Mercia Asset Management Plc · LSE:MERC
Mercia Asset Management — Mercia Technologies — H1 2018 Earnings Presentation
31 slides from Mercia Asset Management's earnings presentation, Dec 3, 2018
Slide 1: Mercia Technologies PLC Half Year Results 2018
Mercia Technologies PLC Half Year Results 2018 Mark Payton – CEO Martin Glanfield – CFO Julian Viggars – CIO Increasing portfolio commercial traction
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 team: A track record of delivering
The team: A track record of delivering Dr Mark Payton Martin Glanfield Julian Viggars CEO CFO CIO 3
Slide 4: A needle, in a stack of needles!
A needle, in a stack of needles! 5.6m SMEs 4% will grow to a 0.4% will grow to a And 20% generate turnover of £1m turnover of £10m, the returns at 20% plus per annum; Scale ups 4
Slide 5: Our focus
Our focus £ £ £ £ £ See the best deals Minimise cash that others do not NAV growth Realise value erosion 5
Slide 6: Regional advantage
Regional advantage 68% 21% • 80+ employees • 9 offices across the UK regions Venture capital deployment (2017) High growth firms (2017) • 19 university partnerships 6
Slide 7: The Mercia investment model
The Mercia investment model 7
Slide 8: Progress; H1 2015 versus H1 2018
Progress; H1 2015 versus H1 2018 2015 2018 T/O £0.7m £5.3m AuM £104.7m £500.0m 8
Slide 9: Summary financial information
Summary financial information Six months to Six months to Year to 30 Sept. 2018 30 Sept. 2017 31 March 2018 £’000 £’000 £’000 Income statement - key items Revenue 5,270 4,849 10,197 Administrative expenses (5,956) (5,697) (10,633) Net expenses (686) (848) (436) Realised gains on disposal of investme
Slide 10: Digital & Digital Entertainment
Sector focus: Market-led approach Digital & Digital Entertainment Market segment: Est. market size: VR and AR $40.0bn by 2024 Sector Head: Mike Hayes Former CEO, SEGA Europe and USA 10
Slide 11: Progress; virtual reality
Progress; virtual reality • 45.6% equity stake • Holding value £13.0m Much more to come …. 11
Slide 12: Electronics, Materials, Manufacturing/Engineering
Sector focus: Market-led approach Electronics, Materials, Manufacturing/Engineering Market segment: Est. market size: Premium audio $1.5bn automotive Sector Head: Mark Volanthen Founding employee at Kymata, acquired by Alcatel for $118.0m 12
Slide 13: Progress; industry-leading speaker technology
Progress; industry-leading speaker technology • 64.0% equity stake • Holding value £7.2m 13
Slide 14: Software & the Internet
Sector focus: Market-led approach Software & the Internet Market segment: Est. market size: Bot mitigation, $20.0bn in 2018, fraud detection forecast to grow Sector Head: Alistair Forbes and prevention to $42.6bn by Co-founder of HoundDog Technology, acquired by GFI 2023 Software 14
Slide 15: Progress; industry-leading bot-detection technology
Progress; industry-leading bot-detection technology • 27.9% equity stake • Holding value £4.7m 15
Slide 16: Life Sciences & Biosciences
Sector focus: Market-led approach Life Sciences & Biosciences Market segment: Est. market size: Synthetic biology $38.0bn Sector Head: Peter Dines Former MD of Surgicraft 16
Slide 17: Progress; synthetic biology
Progress; synthetic biology • 40.5% equity stake • Holding value £9.1m 17
Slide 18: Our approach
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Slide 19: Over 20 direct assets and growing ...
Over 20 direct assets and growing ... 19
Slide 20: Direct investment holdings
Direct investment holdings Net investment Cash invested/ Fair value Net investment Percentage value (received) 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 2018 2018 2018 2018 2018 Investment £'000 £'000 £'000 £'000 % n
Slide 21: Valuation policy and portfolio summary
Valuation policy and portfolio summary 21
Slide 22: Where is the value in Mercia?
Where is the value in Mercia? NAV: 41.3p/share £8.3m MFM: 9.0p/share (2.7p/share) 5.5% ▪ Direct investments £27.3m (9.0p/share) 17.9% £77.8m ▪ Cash (25.7p/share) 51.0% £39.1m ▪ Goodwill, intangible assets & (12.9p/share) 25.6% net working capital ▪ Mercia Fund Managers 22
Slide 23: Why own a share in Mercia?
Why own a share in Mercia? • Highly capital efficient and robust financial model • Risk-mitigated, balanced portfolio of ~20 direct assets • Co-investment opportunities • Building momentum 23
Slide 24: Track record
Track record Oldest venture fund (2002) Balance sheet (to March 2018) 15% IRR and 4.7x DPI 15% IRR 24
Slide 25: In summary
In summary £ £ £ £ £ See the best deals Minimise cash that others do not NAV growth Realise value erosion 25
Slide 26: Appendix
ercld Appendix chnologies
Slide 27: Movements in portfolio: IPO to H1 2018
Movements in portfolio: IPO to H1 2018 £26.5m £(12.0)m Valuation at IPO £77.8m Net investments made £54.3m during the period Unrealised gains on the revaluation of investments Unrealised losses on the revaluation of investments Valuation as at 30 September 2018 £9.0m 27
Slide 28: Movements in portfolio: H1 2018
Movements in portfolio: H1 2018 £3.2m £(0.6)m £77.8m Valuation as at £9.1m 1 April 2018 Net investments made during the year £66.1m Unrealised gains on the revaluation of investments Unrealised losses on the revaluation of investments Valuation as at 30 September 2018 28
Slide 29: Movements in net assets: IPO to H1 2018
Movements in net assets: IPO to H1 2018 £38.9m £(2.8)m £125.2m Pre IPO net assets Goodwill and intangible assets arising on EV acquisition £68.8m Portfolio value increase Increase in cash and short-term liquidity investments Decrease in working capital Net assets as at 30 September 2018 £8.7m £11.6m
Slide 30: Movements in net assets: H1 2018
Movements in net assets: H1 2018 £11.8m £(13.9)m £3.9m £(0.1)m Net assets as at £125.2m £123.5m 1 April 2018 Portfolio value increase Reduction in cash and short-term liquidity investments Increase in working capital Decrease in intangible assets Net assets as at 30 September 2018 30
Slide 31: info@merciatech.co.uk www.merciatech.co.uk
0330 223 1430 info@merciatech.co.uk www.merciatech.co.uk