Mercia Asset Management Plc · LSE:MERC
Mercia Asset Management — H1 FY24 Earnings Presentation
23 slides from Mercia Asset Management's earnings presentation, Nov 28, 2023
Slide 1: Interim Results
30 September 2023 Interim Results Targeted growth underpinned by financial strength 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 ma
Slide 3: Executive team
Dr Mark Payton Chief Executive Officer Co-founder of Mercia, with a PhD in Life Sciences and over 20 years’ experience in tech, commercialisation and investing. Martin Glanfield Chief Financial Officer Executive team KPMG trained chartered accountant with over 20 years’ CFO experience of multiple li
Slide 4: H1 FY24 Highlights
£1.5bn +1.7% £15.0m +23.5% Assets under Revenue management (31 March 2023: £1.4bn) (H1 2023: £12.2m) £2.8m +33.4% £36.5m H1 FY24 EBITDA Cash* on hand– no debt Highlights (H1 2023: £2.1m) c.£60m post period end cash on hand 0.35p +6.1% Up to £5.0m Interim dividend Share buyback announced (H1 2023: 0.
Slide 5: Growth in AuM and profitability
Growth in AuM and profitability AuM growth Revenue and EBITDA growth 1,800 30 1,500 25 1,200 20 900 15 600 10 300 5 0 0 FY21 FY22 FY23 H1 FY24 FY21 FY22 FY23 H1 FY24 FuM (£'m) Proprietary capital (£'m) Total (£'m) Revenue* (£'m) EBITDA* (£'m) * Excluding the impact of exceptional performance fees, t
Slide 6: Direct investment performance
Direct investment performance £’m Sale related cash receipts 86.8 1 April 2020 to 30 Sept 2023* Net cash invested** (57.6) Realised gains 36.4 Realised losses (5.3) Unrealised fair value gains*** 42.6 Unrealised fair value losses*** (23.3) * Including the post period end impact of the nDreams realis
Slide 7: Mercia 20:20
Mercia 20:20 Progressive AuM PBT Dividend 2.5 years into a 0.80p / share FY22: £959m £27.4m (c.2% yield*) three-year strategy 0.86p / share FY23: £1.4bn £2.4m (c.3% yield*) Interim H1 FY24: £1.5bn £1.4m 0.35p / share (+c.6%) Progress: £1.5bn £31.2m - Three-year cumulative c.£1.6bn c.£60m - target: *
Slide 8: Financial review
Financial review Martin Glanfield 8
Slide 9: H1 FY24 AuM growth: Continued organic momentum
H1 FY24 AuM growth: Continued organic momentum 1,600 • Funds raised across asset classes: 1,400 • Retail: c.£25m (EIS and VCT) 1,200 • Public sector: c.£20m (British Business Bank AuM (£’m) 1,000 and North East Venture) • No redemptions 800 • Post-period end inflows: 600 • c.£10m (EIS and British Bu
Slide 10: Long-dated, diversified AuM
Long-dated, diversified AuM • Regional specialist in SME capital • Enables strong margins, with • Long-dated funds comprising provision across the UK, delivered blended fee rate of c.2% evergreen or 10-year LP through a physical presence in structures – all closed end key regional cities 202 442 391
Slide 11: Consolidated statement of comprehensive income
Consolidated statement of comprehensive income For the six months ended 30 September 2023 Unaudited Unaudited Audited Six months ended Six months ended Year ended 30 September 30 September 31 March 2023 2022 2023 £’000 £’000 £’000 Revenue 15,040 12,181 25,881 • Revenue increase 23.5% Administrative
Slide 12: Consolidated statement of financial position
Consolidated statement of financial position As at 30 September 2023 Unaudited Unaudited Audited as at as at as at 30 September 30 September 31 March 2023 2022 2023 £’000 £’000 £’000 Goodwill and intangible assets 37,556 31,338 39,051 Property, plant and equipment and right-of use assets 927 468 964
Slide 13: Consolidated statement of cash flows
Consolidated statement of cash flows For the six months ended 30 September 2023 Unaudited Unaudited Audited Six months ended Six months ended Year ended 30 September 30 September 31 March 2023 2022 2023 £’000 £’000 £’000 Net cash generated from/(used in) operating activities 3,533 (161) 1,200 • Cash
Slide 14: Mercia share register: 69% free float
Mercia share register: 69% free float (31 March 2023: 69%) • Board, management and employees (c.17%) • Invesco (c.14%) • Retail (c.10%) • Fidelity (c.7%) • Ruffer (c.6%) • Chelverton Asset Management (c.4%) Others of note: • BlackRock (c.4%) • Hargreave Hale • Columbia Threadneedle Investments (c.4%
Slide 15: Investment performance
Investment performance Julian Viggars 15
Slide 16: Enduring partner for sustainable growth
Enduring partner for sustainable growth Unrestricted FuM cash Early-stage venture £324m: £0.5m - £5m Mercia Ventures £660m £181m National / scale up venture £336m: £3m – £10m Mercia Debt £552m £152m Regional debt £93m: £0.2m - £1m National debt Mercia Private Equity £48m £13m £459m: £1m - £20m PE Pr
Slide 17: Equity performance
Equity performance IRR 30 September 2023 31 March 2023 Proprietary capital 13% 13% TVPI* Venture Private Equity Venture Private Equity Institutional Funds Legacy 191% 143% 188% 149% Current 103% 126% 113% 119% Retail EIS Funds Legacy 102% n/a 108% n/a Current 90% n/a 92% n/a VCTs (pence per ordinary
Slide 18: Direct investment portfolio - as at 30 September 2023
Direct investment portfolio - as at 30 September 2023 Net investment value Net cash invested Fair value movement Net investment value Equity percentage held Year of first direct as at Six months to Six months to as at as at investment 1 April 2023 30 September 2023 30 September 2023 30 September 202
Slide 19: Top 10 holdings, by value (1-5)
Top 10 holdings, by value (1-5) Investment value £30.2m £15.8m £13.2m £11.6m £10.9m % direct holding (excludes FuM) 33.2% 20.4% 24.1% 62.6% 38.4% Initial year of investment 2014 2018 2022 2015 2016 Description Bot Mobile digital VR developer Video analytics Patch delivery management trading cards Bo
Slide 20: Top 10 holdings, by value (6-10)
Top 10 holdings, by value (6-10) Investment value £9.7m £8.6m £7.5m £6.6m £4.9m % direct holding (excludes FuM) 40.3% 35.5% 65.1% 40.4% 18.1% Initial year of investment 2014 2015 2015 2015 2018 Description Mobile soccer Flat speaker Aluminum Business management Orthobiologics tech pressing intellige
Slide 21: Investment case
Investment case “= mercia
Slide 22: Strong organic growth prospects
Investor type Current Potential Total market c.£434m Estimated at Retail (EIS, VCT) c.£90m Strong organic growth c.5% market share c.£10bn prospects Public sector (e.g. British Business Bank) regional debt c.£315m c.22% market share c.£360m c.£1.6bn and equity funds North of England Institutional Pr
Slide 23: The first choice for investees, investors and employees
• Strong liquidity: • £36.5m, debt-free, balance sheet cash position • c.£60m post period end • Additional c.£346m unrestricted FuM cash • Up to £5.0m share buyback • Progressive dividend - interim dividend up 6% • >85% of AuM is third-party FuM, 100% are closed-end The first choice for investees, i
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