsulated as secure patents in pipeline … processing & modelling … code for software plug-ins … offered to OEMs with .. & supportive ecosystem of applications know-how… key players enhancing brand Impressi
Slide 42: A scalable business model
A scalable business model dsadsdsa Set as a global standard for Competitive, non-exclusive Provide paid-for software & advanced Al light-weighting licensing to OEMs & Tiers engineering services UK factory offers seeding & Exploit potential for HFQ prototype volumes using recycled aluminium Impressio
Slide 43: Summary
Summary • Aligns with drivers across a blended $100bn market • HFQ unlocks potential of high strength aluminium • Proven cleantech technology with commercial revenues • Strong engagement with global OEMs and suppliers • Scalable licensing model supported by extensive IP Impression Technologies Limit
Slide 44: Sally Waterman
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Slide 45: Medherant Limited
Medherant Limited October 2018 Sally Waterman - COO www.Medherant.co.uk
Slide 46: Who we are
Who we are A Company developing innovative products for pain and CNS diseases using a unique transdermal delivery technology, TEPI® Patch • Formed as a spin-out from the world leading polymer chemistry group at the University of Warwick in the UK in 2015 • Exclusive, worldwide licence for revolution
Slide 47: Business model - Two potential sources of revenue
Business model - Two potential sources of revenue 1. Develop own products and license for commercialisation • Best-in-class products to address global markets • Focus on products for pain and CNS diseases • CNS market expected to grow at a • Phase I studies for Ibuprofen TEPI Patch® ongoing CAGR of
Slide 48: Transdermal drug delivery - Benefits and limitations
Transdermal drug delivery - Benefits and limitations • Benefits of patches • Better dose control vs creams, gels & ointments Types of transdermal patches • Avoidance of GI damage & 1st pass metabolism • Tailored steady release of drug from the patch • Convenient & improved compliance • Main limitati
Slide 49: TEPI Patch – Overcoming current limitations
TEPI Patch® – Overcoming current limitations TEPI Patch® technology overcomes key issues in formulating drug-in-adhesive patches
Slide 50: Extensive intellectual property portfolio
Extensive intellectual property portfolio Owner Patents Covers Expire Bostik – exclusively licensed 11 families – 85 SPUR adhesive technology Dec-2028 to Dec-2034 to Medherant for medical granted patents Note: Patent maintenance funded by use Bostik Bostik/Medherant Filed 2015 Use of SPUR adhesive f
Slide 51: Pipeline of TEPI Patch products
Pipeline of TEPI® Patch products Transdermal patches are widely accepted among physicians and patients due to their non-invasive, pain free and easy administration. About 40 patches are currently marketed and there are > 70 in clinical development. TEPI Patch Indication Rationale for a patch Market
Slide 52: Ibuprofen TEPI Patch – Most advanced programme
Ibuprofen TEPI® Patch – Most advanced programme Product • Flexible thin patch (12 x 8.5 cm) containing 200 mg ibuprofen for release over 24 hours Indication • Symptomatic treatment of local pain in acute muscular strains, or sprains in benign traumas Dose • 1 patch/day for up to 5 days Status • Prog
Slide 53: Collaborative development of TEPI Patch products
Collaborative development of TEPI® Patch products Partner Indication Market size estimates Status Japanese Hormone replacement $1.3bn (2025) Patches undergoing testing by pharma therapy partner Roskamp Alzheimer’s disease – $14.8bn (2026) for Collaboration agreement in Institute (US) repurposed drug
Slide 54: TEPI Patch manufacture
TEPI® Patch manufacture • Very simple manufacturing process – solvents not used • Adhesive, drug and excipients mixed and cast • Curing (cross-linking) of adhesive achieved using water vapour • Ibuprofen TEPI Patch process scaled-up & optimised at AdhexPharma1 • Patches made to GMP for Phase I clini
Slide 55: Experienced management team
Experienced management team Nigel Davis, CEO Ken Cunningham, David Haddleton, CSO Research, BD & Chairman Professor at University commercialisation Chair of Abzena, NED of Warwick, ex-ICI, roles at Glaxo, Verona Pharma, ex- Founder Warwick PharmaVentures, SkyePharma, Arakis & Effect Polymers & Innov
Slide 56: Summary
