Annual Report and Financial Statements for the year ended 31 March 2025
17 June 2025
Northern Venture Trust PLC
Annual Report and Financial Statements for the year ended 31 March 2025
Northern Venture Trust PLC is a Venture Capital Trust (VCT) advised by Mercia Fund Management Limited. The trust was one of the first VCTs launched on the London Stock Exchange in 1995. It invests mainly in unquoted venture capital holdings and aims to provide long-term tax-free returns to shareholders through a combination of dividend yield and capital growth.
Financial highlights (comparative figures as at 31 March 2024):
| Year ended 31 March 2025 | Year ended 31 March 2024 | |
| Net assets | £121.3m | £114.8m |
| Net asset value per share | 61.5p | 60.3p |
| Return per share | ||
| Revenue | 0.4p | 0.6p |
| Capital | 3.8p | 1.2p |
| Total | 4.2p | 1.8p |
| Dividend per share declared in respect of the period | ||
| Interim dividend | 1.6p | 1.6p |
| Proposed final dividend | 1.5p | 1.6p |
| Total | 3.1p | 3.2p |
| Return to shareholders since launch | ||
| Net asset value per share | 61.5p | 60.3p |
| Cumulative dividends paid per share ^* | 195.3p | 192.1p |
| Cumulative return per share^ | 256.8p | 252.4p |
| Mid-market share price at end of period | 57.0p | 57.5p |
| Share price discount to net asset value | 7.3% | 4.6% |
| Annualised tax-free dividend yield ^** | 5.1% | 5.2% |
* Excluding proposed final dividend payable on 5 September 2025.
** Based on net asset value per share at the start of the period.
^ Definitions of the terms and alternative performance measures used in this report can be found in the glossary of terms in the annual report.
Chair’s statement
Overview
Over the past 12 months, the UK economy has displayed resilience, with inflation easing and interest rates falling, albeit at slower rates than initially forecasted. Uncertainties posed by geopolitical events and conflicts continue to cause volatility in the financial markets, and notably increased following the end of the financial reporting period.
It is pleasing to note that the valuation of our unquoted portfolio has increased during the past year. Investment activity remained consistent with the two previous financial years, with £14.3 million invested in six new and 11 existing portfolio companies.
Despite the macroeconomic environment, our share offer of £15 million was oversubscribed and I would like to thank existing shareholders for their continued support and warmly welcome new investors. Proceeds from the share offer, together with sales proceeds from investments, mean that the Company is well positioned both to pursue new opportunities to support small and medium businesses and to work with existing portfolio companies to realise their growth plans.
Results and dividend
In the year ended 31 March 2025 the Company delivered a return on ordinary activities of 4.2 pence per share (year ended 31 March 2024: 1.8 pence), representing a total return of 7.0% on the opening net asset value (NAV) per share. The NAV per share as at 31 March 2025, after deducting dividends paid during the year of 3.2 pence, was 61.5 pence, compared with 60.3 pence at 31 March 2024. The strong result for the year generated a performance fee to our Adviser of £399,000 (year ended 31 March 2024: £nil).
There were six exits in the year, the most notable being Gentronix, sold for net proceeds of £6.1 million compared to an original cost of £1.4 million, a 4.5 times lifetime return.
Investment income was higher than the prior period at £2.6 million (year ended 31 March 2024: £2.2 million), which included £0.8 million interest income on realised investments.
In 2018 we revised our dividend policy in the light of the new VCT rules for investment introduced in 2015 and 2017, which we expected to result in more volatile returns. We introduced an annualised target dividend yield of 5% of opening NAV, which has been exceeded in every period since. Having already declared an interim dividend of 1.6 pence per share which was paid in January 2025, your Directors now propose a final dividend of 1.5 pence per share. The total of 3.1 pence per share is equivalent to 5.1% of the opening net asset value per share of 60.3 pence. The final dividend, if approved, will be paid on 5 September 2025 to shareholders on the register on 8 August 2025.
