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This announcement contains inside information.

28 February 2025

Literacy Capital plc

Quarterly trading update and NAV announcement for Q4 2024

BOOK continues to recycle capital to maximise returns whilst focusing on and actively managing investments with strong growth potential

Literacy Capital plc ("Literacy", "BOOK" or the "Company"), a listed investment trust primarily focused on investing directly into private businesses based in the UK, today announces its quarterly trading and NAV update for the three months ending 31 December 2024.

Q4 Highlights:

Commenting on the Q4 performance, CEO of BOOK's investment manager, Richard Pindar, said:

"BOOK's NAV performance in the latter part of 2024 was, as mentioned in our Q3 update in October 2024, the first adverse movement since Q1 2020, which was heavily impacted by Covid-19.

The primary impediment to a better NAV return was the adverse movement in carrying value of two larger assets, as first reported in October 2024. Both had previously performed well and contributed very strongly to NAV growth. This reversed in 2024 reflecting the reduced UK business confidence, which by December 2024 was the lowest since July 2020[1].

Some patience will be needed to overcome these challenges and for portfolio companies to recoup the impact of tax rises or policy changes affecting UK businesses. However, our companies are well-led and able to adapt swiftly. This is demonstrated by the resilience of the aggregated earnings growth figures our portfolio companies have generated. Additionally, when trading conditions are weakest, there tends to be more and better new investment opportunities, which bodes well for future NAV uplifts from new investments.

We note BOOK's relative share price weakness during Q4 and early 2025. We believe this is unwarranted and will take action to address this discount if it persists following publication of the FY24 results, which we expect to issue in mid-March 2025."

Net Asset Value

The Company announces that, as at 31 December 2024, the NAV per ordinary share was 492.8 pence.

Inclusive of the post-period end adjusting event as described below, the NAV per share was 499.2 pence, a reduction of 1.1% since 30 September 2024 (Q3 NAV per share: 504.7p).

The above NAV calculation is based on the Company's issued ordinary share capital as at 31 December 2024 of 60,175,000 ordinary shares of £0.001 each. This NAV calculation includes the cost to ordinary shareholders of the 612,500 warrants in issue. This cost is accrued on a straight-line basis over the vesting period of the warrants.

Portfolio company performance

Double digit revenue and earnings growth across BOOK's top ten holdings was achieved in Q4, with earnings growth reaching its highest point in 2024. Most of BOOK's largest holdings traded in line or ahead of budget. The two businesses that saw their valuations decline in Q4 were relatively large holdings (19.3% of NAV on 30 September 2024), which resulted in the overall decline in NAV. Otherwise, the performance of BOOK's largest portfolio companies remained on track.

Velociti and Live Business were the two strongest contributors in Q4 and were marked up as a result of positive trading. Both continue to demonstrate progress and remain strong prospects for 2025.

The improvement in the reported EBITDA growth and margins is encouraging considering how weak recent UK economic data and business confidence was in H2 2024. It also demonstrates the strength of leadership across BOOK's portfolio companies and the ability they have to swiftly implement change to improve trading performance.

BOOK's modest exposure to private equity fund interests continues to reduce as a proportion of NAV, as the funds sell their underlying portfolio companies and return cash to their investors. During Q4, BOOK also completed the sale of one of its fund interests, receiving £2.8m in cash in October 2024 (at an 8.2% premium to its previous carrying value).

Transactions and investments

£9.1m was invested by BOOK in aggregate during Q4. One new platform investment was completed in the quarter, with Literacy taking a significant minority stake in amplify5, a provider of tailored offshoring solutions to large enterprises and SMEs across the UK, Europe and the US. The rest of this capital investment was injected into the existing portfolio. The largest recipients of additional capital were Oxygen, Grayce and our fund interests; which include two of BOOK's top five investments with respect to carrying value.

Cash & liquidity

Cash inflows amounted to £3.0m in Q4. These receipts related to the sale of one of our fund interests (£2.8m) as described above, with the balance (£0.2m) received courtesy of other distributions from third-party fund investments.

Literacy's RCF was £30.1m drawn as at 31 December 2024 (£19.9m drawn on 30 September 2024). During the quarter, the fund extended its committed portion of the facility with OakNorth Bank plc to £35m, on the same three-year term. The overall limit on the facility remains £40m.

The combination of good growth rates and low leverage at a portfolio company level mean that several assets are likely to be refinanced or sold in the next six months, which would generate healthy cash inflows for BOOK.

Post-balance sheet events

During January 2025, Halsbury Travel completed the bolt-on acquisition of two entities. These were two profitable businesses bought from a parent company that had entered administration. This post-period end event is considered to have an impact on NAV that is worthy of adjustment.

As a result, adjusted NAV and NAV per share figures are presented within the Q4 factsheet to include the impact of this event, given completion of the acquisitions took place before the release of this announcement.

Factsheet

The Company's factsheet for the three months to 31 December 2024 is now available on the Company's website: www.literacycapital.com/investors.

-ENDS-

For further information, please contact:

Literacy Capital plc / Book Asset Management LLP

Richard Pindar / Aasha Tailor

+44 (0) 20 3960 0280

MHP Group

Reg Hoare / Ollie Hoare / Matthew Taylor

[email protected]

+44 (0) 7817 458 804 / + 44 (0) 7827 662 831

Singer Capital Markets Securities Limited

Alaina Wong

+44 (0) 20 7496 3000

About Literacy Capital plc

Literacy Capital (BOOK.L) is a closed-end investment company that was co-founded by Paul Pindar and Richard Pindar in 2017 with £54m of capital. Literacy listed on the London Stock Exchange's Main Market in June 2021, before gaining Investment Trust status on 1 April 2022. The Company focuses on opportunities to invest for the long-term in growing private businesses where a clear route to creating additional value can be seen with its support.

It also has a unique charitable objective, to donate 0.5% of annual NAV to charities focused on improving UK literacy in children. £11.2 million has been donated or reserved for donation to charities since the trust's creation in 2017. For more information, please visit our website: www.literacycapital.com.

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

The information contained in this announcement regarding the Company's investments has been provided by the relevant underlying portfolio company and has not been independently verified by the Company. The information contained herein is unaudited.

This announcement is for information purposes only and is not an offer to invest. All investments are subject to risk.  Past performance is no guarantee of future returns.  Prospective investors are advised to seek expert legal, financial, tax and other professional advice before making any investment decision.  The value of investments may fluctuate.  Results achieved in the past are no guarantee of future results. Neither the content of the Company's website, nor the content on any website accessible from hyperlinks on its website for any other website, is incorporated into, or forms part of, this announcement nor, unless previously published by means of a recognised information service, should any such content be relied upon in reaching a decision as to whether or not to acquire, continue to hold, or dispose of, securities in the Company.

LEI: 2549006P3DFN5HLFGR54