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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 | 08:00:03 |
| 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 : 0295G
Baronsmead Second Venture Trust PLC
24 May 2017
Baronsmead Second Venture Trust plc
Half-Yearly report for the six months ended
31 March 2017
The Directors announce the unaudited half-yearly financial report for the six months to 31 March 2017.
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 has the objective to maintain a minimum annual dividend of 4.5p per ordinary share if possible, but this depends primarily on the level of realisations achieved and cannot be guaranteed.
Following final shareholder approval on 30 November 2016 Baronsmead Second Venture Trust plc ("BSVT") acquired the assets of Baronsmead VCT 5 plc ("BVCT5") in consideration for the issue of new BSVT Shares for BVCT5 shareholders. This is the first set of accounts since BSVT and BVCT5 were combined and it is important to note the comparative prior year figures relate to the original BSVT 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 31 March 2017, 395,000 shares were bought back representing 0.2 per cent. of the shares in issue at 31 March 2017 at prices which represent an average 4.6 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 964,000 shares were bought by investors in the Company's existing shares in the six months to 31 March 2017.
Financial Headlines
-- 2.6% - Net asset value ("NAV") per share increased 2.6 per cent to 94.56p in the six month period ended 31 March 2017, before deduction of dividends.
-- 3.0p - Dividends totalled 3.0p in the six month period ended 31 March 2017. -- 303.4p - NAV total return to shareholders for every 100.0p invested at launch.
Cash returned to shareholders by date of investment
The table below shows the cash returned to shareholders that invested in Baronsmead Second Venture Trust 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) 100.0 20.0 80.0 122.8 142.8
==================== ============= ================== =================== =================== ===================
2005 (March) - C
share 100.0 40.0 60.0 83.7 123.7
==================== ============= ================== =================== =================== ===================
2010 (March) 103.1 30.9 72.2 74.5 102.2
==================== ============= ================== =================== =================== ===================
2012 (December) 117.4 35.2 82.2 56.5 78.1
==================== ============= ================== =================== =================== ===================
2014 (March) 112.4 33.7 78.7 36.5 62.5
==================== ============= ================== =================== =================== ===================
2016 (February) 107.2 32.2 75.0 20.0 48.7
==================== ============= ================== =================== =================== ===================
* Dividends paid to C shareholders post conversion have been adjusted by the conversion ratio (0.85642528).
Chairman's Statement
I am pleased to report a 2.6 per cent. (2.39p) increase in NAV per share for the six months to 31 March 2017 before dividend payments. An interim dividend of 3.0p per share was paid on 31 March 2017 in lieu of the dividend that would have otherwise been paid in June 2017 following the publication of these results.
On 30 November 2016, the Company acquired the assets of BVCT5 in exchange for the issue of New Shares to BVCT5 shareholders. At 31 March 2017, the NAV was GBP182.7m making the Company one of the largest VCTs in the industry.
This is the first set of accounts prepared since the Company's merger with BVCT5 and as a result, the comparative figures in the accounts only relate to the Company prior to the merger and are therefore not a true comparison to the period under review.
Results
During the six months to 31 March 2017, the Company's NAV per share increased 2.6 per cent. from 92.17p to 94.56p before dividends.
Pence
per
ordinary
share
------------------------ ----------
NAV as at 1 October
2016 92.17
------------------------ ----------
Valuation uplift (2.6
per cent.) 2.39
------------------------ ----------
NAV as at 31 March 2017
before dividends 94.56
------------------------ ----------
Less:
Interim dividend paid
to the shareholders
on 31 March 2017 (3.00)
------------------------ ----------
NAV as at 31 March
2017 after dividends 91.56
------------------------ ----------
Portfolio Review
At 31 March 2017, following the merger with BVCT5, the Company's investment portfolio was valued at GBP147m and comprised investments in 71 unquoted and AIM-traded companies. In addition, the Company's investment in CF Livingbridge UK Micro Cap Fund ("Micro Cap Fund", previously Wood Street Microcap Investment Fund)provides investment exposure to a further GBP18m in 44 AIM-traded and fully listed companies.
The increase in NAV of 2.6 per cent. was the result of steady progress across the investment portfolio with particularly noteworthy contributions from our AIM-traded investments and from the Micro Cap Fund. As BVCT5's investment portfolio had a relatively higher weighting to these assets, their acquisition as part of the merger has contributed to the return for all of the Company's shareholders over the period under review.
