Mercia Asset Management Plc · LSE:MERC
Mercia Asset Management — Investor Presentation (March 2019)
53 slides from Mercia Asset Management's investor presentation, March 2019
Slide 1: Welcome to the 11th VCT Investor Seminar
Welcome to the 11 th VCT Investor Seminar
Slide 2: Tim Levett Introduction
Tim Levett Introduction
Slide 3: 2018 - After the storm
2018 - After the storm.
Slide 4: 2019 – Uncertain times
2019 – Uncertain times.
Slide 5: Past presentations
Past presentations. Buoyant mM = i\- SILVERWING y Ai ENERGY SAVINGS ineu MEDOVATE Empowering your media up AVID “~ technology © Promanex 6 niw® Closerstill _ Rockar. « volumatic® alaric Designed To Perform ALL C000.
Slide 6: Martin Green NVM overview
Martin Green NVM overview
Slide 7: VCT portfolio in context
VCT portfolio in context. Venture Legacy portfolio portfolio £67.0m £97.3m £67.0m £97.3m 24 34 Companies Companies As at 31 December 2018
Slide 8: What you can expect from NVM
What you can expect from NVM. Objective: Feasible Stable dividends Maintained With by Transition to larger, Expanded capabilities more diverse portfolio Regional/Scaleup/Patient De-risked with
Slide 9: Where will the long-term return come from?
Where will the long-term return come from? New Legacy MBO development portfolio capital deals
Slide 10: MBO Portfolio
MBO Portfolio Businesses Sold. Businesses Remaining. 24 exits Companies Value 165.9 34 £97.3m 7 exits Sectors Sectors by Value (£m) 61.9 7 57.9 Construction Other £4.5 5 exits Construction Other Consumer £1.7 exits 46.6 Consumer 5 11 £24.3 exits 5 Services 34.2 6 Services 23.2 Healthcare £17.8 17.2
Slide 11: Exit: Love Energy Savings
Exit: Love Energy Savings Nature of business: Energy comparison and switching service Invested: £3.3 million Proceeds: £11.8 million Money multiple: 3.6x
Slide 12: Exit: CloserStill Group
Exit: CloserStill Group Nature of business: Business-to-business (B2B) exhibition, events and media group Invested: £5.0 million Proceeds: £11.5 million Money multiple: 2.3x (7.8x life)
Slide 13: David Cartwright VCT market
David Cartwright VCT market
Slide 14: New investments in unquoted companies
New investments in unquoted companies. Number of companies Investment £millions November and 3 1.1 December 2015 Year to 31 December 59 113.5 2016 Year to 31 December 86 194.8 2017 Year to 31 December 116 215.4 2018 TOTALS 260+ 524.8 + adjusted for new investments by different VCTs in different year
Slide 15: Follow on investments in unquoted companies
Follow on investments in unquoted companies. Investment £millions Year to 31 December 2016 84.2 Year to 31 December 2017 88.3 Year to 31 December 2018 157.2 TOTALS 329.7 The attached data is based on data published by VCTs. The data may not be used or reproduced without the permission of David Cartw
Slide 16: Investments in AIM listed companies
Investments in AIM listed companies. Number of companies Investment £millions November and December 1 0.9 2015 Year to 31 December 2016 30 38.6 Year to 31 December 2017 39 54.1 Year to 31 December 2018 38 72.7 TOTALS 75+ 166.3 + adjusted for investments in companies by different VCTs in different ye
Slide 17: Total investment activity by VCTs
Total investment activity by VCTs. Investment £millions November and December 2015 2.0 Year to 31 December 2016 236.3 Year to 31 December 2017 337.2 Year to 31 December 2018 445.3 TOTALS 1,020.8 The attached data is based on data published by VCTs. The data may not be used or reproduced without the
Slide 18: Since November 2015 VCTs have invested in unquoted and AIM companies
Since November 2015 VCTs have invested in: 260 unquoted companies 75 AIM listed companies The attached data is based on data published by VCTs. The data may not be used or reproduced without the permission of David Cartwright FCA
Slide 19: New investment activity by VCTs since November 2015
