REG - Sure Ventures PLC - Interim Report and Financial Statements
05/12/2024 16:45
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RNS Number : 0230P Sure Ventures PLC 05 December 2024
Sure Ventures
plc
Unaudited Interim Report and Financial Statements
For the six months ended 30 September 2024
Company Number: 10829500
Table of Contents
1 (#_Toc529542791) (#_Toc529542791) Chairman's Statement
2 (#_Toc529542793) (#_Toc529542793) Investment Manager's Report6
3 (#_Toc529542793) (#_Toc529542793) Interim Management Report12
4 (#_Toc529542793) (#_Toc529542793) Alternative Performance Measures
("APMs") 4
5 (#_Toc529542795) (#_Toc529542795) Financial Statements 16
Condensed Statement of Comprehensive Income 17-18
Condensed Statement of Financial Position (#_Toc529542797)
Condensed Statement of Changes in Equity (#_Toc529542798)
Condensed Statement of Cash Flows (#_Toc529542799)
Notes to the Condensed Interim Financial Statements2
1 Chairman's Statement
Chairman's Statement
Dear Shareholders,
On behalf of my fellow Directors, I am pleased to present Sure Ventures plc's
interim results for the six months ended 30 September 2024.
FINANCIAL PERFORMANCE
For the six months to 30 September 2024, the Company reported a net asset
value (NAV) total return per share of 67% (30 September 2023: -6.66%),
exceeding expectations. This performance is due largely to the acquisition by
Connecticut-based Infinite Reality of Landvault for US$450m in an all-share
transaction, in which Fund I (as defined below) has a 7% shareholding, and
which represents a 4.7x uplift on the previous valuation of the Company's
investment in Landvault. It is anticipated that Infinite Reality will plan a
listing on Nasdaq based on a reported valuation of US$5.1bn, underpinned by an
all-cash fundraise of US$350m from a private multi-family office, completed at
the time of its purchase of Landvault.
Since the Company's incorporation in 2017, it has created a balanced portfolio
of early-stage technology companies in rapidly evolving sectors of AI, AR/VR,
IoT, and cybersecurity. The Fund I portfolio is now at the realisation stage
the portfolio is performing well, with a many of the companies demonstrating
robust business models and benefitting from healthy revenue streams. This is
expected to provide several more significant uplifts in the coming quarters as
the Company continues to explore all options available to generate liquidity
from these seasoned investments. Fund II is in its investment stage and the
portfolio is performing as expected.
In the UK and Europe, the investment environment continues to be challenging,
especially by contrast to the environment in the US. Many of the AI portfolio
investments continue to show resilience, as this sector remains essential in
any diversified technology-based portfolio. With high global interest rates
and ongoing geopolitical conflicts, AI is the bright spot in an uncertain
global venture capital landscape.
The Fund I portfolio is complete, with no new investments planned. Remaining
capital will be allocated to follow-on rounds for current investee companies.
Conversely, Fund II is in early investment stages, with investments in eight
companies as at the six months ended 30 September 2024, an increase of five
new investments in the six-month period.
As of 30 September 2024, the Company's NAV attributable to shareholders
increased to £10.61m due to a combination of NAV performance and new
subscriptions.
In line with the market trend, the Company's share price trades at a discount
to its last published NAV. However, in June 2024 and August 2024 the Company
validated 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 Fund ICAV ('Fund I') is a substantial part of the Company's investment
strategy. We committed €7m to Fund I, and as of 30 September 2024,
€6,756,616 has been drawn down.
In 2019 the Company invested directly in VividQ Limited, a pioneer of AR/VR
holography. The investment provided an unrealised uplift in May 2021, and
after a discounted follow-on round in January 2024, the Company decided to
reduce its exposure by selling this holding to the ICAV, crystallizing a loss
of £185k.
Since inception, Fund I has invested in a total of seventeen companies in the
AR/VR, AI and IoT space. The first successful exit occurred in 2019 for a 5x
return with the sale of Artomatix. The accelerator programme investment in
NDRC@ARCLabs has expired, the investment in Smarttech247 returned a small,
realised gain and three portfolio investments have been written down to zero
(Buymie, Ambisense and Warducks Limited). A residual holding of a listed
investment remains in the portfolio, leaving ten private investments in the
Fund I portfolio.
