The information contained in this announcement is restricted and is not for publication, release or distribution in the United States of America, any member state of the European Economic Area, Canada, Australia, Japan or the Republic of South Africa.

This announcement contains inside information.

29 August 2023

Literacy Capital plc ("Literacy" or the "Company")

Sale of major holding at significant premium, raising substantial cash for the Company

Transaction highlights

·    Sale of another of Literacy's largest assets at >50% premium to carrying value

·    Literacy sells its entire interest in the business, receiving more than £20m in cash

·    £7.6m uplift to the asset's 31 March 2023 carrying value, increasing NAV per share by 2.6% to 480.0p

·    The sale delivers a return in excess of 10x for shareholders, with no carried interest payable by Literacy

·    Cash proceeds will be sufficient to repay Literacy's RCF in full and allow for further new investments

Portfolio update

Literacy is pleased to announce that it has sold one of its larger investments in full, generating a strong return for shareholders and a substantial amount of cash, which will ultimately fund future investments.

The transaction at completion will deliver a return for shareholders in excess of 10x the capital invested and valuing Literacy's stake at more than a 50% premium to the 31 March 2023 carrying value.

Following the transaction involving Kernel Global in March 2023 (which delivered a total return of 9.8x to shareholders and a 48.9% premium to carrying value), this is another example of the progress made by a portfolio company and value created since Literacy's investment, as well as prudence in the fund's carrying valuations.

Had the sold asset been valued on 31 March 2023 in line with the valuation in this announcement, the Company's estimated net asset value per share would have been 12.7p per share, or 2.6%, higher at 480.0p (31 March 2023: 467.3p as announced on 27 April 2023).

Literacy intends to use the cash proceeds to fully repay the amounts drawn under its Revolving Credit Facility, before recycling these proceeds into new investments. This represents another highly profitable and successful investment for Literacy, demonstrating the growing maturity and interest from large institutional investors in Literacy's portfolio companies.

Signing and exchange subject to regulatory clearance exchange has taken place, with clearance and completion expected by the end of October. We will provide further information in September, once details of the transaction can be disclosed in full.

Enquiries

For further information, please contact:

About Literacy Capital:

Literacy Capital (BOOK.L) is an investment trust that was launched in 2017 by Paul Pindar and Richard Pindar, before it listed on the London Stock Exchange's main market in June 2021. The Company focuses on opportunities to invest for the long-term in growing private UK businesses where a clear route to creating additional value can be seen. It also has a unique charitable objective to donate 0.9% of annual NAV to charities focused on improving literacy in UK children. £7.1 million has been donated or reserved for donation to charities since the trust's creation in 2017 up until 30 June 2023. For more information, please visit our website: www.literacycapital.com.

Website:

www.literacycapital.com

LEI: 2549006P3DFN5HLFGR54

A copy of this announcement will be available on the Company's website at www.literacycapital.com.