New investment activity by VCTs since November 2015. 60 37 £millions 247 88 114 145 Technology Consumer Services Healthcare Business services Telecommunications Other The attached data is based on data published by VCTs. The data may not be used or reproduced without the permission of David Cartwrig
Slide 20: New investment activity by VCTs since November 2015
New investment activity by VCTs since November 2015. 18 84 20 21 28 £millions 29 49 308 62 127 London South East (ex. London) North West Midlands Scotland East Anglia Yorkshire Wales South West North East Northern Ireland The attached data is based on data published by VCTs. The data may not be used
Slide 21: New unquoted investment activity since November 2015
New unquoted investment activity since November 2015. VCT Number £m VCT Number £m Manager Manager Albion 20 28.2 Maven 21 34.3 Baronsmead 13 19.5 Mobeus 14 41.2 VCTs Beringea 15 35.1 NVM 22 58.8 Downing 28 30.6 Octopus 41 123.0 Foresight 17 41.4 YFM 10 27.9 These VCT managers manage circa 75 per cen
Slide 22: New and follow on unquoted investment activity since November 2015
New and follow on unquoted investment activity since November 2015. VCT Manager £m VCT Manager £m Albion 78.6 Maven 41.2 Baronsmead 21.3 Mobeus 48.1 VCTs Beringea 66.4 NVM 65.5 Downing 52.4 Octopus 286.5 Foresight 46.1 YFM 30.9 These VCT managers manage circa 75 per cent of the funds managed by all
Slide 23: Investment activity since November 2015
Investment activity since November 2015. • The VCT sector and HMRC have taken time to adjust to the new VCT legislation introduced in 2015 and 2017 • The research shows increasing levels of investment activity since November 2015 • The VCT sector is managing to deploy (invest) new VCT funds raised i
Slide 24: Charlie Winward The Venture Portfolio
Charlie Winward The Venture Portfolio
Slide 25: Venture portfolio in context
Venture portfolio in context. Venture Legacy portfolio portfolio £67.0m £97.3m £67.0m £97.3m 24 34 Companies Companies As at 31 December 2018
Slide 26: The team
The team. Aaron Lawson-Clark Alex Wilson Carmine Circelli Charlotte Clarke Ishaan Chilkoti Jason Warren Sam Sinclair Stephen Johnson
Slide 27: 2018 Software investments
2018 Software investments. Invested: £2.8m Invested: £3.1m Region: Scotland Region: Midlands Committed: £2.2m Invested: £2.3m Region: London Region: Scotland
Slide 28: 2018 Lifescience investments
2018 Lifescience investments. Invested: £1.5m Region: North East Invested: £1.0m Invested: £2.7m Region: South East Region: South East
Slide 29: 2018 Commerce investments
2018 Commerce investments. Invested: £4.0m Region: North West Invested: £3.0m Invested: £3.0m Region: North West Region: South East
Slide 30: News – Developing Portfolio
News – Developing Portfolio. Customers announced
Slide 31: Regional
Regional. North East Scotland Avid She Software Newcells Administrate Midlands Clarilis NORTH WEST Sorted South East Rockar Northrow Customs Connect Angle Intelling Medovate Velocity Primal Hello Soda Ablatus Currentbody Ridge Climbing Hangar Mojo London Lending Works Channel Mum South West Knowledg
Slide 32: Statistics
Statistics. Size Jobs 24 1,295 £67.0m = 100 employees Companies Invested Services Consumer Consumer 13% 13% Services £9.3 £9.2 3 3 Digital 2 8% Digital £6.3 (£m) Technology 9 7 37% Healthcare 5 Technology Healthcare £10.1 £29.0 21% 2 Industrial Industrial £3.1 8% As at 31 December 2018
Slide 33: NVM dedicated to finding the best of the UK
NVM dedicated to finding the best of the UK.
Slide 34: Innovative assays to accelerate drug discovery
Innovative assays to accelerate drug discovery Dr Mike Nicholds – Chief Executive Officer Prof Lyle Armstrong – Chief Scientific Officer
Slide 35: Drug discovery needs new models
Drug discovery needs new models Target Compound Secondary validation screening assays In vivo analysis 1 in 10 chance of success! Humans are not animals! Human Trials Humans are 3-D! £100-300m
Slide 36: How do we create value?
