Half-year Results

Mercia Asset Management PLC (AIM: MERC), the regionally focused, private capital asset manager with £2.0billion of assets under management ("AuM"), is pleased to announce its interim results for the six months ended 30 September 2025.

Mark Payton, Chief Executive Officer of Mercia, commented:

"Mercia has delivered a robust first half performance with our increased economies of scale driving both EBITDA and EBITDA margin growth."

1 The interim dividend will be paid on 14 January 2026 to shareholders on the register at the close of business on 12 December 2025.

2 AuM is defined as the value of funds under management from which the Group earns revenues, plus the Group's consolidated net assets.

3 EBITDA is defined as operating profit/(loss) excluding performance fees net of attributable costs, depreciation, realised fair value (loss)/gain on the sale of direct investments, unrealised fair value movement in direct investments, share-based payments charge, amortisation of intangible assets and movement in fair value of deferred consideration.

4 EBITDA margin is defined as EBITDA divided by revenue (excluding performance fees net of attributable costs).

Managed fund movements

• Third-party funds under management ("FuM") increased by c.1% compared to the corresponding period end to c.£1,813million (H1 2025: c.£1,650million; FY 2025: c.£1,800million), with no redemptions

o Venture FuM of c.£959million (H1 2025: c.£952million; FY 2025: c.£928million)

§ £34.8million successfully raised by the three Northern Venture Capital Trusts ("VCTs") in April 2025, in addition to £1.3million of shareholder dividend reinvestment inflows

§ Final dividends totalling £10.1million paid out by the three Northern VCTs in addition to shares repurchased and cancelled totalling £9.9million

§ Two Enterprise Investment Scheme ("EIS") funds closed raising a total of £10.6million

§ £5.0million additional equity allocation under the Northern Powerhouse Investment Fund I

o Development capital FuM of c.£454million (H1 2025 c.£388million; FY 2025: c.£472million)

§ FDC Debt fund, now in its realisation phase, returned c.£18million to investors in the period

o Property finance FuM of c.£400million (H1 2025: c.£310million; FY 2025: c.£400million)

Direct investment portfolio movements

• Direct investment portfolio fair value of £131.1million (H1 2025: £120.9million; FY 2025: £126.0million)
• £5.5million net invested into five portfolio companies (H1 2025: £3.9million net invested into four portfolio companies)

Post-period end developments

• First share allotment, totalling c.£38million of the Northern VCT's current £50.0million fundraise, completed in November
• Launch of £35.0million North East Accelerate Fund in October 2025, investing across Tyne & Wear, Northumberland and County Durham
• Dr Jonathan Pell retires from the Board today and is succeeded by Janine Nicholls as Chair of the Audit and Risk Committee

Mercia will provide a live management presentation and Q&A via the Investor Meet Company platform at 3.00pm today. Registration details for the online investor presentation can be accessed via:

Chief Executive Officer's review

Stronger, resilient and focused on delivering sustainable value for the long term

Overview

Despite macroeconomic and political uncertainty, Mercia continues to demonstrate resilience through the breadth of our platform, regional focus, disciplined investment approach and growing operational efficiency.

Originally founded in 2010, Mercia, via its differentiated model, has built brand recognition as a major national operator with a leading regional presence. As a specialist alternative asset manager solely operating in the private markets, we are well placed to benefit from capital inflows from fund investors (retail, institutional or public sector) seeking a place-based domestic fund manager with a strong track record of returns and differentiated access to regional UK investment opportunities.

The first half of this financial year has been a period of measured progress and solid financial performance for Mercia. Despite subdued investment and exit activity across UK private markets, we delivered increased profitability, a modest number of full and partial exits within the funds' portfolio (including the successful IPO of The Beauty Tech Group, a company from the Northern VCTs' portfolio, post-period end) and saw continued interest in new funds. However, a market perception from across the Group is one of observed caution, with capital deployment generally taking longer than in recent years.

Mercia's strategic objectives remain unchanged: to become the leading UK specialist in regional private markets - providing capital to ambitious businesses and through this, generating sustainable long-term returns for our shareholders and fund investors. At this mid-point in Mercia '27, we remain confident of achieving in our three-year goals of growing AuM to £3.0billion, EBITDA to £10.0million, and EBITDA margin to 26% by 31 March 2027. Growth for this three-year plan, and into the future, is underpinned by the pragmatic divestiture of our balance sheet direct investments.