PORTFOLIO UPDATE FUND I (continued)
The sale to Infinite Reality of Landvault in July 2024 is a landmark event for
the Company, providing a substantial uplift in the portfolio and the main
driver the NAV increase for the period. It has been reported that Infinite
Reality intends ultimately to list on the Nasdaq, and in the meantime the
Company will continue to explore all possible options to generate liquidity in
this investment.
PORTFOLIO UPDATE FUND II
In March 2022, the Company committed £5m to the Sure Valley Ventures
Enterprise Capital Fund (Fund II), an £85m UK software technology fund. The
fund focuses on AR/VR, the Metaverse, AI, IoT, and cybersecurity, with the
British Business Bank as a cornerstone investor. Fund II aims to invest in up
to 25 software companies.
As of 30 September 2024, Fund II has invested in eight companies, and in the
six-month period to September 2024 new investments were made in; Ittybit, a
Salford-based AI compression developer of APIs and tools; Vortex IQ, a
London-based AI-powered automation platform for e-commerce; Phinxt Robotics, a
Manchester-based AI-driven robotics software company; Stylus Education, a
London-based company developing AI to transform teacher workloads; and Purple
Transform, an Oxford-based data analytics company.
These are in addition to the existing investments in Retinize, a Belfast-based
creative tech company; Jaid, a technology company offering AI-powered
communication solutions; and Captur, a London-based enterprise AI platform for
real-time image recognition.
A total of £904k has been drawn down against the Company's commitment to Fund
II in these eight companies, and the deal pipeline remains healthy.
COMMITMENTS AND FUNDING
In 2019, the Company increased its subscription to Fund I by €2.5m, raising
its total commitment to €7m. This enhanced our share in Fund I to 25.9%,
with approximately €250k remaining to be funded. The Company's £5m
commitment to Fund II is spread over the investment period. The Company
believes it has sufficient access to funding to meet its remaining commitments
to both funds, supported by available cash, liquid investments, anticipated
subscriptions, and access to loans and equity subscription facilities.
INVESTMENT ENVIRONMENT
The Company is pleased with the performance of the remaining investments in
Fund I and their potential for delivering higher valuations and negotiated
exits in the next one to two years. It continues to pursue exits in several of
the key portfolio investments and, if sold, these investments could return
additional, substantial value to the Company's NAV.
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 is encouraging and developing
extremely well.
DIVIDEND
The Company did not declare a dividend for the six-month period ended 30
September 2024 (30 September 2023: £nil). Our dividend policy focuses on
capital growth rather than income. Significant dividends or other income from
its investments are not expected. While annual dividends are not anticipated,
there maybe be potential for one-off dividends at the Directors' discretion if
circumstances and liquidity allow.
GEARING
The Company may use gearing of up to 20% of NAV for liquidity, capital
flexibility, and portfolio management. Primary gearing includes bank
borrowings and may also involve derivatives and other methods as determined by
the Board. As of 30 September 2024, the Company had borrowings of £440,000
drawn from a £1,000,000 loan facility with Shard Merchant Capital Limited.
The Board and Investment Manager regularly review borrowing in line with cash
management and investment strategy.
CAPITAL RAISING
On 10 June 2024, the Company announced a placing of 275,862 ordinary shares on
the Specialist Fund Segment of the London Stock Exchange. A further placing of
315,790 ordinary shares was announced on 5 August 2024. This increased the
Company's total shares in admission to 7,643,252 as of 30 September 2024.
The Investment Manager's Report following this statement provides more details
on the Company's operations and prospects. The Board remains confident in the
Company's long-term prospects and its investment objectives.
OUTLOOK
We are extremely pleased to announce the impressive 67% NAV increase for the
period, following the sale of Landvault to Infinite Reality, who continue to
acquire other immersive, digital media companies. Reporting a $5.1bn valuation
following the US$350m all-cash fundraise completed at the time of the
Landvault purchase, this now makes Infinite Reality the largest, most diverse
holding within the Company's portfolios. The Company remains focussed on
converting this valuation uplift into liquidity, be it through a future IPO or
otherwise, and all available options are being explored by the investment
management team to achieve this. The value creation from this transaction is
another example of the Investment Management team's ability to identify
exciting technology investments at the seed stage, and maximize the incredible
growth potential.
The Company continues to work with other Fund I portfolio companies on exit
strategies that are anticipated in the coming quarters, and we remain
optimistic there will be more positive developments to report by the Company's
financial year end.
