TIDMBSC
RNS Number : 8660P
British Smaller Companies VCT2 Plc
22 November 2016
British Smaller Companies VCT2 plc
Interim Management Statement
For the quarter ended 30 September 2016
British Smaller Companies VCT2 plc (the "Company") presents its
interim management statement for the quarter ended 30 September
2016. The statement also includes relevant financial information
between the end of the quarter and the date of this statement. A
copy of this interim management statement can be found at
www.bscfunds.com.
Overview
The Company has continued to make good progress in the quarter
with total return rising to 112.8 pence per ordinary share. This is
an increase of 1.3 pence per ordinary share; equivalent to 3.5% of
the portfolio's value at 1 July 2016.
Improved profitability in a number of investments contributed to
a GBP1.1 million return from the portfolio in the quarter,
delivering a GBP1.2 million increase in NAV in the period
(including the net income surplus of GBP0.1 million) prior to the
payment of the interim dividend.
We have now started to see new investments being approved by
HMRC and the Company has completed two new investments since the
end of the quarter.
The new VCT rules have changed the nature of the businesses that
the Company can invest in, with new investments needing to reinvest
profits to fund their growth plans. The most recent investments
have consisted mainly of equity, rather than yielding debt
instruments, and this is likely to be the norm going forwards. As a
result the Board would anticipate that this will reduce, in the
medium term, the maintainable level of dividends compared to the 7%
yield achieved historically.
Performance
30 September Movement 30 June 2016
2016
--------------------------- ------------- --------- -------------
Net Assets (GBPm) 56.8 (0.3) 57.1
--------------------------- ------------- --------- -------------
NAV per share (PPS) 60.3 (0.7) 61.0
--------------------------- ------------- --------- -------------
Cumulative dividends paid
(PPS) 52.5 2.0 50.5
--------------------------- ------------- --------- -------------
Total Return (PPS) 112.8 1.3 111.5
--------------------------- ------------- --------- -------------
Shares in issue 94,152,527 682,526 93,470,001
--------------------------- ------------- --------- -------------
The total return at 30 September 2016, calculated by reference
to the NAV per ordinary share and the cumulative dividends paid per
ordinary share, was 112.8 pence per ordinary share compared to
111.5 pence per ordinary share at 30 June 2016. Following payment
of an interim dividend of 2.0 pence per ordinary share cumulative
dividends paid have increased to 52.5 pence per ordinary share (30
June 2016: 50.5 pence per ordinary share).
The unaudited NAV per ordinary share as at 30 September 2016 was
60.3 pence per ordinary share (30 June 2016: 61.0 pence per
ordinary share) representing a decrease of 0.7 pence per ordinary
share. The decrease in NAV per ordinary share is due to the net
upward movement in the overall portfolio valuation offset by the
interim dividend paid of 2.0 pence per ordinary share.
Dividends and shares in issue
The number of ordinary shares in issue at 30 September 2016 was
94,152,527 (30 June 2016: 93,470,001). In addition, at 30 September
2016 the Company held 2,367,533 ordinary shares in treasury (30
June 2016: 2,367,533).
On 26 September 2016 the Company paid an interim dividend of 2.0
pence per ordinary share. Pursuant to its dividend re-investment
scheme and on the same date the Company issued 682,526 ordinary
shares at a price of 56.05 pence per ordinary share.
Much of the existing portfolio comprises investments in maturing
businesses with investment structures that provide both ongoing
income and repayments. The nature of the portfolio is beginning to
change with the most recent investments, including those completed
after the period end having to comply with the new VCT rules
comprising around 8% of the invested portfolio.
Net assets
Net assets at 30 September 2016 comprised the following:
% of net
GBP000 assets
Quoted investments at
bid price 1,945 3.4
Unquoted investments at
fair value 34,797 61.3
------- ---------
Total investments 36,742 64.7
Cash and cash equivalents 19,020 33.5
Other net current assets 1,035 1.8
------- ---------
Net assets 56,797 100.0
======= =========
The investment portfolio at 30 September 2016 was comprised as
follows:
Valuation
as a %
Valuation of net
GBP000 assets
Intelligent Office 3,118 5.5
ACC Aviation 2,845 5.0
Mangar Health Limited 2,493 4.4
DisplayPlan Holdings Limited 2,029 3.6
KeTech Enterprises Limited 2,000 3.5
GTK (Holdco) Limited 1,952 3.4
Business Collaborator Limited 1,727 3.0
Gill Marine Holdings Limited 1,683 3.0
Springboard Research Holdings
Limited 1,646 2.9
Immunobiology Limited 1,486 2.6
20,979 36.9
Other investments 15,763 27.8
Total investments 36,742 64.7
========== ==========
During the quarter to 30 September 2016 the Company made one
follow-on investment of GBP0.1 million into Intamac Limited.
In the quarter to 30 September 2016 the realisation and
repayment of investments generated cash proceeds of GBP0.4
million.
Portfolio Performance
Over the quarter to 30 September 2016 aggregate unrealised
portfolio valuations have increased by GBP1.1 million.
The Board continues to follow its policy of maintaining a
diversified portfolio. At 30 September 2016, only one investment
represented more than 5 per cent of the Company's NAV.
Subsequent investments
Since 30 September 2016 the Company has invested an additional
GBP2.0 million into B2M and Traveltek.
-- B2M is a leading provider of software for rugged and
industrial enterprise mobile devices, based in Oxfordshire.
-- Traveltek is a Scottish technology business which provides
market leading dynamic technology to travel agents, tour operators
and wholesalers worldwide.
Since HMRC issued its guidelines to the new legislation in May
this year the Company has completed three new investments totalling
GBP2.9 million. Heads of terms granting exclusivity for a further
three investments totalling GBP3.0 million have recently been
signed.
Outlook
The completion of new investments and developing pipeline of
investment opportunities is encouraging. In this context the
Company has decided that it will undertake a non-prospectus top-up
to raise EUR5 million to be launched on 3 January 2017. The Board
will continue to seek to further expand and diversify the portfolio
recognising that its composition will change over time as the
current portfolio is realised and the newer investments in younger
businesses replaces it. As the return profile from these
investments is likely to have a greater volatility the Board will
continue to monitor its dividend and buy-back policies closely
through this transition.
The information contained within this announcement is deemed by
the Company to constitute inside information as stipulated under
the Market Abuse Regulations (EU No. 596/2014). Upon the
publication of this announcement via Regulatory Information Service
this inside information is now considered to be in the public
domain.
22 November 2016
For further information please contact:
David Hall YFM Private Equity Limited Tel: 0113 244 1000
Gillian Martin Nplus1 Singer Advisory LLP Tel: 0207 496 3000
This information is provided by RNS
The company news service from the London Stock Exchange
END
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