Our dividend investment scheme, under which dividends can be re-invested in new ordinary shares free of dealing costs and with the benefit of the tax reliefs available on new VCT share subscriptions, continues to operate with around 16% participation during the year. Instructions on how to join the scheme are included within the dividend section of our website, which can be found here: mercia.co.uk/vcts/nvt/.
Investment portfolio
Investment activity has remained strong, with £8.9 million of capital provided to six new venture capital investments and £5.4 million of follow-on capital invested into the existing portfolio. We also made progress in realising the Company’s mature portfolio acquired under the previous VCT rules with the remaining such investments now totalling £9.4 million (31 March 2024: £16.0 million).
The value of the portfolio increased by £5.6 million (2.8 pence per share) in the year, with several portfolio companies enjoying significant growth: Pure Pet Food and Project Glow Topco (t/a The Beauty Tech Group) both increased in value by over £3 million. Against this there were some significant write-downs in the investments in Adludio and Newcells Biotech.
Share offers and liquidity
In April 2024 shares related to the second allotment of the 2023/24 share offer, totalling £20 million, were issued. This allotment saw the issuance of 12,234,307 new ordinary shares, yielding gross subscriptions of £7.8 million.
As a result of the public share offer launched in January 2025, 24,216,029 new ordinary shares were issued in April 2025, yielding gross proceeds of £15 million.
The Board continues to monitor liquidity carefully and plans to raise up to £20 million of new capital in the 2025/26 tax year. Further details will be provided in due course.
Share buy-backs
We have maintained our policy of being willing to buy back the Company’s shares in the market when necessary, in order to maintain liquidity, at a 5% discount to NAV. During the year ended 31 March 2025 a total of 7,272,999 (year ended 31 March 2024: 5,263,205) shares were repurchased by the Company for cancellation at an average price of 56.6 pence (year ended 31 March 2024: 58.0 pence), representing 3.8% (year ended 31 March 2024: 3.2%) of the opening issued share capital.
Responsible investment
The Company is mindful of its Environmental, Social and Governance (ESG) responsibilities and we have outlined our evolving approach in the annual report.
VCT legislation and qualifying status
We have continued to meet the stringent and complex qualifying conditions laid down by HM Revenue & Customs for maintaining our approval as a VCT. The Investment Adviser monitors the position closely and reports regularly to the Board. Philip Hare & Associates LLP has continued to act as independent adviser to the Company on VCT taxation matters.
In September 2024 we were pleased that the extension of the VCT Sunset Clause until 2035 was confirmed. The ‘Sunset Clause’ is a European state aid requirement which, without extension, would have removed the VCT tax reliefs that investors receive on newly issued VCT shares.
Whilst no further amendments to VCT legislation have been announced, it is possible that further changes will be made in the future. We will continue to work closely with the Investment Adviser to maintain compliance with the scheme rules at all times.
Investor communications
The Board is conscious of its responsibility to communicate transparently and regularly with shareholders. Aside from the recent newsletter, we look forward to welcoming shareholders to our AGM and to our forthcoming investor seminar to be held on 7 October 2025 in London. A copy of the recent newsletter and details of how to register for the October seminar can be found on the Company’s website at /vcts/nvt/.
Audit tender process
Following a formal and rigorous audit tender process, the Board has resolved that it intends to recommend Johnston Carmichael LLP for appointment as the Company’s auditor for the financial year ending 31 March 2026 onwards, subject to shareholder approval at the AGM in 2025. Forvis Mazars will remain the Company’s auditor until the AGM in 2025. The Board would like to thank Forvis Mazars LLP for their diligent service over the past five years.
Annual General Meeting
The Company’s AGM will be held at 12:30pm on 5 August 2025. The AGM provides an excellent opportunity for shareholders, the Directors and the Investment Adviser to meet in person, exchange views and comment. We will hold the AGM in person at Fora, 210 Euston Road, London, NW1 2DA. We also intend to offer remote access for shareholders through an online webinar facility for those who would prefer not to travel. Full details and formal notice of the AGM are set out in a separate document. Please note that shareholders attending remotely must register their votes ahead of time, as it will not be possible to count votes from online participants at the AGM.
