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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Baronsmead Second Venture Trust Plc | LSE:BMD | London | Ordinary Share | GB0030028103 | ORD 10P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 55.50 | 54.00 | 57.00 | 55.50 | 55.50 | 55.50 | 0.00 | 01:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| Trust,ex Ed,religious,charty | -1.2M | -6.91M | -0.0192 | -28.91 | 200.12M |
From Apr 2019 to Apr 2024
TIDMBMD
RNS Number : 6037H
Baronsmead Second Venture Trust PLC
19 August 2016
Baronsmead Second Venture Trust plc
Half-Yearly report for the six months ended
30 June 2016
The Directors announce the unaudited half-yearly financial report for the six months to 30 June 2016.
Copies of the half-yearly report can be obtained from the following website: www.baronsmeadvcts.co.uk.
Our Investment Objective
Baronsmead Second Venture Trust is a tax efficient listed company which aims to achieve long-term investment returns for private investors.
Investment Policy
-- To invest primarily in a diverse portfolio of UK growth businesses, whether unquoted or traded on AIM.
-- Investments are made selectively across a range of sectors in companies that have the potential to grow and enhance their value.
Dividend Policy
The Board of Baronsmead Second Venture Trust seeks to maintain a minimum annual dividend of 4.5p per ordinary share which primarily depends on the value of realisations achieved.
Following final shareholder approval on 11 March 2016 Baronsmead VCT 3 plc (now renamed Baronsmead Second Venture Trust plc ("BSVT")) acquired the assets of Baronsmead VCT4 plc ("BVCT4") in consideration for the issue of New BSVT Shares for BVCT4 shareholders. This is the first set of accounts since the two VCTs were combined and it is important to note the comparative prior year figures relate to the original Baronsmead VCT 3 plc.
Shareholder choice
The Board wishes to provide shareholders with a number of choices that enable them to utilise their investment in Baronsmead Second Venture Trust in ways that best suit their personal investment and tax planning requirements and in a way that treats all shareholders equally.
-- Fund raising | From time to time the Company seeks to raise additional funds by issuing new shares at a premium to the latest published net asset value to account for issue costs. This enables shareholders seeking additional investments to do so with taxation relief.
-- Dividend Reinvestment Plan | The Company offers a Dividend Reinvestment Plan which enables shareholders to purchase additional shares through the market in lieu of cash dividends.
-- Buy back of shares | From time to time the Company buys its own shares through the market in accordance with its share price discount policy. Subject to certain conditions, the Company seeks to maintain a mid market share price discount of approximately 5 per cent. to net asset value. In the six months to 30 June 2016, 1,255,000 shares were bought back representing 0.8 per cent. of the shares in issue at 30 June 2016 at prices which represent an average 5.1 per cent. discount to the latest published net asset value at the time the shares were bought back. By providing support to market pricing, this helps those shareholders who need to realise their investment.
-- Secondary market | The Company's shares are listed on the London Stock Exchange and can be bought or sold by shareholders using a stockbroker or authorised share dealing service in the same way as shares of any other listed company. Approximately 36,000 shares were bought by investors in the Company's existing shares in the six months to 30 June 2016.
Financial Headlines
-- 7.0p dividend paid in the six month period to 30 June 2016
-- 287.0p - Net asset value ("NAV") total return to shareholders for every 100.0p invested at launch
-- -0.3% - NAV per share decreased 0.3 per cent to 106.16p in the six month period to 30 June 2016 before the deduction of dividends
Cash Returned to Shareholders
The table below shows the cash returned to shareholders that invested in Baronsmead Second Venture Trust plc (formerly known as Baronsmead VCT 3 plc) dependent on their subscription cost, including the income tax available to be reclaimed on the subscription.
Hot Features
Premium
Cumulative
Net cash invested dividends
Cash invested Income tax reclaim (p) paid Return on cash
Year subscribed (p) (p) (p)* invested (%)
==================== ============= ================== =================== =================== ===================
2001 (January) 100.00 20.00 80.00 109.80 129.8
==================== ============= ================== =================== =================== ===================
2005 (March) - C
share 100.00 40.00 60.00 72.50 112.5
==================== ============= ================== =================== =================== ===================
2010 (March) 103.09 30.93 72.16 61.50 89.7
==================== ============= ================== =================== =================== ===================
2012 (December) 117.40 35.22 82.18 43.50 67.1
==================== ============= ================== =================== =================== ===================
2014 (March) 112.40 33.70 78.70 23.50 50.9
==================== ============= ================== =================== =================== ===================
2016 (March) 107.20 32.20 75.00 7.00 36.5
==================== ============= ================== =================== =================== ===================
* Dividends paid to C shareholders post conversion have been adjusted by the conversion ratio (0.85642528).
The table below shows the cash returned to shareholders that invested in Baronsmead VCT 4 plc dependent on their subscription cost, including the income tax available to be reclaimed on the subscription.
