Baronsmead Venture Trust PLC Annual Financial Report (3554I)

TIDMBVT

RNS Number : 3554I

Baronsmead Venture Trust PLC

02 December 2022

Baronsmead Venture Trust plc

Annual Report and Audited Financial Statements

for the year ended 30 September 2022

The Directors of Baronsmead Venture Trust plc are pleased to announce the Annual Financial Report for the year ended 30 September 2022. The Annual Report and Financial Statements can be obtained from the following website: www.baronsmeadvcts.co.uk

Financial Highlights

-- Net Asset Value ("NAV") per share decreased 18.5 per cent to 64.3p, before the deduction of dividends, for the financial year ended 30 September 2022.

-- NAV total return of 405.2p to shareholders for every 100.0p invested at launch (April 1998).

-- Annual tax free dividend yield of 7.3 per cent based on 5.75p dividends paid (including proposed final dividend of 2.75p) and opening NAV of 78.9p.

-- GBP21.5million of investments made into nine new investments and eleven follow-on opportunities during the year.

Our investment objective

Baronsmead Venture Trust plc (the "Company") is a tax efficient listed company which aims to achieve long-term investment returns for private investors, including tax-free dividends.

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 will, wherever possible, seek to pay two dividends to shareholders in each calendar year, typically an interim in September and a final dividend following the Annual General Meeting in February/March.

-- The Board will use, as a guide, when setting the dividends for a financial year, a sum representing 7 per cent of the opening net asset value of that financial year.

Key elements of the business model

Access to an attractive, diverse portfolio

The Company gives shareholders access to a diverse portfolio of growth businesses.

The Company will make investments in growth businesses, whether unquoted or traded on AIM, which are substantially based in the UK in accordance with the prevailing VCT legislation. Investments are made selectively across a range of sectors.

The Manager's approach to investing

The Manager endeavours to select the best opportunities and applies a distinctive selection criteria based on:

-- Primarily investing in parts of the economy which are experiencing long term structural growth

   --      Businesses that demonstrate, or have the potential for, market leadership in their niche 
   --      Management teams that can develop and deliver profitable and sustainable growth 

-- Companies with the potential to become an attractive asset appealing to a range of buyers at the appropriate time to sell

In order to ensure a strong pipeline of opportunities, the Manager invests in building deep sector knowledge and networks and undertakes significant proactive marketing to target companies in preferred sectors. This approach generates a network of potentially suitable businesses with which the Manager maintains a relationship ahead of possible investment opportunities.

The Manager as an influential shareholder

The Manager is an engaged and supportive shareholder (on behalf of the Company) in both unquoted and significant quoted investments.

For unquoted investments, representatives of the Manager often join the investee board.

The role of the Manager with investees is to ensure that strategy is clear, the business plan can be implemented and the management resources are in place to deliver profitable growth. The aim is to build on the business model and grow the company into an attractive target which can be sold or potentially floated in the medium term.

A more detailed explanation of how the investment policy and business model are applied, along with the full text of the investment policy, can be found in the Annual Report.

STRATEGIC REPORT

CHAIRMAN'S STATEMENT

The economic environment over the past year has become highly volatile. Concerns around inflationary pressures and interest rates, exacerbated by the conflict in Ukraine and political instability particularly in the second half of the financial year weighed on the value of the Company's unquoted and AIM-traded investments. As a result, the Company's NAV per share decreased 14.6p per share (18.5 per cent) before dividend payments for the year ended 30 September 2022.

The Company aims to achieve long-term returns for its shareholders from a diverse portfolio of investments in UK growth companies. Consequently, despite the drop in the value of the portfolio over the period, the Board continues to believe that in aggregate, the fundamentals of the large majority of portfolio companies remain robust. The Company is also in a position to support those investee companies where the Manager believes there is a strong prospect of providing good investment returns for shareholders over the medium to longer term. This is illustrated by the impressive returns realised during the year, from the full or partial realisations of investments in Ideagen, Cerillion and Carousel at 13.5x, 11.4x and 5.0x cost respectively. The Company first invested in these companies in January 2013, July 2015 and October 2013 respectively.