Board succession
John E Milad joined the Board on 21 August 2024. John brings over 25 years’ experience as an executive leader, board member, venture capital investor and investment banker focused on the life sciences and medical technology sectors. He is currently the CEO of ERS Genomics, a licenser of the Nobel Prize-winning CRISPR / Cas9 gene editing technology.
Further biographical details for all the Directors can be found in the annual report.
We will mark the retirement from the Board of David Mayes at the AGM. David was appointed in November 2014. Over the past decade, he has served the Company and its shareholders with dedication and commitment. On behalf of the Board and our shareholders, I would like to thank David for his valuable contributions and steadfast support to the Company during his tenure.
Performance Fee
I am pleased to report that the Company’s performance over the past financial year has met the threshold required to trigger the payment of a performance fee of £399,000 to the Investment Adviser. This outcome reflects a year of strong execution and value creation within the portfolio, and I would like to extend the Board’s thanks to the Adviser’s team for delivering results that warrant this reward.
The performance fee has been calculated in line with the revised fee structure agreed with shareholders in 2023. Under this framework, which was designed to provide stronger alignment with long-term shareholder value creation, the performance fee payable is broadly comparable to the level that would have been paid under the legacy arrangement. The performance fee is intended to reward the Adviser for delivering sustained solid performance over time. In addition to the performance fee, the Company’s co-investment scheme continues to play a vital role in aligning the interests of the Adviser’s team with those of our shareholders. Together, these mechanisms provide a well-structured incentive framework that encourages long-term thinking and disciplined capital deployment in the interests of all shareholders.
Outlook
We are cautiously optimistic of the UK’s growth prospects, while remaining aware of and vigilant to the volatility generated from both domestic and global sources. We remain positive about the resilience, diversity and growth potential of the portfolio and its ability to generate long term shareholder value.
Deborah Hudson
Chair
17 June 2025
Income statement
for the year ended 31 March 2025
| Year ended 31 March 2025 | Year ended 31 March 2024 | |||||||||
| Revenue £000 | Capital £000 | Total £000 | Revenue £000 | Capital £000 | Total £000 | |||||
| Gain / (loss) on disposal of investments | – | 3,555 | 3,575 | – | 1,203 | 1,203 | ||||
| Unrealised fair value gains / (losses) on investments | – | 5,603 | 5,603 | – | 2,499 | 2,499 | ||||
| – | 9,158 | 9,158 | – | 3,702 | 3,702 | |||||
| Dividend and interest income | 2,594 | – | 2,594 | 2,220 | – | 2,220 | ||||
| Investment management fee | (568) | (2,103) | (2,671) | (516) | (1,549) | (2,065) | ||||
| Other expenses | (600) | – | (600) | (641) | – | (641) | ||||
| Return before tax | 1,426 | 7,055 | 8,481 | 1,063 | 2,153 | 3,216 | ||||
| Tax on return | (592) | 592 | – | 79 | (79) | – | ||||
| Return after tax | 834 | 7,647 | 8,481 | 1,142 | 2,074 | 3,216 | ||||
| Return per share | 0.4p | 3.8p | 4.2p | 0.6p | 1.2p | 1.8p | ||||
Balance sheet
as at 31 March 2025
| 31 March 2025 £000 | 31 March 2024 £000 | |||||
| Fixed assets | ||||||
| Investments | 93,537 | 82,574 | ||||
| Current assets | ||||||
| Debtors | 2,895 | 951 | ||||
| Cash and cash equivalents | 25,439 | 31,497 | ||||
| 28,334 | 32,448 | |||||
| Creditors (amounts falling due within one year) | (620) | (191) | ||||
| Net current assets | 27,714 | 32,257 | ||||
| Net assets | 121,251 | 114,831 | ||||
| Capital and reserves | ||||||
| Called-up equity share capital | 49,302 | 47,615 | ||||
| Share premium | 35,348 | 30,418 | ||||
