b'36 Mercia Asset Management PLC Annual Report & Accounts 2022Chief Financial Officers reviewRobust results and business fundamentals Chief Financial Officer Martin GlanfieldMercia has generated over 60million ofpre-tax profits growthduring the lasttwo years.The significance of Mercias financial results for the year ended 31 March 2022 is that they 2022 Highlights demonstrate that the previous years record results were not a one-off. These results were27.4 m generated from both the Groups profitable fund management operations and its maturing direct investment portfolio. This combination Profit before taxation of recurring profits and cash flow generation from both our fund management operations 2021: 34.0m and balance sheet investment portfolio, is a key differentiator in the specialist asset management200.6 m sector.Overall financial performanceNet assets The gradual emergence from the economic and 2021: 176.0m social impact of the pandemic during the second half of the financial year, enabled the Group 45.6 p to maintain its profitable fund management and direct investment momentum. Excluding performance fees received, revenue continued to Net assets per share increase and as meeting and travel restrictions 2021: 40.0p eased and budgeted staff recruitment levels were reached, Mercia ended the year back on61.3 m a normal trading footing. The second half of the financial year also saw two new direct investments join the balance sheet portfolio Cash* (Forensic Analytics and Pimberly), the highly profitable sale of Faradion and just prior to 2021: 54.7m the year end, a significant new third-party investment into nDreams, at a materially higher *Including short-term liquidity investments valuation than the previous carrying value.'