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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 | 7,355 | 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 May 2019 to May 2024
TIDMBMD
RNS Number : 2565P
Baronsmead Second Venture Trust PLC
25 May 2018
Baronsmead Second Venture Trust plc
Half-Yearly report for the six months ended
31 March 2018
The Directors announce the unaudited half-yearly financial report for the six months to 31 March 2018.
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 level of around 4.5p per ordinary share if possible, but this depends primarily on the level of realisations achieved and cannot be guaranteed.
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. Approximately 1,115,000 shares were bought in this way during the six months to 31 March 2018.
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 2018, 3,245,000 shares were bought back representing 1.4 per cent of the shares in issue at 31 March 2018 at prices which represent an average 5.0 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 450,000 shares were bought by investors in the Company's existing shares in the six months to 31 March 2018.
Financial Headlines
-- 311.3p - NAV total return to shareholders for every 100.0p invested at launch. -- GBP23m - funds raised in the period (before costs).
-- (0.6%) - Net asset value ("NAV") per share decreased 0.6 per cent. to 89.6p in the six month period ended 31 March 2018.
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 80.0 127.3 147.3
============= ================== =================== =================== ===================
2005 (March) - C
share* 100.0 40.0 60.0 87.5 127.5
============= ================== =================== =================== ===================
2010 (March) 103.1 30.9 72.2 79.0 106.6
============= ================== =================== =================== ===================
2012 (December) 117.4 35.2 82.2 61.0 82.0
============= ================== =================== =================== ===================
2014 (March) 112.4 33.7 78.7 41.0 66.5
============= ================== =================== =================== ===================
2016 (February) 107.2 32.2 75.0 24.5 52.9
============= ================== =================== =================== ===================
2017 (October) 97.5 29.2 68.2 4.5 34.6
============= ================== =================== =================== ===================
The total return could be higher for those shareholders who were able to defer a capital gain on subscription and the net sum invested may be less.
* Dividends paid to C shareholders post conversion have been adjusted by the conversion ratio (0.85642528).
Chairman's Statement
The six months to 31 March 2018 saw two successful realisations from our unquoted investments and a period of relative stability in the performance and valuation of the portfolio as a whole despite some market volatility.
During the period the Company successfully raised GBP23m (before costs) through an offer for subscription which closed on 20 December 2017.
Results
During the six months to 31 March 2018, the Company's NAV per share decreased 0.6 per cent from 90.10p to 89.55p after the payment of a final dividend of 4.5p per share on 2 February 2018.
Pence per
ordinary
share
NAV as at 1 October 2017
(after deducting the final
dividend of 4.5p) 90.10
----------
Valuation decrease (0.6 per
cent) (0.55)
----------
NAV as at 31 March 2018 89.55
----------
The decrease in NAV of 0.6 per cent. was primarily the result of a period of volatility in the quoted markets and a reduction in value of In the Style Fashion. However, steady progress was made across most of the mature unquoted investments.
Over the six months to 31 March 2018, our unquoted investments delivered an increase in their valuations of 1.9 per cent after allowing for losses on underperforming investments. There has been an increased period of uncertainty in the quoted markets particularly in the second half of the period under review, and the value of our AIM-traded and other listed investments decreased by 1.9 per cent. However, our investment in LF Livingbridge UK Micro Cap Fund ("Micro Cap Fund") increased by 4.5 per cent and our investment in LF Livingbridge UK Multi Cap Income Fund ("Multi Cap Income Fund") increased by 3.6% demonstrating some resilience against the market volatility.
Dividends
A final dividend of 4.5p per share was paid on 2 February 2018, having been approved at the AGM on 30 January 2018.
The Board aims to maintain a minimum annual dividend level of around 4.5p per ordinary share and in the past 10 years has paid a minimum of 7.5p in each financial year. Going forward the Board will wherever possible seek to pay two dividends to Shareholders in each calendar year.
It is of course important to remind shareholders that the payment date and amount of future dividends depends significantly on the level and timing of profitable realisations and cannot be guaranteed and inevitably there will be variations in the amounts and dates that dividends are paid.