As others pause or retrench, we continue to invest - in talent, in innovation and in the UK regions that will power the next generation of growth, as we look to benefit from the tail winds within private markets.

Financial and operational performance

• AuM of £2.0billion (FY 2025: £2.0billion)
• EBITDA increased by c.14% to £4.2million (H1 2025: £3.7million)
• EBITDA margin strengthened to 24.6% (H1 2025: 20.8%; FY 2025: 22.1%), reflecting operational efficiencies and the benefits of technology adoption
• Balance sheet direct investment portfolio fair value of c.£131million (FY 2025: c.£126million)
• Cash and cash equivalents of c.£35million (FY 2025: c.£40million), supporting continued growth in the direct investment portfolio, the ongoing share buyback and dividends.

Our financial performance continues to demonstrate the resilience of our model and reinforces Mercia having established a track record of delivery, by being in the right place, at the right time, doing the right things. This is a central differentiating theme, as institutional capital redeployment points increasingly toward the domestic private markets, seeking place-based fund managers with a track record of delivery.

Private markets momentum and alternative assets appeal

Fundraising conditions remained challenging during the period for EIS, while our VCTs are on track to deliver strong capital raisings supported by wealth manager relationships and an increasingly strong investment performance track record. Institutional appetite for UK private assets remains positive, with growing capital commitments from government institutions. Initiatives, such as the Mansion House Reform and Accord and a renewed focus on the UK industrial strategy (IS-8), are reinforcing the role of private markets in supporting UK economic growth. Local Government Pension Scheme pooling and consolidation is also progressing with increased emphasis on place-based investment. Overall, the policy environment and investor sentiment remain supportive of long-term allocations to private assets and we are well positioned to capture this opportunity. The table below summarises our FuM by investor type and our current organic new fund raising targets/pipeline through to 31 March 2027.

Investment highlights

We manage capital across three broad investor categories of retail (EIS and VCT), public sector (local authorities and British Business Bank) and institutional capital (pension funds) - all three pools are increasingly seeking proven managers with a track record of delivery and returns in the private markets.

Despite a relatively subdued investment climate, we still completed 83 investments during the first six months of this financial year (H1 2025: 86), including 39 new investments and 44 follow-ons across our venture, development capital and property finance asset classes. Our c.£95million deployment compares with c.£133million for the same period last year.

Capital invested across the Group regionally during the six months to 30 September 2025 was as follows:

Assets under management

A total of c.£47million of new capital was raised by our EIS and Northern VCTs during the six-month period, in addition to a further £5.0million awarded under the Northern Powerhouse Investment Fund I equity mandate.

Valuations across our managed funds broadly increased during the first six months, whilst c.£56million of distributions were made to both fund investors and Mercia shareholders, including dividends paid to VCT shareholders and Mercia's latest share buyback.

Liquidity

We continue to maintain strong liquidity across our asset classes.

Balance sheet direct investments

Our direct investment portfolio continues to mature, with several companies having appointed advisers as we, and they, look to consider opportunities for potential realisation events. Global events and the stock market declines (seen particularly for tech growth businesses), reached a low point in December 2022. Data collected across 2023, 2024 and into 2025 suggests that tech company multiples, particularly software/SaaS, have started to tick upwards again.

The International Private Equity and Venture Capital Valuation Guidelines December 2018, updated in December 2022 ("IPEV" or the "Guidelines"), are based on the application of Fair Value ("FV"), described as "the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date". Our direct investments are valued at Fair Value in accordance with these Guidelines. For venture investments, we take the price of last round calibrated or third-party indicators (quoted prices/third-party valuation exercises or market events) as the first estimate of FV and then calibrate by way of a comparable exit view to support this third-party derived price or cost. We also seek to verify carrying value, potentially using revenue/EBIT multiples as adjusted for the current segment performance, use the comparable exit values to support the current value, or benchmark against a recent market event, an offer of finance or acquisition. This can result in either upward or downward fair values. For quoted investments, available market bid prices will be the exclusive basis for the measurement of Fair Value for identical instruments.

In respect of material FV movements in the period, post-period end Medherant completed its latest investment round following a positive clinical trial, and therefore we have included the positive impact on our holding value by recognising the preference rights in the share capital table. Both Netacea and VirtTrade have modest impairments as revenue growth has not progressed as quickly as forecast. sureCore has continued to materially underperform, and, as a consequence, we have now fully impaired our valuation of this investment.

