Sure Ventures plc
Unaudited Interim Report and Financial Statements
For the six months ended 30 September 2023
Company Number: 10829500
Table of Contents
1 Chairman's Statement
2 Investment Manager's Report6
4 Alternative Performance Measures ("APMs") 3
Condensed Statement of Comprehensive Income 16
Condensed Statement of Financial Position
Condensed Statement of Changes in Equity
Condensed Statement of Cash Flows
Notes to the Condensed Interim Financial Statements
1 Chairman's Statement
Chairman's Statement
Dear Shareholders,
On behalf of my fellow Directors, I am delighted to present Sure Ventures plc's (the "Company") interim results for the six months ended 30 September 2023.
FINANCIAL PERFORMANCE
For the six-month period to 30 September 2023, the Company reported a net asset value ("NAV") total return per share of -6.66% (30 September 2022: -3.73%), broadly in line with our expectations. The performance for this period remained largely unchanged, providing a similar return to the full year results to 31 March 2023 (-6.86%). This result was due to limited changes in the valuation of our portfolio of unlisted investee companies.
Since our incorporation in 2017, we have created a balanced portfolio of early-stage technology companies in rapidly evolving sectors of Artificial Intelligence ("AI"), Augmented Reality ("AR") Virtual Reality ("VR"), the Internet of Things ("IoT"), and Cybersecurity. In the current economic climate, our portfolio investments in AI have shown resilience, benefitting from the corporate need for cost savings. Goldman Sachs estimates up to 300 million full-time jobs could be impacted by generative AI and Microsoft continues to make substantial investments in this space, evident in its $10bn partnership with OpenAI, creators of ChatGPT. In cybersecurity, we are seeing an increased use of generative AI for more complex threat identification.
In AR and VR, major developments such as the expected launch of Apple's Apple Vision Pro headset in March 2024 are poised to change the landscape. This product could bring AR/VR into mainstream consumer use. UBS and Bank of America predict the new Apple headset will generate significant revenue in 2024, which should positively impact our AR/VR focused investee companies within the portfolio. Additionally, a joint venture between Samsung, Google, and Qualcomm is set to release a mixed reality headset in 2024, expected to be a strong competitor to the Apple version.
The Company is confident that its portfolio is well positioned to realise further gains in all of its investment themes. During 2023 we have seen further geopolitical tensions that have impacted valuations in public and private markets. Higher interest rates restrict available debt financing and has led to fewer leveraged acquisitions in 2023.
The investment portfolio for Fund I (as further defined below) is now complete, and no new investments will be made, with the remaining capital allocated to follow-on rounds of the fourteen investee companies in the portfolio. By contrast, Fund II (also defined below) is in the early stages of investment origination, and to date investments have been made in just three companies.
In the period to 30 September 2023, the Company's NAV attributable to shareholders declined by £30k to £7.94m through a combination of NAV performance and new subscriptions.
In common with the current market trend of listed trusts, the Company's share price now trades at a discount to its last published NAV, currently around 30%. However, in May 2023 and August 2023, the Company was able to validate its share price by raising new subscriptions through private placements at the mid-market share price.
PORTFOLIO UPDATE FUND I
The Company's first fund investment in Sure Valley Ventures Sub-Fund of Suir Valley Funds ICAV ("Fund I") is a substantial part of our investment strategy. We ensured our investments in Fund I were not diluted by making a total commitment of €7m. As at 30 September 2023, €6,594,579 has been drawn down against this commitment.
The Company holds two direct investments outside of Funds I & II in VividQ Limited, a pioneering company in AR and VR holography and a small residual holding in Let's Explore Group (formerly Immotion Group plc). The portfolio of Fund I also includes two listed entities; ENGAGE XR Holdings plc, a developer of VR software and immersive experiences focusing on education, and Smarttech247, a leader in security operations utilizing AI and cybersecurity cloud technologies. Both companies closed broadly flat in the six months to 30 September 2023.
As at 30 September 2023, the Company, through its investment in Fund I, has a further twelve privately held companies in the AR, VR, IoT and AI space. In 2019, the Company achieved its first successful portfolio company exit via the Fund I exit of Artomatix for x5 return of the Company's original investment.
PORTFOLIO UPDATE FUND I (continued)
The first write downs since inception occurred in the year ended 31 March 2023, for Buymie and NDRC@Arclabs. Buymie was acquired in the year ended 31 March 2023 and the Company took the prudent approach to the transaction to write the investment down to zero. The investment in NDRC was an incubator and accelerator programme that had concluded and was the rationale behind writing off the full value of this investment.
PORTFOLIO UPDATE FUND II
In March 2022, the Company announced its commitment of £5m to the Sure Valley Ventures Enterprise Capital LP (Fund II), a £95m UK software technology fund. Fund II focuses on AR, VR, the Metaverse, AI, IoT, and cybersecurity. The British Business Bank is the £50m cornerstone investor through its Enterprise Capital Funds program. Fund II aims to invest in up to 25 software companies during its investment period.
As at 30 September 2023, the first portfolio investments of Fund II have been made. These include Retinize, a Belfast-based creative tech company developing animotive software for VR technology. Investments were also made in Jaid, a technology company offering AI-powered human communication solutions, and Captur, a London-based company that has built an enterprise AI platform for real-time, rules-based image recognition.