Investment and Divestments
The Company's investments and divestments during the period are set out in the tables below.
The new VCT rules introduced in November 2015 have required the Investment Manager to adapt its investment strategy to focus on the provision of development capital to younger companies to enable them to grow their businesses organically rather than through acquisition. The new rules dictate that these companies will be younger and smaller than those in which the Company has previously invested 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 returns will enable the Company to continue to fulfil its investment objective and dividend policy.
This transition has taken some time to achieve as the Manager has had to consider how best to deploy funds in what are undoubtedly higher risk investments whilst maintaining its investment quality standards. This has resulted in fewer new investments than its usual pace would have generated. The Board has been supportive of this approach as to have deployed funds too quickly in the early stages of the transition could have proved expensive in terms of a loss of capital and a reduction in the long-term return to shareholders.
I am now pleased to report that either side of the period end the Company made two new unquoted investments as well as three investments in AIM-traded companies. This resulted in the Company investing a total of GBP2.1m during the period under review and GBP3.3m since then. The Board is also encouraged to note that the pipeline of potential new investments is improving and anticipates the deployment of further funds in new investments over the course of the Summer.
Dividends
An interim dividend of 3.0p per share was paid on 31 March 2017 in lieu of the dividend that would otherwise have been paid in June 2017 following the publication of the Company's results for the six months to 31 March 2017. The Board aims to sustain a minimum annual dividend level of around 4.5p per ordinary share, although over the past 10 years dividend payments have been at least 7.5p per share per annum. As a result, in the ordinary course of events the Board expects to declare a further dividend for the financial year to 30 September 2017, which would be paid following shareholder approval at the Company's next AGM. However, the timing and level of future dividends depends significantly on the level and timing of profitable realisations and cannot be guaranteed; inevitably there will be variations in the dividends paid year on year.
Acquisition and Fundraising
Acquisition proposals with respect to the Company's merger with BVCT5 were published on 17 October 2016 and the merger completed on 30 November 2016. Following the transfer of all of BVCT5's assets and liabilities to the Company, BVCT5 shareholders received approximately 0.838803 new shares in the Company ("New Shares") for every BVCT5 share held by them (rounded down to the nearest whole share). In aggregate, 47.1m shares were issued to BVCT5 shareholders in consideration for approximately GBP43.0 million of assets.
The Company and BVCT5 each raised new funds in the 2015/16 tax years but did not do so in the 2016/17 tax year. The Board will be considering whether to raise new funds in the 2017/18 tax year. This decision will be determined by the Company's cashflow and its anticipated requirements to fund new investments over the next two years. The Board appreciates that shareholders would like as much notice as possible of its fundraising intentions so that they can plan their financial affairs accordingly. Ordinarily, the Board would seek to raise funds in January / February having informed shareholders of its fundraising intentions in November when its annual results to 30 September 2017 are published. However, if it becomes appropriate to raise new funds earlier than this, the Board will ensure that shareholders are informed as soon as possible.
VCT Legislation and Policy Review
Legislative changes to VCTs included in the March 2017 Budget were limited to technical changes to the rules concerning the restructuring of investments. In addition, the Government's venture capital schemes (SEIS, EIS and VCTs) will be included in the recently announced Patient Capital Review which aims "to ensure that high growth businesses can access the long-term capital that they need to fund productivity enhancing investment." This will provide the VCT industry with the opportunity to demonstrate that the existing tax reliefs encourage investment and entrepreneurship and are effective, well targeted, and provide excellent value for money for UK taxpayers. The Manager and Board will be fully engaged throughout this process, with a view to informing the conclusions of the Review and any policy recommendations that might be brought forward.
Outlook
Despite signs of a slowdown in the wider economy, as the impact of a much-weakened sterling finally begins to work its way through to the consumer, there are no signs yet of a deterioration in performance in the portfolio. The Company's investee companies continue to make steady progress with the fulfilment of their business plans, although as always some will do better than others.
The outlook for the rest of 2017 remains uncertain, with the potential for macro and geopolitical events to impact sentiment and create market volatility. However, the Manager continues to focus on areas of secular growth and companies that have the potential to grow profits even without a tailwind from the wider economy.