Portfolio Review
At 31 March 2018, the Company's investment portfolio was valued at GBP160m and comprised investments in 68 unquoted and AIM-traded companies. The Company's investments in the Micro Cap Fund and Multi Cap Income Fund provide investment exposure to an additional 56 AIM-traded and fully listed companies.
Investment and Divestments
The Company's investments and divestments during the period are set out in the tables below.
The Investment Manager, with the support of the Board, took time to consider how best to deploy funds under the new VCT rules, introduced in November 2015 and further enhanced in the Autumn Budget in 2017. As I have advised previously the rule changes have required the 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. I am now pleased to report that following the 7 new investments made in the 2017 financial year, the Company made 3 new investments totalling GBP1.5m and two follow-on investments totalling GBP0.8m in the six months to 31 March 2018. The new investments included PCI-PAL, a secure cloud payment solutions provider, Beeks Financial Cloud Group, a provider of specialist hosting and connectivity solutions to financial institutions, and Fusion Antibodies, a specialist healthcare services provider. Follow on investments were made into SilkFred, a fast fashion e-tailer and CloudCall Group, a cloud based
telephony software integrated with CRM system.
During the period, a total of GBP14.9m was realised from the full and partial sales of both unquoted and quoted investments. Full realisations included one of our longest standing unquoted investments, Crew Clothing Holdings, a clothing brand specialising in active, outdoor and casual wear at 2.3x cost and Eque2, an unquoted investment which provides software to the construction industry at 3.0x cost. Additionally, one recent unquoted investment, In the Style Fashion, has been fully provided for in the period.
Fundraising
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. Accordingly, the Board will consider whether to raise new funds in the 2018/19 tax year which will be determined by the Company's cashflow and its anticipated requirements to fund new investments over the next two years. The Board ordinarily seeks to raise funds during January and February, having informed shareholders of its fundraising intentions in November when its annual results are published, or earlier if practicable.
VCT Legislation and Policy Review
Following the Patient Capital Review in the summer of 2017, legislative changes to VCTs included in the 2017 Autumn Budget were limited and were primarily to ensure that VCT funding was appropriately targeted. As discussed at our AGM in January the investment rules continue to seek to ensure that VCTs invest in younger, earlier stage companies and the funding is used for organic growth and development of those companies. Importantly, there was no change to the tax incentives for investors.
In summary, in our opinion the 2017 Patient Capital Review and Autumn Budget were positive for the VCT industry and your Board and the Investment Manager are hopeful that the status quo will now remain for a number of years.
Outlook
As Brexit negotiations continue with the backdrop of political uncertainty, the UK economy remains relatively resilient. We have witnessed greater market uncertainty since the beginning of the year but despite this the Company's portfolio remains diverse and continues to make steady progress.
The Board is mindful that the new VCT rules have refocussed VCTs towards younger earlier stage companies. While these companies may be less resilient to economic shocks and downturns and inevitably have a higher risk of failure, our Manager has over 20 years of experience of investing in smaller companies. While the new investments are expected to introduce greater variations in returns, the Company has a diverse portfolio of older more established businesses with low levels of debt. It is our belief that it is these investments which will determine returns and liquidity over the medium term and will provide the stability required while the newer, earlier stage portfolio develops.