Cumulative
Net cash invested dividends
Income tax reclaim (p) paid Return on cash
Year subscribed Cash invested (p) (p) (p)* invested (%)
=================== ================= ================== ================== ================== ==================
2002 100.00 20.00 80.00 88.50 108.5
=================== ================= ================== ================== ================== ==================
2006 (C
shareholder)
(March) 100.00 40.00 60.00 66.25 106.2
=================== ================= ================== ================== ================== ==================
2010 (March) 95.94 28.78 67.15 50.50 82.6
=================== ================= ================== ================== ================== ==================
2012 (December) 107.50 32.25 75.24 33.50 61.2
=================== ================= ================== ================== ================== ==================
2013 (March) 102.70 30.81 71.88 29.50 58.7
=================== ================= ================== ================== ================== ==================
2014 (March) 98.80 29.64 69.15 16.50 46.7
=================== ================= ================== ================== ================== ==================
* Dividends paid to C shareholders post conversion have been adjusted by the conversion ratio (1.0372828).
For former BVCT4 shareholders, BSVT dividends paid/declared since 11 March 2016 are adjusted by a factor of approximately 0.92919, this being the basis on which shares in BSVT were issued for every BVCT4 share previously held by them.
Chairman's Statement
Despite the continued strong performance of most of the portfolio, it is disappointing to have to report a fall in the underlying Net Asset Value per share of 0.3 per cent. (0.3p). This was not unexpected however given the recent volatility on the quoted markets, particularly the market fall following the Brexit decision.
You will all be aware that on 11 March 2016, Baronsmead VCT 3 ("BVCT3") plc acquired the assets of Baronsmead VCT 4 ("BVCT4") plc in exchange for the issue of new shares to the BVCT4 shareholders (the Acquisition).
Following the Acquisition, on 14 March 2016, the enlarged BVCT3 changed its name to Baronsmead Second Venture Trust plc ("BSVT" or "the Company"). At 30 June 2016 the NAV of BSVT was GBP150 million making it one of the largest VCTs in the industry. I would like to extend a particularly warm welcome to those BVCT4 shareholders who had not previously held shares in the BVCT3.
Since this is the first set of accounts prepared following the Acquisition, the comparative figures in the accounts relate only to BVCT3 prior to the Acquisition and are therefore not a true comparison to the period under review.
Results
During the six months to 30 June 2016, the Company's NAV per share decreased 0.3 per cent. from 106.46 to 106.16p before dividends.
Pence per ordinary share
-------------------------------------------- -------------------------
NAV as at 1 January 2016 106.46
-------------------------------------------- -------------------------
Valuation decrease (0.3 per cent.) (0.3)
-------------------------------------------- -------------------------
NAV as at 30 June 2016 before dividends 106.16
-------------------------------------------- -------------------------
Less: Interim dividend paid on 3 June 2016 (7.00)
-------------------------------------------- -------------------------
NAV as at 30 June 2016 after dividends 99.16
-------------------------------------------- -------------------------
The interim dividend of 7p paid in June 2016 was largely as a result of realisations in early 2016. It was paid in lieu of the dividend that would normally be declared on the publication of the Company's results for the six months to 30 June 2016. In the ordinary course of events a further dividend would be expected to be declared for the year 2016, subject to the level and timing of profitable realisations of investments.
Portfolio Review
At the date of the Acquisition, with the exception of BVCT3's holding in Wood Street Microcap (WSM), the investments held by BVCT3 and BVCT4 were common to both. As shown in the table below, as at 30 June 2016,the Company's net assets of GBP150m comprised investments in 67 unquoted and AIM-traded companies. In addition, the Company's investment in Wood Street Microcap provides investment exposure to a further 40 AIM-traded and fully listed companies. .
Per cent
Per cent return over
Asset class Nav (GBP) of net assets* No. of investees the period**
----------------- ---------- ---------------- ----------------- --------------
Unquoted
and AIM-traded
companies 102.2m 68 67 2.6
----------------- ---------- ---------------- ----------------- --------------
Wood Street
Microcap
Investment
Fund 8.2m 5 40 (10.1)
----------------- ---------- ---------------- ----------------- --------------
Liquid assets 39.7m 27 N/A -
----------------- ---------- ---------------- ----------------- --------------
Totals 150.1m 100 107
----------------- ---------- ---------------- ----------------- --------------
* By value as at 30 June 2016.
** Includes capitalised interest and redemption premium income received.
Steady progress was made in some of our more mature unquoted investments including Kingsbridge, Armstrong Craven and Kirona and the unquoted portfolio as a whole provided a return of 9.6 per cent. during the period. These gains, however, were more than offset by reductions in value of the Company's investments in AIM traded companies and Wood Street Microcap reflecting the volatility of the quoted markets which was particularly pronounced toward the end of June following the Brexit decision. As a result, the NAV per share at 31 July 2016 was 100.01p per share.
Investment and Divestments
Full details about the investments and divestments during the period are set out in the tables below.
In the six months to 30 June 2016, the Company invested GBP0.9 million in Eden Research plc. Following the period end, the Company invested a total of a further GBP0.6m in one follow-on investment.
The reduced level of investment activity has been due to rules introduced in November 2015 which restricted investment by VCTs to the provision of development capital to younger companies for organic growth rather than acquisitions. These rules are complex and it has taken time for the market to reach an understanding as to how they will be interpreted and enforced by HMRC. They have required the Manager to adapt its investment strategy and as a result, in keeping with the entire VCT industry, its rate of investment has been low during the first half of 2016.
The Company has now completed an investment under the new rules and the Manager reports a steadily increasing flow of investment opportunities. The Manager is experienced at adapting its investment strategy in response to changes in the VCT rules and the Board believes that it will continue to be able to identify an adequate supply of new and attractive investment opportunities that will comply with the new VCT rules and still generate good returns for the Company. The new rules dictate that these companies will be younger and smaller than those in which the Company has previously invested in and, as a result, they may need to be held for longer periods. This may lead to some increased volatility of returns within a portfolio but the Manager remains confident that the overall portfolio will continue to generate appropriate returns.