How do we create value? We harness the power of stem cells to create mini organoids to improve the efficiency of discovering new drugs 1000 Concentration (ng/mL) 100 A B C ç 10 D 1 0 10 20 30 Time (h) Stem cells Organoid Assay Data
Slide 37: We reprogramme cells to become stem cells
We reprogramme cells to become stem cells Tissue sample • iPSCs are human - not animal Induced pluripotent Stem cells (iPSCs) • iPSCs are immortal - no problem with supply Reprogramme Differentiation • Proprietary methods to grow iPSCs into organoids • iPSCs are not genetically modified Neurons Hear
Slide 38: This assay can see you coming
This assay can see you coming • A proprietary process produces a model of the human retina • The model is functionally active – they react to light > • A high-content platform to measure toxicity and drug efficacy
Slide 39: The Journey
The Journey 2019+ _________ 2018 Invest in team _________ Develop next assay 2017 __________ Sales second assay Prepare for scale-up 2016 __________ £800,000 contract 1st assay sales achieved Expand commercial 2015 ___________ £600,000 contract Launched first assay >£400K in 15 months presence Secur
Slide 40: Unique assays with leading edge performance
Unique assays with leading edge performance Industry leading predictability of nephrotoxicity ”If we had used your assay we would have saved $8m” “We want to use your service to generate data to submit to regulators” 1st iPSC based skin assay “We need human rather than rat based data" 1st model of h
Slide 41: Growth and Building Value
Growth and Building Value New Applications More data per assay Expand into Lung and Extend product range Ear Capture ”tissue space” Repeat Customers Strong Pipeline Drive sales of existing assays Proprietary Products
Slide 42: Slide 42
Slide 43: The Climbing Hangar
The Climbing Hangar The evolution of indoor climbing
Slide 44: Lifestyle to rollout: Hangar innovation
Lifestyle to rollout: Hangar innovation • Women’s Climbing Symposium • UV nights • Professional athlete sponsorship • Acquisition and turnaround • External recruitment in key roles • PE investment • ‘Premium budget’ Subscription
Slide 45: UK vs. Mature Markets
UK vs. Mature Markets Climbing Customers Vs. Indoor Customers climbing
Slide 46: Mature markets
Mature markets Brooklyn Boulders Walltopia $50m in PE £35m for 8 investment (3 facilities in sites up to 4000 China people/day) Earth Trek / Touchstone Planet Granite Arkose Gyms Tengram Capital managed PE backed 16 facilities in merger (8 sites restaurant led the San up to 50,000 bouldering Francis
Slide 47: Constellations of culture
How do we know what drives what in a climbing facility? Facility ? Constellations of culture Climbing ? Brand ?
Slide 48: Tim Levett Close and Questions
Tim Levett Close and Questions
Slide 49: NVT long term performance
NVT long term performance. Initial fundraising 1995 (p) 5-year share price and NAV 5-year total return and cumulative dividends (p) 90 219.2 229.0 232.6 234.8 220 213.1 80 200 180 160 70 140 120 60 100 80 50 NAV Share price 60 40 40 20 Dec-14 Dec-15 Dec-16 Dec-17 Dec-18 0 Dec-14 Dec-15 Dec-16 Dec-17
Slide 50: N2VCT long term performance
N2VCT long term performance. Initial fundraising 1999 (p) 5-year share price and NAV 5-year total return and cumulative dividends (p) 180.4 176.7 178.4 100 180 159.8 167.1 160 90 140 80 120 100 70 80 60 60 40 NAV Share price 50 20 0 40 Dec-14 Dec-15 Dec-16 Dec-17 Dec-18 Dec-14 Dec-15 Dec-16 Dec-17 D
Slide 51: N3VCT long term performance
N3VCT long term performance. Initial fundraising 2001 (p) 5-year share price and NAV 5-year total return and cumulative dividends (p) 180.6 180.5 181.9 110 180 165.6 160 155.4 100 140 90 120 80 100 70 NAV Share price 80 60 60 40 50 20 40 0 Dec-14 Dec-15 Dec-16 Dec-17 Dec-18 Dec-14 Dec-15 Dec-16 Dec-
Slide 52: Long term value creation
Long term value creation. DxS: NVM investment profile 24 2009 22 20 18 16 £22.7m 14 12 £m 10 8 6 4 2 - 2001 Investment Valuation
Slide 53: Questions
Questions
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