Anthony Townsend
Chairman
25 May 2018
Summary Investment Portfolio
Investment Diversification at 31 March 2018
Sector by value Percentage
Business Services 30%
-------------
Consumer Markets 12%
-------------
Healthcare & Education 19%
-------------
Technology, Media & Telecommunications
("TMT") 39%
-------------
Total assets by value Percentage
Unquoted - loan stock 16%
-------------
Unquoted - equity 10%
-------------
AIM & collective investment
vehicles 74%
-------------
Time investments held by value Percentage
Less than 1 year 3%
-------------
Between 1 and 3 years 14%
-------------
Between 3 and 5 years 33%
-------------
Greater than 5 years 50%
-------------
Investments in the period
Book cost
Company Location Sector Activity GBP'000
Unquoted investments
Follow on
================================================================================================
Consumer Online Fashion market
SilkFred Ltd London Markets place 275
================ ============== ============================== =========
Total unquoted investments 275
=========
AIM-traded investments
New
Development of antibodies
Fusion Antibodies Healthcare for both therapeutic
plc Belfast & Education and diagnostic applications 550
================ ============== ============================== =========
Secure payment services
PCI-PAL plc London TMT* provider 495
================ ============== ============================== =========
Cloud hosting services
Beeks Financial for the financial trading
Cloud Group plc Renfrewshire TMT* sector 413
================ ============== ============================== =========
Follow on
================ ============== ============================== =========
CloudCall Group Cloud based telephony
plc Leicestershire TMT* platform 549
================ ============== ============================== =========
Total AIM-traded investments 2,007
=========
Total investments in the year 2,282
=========
* Technology, Media & Telecommunications ("TMT").
Realisations in the period
First Overall
investment Proceeds++ multiple
Company date GBP'000 return*
Unquoted realisations
Crew Clothing Holdings
Limited Trade sale Nov 06 5,362 2.3
======================= =========== ========== =========
Eque2 Limited Trade sale Apr 13 5,129 3.0
======================= =========== ========== =========
Partial loan
Kirona Limited repayment Dec 14 1,201 1.2
======================= =========== ========== =========
Xention Pharma Limited Write off Jul 05 0 0.0
======================= =========== ========== =========
Total unquoted realisations 11,692
========== =========
AIM-traded realisations
EG solutions plc Scheme of arrangement May 05 2,728 1.4
======================= =========== ========== =========
Plant Impact plc Scheme of arrangement Feb 15 493 0.3
======================= =========== ========== =========
Ubisense Group plc Market sale Jun 11 28 0.2
======================= =========== ========== =========
Total AIM-traded realisations 3,249
========== =========
Total realisations
in the year 14,941
========== =========
Deferred consideration of GBP60,000 was received in respect of Kingsbridge
Risk Solutions, which had been sold in a prior period.
++ Proceeds at time of realisation including interest.
* Includes interest/dividends received, loan note redemptions and partial realisations accounted for in prior periods.
Deferred consideration of GBP9,000 was received in respect of Kingsbridge Risk Solutions which had been sold in a prior period.
Independent Review Report to Baronsmead Second Venture Trust plc
Conclusion
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 2018 which comprises the Condensed Income Statement, Condensed Statement of Changes in Equity, Condensed Balance Sheet, Condensed Statement of Cash Flows and the related explanatory notes.
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 2018 is not prepared, in all material respects, in accordance with FRS 104 Interim Financial Reporting and the Disclosure Guidance and Transparency Rules ("the DTR") of the UK's Financial Conduct Authority ("the UK FCA").
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. We read the other information contained in the half-yearly financial report and consider whether it contains any apparent misstatements or material inconsistencies with the information in the condensed set of financial statements.
A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK) 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.
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 directors are responsible for preparing the condensed set of financial statements included in the half-yearly financial report 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.
The purpose of our review work and to whom we owe our responsibilities.
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 DTR of 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.
John Waterson
for and on behalf of KPMG LLP
Chartered Accountants
Saltire Court
20 Castle Terrace
Edinburgh EH1 2EG
25 May 2018
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
25 May 2018
Condensed Income Statement (unaudited)
For the six months to 31 March 2018
Six months to Six months to Year to
31 March 2018 31 March 2017 30 September 2017
--------------------- -----
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 - 140 140 - 6,569 6,569 - 12,987 12,987
Realised
(losses)/gains on
disposal of
investments 7 - (2,636) (2,636) - 83 83 - 251 251
Income 3,954 - 3,954 1,239 - 1,239 3,119 - 3,119
Investment
management fee (602) (1,805) (2,407) (526) (1,578) (2,104) (1,092) (3,276) (4,368)
Other expenses (367) - (367) (604) - (604) (832) - (832)
--------------------- ----- -------- -------- -------- -------- -------- -------- -------- -------- --------
Profit/(loss) on
ordinary
activities before
taxation 2,985 (4,301) (1,316) 109 5,074 5,183 1,195 9,962 11,157
Taxation on
ordinary
activities (205) 205 - - - - - - -
--------------------- ----- -------- -------- -------- -------- -------- -------- -------- -------- --------
Profit/(loss) for
the period, being
total
comprehensive
income for the
period 2,780 (4,096) (1,316) 109 5,074 5,183 1,195 9,962 11,157
--------------------- ----- -------- -------- -------- -------- -------- -------- -------- -------- --------
Return per ordinary
share:
Basic and Diluted 2 1.30p (1.91p) (0.61p) 0.06p 2.75p 2.81p 0.63p 5.20p 5.83p
--------------------- ----- -------- -------- -------- -------- -------- -------- -------- -------- --------
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 unaudited 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 and February 2018 by the Association of Investment Companies ("AIC SORP").
