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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Baronsmead Venture Trust Plc | LSE:BVT | London | Ordinary Share | GB0002631934 | 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% | 52.50 | 51.00 | 54.00 | 52.50 | 52.50 | 52.50 | 0.00 | 01:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| Unit Inv Tr, Closed-end Mgmt | -942k | -5.14M | -0.0147 | -35.71 | 183.61M |
From Apr 2021 to Apr 2024
TIDMBVT
RNS Number : 0893A
Baronsmead Venture Trust PLC
27 May 2021
Baronsmead Venture Trust plc
Half-yearly report for the six months ended 31 March 2021
The Directors of Baronsmead Venture Trust plc are pleased to announce the unaudited half-yearly financial report for the six months to 31 March 2021. Copies of the half-yearly report can be obtained from the following website: www.baronsmeadvcts.co.uk
Our Investment Objective
-- Baronsmead Venture Trust 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 NAV of that financial year.
Key elements of the business model
Access to an attractive, diverse portfolio
Baronsmead Venture Trust plc 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.
Financial Highlights
+16.6% Net Asset Value (NAV) per share increased 16.6 per cent. to 79.2p in the six months to 31 March 2021, before deduction of dividends.
460.1p NAV total return to shareholders for every 100.0p invested at launch (April 1998).
GBP32.5m Funds raised in the period (before costs).
GBP8.1m Realised proceeds in the period, returning 3.0x cost.
Cash returned to shareholders
The table below shows the cash returned to shareholders that invested in Baronsmead Venture Trust plc dependent on their subscription cost, including the income tax available to be reclaimed on the subscription.
Hot Features
Premium
Cumulative
dividends
Income Net cash
Cash invested tax reclaim invested paid(#)
(p) Return on
cash invested(#)
Year subscribed (p) (p) (p) (%)
1998 (April) 100.0 20.0 80.0 170.4 190.4
============= ============ ========== ========== =================
1999 (May) 102.0 20.4 81.6 166.9 183.6
============= ============ ========== ========== =================
2000 (February) 137.0 27.4 109.6 163.7 139.5
============= ============ ========== ========== =================
2000 (March) 130.0 26.0 104.0 163.7 145.9
============= ============ ========== ========== =================
2004 (October) - C shares* 100.0 40.0 60.0 119.3 159.3
============= ============ ========== ========== =================
2009 (April) 91.6 27.5 64.1 102.5 141.9
============= ============ ========== ========== =================
2012 (December) 111.8 33.5 78.3 77.0 98.9
============= ============ ========== ========== =================
2014 (March) 103.8 31.1 72.7 59.5 87.3
============= ============ ========== ========== =================
2016 (February) 102.8 30.8 72.0 45.0 73.8
============= ============ ========== ========== =================
2017 (October) 94.8 28.4 66.3 27.0 58.4
============= ============ ========== ========== =================
2019 (February) 84.2 25.3 58.9 20.5 54.4
============= ============ ========== ========== =================
2019 (November) 76.8 23.0 53.8 13.0 46.9
============= ============ ========== ========== =================
2020 (January) 82.4 24.7 57.7 13.0 45.8
============= ============ ========== ========== =================
2020 (February) 80.1 24.0 56.1 9.5 41.8
============= ============ ========== ========== =================
2020 (March) 63.8 19.1 44.7 9.5 44.8
============= ============ ========== ========== =================
2020 (November) 75.2 22.6 52.6 6.5 38.6
============= ============ ========== ========== =================
2020 (December) 78.0 23.4 54.6 6.5 38.3
============= ============ ========== ========== =================
2021 (January) 81.3 24.4 56.9 6.5 38.0
============= ============ ========== ========== =================
2021 (February) 78.8 23.6 55.2 3.0 33.8
============= ============ ========== ========== =================
2021 (March) 80.9 24.3 56.6 3.0 33.7
============= ============ ========== ========== =================
* Share dividend calculated using conversion ratio of 0.9657, which is the rate the C shares were converted into ordinary shares
#Includes interim dividend of 3.0p per share payable 10 September 2021.
