Mercia Asset Management lent to 48 new businesses in Yorkshire and Humber last year

Specialist asset manager Mercia today revealed that it lent to 48 new businesses in Yorkshire and the Humber last year, as growing numbers of senior executives moved to the region.

Bosses at Mercia also reported that the company had delivered "robust" results over the last financial year.

In recent years, Mercia has made a total of 70 investments in Yorkshire, the Humber and Tees, deploying £20m of capital.

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Mark Payton, chief executive officer of Mercia, told The Yorkshire Post he had seen signs of talent moving to Yorkshire, because "success breeds success, in the last year or two there have been a tremendous amount of exits".

Mercia  today revealed that it delivered a 152 per cent increase in adjusted operating profit to £8.4m in the year ended 31 March 2022.Mercia  today revealed that it delivered a 152 per cent increase in adjusted operating profit to £8.4m in the year ended 31 March 2022.
Mercia today revealed that it delivered a 152 per cent increase in adjusted operating profit to £8.4m in the year ended 31 March 2022.

Mercia delivered a 152 per cent increase in adjusted operating profit to £8.4m in the year ended 31 March 2022. Profit before taxation was £27.4m, compared with £34m the year before.

Third-party funds under management of around £758m contributed £19.5m in revenue, excluding performance fees, for the year, Mercia said.

The sale of Faradion in January 2022 resulted in total cash receipts of £19.4m. The Sheffield-based company was founded in 2011 to develop sodium-ion technology and bring it to market.

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Commenting on the results, Mr Payton said: “I am pleased to share a set of results that showcase the strength and maturity of Mercia and its business model.

"The significant success that we have seen during the last two financial years, and our positive future prospects, have been made possible by the combined efforts of everyone connected with Mercia. I would therefore like to express my sincere gratitude to the amazing portfolio companies that we have the privilege to support.

"As a group, we are also very appreciative of the growing belief in Mercia from our third-party fund investors, and both VCT and Mercia shareholders, that the UK regions can deliver value and returns. Finally, I would like to thank Mercia’s employees, without whom we would not have become who we are today: #OneMercia.”

Mercia said it had an ample supply of capital and it aimed to support management teams by building up boardroom expertise.

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Mr Payton added: "We all face an uncertain global outlook as the economic system absorbs inflation levels not seen for 30 years, climbing interest rates and the ongoing war in Ukraine.

"The world continues to retrench from globalisation toward a more nationalist economic agenda. For Mercia, we continue to have a positive outlook despite the macro challenges.

"Our purpose-led UK only agenda of responsible investment across the regions, coupled with maturing equity portfolios across our asset classes in sectors less likely to be adversely impacted by Brexit, supply chain issues and sanctions, together with our increasing investment performance, place us in a positive position as we look to further scale our AuM and, with it, continue to grow total shareholder return."

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Ian Metcalfe, the non-executive chairman, said: "These financial results successfully build on last year’s breakthrough achievements. They also point to the calibre of our people and the accelerating maturity of our business model.

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"This is demonstrated by the recurring profits now being derived from our investment activities in both our fund management business and from the balance sheet portfolio.

"With continuing heightened interest in several of the sectors into which Mercia invests, the opportunities for further growth, and hence the potential for sustained incremental shareholder value creation, is now firmly established."

AIM-listed Mercia Asset Management is one of the largest UK regional investors, with a particular focus on early stage and scale-up businesses.

Mercia provides capital across its four asset classes of venture, private equity, debt and proprietary capital: the group’s ‘Complete Connected Capital’.

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The group initially supports businesses via its third-party funds under management. Over time Mercia can provide further funding to the most promising companies, by deploying direct investment follow-on capital from its own balance sheet. The group has a strong UK footprint through its regional offices.

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