TIDMBSC
RNS Number : 2085Y
British Smaller Companies VCT2 Plc
07 May 2019
British Smaller Companies VCT2 plc
Interim Management Statement
For the quarter ended 31 March 2019
British Smaller Companies VCT2 plc (the "Company") presents its
interim management statement for the quarter ended 31 March 2019.
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 progress in the quarter with
total return rising to 118.5 pence per ordinary share. This is an
increase of 0.1 pence per ordinary share.
At 31 March 2019 net asset value ("NAV") was GBP59.6 million, a
fall of GBP4.5 million, GBP4.3 of which arose from the payment of
the interim dividend of 5.0 pence per ordinary share on 15 February
2019 (net of the shares issued under the Company's DRIS). There
were GBP0.4 million of share buy backs in the period, also reducing
the net assets, and GBP0.2 million of other, positive
movements.
The Company has had a strong start to the year, with investments
totalling GBP1.7 million to date and a successful fundraising,
alongside British Smaller Companies VCT plc, which raised net
proceeds of GBP12.7 million in April 2019.
Performance
The movement in Total Shareholder Return in pence per ordinary
share is set out in the table below:
Pence per
ordinary share
Cumulative dividends to 31 December 2018 58.5
Net Asset Value at 31 December 2018 59.9
--------
Total Shareholder Return at 31 December 2018 118.4
Net underlying increase in portfolio 0.3
Net income after expenses / share buybacks (0.2)
--------
Increase in Total Shareholder Return 0.1
------------------------------------------------------------------- -------- --------
Total Shareholder Return at 31 March 2019 118.5
---------------------------------------------------- ------------ -------- --------
31 March Movement 31 December
2019 2018
Net Assets (GBPm) 59.6 (4.5) 64.1
------------ ---------- ------------
NAV per share (PPS) 55.0p (4.9p) 59.9p
------------ ---------- ------------
Cumulative dividends paid
(PPS) 63.5p 5.0p 58.5p
------------ ---------- ------------
Total Return (PPS) 118.5p 0.1p 118.4p
------------ ---------- ------------
Shares in issue 108,459,010 1,440,190 107,018,820
------------ ---------- ------------
The total return at 31 March 2019, calculated by reference to
the NAV per ordinary share and the cumulative dividends paid per
ordinary share, was 118.5 pence per ordinary share compared to
118.4 pence per ordinary share at 31 December 2018. Cumulative
dividends paid were up 5.0 pence per ordinary share at 63.5 pence
per ordinary share (31 December 2018: 58.5 pence per ordinary
share).
The unaudited NAV per ordinary share as at 31 March 2019 was
55.0 pence per ordinary share (31 December 2018: 59.9 pence per
ordinary share) representing an increase of 0.1 pence per ordinary
share from the portfolio offset by the interim dividend of 5.0
pence per share paid on 15 February 2019.
Dividends and shares in issue
As a result of the realisations in December 2018 a special
interim dividend, representing the realised gain over the original
cost of the investments, of 5.0 pence per ordinary share was paid
on 15 February 2019. On the same date 2,248,386 ordinary shares
were issued under the Company's DRIS.
On 26 March 2019 the Company purchased 808,196 ordinary shares
of 10 pence each at a price of 52.66 pence per ordinary share.
These shares were placed in treasury.
The number of ordinary shares in issue at 31 March 2019 was
108,459,010 (31 December 2018: 100,018,820). In addition, at 31
March 2019 the Company held 6,966,757 ordinary shares in treasury
(31 December 2018: 6,158,561).
Subsequent to the quarter end the Company issued 23,205,679
ordinary shares relating to the fundraising following which the
Company's issued share capital consists of 131,664,689 ordinary
shares of 10 pence each with voting rights and 6,966,757 ordinary
shares of 10 pence each held in treasury.