Additionally, the Board believes that the Manager's acquisition of the Mobeus VCTs in September 2021 has enhanced the Manager's ability to identify and manage attractive early-stage unquoted investments. Through the combined investment firepower of the funds available from the Baronsmead and Mobeus VCTs the Company and its co-investors can be a more influential investor. In addition, the Baronsmead VCTs benefit from a larger portfolio of investments, thereby benefiting from greater diversification.

Results

 
                                                                        Pence 
                                                                 per ordinary 
                                                                        share 
 NAV as at 1 October 2021 (after final dividend)                        78.90 
                                                               -------------- 
 Valuation decrease (-18.5 per cent)                                  (14.61) 
                                                               -------------- 
 NAV as at 30 September 2022 before dividends                           64.29 
                                                               -------------- 
 Less: 
  Interim dividend paid on 9 September 2022                            (3.00) 
                                                               -------------- 
 Proposed final dividend of 2.75p payable, after shareholder 
  approval, on 3 March 2023                                            (2.75) 
                                                               -------------- 
 Illustrative NAV as at 30 September 2022 after proposed 
  dividend                                                              58.54 
                                                               -------------- 
 

Portfolio review

At 30 September 2022, the Company's investment portfolio was valued at GBP105 million and comprised direct investments in a total of 87 companies of which 39 are in unquoted and 48 are in quoted companies. The Company's investments in the LF Gresham House UK Micro Cap Fund ("Micro Cap"), LF Gresham House UK Multi Cap Income Fund ("Multi Cap") and LF Gresham House UK Smaller Companies Fund ("Small Cap"), (together the "Equity Funds") were valued at GBP49 million at 30 September 2022. These investments provide investment exposure to an additional 75 AIM-traded and fully listed companies spreading investment risk across a highly diversified portfolio of 162 companies.

The difficult economic and political environment noted in my opening remarks were reflected in the conditions experienced within the wider equity markets during the year. As a result, the unquoted and quoted portfolios decreased in value by 18 per cent and 20 per cent respectively. This is clearly a disappointing result. To put this in context, however, the FTSE AIM All Share Index decreased by 35 per cent over the period.

Investments and divestments

The Board is pleased to report that the Company has continued to see attractive opportunities and make new investments investing a total of GBP12 million in nine companies during the year. Further details of the new investments made are included in the Manager's review. As we have said to shareholders previously, the requirement to make investments in earlier stage companies may result in greater volatility of returns over time. The priority for portfolio companies is to face difficult market conditions in a controlled way. The Company has the resources to support new and existing portfolio companies and the Manager will focus on their investment fundamentals.

There have been several realisations in both the quoted and unquoted portfolio during the year. For example, the Company realised its investment in Ideagen, in the quoted portfolio, which delivered proceeds of GBP7.7 million for a total gross money multiple of 13.5x. The Company's sale of Carousel, in the unquoted portfolio, delivered total proceeds of GBP7.6 million for a gross money multiple of 5.0x cost. The Manager has also continued its approach of profitable partial realisations of Cerillion plc, resulting in the receipt of proceeds of GBP1.2 million at an aggregate of 11.4x original invested cost in this AIM-listed company during the year.

Dividends

The Board is pleased to declare a final dividend of 2.75p per share for the year to 30 September 2022, payable on 3 March 2023. This is in addition to the 3.00p interim dividend paid in September and means that the total dividends for the year are 5.75p. This is a 7.3 per cent yield based on the opening NAV of 78.9p and meets the target policy of 7 per cent of the NAV at the start of the year. Including the proposed final dividend of 2.75p per share, tax free dividends paid to founder shareholders now total 179.65p per share, 86.25p of which has been paid over the past 10 years.

Realised distributable reserves remain at good levels to fund future dividends and the Manager continues to focus on consistently selling investments and generating realised profits across the portfolio which help to sustain future dividends.

Environmental, Social and Governance ("ESG") matters

Environmental, social and governance analysis is embedded into the Company's investment processes by the Manager in order to build and protect long-term value for investors. A framework based on ten key ESG themes in each portfolio is used to structure analysis, monitor and report on ESG risks and opportunities across their lifecycle. Further information in relation to the Manager's integration of ESG factors in the management of the Company's portfolio is set out in the full Strategic Report.