All of these factors are reflected in the valuation of the Company's investments in the NAV at 30 April 2017 which has grown by a further 1.35p per share, to 92.91p per share. Whilst changes in market sentiment may impact the valuation of investments in the short term and the unexpected general election may result in a slowdown of business transactions over the coming months, the diversity and quality of the Company's portfolio should continue to deliver consistent returns for shareholders over the medium to long term.
Anthony Townsend
Chairman
24 May 2017
Summary Investment Portfolio
Investment Diversification at 31 March 2017
Sector by value Percentage
------------------------ -------------
Business Services 27%
------------------------ -------------
Consumer Markets 17%
------------------------ -------------
Healthcare & Education 14%
------------------------ -------------
Technology, Media &
Telecommunications
("TMT") 42%
------------------------ -------------
Total assets by value Percentage
------------------------- -------------
Unquoted - loan stock 24%
------------------------- -------------
Unquoted - equity 9%
------------------------- -------------
AIM 47%
------------------------- -------------
Collective investment
vehicles 19%
------------------------- -------------
Net current assets
(principally cash) 1%
------------------------- -------------
Time investments held Percentage
by value
------------------------- -------------
Less than 1 year 2%
------------------------- -------------
Between 1 and 3 years 23%
------------------------- -------------
Between 3 and 5 years 33%
------------------------- -------------
Greater than 5 years 42%
------------------------- -------------
Investments in the period
Book
cost
Company Location Sector Activity GBP'000
==================== ================ ============ =========================== ========
Unquoted investments
New
===========================================================================================
Custom Materials Consumer Retailer of customisable
Ltd London Markets products 275
==================== ================ ============ =========================== ========
Total unquoted investments 275
================================================================================= ========
AIM-traded investments
New
===========================================================================================
FreeAgent Holdings Online accounting
plc Edinburgh TMT* software 788
==================== ================ ============ =========================== ========
Healthcare
Collagen Solutions & Develops and manufactures
plc London Education medical grade collagen 412
==================== ================ ============ =========================== ========
Follow on
==================== ================ ============ =========================== ========
CloudCall Group Cloud based telephony
plc Leicestershire TMT* platform 599
==================== ================ ============ =========================== ========
Total AIM-traded investments 1,799
================================================================================= ========
Total investments in the period 2,074
================================================================================= ========
* Technology, Media & Telecommunications ("TMT").
All investments with the exception of Collagen Solutions and Custom Materials were made prior to BSVT acquiring the assets of BVCT5 on 30 November 2016. Hence, the book cost of new investments shown (except for Collagen Solutions and Custom Materials) relate only to the investments made by BSVT. BSVT acquired the BVCT5 investment portfolio (total GBP39,138,000) on 30 November 2016.
Realisations in the period
First Overall
investment Proceeds multiple
Company date GBP'000 return
==================== ============= ============ ======== =========
Unquoted realisations
=======================================================================
CR7 Services Part trade
Ltd sale Aug 14 13 0.0
===================== ============= =========== ======== =========
Total unquoted
realisations 13
================================================== ======== =========
AIM-traded realisations
=======================================================================
Ubisense Group Part market
plc sale Jun 11 33 0.3
===================== ============= =========== ======== =========
Total AIM-traded
realisations 33
================================================== ======== =========
Total realisations
in the period 46
================================================== ======== =========
Deferred consideration of GBP60,000 was received in
respect of Kingsbridge Risk Solutions, which had been
sold in a prior period.
=======================================================================
No realisations were made before the acquisition of the BVCT5 investment portfolio and proceeds shown relate to those made after 30 November 2016.
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 financial report for the six months ended 31 March 2017 which comprises the Condensed Income Statement, Condensed Balance Sheet, Condensed Statement of Changes in Equity, Condensed Statement of Cash Flows and the related explanatory notes. We have read the other information contained in the half-yearly financial 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 Guidance 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 31 March 2017 is not prepared, in all material respects, in accordance with FRS 104 Interim Financial Reporting and the DTR of the UK FCA.