Perry Wilson,
Chairman
3 December 2024
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 fund 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 & Ireland.
Artificial Intelligence
The global technology landscape is undergoing a profound transformation, with
Artificial Intelligence (AI) emerging as the driving force behind this
revolution. While Augmented Reality & Virtual Reality (AR/VR), the
Internet of Things (IoT), and Cybersecurity remain important areas of
innovation, their trajectories are increasingly intertwined with the
advancements in AI.
The global artificial intelligence (AI) market size was valued at USD 621.19
billion in 2024 and is projected to grow from USD to USD 2,740.46 billion by
2032, exhibiting a CAGR of 20.4% during the forecast period (2024-2032). This
growth is fueled by the increasing demand for AI-powered solutions across
industries, ranging from healthcare and finance to manufacturing and
entertainment. Artificial Intelligence (AI) is a field focused on creating
intelligent systems that can emulate human cognitive abilities such as
learning, reasoning, problem-solving, and decision-making. AI involves
developing algorithms and computational models capable of processing and
analysing data, recognizing patterns, and providing insights to aid
decision-making processes.
AI holds significant potential for driving innovation and transforming various
industries. By automating repetitive tasks, AI can enhance operational
efficiency and productivity, allowing human resources to be allocated to more
strategic and creative endeavours. Moreover, AI's ability to analyse vast
amounts of data can uncover valuable insights, enabling more informed
decision-making and problem-solving in areas such as healthcare, finance, and
scientific research. AI also presents opportunities for personalized
experiences through understanding individual preferences and behaviours,
leading to tailored products, services, and recommendations. Additionally,
AI-powered intelligent assistants, chatbots, and autonomous systems can
improve accessibility, convenience, and safety in various domains.
The growth of the AI market is being driven by a number of factors, including
the increasing adoption of AI technologies across various industries, the
growing demand for automation and efficiency, and the development of new AI
applications. Additionally, the increasing availability of data and
advancements in computing power are also contributing to the growth of the AI
market.
Recent developments within the AI Space include:
· Models like OpenAI's GPT-4, Google DeepMind's Gemini, and
Anthropic's Claude have continued pushing the boundaries of natural language
understanding and generation. GPT-4 introduced a multimodal version, able to
process both text and images, offering richer interactions and applications.
These large language models excel at various tasks, including summarization,
code generation, and even complex reasoning. OpenAI release GPT-4o: Their
newest flagship model provides GPT-4-level intelligence but is much faster and
improves on its capabilities across text, voice, and vision.
· Tools like DALL-E (image generation from text) and Runway Gen-2
(text-to-video) are reshaping digital content creation. These models allow
users to generate high-quality visuals and videos using simple prompts, making
creativity and design more accessible.
· Concerns over AI's ethical implications-such as bias,
misinformation, and job displacement-have driven new regulatory efforts. The
EU's AI Act, aimed at creating the first comprehensive legal framework for AI,
is moving forward and may set global standards. It categorizes AI applications
by risk level and imposes various restrictions and obligations on developers.
Immersive Technology
The Immersive Technology Market size was valued at USD 40.88 billion in 2024
and is estimated to register a CAGR of over 27.9% between 2025 and 2032, owing
to the diverse application scope of immersive technologies across various
industries.
Immersive technologies find applications across various industries, including
gaming, entertainment, healthcare, education, manufacturing, retail, and real
estate. The versatility of these technologies allows for innovative solutions
in training, simulation, visualization, marketing, design, and customer
engagement. As more industries recognize the potential benefits of immersive
technologies, demand continues to grow.
Continuous advancements in hardware components such as graphics processing
units (GPUs), displays, sensors, and software frameworks have significantly
improved the capabilities and performance of immersive technologies. This
includes developments in rendering techniques, tracking technologies, and
display resolutions, leading to more realistic and immersive experiences. In
2024, key immersive experience trends include the rise of virtual events,
enhanced AR shopping experiences, and the integration of MR in education.
AI in Immersive Technology
The integration of AI in AR & VR is expected to be transformative:
· Enhanced User Experience: AI is set to play a crucial role in
improving the user experience within AR/VR environments. New MR devices like
the Apple Vision Pro and Meta Quest Pro allow seamless blending of digital and
physical worlds, enhancing immersive experiences.
· Advanced Object Recognition: AI can significantly enhance object
recognition capabilities in AR applications, making it easier for these
systems to identify and interact with real-world objects seamlessly.