Chairman's statement
The six months to 31 March 2021 saw strong performance from our AIM-traded investments, which provided a 31.7 per cent. return in the period, and was supported by positive progress from our unquoted investments, including the successful realisation of Ten10.
I am delighted to report that during the period the Company successfully raised GBP32.5m (before costs) through an offer for subscription which became fully subscribed in March 2021. The Directors are pleased to welcome the 1,200 new shareholders who invested for the first time and to thank the 980 existing shareholders who continue to support the Company.
The Board is also pleased to declare an interim dividend of 3.0p to be paid on 10 September 2021 to shareholders on the register as of 13 August 2021. The dividend will be paid from realised capital profits generated from the sale of portfolio companies.
I must of course remind shareholders that payment dates and the amount of future dividends depend on the level and timing of profitable realisations and cannot be guaranteed.
Results
During the six months to 31 March 2021, the Company's NAV per share decreased 16.6 per cent. from 67.9p to 79.2p after the payment of a final dividend of 3.5p per share on 5 March 2021. The table below shows this increase in NAV, which was due to a combination of a strong performance across the unquoted investments, AIM-traded investments and equity funds.
Pence per
ordinary
share
----------------------------------------------- ----------
NAV as at 1 October 2020 (after deducting the
final dividend of 3.5p) 67.9
----------------------------------------------- ----------
Valuation increase (16.6 per cent.) 11.3
----------------------------------------------- ----------
NAV as at 31 March 2021 79.2
----------------------------------------------- ----------
The 30 April 2021 NAV was 82.9p, a 4.7 per cent. increase driven by further uplifts in the value of the quoted portfolio during the month.
Portfolio review
The table below provides a summary of each asset class and the return generated during the period under review.
Number of
NAV* investees % return in
Asset class (GBPm) % of NAV* companies** the period***
Unquoted 45 21 35 13
-------- ---------- ------------- ---------------
AIM- traded companies 71 33 44 32
-------- ---------- ------------- ---------------
LF Gresham House
UK Micro Cap Fund 36 17 48 32
-------- ---------- ------------- ---------------
LF Gresham House
UK Multi Cap Income
Fund 3 1 47 15
-------- ---------- ------------- ---------------
Liquid assets(#) 61 28 - -
-------- ---------- ------------- ---------------
Total 216 100 - -
-------- ---------- ------------- ---------------
*By value at 31 March 2021.
**Includes investee companies with holdings by more than one fund. Total number of individual companies held is 145.
***Return includes interest received on unquoted realisations during the period.
(#) Represents cash, OEICs and net current assets.
The value of the unquoted portfolio increased 12.6 per cent. in the six months to 31 March 2021. Continued trading momentum in software and e-commerce investments together with a bounce back in demand within several businesses initially impacted by COVID-19, drove the portfolio performance. The performance was moderated by write downs in the valuation of investments operating in consumer travel, hospitality and accommodation markets, which are still being negatively impacted by lockdown and travel restrictions.
Public markets have continued to recover from lows 12 months ago, driven by the speed of the vaccination rollout, growth in economic activity and further Government support and investment programmes. Healthcare, education and technology investments were the key contributors to the strong performance of the direct AIM investments and the Equity Fund portfolios over the period.
Investments and divestments
The Company's investments and divestments during the period are set out below.
Investments
I am pleased to report that the Company made four new investments totalling GBP5.1m and three follow-on investments with a combined value of GBP1.4m in the six months to 31 March 2021. Below are descriptions of the new investments made:
-- eConsult (unquoted) develops and operates a digital consultation platform used in both GP surgeries and hospitals.
-- RevLifter (unquoted) provides software that helps e-commerce companies optimise website conversion by offering tailored promotions to customers by using advanced behavioural analytics.
-- Counting Up (unquoted) is the leading UK provider of unified banking and accounting software to micro-businesses. Counting Up develops and operates the software which provides an all-in-one financial tool for small business users.
-- Metrion Biosciences (unquoted) is a UK-based Contract Research Organisation focused on delivering a range of high-quality ion channel drug discovery services.
Following the period end, a new quoted investment of GBP0.6m was made into Crimson Tide, a workforce management software-as-a-service provider.
