Sure Ventures plc
Unaudited Interim Report and Financial Statements
For the six months ended 30 September 2024
Company Number: 10829500
Table of Contents
1 Chairman's Statement
2 Investment Manager's Report6
3 Interim Management Report12
4 Alternative Performance Measures ("APMs") 4
5 Financial Statements 16
Condensed Statement of Comprehensive Income 17-18
Condensed Statement of Financial Position
Condensed Statement of Changes in Equity
Condensed Statement of Cash Flows
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 profit or loss |
| - | 4,515,070 | 4,515,070 |
| Rebate management fee | 9 | 68,333 | - | 68,333 |
| Total net income | | 68,333 | 4,515,070 | 4,583,403 |
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| 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) |
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|
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| Finance costs |
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| Interest expense | | (16,956) | - | (16,956) |
| Total finance costs | | (16,956) | - | (16,956) |
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| |
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| (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 |
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|
|
| (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 profit or loss |
| - | (136,107) | (136,107) |
| 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 (unaudited) £ | 31 March 2024 (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 Capital £ | Share Premium
£ | Revenue Reserves
£ | Capital Reserves
£ | Total Reserves
£ | Total Equity
£ |
| 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 |
For the six months ended 30 September 2023 (unaudited)
| | Ordinary Share Capital £ | Share Premium
£ | Revenue Reserves
£ | Capital Reserves
£ | Total Reserves
£ | Total Equity
£ |
| 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 | | |
|
| | |
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 (unaudited) £ | 30 September 2023 (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 loss | 7 | (4,662,742) | 56,154 |
| 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 |
| 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 |
30 September 2024
|
2024
| Ordinary Share Capital 30 September 2024 £ | Ordinary Share Capital 31 March 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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