MOBEUS INCOME & GROWTH 4 VCT PLC

LEI: 213800IFNJ65R8AQW943

UNAUDITED HALF-YEAR RESULTS FOR THE SIX MONTHS TO 30 JUNE 2021

Mobeus Income & Growth 4 VCT plc ("the Company") today announces its Half-Year results for the six months to 30 June 2021.

You may, in due course, view the Half-Year Report, comprising the Unaudited Condensed Financial Statements of the Company by visiting www.mig4vct.co.uk.

Financial Highlights

As at 30 June 2021:

Net assets: £87.32 million

Net asset value ("NAV") per share: 104.76 pence

Results for the six months to 30 June 2021:

·    Net asset value ("NAV") total return¹ per share was 28.5%.

·    Share price total return¹ per share was 34.1%.

·    The Board declared an interim dividend in respect of the current year of 5.00 pence per share, paid to Shareholders on 6 August 2021. Payment of this dividend has increased cumulative dividends paid¹ since inception to 139.20 pence per share.

·    The Company made four new investments totalling £2.53 million and five follow-on investments totalling £1.30 million.

·    £18.81 million of unrealised gains were achieved for the six months from strong portfolio performance.

·    The Company realised investments totalling £5.42 million of cash proceeds and generated net realised gains of £1.14 million for the six months.

¹  Definitions of key terms and alternative performance measures ("APMs") / Key performance indicators ("KPIs") shown above and throughout this Report are shown in the Glossary of terms within the Half-Year Report. 

PERFORMANCE SUMMARY

The longer-term trend of performance based upon cumulative total return per share (NAV basis) is shown in the chart below:-

¹  These figures exclude the impact of a 5.00 pence per share dividend paid after the period-end on 6 August 2021. Payment of this dividend will reduce the Company's NAV per share and increase cumulative dividends paid to date by 5.00 pence per share.

The chart above shows the recent past performance of the original funds raised in 1999.  The original subscription price was 200p per share before the benefit of income tax relief. Subscription prices from subsequent fundraisings and historic performance data from 2008 are shown in the Investor Performance Appendix at 30 June 2021 on the Company's website at: www.mig4vct.co.uk where they can be accessed by clicking on the word "table" under "Reviewing the performance of your investment" heading on the home page.

On 1 August 2006, Mobeus became sole Investment Adviser to the Company. The cumulative NAV total return at this date was 122.51 pence.

Chairman's Statement

I am pleased to present the Company's Half-Year Report for the six months to 30 June 2021.

Overview

The first six months of the Company's financial year have shown strong performance for Shareholders with a NAV total return per share of 28.5% for the period.

In the Company's Annual Report for the year ended 31 December 2020, I reported on the resilience of the portfolio and the Company's robust recovery from the initial shock of COVID-19. I am pleased to say that this momentum has been sustained into the new financial year with a period of unprecedented value growth, driven by strong trading performances across the portfolio coupled with a number of landmark transactions for the VCT.

This performance, despite initial teething issues following Brexit, is very encouraging. However, some indirect effects of COVID-19 are starting to be felt by portfolio businesses, for example, in the emergence of a broad range of supply-side shortages, from cardboard packaging through to electronic components and freight space. As restrictions are being further eased, there does remain much uncertainty around these secondary and potentially longer-term effects of the pandemic which will demand continued close monitoring. Nevertheless, most of the investee companies in the portfolio have thus far proven their ability to adapt well in a rapidly changing environment and have avoided any significant direct impact from COVID-19. Your Board has been encouraged by their adeptness in facing challenges by swiftly identifying new opportunities and capitalising on them. In particular, favourable trading conditions continue for a number of technology-related companies in the portfolio, particularly those businesses operating direct-to-consumer models.

During the period under review and despite considerable COVID-19 related restrictions, M&A activity has remained buoyant and the Investment Adviser continues to see a healthy deal flow. The Company added four new investments to its portfolio, deployed follow-on funding into five existing portfolio companies and supported the successful admission to AIM of a further two of its investments.

Finally, I would like to draw Shareholder's attention to a positive development in respect of the Company's Investment Adviser, Mobeus Equity Partners LLP. Please refer to 'Change in management arrangements' later in my Statement.