* Trading as Avid Games.

** Trading as Intelligent Positioning/Pi Datametrics.

Investment market environment

While institutional sentiment towards them remains fundamentally positive, the UK's private markets remain characterised by selective investor appetite and constrained liquidity. For smaller businesses, particularly those based outside of London, a funding gap persists creating both a challenge and an opportunity. Mercia's regional model provides a crucial bridge - deploying commercial capital across the South East, South West, East of England, the North, Midlands and Scotland. We also continue to engage with HM Treasury and the British Business Bank to advocate for policy refinements that could unlock additional liquidity to meet the growing and ambitious opportunities across the entire UK.

Venture

Currently, the domestic market provision of venture capital is greatly skewed towards late stage (series E and onwards) - in large part tilted towards FinTech and AI-centred initiatives. There is a growing under supply of capital at the early end (seed to series A) for businesses seeking £0.5million to £15.0million. Although this means now is an excellent time to build a portfolio due to limited competition, it does mean that there are more limited syndication options, which we would expect to return in time as per previous venture cycles, with a recovering economy triggered in large part by returning momentum in the public markets.

Whether the current bubble of AI, as a standalone investment class, bursts or not (for instance, as witnessed with the e-commerce/dot com bubble over two decades ago), AI as a disruptive innovation is here to stay. When AI combines with quantum computing, we expect a real global game changer. Many of the opportunities we see have AI-enablement as a default offering, with applications in defence and space growing in number. Conversely, Clean tech and green energy initiatives are struggling to raise syndicated capital, as are certain capital-intensive life science plays.

Development capital (SME lending and Private equity)

Although many companies have been waiting for the outcome of this year's Autumn Budget, deal flow has remained strong in the regional private credit market with our focus on profitable businesses seeking capital for (i) changes in ownership, (ii) growth funding requirements and (iii) financial restructuring. Mercia's development capital portfolios are adapting to a new reality of increased deal times and higher costs of operation. We have seen a reduction in financing requirement in the market for M&A activity in general, which has in part (although not materially impacting our part of the market) attracted the return of banks, demonstrating an increased appetite for alternative uses of their capital. Our investment performance continues to be market-leading in this sector. There is a growing, if not cautious, optimism about the potential favourable impact of the newly introduced UK Government IS-8 strategy and devolved powers of the Mayoral Combined Authorities.

Property finance

As with other asset classes, for both residential and commercial properties, uncertainty regarding the recent Autumn Budget and other new initiatives such as the Building Safety Act, little improvement to the planning process, rent review legislation, the Renters' Right Act, higher than expected interest rates coupled with unchanged land prices has, at least temporarily, slowed developer activities and with it, lending transactions.

Developers, as with investors, seek stability and we predict that the industrial property sector will be one of the first to pick up again as they do not have the same regulatory and planning issues that are seen in the residential sector. We hope that once into 2026, with reducing interest rates, market stability and improvements to the planning process, that the residential development market will return too, particularly if there are new incentives put in place for first time buyers.

Operational and cultural progress

During the period, we made tangible progress in deepening integration across our regional offices and investment divisions - a key differentiator in terms of both capital deployment and access to deal flow. Our #OneMercia teams remain our greatest strength. We have continued to invest in talent development, with a focus on leadership identification, ensuring we sustain a culture of shared curiosity, accountability and team work.

Operations

Over the past six months, Mercia has focused on strengthening operational resilience and enhancing our digital infrastructure. Currently, we have a particular emphasis on unifying tools and processes, enabling digitisation and automation of workflows as part of embracing a rapidly evolving digital environment. The use of AI is starting to play a central role in transforming internal workflows and external engagement. This has unlocked benefits in efficient information gathering, data processing and the streamlining of tasks toward scale-led operational efficiency.

ESG

We continue to strengthen our commitment to responsible investment across the portfolios by enhancing our ESG due diligence, with all new funds now adopting our materiality assessment tool. This considers material social and environmental outcomes alongside financial return.

We don't just say, we do. Through Mercia Spirit, via our c.130 strong team across 11 offices, we have organised three corporate volunteering days for staff as well as multiple awareness initiatives such as World Menopause Day, Macmillan Coffee Morning and World Mental Health Day. Rise & Thrive, our initiative to improve diversity, equity and inclusion in funding, delivered six founder events; four targeted at female founders. Together, these initiatives engaged over 200 founders and stakeholders.