COMMITMENTS AND FUNDING
In 2019, the Company increased its subscription to Fund I by €2.5m, raising its total commitment to €7m. This increase enhanced our share in Fund I from 21.6% to 25.9%, with approximately €405k remaining to be funded. We continue to believe in the potential for further uplifts in valuations from our initial investments.
The Company's commitment to Fund II is £5m over Fund II's investment period. The forecast capital calls throughout the investment period were a key consideration before making this commitment. The Company believes it has sufficient access to funding to meet its remaining commitments to both Fund I and Fund II. This confidence is supported by our available cash, liquid investments, anticipated subscriptions, and access to loans and equity subscription facilities.
INVESTMENT ENVIRONMENT
The Company is confident and pleased with the investments in Fund I and their potential for delivering higher valuations and negotiated exits in the next one to two years. The pace of technological change is rapid, and our diverse portfolio is well-positioned to benefit from these developments. The initial investments for Fund II and the varied deal pipeline are also promising.
DIVIDEND
During the six months ending 30 September 2023, the Company did not declare a dividend (30 September 2022: £nil). In line with our dividend policy, we focus on achieving shareholder returns through capital growth rather than income. The Company does not expect to receive significant dividends or other income from its investments. While the Company does not anticipate paying an annual dividend, there may be potential for the payment of one-off dividends at the Directors' discretion, should the circumstances and liquidity allow.
GEARING
The Company may use gearing of up to 20% of NAV to enhance returns and for liquidity, capital flexibility, and efficient portfolio management. Our primary form of gearing includes bank borrowings but may also involve the use of derivative instruments and other methods as determined by the Directors. As at 30 September 2023, the Company had borrowings of £200,000 drawn from a £1,000,000 loan facility with Shard Merchant Capital Limited. After this period, on 9 November 2023, the Company borrowed an additional £200,000 under the loan facility, bringing total borrowings to £400,000. The Directors, in conjunction with the Investment Manager, regularly review the Company's borrowing in line with our overall cash management and investment strategy.
CAPITAL RAISING
On 5 May 2023, the Company announced a placing of 200,000 ordinary shares on the Specialist Fund Segment of the London Stock Exchange. A further placing of 205,128 ordinary shares was announced on 21 August 2023, under the existing ISIN: GB00BYWYZ460. This increased our total shares in admission to 7,051,600. The Investment Manager's Report that follows this statement provides more details on the Company's operations and prospects. The Directors remain confident in the long-term prospects of the Company in achieving its investment objectives.
OUTLOOK
The portfolio construction of Fund I is complete and is now at the realisation stage. Several companies are attracting interest from potential acquirers, with some engaged in ongoing discussions for several months. Others are preparing for follow-on funding rounds, with the potential for higher valuations. Fund II is in the early stages of the investment cycle, and the investment team is encouraged by the quality of its initial investments and the developing deal pipeline.
The Company's performance has been stable in a challenging economic environment, marked by higher inflation, higher interest rates, and geopolitical tensions. These factors continue to impact public and private markets and have slowed private market deal activity. However, the Company believes its investment portfolio is well positioned for significant returns in breakthrough technology sectors. The Investment Manager will be actively exploring exits for Fund I in 2024.
Perry Wilson,
Chairman
12 December 2023
2 Investment Manager's Report
Investment Manager's Report
The company
Sure Ventures plc (the "Company") was established to enable investors to gain access to early-stage technology companies in the four exciting and expansive market verticals of Augmented Reality and Virtual Reality (AR/VR), Artificial Intelligence (AI), Cybersecurity and the Internet of Things (IoT).
The Company gains access to deal flow ordinarily reserved for venture capital funds and ultra-high net worth angel investors, establishing a diversified software-centric portfolio with a clear strategy. Listing the Company on the London Stock Exchange offers investors:
· Relative liquidity
· A quoted share price
· A high level of corporate governance
It is often too expensive, too risky and too labour-intensive for investors to build a portfolio of this nature themselves. We are leveraging the diverse skillsets of an experienced management team who have the industry network to gain access to quality deal flow, the expertise to complete extensive due diligence in target markets and the entrepreneurial skills to help these companies to mature successfully. Those investing in the Company will get exposure to Sure Valley Ventures which in turn makes direct investments in the above sectors in the UK and Ireland.
Augmented Reality and Virtual Reality
The Immersive Technologies market has had a significant growth boost during the COVID-19 pandemic, with people looking for new ways to connect and entertain themselves. In 2022, the Global AR/VR market size surpassed $22.53 billion and by 2030, it is projected to reach $134.18 billion, registering a Compound Annual Growth Rate (CAGR) of 22.46%. There are a number of factors driving the growth of the AR/VR market. One is the growth of the mobile gaming industry. Mobile gaming is a major driver of AR/VR adoption, as it allows users to experience immersive games and experiences without having to purchase expensive hardware. Another factor driving the growth of the AR/VR market is the increase in internet connectivity. As internet speeds and availability improve, AR/VR applications become more feasible. This is leading to increased adoption of AR/VR in a variety of industries, including education, healthcare, and manufacturing.
The increasing use of consumer electronic devices is also driving the growth of the AR/VR market. As more and more people own smartphones, tablets, and other devices that can be used to access AR/VR content, the market for AR/VR headsets and other hardware is expected to grow.
Some recent developments in the AR/VR market include:
· Meta launching their new Meta Quest 3 headset at their Meta Connect event on 27 September 2023, with the product hosting a number of significant improvements in comparison to its predecessor such as screen resolution and stronger processing power.