A total of GBP8.2 million was realised through exits during the period. This includes the sale of Kingsbridge which generated a return 3.2 times its original cost and a deferred recovery from the previous disposal of Carnell which increased the return on this investment to 1.0 times cost. The disposals of Fisher Outdoor Leisure, Independent Community Care Management, Valldata and Tangent Communications each produced returns of between 0.5 and 0.8 times cost, however this had little impact on the NAV as at 30 June 2016 as provisions against their value had been made previously.
Acquisition and Fundraising
Proposals for the Acquisition of the shares of BVCT4 as well as a fundraising were published on 27 January 2016 and the Acquisition completed on 11 March 2016. Following the transfer of all of BVCT4's assets and liabilities to the Company, BVCT4 shareholders received approximately 0.92919 new shares in the Company ("New Shares") for every BVCT4 share previously held by them (rounded down to the nearest whole share). In aggregate, 68.0m shares were issued to BVCT4 shareholders in consideration for approximately GBP70.7 million of assets. In addition to the BVCT4 acquisition, the Company completed a further GBP10 million fundraising which was fully subscribed by existing shareholders and a further 9.3 million shares were issued on 15 March 2016.
Proposed merger with Baronsmead VCT 5
On 11 August 2016 the Board and the Board of Baronsmead VCT 5 plc announced that they have entered into discussions regarding a possible merger. It is intended that the merger would be effected on a NAV for NAV basis by way of a scheme of reconstruction under the Insolvency Act 1986. The boards believe that a merger would be in the best interests of the shareholders of both companies as it is expected that it would result in estimated annual costs savings of around GBP300,000 per annum, remove the duplication of communication with the many shareholders that are common to both companies and create a larger merged company with net assets of approximately GBP200 million. The Board and the Board of Baronsmead VCT 5 plc expect to write to their respective shareholders with further details on the terms of the proposed Merger in October 2016. It is currently intended that, subject to shareholder approval, the Merger would become effective in November 2016.
Change of Financial Year End
In August 2016, the Company announced that it had changed its financial year end from 31 December to 30 September. As a result, it is expected that the Company will publish its report and financial statements for the 9 months to 30 September 2016 in November 2016.
Outlook
It will take time for the impact of the Brexit referendum on the UK economy to become apparent and in turn what the impact on the Company and its investments will be. In particular, it is too early to determine what the implications will be with regard to the VCT rules that are heavily influenced by the EU State Aid rules and whether in time there will be any relaxation to these restrictions. We are therefore proceeding on the basis that this will not be the case as it is likely to be a number of years before there will be clarity on that matter.
Reassuringly, the current portfolio mix is diverse, gearing levels are low and so far trading activity has remained steady. This is a reflection of the fact that the portfolio is comprised of UK based companies whose trading activities are primarily UK based. There are a number of more mature investments that may be disposed of over the coming years that should assist in generating good returns for investors and enable the Company to continue to pay attractive dividends. The market is slowly adapting to the new VCT rules and the number of investment opportunities being considered is growing. The Manager is one of the most experienced in the sector with a track record of investing for the long term and we are therefore confident it can adapt to the challenges of the new VCT rules and any disruption that Brexit may bring.
Anthony Townsend
Chairman
18 August 2016
Investment Diversification at 30 June 2016
Sector by value Percentage
------------------------ -------------
Business Services 27%
------------------------ -------------
Consumer Markets 21%
------------------------ -------------
Healthcare & Education 13%
------------------------ -------------
Technology, Media &
Telecommunications
("TMT") 39%
------------------------ -------------
Total assets by value Percentage
----------------------------- -------------
Unquoted - loan stock 24%
----------------------------- -------------
Unquoted - equity 7%
----------------------------- -------------
AIM & collective investment
vehicle 42%
----------------------------- -------------
Listed interest bearing
securities 11%
----------------------------- -------------
Net current assets
(principally cash) 16%
----------------------------- -------------
Time investments held Percentage
by value
------------------------- -------------
Less than 1 year 6%
------------------------- -------------
Between 1 and 3 years 31%
------------------------- -------------
Between 3 and 5 years 29%
------------------------- -------------
Greater than 5 years 34%
------------------------- -------------
Investments in the period
Book
cost
Company Location Sector Activity GBP'000
=============== ================= =========== ========================= ========
AIM-traded investments
New
====================================================================================
Developer of biological
Eden Research Business fungicides and bio
plc Gloucestershire Services equivalents 900
=============== ================= =========== ========================= ========
Total investments in the period 900
========================================================================== ========
BSVT acquired the BVCT4 investment portfolio (total GBP51,334,000) on 11 March 2016.
