Mercia Asset Management Plc · LSE:MERC
Mercia Asset Management — Mercia Technologies — H1 2017/18 Earnings Presentation
25 slides from Mercia Asset Management's earnings presentation, Dec 6, 2017
Slide 1: Interim Results for the six months ended 30 September 2017
Interim Results for the six months ended 30 September 2017 Commercialising regional growth opportunities Mark Payton - CEO, Martin Glanfield - CFO, Matt Mead - CIO 6 December 2017
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: The Board and Investment Team
The Board and Investment Team Dr Mark Payton Martin Glanfield Matt Mead Jonathan Diggines Susan Searle Ian Metcalfe Ray Chamberlain CEO CFO CIO Third Party Funds Non-executive Snr Independent Non-executive Chair Director Director Julian Viggars Mike Hayes Peter Dines Dr Alistair Forbes Dr Mark Volan
Slide 4: Progress since IPO
Progress since IPO January 2007 December 2016 January 2017 Mercia established Sale of Allinea Software to ARM Fundraise: £40.0m - First cash exit, with 88% uplift on Mercia Technologies’ investment cost September 2016 February 2017 December 2014 H1 2017 Fund wins IPO: £70.0m raised - £108.5m fund ma
Slide 5: Mercia's Progress; H1 2017/18 against H1 2016/17
Mercia’s Progress; H1 2017/18 against H1 2016/17 Pre-exceptional Revenue Net expenses operating profit up 66% to £4.8m down 40% to £0.9m up 80% to £1.8m Portfolio value Fair value gains NAV per share up 24% to £64.7m £3.0m 41.1p - up 7.9% Unrestricted cash FUM University partners up 103% to £48.6m u
Slide 6: University partnerships delivering value
University partnerships delivering value The Midlands Scotland Delivering 50 innovative opportunities The North 6
Slide 7: Complete Capital Solution
Complete Capital Solution More than £190.0m 10-30% equity stake 20-40% equity stake 7
Slide 8: Managed funds delivering value
Managed funds delivering value • MF1, MF2, PLC balance sheet • RisingStars Growth Fund I • First fund investment - 2009 • First fund investment - 2004 • University of Warwick • Investment Team networks • Total invested - £0.8m • Total invested - £0.9m • Fund return - 26x • Return to date - 55x • PLC
Slide 9: Portfolio
ercid Portfolio chnologies
Slide 10: Focused
Focused Software & the Internet Digital & Digital Entertainment • Artificial intelligence • Virtual reality • Cybersecurity • Augmented reality • Software as a service • Mixed reality • Analytical tools • Serious games Portfolio Composition • Adtech Electronics, Materials & Life Sciences & Bioscienc
Slide 11: Software & the Internet key sector companies
Key sector companies Dr Alistair Forbes – Sector Head Investment Director 15+ years in the sector Software & the Co-founder of HoundDog Technology, acquired by GFI Internet Software in 2009. He then held the position of GM for a division that grew from $6.0m ARR to $100.0m ARR in a period of 6 years
Slide 12: Digital & Digital Entertainment key sector companies
Key sector companies Investment Director Mike Hayes – Sector Head 20+ years in the sector Digital & Digital Formerly CEO at SEGA Europe & America, sales & marketing Entertainment director at Nintendo and marketing director at Codemasters nDreams Edge Case Games VirtTrade Soccer Manager Equity stake:
Slide 13: Electronics, Materials & Manufacturing key sector companies
Key sector companies Electronics, Investment Director Dr Mark Volanthen – Sector Head 20+ years in the sector Materials & Named on 65 patents. Founding Manufacturing/ employee at Kymata, acquired by Alcatel for $118.0million Engineering Warwick Audio Impression Smart Antenna Faradion Technologies Te
Slide 14: Life Sciences & Biosciences key sector companies
Key sector companies Investment Director Peter Dines – Sector Head 20+ years in the sector Life Sciences & Former MD of Surgicraft, during Biosciences which time sales tripled, sold to Livingbridge The Native Oxford Genetics Concepta Medherant Antigen Company Equity stake: Equity stake: Equity stake
Slide 15: H1 2017/18 Financials
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Slide 16: Summary financial information
Summary financial information Six months to Six months to Year to 30 Sept. 2017 30 Sept. 2016 31 March 2017 £’000 £’000 £’000 Income statement - key items Revenue 4,849 2,887 6,660 Cost of sales and other administrative expenses (5,697) (4,341) (9,143) Net expenses (848) (1,454) (2,483) Fair value m
Slide 17: Direct investment holdings: H1 2017/18
Direct investment holdings: H1 2017/18 Net investment Fair value Net investment Percentage value Net cash invested movement value held As at Six months to Six months to As at As at 1 April 30 September 30 September 30 September 30 September 2017 2017 2017 2017 2017 Investment £'000 £'000 £'000 £'000
Slide 18: Valuation policy and portfolio summary
Valuation policy and portfolio summary • All £64.7million of investments are held at fair values based on IPEVCV Guidelines • Early stage companies often have no current/short-term future earnings or positive cash flows • Consequently, the most appropriate fair value methodology is that based on ava
Slide 19: Strategy for continued growth
Strategy for continued growth NAV growth Minimisation of NAV Leverage partnerships Realise value erosion Strong focus on the Revenue growth rate We only invest from our Through trade sales accelerated growth in greater than cost base managed funds into which we and IPOs, leading to the value of dire
Slide 20: Appendix
ercld Appendix chnologies
Slide 21: Movements in portfolio: IPO to H1 2017/18
Movements in portfolio: IPO to H1 2017/18 £19.2m £(7.2)m £64.7m At IPO Net investments made since £43.7m IPO Unrealised gains on the revaluation of investments Unrealised losses on the revaluation of investments Valuation as at 30 September 2017 £9.0m 21
Slide 22: Movements in portfolio: H1 2017/18
Movements in portfolio: H1 2017/18 £4.7m £(1.7)m £64.7m Valuation as at £9.7m 1 April 2017 Net investments made during the period £52.0m Unrealised gains on the revaluation of investments Unrealised losses on the revaluation of investments Valuation as at 30 September 2017 22
Slide 23: Movements in net assets: IPO to H1 2017/18
Movements in net assets: IPO to H1 2017/18 £55.2m £(7.8)m £123.6m Pre IPO net assets Goodwill and intangible assets arising on EV acquisition Portfolio value increase £55.7m Increase in cash and short-term liquidity investments Decrease in working capital Net assets as at 30 September 2017 £8.9m £11
Slide 24: Movements in net assets: H1 2017/18
Movements in net assets: H1 2017/18 £12.7m £(8.6)m £(1.9)m £123.6m Net assets as at £121.4m 1 April 2017 Portfolio value increase Reduction in cash and short-term liquidity investments Other net asset movements Net assets as at 30 September 2017 24
Slide 25: info@merciatech.co.uk www.merciatech.co.uk
0330 223 1430 info@merciatech.co.uk www.merciatech.co.uk
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