Summary • Building a sustainable business with two potential sources of licence revenue (milestones &/or royalties) • First licence expected 2019 • Developing five TEPI Patch products for pain and CNS diseases to licence for commercialization • Ibuprofen TEPI Patch in Phase I, MAA due to be filed 20
Slide 57: Ryan Cawood, Oxford Genetics
mercig Ryan Cawood Oxford Genetics
Slide 58: Pioneering Transformative Technologies to Realise the Biologics Revolution
Pioneering Transformative Technologies to Realise the Biologics Revolution Ryan Cawood, CEO and Founder
Slide 59: Agenda
Agenda > About The Market > About Oxford Genetics > Technology Overview > Delivering The Vision
Slide 60: Biologics are the Future Medicines
About The Market Biologics are the Future Medicines > Medication market is $1.2 trillion > Medicines are changing, increasing in complexity, harder to discover and harder to manufacture > Most medicines in the future will be biologics > Major growth expected in gene therapy, cell therapy, and protei
Slide 61: Major Success, but Major Challenges
About The Market Major Success, but Major Challenges Major Successes Major Challenges ADA-SCID for Immunodeficiency Discovery Difficult to Identify New Biologics CAR T for Cancer Oxford Genetics Design Check Point Inhibitors for Cancer Highly Complex to Design and Develop Technologies and Custom Sol
Slide 62: Company Background
About Oxford Genetics Company Background > Founded in 2011 > US subsidiary founded 2017 > 70 employees > Built on proprietary genomics DNA ‘molecular Lego’ platform > Custom solution and downstream licensing model > Based in Oxford Science Park, 13,000 sq. Ft. facility 63
Slide 63: Three Main Treatment Types > Three Main Business Divisions
About Oxford Genetics Three Main Treatment Types > Three Main Business Divisions Gene Therapies Cell Therapies Antibody Therapies Oxford Genetics Platform Technologies Viral Therapeutics Division Gene Editing Division Protein Therapeutics Division Division Specific Technologies Division Specific Tec
Slide 64: Technology USPs
About Oxford Genetics Technology USPs > Highest yielding gene therapy production systems on the market > Only global provider of packaging cell lines and producer cell line services > World leading capacity for efficient CRISPR gene editing through automated platforms > Highest quality CRISPR librar
Slide 65: Board and Management
About Oxford Genetics Board and Management Dr Ryan Cawood Dr David Hames Dr Matt Baker Prof Len Seymour Mr Martin Hall Dr Mark Payton Dr Tom Payne Chief Executive Officer Non-Exec. Chairman Non-Executive Director Non-Exec. Director Chief Financial Officer Non-Exec. Director Chief Scientific Officer
Slide 66: 2018 Progress
About Oxford Genetics 2018 Progress > 3 year CRISPR gene editing contract began in August 2018. Minimum revenue $8M over 3 years – potential >$19.5M > 7 license agreements signed for existing technologies > 11 new licensable technologies and custom service solutions to be launched by April 2019 > Fo
Slide 67: R&D Grant Funding
About Oxford Genetics R&D Grant Funding 2 > Investment in innovative R&D is essential to maintain a market leading position 1.5 > more than doubled grant income year-on-year for 6 consecutive years GBP Million > Current running grants total: £1.9M 1 > Signed collaborative deal with MeiraGTx for AAV
Slide 68: Building a Gene Therapy Manufacturing Tool Kit
Technology Overview 1 Building a Gene Therapy Manufacturing Tool Kit Through the technologies we have established, Oxford Genetics is ideally positioned to capture short and long term revenue by providing manufacturing systems that can follow a clients clinical success Non-stable Production Semi-sta
Slide 69: Automated CRISPR Robotics
Technology Overview 2 Automated CRISPR Robotics > Developed in house. Scales a very manual part of our workflow > Each automated platform can deliver approx. 400-500 cell lines per year > Equates to approximately £4-5M in revenue per platform at full capacity, currently establishing the 3rd system >
Slide 70: Delivering Our Vision
Future Direction Delivering Our Vision 01 Maximise Margins and Profitability Fully automate OG primary custom solutions 02 Increase Capacity for Large High Value Projects Establish bioreactor capabilities for viral and antibody production Achieve a Market-leading Position 03 Expand our world-class m
Slide 71: Patrick O'Luanaigh
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Slide 72: Interactive. Immersive. Incredible. VR.