· Apple continuing with the development of the Vision Pro, maintaining the view that it will be likely be released in early 2024 at a price point of $3,500.
· The European council publishing their strategy for web 4.0 strengthening the viewpoint that the shift towards the virtual world is further becoming a reality and must be prepared for.
· Further rumours surrounding Google future VR Headset have emerged, suggesting that their device, supposedly being created in partnership with Samsung and Qualcomm, is due to be released in Summer 2024 to compete with the Vision Pro.
These developments are expected to help accelerate growth in the AR/VR market even further.
In addition, the AR/VR market is expected to be further boosted by the development of the metaverse. The metaverse is a virtual world that is created by the convergence of AR, VR, and other technologies. It is expected to be a major driver of growth in the AR/VR market, as it will provide a new platform for gaming, entertainment, education, and work. The metaverse is still in its early stages of development, but it has the potential to be a major disruptive force in the tech industry. As it continues to develop, it is likely to have a significant impact on the AR/VR market.
Internet of Things
The IoT market is expected to grow significantly in the coming years. According to a report by Fortune Business Insights, the global IoT market size is predicted to grow from $662.21 billion in 2023 and to reach $3,352.97 billion by 2030, exhibiting a CAGR of 26.1% during the forecast period (2023-2030). The growth of the IoT market is being driven by a number of factors, including the increasing demand for connected devices, the growth of the cloud computing market, and the development of new IoT technologies. The increasing demand for connected devices is one of the key drivers of the IoT market. Connected devices are used in a variety of applications, including smart homes, smart cities, and industrial automation.
Internet of Things (continued)
The growth of the cloud computing market is also contributing to the growth of the IoT market. Cloud computing provides a platform for storing and processing data from IoT devices. Furthermore, the development of new IoT technologies is also contributing to the growth of the market. These new technologies include 5G, AI, and machine learning. 5G will enable faster and more reliable connections between IoT devices. AI and machine learning will be used to analyse data from IoT devices and make predictions.
Cybersecurity
The global AI in cybersecurity market size is valued at $22.4 billion in 2023 and is expected to hit around $60.6 billion by 2028, growing at a CAGR of 21.9% from 2023-2028. The growth of the cyber security market is being driven by a number of factors, including the increasing number of cyber-attacks, the growing adoption of cloud computing, and the increasing use of IoT devices. Cyber-attacks are becoming more sophisticated and targeted, and they are causing significant financial and reputational damage to organisations. The growing adoption of cloud computing is also contributing to the growth of the cyber security market. Cloud computing provides a new attack surface for cyber criminals, and it is important for organisations to have the right security measures in place to protect their data. The increasing use of IoT devices is also contributing to the growth of the market. IoT devices are often connected to the internet, which makes them vulnerable to cyber-attacks. It is important for organisations to secure their IoT devices to protect their data and systems. The future prediction for growth of the cyber security market is very positive. The market is expected to continue to grow at a significant rate in the coming years. This growth will be driven by the increasing number of cyber-attacks, the growing adoption of cloud computing, and the increasing use of IoT devices.
Artificial Intelligence
The global AI market size was valued at $428.00 billion in 2022. The market is projected to grow from $515.31 billion in 2023 to $2,025.12 billion by 2030, exhibiting a CAGR of 21.6% during the forecast period. AI is the simulation of human intelligence processes using various machines by means of creating intelligent software and hardware capable of replicating human behaviour such as learning and problem-solving. The report covers Al-based solutions such as AWS Chatbots, OpenAl Codex, Azure Al, and others. The global market is set to grow drastically with the surge in AI applications, increased number of relevant partnerships and collaborations, rise in small-scale Al providers, changing complexities of business structure, and hyper-personalised service demands. Additionally, government initiatives and investments in Al technologies for enterprises and end users create benefits.
Recent developments within the AI Space include:
· Open AI announcing a plethora of future new features within their August and September blog updates, suggesting that voice conversations and unique customizability features will be arriving imminently onto their platform.
· Mid journey introducing "Vary Region", the companies unique answer to Adobe Photoshop, allowing for users to edit specific parts of an image with AI prompts and for specific editing solely through describing any desired changes via text box.
· Google allowing early access to their conversational AI software Gemini, for a small number of companies. This marks the beginning of Google intention to compete directly with Open AI's GPT-4, which has seen significant attention over recent months. Similar to Open AI's offering, at launch Gemini is likely to be able to read, summarise and generate original text, as well as help users perform actions like generating images or writing code.
The benefit of investing in companies in these four key sectors at a seed stage are that:
· Sure Valley Ventures can invest in these companies at attractive valuations of between £2m to £8m and get up to 20% of the company for initial investment amounts of between £0.75m to £1.25m.
· The investment sectors (AR/VR, IoT, AI, and Cybersecurity) have massive growth potential ahead of them which creates a tailwind behind the companies that are creating these new markets.
· These sectors are also ones that have the potential of creating the next big European companies and building on Europe's existing technological strengths.
· These companies have the potential to get to exponential growth and of achieving an IPO or being acquired by one of the Silicon Valley giants who are all investing in these sectors.
· The Sure Valley Ventures Platform and Network can help fast-track the development of these companies across the chasm to the Series A investment round, which in turn increases the potential for an outsized return and also reduces the risk of the failure of a portfolio company.
In summary, Sure Ventures plc can gain exposure to all of these benefits through its participation in Sure Valley Ventures, as further outlined overleaf.