Realisations
Proceeds of GBP2.2m were received during the period from sales of quoted investments, including:
-- Cerillion plc - top-slicing delivered proceeds of GBP1.6m, equating to a money multiple of 4.2x.
-- Collagen Solutions plc - a full exit through a takeover offer for the company realised proceeds of GBP0.6m, giving a money multiple of 1.3x.
There continues to be a good level of liquidity in public markets and the Manager has made a select number of divestments within the quoted portfolio where share prices have rallied strongly since the initial decline in markets, following the first national lockdown in March last year.
From the unquoted portfolio, the sale of the investment in Ten10 successfully completed in October 2020. The sale returned total proceeds of GBP5.9m resulting in a total gross money multiple of 3.7x original investment cost.
From the quoted portfolio, following the end of the financial period there has been a takeover of Wey Education, resulting in the full realisation of the Company's investment, returning 13.6x cost and delivering proceeds of GBP5.8m.
COVID-19 impact
COVID-19 has had a material impact on UK businesses over the last year and has caused significant volatility and disruption to the global economy. The pandemic has presented operational risks for the Company, but the Board continues to appreciate the strong response and resilience of key service providers during this difficult time.
Although there are now several approved vaccines in circulation, there may still be the risk of a third wave of infections, which could lead to a further period of uncertainty and volatility in markets. We are encouraged by the Manager's ongoing engagement with portfolio companies and the focus on investing in businesses with strong fundamental characteristics which should continue to grow consistently through the economic cycle.
Fundraising
The Board will consider whether to raise new funds in the 2021/22 tax year. This will be determined by the Company's cashflow and its anticipated requirements to fund new and follow-on investments over the next two to three years. The Board appreciates that shareholders would like plenty of notice of its fundraising intentions and will ensure that shareholders are informed of any such fundraising at the earliest practical time.
Change of auditor
The audit committee has considered the external audit arrangements and held an audit tender process in early 2021. Following the conclusion of this process, the audit committee has appointed BDO LLP as the Company's auditor and KPMG LLP will retire with effect from 28 May 2021. KPMG's resignation letter will be sent to the Company's shareholders alongside this half-yearly report.
Board succession
The Board acknowledges that succession planning and refreshment of the Board remains one of the priorities for the year ending 30 September 2021, during which process there will be an emphasis on ensuring that the Board and its Committees continue to have a suitable combination of skills, experience, knowledge and diversity.
Shareholder scam warning
We are aware that some of our shareholders have received unsolicited phone calls or correspondence concerning their investment in the Company.
Shareholders are advised to be very wary of any unsolicited advice, offers to buy shares at a discount or offers for free company reports.
Please note that none of the Investment Manager, Company or the Company's Registrar, Computershare, would make unsolicited telephone calls to shareholders. Any calls made would relate only to official documentation already circulated to shareholders and never in respect of investment "advice".
If you are in any doubt about the veracity of an unsolicited phone call, please call either the Company or the Registrar at the numbers provided in the Contact information page below.
Outlook
The economic outlook in the UK continues to improve as COVID-19 restrictions ease and consumer confidence recovers. The March Budget included an extension of Government support and investment in infrastructure and the technology sector to help rebuild the UK economy. While most economic commentators expect the economy to rebound strongly over the next two quarters, the longer-term impact of the pandemic remains uncertain. Any additional wave of the virus could lead to the reintroduction of restrictions and the possibility of further volatility in both public markets and revenues within some portfolio companies. However, the Board continues to believe that the portfolio is well positioned to deliver robust investment performance over the long-term and the Company remains well capitalised to actively support the high growth, entrepreneurial businesses that will be key forces in driving a sustainable economic recovery.