Outlook

The second half of FY26 is set to build on the strong operational and financial momentum of the first. Fundraising activities remain robust, with a growing pipeline across all capital pools that we manage.

We expect a strengthening domestic market through to the conclusion of our Mercia '27 strategic plan, with recent successful IPOs signalling renewed confidence. Historically, venture activity accelerates six to nine months after public markets reopen and we're already seeing those early signs. We are optimistic for continued progress in 2026 and beyond.

Including the interim dividend announced today, Mercia will have returned over £25million to shareholders through dividends and share buybacks since the start of the COVID pandemic. Our model continues to deliver; c.80% recurring revenues, disciplined capital deployment and a maturing direct investment portfolio with modest capital requirements.

With a growing EBITDA margin and c.£35million of cash on the balance sheet, Mercia is in a strong position for continued organic and corporate growth.

Our purpose - to grow the prosperity of the UK's regions through responsible investment - remains our guiding principle. To that end I would like to thank our teams, valued fund investors, portfolio partners and shareholders for their ongoing long-term commitment and trust.

Mercia is well positioned to deliver sustainable profitable growth and long-term value creation in the years ahead.

Dr Mark Payton

Chief Executive Officer

Chief Financial Officer's review

Overall financial performance

During a relatively subdued six-month investment period, Mercia has nevertheless continued to grow its EBITDA and EBITDA margin, by continuing to focus on opportunities for greater operational efficiency, without restricting our ability to deploy capital when suitable investment opportunities arise.

Interim dividend

The continued EBITDA growth of the Group has enabled Mercia's Board to declare a c.5% increase in the interim dividend to 0.39 pence per share (H1 2025: 0.37 pence per share). This interim dividend will be paid on 14 January 2026 to shareholders on the register at close of business on 12 December 2025, with a total dividend payable of c.£1,675,000 (H1 2025: £1,596,000).

Share buyback

In July 2025, the Group announced commencement of a share buyback policy of up to £3.0million per annum.

During the period to 30 September 2025, the Company purchased 2,951,393 Ordinary shares for cancellation, with an aggregate value of £1.0million.

Alternative performance measures ("APM")

The Directors believe that the reporting of EBITDA and EBITDA margin assist in providing insightful measures of operating and cash generative performance for businesses such as Mercia and are APMs of interest to both current and potential shareholders.

EBITDA is defined as operating profit excluding performance fees net of attributable costs, depreciation, realised fair value (losses)/gains on the sale of direct investments, unrealised fair value movement in direct investments, share-based payments charge, amortisation of intangible assets and movement in the fair value of deferred consideration.

EBITDA margin is defined as EBITDA divided by revenue (excluding performance fees net of attributable costs).

Results reported on an APM basis are denoted by ¹ throughout this review.

A reconciliation of these results prepared in accordance with International Financial Reporting Standards ("IFRS") to those presented on an APM basis is as follows:

Six months ended 30 September 2025

Revenue 1

Revenue decreased 3.9% compared to the corresponding period in 2024 to £17,201,000 (H1 2025: £17,908,000), and comprised fund management related fees, initial management fees from equity investment rounds, arrangement fees from loans, investment director monitoring fees, sundry business services income and VCT share offer related fees.

The majority of the relatively small reduction in revenue was due to lower capital deployment and the associated transaction related fees.

Administrative expenses 1

Administrative expenses, excluding depreciation, decreased 8.6% to £12,977,000 (H1 2025: £14,192,000) and comprised predominantly staff-related, office, marketing, professional adviser and VCT share offer related costs.

The reduction was largely due to lower staff headcount and recruitment costs than during the corresponding period in 2024, when there had been a material hiring increase following significant new fund mandate wins.

EBITDA

EBITDA increased 13.7% to £4,224,000 (H1 2025: £3,716,000), equating to an EBITDA margin of 24.6% (H1 2025: 20.8%; FY 2025: 22.1%), with the increase largely achieved through operational efficiencies.

Net finance income

Total gross finance income of £729,000 (H1 2025: £1,128,000) arose almost entirely from interest receivable on cash deposits (as shown in note 8 of the summary financial information). Finance costs of £42,000 (H1 2025: £26,000) comprised interest payable on office leases and the Group's staff electric car scheme.