Condensed Statement of Changes in Equity (unaudited)
For the six months to 31 March 2018
Non-distributable reserves Distributable reserves
----------------------
Called-up share Share Revaluation Revenue
capital premium reserve Capital reserve Total
Notes GBP'000 GBP'000 GBP'000 reserve GBP'000 GBP'000 GBP'000
---------------------- ----- ---------------------- -------- ---------------- -------- ------------
At 1 October 2017 20,904 - 38,412 125,783 1,590 186,689
(Loss)/profit after
taxation - - (3,055) (1,041) 2,780 (1,316)
Net proceeds of share
issues, share
buybacks & sale of
shares from treasury 4 2,375 20,080 - (2,536) - 19,919
Share premium
cancellation costs 4 - - - 3 - 3
Dividends paid 6 - - - (8,653) (1,205) (9,858)
---------------------- ----- ---------------------- -------- ----------- ---------------- -------- ------------
At 31 March 2018 23,279 20,080 35,357 113,556 3,165 195,437
---------------------- ----- ---------------------- -------- ----------- ---------------- -------- ------------
Non-distributable reserves Distributable reserves
----------------------- -----
Share Revaluation Capital Revenue
For the six months to Called-up share capital Premium reserve reserve reserve Total
31 March 2017 Notes GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
----------------------- ----- ----------------------- -------- ----------- ----------- ------------
At October 2016 16,196 81,466 24,357 18,394 495 140,908
Shares issued following
the acquisition of
Baronsmead VCT5 plc 4,708 38,245 - - - 42,953
Profit/(loss) after
taxation - - 6,621 (1,547) 109 5,183
Net cost of share
buybacks - - - (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
-----------------------
Called-up share Share Revaluation Capital Revenue
For the year to 30 capital Premium reserve Reserve reserve Total
September 2017 Notes GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
----------------------- ----- ---------------------- --------- -------------- -------- ------------
As at 1 October 2016 16,196 81,466 24,357 18,394 495 140,908
Shares issued following
the acquisition of
Baronsmead VCT5 plc 4,708 38,245 - - - 42,953
Cancellation of share
premium - (119,711) - 119,711 - -
Share premium
cancellation costs - - - (29) - (29)
Profit/(loss) after
taxation - - 14,055 (4,093) 1,195 11,157
Net cost of share
buybacks - - - (2,313) - (2,313)
Dividends paid 6 - - - (5,887) (100) (5,987)
----------------------- ----- ---------------------- --------- ----------- -------------- -------- ------------
At 30 September 2017 20,904 - 38,412 125,783 1,590 186,689
----------------------- ----- ---------------------- --------- ----------- -------------- -------- ------------
Condensed Balance Sheet (unaudited)
As at 31 March 2018
As at As at
31 March 31 March As at
2018 2017 30 September 2017
Notes GBP'000 GBP'000 GBP'000
------------------------------------------------ ----- --------------- --------------- ------------------
Fixed assets
Unquoted investments 7 50,729 60,304 61,163
Traded on AIM 7 84,848 86,485 87,711
Collective investment vehicle 7 59,855 34,548 38,490
Investments 7 195,432 181,337 187,364
Current assets
Debtors 652 195 260
Cash at bank and on deposit 780 2,711 515
------------------------------------------------ ----- --------------- --------------- ------------------
1,432 2,906 775
Creditors (amounts falling due within one year) (1,427) (1,528) (1,450)
Net current assets 5 1,378 (675)
Net assets 195,437 182,715 186,689
Capital and reserves
Called-up share capital 23,279 20,904 20,904
Share premium 20,080 119,711 -
Capital reserve 113,556 10,618 125,783
Revaluation reserve 7 35,357 30,978 38,42
Revenue reserve 3,165 504 1,590
Equity shareholders' funds 195,437 182,715 186,689
------------------------------------------------ ----- --------------- --------------- ------------------
As at As at
31 March 31 March As at