Performance

The Company's NAV total return per share was 28.5% for the six months to 30 June 2021 (2020: fall of (0.4)%), and the share price total return was 34.1% (2020: a fall of (5.7)%). This represents an exceptional uplift for the period and contrasts markedly with that recorded through the height of the COVID-19 pandemic for the same period last year.

The positive NAV total return for the period was principally the result of significant unrealised gains in the value of investments still held, as well as realised gains achieved via partial realisations of several portfolio companies.

The valuations at the half-year point reflect the continued beneficial impact of changes in UK consumer and business behaviour, brought on by the pandemic and lockdown restrictions. In the case of two direct-to-consumer portfolio companies, whose shares were admitted to public trading on AIM in March 2021, the Company has benefited from the market's recognition of this rapidly developing channel, evidenced in the substantial investor appetite for the offers of shares. Nonetheless, the Board remains vigilant in monitoring the economic uncertainty and increased concentration of risk associated with holding a significant portion of the portfolio's value in a small number of public market investments, which accounted for 14.8% of NAV at 30 June 2021.

At the period-end, the Company was ranked 7th out of 30 Generalist VCTs over ten years and 5th out of 39 over five years, in the Association of Investment Companies' analysis of NAV Cumulative Total Return. Shareholders should note that these figures do not reflect the increased NAV at 31 March 2021, disclosed in this Report.

Investment portfolio

The portfolio has performed very strongly in the first six months of the Company's financial year. The overall value increased by £19.95 million (2020: fall of £(0.47) million), or 47.9% (2020: fall of (1.2)%) on a like-for-like basis, compared to the start of the year. This increase comprised a net unrealised uplift in portfolio valuations of £18.81 million, and £1.14 million in net realised gains over the period. The portfolio was valued at £60.04 million at the period-end (31 December 2020: £41.68 million).

Two notable events supported unrealised returns for Shareholders during the period. The flotation of both Virgin Wines and Parsley Box on the AIM market in March 2021 resulted in significant uplifts in valuation. As part of the Virgin Wines transaction, the Company received repayment of its remaining loan stock, leaving Virgin Wines ungeared. As part of the IPO of Parsley Box, the Company realised part of its equity holding, securing a 4.0x return on the cost of the shares sold. There were further substantial valuation increases from MyTutor, MPB and Vian Marketing (trading as Red Paddle), partially offset by valuation falls at Andersen EV and Kudos Innovations. Although a minority of portfolio companies have been disadvantaged by the COVID-19 pandemic, principally as a result of staff shortages, closure of retail sites and interrupted supplies, these factors have only had a modest impact on overall shareholder returns.

Within the net realised gains, the principal contributors were the partial exits of Parsley Box (£0.54 million) and MPB (£0.41 million) as well as the full exit of Omega Diagnostics (£0.16 million), the latter having secured a multiple of original cost over the life of the investment of 5.9x. Proceeds generated from these gains, combined with loan repayments and other capital receipts, totalled £5.42 million received by the Company in the period.

During the six months under review, the Company invested a total of £2.53 million into four new investments: an AI and Urban Traffic Control system (Vivacity Labs), a provider of UK leisure and experience breaks (Caledonian Leisure), an SaaS LegalTech software business (Legatics) and a veterinary clinics and pet food provider (Vet's Klinic).

In addition, five follow-on investments totalling £1.30 million were made into: a provider of ambient ready meals targeting the over 60s (Parsley Box), a hair colourants brand (Bleach London), a regulatory and reporting requirement service provider (Arkk Consulting), a Spanish restaurant chain (Tapas Revolution) and a premium frozen raw dog food provider (Bella & Duke). We expect follow-on investments to continue to be a feature of these growth capital situations as they seek to achieve scale.

Since the period-end, the Company has also made one follow-on investment of £0.70 million into a digital tutoring marketplace (MyTutor); The business has exhibited strong growth as screen-based educational tools become integrated into schools' delivery of lessons to pupils.

In the following days, the Company sold part of its original equity holding in MyTutor to a strategic investor generating a £0.51 million realised gain for the Company over the original cost of the equity shares sold. In isolation, the impact of this partial sale is a 0.10 pence uplift in NAV per share compared to the 30 June 2021 NAV per share contained within this Half Year Report.

Details of this investment activity and the performance of the portfolio are contained in the Investment Adviser's Review and the Investment Portfolio Summary below.