Sunset Clause

When EU State Aid approval of the UK's VCT and EIS schemes was given in 2015 legislation was introduced for the schemes, which means if the legislation is not renewed investors will no longer be able to claim initial tax relief on investments made after 5 April 2025 "the Sunset Clause".

On 23 September 2022 the Government announced as part of a "mini-budget" that "the government remains supportive of the Enterprise Investment Scheme (EIS) and Venture Capital Trusts (VCT) and sees the value of extending them in the future". Additionally, on 7 November 2022, as part of its Autumn Statement, the Government said "the Government remains supportive of the Enterprise Investment Scheme and Venture Capital Trusts and sees the value of extending them in the future". Given these statements, the general consensus in the VCT industry is that the Government will extend the provisions of the Sunset Clause. However, no further details have been provided as yet on the length of that extension, or any conditions or variations to the current VCT scheme that may be attached to any such extension.

During the year and prior to the Government's recent announcements, the Board engaged Howard Kennedy to provide a strategic review of its options should the Sunset Clause become effective. The Board will continue to monitor the strategic options available to the Company in order to best prepare for and react to future changes in VCT rules to see how we can best protect shareholders' interests value in the face of regulatory uncertainty.

Fundraising

In August 2022, the Board announced its intention to raise new funds to increase the Company's resources available for new and follow-on investments over the next two to three years. The Company expects to launch an offer for subscription in January 2023. Investing throughout an economic cycle is a key part of the Company's investment strategy, with the additional funds raised being deployed in smaller UK companies at what the Board and the Manager believe will be at an advantageous time.

Annual General Meeting ("AGM")

I look forward to meeting as many shareholders as possible at the next AGM, to be held on 1 February 2023, at Saddlers' Hall, 40 Gutter Lane, London, EC2V 6BR. The Manager will deliver a presentation at 11.30am, followed by some light refreshments at 12.30pm, after which I will present my own review of the year at 1.00pm. The Company intends to hold this AGM in person, however, we will also live stream the event for any shareholders who do not wish, or are unable, to attend in person. Registration details for the live stream will be included in the Notice of AGM and on the Baronsmead website.

Outlook

The economic outlook continues to exhibit elevated levels of uncertainty. We are moving from a period of low inflation and interest rates to a sustained period of increasing rates, combined with the unwinding Government stimulus.

We anticipate these forces will continue to drive periods of sentiment driven volatility in equity markets well into next year. While we view this outlook with suitable caution, we also expect heightened volatility to create attractive long-term investment opportunities.

The Board believe it is a good time to be investing in earlier stage, innovative and high growth potential businesses. The Manager will be looking to take advantage of changes in consumer behaviour and the disruption of traditional supply chains being driven by technology. We remain confident that the Manager is suitably positioned to provide the necessary levels of support to the portfolio companies and remains focused on retaining, recovering and helping to grow value in existing and future investee companies.

Fiona Miller Smith

Chairman

1 December 2022

MANAGER'S REVIEW

This year has seen a prolonged period of weakness in the public and private equity markets brought about by macroeconomic uncertainty and global events. Against this backdrop, the portfolio, whilst well diversified, with exposure to over 160 quoted and unquoted companies, has delivered a decrease in net asset value total return of 18.5 per cent over the year.

PORTFOLIO REVIEW

Overview

The net assets of GBP194 million were invested as follows:

 
                                              NAV    % of            Number   % return 
                                           (GBPm)    NAV*    of investees**     in the 
 Asset class                                                                   year*** 
 Unquoted                                      48      25                39       (18) 
                                         --------  ------  ----------------  --------- 
 AIM-traded companies                          57      29                48       (20) 
                                         --------  ------  ----------------  --------- 
 LF Gresham House UK Micro Cap 
  Fund                                         27      14                50       (32) 
                                         --------  ------  ----------------  --------- 
 LF Gresham House UK Multi Cap 
  Income Fund                                   8       4                41       (10) 
                                         --------  ------  ----------------  --------- 
 LF Gresham House UK Smaller Companies 
  Fund                                         14       7                38       (16) 
                                         --------  ------  ----------------  --------- 
 Liquid assets                                 40      21               N/A          - 
                                         --------  ------  ----------------  --------- 
 Totals                                       194     100               216 
                                         --------  ------  ----------------  --------- 
 
   *      By value as at 30 September 2022. 