2018 2017 30 September 2017
Net asset value per share 89.55p 91.56p 94.60p
Number of ordinary shares in circulation 218,252,975 199,553,707 197,344,707
----------------------------------------- ----------- ----------- ------------------
Condensed Statement of Cash Flows (unaudited)
For the six months to 31 March 2018
Six Six
months to months to Year to
31 March 2018 31 March 2017 30 September 2017
GBP'000 GBP'000 GBP'000
------------------------------------------------------------- ----------------- ---------------- ------------------
Net cash inflow/(outflow) from operating activities 1,281 (1,370) (2,154)
Net cash outflow from investing activities (11,058) (18,968) (18,409)
Equity dividends paid (9,858) (5,987) (5,987)
------------------------------------------------------------- ----------------- ---------------- ------------------
Net cash outflow before financing activities (19,635) (26,325) (26,550)
Net cash inflow from financing activities 19,900 4,926 2,955
Increase/(decrease) in cash 265 (21,399) (23,595)
Reconciliation of net cash flow to movement in net cash
Increase/(decrease) in cash 265 (21,399) (23,595)
Opening cash position 515 24,110 24,110
Closing cash at bank and on deposit 780 2,711 515
Reconciliation of (loss)/ profit on ordinary activities
before taxation to net cash inflow/(outflow)
from operating activities
(Loss)/ profit on ordinary activities before taxation (1,316) 5,183 11,157
(Losses)/gains on investments 2,496 (6,652) (13,238)
Changes in working capital and other non-cash items 101 99 (73)
Net cash inflow/(outflow) from operating activities 1,281 (1,370) (2,154)
------------------------------------------------------------- ----------------- ---------------- ------------------
Notes
1. The condensed financial statements for the six months to 31 March 2018 comprise the unaudited statements set out 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 and February 2018 ('the SORP') for its annual Financial Statements. The condensed financial statements for the six months to 31 March 2018 have therefore been prepared in accordance with FRS 104 'Interim Financial Reporting' and the principles of the SORP. They have also been prepared on a going concern basis. 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 30 September 2017.
The financial information contained in this half-yearly financial report does not constitute statutory accounts as defined in sections 434 - 436 of the Companies Act 2006. The information for the year to 30 September 2017 has been extracted from the latest published audited financial statements, which have been filed with the Registrar of Companies. The report of the auditor for the audited financial statements for the year to 30 September 2017 was (i) unqualified, (ii) did not include a reference to any matters to which the auditor drew attention by way of emphasis without qualifying their report, and (iii) did not contain a statement under section 498 (2) or (3) of the Companies Act 2006. No statutory accounts in respect of any period after 30 September 2017 have been reported on by the Company's auditors or delivered to the Registrar of Companies.
2. Return per share is based on a weighted average of 214,509,435 ordinary shares in issue (31 March 2017 - 184,194,122 ordinary shares; 30 September 2017 - 191,452,309 ordinary shares).
3. Earnings for the first six months to 31 March 2018 should not be taken as a guide to the results of the full financial year to 30 September 2018.
4. During the six months to 31 March 2018, the Company issued 23,753,268 shares at net proceeds of GBP22,455,000 (including costs). During the same period, the Company purchased 3,245,000 shares to be held in treasury at a cost of GBP2,883,000 and sold 400,000 shares from treasury for GBP347,000. At 31 March 2018, the Company held 14,538,214 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.