Internet of Things
The global Internet of Things (IoT) market size was valued at USD 714.48
billion in 2024 and is projected to grow to USD 4,062.34 billion by 2032,
exhibiting a CAGR of 24.3% during the forecast period (2024-2032).
The Internet of Things refers to the network of physical objects that are
inserted with software, sensors, and other mechanisms for exchanging and
connecting data with other systems and devices over the Internet. The Internet
of Things technology operates as a global infrastructure for the information
society, empowering modernized services to connect and communicate things
based on prevailing and evolving communication mechanisms. Also, it delivers
interoperable data and the capability to communicate self-sufficiently without
human intervention.
With rising population and urbanization, several countries globally are
introducing smart city projects and implementing smart city solutions to
accomplish resources. Connected devices, such as sensors, smart meters, and
smart lights, help advance the functions and proficiency of set-up and related
services. The rising number of smart homes and buildings, Industry 4.0, smart
manufacturing, and smart infrastructure developments are projected to generate
a vast transformation in business areas, thereby driving the internet of
things market growth.
Moreover, smart city solutions, such as smart utility meters, smart
transportation, smart waste management, smart grids, and smart air quality
controllers, are being implemented by consumers, thereby elevating the market
potential of connected devices worldwide.
AI in Internet of Things (IoT)
As AI technologies continue to advance, they are expected to play a crucial
role in the development of more sophisticated IoT applications. For example:
· Generative AI can be implemented in Internet of Things solutions
to enhance projecting maintenance. IoT sensors can collect massive amounts of
data regarding machine health and performance that can be used to train
generative AI models to generate synthetic data for upkeep predictive
analysis.
· AI algorithms can process and analyse vast amounts of data
generated by IoT devices, extracting actionable insights and enabling more
intelligent decision-making.
· AI-driven automation can be used to improve the efficiency of IoT
systems.
· AI can predict and identify potential issues in IoT devices
before they become critical, optimizing maintenance schedules and reducing
downtime.
Such applications of AI, along with IoT, can be used across different
industries, such as manufacturing, automotive, healthcare, and others.
Cybersecurity
The global cyber security market size was valued at USD 207.77 billion in 2024
and is projected to reach USD 376.55 billion in 2029, exhibiting a 12.63% CAGR
during the forecast period.
Cybersecurity (continued)
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 organizations. The
key cyber security players are implementing core technologies such as machine
learning, the Internet of Things (IoT), cloud, and Big Data in their business
security units. They are further adopting IoT and machine learning
signature-less security system. This adoption would help the players
understand uncertain activities and trials and identify & detect uncertain
threats.
With the rising growth in the IoT market, IoT solutions are gaining popularity
across various information security applications. Consequently, adopting
advanced technologies in internet security is considered a rapidly emerging
market trend. Moreover, Big Data and cloud technology support enterprises in
learning and exploring potential risks.
Another trend that aids the cyber security industry growth is the increased
adoption of cloud computing. Players in the market, including Cisco Systems,
IBM Corporation, and others, focus on developing advanced cyber security
solutions based on. The rising number of e-commerce platforms and
technological advancements, such as artificial intelligence, cloud, and block
chain, have augmented internet security solutions in a connected network
infrastructure. Additionally, e-commerce companies are focused on adopting
network security solutions in their IT and electronic security systems.
AI in Cyber Security
As cyber threats become increasingly sophisticated, AI is playing a critical
role in bolstering cybersecurity defences. AI-powered systems can analyse
network traffic, detect anomalies, and identify potential threats in
real-time, providing proactive protection against cyberattacks.
The growth of the AI market is also expected to have a significant impact on
the Cyber Security market. As AI technologies continue to advance, they are
expected to play a crucial role in the development of more sophisticated cyber
security systems. For example:
· AI-driven threat detection: AI and machine learning are being
used to detect and respond to cyber threats more efficiently, allowing for
real-time analysis of vast data to identify and mitigate attacks.
· AI-driven behavioural analytics help detect unusual user patterns
that may signal insider threats or unauthorized access, providing enhanced
protection against sophisticated cyber threats.
Conclusion
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 £2 to £8m and get up to 20% of the company for initial investment
amounts of between £0.75m to £1.25m.
· The investment sectors (AI, AR/VR, IoT, 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 build on Europe's existing technology
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 these benefit through
its participation in the Sure Valley Ventures Funds.