INTERACTIVE. IMMERSIVE. INCREDIBLE. VR. Patrick O’Luanaigh | CEO
Slide 73: Our Past
OUR PAST The journey so far...
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Slide 75: In the beginning…
In the beginning…
Slide 76: PS Home
PS Home
Slide 77: ARG, Lewis Hamilton
ARG, Lewis Hamilton
Slide 78: Slide 78
Slide 79: VR titles released so far
VR titles released so far Winner, Most Original Game TIGA Awards 2017 “It blew my mind. There is no other way to say it.” Kotaku 5/5 9/10 9/10 8.5/5 Darkstation Gaming Nexus SquareXO PC Afectionado 4.5/5 8/10 8/10 The VR Base Playstation Lifestyle Game Reactor
Slide 80: Hand-picked VR Talent
Hand-picked VR Talent Award-Winning Leaders Creators of Entrusted with Studios in New Tech Top Selling VR Global IP AR SMARTPHONES
Slide 81: Our Present
OUR PRESENT Growing revenues and rapid growth
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Slide 83: Relationships and clients
Relationships and clients PlayStationVR @oculus Google Hi Microsot QOQVIVE STARBREEZE STARVR_ IMAX@ Samsung D@LL Mosvr acer Hiss! TAMD GinvipDIA = unity
Slide 84: Shooty Fruity is high-quality VR gaming at its best
“Shooty Fruity is high-quality VR gaming at its best” PC Afectionado
Slide 85: VR LBE
VR LBE
Slide 86: Rapid growth and major deal pipeline
Rapid growth and major deal pipeline
Slide 87: Our Future
OUR FUTURE Heading towards the AR/VR hockey stick
Slide 88: VR adoption vs. other technologies
VR adoption vs. other technologies (Share of U.S. households 1960-2020) 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 1960 1970 1980 1990 2000 2010 2020 Colour TV VCR PC Cell Phone Internet VR Data: Superdata 2018 (VRX)
Slide 89: VR adoption vs. other technologies
VR adoption vs. other technologies (Share of U.S. households 1960-2020) 25% 20% 15% 10% Includes Google Cardboard-based devices. 5% Sources: Michael Fallon, The New York Times, Pew Research Centre, Gallup, U.S. Census, SuperData Research 0% 2015 2016 2017 2018 2019 2020 Data: Superdata 2018 (VRX)
Slide 90: Oculus Quest
Oculus Quest SPRING 2019 ag) df
Slide 91: The Virtual Market: Consumer software revenue 2017-2021
The Virtual Market: Consumer software revenue 2017-2021 (worldwide) Other 15% Other 13% Social media Interactive media 7% 7% Games 2017 Games 2021 Interactive media $554M $5.6B 55% 53% 8% LBE 25% LBE 17% Data: Superdata 2018 (VRX)
Slide 92: nDreams revenue growth
nDreams revenue growth CAGR
Slide 93: Our goals
Our goals 1. Top 3 VR developers in the world 2. Quality is everything 3. Revenue growth and profitability 4. Build and own strong, valuable IPs 5. Strengthen key relationships 6. All funded deals are strategic
Slide 94: Interactive. Immersive. Incredible. VR.
INTERACTIVE. IMMERSIVE. INCREDIBLE. VR. Patrick O’Luanaigh | CEO
Slide 95: In conclusion
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Slide 96: Built to realise value
Built to realise value NAV growth Minimisation of cash Leverage partnerships and Realise value erosion business model Business built, now Increasing revenue and In last 12 months: Cash returns strong focus on reducing net expenses • ~2000 plans received (~5% through trade accelerated growth invested
Slide 97: Contact
0330 223 1430 info@merciatech.co.uk www.merciatech.co.uk