** Includes investee companies with holdings by more than one fund. Total number of individual companies held is 162.

   ***    Return includes interest received on unquoted realisations during the year. 
   #     Represents cash, OEICs and net current assets. 

The tables below show the breakdown of new investments and realisations over the course of the year and below is a commentary on some of the key highlights in both the unquoted and quoted portfolios.

Investment activity - unquoted and quoted

The Company's investment strategy is primarily focused on companies operating in parts of the economy that we believe are benefiting from long-term structural growth trends and in sectors where we have deep expertise and network. The amount of capital invested in each business is matched to the scale, maturity and underlying risk profile of the company seeking investment.

During the year, GBP21.5 million was invested into 19 companies including nine new additions to the portfolio and eleven follow on investments in ten existing portfolio companies.

Six new unquoted investments were completed during the year into Popsa Holdings Ltd, Proximity Insight Holdings Ltd, Bidnamic, Fu3e Ltd, Focal Point Positioning Ltd and Orri Ltd. Below are descriptions of the new investments made:

-- Popsa is a photobook mobile app which utilises proprietary machine learning ("ML") algorithms to dramatically shorten the time of creation

-- Proximity Insight provides a cloud-based app for retail sales associates to engage and transact with customers in-store or online

   --      Bidnamic is a Google Shopping bid optimisation platform 
   --      Fu3e is a collaborative project management and real time reporting platform for real estate 

professionals

-- Focal Point utilises proprietary ML algorithms to significantly improve satellite-based location sensitivity

   --      Orri is a clinically-led provider of eating disorder services 

Three new AIM quoted investments were made during the year into Skillcast, Aptamer Group and Oberon Investments:

   --      Skillcast is a vendor of financial risk and compliance software 

-- Aptamer is a developer of a platform technology with applications in the therapeutic and diagnostic areas of healthcare

   --      Oberon Investments is a wealth management and financial advisory firm 

The Company made additional investments in ten existing portfolio companies, one quoted and nine unquoted, across the year. This is consistent with the investment strategy of continuing to back our high potential assets with further capital to support future growth. We anticipate the level of follow-on investment will continue to grow as the earlier stage portfolio continues to mature.

Unquoted portfolio

Performance

The unquoted portfolio decreased in value by 18 per cent during the year. Our portfolio companies have faced a challenging macroeconomic environment, including rising levels of inflation and interest rates and continued supply chain disruption relating to both the ongoing effects of the COVID-19 pandemic and the impact of conflict in Ukraine. In particular, this has started to impact the consumer facing businesses in the portfolio. Whilst the fall in value was predominantly as a result of declines in comparative benchmarks rather than any underlying trading performance, we have seen robust performance from many of our technology, healthcare and services companies which continue to grow recurring or contracted revenues, albeit, in general, at a slower pace than has been forecast.

As Investment Manager we remain highly engaged with the management teams within the portfolio, sharing insight and best practice to help them both manage risk and spot opportunities in a quickly changing environment. We have continued to invest in our portfolio and in-house talent teams, which alongside our extensive network of earlier stage, high growth company experts, ensure we are well positioned to help the companies we invest in to navigate the challenges they face whilst also continuing to develop and scale.

Divestments

The Company successfully realised its investment in Carousel Logistics in February 2022, delivering GBP7.6 million in proceeds and an initial investment return of 5.0x. Carousel is a pan-European logistics specialist, delivering high-value parts and products for performance and life-critical industries. The business grew significantly during the investment period, including expanding their international footprint both organically and through acquisition. In addition, the Company also successfully realised its investment in Happy Days in July 2022, delivering GBP2.6 million in proceeds and an initial investment return of 0.8x.

Also, during the year, the Company fully divested its holding in Rainbird Technologies for no return on investment.

Quoted portfolio (AIM-traded investments)

Performance

The quoted portfolio decreased in value by 20 per cent during the year, giving up some of the strong gains made for shareholders in the prior year. This performance should be viewed in the context of a challenging equity market environment globally driven by macroecomic and geopolitical uncertainty and headwinds which have resulted in de-ratings across most asset classes. For reference the AIM market in the UK fell 35 per cent over the same period. Despite the adverse share price performances from many of the portfolio companies the majority of the AIM portfolio remains in good financial health and is exposed to structural growth areas providing some insulation from the deteriorating economic conditions.

