TIDMBSC
RNS Number : 8167S
British Smaller Companies VCT2 Plc
18 November 2021
British Smaller Companies VCT2 plc
Interim Management Statement
For the quarter ended 30 September 2021
British Smaller Companies VCT2 plc (the "Company") presents its
interim management statement for the quarter ended 30 September
2021. 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's Total Return at 30 September 2021 was 138.2 pence
per ordinary share, representing an increase of 3.2 pence per
ordinary share over the Total Return of 135.0 pence per ordinary
share as at 30 June 2021. The increase represents 5.0 per cent of
the opening net asset value of 63.5 pence per ordinary share.
Cumulatively this takes the increase in the Total Return for the
nine months to 30 September 2021 to 13.2 pence per share
representing 24.0 per cent of the opening Net Asset Value (""NAV")
of 55.0 pence per share.
In the quarter one new investment of GBP1.4 million was made
into Vuealta, together with three follow-on investments totalling
GBP0.3 million into Arraco, Ncam and Biz2Mobile. Vuealta delivers
scenario planning and forecasting solutions for supply chain,
finance and operations, with the investment enabling the business
to continue its global expansion strategy and product
development.
The Company completed the sale of its shareholding in Deep
Secure in July. The exit generated capital proceeds of GBP3.3
million delivering a profit of GBP2.8 million above cost, and an
uplift of GBP1.3 million on the carrying value at the beginning of
the financial year. Including income, the total return from this
investment was GBP3.8 million over an 11.6 year holding period,
producing an internal rate of return of 23 per cent and a multiple
of 7.7x cost.
In October 2021 the Company also completed the partial sale of
20 per cent of its holding in Matillion, generating capital
proceeds of GBP5.9 million. The partial realisation, which was in
line with the related valuation recognised at 30 September 2021,
crystallised a profit on the partial realisation of GBP5.6 million
above cost with the proceeds being equivalent to 3.3x the total
investment of GBP1.8 million made by the Company into
Matillion.
As a consequence of the above, on 7 October 2021 the directors
announced the payment of a third interim dividend for the current
year of 5.0 pence per ordinary share ("Third Interim Dividend"),
which was paid on 16 November 2021 to shareholders on the register
at the close of business on 15 October 2021. This brought total
dividends paid in the current financial year to 8.0 pence per
ordinary share. These cumulative dividends equate to a yield of
14.5 per cent of the NAV at 31 December 2020.
Your Company's portfolio has delivered a strong performance over
the nine-month period to 30 September 2021, generating a return of
GBP23.5 million. The cumulative increase in Total Return of 13.2
pence since the start of the year maintains the Total Return above
the hurdle at which a performance fee becomes payable, provided
that the Total Return is maintained through to 31 December 2021. As
a result the Company has taken into account GBP4.1 million for a
performance incentive (of which GBP0.8 million was recognised in
the quarter). All returns are stated after taking into account the
provision.
Performance
The movement in Total Return in pence per ordinary share is set
out in the table below:
30 June Increase Buyback Movement 30 September
2021 in Value of shares In Period 2021
Net Assets (GBPm) 89.0 4.5 (0.4) 4.1 93.1
------------ ---------- ----------- ----------- -------------
NAV per share
(PPS) 63.5p 3.2 - 3.2 66.7p
------------ ---------- ----------- ----------- -------------
Cumulative dividends
paid (PPS) 71.5p - - - 71.5p
------------ ---------- ----------- ----------- -------------
Total Return
(PPS) 135.0p 3.2 - 3.2 138.2p
------------ ---------- ----------- ----------- -------------
Shares in issue 140,231,049 - (675,308) (675,308) 139,555,741
------------ ---------- ----------- ----------- -------------
The unaudited NAV per ordinary share increased from 63.5 pence
per share to 66.7 pence per share, equivalent to 5.0 per cent in
the period. Cumulative dividends paid at 30 September 2021 were
71.5 pence per ordinary share (30 June 2021: 71.5 pence per
ordinary share).