John Waterson
for and on behalf of KPMG LLP
Chartered Accountants
Saltire Court
20 Castle Terrace
Edinburgh EH1 2EG
24 May 2017
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 FRS 104 Interim Financial Reporting
-- the interim management report includes a fair review of the information required by:
a) 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; and a description of the principal risks and uncertainties for the remaining six months of the year; and
b) 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 entity 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
24 May 2017
Condensed Income Statement
For the six months to 31 March 2017
Six months to Six months to Nine months to
31 March 2017 30 June 2016 30 September 2016
--------------------- ----- ---------------------------- ---------------------------- ----------------------------
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 - 6,569 6,569 - 855 855 - 5,920 5,920
--------------------- ----- -------- -------- -------- -------- -------- -------- -------- -------- --------
Realised gains on
disposal of
investments 7 - 83 83 - 2,130 2,130 - 2,216 2,216
--------------------- ----- -------- -------- -------- -------- -------- -------- -------- -------- --------
Income 1,239 - 1,239 702 - 702 1,221 - 1,221
--------------------- ----- -------- -------- -------- -------- -------- -------- -------- -------- --------
Investment
management fee (526) (1,578) (2,104) (398) (1,194) (1,592) (616) (1,847) (2,463)
--------------------- ----- -------- -------- -------- -------- -------- -------- -------- -------- --------
Other expenses (604) - (604) (650) - (650) (810) - (810)
--------------------- ----- -------- -------- -------- -------- -------- -------- -------- -------- --------
Profit/(loss) on
ordinary
activities before
taxation 109 5,074 5,183 (346) 1,791 1,445 (205) 6,289 6,084
--------------------- ----- -------- -------- -------- -------- -------- -------- -------- -------- --------
Taxation on
ordinary activities - - - - - - - - -
--------------------- ----- -------- -------- -------- -------- -------- -------- -------- -------- --------
Profit/(loss) for
the period, being
total
comprehensive
income for the
period 109 5,074 5,183 (346) 1,791 1,445 (205) 6,289 6,084
--------------------- ----- -------- -------- -------- -------- -------- -------- -------- -------- --------
Return per ordinary
share:
--------------------- ----- -------- -------- -------- -------- -------- -------- -------- -------- --------
Basic and Diluted 2 0.06p 2.75p 2.81p (0.29p) 1.50p 1.21p (0.16p) 4.83p 4.67p
--------------------- ----- -------- -------- -------- -------- -------- -------- -------- -------- --------
All items in the above statement derive from continuing operations.
There are no recognised gains and losses other than those disclosed in the Income Statement.
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 the Financial Reporting Standard ("FRS"). The supplementary revenue return and capital return columns are prepared in accordance with the Statement of Recommended Practice issued in November 2014 and updated in January 2017 by the Association of Investment Companies ("AIC SORP").
Condensed Statement of Changes in Equity
For the six months to 31 March 2017
Non-distributable reserves Distributable reserves
------------------- ----- ------------------------------------------------ -------------------------- ------------
Called-up share Revaluation Revenue
capital Share reserve Capital reserve Total
Notes GBP'000 premiumGBP'000 GBP'000 reserve GBP'000 GBP'000 GBP'000
------------------- ----- ------------------ --------------- ----------- ---------------- -------- ------------
At 1 October 2016 16,196 81,466 24,357 18,394 495 140,908
------------------- ----- ------------------ --------------- ----------- ---------------- -------- ------------
Profit/(loss) on
ordinary
activities after
taxation - - 6,621 (1,547) 109 5,183
------------------- ----- ------------------ --------------- ----------- ---------------- -------- ------------
Shares issued
following the
acquisition of
Baronsmead VCT5
plc 4 4,708 38,245 - - - 42,953
------------------- ----- ------------------ --------------- ----------- ---------------- -------- ------------
Buyback of shares
to be held in
treasury 4 - - - (342) - (342)
------------------- ----- ------------------ --------------- ----------- ---------------- -------- ------------
Dividends paid 6 - - - (5,887) (100) (5,987)
------------------- ----- ------------------ --------------- ----------- ---------------- -------- ------------
At 31 March 2017 20,904 119,711 30,978 10,618 504 182,715
------------------- ----- ------------------ --------------- ----------- ---------------- -------- ------------
Non-distributable reserves Distributable reserves
--------------- ----- ------------------------------------------------ ----------------------------- -------------
For the six Called-up share Revaluation Revenue
months to 30 capital Share reserve Capital reserve Total
June 2016 Notes GBP'000 premiumGBP'000 GBP'000 reserve 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 6,800 63,884 - - - 70,684
--------------- ----- --------------- --------------- -------------- --------------- ------------ -------------
Net proceeds of
share issue,
share buybacks
& sale of