The best performing investments all sit in the software sector with two benefitting from the elevated level of takeover activity in the UK public markets for much of the financial year. Cerillion, a provider of billing and charging software to the telecoms industry continued to deliver strong revenue and profit growth and upgraded expectations on the back of strong contract win momentum. Ideagen, a governance, risk and compliance software provider saw its share price increase by 10 per cent over the year driven in the main by a takeover approach from a vehicle backed by private equity firm Hg Capital at a substantial premium. The takeover resulted in a full exit for Baronsmead funds at a multiple of 13.5 times original cost. Cloudcall, an internet telephony software company, also received a takeover approach from US private equity firm Xplorer Capital Management LLC resulting in a strong recovery in value following a period of operational underperformance, realising a return of 0.9 times original cost.

The largest detractors from performance were Netcall, a provider of cloud contact centre and business process automation software which was derated despite strong growth in revenue and profit during the period; TPXImpact which again was derated during the period although we note the business has subsequently downgraded its market estimates resulting in the CEO stepping down post year end; and Inspired, an energy procurement and optimisation consultancy which de-rated during the year despite delivering results in line with expectations and seeing strong increased demand for its services resulting from elevated energy prices following the conflict in Ukraine.

We closely monitor our AIM portfolio with a rolling programme of independent reviews of top AIM holdings and broadly continue to be positive on the long-term investment prospects of these companies. Many of the larger quoted investments have been long-term holdings. These companies are typically profitable, cash generative businesses with low levels of financial gearing and continue to have attractive long-term growth prospects.

Divestments

Proceeds totalled GBP11.2 million during the year following three full and one partial realisation. Ideagen was fully realised following a takeover by private equity firm Hg Capital, returning 13.5x cost in July 2022. The Company's investment in Cloudcall Group was also fully realised returning 0.9x cost. The opportunity to crystallise some more profits was taken for Cerillion plc; over the course of the year proceeds of GBP1.2 million were realised at 11.4x cost.

Collective Investment Vehicles

The Manager believes that the Company's investments in the LF Gresham House UK Micro Cap Fund ("Micro Cap"), LF Gresham House UK Multi Cap Income Fund ("Multi Cap"), and LF Gresham House UK Smaller Companies Fund ("Small Cap") are a core component of the Company's portfolio construction. These investments provide shareholders with additional diversification through exposure to an additional 75 underlying companies, as well as access to the potential returns available from a larger and more established group of companies that fall within the Manager's core area of expertise.

Over the year Micro Cap delivered a return of -32 per cent, Multi Cap delivered a return of -10 per cent and the Small Cap fund delivered -16 per cent.

Micro Cap and Multi Cap continue to be both highly rated by independent ratings agencies. Micro Cap's cumulative performance is currently top quartile within the IA UK Smaller Companies sector and is the fourth best performing fund over the past 10 years. Multi Cap's cumulative performance has been the top performing fund within the IA UK Equity Income sector over three years, five years and since launch in June 2017. Small Cap has also achieved top quartile cumulative performance since launch in 2019 and is the fourth best performing fund over the past three years and second best since launch.

Liquid assets (cash and near cash)

The Company had cash and liquidity OEICs of approximately GBP41 million at the year-end. This asset class is

conservatively managed to take minimal or no capital risk.

ESG highlights

During the year we have conducted our second ESG survey of our unquoted portfolio companies, to identify how these companies think about ESG and which ESG data is already being reported and monitored. Further details on our ESG approach and policies can be found in the strategic report.

Outlook

Despite the current macroeconomic headwinds, the opportunity to invest and support growth in entrepreneurial earlier-stage businesses remains strong. Our focus on investing in parts of the economy which are experiencing structural growth and in sectors where we have extensive talent networks and domain expertise continues to identify attractive investment opportunities. With our support and guidance, many of our portfolio management teams continue to innovate to take advantage of the disruption in the market as a result of the economic downturn. We anticipate the rate of follow-on investment to increase across the portfolio as we support our successful companies to trade through the cycle and to continue to scale.