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 2024, a total of €6,756,616 had been drawn down against this
commitment.
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 announced it had
entered into a conditional sale and purchase agreement, 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 AIFM 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 2024, Sure
Ventures PLC has sold materially all of its holding in this listed entity,
with only a small residual position remaining.
PORTFOLIO BREAKDOWN (continued)
On 25 February 2022, Sure Ventures PLC committed to invest £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 2024, a
total of £903,670 had been drawn down against this commitment.
As detailed in the Statement of Position included in the following financial
statements, these two Sure Valley Ventures Fund investments alongside the
residual listed holding represent the entire portfolio of Sure Ventures PLC as
at 30 September 2024.
On 10 June 2024, the Company announced a placing of 275,862 ordinary shares,
followed by a further issue of equity to Mindflair PLC of 315,790 ordinary
shares, announced on 5 August 2024. The ordinary shares were admitted to
trading on the Specialist Fund Segment of the London Stock Exchange on 13 June
2024 and 8 August 2024 respectively, under the existing ISIN: GB00BYWYZ460,
taking the total shares in admission as at 30 September 2024 to 7,643,252.
SUIR VALLEY FUNDS ICAV
Suir Valley Funds ICAV (the ''ICAV'') is a close-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 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 30 September 2024 Fund I had commitments totaling €27m and had made
seventeen 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 the PLC. Total distributions from Fund I to the PLC as at 30
September was €1,759,630.
SURE VALLEY VENTURES ENTERPRISE CAPITAL FUND
Sure Valley Ventures Enterprise Capital Fund is a close-ended UK based GP/LP
Fund which completed its first close on 1st March 2022. The total commitments
for this first close were £85m, with potential for a further £10m to be
raised in a secondary close. The British Business Bank are the cornerstone
investor of this Fund, 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 the Fund had drawn down a total of £15.06m and has made
eight investments. In the six month period from 31 March 2024, the Fund has
invested £650k into a London based company called Ittybit in June 24; £750k
into a London based company called Vortex IQ in June 24; £1m into a
Manchester based company called Phinxt Robotics in July 24; £500k into a
London based company called Stylus Education in August 24; and finally £1.5m
into an Oxford based company called Purple Transform in August 24. The total
invested capital to date for Sure Ventures PLC was £903,670.
Performance
In the period to 30 September 2024 the Company returned a net asset value of
£1.39/unit, representing a 67% increase from the audited March-24 NAV of
£0.83. The NAV increase is largely a result of the Fund I performance,
whereby one of the portfolio companies agreed a sale to a large US acquirer at
a $450m valuation. This represents a more than 10X return on the investment
and, once the acquirer IPOs on Nasdaq, is projected to return the full Fund
investment.
The investment in Sure Valley Venture Enterprise Capital Fund has returned a
NAV of £0.68. This performance is considered in line with expectation as the
Fund continues to build out the portfolio and would be unlikely to see any
immediate gains given the infancy of the Fund.
Given the lack of revenue to support the ongoing operational costs of the PLC,
the unrealised gains in the two Sure Valley Funds are key to maintaining a
steady NAV, until the point that we see more exits to create realised gains,
which we hope to see in the near future.
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 most companies having now completed series A
funding rounds, which provided the previous NAV growth that was set out to
achieve from inception. The focus now shifts towards finding exit
opportunities as we look to realise some further gains across the portfolio.
As the investment period of this Fund 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 the Fund 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 Fund will yield exciting opportunities as the Fund
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 following
financial year, particularly with the exciting pipeline of deals that can been
seen from the new Enterprise Capital Fund and the increasing maturity of the
first Sure Valley Ventures Fund 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
8 November 2024
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 2024.
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 2024 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 2024 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 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
3 December 2024
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 2024
Average NAV (£'000) a £10,724
Recurring costs (£'000) b £419
b/a 3.91%
PREMIUM/DISCOUNT
The amount, expressed as a percentage, by which the share price is less than
the NAV per ordinary share.