Realisations in the period
First Overall
investment Proceeds++ multiple
Company date GBP'000 return*
========================= ============= ============ ========== =========
Unquoted realisations
=============================================================================
Kingsbridge Risk Full trade
Solutions Ltd sale Jan 14 5,196 3.2
========================= ============= ============ ========== =========
Fisher Outdoor
Leisure Holdings Full trade
Ltd sale Jun 06 1,926 0.8
========================= ============= ============ ========== =========
Independent Community
Care Management Full trade
Ltd sale Oct 11 548 0.5
========================= ============= ============ ========== =========
Valldata Group
Ltd Write off Apr 10 0 0.5
========================= ============= ============ ========== =========
Total unquoted
realisations 7,670
====================================================== ========== =========
AIM-traded realisations
========================= ============= ============ ========== =========
Tangent Communications Full market
plc sale Mar 07 500 0.5
========================= ============= ============ ========== =========
Total AIM-traded
realisations 500
====================================================== ========== =========
Total realisations
in the period 8,170
====================================================== ========== =========
++ Proceeds at time of realisation including redemption
premium and interest
* Includes interest/ dividends received, load note
redemptions and partial realisations accounted
for in prior periods.
Deferred consideration of GBP56,000 was received
in respect of CableCom II Networking Holdings Ltd,
which had been sold in prior periods. Carnell Contractors
Ltd was fully realised on receipt of final earn-out
dividend.
=============================================================================
With the exception of Kingsbridge Risk Solutions Ltd, Fisher Outdoor Leisure Holdings Ltd and Tangent Communications, all realisations were made before the acquisition and the cost and proceeds shown relate to those made prior to the entities combining.
Independent Review Report to Baronsmead Second Venture Trust plc
Introduction
We have been engaged by the Company to review the condensed set of financial statements in the half-yearly report for the six months ended 30 June 2016 which comprises the Income Statement, Statement of Changes in Equity, Balance Sheet and Statement of Cash Flows and the related explanatory notes. We have read the other information contained in the half-yearly report and considered whether it contains any apparent misstatements or material inconsistencies with the information in the condensed set of financial statements.
This report is made solely to the Company in accordance with the terms of our engagement to assist the Company in meeting the requirements of the Disclosure and Transparency Rules ("the DTR") of the UK's Financial Conduct Authority ("the UK FCA"). Our review has been undertaken so that we might state to the Company those matters we are required to state to it in this report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company for our review work, for this report, or for the conclusions we have reached.
Directors' responsibilities
The half-yearly financial report is the responsibility of, and has been approved by, the directors. The directors are responsible for preparing the half-yearly financial report in accordance with the DTR of the UK FCA.
As disclosed in note 1, the annual financial statements of the company are prepared in accordance with UK Accounting Standards and applicable law (UK Generally Accepted Accounting Practice), including FRS 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland. The condensed set of financial statements included in this half yearly financial report has been prepared in accordance with FRS 104 Interim Financial Reporting.
Our responsibility
Our responsibility is to express to the Company a conclusion on the condensed set of financial statements in the half-yearly financial report based on our review.
Scope of review
We conducted our review in accordance with International Standard on Review Engagements (UK and Ireland) 2410 Review of Interim Financial Information Performed by the Independent Auditor of the Entity issued by the Auditing Practices Board for use in the UK. A review of interim financial information consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK and Ireland) and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.
Conclusion
Based on our review, nothing has come to our attention that causes us to believe that the condensed set of financial statements in the half-yearly financial report for the six months ended 30 June 2016 is not prepared, in all material respects, in accordance with FRS 104 Interim Financial Reporting and the DTR of the UK FCA.
John Waterson, Statutory Auditor
for and on behalf of KPMG LLP
Chartered Accountants
Saltire Court
20 Castle Terrace
Edinburgh EH1 2EG
18 August 2016
Responsibility Statement of the Directors in respect of the Half-Yearly Financial Report
We confirm that to the best of our knowledge:
-- the condensed set of financial statements has been prepared in accordance with the FRS104 'Interim Financial Reporting';
-- the Chairman's Statement (constituting the interim management report) includes a fair review of the information required by DTR 4.2.7R of the Disclosure Guidance and Transparency Rules, being an indication of important events that have occurred during the first six months of the financial year and their impact on the condensed set of financial statements;
-- the Statement of Principal Risks and Uncertainties below is a fair review of the information required by DTR 4.2.7R; and
-- the financial statements include a fair review of the information required by DTR 4.2.8R of the Disclosure Guidance and Transparency Rules, being related party transactions that have taken place in the first six months of the current financial year and that have materially affected the financial position or performance of the Company during that period; and any changes in the related party transactions described in the last annual report that could do so.
On behalf of the Board,
Anthony Townsend
Chairman
18 August 2016
Unaudited Income Statement
For the six months to 30 June 2016
Six months to Six months to Year to
30 June 2016 30 June 2015 31 December 2015
--------------------- ----- ---------------------------- ---------------------------- ----------------------------
Revenue Capital Total Revenue Capital Total Revenue Capital Total
Notes GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
--------------------- ----- -------- -------- -------- -------- -------- -------- -------- -------- --------
Unrealised gains on
movement in fair
value of
investments 7 - 855 855 - 4,142 4,142 - 5,788 5,788
--------------------- ----- -------- -------- -------- -------- -------- -------- -------- -------- --------
Realised gains on
disposal of
investments 7 - 2,130 2,130 - 473 473 - 4,034 4,034
--------------------- ----- -------- -------- -------- -------- -------- -------- -------- -------- --------
Income 702 - 702 711 - 711 1,627 - 1,627
--------------------- ----- -------- -------- -------- -------- -------- -------- -------- -------- --------
Investment
management fee (398) (1,194) (1,592) (233) (700) (933) (477) (1,430) (1,907)
--------------------- ----- -------- -------- -------- -------- -------- -------- -------- -------- --------
Other expenses (650) - (650) (246) - (246) (475) - (475)
--------------------- ----- -------- -------- -------- -------- -------- -------- -------- -------- --------
(Loss)/profit on
ordinary
activities before
taxation (346) 1,791 1,445 232 3,915 4,147 675 8,392 9,067
--------------------- ----- -------- -------- -------- -------- -------- -------- -------- -------- --------
Taxation on
ordinary activities - - - - - - - - -
--------------------- ----- -------- -------- -------- -------- -------- -------- -------- -------- --------
(Loss)/profit for
the period, being
total
comprehensive
income for the
period (346) 1,791 1,445 232 3,915 4,147 675 8,392 9,067
--------------------- ----- -------- -------- -------- -------- -------- -------- -------- -------- --------
Return per ordinary
share:
--------------------- ----- -------- -------- -------- -------- -------- -------- -------- -------- --------
Basic 2 (0.29p) 1.50p 1.21p 0.31p 5.21p 5.52p 0.90p 11.23p 12.13p
--------------------- ----- -------- -------- -------- -------- -------- -------- -------- -------- --------
All items in the above statement derive from continuing operations.