PORTFOLIO BREAKDOWN
On 6 February 2018, the Company entered into a €4.5m commitment to Sure Valley Ventures ("Fund I"), the sole sub-fund of Suir Valley Funds ICAV and its investment was equalised into Fund I at that date. On 31 August 2019, a further €2.5m was committed to Fund I, taking the total investment in Sure Valley Ventures to €7m. The first drawdown was made on 5 March 2018 and as at 30 September 2023, a total of €6,594,579 had been drawn down against this commitment.
On 26 April 2019, the Company made a direct investment of £500,000 into VividQ Limited, a deep tech start-up with world leading expertise in 3D holography. VividQ Limited completed an additional funding round in May 2021 which saw the valuation of this investment rise to £794k, representing a 59% unrealised gain.
Sure Ventures plc also holds a direct investment in a UK-based immersive entertainment group; Let's Explore Group, Inc (formerly Immotion Group plc), as announced on 24 April 2018. In May 2023, Let's Explore Group, Inc announced it had entered into a conditional sale and purchase agreement, for the sale of its Location Based Entertainment business (collectively; Immotion Studios Limited, Immotion VR Limited and C.2K Entertainment Inc.), to LBE BidCo, Inc. for an enterprise value of $25,211,739 on a cash free/debt free basis. Further to this news, a tender offer for 65% of shares held was made by the acquirer at 4.75p a share, which the Shard Capital AIFM LLP team took up. In addition to this, due to the unknown nature of the acquirer, the decision was made to sell down the remaining 35% of the holding, as liquidity in the share permitted. As at 30 September 2023, Sure Ventures plc has sold the majority of its holding in this listed entity, with only a small residual position remaining.
On 25 February 2022, Sure Ventures plc committed to investing £5m into the second fund of Sure Valley Ventures ("Fund II"). Fund II completed an £85m first close of a £95m UK software technology fund, which aims to increase the supply of equity capital to high-potential, early-stage UK companies. The first drawdown was made on 23 February 2022 and as at 30 September 2023, a total of £445,500 had been drawn down against this commitment.
As detailed in the Condensed Statement of Financial Position included in the following financial statements, these two Sure Valley Ventures investments alongside the two direct investments, represent the entire portfolio of Sure Ventures plc as at 30 September 2023.
On 5 May 2023, the Company announced a placing of 200,000 ordinary shares, followed by a further placing of 205,128 ordinary shares, announced on 21 August 2023. The ordinary shares were admitted to trading on the Specialist Fund Segment of the London Stock Exchange on 12 May 2023 and 25 August 2023 respectively, under the existing ISIN: GB00BYWYZ460, taking the total shares in admission as at 30 September 2023 to 7,051,600.
SUIR VALLEY FUNDS ICAV
Suir Valley Funds ICAV (the "ICAV") is a closed-ended Irish Collective Asset-management Vehicle with segregated liability between sub-funds incorporated in Ireland pursuant to the Irish Collective Asset-management Vehicles Act 2015 to 2021 and constituted as an umbrella fund insofar as the share capital of the ICAV is divided into different series with each series representing a portfolio of assets comprising a separate sub-fund.
The ICAV was registered on 18 October 2016 and authorised by the Central Bank of Ireland as a qualifying investor alternative investment fund ("QIAIF") on 10 January 2017. The initial sub-fund of the ICAV is Sure Valley Ventures, or Fund I, which had an initial closing date of 1 March 2017. Fund I invests in a broad range of software companies with a focus on companies in the AR/VR, AI and IoT sectors.
As at 31 March 2023, Fund I had commitments totaling €27m and had made 17 direct investments into companies spanning the AR/VR, AI and IoT sectors. One of these investments was sold in 2019, giving Fund I its first realised gain on exit of around 5X return on investment. On 12 March 2018, Immersive VR Education Limited, Fund I's first investment, completed a flotation on the London Stock Exchange (AIM) and the Dublin Stock Exchange (ESM). The public company is now called ENGAGE XR Holdings plc - ticker EXR (Formally VR Education Holdings plc - VRE). EXR was the first software company to list on the ESM since that market's inception. In July 2020, following an improvement in share price, Fund I decided to sell sufficient shares to recover its initial investment. This resulted in a realised gain of €73k being payable to Sure Ventures plc, along with its share of the initial investment, and some escrow funds from the aforementioned exit. The final escrow payment from the sale was settled in July 2021, seeing another €151k flowing to Sure Ventures plc. Total distributions from Fund I to Sure Ventures plc as at 30 September 2023 were €1,759,630.
SURE VALLEY VENTURES ENTERPRISE CAPITAL LP
Sure Valley Ventures Enterprise Capital LP is a closed-ended UK based GP/LP Fund which completed its first close on 1 March 2022. The total commitments for this first close were £85m, with the potential for a further £10m to be raised in a secondary close. The British Business Bank are the cornerstone investor of Sure Valley Ventures Enterprise Capital LP, committing £50m of the initial £85m, with Sure Ventures plc committing a total of £5m.
Fund II has a similar investment strategy to the first Fund, being a seed capital investor in high growth software companies that are focused on bringing a disruptive innovation to market. It plans to invest into 25 software companies from across the UK through its new fund. As well as being based in London, Dublin, and Cambridge, the Sure Valley team has recently opened an office in Manchester to help access deals in the significant and exciting innovation clusters that have developed around creative technologies in the North of England and in the metaverse and AI opportunities in cities such as Manchester, Leeds, Sheffield and Newcastle.