Several parts of the portfolio have faced challenges due to the macroeconomic environment, most notably our investments in companies that rely on consumer sentiment. Our investee companies are having to navigate the impact of wage inflation, rising energy prices and supply chain disruption. However, the portfolio continues to be highly diversified and overall is defensively positioned.

The Gresham House Ventures team, which consists of 21 investment professionals is well placed to take advantage of the opportunities that an uncertain economic environment will present. Our experienced portfolio and in-house talent teams continue to add value to our portfolio companies post investment. We remain confident in the ability of more agile, fast moving earlier stage companies to perform well in the current economic environment and in our ability to invest capital and deliver attractive long-term returns for the Company.

Gresham House Asset Management Ltd

Investment Manager

1 December 2022

Investments in the year

 
                                                                                                  Book cost 
         Company               Location           Sector                   Activity                GBP'000 
  Unquoted investments 
   New 
 Popsa Holdings                                               Mobile-first photobook 
  Ltd                       Surrey             Technology      app provider                           3,120 
                           -----------------  --------------  ----------------------------------  --------- 
                                                              Real-estate development 
 Fu3e Ltd                   Sussex             Technology      project management platform            1,680 
                           -----------------  --------------  ----------------------------------  --------- 
                                                              Platform for front-line 
                                                               sales associates of omni-channel 

 Proximity Insight                                             retailers to engage with 
  Holdings Ltd              London             Technology      customers                              1,148 
                           -----------------  --------------  ----------------------------------  --------- 
                                                              Google shopping bid-optimisation 
 Bidnamic                   Yorkshire          Technology      software                                 949 
                           -----------------  --------------  ----------------------------------  --------- 
                                                              Research and development 
 Focal Point                                                   focused technology business 
  Positioning                                                  focusing on global navigation 
  Ltd                       Cambridgeshire     Technology      and satellite systems                    905 
                           -----------------  --------------  ----------------------------------  --------- 
                                                              Provider of intensive 
                                               Healthcare      day care treatments for 
 Orri Ltd                   London              & Education    eating disorders                         792 
                           -----------------  --------------  ----------------------------------  --------- 
 Follow-on 
 Panthera Biopartners                          Healthcare     Recruitment services 
  Ltd                       Yorkshire           & Education    for clinical trials                    2,399 
                           -----------------  --------------  ----------------------------------  --------- 
                                                              Provides real time life 
                                               Healthcare      science intelligence 
 Airfinity Ltd              London              & Education    as a subscription service              1,248 
                           -----------------  --------------  ----------------------------------  --------- 
                                                              Online consultation provider 
 eConsult Health                               Healthcare      used by GP practices 
  Ltd                       Surrey              & Education    and hospitals                          1,200 
                           -----------------  --------------  ----------------------------------  --------- 
                                               Consumer       Supplier of customisable 
 Yappy Ltd                  Lancashire          Markets        pet products                             940 
                           -----------------  --------------  ----------------------------------  --------- 
                                                              Leading integration platform 
 Patchworks Integration                                        for fast-growing retail 
  Ltd                       Nottinghamshire    Technology      and ecommerce businesses                 720 
                           -----------------  --------------  ----------------------------------  --------- 
                                                              AI platform using advanced 
                                                               behavioural analytics 
                                                               to deliver tailored promotions 
 RevLifter Ltd              London             Technology      to users                                 719 
                           -----------------  --------------  ----------------------------------  --------- 
 Custom Materials                                             Retailer of customisable 
  Ltd                       London             Technology      products                                 536 
                           -----------------  --------------  ----------------------------------  --------- 
                                               Business 
 Glisser Ltd                London              Services      Audience response software                293 
                           -----------------  --------------  ----------------------------------  --------- 
 Tribe Digital 
  Holdings Pty                                                Influencer marketing 
  Ltd                       London             Technology      platform                                 252 
                           -----------------  --------------  ----------------------------------  --------- 
 Total unquoted investments                                                                          16,901 
                                                                                                  --------- 
  AIM-traded investments 
   New 
                                                              Platform providing antibody 
 Aptamer Group                                 Healthcare      alternatives to the pharma 
  plc                       Yorkshire           & Education    industry                               2,206 
                           -----------------  --------------  ----------------------------------  --------- 
                                                              Compliance e-learning 
 Skillcast Group                               Healthcare      and regulatory technology 
  plc                       London              & Education    services                                 753 
                           -----------------  --------------  ----------------------------------  --------- 
 Oberon Investments                            Business 
  Group plc                 London              Services      Corporate advisory business               658 
                           -----------------  --------------  ----------------------------------  --------- 
 Follow-on 
                                                              Commercialisation of 
                                                               university research-based 
 Crossword Cybersecurity                                       cyber security software 
  plc                       London             Technology      and consulting                           960 
                           -----------------  --------------  ----------------------------------  --------- 
 Total AIM-traded investments                                                                         4,577 
                                                                                                  --------- 
 Total investments in the year                                                                       21,478 
                                                                                                  --------- 
 