| Capital redemption reserve | 8,476 | 6,658 | ||||
| Capital reserve | 20,451 | 28,099 | ||||
| Revaluation reserve | 6,779 | 882 | ||||
| Revenue reserve | 895 | 1,159 | ||||
| Total equity shareholders’ funds | 121,251 | 114,831 | ||||
| Net asset value per share | 61.5p | 60.3p | ||||
Statement of changes in equity
for the year ended 31 March 2025
| Non-distributable reserves | Distributable reserves | |||||||||||
| Called-up share capital £000 | Share premium £000 | Capital redemption reserve £000 | Revaluation reserve* £000 | Capital reserve £000 | Revenue reserve £000 | Total £000 | ||||||
| At 31 March 2024 | 47,615 | 30,418 | 6,658 | 882 | 28,099 | 1,159 | 114,831 | |||||
| Return after tax | – | – | – | 5,897 | 1,750 | 834 | 8,481 | |||||
| Dividends paid | – | – | – | – | (5,282) | (1,098) | (6,380) | |||||
| Net proceeds of share issues | 3,505 | 4,930 | – | – | – | – | 8,435 | |||||
| Shares purchased for cancellation | (1,818) | – | 1,818 | – | (4,116) | – | (4,116) | |||||
| At 31 March 2025 | 49,302 | 35,348 | 8,476 | 6,779 | 20,451 | 895 | 121,251 | |||||
for the year ended 31 March 2024
| Non-distributable reserves | Distributable reserves | |||||||||||
| Called-up share capital £000 | Share premium £000 | Capital redemption reserve £000 | Revaluation reserve* £000 | Capital reserve £000 | Revenue reserve £000 | Total £000 | ||||||
| At 31 March 2023 | 41,230 | 19,394 | 5,342 | 1,698 | 34,433 | 400 | 102,497 | |||||
| Return after tax | – | – | – | (816) | 2,890 | 1,142 | 3,216 | |||||
| Dividends paid | – | – | – | – | (6,156) | (383) | (6,539) | |||||
| Net proceeds of share issues | 7,701 | 11,024 | – | – | – | – | 18,725 | |||||
| Shares purchased for cancellation | (1,316) | – | 1,316 | – | (3,068) | – | (3,068) | |||||
| At 31 March 2024 | 47,615 | 30,418 | 6,658 | 882 | 28,099 | 1,159 | 114,831 | |||||
Statement of cash flows
for the year ended 31 March 2025
| Year ended 31 March 2025 £000 | Year ended 31 March 2024 £000 | ||||||
| Cash flows from operating activities | |||||||
| Return before tax | 8,481 | 3,216 | |||||
| Adjustments for: | |||||||
| (Gain) / loss on disposal of investments | (3,555) | (1,203) | |||||
| Movements in fair value of investments | (5,603) | (2,499) | |||||
| (Increase) / decrease in debtors | 58 | (103) | |||||
| Increase / (decrease) in creditors | 429 | 8 | |||||
| Net cash inflow / (outflow) from operating activities | (190) | (581) | |||||
| Cash flows from investing activities | |||||||
| Purchase of investments | (14,258) | (15,351) | |||||
| Proceeds on disposal of investments | 10,451 | 24,310 | |||||
| Net cash inflow / (outflow) from investing activities | (3,807) | 8,959 | |||||
| Cash flows from financing activities | |||||||
| Issue of ordinary shares | 8,801 | 19,353 | |||||
| Share issue expenses | (366) | (628) | |||||
| Purchase of ordinary shares for cancellation | (4,116) | (3,068) | |||||
| Equity dividends paid | (6,380) | (6,539) | |||||
| Net cash inflow / (outflow) from financing activities | (2,061) | 9,118 | |||||
| Increase / (decrease) in cash and cash equivalents | (6,058) | 17,496 | |||||
| Cash and cash equivalents at beginning of year | 31,497 | 14,001 | |||||
| Cash and cash equivalents at end of year | 25,439 | 31,497 | |||||
Investment portfolio
31 March 2025
Fifteen largest venture capital investments | Cost £000 | Valuation £000 | Like for like valuation increase / (decrease) over year** £000 | % of net assets by value | ||||
| 1 | Project Glow Topco (t/a The Beauty Tech Group) | 1,686 | 7,323 | 3,766 | 6.0% | |||
| 2 | Pure Pet Food | 1,675 | 6,205 | 3,301 | 5.1% | |||
| 3 | Rockar | 1,877 | 3,559 | 393 | 2.9% | |||
| 4 | Pimberly | 2,060 | 3,520 | 41 | 2.9% | |||
| 5 | Tutora (t/a Tutorful) | 3,305 | 3,305 | – | 2.7% | |||
| 6 | Forensic Analytics | 2,717 | 2,717 | – | 2.2% | |||
| 7 | Netacea | 2,631 | 2,631 | – | 2.2% | |||
| 8 | Biological Preparations Group | 2,366 | 2,620 | 445 | 2.2% | |||