Peter Lawrence
Chairman
27 May 2021
Investments in the period
Book cost
Company Location Sector Activity GBP'000
Unquoted investments
New
================================================================================================
Online consultation provider
Healthcare used by GP practices
eConsult Surrey & Education and hospitals 2,400
=========== ============== ================================= =========
Ion channel drug discovery
Metrion Biosciences Healthcare and safety assessment
Ltd Cambridge & Education services provider 1,057
=========== ============== ================================= =========
Business Banking and accounting
Counting Ltd London Services software for small business 940
=========== ============== ================================= =========
A-I platform using advanced
behavioural analytics
to deliver tailored promotions
RevLifter Ltd London TMT to users 719
=========== ============== ================================= =========
Follow on
Business
Glisser Ltd London Services Audience engagement software 705
=========== ============== ================================= =========
Equipsme (Holdings) Business SME health insurance
Ltd London Services plans provider 211
=========== ============== ================================= =========
Total unquoted investments 6,032
=========
AIM-traded Investments
Follow on
CloudCall Group Cloud software and integrated
plc Leicester TMT communications 495
=========== ============== ================================= =========
Total AIM-traded investments 495
=========
Total investments in the period 6,527
=========
TMT - Technology, Media and Telecommunications
Realisations in the period
Original
First book cost Proceeds Overall
investment (#) (++) multiple
Company date GBP'000 GBP'000 return
Unquoted realisations
==========
Full trade
Ten10 Group Ltd sale Feb 15 1,908 5,933 3.7 *
============= ============ ========== ======== ==========
Total unquoted realisations 1,908 5,933 3.7*
========== ======== ==========
AIM-traded realisations
==========
Cerillion plc Market sale Nov 15 376 1,574 4.2
============= ============ ========== ======== ==========
Collagen Solutions plc Takeover Mar 17 450 586 1.3
============= ============ ========== ======== ==========
Total AIM-traded realisations 826 2,160 2.6
------------------------------------------------------------ ---------- -------- ----------
Total realisations in
the period 2,734 8,093 3.0
---------- -------- ----------
(#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.)
Responsibility statement of the directors in respect of the half-yearly financial report
Half-yearly report
The important events that have occurred during the period under review, the key factors influencing the financial statements and the principal uncertainties for the remaining six months of the financial year are set out in the Chairman's Statement and the Strategic Report.
The principal risks facing the Company are substantially unchanged since the date of the Company's Annual Report for the financial year ended 30 September 2020 and continue to be as set out in that Report on pages 18 and 19.
Risks faced by the Company include but are not limited to; loss of approval as a Venture Capital Trust, investment performance risk, legislative risk, regulatory and compliance risk, operational risk, and economic and political risk. The Board considers the COVID-19 pandemic and Brexit to befactors which permeate these risks, and their impact is considered within the relevant risk within the Annual Report.
Responsibility statement
Each Director confirms that to the best of their knowledge:
-- the condensed set of nancial statements has been prepared in accordance with FRS 104 Interim Financial Reporting Standards and gives a true and fair view of the assets, liabilities, financial position and profit or loss of the Company.
-- This half-yearly 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 rst six months of the nancial year and their impact on the condensed set of nancial 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 rst six months of the current nancial year and that have materially affected the nancial position or performance of the Company during that period; and any changes in the related party transactions described in the last annual report that could do so.
The Half-yearly report was approved by the Board of Directors on 27 May 2021 and was signed on its behalf by Mr Peter Lawrence, Chairman.
Peter Lawrence
Chairman
27 May 2021
Condensed Income Statement (unaudited)
For the six months to 31 March 2021
Six months to Six months to Year to 30 September
31 March 2021 31 March 2020 2020
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
Gains/(losses)
on investments 5 - 31,241 31,241 - (13,269) (13,269) - 5,865 5,865
Income 436 - 436 369 - 369 3,679 - 3,679
Investment management
fee (471) (1,414) (1,885) (363) (1,088) (1,451) (750) (2,251) (3,001)
Performance fee - (286) (286) - - - - - -
Other expenses (342) - (342) (331) - (331) (599) - (599)
--------------------- ----- -------- -------- -------- -------- -------- -------- -------- -------- --------
(Loss)/profit
before taxation (377) 29,541 29,164 (325) (14,357) (14,682) 2,330 3,614 5,944
Taxation on ordinary
activities - - - - - - (333) 333 -
--------------------- ----- -------- -------- -------- -------- -------- -------- -------- -------- --------
(Loss)/profit
for the period,
being the total
comprehensive
income for the
period after
taxation (377) 29,541 29,164 (325) (14,357) (14,682) 1,997 3,947 5,944
--------------------- ----- -------- -------- -------- -------- -------- -------- -------- -------- --------
Return per ordinary
share:
--------------------- ----- -------- -------- -------- -------- -------- -------- -------- -------- --------
Basic and Diluted 2 (0.15p) 11.72p 11.57p (0.15p) (6.65p) (6.80p) 0.90p 1.77p 2.67p
--------------------- ----- -------- -------- -------- -------- -------- -------- -------- -------- --------
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 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 by the Association of Investment Companies ("AIC SORP").