Revenue account

The results for the period are set out in the Unaudited Condensed Income Statement on pages 16 and 17 of the Half-Year Report and show a revenue return (after tax) of 0.11 pence per share (2020: 1.28 pence per share). The revenue return for the period of £0.09 million has decreased from last year's comparable figure of £1.06 million. This is mainly due to significant investment income received on the disposal of Auction Technology Group which inflated the prior year's figure. Shareholders should note that medium term income returns are expected to be lower than in prior years as the portfolio evolves to comprise a higher proportion of younger growth capital investments which are less likely to provide income to the VCT until they have achieved significant scale and/or are sold.

Dividends

The Board was pleased to declare an Interim dividend of 5.00 pence per share on 30 June 2021 in respect of the current financial year. This dividend was paid on 6 August 2021, to Shareholders on the Register on 9 July 2021, and has brought cumulative dividends paid per share since inception to 139.20 pence per share.

Following the payment of this recent dividend, the Company has now met or exceeded the Board's dividend target of paying at least 4.00 pence per share in respect of each financial year in each of the last eleven years. While the Board has not changed the dividend target, ordinary dividend payments are more likely to be volatile and, at least over the medium-term, may be lower than have been paid in the recent past. The continued move of the portfolio to growth capital investments may make the target more difficult to achieve in future financial years without recourse to the Company's reserves. Shareholders should note that the majority of the NAV total return for the current year to date relates to the unrealised gains of the portfolio, which are not yet distributable.

To the extent that the Company is required to pay dividends in order to maintain its regulatory status as a VCT, for example, to stay above the minimum percentage of assets required to be held in qualifying investments, such dividends may cause the Company's NAV per share to reduce by a corresponding amount.

Dividend Investment Scheme

The Company's Dividend Investment Scheme ("DIS") provides Shareholders with the opportunity to reinvest their cash dividends into new shares in the Company at the latest published NAV per share. New VCT shares attract the same tax reliefs as shares purchased through an Offer for Subscription. As part of the 5.00 pence per share dividend paid on 6 August 2021, 695,052 Ordinary shares were allotted to participants of the DIS at an average price of 92.24 pence per share.

Shareholders wishing to take advantage of the scheme for any future dividends can opt-in to the DIS by completing a mandate form available on the Company's website, under the 'Dividends' heading, at: www.mig4vct.co.uk. An election to participate must be registered at least 15 days prior to a dividend payment. Existing participants may opt-out by contacting Link Group, using their details provided under Shareholder Information on page 28 of the Half-Year Report

Fundraising

The Board, with the Investment Adviser, continues to monitor the Company's liquidity levels and cashflow requirements alongside investment activity, market movements, regulatory obligations and costs. With these in mind and under regular review, the Board considers future fundraising requirements and will notify Shareholders of any intention to raise further funds for the Company through an Offer for Subscription.

Liquidity

Cash and near cash resources held by the Company as at 30 June 2021 amounted to £27.53 million, or 31.5% of net assets. After the period-end, following the payment of a 5.00 pence per share dividend, the pro-forma level of liquidity will be £24.00 million (28.6% of net assets)

Share buy-backs

During the six months ended 30 June  2021, the Company bought back and cancelled 649,944 of its own shares, representing 0.8% (2020: 1.2%) of the shares in issue at the beginning of the period, at a total cost of £0.60 million (2020: £0.42 million), inclusive of expenses.

It is the Company's policy to cancel all shares bought back in this way. The Board regularly reviews its buyback policy, where its priority is to act prudently and in the interest of remaining Shareholders, whilst considering other factors, such as levels of liquidity and reserves, market conditions and applicable law and regulations. Under this policy, the Company seeks to maintain the discount at which the Company's shares trade at no more than 5% below the latest published NAV.

Shareholder communications

May I remind you that the Company has its own website which is available at:  www.mig4vct.co.uk

The Investment Adviser last held its annual Shareholder Event on behalf of all Mobeus-advised VCTs in early 2020. Last year's event was well received and the Investment Adviser plans to hold an event later in 2021. Further details will be circulated to Shareholders and shown on the Company's website in due course.

Fraud Warning

We have been made aware of an increase in the number of Shareholders being contacted in connection with sophisticated but fraudulent financial scams which purport to come from the Company or to be authorised by it. This is often by a phone call or an email usually originating from outside of the UK, claiming or appearing to be from a corporate finance firm offering to buy your shares at an inflated price.