shares from
treasury 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
--------------- ----- --------------- --------------- -------------- --------------- ------------ -------------
Non-distributable reserves Distributable reserves
----------------- ----- ---------------------------------------------- -------------------------- --------------
For the nine Called-up share Revaluation Revenue
months to 30 capital Share reserve Capital reserve Total
September 2016 Notes GBP'000 premiumGBP'000 GBP'000 reserve 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 - - 8,897 (2,608) (205) 6,084
----------------- ----- ---------------- --------------- ----------- ---------------- -------- --------------
Shares issued
following the
acquisition of
Baronsmead VCT4
plc 6,800 63,884 - - - 70,684
----------------- ----- ---------------- --------------- ----------- ---------------- -------- --------------
Net proceeds of
share issue,
share buybacks &
sale of shares
from treasury 933 8,767 - 939 - 10,639
----------------- ----- ---------------- --------------- ----------- ---------------- -------- --------------
Dividends paid 6 - - - (25,695) - (25,695)
----------------- ----- ---------------- --------------- ----------- ---------------- -------- --------------
At 30 September
2016 16,196 81,466 24,357 18,394 495 140,908
----------------- ----- ---------------- --------------- ----------- ---------------- -------- --------------
Condensed Balance Sheet
As at 31 March 2017
As at As at
31 March 30 June As at
2017 2016 30 September 2016
Notes GBP'000 GBP'000 GBP'000
------------------------------------------------ ----- --------------- ---------------- ------------------
Fixed assets
------------------------------------------------ ----- --------------- ---------------- ------------------
Unquoted investments 7 60,304 47,538 49,286
------------------------------------------------ ----- --------------- ---------------- ------------------
Traded on AIM 7 86,485 54,650 58,093
------------------------------------------------ ----- --------------- ---------------- ------------------
Collective investment vehicle 7 34,548 8,210 9,200
------------------------------------------------ ----- --------------- ---------------- ------------------
Listed interest bearing securities - 15,987 -
------------------------------------------------ ----- --------------- ---------------- ------------------
Investments 7 181,337 126,385 116,579
------------------------------------------------ ----- --------------- ---------------- ------------------
Current assets
------------------------------------------------ ----- --------------- ---------------- ------------------
Debtors 195 370 1,464
------------------------------------------------ ----- --------------- ---------------- ------------------
Cash at bank and on deposit 2,711 24,700 24,110
------------------------------------------------ ----- --------------- ---------------- ------------------
2,906 25,070 25,574
------------------------------------------------ ----- --------------- ---------------- ------------------
Creditors (amounts falling due within one year) (1,528) (1,305) (1,245)
------------------------------------------------ ----- --------------- ---------------- ------------------
Net current assets 1,378 23,765 24,329
------------------------------------------------ ----- --------------- ---------------- ------------------
Net assets 182,715 150,150 140,908
------------------------------------------------ ----- --------------- ---------------- ------------------
Capital and reserves
------------------------------------------------ ----- --------------- ---------------- ------------------
Called-up share capital 20,904 16,196 16,196
------------------------------------------------ ----- --------------- ---------------- ------------------
Share premium 119,711 81,466 81,466
------------------------------------------------ ----- --------------- ---------------- ------------------
Capital reserve 10,618 32,842 18,394
------------------------------------------------ ----- --------------- ---------------- ------------------
Revaluation reserve 7 30,978 19,292 24,357
------------------------------------------------ ----- --------------- ---------------- ------------------
Revenue reserve 504 354 495
------------------------------------------------ ----- --------------- ---------------- ------------------
Equity shareholders' funds 182,715 150,150 140,908
------------------------------------------------ ----- --------------- ---------------- ------------------
As at As at
31 March 30 June As at
2017 2016 30 September 2016
------------------------------------------- ----------- ----------- ------------------
Net asset value per share 91.56p 99.16p 92.17p
------------------------------------------- ----------- ----------- ------------------
Number of ordinary shares in circulation 199,553,707 151,420,796 152,870,796
------------------------------------------- ----------- ----------- ------------------
Treasury net asset value per share 91.39p 99.03p 91.89p
------------------------------------------- ----------- ----------- ------------------
Number of ordinary shares held in treasury 9,484,214 10,539,214 9,089,214
------------------------------------------- ----------- ----------- ------------------