The revenue column of the Income Statement includes all income and expenses. The capital column accounts for the realised and unrealised profit or loss on investments and the proportion of the management fee charged to capital.
The total column of this statement is the Statement of Total Comprehensive Income of the Company prepared in accordance with Financial Reporting Standards ("FRS"). The supplementary revenue return and capital return columns are prepared in accordance with the Statement of Recommended Practice issued in November 2014 by the Association of Investment Companies ("AIC SORP").
Unaudited Statement of Changes in Equity
For the six months to 30 June 2016
Non-distributable reserves Distributable reserves
-------------- ----- ----------------------------------------------------------- ------------------------ --------
Called-up Share Other Revaluation Capital Revenue
share capital premium reserve reserve reserve reserve Total
Notes GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
-------------- ----- -------------- -------------- -------------- ----------- -------------- -------- --------
At 1 January
2016 8,463 8,815 - 15,460 45,758 700 79,196
-------------- ----- -------------- -------------- -------------- ----------- -------------- -------- --------
Profit/ (loss)
on ordinary
activities
after
taxation - - - 3,832 (2,041) (346) 1,445
-------------- ----- -------------- -------------- -------------- ----------- -------------- -------- --------
Shares issued
following the
acquisition
of Baronsmead
VCT4 plc 4 6,800 63,884 - - - - 70,684
-------------- ----- -------------- -------------- -------------- ----------- -------------- -------- --------
Net proceeds
of share
issue, sale
of shares
from treasury
& costs of
buybacks 4 933 8,767 - - (322) - 9,378
-------------- ----- -------------- -------------- -------------- ----------- -------------- -------- --------
Dividends paid 6 - - - - (10,553) - (10,553)
-------------- ----- -------------- -------------- -------------- ----------- -------------- -------- --------
At 30 June
2016 16,196 81,466 - 19,292 32,842 354 150,150
-------------- ----- -------------- -------------- -------------- ----------- -------------- -------- --------
For the six months to 30 June 2015
Non-distributable reserves Distributable reserves
---------------- -------------------------------------------------------------- -------------------------- --------
Called-up share Revaluation Revenue
capital Share Other Reserve reserve Capital reserve Total
GBP'000 premium GBP'000 GBP'000 GBP'000 reserve GBP'000 GBP'000 GBP'000
---------------- --------------- --------------- --------------- ----------- ---------------- -------- --------
At 1 January
2015 8,463 8,813 33,716(#) 12,521 12,410 694 76,617
---------------- --------------- --------------- --------------- ----------- ---------------- -------- --------
Movement between
reserves - - (33,716) - 33,716 - -
---------------- --------------- --------------- --------------- ----------- ---------------- -------- --------
Profit/(loss) on
ordinary
activities
after taxation - - - 4,114 (199) 232 4,147
---------------- --------------- --------------- --------------- ----------- ---------------- -------- --------
Costs of share
buybacks - - - - (1,052) - (1,052)
---------------- --------------- --------------- --------------- ----------- ---------------- -------- --------
At 30 June 2015 8,463 8,813 - 16,635 44,875 926 79,712
---------------- --------------- --------------- --------------- ----------- ---------------- -------- --------
For the year to 31 December 2015
Non-distributable reserves Distributable reserves
-------------- ----- ----------------------------------------------------------- ------------------------ --------
Called-up Share Revaluation Capital Revenue
share capital premium Other reserve reserve reserve reserve Total
Notes GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
-------------- ----- -------------- -------------- -------------- ----------- -------------- -------- --------
At 1 January
2015 8,463 8,813 33,716(#) 12,521 12,410 694 76,617
-------------- ----- -------------- -------------- -------------- ----------- -------------- -------- --------
Movement
between
reserves - - (33,716) - 33,716 - -
-------------- ----- -------------- -------------- -------------- ----------- -------------- -------- --------
Profit/(loss)
on ordinary
activities
after
taxation - - - 2,939 5,453 675 9,067
-------------- ----- -------------- -------------- -------------- ----------- -------------- -------- --------
Net proceeds
of sale of
shares from
treasury &
costs of
buybacks - 2 - - (914) - (912) -------------- ----- -------------- -------------- -------------- ----------- -------------- -------- -------- Dividends paid 6 - - - - (4,907) (669) (5,576) -------------- ----- -------------- -------------- -------------- ----------- -------------- -------- -------- At 31 December 2015 8,463 8,815 - 15,460 45,758 700 79,196 -------------- ----- -------------- -------------- -------------- ----------- -------------- -------- --------
(#) On 18 December 2013 the court granted order allowing the Company to cancel its share premium account and capital redemption reserve. The amounts of GBP22,866,000 (share premium) and GBP10,862,000 (capital redemption reserve) less costs paid became distributable during 2015.
