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21 March 2024

Literacy Capital plc ("Literacy Capital", "BOOK" or the "Fund")

Final results and audited financial statements for the year to 31 December 2023

Helping to build great businesses to generate superior returns

Literacy Capital, the listed investment trust, is pleased to release its final results for the year to 31 December 2023.

A PDF copy of the results can be viewed at: www.literacycapital.com/investors/reports-and-results

Performance highlights

·    NAV per ordinary share of 500.4p

o  Net assets of £300.3m, an increase of 19.0% after all costs and expenses (including charitable donations), in the twelve months to 31 December 2023

o  Book's share price increased 30.4% over the same period

·    Significant step up in cash realised in 2023, driven by a maturing portfolio and interest in Literacy's assets from acquirors

o  £46.3m cash received in the twelve month period to 31 December 2023 (£13.1m in 2022)

o  The majority of this cash (£40.8m) was generated from the transactions involving Kernel Global and Butternut Box. These transactions both completed at significant premiums to Literacy's carrying value of the assets (49% and 54% premiums respectively)

·  Continued focus on deploying capital into new investments and existing portfolio companies, as well as building a pipeline of new opportunities

o  Two new platform investments completed in 2023, with follow-on capital provided to several portfolio companies to support and accelerate their growth

o  £33.6m cash invested in aggregate in 2023, an increase of 25.4% compared to calendar year 2022, providing potential for uplifts in future periods

·   The Fund and its portfolio is favourably positioned at the end of 2023. This is despite more challenging UK macroeconomic conditions (particularly in H2 2023), with Literacy Capital's companies modestly leveraged

o  Following the sale of BOOK's stake in Butternut Box, almost 100% of NAV is now weighted towards the buyouts of profitable businesses, rather than earlier stage, more risky investments

o  On 31 December 2023, the average EV / EBITDA multiple was 9.4x and net senior debt / EBITDA was 1.6x (both calculated on a weighted average basis for Literacy's ten largest investments, which comprise 86.5%³ of NAV)

·    Increasing charitable donations, helping disadvantaged children across the UK get a fair chance

o  A further £2.8m of charitable donations provided for in 2023 (£2.3m in 2022), a year-on-year increase in line with NAV growth

o  Total donations now exceed £8.5m since inception of Literacy Capital

Performance to 31 December 2023

Inception: 30 April 2018

Comparison to prior periods

Richard Pindar, CEO of the Investment Manager and Director of Literacy Capital plc, commented:

"Overall, we are pleased with the performance of BOOK's portfolio during this financial year. Following extremely strong performance years in 2021 and 2022 (NAV growth of +94.1% and +51.7% respectively), it has been challenging to repeat this level of performance in 2023 (+19.0%), as weaker UK macroeconomic conditions have impacted the growth of certain portfolio companies.

2023 marked the first occasion where we were able to complete a significant sale of an earlier Literacy Capital investment, which we were able to achieve twice. In both cases, Literacy enjoyed approximately a 10x return on its investment and a premium at exit of 50% to carrying value.

We continue to explore several new investment opportunities and we strive to retain the same discipline when appraising these. As Literacy's unique approach and alternative structure compared to traditional private equity is better understood by company founders, we expect to continue to see a good volume of opportunities. This allows us to remain highly selective about the businesses and people we choose to work with.

Finally, it is worth highlighting again the strong financial alignment between the Fund's shareholders and investment manager. The management fee is low and no performance fees are paid by the Fund to its Manager, with the focus remaining on generating the best net returns possible for shareholders."

Enquiries

For further information, please contact:

About Literacy Capital:

Literacy Capital (BOOK.L) is an investment trust that was launched in 2017 by Paul and Richard Pindar, before it listed on the London Stock Exchange's main market in June 2021. The Company focuses on opportunities to invest for the long-term in growing private businesses where a clear route to creating additional value can be seen. It also has a unique charitable objective to donate 0.9% of annual NAV to charities focused on improving literacy in UK children. £8.5 million has been donated or reserved for donation to charities since the trust's creation in 2017. For more information, please visit our website: www.literacycapital.com.

Website:

www.literacycapital.com

LEI: 2549006P3DFN5HLFGR54

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

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

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

This announcement may include "forward-looking statements". All statements other than statements of historical facts included in this announcement, including, without limitation, those regarding the Company's financial position, business strategy, plans and objectives of management for future operations (including development plans and objectives relating to the Company's products and services) are forward-looking statements. Forward-looking statements are subject to risks and uncertainties and accordingly the Company's actual future financial results and operational performance may differ materially from the results and performance expressed in, or implied by, the statements. These factors include but are not limited to those described in the formal Prospectus. These forward-looking statements speak only as at the date of this announcement. The Company expressly disclaims any obligation or undertaking to update or revise any forward-looking statements contained herein to reflect actual results or any change in the assumptions, conditions or circumstances on which any such statements are based unless required to do so by the Financial Services and Markets Act 2000, the Listing Rules or Prospectus Regulation Rules made under Part VI of the Financial Services and Markets Act 2000 of the Financial Conduct Authority or other applicable laws, regulations or rules.