Number of listed ordinary shares in issue 209,037,921 161,960,010 161,960,010
------------------------------------------- ----------- ----------- ------------------
Condensed Statement of Cash Flows
For the six months to 31 March 2017
Six
Six months to Nine months
months to 30 June to
31 March 2017 2016 30 September 2016
GBP'000 GBP'000 GBP'000
------------------------------------------------------------ ---------------- ------------------ ------------------
Net cash outflow from operating activities (1,370) (760) (1,156)
------------------------------------------------------------ ---------------- ------------------ ------------------
Net cash (outflow)/inflow from investing activities (18,968) (4,217) 10,740
------------------------------------------------------------ ---------------- ------------------ ------------------
Equity dividends paid (5,987) (10,553) (25,695)
------------------------------------------------------------ ---------------- ------------------ ------------------
Net cash outflow before financing activities (26,325) (15,530) (16,111)
------------------------------------------------------------ ---------------- ------------------ ------------------
Net cash inflow from financing activities 4,926 28,926 28,917
------------------------------------------------------------ ---------------- ------------------ ------------------
(Decrease)/increase in cash (21,399) 13,396 12,806
------------------------------------------------------------ ---------------- ------------------ ------------------
Reconciliation of net cash flow to movement in net cash
------------------------------------------------------------ ---------------- ------------------ ------------------
(Decrease)/increase in cash (21,399) 13,396 12,806
------------------------------------------------------------ ---------------- ------------------ ------------------
Opening cash position 24,110 11,304 11,304
------------------------------------------------------------ ---------------- ------------------ ------------------
Closing cash at bank and on deposit 2,711 24,700 24,110
------------------------------------------------------------ ---------------- ------------------ ------------------
Reconciliation of profit on ordinary activities before
taxation to net cash outflow from operating
activities
------------------------------------------------------------ ---------------- ------------------ ------------------
Profit on ordinary activities before taxation 5,183 1,445 6,084
------------------------------------------------------------ ---------------- ------------------ ------------------
Gains on investments (6,652) (2,985) (8,136)
------------------------------------------------------------ ---------------- ------------------ ------------------
Changes in working capital and other non-cash items 99 780 896
------------------------------------------------------------ ---------------- ------------------ ------------------
Net cash outflow from operating activities (1,370) (760) (1,156)
------------------------------------------------------------ ---------------- ------------------ ------------------
Notes
1. The condensed financial statements for the six months to 31 March 2017 comprise the statements set out above together with the related notes below. The Company applies FRS 102 and the AIC's Statement of Recommended Practice issued in November 2014 and updated in January 2017 ('the SORP') for its annual Financial Statements. The condensed financial statements for the six months to 31 March 2017 have therefore been prepared in accordance with FRS 104 'Interim Financial Reporting' and the principles of the SORP. 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 period ended 30 September 2016.
2. Return per share is based on a weighted average of 184,194,122 ordinary shares in issue (30 June 2016 - 119,521,416 ordinary shares; 30 September 2016 - 130,242,740 ordinary shares).
3. Earnings for the first six months to 31 March 2017 should not be taken as a guide to the results of the full financial year to 30 September 2017.
4. During the six months to 31 March 2017 the Company bought 395,000 shares in to treasury. At 31 March 2017, the Company held 9,484,214 ordinary shares in treasury. Shares may be sold out of treasury below Net Asset Value as long as the discount at issue is narrower than the average discount at which the shares were bought into treasury.
On 30 November 2016 the Company acquired all of the assets and liabilities of BVCT5 plc for the issue of 47,077,911 consideration shares, on a relative net asset basis.
5. Excluding treasury shares, there were 199,553,707 ordinary shares in circulation at 31 March 2017 (30 June 2016 - 151,420,796 ordinary shares; 30 September 2016 - 152,870,796 ordinary shares).
6. The interim dividend of 3.00p per share (2.95p capital, 0.05p revenue) was paid on 31 March 2017 to shareholders on the register on 10 March 2017. The ex-dividend date was 9 March 2017.
During the nine month period from 1 January 2016 to 30 September 2016, the Company paid a first interim dividend on 3 June 2016 of 7.00p per share (7.00p capital, nil revenue) and a second interim dividend on 30 September 2016 of 10.00p per share (10.00p capital, nil 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 1 - Fair value is measured based on quoted prices in an active market.