| 9 | Ridge Pharma | 1,497 | 2,527 | 359 | 2.1% | |||
| 10 | Enate | 1,516 | 2,176 | 659 | 1.8% | |||
| 11 | LMC Software | 1,950 | 2,156 | 207 | 1.8% | |||
| 12 | Broker Insights | 2,076 | 2,152 | 68 | 1.8% | |||
| 13 | Turbine Simulated Cell Technologies | 1,863 | 2,074 | 22 | 1.7% | |||
| 14 | Clarilis | 1,972 | 1,972 | – | 1.6% | |||
| 15 | Semble | 1,951 | 1,951 | – | 1.6% | |||
| Other venture capital investments | ||||||||
| 16 | Naitive Technologies | 1,836 | 1,938 | 104 | 1.6% | |||
| 17 | Napo | 1,933 | 1,933 | – | 1.6% | |||
| 18 | Risk Ledger | 1,412 | 1,911 | 500 | 1.6% | |||
| 19 | Social Value Portal | 1,888 | 1,888 | – | 1.5% | |||
| 20 | Administrate | 2,906 | 1,842 | (184) | 1.5% | |||
| 21 | Send Technology Solutions | 1,770 | 1,838 | 69 | 1.5% | |||
| 22 | Moonshot | 1,329 | 1,805 | 478 | 1.5% | |||
| 23 | IDOX* | 238 | 1,799 | (139) | 1.5% | |||
| 24 | Newcells Biotech | 3,225 | 1,777 | (1,693) | 1.5% | |||
| 25 | Volumatic Holdings | 216 | 1,773 | (148) | 1.5% | |||
| 26 | Locate Bio | 1,753 | 1,753 | – | 1.4% | |||
| 27 | VoxPopMe | 1,660 | 1,660 | – | 1.4% | |||
| 28 | Camena Bioscience | 1,594 | 1,594 | – | 1.3% | |||
| 29 | Wonderush Ltd (t/a Hownow) | 1,421 | 1,421 | – | 1.2% | |||
| 30 | Ski Zoom (t/a Heidi Ski) | 1,404 | 1,404 | – | 1.2% | |||
| 31 | Axis Spine Technologies | 1,353 | 1,357 | 4 | 1.1% | |||
| 32 | Buoyant Upholstery | 672 | 1,349 | (719) | 1.1% | |||
| 33 | Culture AI | 1,324 | 1,324 | – | 1.1% | |||
| 34 | Duke & Dexter | 1,237 | 1,281 | 637 | 1.1% | |||
| 35 | Promethean | 1,281 | 1,281 | – | 1.1% | |||
| 36 | Optellum | 1,276 | 1,276 | – | 1.1% | |||
| 37 | Rego Technologies (t/a Upp)(formerly Volo) | 2,504 | 1,104 | 401 | 0.9% | |||
| 38 | Centuro Global | 1,038 | 1,038 | – | 0.9% | |||
| 39 | iOpt | 941 | 1,025 | 84 | 0.8% | |||
| 40 | Tozaro (formerly MIP Discovery) | 1,025 | 1,025 | – | 0.8% | |||
| 41 | Scalpel | 976 | 976 | – | 0.8% | |||
| 42 | Seahawk Bidco | 513 | 971 | (21) | 0.8% | |||
| 43 | Wobble Genomics | 968 | 968 | – | 0.8% | |||
| 44 | Warwick Acoustics | 964 | 964 | – | 0.8% | |||
| 45 | Oddbox | 1,093 | 869 | 71 | 0.7% | |||
| 46 | Synthesized | 510 | 751 | 240 | 0.6% | |||
| 47 | Quotevine | 1,311 | 495 | 495 | 0.4% | |||
| 48 | Thanksbox (t/a Mo) | 1,685 | 402 | (13) | 0.3% | |||
| 49 | Atlas Cloud | 704 | 387 | (1) | 0.3% | |||
| 50 | RTC Group* | 436 | 345 | – | 0.3% | |||
| 51 | Fresh Approach (UK) Holdings | 885 | 313 | (127) | 0.3% | |||
| 52 | Sorted | 182 | 241 | 58 | 0.2% | |||
| 53 | Arnlea Holdings | 1,305 | 227 | (11) | 0.2% | |||
| 54 | Sen Corporation | 681 | 141 | (156) | 0.1% | |||
| 55 | Northrow | 1,494 | 76 | (615) | 0.1% | |||
| 56 | Angle* | 131 | 36 | (9) | 0.0% | |||
| 57 | Adludio | 2,927 | 33 | (2,904) | 0.0% | |||
| 58 | Customs Connect Group | 1,525 | 33 | (80) | 0.0% | |||
| 59 | Velocity Composites* | 90 | 25 | (6) | 0.0% | |||
| Total venture capital investments | 86,758 | 93,537 | 77.1% | |||||
| Net current assets | 27,714 | 22.9% | ||||||
| Net assets | 121,251 | 100.0% | ||||||
* Listed on AIM.
** This change in ‘like for like’ valuations is a comparison of the 31 March 2025 valuations with the 31 March 2024 valuations (or where a new investment has been made in the year, the investment amount), having adjusted for any partial disposals, loan stock repayments or new and follow-on investments in the year.
Risk management
The Board carries out a regular and robust assessment of the risk environment in which the Company operates and seeks to identify new risks as they emerge. The principal and emerging risks and uncertainties identified by the Board which might affect the Company’s business model and future performance, and the steps taken with a view to their mitigation, are as follows:
| Risk | Mitigation |