Condensed statement of changes in equity
For the six months to 31 March 2021 (unaudited)
Non-distributable reserves Distributable reserves
Called-up Share Revaluation Capital Revenue
share capital premium reserve reserve reserve Total
Notes GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
At 1 October 2020 25,268 49,397 29,590 58,399 2,180 164,834
Profit/(loss) after
taxation - - 26,543 2,998 (377) 29,164
Net proceeds of share
issues, share buybacks
& sale of shares
from treasury 3 4,232 27,314 - (784) - 30,762
Dividends paid 4 - - - (8,177) (1,055) (9,232)
At 31 March 2021 29,500 76,711 56,133 52,436 748 215,528
For the six months to 31 March 2020 (unaudited)
Non-distributable reserves Distributable reserves
Called-up Share Revaluation Capital Revenue
share capital premium reserve reserve reserve Total
Notes GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
At 1 October 2019 22,053 28,397 26,909 72,401 1,309 151,069
Loss after taxation - - (11,945) (2,412) (325) (14,682)
Net proceeds of share
issues, share buybacks
& sale of shares from
treasury 3,215 21,000 - (1,265) - 22,950
Dividends paid - - - (7,100) (665) (7,765)
At 31 March 2020 25,268 49,397 14,964 61,624 319 151,572
For the year ended 30 September 2020 (Audited)
Non-distributable reserves Distributable reserves
Called-up Share Revaluation Capital Revenue
share capital premium reserve reserve reserve Total
Notes GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
At 1 October 2019 22,053 28,397 26,909 72,401 1,309 151,069
Profit after taxation - - 2,681 1,266 1,997 5,944
Net proceeds of share
issues, share buybacks
& sale of shares from
treasury 3,215 21,000 - (1,715) - (22,500)
Dividends paid - - - (13,553) (1,126) (14,679)
At 30 September 2020 25,268 49,397 29,590 58,399 2,180 164,834
Condensed Balance Sheet
As at 31 March 2021 (Unaudited)
As at As at As at
31 March 31 March 30 September
2021 2020 2020
Notes GBP'000 GBP'000 GBP'000
Fixed assets
Unquoted investments 5 44,698 38,894 39,187
Traded on AIM 5 71,151 46,570 55,686
Collective investment vehicles 5 58,155 53,117 59,390
Listed on LSE 5 25 - 29
=============================== ======= =========== =========== =============
Investments 5 174,029 138,581 154,292
Current assets
Debtors 108 2,297 469
Cash at bank 42,849 11,801 11,042
42,957 14,098 11,511
Creditors (amounts falling
due within one year) (1,458) (1,107) (969)
Net current assets 41,499 12,991 10,542
Net assets 215,528 151,572 164,834
Capital and reserves
Called-up share capital 29,500 25,268 25,268
Share premium 76,711 49,397 49,397
Capital reserve 52,436 61,624 58,399
Revaluation reserve 5 56,133 14,964 29,590
Revenue reserve 748 319 2,180
Equity shareholders' funds 215,528 151,572 164,834
------------------------------- ------- ----------- ----------- -------------
Net asset value per share 79.16p 65.43p 71.35p
Number of ordinary shares
in circulation 272,255,245 231,677,817 231,016,950
Condensed Statement of Cash Flows
For the six months to 31 March 2021(unaudited)
Six Six
months months Year
to to to
31 March 31 March 30 September
2021 2020 2020
GBP'000 GBP'000 GBP'000
Net cash outflow from operating activities (1,159) (1,327) (179)
Net cash inflow/(outflow) from investing activities 11,497 (9,852) (6,428)
Equity dividends paid (9,232) (7,765) (14,679)
Net cash inflow/(outflow) before financing
activities 1,106 (18,944) (21,286)
Net cash inflow from financing activities 30,701 20,953 22,536
Increase in cash 31,807 2,009 1,250
Reconciliation of net cash flow to movement
in net cash
Increase in cash 31,807 2,009 1,250
Opening cash at bank and on deposit 11,042 9,792 9,792
Closing cash at bank and on deposit 42,849 11,801 11,042
Reconciliation of profit/(loss) before taxation
to net cash outflow from operating activities