Unaudited Balance Sheet
As at 30 June 2016
As at
As at As at 31 December As at
30 June 2016 30 June 2015 2015 30 June 2015*
Notes GBP'000 GBP'000 GBP'000 GBP000
------------------------------------------------ ----- -------------- ------------- -------------- --------------
Fixed assets
------------------------------------------------ ----- -------------- ------------- -------------- --------------
Unquoted investments 7 47,538 29,210 26,670 58,420
------------------------------------------------ ----- -------------- ------------- -------------- --------------
Traded on AIM 7 54,650 24,841 27,548 48,789
------------------------------------------------ ----- -------------- ------------- -------------- --------------
Collective investment vehicle 7 8,210 8,493 9,133 8,493
------------------------------------------------ ----- -------------- ------------- -------------- --------------
Listed interest bearing securities 7 15,987 7,992 4,498 17,482
------------------------------------------------ ----- -------------- ------------- -------------- --------------
Investments 7 126,385 70,536 67,849 133,184
------------------------------------------------ ----- -------------- ------------- -------------- --------------
Current assets
------------------------------------------------ ----- -------------- ------------- -------------- --------------
Debtors 370 272 651 541
------------------------------------------------ ----- -------------- ------------- -------------- --------------
Cash at bank and on deposit 24,700 9,516 11,304 20,555
------------------------------------------------ ----- -------------- ------------- -------------- --------------
25,070 9,788 11,955 21,096
================================================ ===== -------------- ------------- -------------- --------------
Creditors (amounts falling due within one year) (1,305) (612) (608) (1,184)
------------------------------------------------ ----- -------------- ------------- -------------- --------------
Net current assets 23,765 9,176 11,347 19,912
------------------------------------------------ ----- -------------- ------------- -------------- --------------
Net assets 150,150 79,712 79,196 153,096
------------------------------------------------ ----- -------------- ------------- -------------- --------------
Capital and reserves
------------------------------------------------ ----- -------------- ------------- -------------- --------------
Called-up share capital 16,196 8,463 8,463
------------------------------------------------ ----- -------------- ------------- -------------- --------------
Share premium 81,466 8,813 8,815
------------------------------------------------ ----- -------------- ------------- -------------- --------------
Capital reserve 32,842 44,875 45,758
------------------------------------------------ ----- -------------- ------------- -------------- --------------
Revaluation reserve 7 19,292 16,635 15,460
------------------------------------------------ ----- -------------- ------------- -------------- --------------
Revenue reserve 354 926 700
------------------------------------------------ ----- -------------- ------------- -------------- --------------
Equity shareholders' funds 150,150 79,712 79,196
------------------------------------------------ ----- -------------- ------------- -------------- --------------
*For comparative purposes, the amounts shown are the combined figures of BSVT and BVCT4 as at 30 June 2015.
As at As at As at
30 June 2016 30 June 2015 31 December 2015
------------------------------------------- -------------- ------------- -----------------
Net asset value per share 99.16p 107.35p 106.46p
------------------------------------------- -------------- ------------- -----------------
Number of ordinary shares in circulation 151,420,796 74,253,966 74,393,966
------------------------------------------- -------------- ------------- -----------------
Treasury net asset value per share 99.03p 106.37p 105.80p
------------------------------------------- -------------- ------------- -----------------
Number of ordinary shares held in treasury 10,539,214 10,374,214 10,234,214
------------------------------------------- -------------- ------------- -----------------
Number of listed ordinary shares in issue 161,960,010 84,628,180 84,628,180
------------------------------------------- -------------- ------------- -----------------
Unaudited Statement of Cash Flows
For the six months to 30 June 2016
Six Six
months to months to Year
30 June 2016 30 June to
GBP'000 2015 31 December 2015
GBP'000 GBP'000
------------------------------------------------------------------------ ------------- ---------- -----------------
Net cash (outflow) from operating activities (760) (407) (1,073)
------------------------------------------------------------------------ ------------- ---------- -----------------
Net cash (outflow)/inflow from investing activities (4,217) 648 8,542
------------------------------------------------------------------------ ------------- ---------- -----------------
Equity dividends paid (10,553) - (5,576)
------------------------------------------------------------------------ ------------- ---------- -----------------
Net cash (outflow)/inflow before financing activities (15,530) 241 1,893
------------------------------------------------------------------------ ------------- ---------- -----------------
Net cash inflow/(outflow) from financing activities 28,926 (1,048) (912)
------------------------------------------------------------------------ ------------- ---------- -----------------
Increase/(decrease) in cash 13,396 (807) 981
------------------------------------------------------------------------ ------------- ---------- -----------------
Reconciliation of net cash flow to movement in net cash
------------------------------------------------------------------------ ------------- ---------- -----------------
Increase/(decrease) in cash 13,396 (807) 981
------------------------------------------------------------------------ ------------- ---------- -----------------
Opening cash position 11,304 10,323 10,323
------------------------------------------------------------------------ ------------- ---------- ----------------- Closing cash at bank and on deposit 24,700 9,516 11,304 ------------------------------------------------------------------------ ------------- ---------- ----------------- Reconciliation of profit on ordinary activities before taxation to net cash outflow from operating activities ------------------------------------------------------------------------ ------------- ---------- ----------------- Profit on ordinary activities before taxation 1,445 4,147 9,067 ------------------------------------------------------------------------ ------------- ---------- ----------------- Gains on investments (2,985) (4,615) (9,822) ------------------------------------------------------------------------ ------------- ---------- ----------------- Changes in working capital and other non-cash items 780 61 (318) ------------------------------------------------------------------------ ------------- ---------- ----------------- Net cash outflow from operating activities (760) (407) (1,073) ------------------------------------------------------------------------ ------------- ---------- -----------------
Notes
1. The condensed financial statements for the six months to 30 June 2016 comprise the statements set out above together with the related notes below. The Company applied FRS 102 and the AIC's Statement of Recommended Practice issued in November 2014 for its financial year ending 31 December 2015 in its financial statements. The condensed financial statements for the six months to 30 June 2016 have therefore been prepared in accordance with FRS 104 'Interim Financial Reporting'. The accounts have been prepared on the same basis as the accounting policies set out in the Company's Annual Report and Financial Statements for the year ended 31 December 2015.
