REG - Mercia Asset Mgt PLC - Update on Impression Technologies Limited

Mercia Asset ManagementAnnouncement

30/05/2024 15:30

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RNS Number : 5197Q  Mercia Asset Management PLC  30 May 2024

 RNS   30 May 2024

 

Mercia Asset Management PLC

 

("Mercia", the "Company" or the "Group")

 

Update on Impression Technologies Limited

 

 

Mercia Asset Management PLC (AIM: MERC), the proactive, regionally focused
specialist asset manager with over £1.5 billion of assets under
management, announces that it has made the decision to cease further funding
for one of its direct investments, Impression Technologies Limited ("ITL").

 

Mercia first invested in ITL via its thirds-party funds in 2014 and it became
a balance sheet direct investment in 2015. During the period of Mercia's
investment, ITL developed its novel Hot Form Quench ("HFQ®") technology,
established a low volume manufacturing facility, secured its first production
customers, signed licences with several automotive sub-contractors and
developed its technology to be transferable across industry sectors e.g.
aerospace.

 

However, despite this considerable technological and commercial progress, ITL
has been unable to reach breakeven. As announced on 28 November 2023, Mercia
reduced its direct investment carrying value in its interim results,
reflecting increased uncertainty following a sale process which did not
ultimately succeed. Since that time, ITL has continued to explore options
including further funding or a sale. Ultimately however, no successful new
external funding or a sale of ITL has been achieved. Given that ITL's pathway
to profitability remains highly uncertain, Mercia has also decided to cease
further funding.  It is now anticipated that ITL will enter into an
insolvency process in the near future.

 

Mercia will now reduce the carrying value of its investment in ITL as at 31
March 2024 to zero, resulting in a small reduction in the Group's net asset
value per share of c.2 pence, compared with the net asset value per share of
45.3 pence as at 30 September 2023.

 

Dr Mark Payton, CEO of Mercia Asset Management PLC, said: "Mercia's year to 31
March 2024 has demonstrated the variability of venture investing, from the
very successful and profitable sale of the Group's direct investment in
nDreams for £30.2million, to the difficult decision to cease further
investment into Impression Technologies Limited, after a decade of supporting
its management team and its proven HFQ® technology. Despite our full support
and ITL's best efforts, it has failed to reach breakeven or identify a
suitable next-stage investor.

 

"Investment discipline is at the heart of Mercia's investing philosophy and
long-term performance. Therefore, having explored all available options, we
have reached this decision to cease further funding into ITL."

 

This announcement contains inside information for the purposes of Article 7 of
the Market Abuse Regulation (EU) 596/2014 which is part of UK law by virtue of
the European Union (Withdrawal) Act 2018. Upon publication of this
announcement, this inside information is now considered to be in the public
domain.

 

- Ends -

 

For further information, please contact:

 Mercia Asset Management PLC                                 +44 (0)330 223 1430

 Mark Payton, Chief Executive Officer

 Martin Glanfield, Chief Financial Officer

 www.mercia.co.uk (http://www.mercia.co.uk/)

 Canaccord Genuity Limited (NOMAD and Joint Broker)          +44 (0)20 7523 8000
 Simon Bridges, Emma Gabriel

 Singer Capital Markets (Joint Broker)                       +44 (0)20 7496 3000
 Harry Gooden, James Moat

 FTI Consulting                                                       +44 (0)20 3727 1051
 Tom Blackwell, Jenny Boyd
 mercia@fticonsulting.com (mailto:mercia@fticonsulting.com)

 

About Mercia Asset Management PLC

Mercia is a proactive, specialist asset manager focused on supporting regional
SMEs to achieve their growth aspirations. Mercia provides capital across its
four asset classes of venture, private equity, debt and proprietary capital:
the Group's 'Complete Connected Capital'. The Group initially nurtures
businesses via its third-party funds under management, then over time Mercia
can provide further funding to the most promising companies, by deploying
direct investment follow-on capital from its own balance sheet.

 

The Group has a strong UK footprint through its regional offices, university
partnerships and extensive personal networks, providing it with access to
high-quality deal flow.

 

Mercia Asset Management PLC is quoted on AIM with the EPIC "MERC".

 

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