5. Excluding treasury shares, there were 218,252,975 ordinary shares in circulation at 31 March 2018 (31 March 2017 - 199,553,707 ordinary shares; 30 September 2017 - 197,344,707 ordinary shares).
6. The final dividend in relation for the year ended 30 September 2017 of 4.50p per share (3.95p capital, 0.55p revenue) was paid on 2 February 2018 to shareholders on the register on 5 January 2018. The ex-dividend date was 4 January 2018. During the year to 30 September 2017, the Company paid an interim dividend on 31 March 2017 of 3.00p per share (2.95p capital, 0.05p 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 1 Level 2 Level 3
------------------------------
Collective
Traded investment Traded
on AIM vehicles on AIM Unquoted Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
------------------------------ --------- ------------ --------- --------- ---------
Opening book cost 67,670 28,325 3,429 49,528 148,952
Opening unrealised
appreciation/(depreciation) 18,450 10,165 (1,838) 11,635 38,412
------------------------------ --------- ------------ --------- --------- ---------
Opening valuation 86,120 38,490 1,591 61,163 187,364
------------------------------ --------- ------------ --------- --------- ---------
Movements in the year:
Transfer between levels 2,075 - (2,075) - -
Purchases at cost 2,007 24,750 - 275 27,032
Sale - proceeds (3,249) (4,400) - (8,819) (16,468)
- realised gains on
sales (731) - - (1,905) (2,636)
Unrealised gains realised
during the period 885 - - 2,310 3,195
(Decrease)/ increase
in unrealised appreciation (3,899) 1,015 2,124 (2,295) (3,055)
------------------------------ --------- ------------ --------- --------- ---------
Closing valuation 83,208 59,855 1,640 50,729 195,432
------------------------------ --------- ------------ --------- --------- ---------
Closing book cost 68,657 48,675 1,354 41,389 160,075
Closing unrealised
appreciation 14,551 11,180 286 9,340 35,357
------------------------------ --------- ------------ --------- --------- ---------
Closing valuation 83,208 59,855 1,640 50,729 195,432
------------------------------ --------- ------------ --------- --------- ---------
Equity shares 83,208 - 1,640 18,678 103,526
Loan notes - - - 32,051 32,051
Collective Investment
vehicles - 59,855 - - 59,855
------------------------------ --------- ------------ --------- --------- ---------
Closing valuation 83,208 59,855 1,640 50,729 195,432
------------------------------ --------- ------------ --------- --------- ---------
CentralNic Group plc has been changed to a Level 3 investment due to a suspension of trading during the period. TLA Worldwide plc has been changed to a Level 1 investment due to a lift on the suspension of trading during the period.
There has been no significant change in the risk analysis as disclosed in the Company's Annual Report and Accounts to 30 September 2017.
8. The Company has one reportable segment being investing in primarily a portfolio of UK growth businesses, whether unquoted or traded on AIM.
9. 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 year ended 30 September 2017. 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 year ended 30 September 2017. During the period the Company has incurred management fees of GBP2,407,000 (31 March 2017 - GBP2,104,000; 30 September 2017 - GBP4,368,000) and secretarial and accounting fees of GBP82,000 (31 March 2017 -GBP80,000; 30 September 2017 - GBP162,000) 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 2018 the Company held cash and readily realisable securities totalling GBP36,620,000 including GBP35,840,000 held in Sterling Liquidity Funds. 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 PLC
John Davies The Pavilions
Malcolm Groat Bridgwater Road
Ian Orrock Bristol BS99 6ZZ
Tel: 0800 923 1534
Secretary
Livingbridge VC LLP Brokers
Panmure Gordon & Co
Registered Office One New Change
100 Wood Street London EC4M 9AF
London EC2V 7AN Tel: 020 7886 2500
Investment Manager Auditor
Livingbridge VC LLP KPMG LLP
100 Wood Street Saltire Court
London EC2V 7AN 20 Castle Terrace
020 7506 5717 Edinburgh EH1 2EG
Registered Number Solicitors
04115341 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 news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.
END
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