Literacy Capital has published results for the year ended 31 December 2023 and they are very good. The NAV increased by 19.0% and the share price by 30.4% in a period where the All-Share Index only made 7.9%.
The NAV per share finished the year at 500.4p and the net asset value now exceeds £300m.
Highlights are:
- Significant step up in cash realised in 2023, driven by a maturing portfolio and interest in Literacy’s assets from acquirors
- 46.3m cash received in the twelve month period to 31 December 2023 (£13.1m in 2022)
- 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
- Two new platform investments completed in 2023, with follow-on capital provided to several portfolio companies to support and accelerate their growth
- £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
- 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
- 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
- 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% of NAV)
- Increasing charitable donations, helping disadvantaged children across the UK get a fair chance
- 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
- Total donations now exceed £8.5m since inception of Literacy Capital
[Richard Pindar will be on the weekly show on 10 May 2024, discussing the fund’s progress. Don’t miss it.]
BOOK : Literacy Capital knocks it out the park again