Unrealised fair value movement in direct investments

The net unrealised fair value movement in direct investments resulted in a £340,000 decrease (H1 2025: £185,000 increase) and as at 30 September 2025, the fair value of the Group's direct investment portfolio was £131,100,000 (FY 2025: £125,960,000).

Unrealised fair value gains arose in four (H1 2025: three) of the Group's direct investments. The largest unrealised fair value gain was in respect of Medherant Limited, which accounted for £3,472,000 of the total (H1 2025: £93,000 unrealised fair value gain in respect of VirtTrade Limited).

There were five (H1 2025: two) unrealised fair value losses, the largest being £1,639,000 which arose in respect of VirtTrade Limited (H1 2025: £65,000 unrealised fair value loss in respect of Impression Technologies Limited).

Share-based payments charge

The £329,000 non-cash charge (H1 2025: £478,000) arose from the total number of both issued and vested share options held by employees throughout the Group.

Amortisation of intangible assets

The amortisation charge for the period of £1,495,000 (H1 2025: £1,495,000) represents the continuing amortisation of the acquired intangible assets of FDC and the VCT fund management business.

Taxation

The components of the Group's tax charge are shown in note 9 of the summary financial information. The overall tax charge for the period comprises a corporation tax charge on taxable profits, partially offset by the continued unwinding of the deferred tax liability in respect of the intangible assets which arose on the acquisition of FDC and the VCT fund management business.

Profit and total comprehensive income for the period

Profit and total comprehensive income for the period is £1,679,000 (H1 2025: £1,776,000), resulting in a basic earnings per Ordinary share of 0.39 pence (H1 2025: 0.41 pence).

Summarised statement of financial position

* 431,317,067 Ordinary shares, excluding those held in treasury, has been used as the denominator for calculating net assets per share as at 30 September 2025. 431,292,375 Ordinary shares, excluding those held in treasury, has been used as the denominator for calculating the comparative net assets per share as at 30 September 2024. 431,336,370 Ordinary shares, excluding those held in treasury, has been used as the denominator for calculating the comparative net assets per share as at 31 March 2025.

Intangible assets

The Group's intangible assets consist of acquired goodwill and the intangible assets recognised on the acquisition of FDC and the VCT fund management business.

Direct investment portfolio

During the period, Mercia's direct investment portfolio increased from £125,960,000 as at 31 March 2025 (H1 2025: £116,861,000 as at 31 March 2024) to £131,100,000 as at 30 September 2025 (H1 2025: £120,932,000 as at 30 September 2024), a 4.1% increase (H1 2025: 3.5% increase).

The Group invested £5,480,000 net (H1 2025: £3,886,000 net; FY 2025: £9,704,000 net) into five direct investments (H1 2025: four direct investments; FY 2025: seven direct investments).

Cash and cash equivalents

At the period end, Mercia had cash and cash equivalents totalling £34.5million (H1 2025: £46.2million; FY 2025: £40.1million).

The Group continues to have limited working capital needs due to the nature of its business and during the period cash generated from operating activities totalled £1.5million (H1 2025: £4.0million; FY 2025: £9.4million).

As at 30 September 2025, the Group's cash and cash equivalents were spread across four leading United Kingdom banks and a BlackRock Sterling money market fund, earning an average overall yield of c.4%.

The summarised movements in the Group's cash and cash equivalents during the period are shown below.

Outlook

The Group's first-half performance continues to demonstrate Mercia's robust fundamentals with growth in EBITDA and EBITDA margin. This continued growth, alongside the cash generative nature of Mercia's fund management activities, supports a c.5% increase in the interim dividend to 0.39 pence per share.

We remain confident that the current momentum will continue during the second half of this financial year.

Martin Glanfield

Chief Financial Officer

Summary Financial Information

Consolidated statement of comprehensive income

For the six months ended 30 September 2025

All results derive from continuing operations.

Consolidated statement of financial position

As at 30 September 2025

The condensed consolidated interim financial statements of Mercia Asset Management PLC were approved by the Board of Directors on 1 December 2025 and authorised for issue. They were signed on its behalf by:

Dr Mark Payton Martin Glanfield

Chief Executive Officer Chief Financial Officer

Consolidated statement of cash flows

For the six months ended 30 September 2025

Adjustments to reconcile operating profit to cash generated from operating activities:

General information

Mercia Asset Management PLC (the "Group", "Mercia") is a public limited company, incorporated and domiciled in England, United Kingdom and registered in England and Wales with registered number 09223445. Its Ordinary shares are admitted to trading on the AIM market of the London Stock Exchange. The registered office address is Mercia Asset Management PLC, Forward House, 17 High Street, Henley-in-Arden, Warwickshire B95 5AA.

