Technology investors bemoan the lack of London-listed companies that operate in growth markets such as virtual reality and online gaming. Mercia Technologies (MERC), which invests in small UK technology businesses, might be the next best thing. The group sunk £4.4m into 11 companies in the six months to 30 September, lifting the value of its portfolio by 19 per cent to £29.2m.
Midlands-based Mercia sources investments from its fund management arm, which raises money from third-party investors to fund nascent ventures in software, digital entertainment, life sciences and advanced materials. Management invested about £2.5m of Mercia's own capital into four new 'emerging stars', including sci-fi video game maker Edge Case Games, wireless connectivity specialist LM and Impression, which designs specialised components for the transportation market. It ploughed the balance into existing ventures such as digital trading card group VirtTrade.
Mercia has invested a further £4.2m since the period-end, taking its outlay to over £20m since it floated in December 2014. Following its purchase of a stake in Intelligent Positioning - which helps brands such as Marks & Spencer track online search queries and results - it now has 19 holdings. The group also expanded its regional foothold, opening an Edinburgh office and striking partnerships with two Scottish universities.
Broker Cenkos expects net asset value (NAV) of 37p a share in the year to March 2016 (38.1p in FY2015).
| MERCIA TECHNOLOGIES (MERC) | ||||
|---|---|---|---|---|
| ORD PRICE: | 47.5p | MARKET VALUE: | £101m | |
| TOUCH: | 47-48p | 12-MONTH HIGH: | 80p | LOW: 47p |
| DIVIDEND YIELD: | nil | PE RATIO: | na | |
| NET ASSET VALUE: | 38p* | NET CASH: | £38.5m* | |
| Half-year to 30 Sep | Turnover (£000) | Pre-tax profit (£000) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2014† | na | na | na | nil |
| 2015 | 654 | -748 | -0.35 | nil |
| % change | - | - | - | - |
*Excludes £10m in short-term liquidity investments †Mercia listed in December 2014 | ||||