Profit/(loss) before taxation 29,164 (14,682) 5,944
Gains/(losses) on investments (31,241) 13,269 (5,865)
Changes in working capital and other non-cash
items 918 86 (258)
Net cash outflow from operating activities (1,159) (1,327) (179)
Notes to the financial statements
For the six months to 31 March 2021 (Unaudited)
1. Basis of preparation
The condensed financial statements for the six months to 31 March 2021 comprise the unaudited statements together with the related notes. The Company applies FRS 102 and the AIC's Statement of Recommended Practice ('the SORP') for its annual financial statements. The condensed financial statements for the six months to 31 March 2021 have therefore been prepared in accordance with FRS 104 'Interim Financial Reporting' and the principles of the SORP. They have 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 2020.
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 half-yearly financial report for the six months ended 31 March 2021 and for the six months ended 31 March 2020 have been neither audited nor reviewed by the Company's auditors. The information for the year to 30 September 2020 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 2020 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 2020 have been reported on by the Company's auditors or delivered to the Registrar of Companies.
Copies of the half-yearly financial report have been made available to shareholders and are available from Gresham House, Octagon Point, 5 Cheapside, London EC2V 6AA.
2. Performance and shareholder returns
Return per share is based on a weighted average of 252,148,059 ordinary shares in issue (31 March 2020 - 215,978,185 ordinary shares; 30 September 2020 - 222,939,528 ordinary shares).
Earnings for the first six months to 31 March 2021 should not be taken as a guide to the results of the full financial year to 30 September 2021.
3. Called-up share capital
Allotted, called-up and fully paid:
Ordinary shares GBP'000 --------------------------------------------------------- ------- 252,6 252,685,805 ordinary shares of 10p each listed at 30 September 2020 25,268 42,321,229 ordinary shares of 10p each issued during the period 4,232 295,007,034 ordinary shares of 10p each listed at 31 March 2021 29,500 --------------------------------------------------------- ------- 21,668,855 ordinary shares of 10p each held in treasury at 30 September 2020 (2,166) 1,502,934 ordinary shares of 10p each repurchased during the period and held in treasury (150) 420,000 ordinary shares of 10p each sold from treasury during the period 42 22,751,789 ordinary shares of 10p each held in treasury at 31 March 2021 (2,274) --------------------------------------------------------- ------- 272,255,245 ordinary shares of 10p each in circulation* at 31 March 2021 27,226 --------------------------------------------------------- ------- * carrying one vote each
During the six months to 31 March 2021, the Company issued 42,321,229 shares at net proceeds of GBP31,546,000 (after costs). During the same period, the Company purchased 1,502,934 shares to be held in treasury at a cost of GBP1,093,000. The Company also sold 420,000 treasury shares at a cost of GBP309,000. At 31 March 2021 the Company held 22,751,789 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.
Excluding treasury shares, there were 272,255,245 ordinary shares in issue at 31 March 2021 (31 March 2020 - 231,667,817 ordinary shares; 30 September 2020 - 231,016,950 ordinary shares).
4. Dividends
The final dividend for the year ended 30 September 2020 of 3.5p per share (3.1p capital, 0.4p revenue) was paid on 5 March 2021 to shareholders on the register on 5 February 2021. The ex-dividend date was 4 February 2021.