As at 30 September 2023, Sure Valley Ventures Enterprise Capital LP had drawn down a total of £7.53m and has made its first three investments into a Belfast based company called Retinize, for an amount of £1m in March 2022; a London based company called Jaid (t/a Opsmatix Limited) for £1m in November 2022 plus a further £350k in May 2023; and finally a London based company called Captur, which Sure Valley Ventures Enterprise Capital LP invested £1.5m in September 2023. The total invested capital to date for Sure Ventures plc was £445,500.
Performance
In the period to 30 September 2023, the Company's performance remained strong, in a backdrop of economic uncertainty, as it returned a Net Asset Value ("NAV") of £1.13/unit, representing a 6.66% decline from the audited March 2023 NAV of £1.20p. The NAV remains largely unchanged as a result of minimal fluctuations in valuation of any of the portfolio companies from the year end, against a backdrop of the usual cost base. Regarding the two direct investments, Let's Explore Group, Inc which has been acquired, closed the period at 2.7p, down from 3.6p at the year end; indicative of a tough few months in the public markets and wider economy. However, as mentioned above, Sure Ventures plc has materially exited this position at higher levels than the current share price. VividQ Limited remains unchanged, having closed a new funding round to give Sure Ventures plc an unrealised gain of 59% on its initial holding in the previous financial year. Given the lack of revenue to support the ongoing operational costs of Sure Ventures plc, these unrealised gains are key to maintaining a steady NAV, until the point that we see more exits and realised gains.
FutuRe Investment OUTLOOK
Fund I has achieved one very positive realised gain, recovered its full investment in its listed portfolio company, as well as seeing number a of unrealised gains across the portfolio. The portfolio of current investments is continuing to mature, with more companies completing Series A funding rounds, which has started to provide the NAV growth that was set out to achieve from inception. As the investment period of Fund I has now closed, there are no more new investments to be made, with all remaining capital being allocated to follow-on funding of existing investments, as these companies continue to grow and provide Fund I with opportunities to exit.
In addition to this, having more exposure to the UK market for early-stage high growth software companies through the commitment into the Sure Valley Ventures Enterprise Capital LP will yield exciting opportunities as Sure Valley Ventures Enterprise Capital LP continues to deploy capital across the landscape with a view to generating significant returns for investors throughout its lifecycle.
We remain confident in the future outlook of the Company for the rest of the financial year, particularly with the launch of Sure Valley Ventures Enterprise Capital LP and the increasing maturity of the Sure Valley Ventures portfolio. Whilst the Funds provide great exposure to a wealth of expertise and a larger suite of portfolio companies, we also reserve the right to make further direct investments provided there is sufficient working capital to do so.
Shard Capital AIFM LLP
Investment Manager
22 November 2023
3 Interim Management Report
Interim Management Report
The report below together with the Chairman's Statement, Investment Manager's Report, and related party disclosures in the notes to the financial statements constitute the Interim Management Report of Sure Ventures plc (the "Company") for the six months ended 30 September 2023.
Principal risks and uncertainties
The principal risks and uncertainties associated with the Company's business are divided into the following main areas:
· Operational risks, including risks associated with reliance on third party service providers, reliance on key individuals at the Investment Manager and fluctuations in the market price of the Company's shares;
· Investment risks, including risks associated with the investment objective, borrowing and liquidity of investments; and
· Regulatory risks, including risks associated with maintenance of investment trust status and compliance with applicable legislative obligations.
The above risks are described further in the Company's Annual Report for the year ended 31 March 2023 together with measures that have been put in place to mitigate and manage those risks.
In the view of the Directors, the principal risks and uncertainties reported in the latest Annual Report for the year ended 31 March 2023 remain unchanged and will be applicable to the remaining six months of the financial year.
Going concern
The Board of Directors and the Investment Manager believe that the operational viability and going concern status of the Company remains intact and will continue for the next financial 12 months ahead and foreseeable future. The Board of Directors has no concerns in regard to the ongoing existence of the Company.
The Board of Directors is also satisfied that the key service providers have the ability to continue to operate efficiently in a remote or virtual working environment.
Statement of Directors' Responsibilities
The Directors confirm that, to the best of their knowledge that:
a) the condensed set of unaudited financial statements contained within the half-yearly financial report have been prepared in accordance with International Accounting Standard ("IAS") 34, Interim Financial Reporting as required by the Disclosure and Transparency Rule 4.2.4R, and give a true and fair view of the assets, liabilities, and financial position of the Company;
b) the Interim Management Report includes a fair review, as required by Disclosure and Transparency Rule 4.2.7R, of important events that have occurred during the first six months of the financial year, their impact on the condensed set of unaudited financial statements, and a description of the principal risks and perceived uncertainties for the remaining six months of the financial year; and
c) the Interim Management Report includes a fair review of the information concerning related parties' transactions as required by Disclosure and Transparency Rule 4.2.8R.
For and on behalf of the board of directors
Perry Wilson
Chairman
12 December 2023
4 Alternative Performance Measures ("APMs")
Alternative Performance Measures ("APMs")
APMs are often used to describe the performance of investment companies although they are not specifically defined under UK-adopted international accounting standards. Calculations for APMs used by the Company are shown below.