2. Return per share is based on a weighted average of 119,521,416 ordinary shares in issue (30 June 2015 - 75,135,817 ordinary shares; 31 December 2015 - 74,732,308 ordinary shares).
3. Earnings for the first six months to 30 June 2016 should not be taken as a guide to the results of the nine months ending 30 September 2016.
4. During the six months to 30 June 2016 the Company purchased 1,255,000 shares to be held in treasury and sold 950,000 shares from treasury. At 30 June 2016, the Company holds 10,539,214 ordinary shares in treasury. These shares may be re-issued below Net Asset Value as long as the discount at issue is narrower than the average discount at which the shares were bought back.
On 11 March 2016 the Company acquired all of the assets and liabilities of BVCT 4 plc for the issue of 68,003,674 consideration shares, on a relative net asset basis. 9,328,156 shares were issued as part of a subsequent share issue.
5. Excluding treasury shares, there were 151,420,796 ordinary shares in circulation at 30 June 2016 (30 June 2015 - 74,253,966 ordinary shares; 31 December 2015 - 74,393,966 ordinary shares).
6. The interim dividend of 7.0p per share (7.0p capital, nil revenue) was paid on 3 June 2016 to shareholders on the register on 20 May 2016. The ex-dividend date was 19 May 2016.
During the year to 31 December 2015, the Company paid a first interim dividend on 18 September 2015 of 3.0p per share (2.7p capital, 0.3p revenue) and a second interim dividend on 18 December 2015 of 4.5p per share (3.9p capital, 0.6p revenue).
7. All investments are initially recognised and subsequently measured at fair value. Changes in fair value are recognised in the Income Statement.
The methods of fair value measurement are classified into a hierarchy based on reliability of the information used to determine the valuation.
-- Level a - Fair value is measured based on quoted prices in an active market.
-- Level b - Fair value is measured based on directly observable current market prices or indirectly being derived from market prices.
-- Level c - i) Fair value is measured using a valuation technique that is based on data from an observable market or;
ii) Fair value is measured using a valuation technique that is not based on data from an observable market.
Level a Level Level
b c (ii)
---------------------------------------- ------------------------ ------------ --------- ---------
Listed Traded Collective Unquoted Total
interest on AIM investment GBP'000 GBP'000
bearing GBP'000 vehicle
securities GBP'000
GBP'000
---------------------------------------- ------------ ---------- ------------ --------- ---------
Opening book cost 4,498 19,442 3,525 24,924 52,389
---------------------------------------- ------------ ---------- ------------ --------- ---------
Opening unrealised
appreciation - 8,106 5,608 1,746 15,460
---------------------------------------- ------------ ---------- ------------ --------- ---------
Opening valuation 4,498 27,548 9,133 26,670 67,849
---------------------------------------- ------------ ---------- ------------ --------- ---------
Movements in the
period:
---------------------------------------- ------------ ---------- ------------ --------- ---------
Transfer between
levels - 900 - (900) -
---------------------------------------- ------------ ---------- ------------ --------- ---------
Purchases at cost 26,983 900 - - 27,883
---------------------------------------- ------------ ---------- ------------ --------- ---------
Holdings acquired
following the
acquisition of
Baronsmead VCT4
plc - 26,295 - 25,039 51,334
---------------------------------------- ------------ ---------- ------------ --------- ---------
Sale - proceeds (15,494) (500) - (7,672) (23,666)
---------------------------------------- ------------ ---------- ------------ --------- ---------
* realised gains on sales - 248 - 1,882 2,130
---------------------------------------- ------------ ---------- ------------ --------- ---------
Unrealised losses
realised during
the period - (444) - (2,533) (2,977)
---------------------------------------- ------------ ---------- ------------ --------- ---------
(Decrease/ increase)
in unrealised
appreciation - (297) (923) 5,052 3,832
---------------------------------------- ------------ ---------- ------------ --------- ---------
Closing valuation 15,987 54,650 8,210 47,538 126,385
---------------------------------------- ------------ ---------- ------------ --------- ---------
Closing book cost 15,987 46,841 3,525 40,740 107,093
---------------------------------------- ------------ ---------- ------------ --------- ---------
Closing unrealised
appreciation - 7,809 4,685 6,798 19,292
---------------------------------------- ------------ ---------- ------------ --------- ---------
Closing valuation 15,987 54,650 8,210 47,538 126,385
---------------------------------------- ------------ ---------- ------------ --------- ---------
Equity shares - 54,650 8,210 11,073 73,933
---------------------------------------- ------------ ---------- ------------ --------- ---------
Loan notes - - - 36,465 36,465
---------------------------------------- ------------ ---------- ------------ --------- ---------
Fixed income securities 15,987 - - - 15,987
---------------------------------------- ------------ ---------- ------------ --------- ---------
Closing valuation 15,987 54,650 8,210 47,538 126,385
---------------------------------------- ------------ ---------- ------------ --------- ---------
There has been no significant change in the risk analysis as disclosed in the Company's annual accounts.
