TIDMMCAP
RNS Number : 1904L
Macaulay Capital PLC
04 September 2023
4 September 2023
Macaulay Capital PLC
("Macaulay Capital" or the "Company")
Interim Results
Macaulay Capital PLC (AQSE: MCAP), which was formed to originate
and manage corporate transactions, raise funds from third parties,
invest its own funds alongside those of external investors and to
manage its investment portfolio with the aim of maximising its
value, announces its interim results for the six months ended 30
June 2023. A copy of these results is available on the Company's
website.
This announcement contains inside information for the purposes
of the UK Market Abuse Regulation and the Directors of the Company
are responsible for the release of this announcement.
S
Enquiries:
Macaulay Capital PLC
Clive Milner +44 (0 )20 3946 5980
Cairn Financial Advisers LLP (AQSE Corporate
Adviser)
James Caithie
Louise O'Driscoll +44 (0)20 7213 0880
Oberon Capital (Broker)
Chris Crawford +44 (0)20 3179 5304
For more information please visit: www.macaulaycapital.com
Chairman's Statement
It is now just over a year since our admission to trading on the
Aquis Stock Exchange Growth Market, when we raised a total of GBP2
million before costs, at 20p per share.
By introducing investors and investing directly ourselves, the
Company and its subsidiary, Macaulay Management Limited (together
"the Group") provide a combination of growth and replacement
capital to established private companies. This helps them to
finance their future development as well as facilitating partial
exits for founder investors and incentivising the management
teams.
For our investors, we structure investments typically as a
combination of redeemable loan stock and equity. This gives
investors the ability to have much of their capital repaid over
time, together with an equity interest in the investee company. We
aim to provide investors with a good return on their investment
and, because shares in qualifying private companies benefit from
Business Relief, they can be transferred free of Inheritance
Tax.
As at 30 June 2023, our cash was GBP368,453 and the value of our
investments was GBP900,000 (at cost). In the six months to 30 June
2023, our revenues were GBP213,946, on which we incurred losses of
GBP107,566, which was expected while we build our business to the
point at which, as a trading business, it breaks even and then
becomes profitable.
The Horner Family remains the largest shareholder block with a
total of 2.1 million shares (21.0%), which will by July 2024
increase by a further 6 million shares to 8.1 million shares
(50.3%), through the exercise of warrants priced at 25p per
share.
Trading Activities
On 13 March 2023 and as set out in our Aquis admission document,
we announced that we had taken over the management of the
investment portfolio (the "Legacy Portfolio") of five private
companies from Chelverton Asset Management Limited ("CAM"). Under
the agreements with the relevant companies, the Group is
responsible for monitoring their performance, which usually
includes taking a board position, for which we are entitled to
monthly management fees and potential performance fees on exit.
On 23 March 2023 we announced the completion of the secondary
management buy-out of Camloc Motion Control Limited, an established
Midlands based precision engineering business which manufactures
compression struts and dampers. This was bought from a private
equity fund, and we partnered with the incumbent management team.
We invested GBP700,000 of the total fundraise of approximately
GBP1.55 million and it remains our intention to sell down
GBP500,000 of our investment in due course. 96.5 per cent. of our
investment is in 8% loan stock, which means that we are earning a
significant revenue return on our investment.
On 5 June 2023 we announced the completion of a transaction
where we raised GBP940,000 to be invested in Kelda Showers Limited,
a company which has developed a disruptive water and energy saving
solution to the shower market. The transaction, which was in
ordinary shares and expected to be eligible for EIS, was supported
by Kelda's management and existing shareholders, together with new
investors. Whilst the Group did not itself invest in Kelda as the
investment was entirely in ordinary shares, David Horner and
Richard Bucknell invested personally an aggregate of GBP120,000,
and the Group earned a transaction fee and is entitled to a monthly
monitoring fee.
Post year end, on 21 August 2023 we announced that a trade buyer
had acquired all of the shares held by the B Share Investors in
Qualification Check Limited ("QCL"). QCL was one of the five
companies in the Legacy Portfolio and is a leading provider of
global qualification verification services. The B Share Investors
were introduced by CAM and for those who invested in February 2017,
the sale price is a gross money multiple return of 7.3 times,
taking into account EIS relief, and the gain will be free of CGT;
and for those who invested in March 2021, the sale price is a gross
money multiple return of 3.8 times, before CGT, management and
performance fees. These fees are to be shared by the Group and CAM
with the net amount receivable by the Group being GBP211,751.