Realisations in the year

 
                                                                                 Original                  Overall 
                                           First Investment                  book cost(#)  Proceeds++     multiple 
 Company                                               date                       GBP'000     GBP'000       return 
 Unquoted realisations 
                           -------------  -----------------  ----------------------------  ----------  ----------- 
 Carousel Logistics         Full Trade 
  Ltd                        Sale                    Oct 13                         1,910       7,636         5.0* 
                           -------------  -----------------  ----------------------------  ----------  ----------- 
 Happy Days Consultancy     Full Trade 
  Ltd                        Sale                    Apr 12                         3,420       2,605          0.8 
                           -------------  -----------------  ----------------------------  ----------  ----------- 
 Rainbird Technologies      Full Trade 
  Ltd                        Sale                    Feb 19                           700           0          0.0 
                           -------------  -----------------  ----------------------------  ----------  ----------- 
 Total unquoted realisations                                                        6,030      10,241 
                                                             ----------------------------  ----------  ----------- 
 AIM-traded realisations 
                           -------------  -----------------  ----------------------------  ----------  ----------- 
 Ideagen plc                Takeover                 Jan 13                           565       7,656         13.5 
                           -------------  -----------------  ----------------------------  ----------  ----------- 
 Cloudcall Group plc        Takeover                 Apr 14                         2,630       2,373          0.9 
                           -------------  -----------------  ----------------------------  ----------  ----------- 
 Cerillion plc              Market sale              Nov 15                           106       1,206         11.4 
                           -------------  -----------------  ----------------------------  ----------  ----------- 
 Mi-Pay Group plc           Liquidated               Dec 05                           800          11          0.0 
                           -------------  -----------------  ----------------------------  ----------  ----------- 
 Total AIM-traded realisations                                                      4,101      11,246 
                                                             ----------------------------  ----------  ----------- 
 Total realisations in the year                                                    10,131      21,487 
                                                             ----------------------------  ----------  ----------- 
 
 
   #     Residual book cost at realisation date. 
   ++     Proceeds at time of realisation including interest. 

* Includes interest/dividends received, loan note redemptions and partial realisations accounted for in prior periods

Final Dividend

Subject to shareholder approval at the AGM, a final dividend of 2.75p per share will be paid on 3 March 2023 to shareholders on the register at 3 February 2023. The ex-dividend date will be 2 February 2023.

Annual General Meeting

The AGM will be held on 1 February 2023 at Saddlers' Hall, 40 Gutter Lane, London, EC2V 6BR. The Manager will deliver a presentation at 11.30am, followed by some light refreshments at 12.30pm, after which the Chairman will present a review of the year at 1.00pm. The Company intends to hold this AGM in person, however, we will also live stream the event for any shareholders who do not wish, or are unable, to attend in person. A separate Notice convening the AGM will be posted to shareholders and will be separate to the Annual Report. The Notice will include an explanation of the items to be considered at the AGM and will be uploaded to the Company's website in due course.

Further Information

The Annual Report and Accounts for the year ended 30 September 2022 will be available today on www.baronsmeadvcts.co.uk .

It will also be submitted shortly in full unedited text to the Financial Conduct Authority's National Storage Mechanism and will be available for inspection at data.fca.org.uk/#/nsm/nationalstoragemechanism in accordance with DTR 6.3.5(1A) of the Financial Conduct Authority's Disclosure Guidance and Transparency Rules.

LEI: 213800VQ1PQHOJXDDQ88

END

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