Net assets
Net assets at 31 March 2019 comprised the following:
% of net
GBP000 assets
Unquoted investments at
fair value 38,887 65.2
Quoted investments at
bid price 1,075 1.8
------- ---------
Total investments 39,962 67.0
Cash and cash equivalents 18,569 31.2
Other net current assets 1,069 1.8
------- ---------
Net assets 59,600 100.0
======= =========
The investment portfolio at 31 March 2019 was comprised as
follows:
Valuation
as a %
Valuation of net
GBP000 assets
Matillion Limited 5,489 9.2
ACC Aviation 5,440 9.1
Intelligent Office UK 3,021 5.1
Business Collaborator Limited 2,441 4.1
KeTech Enterprises Limited 2,231 3.8
Deep-Secure Ltd 2,110 3.5
Eikon Holdco Limited 2,095 3.5
Springboard Research Holdings
Limited 1,687 2.8
Leengate Valves Limited 1,291 2.2
Frescobol Carioca Limited 1,200 2.0
27,005 45.3
Other investments 12,957 21.7
Total investments 39,962 67.0
========== ==========
During the quarter to 31 March 2019 the Company made one new
investment of GBP1.2 million into Frescobol Carioca Limited, the
luxury men's resort wear and lifestyle brand. The Company also made
follow-on investments totalling GBP0.5 million into four portfolio
companies.
In the quarter to 31 March 2019 the realisation and repayment of
investments generated cash proceeds of GBP0.1 million.
In April 2019 the Company realised its investment in Leengate
Valves Limited generating proceeds of GBP1.3 million and delivering
a total return of GBP2.2 million, a multiple of 2.3x original
cost.
Investments made prior to the November 2015 Budget represented
62 per cent of the value of the unquoted portfolio at 31 March 2019
and, following the Leengate disposal, they now represent 61 per
cent of the unquoted portfolio.
Portfolio Performance
Over the quarter to 31 March 2019 the aggregate unrealised
portfolio valuation has increased by GBP0.3 million.
The Board continues to follow its policy of maintaining a
diversified portfolio. At 31 March 2019, only three investments
represented more than 5 per cent of the Company's NAV, the largest
being 9.2 per cent, with the top ten investments representing 45.3
per cent of NAV (31 December 2018 41.0 per cent).
Fundraising
On 27 November 2018 your Company launched a new share offer with
British Smaller Companies VCT plc to raise in aggregate up to GBP30
million, with an over-allotment facility of GBP5 million. I am
delighted that due to strong demand the offer closed on 11 February
2019 raising total gross proceeds of GBP35 million. The allotment
of new ordinary shares took place on 1 April 2019, subsequent to
which your Company received net proceeds of GBP12.5 million. On the
same date a further GBP0.2million was raised by allotting shares
outside the Offers.
Board Composition
After 19 years Richard Last will step down from the Board later
today at the end of this year's AGM. The Board would like to thank
Richard for his significant contribution to the Company, especially
its evolution from its merger with British Smaller Technologies
Company VCT plc to co-investing alongside British Smaller Companies
VCT plc.
Outlook
Despite the turmoil in Westminster smaller businesses continue
to grow and innovate. The Company continues to invest, with one new
investment in the quarter and a number of follow-on investments to
support further growth and facilitate strategic change. There are a
number of opportunities at the advanced stages of review and the
success of the recent fundraising allows the Company to continue to
take advantage of these opportunities as well as providing capacity
for follow-on funding which will inevitably be required.
Undoubtedly the work done with HMRC to improve their advance
assurance process by the Investment Adviser, as a member of the VCT
Association, is helping to speed up the process of investments and
further progress in this area remains the target.
The Company's portfolio continues to evolve, with investments
since the November 2015 Budget now representing 38 per cent of the
portfolio's value and the Board will continue to review its
dividend policies as the more mature investments are realised. A
number of investments are currently in sale processes and, as with
the realisations of Gill Marine, Mangar and GTK in December 2018,
the Board would hope to pay special dividends on future
realisations.
Your Board remains focussed on maximising long-term Total
Shareholder Return.
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.
7 May 2019
For further information please contact:
David Hall YFM Private Equity Limited Tel: 0113 244 1000
Jonathan Becher Panmure Gordon (UK) Limited Tel: 0207 886 2715
This information is provided by RNS, the news service of the
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END
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