ONGOING CHARGES
A measure expressed as a percentage of average Net Asset Value ("NAV"), of the regular, recurring annual costs of running an investment company, calculated in accordance with the Association of Investment Companies ("AIC") methodology.
| For the six months ended 30 September 2023 | | |
| Average NAV (£'000) | a | £7,922 |
| Recurring costs (£'000) | b | £364 |
| | b/a | 4.60% |
PREMIUM/DISCOUNT
The amount, expressed as a percentage, by which the share price is more than the NAV per ordinary share.
| As at 30 September 2023
| | |
| NAV per ordinary share | a | 112.67p |
| Share price | b | 94p |
| | (b-a)/a | (16.57%) |
TOTAL RETURN
A measure of performance that includes both income and capital returns. This takes into account capital gains and reinvestment of any dividends paid out by the Company, with reinvestment on ex-dividend date.
| For the six months ended 30 September 2023 | | NAV | Share price |
| Opening as at 31 March 2023 (p) | a | 119.81 | 95 |
| Closing as at 30 September 2023 (p) | b | 112.67 | 94 |
| Dividend reinvestment factor | c | 1 | 1 |
| Adjusted closing (d = b x c) | d | 112.67 | 94 |
| Total return | (d-a) / a | (5.96%) | (1.05%) |
5 Financial Statements
Condensed Statement of Comprehensive Income
For the six months ended 30 September 2023 (unaudited)
| | Note | Revenue £ | Capital | Total |
| Income | | | | |
| Loss on sale of investments | 7 | - | (83,570) | (83,570) |
| Other net changes in fair value on financial assets at fair value through profit or loss |
| - | (136,107) | (136,107) |
| Rebate management fee | 9 | 49,456 | - | 49,456 |
| Other Income | | 10 | - | 10 |
| Total net income/(loss) | | 49,466 | (219,677) | (170,211) |
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| |
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|
|
| Expenses | | | | |
| Management fee | 9 | (74,456) | - | (74,456) |
| Custodian, secretarial and administration fees | | (57,494) | - | (57,494) |
| Other expenses | | (91,284) | - | (91,284) |
| Total operating expenses |
| (223,234) | - | (223,234) |
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|
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|
|
| Finance costs |
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| Interest expense | | (7,978) | - | (7,978) |
| Total finance costs | | (7,978) | - | (7,978) |
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| |
|
|
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| Loss before taxation and after finance costs | | (181,746) | (219,677) | (401,423) |
| Taxation | | - | - | - |
| Loss after taxation | | (181,746) | (219,677) | (401,423) |
| | |
|
|
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| Deficit per share | 6 | (2.66) | (3.22) | (5.88) |
For the six months ended 30 September 2022 (unaudited)
| | | Revenue £ | Capital | Total |
| Income | | | | |
| Other net changes in fair value on financial assets at fair value through profit or loss | | - | (12,816) | (12,816) |
| Rebate management fee | | 50,694 | - | 50,694 |
| Total net income/(loss) | | 50,694 | (12,816) | 37,878 |
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| |
|
|
|
| Expenses | | | | |
| Management fee | | (50,628) | (66) | (50,694) |
| Custodian, secretarial and administration fees | | (54,714) | - | (54,714) |
| Other expenses | | (125,036) | - | (125,036) |
| Total operating expenses | | (230,378) | (66) | (230,444) |
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| |
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| Loss before taxation and after finance costs | | (179,684) | (12,882) | (192,566) |
| Taxation | | - | - | - |
| Loss after taxation | | (179,684) | (12,882) | (192,566) |
| | |
|
|
|
| Deficit per share | | (2.87) | (0.21) | (3.08) |
The total comprehensive income and expense for the period is attributable to shareholders of the Company. The accompanying notes on pages 20 to 22 form part of these condensed interim financial statements.
Condensed Statement of Financial Position
As at 30 September 2023
| | Note | 30 September 2023 (unaudited) £ | 31 March 2023 (audited) |
| Non-current assets | | | |
| Investments held at fair value through profit or loss | 7 | 8,266,919 | 8,196,153 |
| | | 8,266,919 | 8,196,153 |
|
| | | |
| Current assets | | | |
| Receivables | | 218 | 2,240 |
| Subscription receivable | | 1,000 | - |
| Cash and cash equivalents | | 75,520 | 36,697 |
| | | 76,738 | 38,937 |
| | |
| |
| Total assets | | 8,343,657 | 8,235,090 |
|
| | | |
| Non-current liabilities | | | |
| Interest payable | | (15,123) | (7,145) |
| Loans payable | | (200,000) | (200,000) |
|
| | (215,123) | (207,145) |
|
| | |
|
| Current liabilities | | |
|
| Capital call payable | 9 | (117,500) | - |
| Other payables | | (66,250) | (64,738) |
|
| | (183,750) | (64,738) |
|
| |
| |
| Total liabilities | | (398,873) | (64,738) |
| | | | |
| Total net assets | | 7,944,784 | 7,963,207 |
| | | | |
| Shareholders' funds | | | |
| Ordinary share capital | 8 | 70,515 | 66,464 |
| Share premium | | 6,782,646 | 6,403,697 |
| Revenue reserves | | (1,826,824) | (1,645,078) |
| Capital reserves | | 2,918,447 | 3,138,124 |
| Total shareholders' funds | | 7,944,784 | 7,963,207 |
|
| | | |
| Net asset value per share |
| 112.67p | 119.81p |
The accompanying notes on pages 20 to 22 form part of these condensed interim financial statements.