8. The financial information contained in this half-yearly financial report does not constitute statutory accounts as defined in Section 434 of the Companies Act 2006. The information for the year to 31 December 2015 has been extracted from the latest published audited financial statements. The audited financial statements for the year to 31 December 2015, which were unqualified, have been filed with the Registrar of Companies. No statutory accounts in respect of any period after 31 December 2015 have been reported on by the Company's auditors or delivered to the Registrar of Companies.
9. The Company has one reportable segment being investing in primarily a portfolio of UK growth businesses, whether unquoted or traded on AIM.
10. Copies of the half-yearly financial report have been made available to shareholders and are available from the Registered Office of the Company at 100 Wood Street, London EC2V 7AN.
Principal Risks and Uncertainties
The Company's assets consist of equity and fixed interest investments, shares in collective investment schemes, cash and liquid resources. Its principal risks are therefore market risk, credit risk and liquidity risk. Other risks faced by the Company include loss of approval as a Venture Capital Trust, investment performance, regulatory and compliance, legislative, economic, political and other external factors and operational risks. These risks, and the way in which they are managed, are described in more detail in the Principal Risk & Uncertainties table within the Strategic Report section in the Company's Annual Report and Accounts for the year to 31 December 2015. The Company's principal risks and uncertainties have not changed materially since the date of that report.
Related Parties
Livingbridge VC LLP ('the Manager') manages the investment of the Company. The Manager also provides or procures the provision of secretarial, administrative and custodian services to the Company. Under the management agreement, the Manager receives a fee of 2.5 per cent. per annum of the net assets of the Company. This is described in more detail under the heading 'The Investment Management Agreement' within the Strategic Report in the Company's Annual Report and Accounts for the year to 31 December 2015. During the period the Company has incurred management fees of GBP1,592,000 (30 June 2015 - GBP933,000; 31 December 2015 - GBP1,907,000) and secretarial and accounting fees of GBP74,000 (30 June 2015 - GBP69,000; 31 December 2015 - GBP136,000) payable to the Manager.
Going Concern
After making enquiries, and bearing in mind the nature of the Company's business and assets, the Directors consider that the Company has adequate resources to continue in operational existence for the foreseeable future. In arriving at this conclusion the Directors have considered the liquidity of the Company and its ability to meet obligations as they fall due for a period of at least twelve months from the date that these financial statements were approved. As at 30 June 2016 the Company held cash and readily realisable securities totalling GBP 40,687,000. Cash flow projections have been reviewed and show that the Company has sufficient funds to meet both its contracted expenditure and its discretionary cash outflows in the form of the share buyback programme and dividend policy. The Company has no external loan finance in place and therefore is not exposed to any gearing covenants.
Corporate Information
Directors Registrars and Transfer Office
Anthony Townsend (Chairman) Computershare Investor Services
Robert Owen PLC
Malcolm Groat* The Pavilions
Ian Orrock Bridgwater Road
Bristol BS99 6ZZ
Secretary Tel: 0800 923 1533
Livingbridge VC LLP
Brokers
Registered Office Panmure Gordon & Co
100 Wood Street One New Change
London EC2V 7AN London EC4M 9AF
Tel: 020 7886 2500
Investment Manager
Livingbridge VC LLP Auditors
100 Wood Street KPMG LLP
London EC2V 7AN Saltire Court
020 7506 5717 20 Castle Terrace
Edinburgh EH1 2EG
Registered Number
04115341 Solicitors
Dickson Minto W.S.
Broadgate Tower
20 Primrose Street
London EC2A 2EW
VCT Status Adviser
Philip Hare & Associates
LLP
4-6 Staple Inn
London WC1V 7QH
Website
www.baronsmeadvcts.co.uk
* Chairman of the Audit Committee.
Chairman of the Management Engagement and Remuneration Committee, Chairman of the Nomination Committee.
National Storage Mechanism
A copy of the Half-Yearly Report will be submitted shortly to the National Storage Mechanism ("NSM") and will be available for inspection at the NSM, which is situated at: www.hemscott.com/nsm.do.
END
Neither the contents of the Company's website nor the contents of any website accessible from hyperlinks on this announcement (or any other website) is incorporated into, or forms part of, this announcement.
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR BRGDIGUBBGLI
(END) Dow Jones Newswires
August 19, 2016 02:00 ET (06:00 GMT)
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