The Board strongly recommends Shareholders take time to read the Company's Fraud warning section, including details of who to contact, contained within the Information for Shareholders section in the Half-Year Report. 

Environmental, Social and Governance ("ESG")

Whilst the requirements under company law to detail ESG matters are not applicable to the Company at the current time, the Board is conscious of the Company's potential impact on the environment as well as its social and corporate governance responsibilities. The Investment Adviser has presented its ESG strategy to the Board and is providing regular updates regarding ESG developments.

Your Board would like to assure Shareholders that ESG matters form a key consideration in investment decisions. The future FCA reporting requirements consistent with the Task Force on Climate-related Financial Disclosures commencing from 1 January 2021 do not currently apply to the Company although will be kept under review in light of any recommended changes.

Change of management arrangements

Shareholders will have received a letter or email explaining that the Investment Adviser for the Company, Mobeus Equity Partners LLP ("Mobeus") has agreed to a sale of its VCT and investment management business to a subsidiary of Gresham House plc. The Board, alongside the Boards of the other Mobeus advised VCTs, have agreed to the novation of the investment advisory arrangements from Mobeus to Gresham House. Gresham House is a fast-growing specialist fund group with a long-term commitment to the VCT Industry and is the existing investment manager of the two Baronsmead VCTs. The entire core management, investment and operational teams involved with the Mobeus-advised VCTs will all transfer to Gresham House in connection with this transaction to form a significantly enlarged team. This integration will create one of the largest teams in the sector with the coverage, experience and contacts to access more and higher quality investment opportunities. The Board is confident that the team will continue to build the Company's portfolio and enhance their value. The Board considers that this change is in the interests of Shareholders and looks forward to working with Gresham House to achieve a continued strong investment performance for the Mobeus-advised VCTs. The Board can confirm that no material changes are being made to the investment advisory arrangements. Shareholders can also be assured that the Boards' track record of governance and independence will be maintained. For further details, please refer to the Company's website, under 'Shareholder literature' at www.mig4vct.co.uk.

Outlook

Both the direct and indirect impacts of COVID-19 have been, and will continue to be, wide reaching. Nevertheless, your Board considers that your Company is well positioned to continue to respond and adapt in most likely scenarios that can presently be foreseen. The strong liquidity arising from successful realisations and previous fundraisings underpins the Company's ability not only to support the existing portfolio, but also to capitalise on opportunities which may arise for new investment. Activity has been positive in the first six months of the year and the Board is confident in the Investment Adviser's ability to identify attractive new potential investments.

COVID-19 uncertainties and, in particular, the emerging supply-side concerns may cause continuing instability and fuel inflationary pressures going forward. UK and European businesses will also continue to operate in an uncertain trading environment for the near future as the new UK/EU trade agreement beds down. However, the Companies in the portfolio prepared for a considerable time for the impact of Brexit and those preparations appear to be working well. Although there are signs that the UK's successful vaccination programme is beginning to bear fruit, there remains a risk of potential future restrictions. Notwithstanding these uncertainties, both the Investment Adviser and portfolio companies remain well positioned to not only respond but to prosper in the future.

I would like to take this opportunity once again to thank all Shareholders for their continued support.

Jonathan Cartwright

Chairman

15 September 2021

Investment Policy

The investment policy is designed to meet the Company's objective.

Investments

The Company invests primarily in a diverse portfolio of UK unquoted companies. Investments are made selectively across a number of sectors, principally in established companies. Investments are usually structured as part loan stock and part equity in order to produce a regular income stream and to generate capital gains from realisations.

There are a number of conditions within the VCT legislation which need to be met by the Company and which may change from time to time. The Company will seek to make investments in accordance with the requirements of prevailing VCT legislation.

Asset allocation and risk diversification policies, including the size and type of investments the Company makes, are determined in part by the requirements of prevailing VCT legislation. No single investment may represent more than 15% (by VCT tax value) of the Company's total investments at the date of investment.

Liquidity

The Company's cash and liquid funds are held in a portfolio of readily realisable interest bearing investments, deposit and current accounts, of varying maturities, subject to the overriding criterion that the risk of loss of capital be minimised.