| Availability of qualifying investments: there can be no guarantee that suitable investment opportunities will be identified in order to meet the Company’s objectives, which could have an adverse effect on Investor returns. Additionally, the Company’s ability to obtain maximum value from its investments may be limited by the requirements of the relevant VCT Rules in order to maintain the VCT status of the Company. | The Investment Adviser has a dedicated investment team that identifies and transacts in qualifying investments. The Directors regularly meet with the Investment Adviser to maintain awareness of the pipeline, and factors this into the Company’s fund raising plans. |
| Credit risk: the Company holds a number of financial instruments and cash deposits and is dependent on the counterparties discharging their commitment. Such balances my be held with banks or in money market funds as part of the Company’s liquidity management. | The Directors review the creditworthiness of the counterparties to these instruments including the rating of money market funds to seek to manage and mitigate exposure to credit risk. |
| Economic and geopolitical risk: events such as economic recession or general fluctuation in stock markets, exchange rates and interest rates, notwithstanding recent lower inflation and falling interest rates, may affect the valuation of investee companies and their ability to access adequate financial resources, as well as affecting the Company’s own share price and discount to net asset value. In addition, US trade policy and hostilities in the Middle East and Ukraine (including sanctions on the Russian Federation) may have further economic consequences as a result of market volatility and the restricted access to certain commodities and energy supplies. Such conditions may adversely affect the performance of companies in which the Company has invested (or may invest), which in turn may adversely affect the performance of the Company, and may have an impact on the number or quality of investment opportunities available to the Company and the ability of the Investment Adviser to realise the Company’s investments. Any of these factors could have an adverse effect on Investor returns. | The Company invests in a diversified portfolio of investments spanning various industry sectors and which are at different stages of growth. The Company maintains sufficient cash reserves to be able to provide additional funding to investee companies where it is appropriate and in the interests of the Company to do so. The Investment Adviser’s team is structured such that appropriate monitoring and oversight is undertaken by an experienced investment executive. As part of this oversight, the investment executive will guide and support the board of each unquoted investee company. At all times, and particularly during periods of heightened economic uncertainty, the investment team of the Investment Adviser share best practice from across the portfolio with the investee management teams in order to help with addressing economic challenges. |
| Financial risk: most of the Company’s investments involve a medium to long-term commitment and many are illiquid. | The Directors consider that it is inappropriate to finance the Company’s activities through borrowing except on an occasional short-term basis. Accordingly they seek to maintain a proportion of the Company’s assets in cash or cash equivalents in order to be in a position to pursue new unquoted investment opportunities and to make follow-on investments in existing portfolio companies. The Company has very little direct exposure to foreign currency risk and does not enter into derivative transactions. |