The financial statements on pages 16 to 19 were approved by the Board of Directors and authorised for issue on 12 December 2023. The financial statements were signed on its behalf by:
Perry Wilson
Chairman
Condensed Statement of Changes in Equity
For the six months ended 30 September 2023 (unaudited)
| | Ordinary Share Capital £ | Share Premium
£ | Revenue Reserves
£ | Capital Reserves
£ | Total Reserves
£ | Total Equity
£ |
| As at 31 March 2023 | 66,464 | 6,403,697 | (1,645,078) | 3,138,124 | 1,493,046 | 7,963,207 |
| Ordinary shares issued | 4,051 | 395,949 | - | - | - | 400,000 |
| Ordinary shares issue costs | - | (17,000) | - | - | - | (17,000) |
| Loss after taxation | - | - | (181,746) | (219,677) | (401,423) | (401,423) |
| Dividends paid in the period | - | - | - | - | - | - |
| Balance as at | | |
|
| | |
For the six months ended 30 September 2022 (unaudited)
| | Ordinary Share Capital £ | Share Premium
£ | Revenue Reserves
£ | Capital Reserves
£ | Total Reserves
£ | Total Equity
£ |
| As at 31 March 2022 | 60,132 | 5,768,780 | (1,315,688) | 3,238,372 | 1,922,684 | 7,751,596 |
| Ordinary shares issued | 4,750 | 470,250 | - | - | - | 475,000 |
| Ordinary shares issue costs | - | (23,750) | - | - | - | (23,750) |
| Loss after taxation | - | - | (179,684) | (12,882) | (192,566) | (192,566) |
| Dividends paid in the period | - | - | - | - | - | - |
| Balance as at | 64,882 | 6,215,280 | (1,495,372) | 3,225,490 | 1,730,118 | 8,010,280 |
The accompanying notes on pages 20 to 22 form part of these condensed interim financial statements.
Condensed Statement of Cash Flows
For the six months ended 30 September 2023
| | Note | 30 September 2023 (unaudited) £ | 30 September 2022 (unaudited) £ |
| Cash flows from operating activities: | | | |
| Loss after taxation | | (401,423) | (192,566) |
| Adjustments for: | | | |
| Decrease in receivables | | 2,022 | 1,600 |
| Increase in payables | | 1,512 | 24,456 |
| Increase in capital call payable | 9 | 117,500 | - |
| Loss on sale of investment | 7 | 83,570 | - |
| Unrealised loss/(profit) on foreign exchange | 7 | 79,953 | (200,393) |
| Net changes in fair value on financial assets at fair value through profit or loss | 7 | 56,154 | 213,208 |
| Net cash (outflow) from operating activities | | (60,712) | (153,695) |
|
| | | |
| Cash flows from investing activities: | | | |
| Purchase of investments | 7 | (441,990) | (496,335) |
| Sale of investments | 7 | 151,547 | - |
| Net cash (outflow) from investing activities | | (290,443) | (496,335) |
|
| | | |
| Cash flows from financing activities: | | | |
| Proceeds from issue of ordinary shares | | 399,000 | 475,000 |
| Interest expense | | 7,978 | - |
| Ordinary share issue costs | | (17,000) | (23,750) |
| Net cash inflow from financing activities | | 389,978 | 451,250 |
|
| | | |
| Net change in cash and cash equivalents | | 38,823 | (198,780) |
| Cash and cash equivalents at the beginning of the period | | 36,697 | 282,178 |
| Net cash and cash equivalents |
| 75,520 | 83,398 |
The accompanying notes on pages 20 to 22 form part of these condensed interim financial statements.
Notes to the Condensed Interim Financial Statements
1) General information
Sure Ventures plc (the "Company") is a company incorporated in England and Wales (registration number: 10829500) on 21 June 2017 and commencing trading on 19 January 2018 upon listing. The registered office of the Company is International House, 36-38 Cornhill, London, EC3V 3NG, United Kingdom.
The Company is an investment company within the meaning of section 833 of the Companies Act 2006.
The Company operates as an investment trust in accordance with Chapter 4 of Part 24 of the Corporation Tax Act 2010 and the Investment Trust (Approved Company) (Tax) Regulations 2011. In the opinion of the Directors, the Company has conducted its affairs so that it is able to maintain its status as an investment trust. Approval of the Company's application for approval as an investment trust was received from Her Majesty's Revenue and Customs ("HMRC") on 22 November 2018, applicable from the accounting period commencing 1 April 2018.
The Company is an externally managed closed-ended investment company with an unlimited life and has no employees.
The information set out in these unaudited condensed interim financial statements for the period ended 30 September 2023 does not constitute statutory accounts as defined in section 435 of Companies Act 2006. The Statement of Financial Position comparative figures and the comparative figures stated in the notes to the condensed interim financial statements as at 31 March 2023 are derived from the audited financial statements for that year. The financial statements for the year ended 31 March 2023 have been delivered to the Registrar of Companies and contain an unqualified audit report and did not contain a statement under emphasis of matter or statements under section 498(2) or (3) of the Companies Act 2006. The financial statements of the Company for the year ended 31 March 2023 are available upon request from the Company's registered office.
2) Basis of accounting
The financial statements of the Company have been prepared in accordance with UK-adopted international accounting standards in accordance with the requirements of the Companies Act 2006. They do not include all the information required for the full annual financial statements and should be read in conjunction with the annual financial statements of the Company for the year ended 31 March 2023. The principal accounting policies adopted in the preparation of the financial information in these unaudited condensed interim financial statements are unchanged from those used in the Company's financial statements for the year ended 31 March 2023. This report does not itself contain sufficient information to comply with IFRS.
