Mercia Asset Management Plc · LSE:MERC
Mercia Asset Management — H1 FY2025 Earnings Presentation
24 slides from Mercia Asset Management's earnings presentation, Nov 26, 2024
Slide 1: Interim Results
26 November 2024 Interim Results 1
Slide 2: Important notice
Important notice • This document contains statements about Mercia Asset Management PLC that are or may be forward-looking statements. Forward-looking statements include statements relating to (i) future revenues, expenses, earnings, financial condition and future prospects; and (ii) business and man
Slide 3: Agenda
Agenda Dr Mark Payton Chief Executive Officer 1. Performance overview, our model and Co-founder of Mercia, with a ‘Mercia 27’ PhD in Life Sciences and over 25 years’ experience in tech, commercialisation and investing. 2. Financial results 3. Progress and value drivers Martin Glanfield Chief Financi
Slide 4: FY25 interim highlights
£17.9m +19.1% £46.2m Revenue Cash on hand* – no debt (H1 2024: £15.0m) (31 March 2024: £46.9m) £3.7m +34.0% £120.9m EBITDA Direct investments fair value (H1 2024: £2.8m) (31 March 2024: £116.9m) FY25 interim highlights 0.37p +5.7% £1.8bn Interim dividend Assets under management (H1 2024: 0.35p) (31
Slide 5: Mercia today - specialist alternative asset manager with 11 offices - H1 FY25 deployment
Mercia today - specialist alternative asset manager with 11 offices - H1 FY25 deployment The North East and Scotland Newcastle c.£9m deployed Yorkshire and The Humber Leeds/Sheffield/Hull The North West c.£20m deployed Manchester/Preston The Midlands: c.£12m deployed Birmingham/Henley-in- Arden/Nott
Slide 6: Mercia’s differentiated business model
Mercia’s differentiated business model • Private markets only • 100% of funds are evergreen or long dated • Business model • No fund redemptions • c.2% blended fee margin • c.81% recurring revenue (FY24: c.76%) • Differentiated business • A leading domestic only specialist alternative asset manager
Slide 7: Building Mercia as the first-choice domestic specialist alternative asset manager
Building Mercia as the first-choice domestic specialist alternative asset manager Investment Risk Financial Platforms performance mitigation resources Diversification Scalable Robust Track record By asset class Deal origination Cash generative Focus on top quartile By investor type Sales and distrib
Slide 8: Financial review
Financial review Martin Glanfield 8
Slide 9: Sustained organic growth in revenue, EBITDA and cash generation
Sustained organic growth in revenue, EBITDA and cash generation Cash generated from Revenue EBITDA operating activities 20,000 4,000 4,500 18,000 3,500 4,000 16,000 3,500 3,000 14,000 £'000 £'000 3,000 £'000 12,000 2,500 2,500 10,000 2,000 2,000 8,000 1,500 6,000 1,500 1,000 4,000 1,000 2,000 500 50
Slide 10: Sustained growth in assets under management
Sustained growth in assets under management 1,900 1,850 • c.3% organic fund inflows 1,800 • Funds raised across asset AuM (£’m) classes: 1,750 • Retail: c.£47m • Public sector c.£10m 1,700 (British Business Bank) 1,650 • No redemptions 1,600 1 Apr 2024 AuM Inflows Transition to Performance Distribut
Slide 11: Long-dated, diversified AuM
Long-dated, diversified AuM • Regional specialist in SME • Enables recurring revenues, with • Long-dated funds comprising capital provision across the UK, blended fee margin of c.2% evergreen or 10-year LP type delivered through a physical structures – all closed end presence in key regional cities
Slide 12: Consolidated statement of comprehensive income
Consolidated statement of comprehensive income For the six months ended 30 September 2024 Unaudited Unaudited Audited Six months ended Six months ended Year ended 30 September 30 September 31 March 2024 2023 2024 APM basis £’000 £’000 £’000 Revenue 17,908 15,040 30,434 • Revenue up c.19% Administrat
Slide 13: Consolidated statement of financial position
Consolidated statement of financial position As at 30 September 2024 Unaudited Unaudited Audited as at as at as at 30 September 30 September 31 March 2024 2023 2024 £’000 £’000 £’000 Goodwill and intangible assets 34,801 37,556 36,296 Property, plant, equipment and right-of use assets 1,054 927 839
Slide 14: Consolidated statement of cash flows
Consolidated statement of cash flows For the six months ended 30 September 2024 Unaudited Six months Unaudited Audited ended Six months ended Year ended 30 September 30 September 31 March 2024 2023 2024 £’000 £’000 £’000 Net cash generated from operating activities 4,157 3,533 7,084 • Cash generativ
Slide 15: Direct investment portfolio as at 30 September 2024
Direct investment portfolio as at 30 September 2024 Net investment value Net cash invested Fair value movement Net investment value Equity percentage Year of first as at Six months to Six months to as at held as at direct 1 April 2024 30 September 2024 30 September 2024 30 September 2024 30 Septembe
Slide 16: Direct investment portfolio – top 10 assets
Direct investment portfolio – top 10 assets 16
Slide 17: Valuation methodology
Valuation methodology Direct investment portfolio by valuation methodology • Follow IPEVCV Guidelines • c.53% of the portfolio value based on price of recent Listed investments - 1% investment round Initial fair value - 6% Price of recent investment round - 53% • c.40% of the portfolio value based o
Slide 18: Progress and value drivers
Progress and value drivers 18
Slide 19: Our 10-year growth story
Our 10-year growth story Total direct Average Six month Third-party Six month Timeline investment investment deployment EBITDA FTE FuM revenue value size rate At IPO c.£23m c.£9m c.£0.2m c.£2m c.£0.4m £0 7 H1 FY25 c.£1.6bn c.£121m c.£1.5m c.£100m c.£17.9m £3.7m 138 Mercia listed on AIM on 18 Decembe
Slide 20: Differentiated investment strategies and asset classes
Differentiated investment strategies and asset classes Development capital Intermediary real asset Balance sheet (incl. direct Private venture Total (debt and private equity) finance investments) AuM: £952m £388m £310m £187m £1.8bn Asset type: Equity as sole or Direct lending, growth equity, Midland
Slide 21: ‘Mercia 27’ levers and value drivers
‘Mercia 27’ levers and value drivers THE LEVERS THE OUTPUT Strategic assets (31 March 2027) (venture and development capital) Target net AuM growth Organic inflows of from £1.8bn and M&A ≥10% per c.£3bn in AuM Real assets (natural, residential and infrastructure) annum Efficiency Grow EBITDA margin
Slide 22: Multiple drivers of growth
Multiple drivers of growth Making a positive difference for fund investors and the domestic economy Private • Track record of deal origination through our 11 regional offices markets • Long-term capital across multiple mandates Blended fee margin of c.2% • Structural domestic drivers of growth Predi
Slide 23: Mercia is a responsible impact investor
Mercia is a responsible impact investor • Environmental responsibility • Active reduction in carbon footprint through resource conservation, use of public transport and company EV scheme • Proactive engagement with investment portfolio • Growing venture portfolio focused on sustainability • Social i
Slide 24: In summary
In summary Growth in Tailwinds for Progressive Strong revenue and third-party dividend balance sheet EBITDA FuM growth 24
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