Mercia posts record results as it continues to invest in Yorkshire

Regional investor Mercia Asset Management swung to a profit after tax of £34.5m from a £17.5m loss the previous year as the firm had its strongest year for venture capital activities.

Mark Payton is CEO of Mercia.

Mercia also saw its revenue increase 50.5 per cent for the year ended March 31, 2021, to £19.2m. Adjusted operating profit came in at £3.3m, up from £500,000.

Mark Payton, CEO of Mercia, told The Yorkshire Post that the results showed that its business model was delivering.

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He added: “It is somewhat of a unique model where we have third party funds under management as well as our proprietary capital.

We combined those two. Not only is that delivering but providing much more growth to come.

“It’s important to note that over 90 per cent of companies that we back are outside of London and across the regions. The concept that the regions have little to offer is flawed.”

Yorkshire is a “heartland” for the business, its chief investment officer Julian Viggars says, with 86 of its 173 investments being done in the region over the last year.

The Covid-19 outbreak initially provided a challenge around doing new deals.

Mr Payton said: “The industry broadly decided to focus on portfolio until it could meet people face-to-face and wasn't going to do new deals. We took a different approach.

“We aggressively approached a digital deal origination. We did seminars and webinars through our portfolio.

“We invested in over 70 businesses that were new to us. Often without meeting them at their own premises.

“That was challenging to make that step forward. We’re very pleased that we did. We’ve got some excellent businesses now that we are able to see and support.”

The CEO of Mercia said the group had weathered the period well and praised its “exceptional” team.

He added: “We moved very quickly to remote working. We had a digital operation here anyway. That was quite a swift move.

“The group has weathered this period really well, which is of course complemented by the fact that we have really strong liquidity both in terms of funds and in terms of our balance sheet.

“There’s something like £314m of unrestricted capital across the group of which circa £57m of that is on our balance sheet.

“We’re a well financed business with excellent people within the business and frankly an excellent portfolio.”

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