https://www.investegate.co.uk/edge-perf ... 15259144H/Extracts:
Net asset value per Share
31 August 2022, 31 August 2021, 28 February 2022
Net assets £7.2m, £18.1m, £25.2m
H shares in issue 10,729,167, 11,595,682, 11,595,682
NAV per share 67.45p, 155.94p, 217.38p
Net asset total return per share 144.45p, 197.94p, 259.38p
During the six months ended 31 August 2022, the Company bought back 866,515 shares, being 7.5% of the issued share capital of the Company at the start of the period, at a price of 102.06 pence per share for cancellation
Company Strategy
As the Manager and Board consider the Company to be sub scale, they are together evaluating options for the Company. The Board will inform Shareholders once a proposal has been established. In the meantime, the Board has decided to suspend the share buy-back programme until further notice, whilst various potential routes are under consideration
Investment Performance
The Board announced that one of the Company's portfolio companies, Festicket, was experiencing trading headwinds in August; unfortunately, the business went into administration. The value has been written down to zero, a value movement of £4.79 million from the year end.
The listed portfolio companies, Audioboom, Mirriad and Unity have seen significant impacts on their share prices, reflecting stock market performance. During the half year, Audioboom’s share price has reduced by 69% (£4.31 million in portfolio value) from 28 February 2022; Unity’s share price has reduced by 54% (£356,000); Mirriad’s share price has reduced by 69% (£172,000)
Performance Incentive Fee
In accordance with the investment Management agreement put in place in 2020 the investment manager was paid a performance fee of approximately £2.6 million in July 2022
Fundraising
The Company undertook no fundraising activities in the period under review. The Investment Manager is continuing to evaluate overall options for the Company in the light of the state of the global economy, and we will be writing to Shareholders about these in the near future.
Dividends
The prior year adjustment relating to a reserve movement between realised and unrealised Capital Reserves as set out in the last year end accounts has had a knock-on effect of rendering the payment of the Company’s 2021 H & I class dividends illegal due to a lack of distributable reserves.
This issue was recognised in June 2022; by this time the reserves position had been regularised as a result of the March 2022 capital reorganisation referred to above. A resolution to release Shareholders and Directors of any liability in relation to these dividends will be put to Shareholders at a forthcoming General Meeting
Company Portfolio
Due to the drop in the Company’s portfolio valuation in the period coupled with the substantial cash outflows of dividends, share buy-back and Manager performance fee, the overall fund value at 31 August 2022 has fallen to £7.24 million which the Manager and Board consider to be sub-scale
Transactions with the Investment Manager
As a result of the new investment management agreement approved by Shareholders, the Investment Manager did not bear any of the Company’s running costs in respect of the financial year ending 28 February 2022. A cost cap of 3.5% of the year’s closing net asset value will be re-introduced in the Company’s financial year ending 28 February 2023
During the period, the Company has incurred investment management fees of £283,579 (exclusive of VAT) and a performance related incentive fee of £2,586,146 (exclusive of VAT).