Borrowing

The Company's Articles of Association permit borrowings of amounts up to 10% of the adjusted capital and reserves (as defined therein). However, the Company has never borrowed and the Board would only consider doing so in exceptional circumstances.

Investment Review

Portfolio review

More than one year on from a low point in March 2020 marked by value reductions and market volatility, it is apparent that the overall portfolio has adapted well and generally remains robust. Having recovered from the COVID-19 related decline by the start of 2021, and with the economic uncertainty now dissipating to some extent, the portfolio has returned to a more positive trajectory.

It should be noted that, whilst markets helped deliver a buoyant recovery in 2020, the main driver of value growth in 2021 has been a continuation of strong underlying trading performance across the portfolio. This has been bolstered by a small number of significant re-ratings resulting from flotations or sizeable fundraisings during the period.

Whilst there have been a few portfolio companies which have experienced disruption as a result of the UK lockdowns, a significant proportion have actually benefited from a structural change in consumer purchasing habits and are now trading above their pre COVID-19 levels.

Overall, the majority of the portfolio has demonstrated a high degree of resilience, with over 90% of companies by number showing revenue and/or earnings progression over the previous two years. Investments classified as Retailers now comprise over 51% of the portfolio by value, all of which demonstrating the success of the direct-to-consumer business model, with only one retaining any physical presence at all. In the case of both Virgin Wines UK PLC and Parsley Box Group PLC, this strong performance led to successful AIM flotations in March 2021.

Whilst the portfolio has limited exposure to more challenging sectors such as hospitality and travel, software and other technology-enabled businesses have performed strongly, with both MPB and Bella & Duke attracting sizeable equity investments from third party equity investors in further funding rounds. A small number of companies have struggled, though they are in the minority and their impact on overall shareholder return is minimal. Furthermore, some of these companies, such as Media Business Insight and RDL, have seen a recent uplift in business which suggests a potentially more positive outlook, though it is still early days in their recovery.

Whilst the exposure to Retailers is very well diversified across the most attractive business models, it is noted that 21.6% of the invested portfolio value is now concentrated in the two recently AIM-listed investments. The AIM market has witnessed some volatility as of late, though the Company's investments retain their strong position and Mobeus remains confident in their prospects. In line with market practice, in both cases the Company's shareholdings are subject to lock-up arrangements for a period post-flotation which is normal for a transaction of this type.

Strong trading activity levels have created investment opportunities for the Company as portfolio companies sought to enhance their positions by building capability in light of demand. A number of further investments were therefore made into the portfolio during the period. Mobeus continues to review the opportunities for follow-on investments and is in a good position to capitalise on these due to the Company's strong liquidity. M&A sentiment also remained buoyant with a continuing stream of attractive realisations throughout the period. The outlook for both follow-on investment and realisations continues to be positive.

The Company made investments totalling £3.83 million (2020: £1.96 million), comprising £2.53 million (2020: £0.81 million) into four new investments and £1.30 million (2020: £1.15 million) into five existing investments. This level of new and follow-on investment is pleasing given the continued uncertainty and lockdown restrictions over the period under review.

It is reassuring to see that the traditional investments, as well as the growth investments, are continuing to make good progress overall. A strong track record for the growth investments is now emerging which validates the strategic change arising from the change in VCT rules in 2015.

The portfolio's valuation changes in the six-month period to 30 June are summarised as follows:

The portfolio movements in the same period are summarised as follows:

New investments during the period

The Company made four new investments totalling £2.53 million during the period, as detailed below:

Follow-on investments during the period

The Company made further investments into five existing portfolio companies in the period, totalling £1.30 million, as detailed below:

Portfolio valuation movements

The portfolio generated significant net unrealised gains of £18.81 million in the first half of its financial year. The scale of the valuation increases was underpinned by the Company's growth portfolio, many of which have direct-to-consumer business models which, as mentioned previously, have thrived in the remote working conditions necessitated by COVID-19. Although some normalisation is anticipated, Mobeus believes that this has accelerated an existing trend and, in many cases, companies have now moved to a higher operating base. Over this period, some older style MBO portfolio companies with similar business practices have also benefited. A few companies have struggled in this environment, and while there remains a possibility such businesses could fail, their value has already been reduced to modest levels, reducing the risk to shareholder value.