During the year to 30 September 2020, the Company paid an interim dividend in September 2020 of 3.0p per share (2.8p capital, 0.2p revenue).
5. Investments
All investments are initially recognised 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.
The valuation of unquoted investments contained within level 3 of the Fair Value hierarchy involves key assumptions dependent upon the valuation methodology used. The primary methodologies applied are:
- Rebased Cost - Earnings Multiple - Offer Less 10 per cent
The earnings multiple approach involves more subjective inputs than the Rebased Cost and Offer approaches and therefore presents a greater risk of over or under estimation. Key assumptions for the earnings multiple approach are the selection of comparable companies and the use of either historic or forecast revenue or earnings, as considered most appropriate. Other assumptions include the appropriateness of the discount magnitude applied for reduced liquidity and other qualitative factors. These assumptions are described in more detail in note 2.3 in the Company's Report and Financial Statements for the year to 30 September 2020. The techniques used in the valuation of unquoted investments have not changed materially since the date of that Report.
Level 1 Level 2 Level 3
---------------------------------
Collective
Traded Traded Traded investment
on AIM on LSE on AIM vehicles Unquoted Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
--------- ----------
Opening book cost 40,287 2,315 4,481 44,412 33,207 124,702
Opening unrealised
appreciation/(depreciation) 13,533 (2,286) (2,615) 14,978 5,980 29,590
----------------------------- -------- --------- --------- ----------- ---------- --------
Opening fair value 53,820 29 1,866 59,390 39,187 154,292
----------------------------- -------- --------- --------- ----------- ---------- --------
Movements in the
period:
Transfer between
levels 4,481 - (4,481) - - -
Purchases at cost 495 - - - 6,032 6,527
Sale - proceeds (2,160) - - (10,362) (5,509) (18,031)
Sale - realised gains/
(losses) on sales 82 - - - (2) 80
Unrealised gains
realised during the
period 1,251 - - - 3,367 4,618
Increase/(decrease)
in unrealised appreciation/
(depreciation) 13,182 (4) 2,615 9,127 1,623 26,543
----------------------------- -------- --------- --------- ----------- ---------- --------
Closing fair value 71,151 25 - 58,155 44,698 174,029
----------------------------- -------- --------- --------- ----------- ---------- --------
Closing book cost 44,436 2,315 - 34,050 37,095 117,896
Closing unrealised
appreciation/(depreciation) 26,715 (2,290) - 24,105 7,603 56,133
----------------------------- -------- --------- --------- ----------- ---------- --------
Closing fair value 71,151 25 - 58,155 44,698 174,029
----------------------------- -------- --------- --------- ----------- ---------- --------
Equity shares 71,151 25 - - 26,261 97,437
Preference Shares - - - - 6,903 6,903
Loan notes - - - - 11,534 11,534
Collective investment
vehicles - - - 58,155 - 58,155
----------------------------- -------- --------- --------- ----------- ---------- --------
Closing fair value 71,151 25 - 58,155 44,698 174,029
----------------------------- -------- --------- --------- ----------- ---------- --------
The AIM-traded investments held in Level 2 as at 30 September 2020 have been transferred to Level 1 after recent trading activity in the period.
6. Other required disclosures 6.1 Segmental reporting
The Company has one reportable segment being investing in primarily a portfolio of UK growth businesses, whether unquoted or traded on AIM.
6.2 Principal risks and uncertainties
The Company's financial instruments consist of equity and fixed interest investments, cash balances and liquid resources. Its principal risks are therefore market risk, price 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 Report and Financial Statements for the year to 30 September 2020. The Board continues to regularly to review the risk environment in which the Company operates.
The COVID-19 pandemic has presented the Company with immediate risks in respect of the performance and valuation of portfolio companies and operational risks such as the resilience of third party providers. These risks are discussed further in the Chairman's statement.