As at 30 September 2024
NAV per ordinary share a 138.87p
Share price b 87.50p
(b-a)/a (36.99%)
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 2024 NAV Share price
Opening as at 31 March 2024 (p) a 82.53 73.50
Closing as at 30 September 2024 (p) b 138.87 87.50
Dividend reinvestment factor c 1 1
Adjusted closing (d = b x c) d 138.87 87.50
Total return (d-a) / a 68.27% 19.04%
5 Financial Statements
Condensed Statement of Comprehensive Income
For the six months ended 30 September 2024 (unaudited)
Note Revenue Capital Total
£
£
£
Income
Other net changes in fair value on financial assets at fair value through 7 - 4,515,070 4,515,070
profit or loss
Rebate management fee 9 68,333 - 68,333
Total net income 68,333 4,515,070 4,583,403
Expenses
Management fee 9 (93,333) - (93,333)
Custodian, secretarial and administration fees (62,462) - (62,462)
Other expenses (102,849) - (102,849)
Total operating expenses (258,644) - (258,644)
Finance costs
Interest expense (16,956) - (16,956)
Total finance costs (16,956) - (16,956)
(Loss)/Gain before taxation and after finance costs (207,267) 4,515,070 4,307,803
Taxation - - -
(Loss)/Gain after taxation (207,267) 4,515,070 4,307,803
(Deficit)/Surplus per share 6 (2.83) 61.74 58.91
The total comprehensive income and expense for the period is attributable to
shareholders of the Company. The accompanying notes on pages 22 to 24 form
part of these condensed interim financial statements.
Condensed Statement of Comprehensive Income (continued)
For the six months ended 30 September 2023 (unaudited)
Note Revenue Capital Total
£
£
£
Income
Loss on sale of investments - (83,570) (83,570)
Other net changes in fair value on financial assets at fair value through - (136,107) (136,107)
profit or loss
Rebate management fee 9 49,456 - 49,456
Other income 10 - 10
Total net income/(loss) 49,466 (219,677) (170,211)
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)
Finance costs
Interest expense (7,978) - (7,978)
Total finance costs (7,978) - (7,978)
Loss before taxation and after finance costs (181,746) (219,677) (401,423)
Taxation - - -
Loss after taxation (181,746) (219,677) (401,423)
Deficit per share (2.66) (3.22) (5.88)
The total comprehensive income and expense for the period is attributable to
shareholders of the Company. The accompanying notes on pages 22 to 24 form
part of these condensed interim financial statements.
Condensed Statement of Financial Position
As at 30 September
2024
Note 30 September 2024 31 March 2024
(unaudited) (audited)
£
£
Non - current assets
Investments held at fair value through profit or loss 7 11,128,216 6,236,446
11,128,216 6,236,446
Current assets
Receivables 2,878 8,527
Cash and cash equivalents 13,265 65,209
16,143 73,736
Total assets 11,144,359 6,310,182
Non - current liabilities
Interest payable (46,194) (29,238)
Loans payable (440,000) (400,000)
(486,194) (429,238)
Current liabilities
Other payables (43,632) (61,214)
(43,632) (61,214)
Total assets less current liabilities (529,826) 6,248,968
Total net assets 10,614,533 5,819,730
Shareholders' funds
Ordinary share capital 8 76,431 70,514
Share premium 7,263,731 6,782,648
Revenue reserves (2,220,726) (2,013,466)
Capital reserves 5,495,097 980,034
Total shareholders' funds 10,614,533 5,819,730
Net asset value per share 138.87p 82.53p
The accompanying notes on pages 22 to 24 form part of these condensed interim
financial statements.
The financial statements on pages 17 to 21 were approved by the board of
directors and authorised for issue on 3 December 2024. 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 2024 (unaudited)
Ordinary Share Revenue Capital Total Total
Share Premium Reserves Reserves Reserves Equity
Capital
£ £ £ £ £ £
As at 31 March 2024 70,514 6,782,648 (2,013,466) 980,034 (1,033,432) 5,819,730
Ordinary shares issued 5,917 494,083 - - - 500,000
Ordinary shares issue costs - (13,000) - - - (13,000)
(Loss)/Gain after taxation - - (207,260) 4,515,063 4,307,803 4,307,803
Balance as at 76,431 7,263,731 (2,220,726) 5,495,097 3,274,371 10,614,533
30 September 2024
For the six months ended 30 September 2023 (unaudited)
Ordinary Share Revenue Capital Total Total
Share Premium Reserves Reserves Reserves Equity
Capital
£ £ £ £ £ £
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)
Balance as at (1,826,824) 2,918,447
30 September 2023
70,515
6,782,646
1,091,623
7,944,784
The accompanying notes on pages 22 to 24 form part of these condensed interim
financial statements.