Basis of preparation

The financial information presented in these condensed consolidated interim financial statements constitutes the condensed consolidated financial statements of Mercia Asset Management PLC and its subsidiaries for the six months ended 30 September 2025. These condensed consolidated interim financial statements should be read in conjunction with the Group's Annual Report and consolidated financial statements for the year ended 31 March 2025, which have been prepared in accordance with international accounting standards in conformity with the requirements of the Companies Act 2006, International Financial Reporting Standards ("IFRS") and the applicable legal requirements of the Companies Act 2006.

These condensed consolidated interim financial statements and the comparative financial information presented in these condensed consolidated interim financial statements for the period ended 30 September 2025 do not constitute full statutory accounts within the meaning of Section 434 of the Companies Act 2006. The Group's Annual Report and consolidated financial statements for the year ended 31 March 2025 were approved by the Board on 1 July 2025 and have been delivered to the Registrar of Companies. The Group's independent auditor's report on those accounts was unqualified, did not contain an emphasis of matter paragraph and did not contain any statement under section 498 of the Companies Act 2006.

These condensed consolidated interim financial statements have been prepared in accordance with International Accounting Standard ("IAS") 34 Interim Financial Reporting, as adopted for use in the UK.

No new or revised standards or interpretations that have become effective during the period ended 30 September 2025 have had a material effect on the financial statements of the Group.

Although not required by statute or regulation, the financial information contained in these condensed consolidated interim financial statements, which were approved by the Board on 1 December 2025 and authorised for issue, has been reviewed by the Group's independent auditor.

Going concern

Based on the Group's balance sheet, including its liquidity position at the period end and its forecast future operating and investment activities, the Directors have a reasonable expectation that the Group has adequate financial resources to manage business risks in the current economic environment and continue in operational existence, for a period of at least 12 months from the date of this announcement. Accordingly, the Directors continue to adopt the going concern basis in preparing these condensed consolidated interim financial statements.

Material accounting policies

The principal accounting policies applied in the presentation of the condensed consolidated interim financial statements of Mercia Asset Management PLC (the "Group", "Mercia" or the "Company"), including the critical accounting judgements made by the Directors and the key sources of estimation, are consistent with those followed in the preparation of the Group's Annual Report and consolidated financial statements for the year ended 31 March 2025 and have been consistently applied throughout the period ended 30 September 2025.

Segmental reporting

The Group's revenue and profits are derived from its principal activity within the United Kingdom.

IFRS 8 Operating Segments defines operating segments as those activities of an entity about which separate financial information is available and which are evaluated by the Chief Operating Decision Maker to assess performance and determine the allocation of resources. The Chief Operating Decision Maker has been identified as the Board of Directors. The Directors are of the opinion that under IFRS 8 Operating Segments the Group has only one operating segment, being specialist alternative asset management, because the results of the Group are monitored on a Group-wide basis. The Board of Directors assesses the performance of the operating segment using financial information which is measured and presented in a consistent manner.

An analysis of the Group's revenue is as follows:

• Realised fair value loss and unrealised fair value movement in direct investments

The UK standard rate of corporation tax is 25% (H1 2025: 25%). The deferred tax credit of £373,000 (H1 2025: £373,000) represents the unwinding of the deferred tax liabilities which arose in respect of the intangible assets recognised on the acquisition of Frontier Development Capital Limited and the VCT fund management business.

Earnings per share

Basic earnings per share is calculated by dividing the profit for the financial period by the weighted average number of Ordinary shares in issue during the period. Diluted earnings per share is calculated by dividing the profit for the financial period by the weighted average number of Ordinary shares outstanding and, when dilutive, adjusted for the effect of all potentially dilutive shares, including share options, on an as-if-converted basis. The potential dilutive shares are included in diluted earnings per share calculations on a weighted average basis for the period. The profit and weighted average number of shares used in the calculations are set out below:

The calculation of basic and diluted earnings per share is based on the following weighted average number of Ordinary shares:

Dividends

An interim dividend for the year ending 31 March 2026 of 0.39 pence per share, totalling £1,682,000, has been declared after the reporting period end and as such, has not been included as a liability in these condensed consolidated financial statements, in accordance with IAS 10.