| Investment and liquidity risk: the Company invests in early stage companies which may be pre-revenue at the point of investment. Portfolio companies may also require significant funds, through multiple funding rounds to develop their technology or the products being developed may be subject to regulatory approvals before they can be launched into the market. This involves a higher degree of risk and company failure compared to investment in larger companies with established business models. Early stage companies generally have limited product lines, markets and financial resources and may be more dependent on key individuals. The securities of companies in which the Company invests are typically unlisted, making them particularly illiquid and may represent minority stakes, which may cause difficulties in valuing and disposing of the securities. The Company may invest in businesses whose shares are quoted on AIM however this may not mean that they can be readily traded and the spread between the buying and selling prices of such shares may be wide. | The Directors aim to limit the investment and liquidity risk through regular monitoring of the investment portfolio and oversight of the Investment Adviser, who is responsible for advising the Board in accordance with the Company’s investment objective. The investment and liquidity risks are mitigated through the careful selection, close monitoring and timely realisation of investments, by carrying out rigorous due diligence procedures and maintaining a wide spread of holdings in terms of financing stage and industry sector within the rules of the VCT scheme. The Board reviews the investment portfolio and liquidity with the Investment Adviser on a regular basis. |
| Legislative and regulatory risk: in order to maintain its approval as a VCT, the Company is required to comply with current VCT legislation in the UK. Changes to UK legislation in the future could have an adverse effect on the Company’s ability to achieve satisfactory investment returns whilst retaining its VCT approval. The Company is registered with the Financial Conduct Authority (FCA) as a small internally managed AIF and is required to comply with a number of reporting and other regulatory requirements. Failure to comply correctly or changes in the regulatory regime could affect the status of the VCT. | The Board and the Investment Adviser monitor political developments and where appropriate seek to make representations either directly or through relevant trade bodies. The Board also works closely with the Adviser to ensure that the Company remains compliant with the relevant regulatory requirements. |
| Operational risk: the Company does not have any employees and the Board relies on a number of third party providers, including the Investment Adviser, registrar and custodian, sponsor, receiving agent, lawyers and tax advisers, to provide it with the necessary services to operate. Such operations delegated to the Company’s key service providers may not be performed in a timely or accurate manner, resulting in reputational, regulatory, or financial damage. The risk of cyber-attack or failure of the systems and controls at any of the Company’s third party providers may lead to an inability to service shareholder needs adequately, to provide accurate reporting and accounting and to ensure adherence to all VCT legislation rules. | The Board has appointed an Audit and Risk Committee, who monitor the effectiveness of the system of internal controls, both financial and non-financial, operated by the Company and the Investment Adviser. These controls are designed to ensure that the Company’s assets are safeguarded and that proper accounting records are maintained. Third party suppliers are required to have in place their own risk and controls framework, business continuity plans and the necessary expertise and resources in place to ensure that a high quality service can be maintained even under stressed scenarios. |