Total valuation increases were £19.12 million. The main valuation increases were:

Virgin Wines, My Tutor, MPB and Vian Marketing (trading as Red Paddle) have generated record revenues and earnings over the lockdown periods and beyond. They have all significantly increased their customer base and each have strong growth prospects.

Total valuation decreases were £(0.31) million.  The main valuation decreases were:

Andersen EV has been operating in a fast-developing industry beset with regulatory hurdles that have challenged its progress over the period, whilst Kudos Innovations has been impacted by contract delays.

The majority of the increase in portfolio value lies in the top ten companies which represent nearly 70% of the portfolio by value. Year-on-year growth by either revenues or earnings has been seen in all of the top ten companies and it is pleasing to note that seven of these are from the younger, growth portfolio made after the VCT rule change in 2015.

Realisations during the period

The Company realised its remaining investment in Omega Diagnostics plc during the period, as detailed below:

Loan stock repayments and other gains/(losses) in the period

During the Half-Year and following the admission of its shares to AIM, the Company received £1.25 million from the partial realisation of its holding in Parsley Box, generating a realised gain of £0.54 million. Over the two years to date that this investment has been held, this partial sale generated a multiple of cost of 4.0x on the cost of the shares sold. The Company also received £1.26 million from the partial realisation of MPB Group, generating a realised gain of £0.41 million. This partial realisation generated a 7.8x multiple of cost on the cost of the shares sold and was the result of a large private equity investor taking a sizeable equity investment in the company.

Proceeds of £2.46 million were received via loan repayments from Virgin Wines, MPB Group, Vian Marketing (trading as Red Paddle) and BG Training. Finally, deferred proceeds totalling £0.09 million in realised gains were received in respect of the realisation of investments in Blaze Signs and Vectair, in a previous year.  A small realised loss of £(0.06) million was also recognised in respect of transaction costs for Virgin Wines due to stamp duty paid upon the listing of shares to AIM.

Further investments made after the period-end

The Company made one further investment into the existing portfolio, after the period-end, as detailed below:

Following the period-end, the Company sold part of its original equity investment made in 2017 to a large strategic investor generating a £0.51 million realised gain compared to an original equity investment cost of £0.19 million.

Environmental, Social, Governance considerations

The Investment Adviser believes that the consideration of environmental, social and corporate governance ("ESG") factors throughout the investment cycle will contribute towards enhanced Shareholder value. This position is fully endorsed by the VCT board.

When seeking new investment opportunities, it operates with a list of exclusions which preclude it from investing in any businesses operating in areas perceived to be unsustainable or detrimental to wider society, or any businesses that have committed purposeful breaches of regulation or have engaged in unlawful activity.  Once identified, each potential new investment is then subject to a comprehensive due diligence process that encompasses commercial, financial and ESG principles. This process helps in the formulation and agreement of strategic objectives at the stage of business planning and investment. The Investment Adviser then continues to work closely with each portfolio company board to support them in addressing their particular ESG challenges and opportunities, which are diverse across the entire portfolio.

Mobeus Equity Partners LLP is a signatory of the United Nations Principles of Responsible Investment

("PRI"), considered to be the world's leading proponent of responsible investing. As a signatory, it must report to the PRI on an annual basis and is held accountable to worldwide ESG standards. As such, the Investment Adviser continues to develop its policies and procedures with the professional advice of specialist ESG consultants and reports on the development of this ESG framework to the Board on a regular basis.

Change of management arrangements

As Shareholders' may be aware, Mobeus has recently agreed to a sale of its investment advisory business to Gresham House. The entire investment and operations team at Mobeus will be joining Gresham House with the integration forming one of the largest and most experienced teams in the VCT sector. This substantial scale should enable the investment team to compete effectively amid rising demand for early-stage growth capital and target enhanced returns for shareholders. The existing team at Gresham House is culturally aligned with Mobeus and has similar investment philosophies. It is expected that this combined investment team will be a major force in the supply of capital to the VCT sector and it is expected that the team's enhanced market position should attract strong deal flow in order to produce attractive investment returns.