-- Level 2 - Fair value is measured based on directly observable current market prices or indirectly being derived from market prices.
-- Level 3 - Fair value is measured using a valuation technique that is not based on data from an observable market.
Level Level Level
1 2 3
---------------------------------------- --------- ------------ --------- ---------
Collective
Traded investment
on AIM vehicles Unquoted Total
GBP'000 GBP'000 GBP'000 GBP'000
---------------------------------------- --------- ------------ --------- ---------
Opening book cost 47,957 3,525 40,740 92,222
---------------------------------------- --------- ------------ --------- ---------
Opening unrealised
appreciation 10,136 5,675 8,546 24,357
---------------------------------------- --------- ------------ --------- ---------
Opening valuation 58,093 9,200 49,286 116,579
---------------------------------------- --------- ------------ --------- ---------
Movements in the
period:
---------------------------------------- --------- ------------ --------- ---------
Purchases at cost 1,799 17,000 275 19,074
---------------------------------------- --------- ------------ --------- ---------
Holdings acquired
following the
acquisition of
Baronsmead VCT5
plc 23,251 6,810 9,077 39,138
---------------------------------------- --------- ------------ --------- ---------
Sale - proceeds (33) - (73) (106)
---------------------------------------- --------- ------------ --------- ---------
* realised gains on sales 22 - 61 83
---------------------------------------- --------- ------------ --------- ---------
Unrealised losses
realised during
the period (51) - (1) (52)
---------------------------------------- --------- ------------ --------- ---------
(Decrease/ increase)
in unrealised
appreciation 3,404 1,538 1,679 6,621
---------------------------------------- --------- ------------ --------- ---------
Closing valuation 86,485 34,548 60,304 181,337
---------------------------------------- --------- ------------ --------- ---------
Closing book cost 72,945 27,335 50,079 150,359
---------------------------------------- --------- ------------ --------- ---------
Closing unrealised
appreciation 13,540 7,213 10,225 30,978
---------------------------------------- --------- ------------ --------- ---------
Closing valuation 86,485 34,548 60,304 181,337
---------------------------------------- --------- ------------ --------- ---------
Equity shares 86,485 - 15,735 102,220
---------------------------------------- --------- ------------ --------- ---------
Loan notes - - 44,569 44,569
---------------------------------------- --------- ------------ --------- ---------
Collective Investment
vehicles - 34,548 - 34,548
---------------------------------------- --------- ------------ --------- ---------
Closing valuation 86,485 34,548 60,304 181,337
---------------------------------------- --------- ------------ --------- ---------
There has been no significant change in the risk analysis as disclosed in the Company's Annual Report and Accounts to 30 September 2016.
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 nine month period ended 30 September 2016 has been extracted from the latest published audited financial statements. The audited financial statements for the nine month period ended 30 September 2016, which were unqualified, have been filed with the Registrar of Companies. No statutory accounts in respect of any period after 30 September 2016 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, legislative, investment performance, economic, political and other external factors, regulatory and compliance and operational risks. These risks, and the way in which they are managed, are described in more detail in the Principal Risks & Uncertainties table within the Strategic Report section in the Company's Annual Report and Accounts for the
nine month period ended 30 September 2016. 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 investments of the Company. The Manager also provides or procures the provision of secretarial, accounting, 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 nine month period ended 30 September 2016. During the period the Company has incurred management fees of GBP2,104,000 (30 June 2016 - GBP1,592,000; 30 September 2016 - GBP2,463,000) and secretarial and accounting fees of GBP80,000 (30 June 2016 - GBP74,000; 30 September 2016 - GBP110,000) 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 31 March 2017 the Company held cash and readily realisable securities totalling GBP19,711,000 including GBP17,000,000 held in JPMorgan Sterling Liquidity Fund. 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
John Davies PLC
Malcolm Groat* The Pavilions
Ian Orrock Bridgwater Road
Bristol BS99 6ZZ
Secretary Tel: 0800 923 1534
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 Auditor
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
PricewaterhouseCoopers LLP
1 Embankment Place
London WC2N 6RH
Website
www.baronsmeadvcts.co.uk
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.morningstar.co.uk/uk/NSM.
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 BLGDUSUDBGRX
(END) Dow Jones Newswires
May 24, 2017 02:00 ET (06:00 GMT)
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