| Performance of the Investment Adviser: the successful implementation of the Company’s investment policy is dependent on the expertise of the Investment Adviser and its ability to attract and retain suitable staff. The Company’s ability to achieve its investment objectives is largely dependent on the performance of the Investment Adviser in the acquisition and disposal of assets and the management of such assets. The Board has broad discretion to monitor the performance of the Investment Adviser and the power to appoint a replacement, but the Investment Adviser’s performance or that of any replacement cannot be guaranteed. | The Board have both formal reviews by way of the Management Engagement Committee and Board meetings, and informal reviews over the course of the year outside of the formal Board timetable. Performance is closely monitored, including receiving detailed league table information and other market intelligence. Any concerns or suggestions are passed to the Investment Adviser, which are robustly challenged. |
| Stock market risk: a small proportion of the Company’s investments are quoted on AIM and will be subject to market fluctuations upwards and downwards. External factors such as terrorist activity, political activity or global health crises, can negatively impact stock markets worldwide. In times of adverse sentiment there may be very little, if any, market demand for shares in smaller companies quoted on AIM. | The Company’s small number of holdings of quoted investments are actively managed by the Investment Adviser, and the Board keeps the portfolio and the actions taken under ongoing review. |
| VCT qualifying status risk: while it is the intention of the Directors that the Company will be managed so as to continue to qualify as a VCT, there can be no guarantee that this status will be maintained. A failure to continue meeting the qualifying requirements could result in the loss of VCT tax relief, the Company losing its exemption from corporation tax on capital gains, to shareholders being liable to pay income tax on dividends received from the Company and, in certain circumstances, to shareholders being required to repay the initial income tax relief on their investment. | The Investment Adviser keeps the Company’s VCT qualifying status under continual review and its reports are reviewed by the Board on a quarterly basis. The Board has also retained Philip Hare & Associates LLP to undertake an independent VCT status monitoring role. |
Other matters
The above summary of results for the year ended 31 March 2025 does not constitute statutory financial statements within the meaning of Section 435 of the Companies Act 2006 and has not been delivered to the Registrar of Companies. Statutory financial statements will be filed with the Registrar of Companies in due course; the independent auditor’s report on those financial statements under Section 495 of the Companies Act 2006 is unqualified, does not include any reference to matters to which the auditor drew attention by way of emphasis without qualifying the report and does not contain a statement under Section 498 (2) or (3) of the Companies Act 2006.
The calculation of the return per share is based on the return after tax for the year of £8,481,000 (2024: £3,216,000) and on 200,018,249 (2024: 179,260,563) shares, being the weighted average number of shares in issue during the period.
If approved by shareholders, the proposed final dividend of 1.5 pence per share for the year ended 31 March 2025 will be paid on 5 September 2025 to shareholders on the register at the close of business on 8 August 2025.
The full annual report including financial statements for the year ended 31 March 2025 is expected to be made available to shareholders on or around 27 June 2025 and will be available to the public at the registered office of the company at Forward House, 17 High Street, Henley-in-Arden B95 5AA and on the Company’s website.
The contents of the Mercia Asset Management PLC website and the contents of any website accessible from hyperlinks on the Mercia Asset Management PLC website (or any other website) are not incorporated into, nor form part of, this announcement.