The movements in NAV per ordinary share are set out in the table
below:
GBPm Pence per
ordinary share
NAV at 30 June 2021 89.0 63.5
Increase in portfolio value 5.6 4.0
Net operating costs (0.3) (0.2)
Incentive fee (0.8) (0.6)
Issue/buy-back of shares (0.4) -
------ ---------
4.1 3.2
----- -------
NAV at 30 September 2021 93.1 66.7
------ ----- --------- -------
Following payment of the second interim dividend of 1.5 pence
per ordinary share for the year ending 31 December 2021 on 25
October 2021 and the third interim dividend of 5.0 pence per
ordinary share on 16 November 2021 the unaudited net asset value is
60.2 pence per ordinary share.
Dividends and shares in issue
On 27 September 2021 the Company purchased 675,308 ordinary
shares of 10 pence each at a price of 59.40 pence per ordinary
share. These shares were placed in treasury.
The number of ordinary shares in issue at 30 September 2021 was
139,555,741 (30 June 2021: 140,231,049). In addition, at 30
September 2021 the Company held 15,276,543 ordinary shares in
treasury (30 June 2021: 14,601,235).
Following the payment of the second interim dividend of 1.5
pence per ordinary share on 25 October 2021 the Company issued
760,733 ordinary shares under the DRIS, and following the payment
of the third interim dividend of 5.0 pence per ordinary share on 16
November 2021 the Company issued 2,491,956 ordinary shares under
the DRIS, taking cumulative dividends paid to 78.0 pence per
ordinary share and the number of ordinary shares in issue to
142,808,430 at that date.
Net assets
Net assets at 30 September 2021 comprised the following:
% of net
GBP000 assets
Unquoted investments at fair
value 75,180 80.8%
Cash and cash equivalents 21,353 22.9%
Other net current liabilities (3,449) (3.7%)
-------- ---------
Net assets 93,084 100.0%
======== =========
Investments
The investment portfolio at 30 September 2021 comprised:
Cumulative
valuation
as a %
Valuation of net
GBP000 assets
Matillion Limited 30,231 32.5%
Springboard Research Holdings
Limited 4,124 36.9%
Intelligent Office UK 3,067 40.2%
Wooshii Limited 2,933 43.3%
KeTech Enterprises Limited 2,904 46.5%
Elucidat Ltd 2,791 49.5%
Unbiased EC1 Limited 2,786 52.5%
SharpCloud Software Limited 2,666 55.3%
Force24 Ltd 2,569 58.1%
ACC Aviation Group Limited 2,392 60.7%
56,463 60.7%
Other investments 18,717 20.1%
Total investments 75,180 80.8%
========== ===========
Investments made since November 2015 represented 78 per cent of
the value of the unquoted portfolio at 30 September 2021.
Portfolio performance
Over the quarter to 30 September 2021 the aggregate portfolio
valuation has increased by GBP5.6 million which incorporates a
number of increased valuations including Matillion (GBP3.2 million)
and Springboard (GBP1.3 million).
Fundraising
The Company launched a Joint Fundraising with British Smaller
Companies VCT plc in the 2021/22 tax year on 22 September 2021,
seeking to raise in aggregate GBP40 million, with an over-allotment
facility of GBP20 million (the "Offers"). The Company announced on
11 October 2021 that the over-allotment facility would be utilised
in relation to the Offers, and the Company is pleased to report
that the Offers were fully utilised and that the Offers were closed
to new applications on 12 November 2021. The Company anticipates
that the first and final allotment in relation to the Offers will
be made on or around 7 January 2022, with share certificates
dispatched within 10 working days thereafter.
Outlook
Your Company is continuing to support those businesses in the
portfolio that are investing for accelerated growth. This has been
an increasing trend in the current year and one that is anticipated
to continue through to 2022.
Whilst the pandemic and the new trading relationship with the EU
have provided some uncertainty to the overall economic climate
there remains a strong demand from the UK's smaller companies
seeking to innovate their business models and management teams to
drive further growth. The plans to add additional investment
capacity are intended to ensure that your Company remains well
funded to take advantage of the investment opportunities as they
arise.
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.
18 November 2021
For further information please contact:
David Hall YFM Private Equity Limited Tel: 0113 244 1000
Alex Collins Panmure Gordon (UK) Limited Tel: 0207 886 2767
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END
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