Details of the dividends declared and paid in the comparative periods are set out in the Group's consolidated financial statements for the year ended 31 March 2025.

Investments

The net change in the value of the direct investment portfolio for the period is an increase of £5,140,000 (H1 2025: increase of £4,071,000). The table below reconciles the opening to closing value of investments for both the current and comparative periods.

Investments held in the Group's direct investment portfolio are carried at fair value in accordance with IFRS 10 Investment Entity exemption.

The measurement basis for determining the fair value of investments held at each period end is as follows:

Valuation inputs and sensitivities

The following table summarises quantitative information about the significant unobservable inputs used in Level 3 fair value measurements as at 30 September 2025 and 31 March 2025.

Under IAS 12 Income Taxes, provision is made for the deferred tax liability associated with the recognition of intangible assets arising as part of the acquisitions of Frontier Development Capital Limited and the VCT fund management contracts.

As at 30 September 2025, the deferred tax liability has been calculated using the tax rate of 25%.

Issued share capital

During the period, 2,951,393 Ordinary shares were repurchased and cancelled in accordance with the Group's new annual share buyback policy; see note 18. The outstanding Ordinary shares as at 30 September 2025, being 431,317,067, are entitled to one vote each and have equal rights as to dividends. The Ordinary shares are not redeemable.

Treasury reserve

Fair value measurements

The fair values of the Group's financial assets and liabilities are considered a reasonable approximation to the carrying values shown in the consolidated statement of financial position. Subsequent to their initial recognition at fair value, measurements of movements in fair values of financial instruments are grouped into Levels 1 to 3, based on the degree to which the fair value is observable. The fair value hierarchy used is outlined in more detail in note 2 to these condensed consolidated financial statements.

The following table gives information about how the fair values of these financial assets and financial liabilities are determined and presents the Group's assets measured at fair value as at 30 September 2025. There have been no movements in financial assets or financial liabilities between levels during the current or comparative periods. The table in note 12 sets out the movement in the Level 1 and 3 financial assets from the start to the end of the period.

Assets:

Financial assets at fair value through profit or loss - direct investment portfolio

Liabilities:

Financial liabilities at fair value through profit or loss - deferred consideration

The Directors consider that the carrying amounts of financial assets and financial liabilities recorded at amortised cost in the financial statements approximate to their fair values.

Financial instruments in Level 1

The Group had one direct investment quoted on the AIM market of the London Stock Exchange, MyHealthChecked PLC, which is valued using the closing bid price as at 30 September 2025.

Financial instruments in Level 3

If one or more of the significant inputs required to fair value an instrument is not based on observable market data, the instrument is included in Level 3. Apart from the one investment classified in Level 1, all other investments held in the Group's direct investment portfolio have been classified in Level 3 of the fair value hierarchy and the individual valuations for each of the companies have been arrived at using appropriate valuation techniques.

The Group has adopted the International Private Equity and Venture Capital Valuation Guidelines for determining its valuation techniques, which specify that the price of a recent investment represents one of a number of inputs used to arrive at fair value and uses a single classification for all Level 3 investments. Note 2 of the Group's consolidated financial statements for the year ended 31 March 2025 provides further information on the Group's valuation methodology, including a detailed explanation of the valuation techniques used for Level 3 financial instruments.

A reconciliation of the movement in Level 1 and 3 financial assets is disclosed in note 12.

INDEPENDENT REVIEW REPORT TO MERCIA ASSET MANAGEMENT PLC

Conclusion

We have been engaged by the company to review the condensed set of financial statements in the half-yearly financial report for the six months ended 30 September 2025 which comprises the consolidated statement of comprehensive income, consolidated statement of financial position, consolidated cashflow statement, consolidated statement of changes in equity and notes to the interim financial statements.

Basis for conclusion

Conclusions relating to going concern

Responsibilities of directors

Auditor's responsibilities for the review of the financial information

Use of our report

BDO LLP

Chartered Accountants

London, UK

Directors, secretary and advisers

Directors

Ian Metcalfe OBE DL (Non-executive Chair)

Dr Mark Payton (Chief Executive Officer)

Martin Glanfield (Chief Financial Officer)

Diane Seymour-Williams (Senior Independent Director)

Janine Nicholls (Non-executive Director)

200 Aldersgate

London EC2A 4HD