Our Portfolio
We now have seven portfolio companies. Three of the companies -
Devonvale (a manufacturer of flapjacks, cakes and cereal bars based
in Honiton), Camloc and Kelda Showers - were identified by us and
we helped to structure the investment, agreed terms and arranged
the investment.
The other four portfolio companies are from the Legacy
Portfolio. As noted above, we have recently arranged an exit by our
investors from QCL.
Investors
A business imperative continues to be the broadening of the pool
of potential investors for the investment opportunities that we
create, and this is where we are focusing our marketing
efforts.
We believe that the area of the market that we are targeting for
investment is underserved, which will enable us to create
shareholder value for our investors through the identification of
opportunities to invest in established companies at attractive
valuations. We believe that our offering should be of great
interest to High Net Worth individuals and family offices,
particularly in a time of rising Inheritance Tax assessments.
We also stress to potential investors the importance of
investing across a range of our opportunities to reduce their
investment risk.
Outlook
We continue to see a wide range of interesting investment
opportunities to consider. Our investment process is rigorous and
time-consuming, and because we are highly selective, often
unrewarding. However, we believe that this robust selection process
is essential to achieve good returns for us and our fellow
investors.
We are pleased with the progress made to date and expect this to
continue in the second half of the year.
Finally, and on behalf of the Board, I would like to thank our
shareholders, employees, and advisers for their support.
Lindsay Mair
Chairman
4 September 2023
Condensed Consolidated Statement of Comprehensive Income
for the 6 months ended 30 June 2023
6 months to Period to
31 December
30 June 2023 2022
(unaudited) (audited)
Notes GBP GBP
Income 213,946 118,737
Other expenses (319,593) (502,827)
------------
Loss on ordinary activities before
interest and taxation (105,647) (384,090)
Loan interest (1,919) (904)
------------ ---------------------------
Loss on ordinary activities before
taxation (107,566) (384,994)
------------ ---------------------------
Taxation - -
------------ ---------------------------
Loss on ordinary activities after
taxation (107,566) (384,994)
------------ ---------------------------
Loss per Ordinary share in pence 3 (1.08) (3.85)
------------ ---------------------------
Condensed Consolidated Balance Sheet at 30 June 2023
30 June 2023 31 December 2022
(unaudited) (audited)
GBP GBP
Fixed assets
Tangible assets 3,517 4,219
Investments at fair value
through profit or loss 900,000 200,000
--------- ---------
903,517 204,219
Current assets
Debtors: amounts falling due
within one year 90,612 104,962
Cash at bank and in hand 368,453 1,189,219
-------- ---------
459,065 1,294,181
-------- ---------
Creditors: amounts falling
due within one year
Other creditors and accruals (32,142) (60,394)
-------- ---------
Net current assets 426,923 1,233,787
--------- ---------
Net assets 1,330,440 1,438,006
--------- ---------
Capital and reserves
Called up share capital 1,000,000 1,000,000
Share premium account 823,000 823,000
Profit and loss account (492,560) (384,994)
--------- ---------
Shareholders' funds 1,330,440 1,438,006
--------- ---------
Condensed Consolidated Statement of Changes in Equity
for the 6 months ended 30 June 2023
Called up Share premium Profit and Total
share capital account loss account equity
GBP GBP GBP GBP
Period to 31 December
2022 (audited)
At 13 May 2022 - - - -
Total comprehensive
income for
the period:
Loss for the period - - (384,994) (384,994)
Transactions with
Shareholders
recorded directly to
equity:
Issue of Ordinary shares 1,000,000 1,000,000 - 2,000,000
Share issue expenses
(including
irrecoverable VAT) - (177,000) - (177,000)
At 31 December 2022 1,000,000 823,000 (384,994) 1,438,006
--------------------- ---------------------- --------------------- ---------------------
Period to 30 June 2023
(unaudited)
Total comprehensive
income for
the period:
Loss for the period - - (107,566) (107,566)
At 30 June 2023 1,000,000 823,000 (492,560) 1,330,440
--------------------- ---------------------- --------------------- ---------------------
Condensed Consolidated Cash Flow for the 6 months ended 30 June
2023
6 months to Period ended
30 June 2023 31 December 2022
(unaudited) (audited)
GBP GBP
Cash flows used in operating activities:
Loss for the year (107,566) (384,994)
Adjusted for:
Depreciation of assets 702 1,407
Interest paid 1,919 904
Decrease/(increase) in debtors 14,350 (104,962)
(Decrease)/increase in creditors (28,252) 60,394
------------ ----------------
Net cash used in operating activities (118,847) (427,251)
Cash used in investing activities:
Purchase of investments (700,000) (200,000)
Purchase of fixed assets - (5,626)
------------ ----------------
Net cash used in investing activities (700,000) (205,626)
Cash flows (used in)/generated
from financing activities:
Issue of Ordinary shares - 2,000,000
Share issue expenses (including
irrecoverable VAT) - (177,000)
Interest paid (1,919) (904)
------------ ----------------
Net cash (used in)/generated from
financing activities (1,919) 1,822,096
------------ ----------------
Net (decrease)/increase in cash
and cash equivalents (820,766) 1,189,219
------------ ----------------
Reconciliation of net cash flow
to movement in net cash:
(Decrease)/increase in cash (820,766) 1,189,219
Net cash at start of period 1,189,219 -
------------ ----------------
Net cash at end of period 368,453 1,189,219
------------ ----------------
Notes to the Unaudited Financial Statements
1 General information
Macaulay Capital Plc was incorporated on 13 May 2022 for the
purpose of acquiring Macaulay Management Limited ("MML"). MML was
incorporated on 14 October 2021 and was formed to originate and
manage corporate transactions, raise funds from third parties,
invest the Group's own funds alongside those of external investors
and to manage the Group's investment portfolio with the aim of
maximising its value. Macaulay Capital Plc acquired the entire
issued share capital of MML on 14 June 2022.
The Company is a public limited company, which is incorporated
and registered in England and Wales (Registered number:
14105915).
The registered office address is Suite 8, Bridge House,
Courtenay Street, Newton Abbot, TQ12 2QS.
2 Accounting policies
2.1 Basis of preparation of financial statements
The interim financial statements of the Company and its
subsidiary for the six months ended 30 June 2023, which are
unaudited, have been prepared in accordance with UK Generally
Accepted Accounting Practice ("UK GAAP").
The financial information contained in the Half Yearly report
does not constitute statutory accounts as defined in Section 435 of
the Companies Act 2006. The financial information for the preceding
statutory reporting period is based on the statutory accounts for
the period ended 31 December 2022. Those accounts, upon which the
auditors, Hazlewoods LLP, issued a report which was unqualified,
have been delivered to the Registrar of Companies.
The financial statements have been prepared in accordance with
the accounting policies set out in the statutory accounts for the
period ended 31 December 2022.
The interim financial statements are presented in sterling.
2.2 Basis of consolidation
The consolidated financial statements incorporate the results of
the Company and its subsidiary MML, (the Group), as if they form a
single entity using merger accounting. On the establishment of the
Company as the ultimate parent of the Group, no change in ownership
occurred and the entity was established for the purpose of
acquiring MML. Therefore, the requirements of purchase method
accounting did not apply.
The financial statements of the subsidiary are prepared for the
6 months to 30 June 2023 using consistent accounting policies. All
inter-company balances and transactions, including unrealised
profits arising from them, are eliminated on consolidation.
2.3 Going concern
Company law requires the Directors to consider the
appropriateness of the going concern basis when preparing the
financial statements. Having reviewed cash flow forecasts for the
period to June 2024, the Directors confirm that they consider that
the going concern basis is appropriate. This review included
consideration of the Group's financial position in respect of its
cash flows and investment commitments (of which there are none of
significance), the working arrangements of key service providers,
the impact of the conflict in Ukraine and the current economic
environment. In addition, the Directors are not aware of any
material uncertainties that may cast significant doubt upon the
Group's ability to continue as a going concern.
The Directors believe that the Group has sufficient resources to
continue in operational existence for the foreseeable future. Thus,
they have adopted the going concern basis of accounting in
preparing the annual financial statements.
3 Loss per share
The calculation of basic return per share is based on the return
after tax and on a weighted average number of ordinary shares in
issue in the period. Normal and diluted returns per share are the
same as there are no dilutive elements on share capital.
6 months to Period to
30 June 2023 31 December 2022
(unaudited) (audited)
Loss after taxation attributable
to Ordinary shareholders (GBP) (107,566) (384,994)
Weighted average Ordinary shares
in issue 10,000,000 10,000,000
Loss per Ordinary share - basic
and diluted (pence) (1.08) (3.85)
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END
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