Condensed Statement of Cash Flows
For the six months ended 30 September 2024
Note 30 September 2024 30 September 2023
(unaudited) (unaudited)
£ £
Cash flows from operating activities:
Profit/(Loss) after taxation 4,307,803 (401,423)
Adjustments for:
Decrease in receivables 5,649 2,022
(Decrease)/Increase in payables (626) 1,512
Increase in capital call payable - 117,500
Loss on sale of investment - 83,570
Unrealised loss on foreign exchange 7 147,672 79,953
Net changes in fair value on financial assets at fair value through profit or 7 (4,662,742) 56,154
loss
Net cash (outflow) from operating activities (202,244) (60,712)
Cash flows from investing activities:
Purchase of investments 7 (376,700) (441,990)
Sale of investments 7 - 151,547
Net cash (outflow) from investing activities (376,700) (290,443)
Cash flows from financing activities:
Proceeds from issue of ordinary shares 500,000 399,000
Interest expense - 7,978
Proceed from loans 40,000 -
Ordinary share issue costs (13,000) (17,000)
Net cash inflow from financing activities 527,000 389,978
Net change in cash and cash equivalents (51,944) 38,823
Cash and cash equivalents at the beginning of the period 65,209 36,697
Net cash and cash equivalents 13,265 75,520
The accompanying notes on pages 22 to 24 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 2024 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 2024 are derived from the audited financial statements for that
year. The financial statements for the year ended 31 March 2024 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 2024 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 2024. 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 2024. 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
2024.
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 2024.
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 2024 Revenue Capital Total
(pence)
(pence)
(pence)
Earnings per ordinary share (2.83p) 61.74p 58.91p
The calculation of the above is based on revenue returns of (£207,260),
capital returns of £4,515,070 and total returns of £4,307,803 and weighted
average number of ordinary shares of 7,273,795 as at 30 September 2024.
For the financial year ended 31 March 2024
Earnings per ordinary share (5.31p) (31.10p) (36.41p)
The calculation of the above is based on revenue returns of (£368,388),
capital returns of (£2,158,090) and total returns of (£2,526,478) and
weighted average number of ordinary shares of 6,938,133 as at 31 March 2024.
7) INVESTMENTS AT FAIR VALUE THROUGH PROFIT OR LOSS
As at 30 September 2024 As at 31 March 2024
£ £
Opening cost
Opening fair value 6,236,446 8,196,153
Purchases at cost 376,700 662,460
Sales - (464,077)
Realised loss - (271,039)
Unrealised gain/(loss) 4,662,742 (1,735,329)
Unrealised loss on foreign exchange (147,672) (151,722)
Closing fair value 11,128,216 6,236,446
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 No. of shares No. of shares Ordinary Share Capital Ordinary Share Capital
31 March
30 September
30 September 31 March
2024
2024
2024 2024
£ £
Ordinary shares of 1 penny each 7,643,252 7,051,600 76,431 70,514
The following table details the subscription activity for the period ended 30
September 2024.
30 September 2024 31 March 2024
Opening balance as at 1 April 7,051,600 6,646,472
Ordinary shares issued 591,652 405,128
Closing balance as at period/year end 7,643,252 7,051,600
During the period ended 30 September 2024 and the year ended 31 March 2024,
all proceeds from the issues 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 2024, there was £1,286 (31 March 2024: £4,343) 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 £93,333 (30 September 2023: £74,456)
of management fees and as at
30 September 2024, there was £12,500 (31 March 2024: £12,500) payable to the
Manager. During the period, the Company received a rebate management fee of
£68,333 (30 September 2023: £49,456) from the Manager.
During the period, the Company paid £13,000 (30 September 2023: £17,000) of
placement fees to Shard Capital Partners LLP.
During the period, the Company paid corporate broking retainer fees of £6,530
(30 September 2023: £3,280) (excluding VAT) to Shard Capital Partners LLP.
The Company has investments in Sure Valley Ventures, the sub-fund of Suir
Valley Funds ICAV, and Sure Valley Ventures Enterprises Capital LP, amounting
to £10,495,413 (31 March 2024: £5,932,789) and £627,766 (31 March 2024:
£300,014) respectively. These funds are also managed by the Manager.
10) SubsequENT EVENTS
There were no subsequent events which would require disclosure in the
financial statements.
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