6.3 Related parties
Gresham House Asset Management Ltd ('the Manager') manages the investments of the Company. The Manager also provides or procures the provision of secretarial, administrative and custodian services to the Company. Under the management agreement, the Manager receives a fee of 2.0 per cent per annum of the net assets of the Company. This is described in more detail under the heading 'The management agreement' within the Strategic Report in the Company's Annual Report and Financial Statements for the year to 30 September 2020. During the period the Company has incurred management fees of GBP1,885,000 (31 March 2020 - GBP1,451,000; 30 September 2020 - GBP3,001,000) and secretarial fees of GBP62,000 (31 March 2020 - GBP77,500; 30 September 2020 - GBP154,000) payable to the Manager. A performance fee of GBP286,000 has been accrued at 31 March 2021 (31 March 2020 - GBPnil; 30 September 2020 - GBPnil). This is described in more detail under the heading 'Performance fees' within the Strategic Report in the Company's Annual Report and Financial Statements for the year to 30 September 2020.
A related party relationship exists between Baronsmead Venture Trust and Happy Days Consultancy Limited, owing to the significant influence deemed to be held over the operations of the company. As at 31 March 2021, the loan balance stood at GBP5,414,000, including GBP2,336,000 of capitalised interest, as provided for in the Agreement with the company.
A related party relationship exists between Baronsmead Venture Trust and Storyshare Holdings Limited, owing to the significant influence held over the operations of the company.
6.4 Investment in associates
The Company has made the presumption that the following holding is an investment in an associate, owing to the proportion of equity held and representation on the board representing significant influence over the operations of the company. The investment is held as part of an investment portfolio, and is therefore measured at fair value through profit and loss, as detailed in note 7 rather than using the equity method, as permitted by Section 14 of FRS 102:
Name Location Class of % of Equity Profit Net Assets Results
Shares (GBPm) (GBPm) for year
held ended
Happy Days 31 December
Consultancy UK A Ordinary 25.2 (1.3) (9.7) 2019(1)
(1) Latest published set of financial statements available at Companies House.
6.5 Going Concern
The Board has considered a detailed assessment of the company's ability to meet its liabilities as they fall due, including stress and liquidity tests which modelled the effects of substantial falls in markets and significant reductions in market liquidity (including further stressing the current economic conditions caused by the COVID-19 pandemic) on the Company's assets and liabilities. In light of the results of these tests, the Company's cash balances, the liquidity of the Company's investments and the absence of any gearing, the Directors are satisfied that the Company has adequate financial resources to continue in operation for at least the next 12 months and that, accordingly, it is appropriate to adopt the going concern basis in preparing the financial statements.
6.6 Post balance sheet events
The following events occurred between the balance sheet date and the signing of these financial statements:
-- The 30 April 2021 NAV of 82.9p was announced on 07 May 2021. At the date of publishing this report, the Board is unaware of any matter that will have caused the NAV per share to have changed significantly since the latest NAV.
-- Full realisation: a takeover of Wey Education completed on 25 May 2021, realising proceeds of GBP5.8m and returning 13.6x invested cost.
Corporate Information
Directors Registrars and Transfer Office
Peter Lawrence (Chairman) Computershare Investor Services
Valerie Marshall# PLC
Les Gabb* The Pavilions
Susannah Nicklin Bridgwater Road
Bristol BS99 6ZZ
Secretary Tel: 0800 923 1533
Gresham House Asset Management
Ltd Brokers
Panmure Gordon & Co
Registered Office One New Change
5 New Street Square London EC4M 9AF
London EC41 3TW Tel: 020 7886 2500
Investment Manager Auditor
Gresham House Asset Management BDO LLP
Ltd 55 Baker Street
5 New Street Square London W1U 7EU
London EC41 3TW
0207 3875 9862 Solicitors
Dickson Minto
Registered Number Broadgate Tower
03504214 20 Primrose Street
London EC2A 2EW
VCT Status Adviser
PricewaterhouseCoopers LLP
1 Embankment Place
London WC2N 6RH
Website
www.baronsmeadvcts.co.uk
# Senior Independent Director and Chairman of the Nomination Committee
*Chairman of the Audit Committee
Chairman of the Management Engagement and Remuneration Committee
LEI: 213800VQ1PQHOJXDDQ88
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END
IR FLFFSEAIDFIL
(END) Dow Jones Newswires
May 27, 2021 10:37 ET (14:37 GMT)
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