3) Estimates
The preparation of the unaudited condensed interim financial statements requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets and liabilities, income, and expenses. Actual results may differ from these estimates.
In preparing these unaudited condensed interim financial statements, the significant judgement made by management in applying the Company's accounting policies and the key sources of estimation were the same as those that applied to the Company financial statements as at and for the year ended 31 March 2023.
4) Financial risk management
The Company's financial risk management objectives and policies are consistent with those disclosed in the Company's financial statements as at and for the year ended 31 March 2023.
5) Taxation
As an investment trust the Company is exempt from corporation tax on capital gains. The Company's revenue income is subject to tax, but offset by any interest distribution paid, which has the effect of reducing that corporation tax to nil. This means the interest distribution may be taxable in the hands of the Company's shareholders.
6) Earnings per Share
| For the six months period ended 30 September 2023 | Revenue | Capital | Total |
| Earnings per ordinary share | (2.66p) | (3.22p) | (5.88p) |
| For the financial year ended 31 March 2023 | |||
| Earnings per ordinary share | (5.14p) | (1.56p) | (6.70p) |
The calculation of the above is based on revenue returns of (£181,746) (31 March 2023: (£329,390)), capital returns of (£219,677) (31 March 2023: (£100,248)) and total returns of (£401,423) (31 March 2023: (£427,988)) and weighted average number of ordinary shares of 6,825,287 (31 March 2023: 6,413,341) as at 30 September 2023.
7) INVESTMENTS AT FAIR VALUE THROUGH PROFIT OR LOSS
| | As at 30 September 2023 £ | As at 31 March 2023 £ |
| Opening cost | | |
| Opening fair value | 8,196,153 | 7,516,667 |
|
| |
|
| Purchases at cost | 441,990 | 779,734 |
| Sales | (151,547) | - |
| Realised loss | (83,570) | - |
| Unrealised loss | (56,154) | (304,393) |
| Unrealised (loss)/gain on foreign exchange | (79,953) | 204,145 |
| Closing fair value | 8,266,919 | 8,196,153 |
8) Ordinary Share Capital
The table below details the issued share capital of the Company as at the date of the Financial Statements.
| Issued and allotted |
30 September 2023
|
2023
| Ordinary Share Capital 30 September 2023 £ | Ordinary Share Capital 31 March 2023 £ |
| Ordinary shares of 1 penny each | 7,051,600 | 6,646,472 | 70,515 | 66,464 |
On incorporation, the issued share capital of the Company was £0.01 represented by one ordinary share of £0.01. Redeemable preference shares of 50,000 were also issued with a nominal value of £1 each, of which 25% were paid. The redeemable shares were issued to enable the Company to obtain a certificate of entitlement to conduct business and to borrow under section 761 of the Companies Act 2006. The redeemable shares were redeemed on listing from the proceeds of the issue of the new ordinary shares upon admission on 19 January 2018.
The following table details the subscription activity for the period ended 30 September 2023.
| | 30 September 2023 | 31 March 2023 |
| Opening balance as at 1 April | 6,646,472 | 6,013,225 |
| Ordinary shares issued | 405,128 | 633,247 |
| Closing balance as at period/year end | 7,051,600 | 6,646,472 |
During the period ended 30 September 2023, there was £1,000 subscription receivable (31 March 2023: all proceeds from this issue were received).
9) Related Party Transactions and Transactions with the Manager
Directors - There were no contracts subsisting during or at the end of the period in which a Director of the Company is or was interested in and which are or were significant in relation to the Company's business. There were no other transactions during the period with the Directors of the Company. The Directors do not hold any ordinary shares of the Company.
As at 30 September 2023, there was £1,292 (31 March 2023: £1,239) payable to HMRC for the taxes on the Directors' fees and expenses.
Manager - Shard Capital AIFM LLP (the "Manager"), a UK-based company authorised and regulated by the Financial Conduct Authority, has been appointed as the Company's manager and authorised investment fund manager for the purposes of the Alternative Investment Fund Managers Directive. Details of the services provided by the Manager and the fees paid are given in the Prospectus dated 17 November 2017.
During the period the Company incurred £74,456 (30 September 2022; £50,628) of management fees and as at
30 September 2023, there was £25,000 (31 March 2023: £12,500) payable to the Manager. During the period the Company received a rebate of £49,456 (30 September 2022; £50,694) on management fees.
During the period the Company paid £27,000 (30 September 2022: £23,750) of placement fees to Shard Capital Partners LLP (the "Placing Agent").
During the period the Company paid £3,280 (30 September 2022: £6,110) (excluding VAT) of corporate broking retainer fees to the Placing Agent.
The Company has an investment in Sure Valley Ventures Fund, the sub-fund of Suir Valley Funds ICAV and Sure Valley Ventures Enterprises Capital LP, amounting to £7,212,710 and £255,931 as at 30 September 2023 (31 March 2023: £7,139,802 and £121,367) respectively. These funds are also managed by the Manager.
Capital call payable as at 30 September 2023 of £117,500 (31 March 2023: £Nil) relates to the Sure Valley Ventures Enterprises Capital LP capital call on 21 September 2023.
10) SubsequENT EVENTS
There were no subsequent events which would require disclosure in the financial statements.
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