Outlook

The growth strategy implemented in 2015 is clearly showing signs of bearing fruit with many companies beginning to achieve significant scale and attract the interest of public markets and larger secondary investors. The portfolio is in a healthy position with many companies trading well throughout the COVID-19 related lockdowns, and several at record levels. It continues to evolve, offering a balance of fast-growing investments at various stages of maturity and scale across a range of diverse market sectors. There is a significant exposure to businesses operating a direct-to-consumer business model which has underpinned performance during the period. This also gives confidence about the future strength of the portfolio and its ability to cope with the challenges and opportunities associated with Brexit, the macro-economic outlook and the ongoing impact of COVID-19. The new investment pipeline is recovering to levels seen pre-COVID-19 and the prospects for capital deployment are encouraging. 

There have been some strong portfolio uplifts underpinned by some large equity transactions, flotations and trading. The exceptional performance experienced since the impact of COVID-19 in March 2020, is likely to moderate over the next 12 months as the level of activity normalises.  There remains much uncertainty around the wider impact of the pandemic on the economy going forward.  However, the portfolio is in a robust shape and the investment activity levels are promising. Mobeus is therefore cautiously optimistic for the future.

Mobeus Equity Partners LLP

Investment Adviser

15 September 2021

INVESTMENT PORTFOLIO SUMMARY as at 30 June 2021

Statement of the Directors' Responsibilities 

Responsibility statements

In accordance with Disclosure and Transparency Rule (DTR) 4.2.10, Jonathan Cartwright (Chairman), Graham Paterson (Chairman of the Audit Committee and Nomination and Remuneration Committee), Helen Sinclair (Chairman of the Investment Committee) and Christopher Burke, being the Directors of the Company confirm that to the best of their knowledge:

a)     the condensed set of financial statements, which has been prepared in accordance with Financial Reporting Standard 104 "Interim Financial Reporting" gives a true and fair view of the assets, liabilities, financial position and profit of the Company, as required by DTR 4.2.10;

b)    the Half-Year Management Report which comprises the Chairman's Statement, Investment Policy, Investment Review and the Investment Portfolio Summary includes a fair review of the information required by DTR 4.2.7, being an indication of the important events that have occurred during the first six months of the financial year and their impact on the condensed set of financial statements;

c)     a description of the principal risks and uncertainties facing the Company for the remaining six months is set out below, in accordance with DTR 4.2.7; and

d)    there were no related party transactions in the first six months of the current financial year that are required to be disclosed, in accordance with DTR 4.2.8.

Principal risks and uncertainties

In accordance with DTR 4.2.7, the Board confirms that the principal risks and uncertainties facing the Company have not materially changed from those identified in the Annual Report and Financial Statements for the year ended 31 December 2020 ("the Annual Report") and are not expected to change ahead of the year-end.

The principal risks faced by the Company are:

·      Loss of approval as a Venture Capital Trust;

·      economic and political risk;

·      investment risk;

·      regulatory risk;

·      financial and operating risk;

·      market risk;

·      asset liquidity risk; and

·      environmental, social and governance risk.

A detailed explanation of the principal risks can be found in the Annual Report on page 31 and 32, and in Note 15 on pages 69 to 76 of the Annual Report and Financial Statements for the year ended 31 December 2020, copies of which are available on the Investment Adviser's website, www.mobeus.co.uk or by going directly to the VCT's website,  www.mig4vct.co.uk.

Going concern

The Board has assessed the Company's operation as a going concern. The Company's business activities, together with the factors likely to affect its future development, performance and position are set out in the Half-Year Management Report. The Directors have satisfied themselves that the Company continues to maintain a significant cash position and is adequate for the Company to continue to operate as a going concern under any plausible stress scenario. The majority of companies in the portfolio continue to trade well and the portfolio taken as a whole remains resilient and well-diversified. The major cash outflows of the Company (namely investments, buybacks and dividends) are within the Company's control.

The Board's assessment of liquidity risk and details of the Company's policies for managing its financial risks and capital are shown in Note 15 on pages 69 to 76 of the Annual Report and Financial Statements for the year ended 31 December 2020. Accordingly, the Directors continue to adopt the going concern basis of accounting in preparing the half-year report and annual financial statements.

Cautionary statement

This report may contain forward looking statements with regards to the financial condition and results of the Company, which are made in the light of current economic and business circumstances. Nothing in this report should be construed as a profit forecast.

For and on behalf of the Board:

Jonathan Cartwright

Chairman

15 September 2021

UNAUDITED CONDENSED FINANCIAL STATEMENTS

Unaudited Condensed Income Statement for the six months to 30 June 2021