British Smaller Companies VCT2 Plc 3rd Quarter Results (5251G)

TIDMBSC

RNS Number : 5251G

British Smaller Companies VCT2 Plc

25 November 2020

British Smaller Companies VCT2 plc

Interim Management Statement

For the quarter ended 30 September 2020

British Smaller Companies VCT2 plc (the "Company") presents its interim management statement for the quarter ended 30 September 2020. The statement also includes relevant financial information between the end of the quarter and the date of this statement. A copy of this interim management statement can be found at www.bscfunds.com .

Overview

The Company's Total Return at 30 September 2020 was 120.6 pence per ordinary share, representing an increase of 3.7 pence per ordinary share over the Total Return of 116.9 pence per ordinary share as at 30 June 2020.

Performance

The movement in Total Return in pence per ordinary share is set out in the table below:

 
                                                                         Pence per 
                                                                       ordinary share 
 Cumulative dividends to 30 June 2020                                    68.5 
 Net Asset Value ("NAV") at 30 June 2020                                 48.4 
                                                                    --------- 
 Total Return at 30 June 2020                                                    116.9 
 Increase in portfolio value                                              3.9 
  Value realised as income                                              (1.5) 
  Net movement in portfolio value                                         2.4 
 Net income after expenses / share buy-backs                              1.3 
                                                                    --------- 
 Increase in Total Return                                                          3.7 
------------------------------------------------------------------  ---------  ------- 
 Total Return at 30 September 2020                                               120.6 
---------------------------------------------------  ----  -------  ---------  ------- 
 
 

The value of the portfolio increased by 3.9 pence per share, equivalent to 8.1 per cent of the Net Asset Value at 30 June 2020. Of this increase GBP1.9 million from ACC Aviation was crystalised as a dividend payment to the Company which is shown in the net income after expenses.

 
                    30 June     Increase      Issue      Dividends    Movement    30 September 
                      2020       in Value      under                  In Period       2020 
                                              DRIS / 
                                              buyback 
                                             of shares 
 Net Assets 
  (GBPm)             62.6          4.8         0.2         (1.9)        3.1           65.7 
                 ------------  ----------  -----------  ----------  -----------  ------------- 
 NAV per share 
  (PPS)              48.4p        3.7p          -         (1.5p)        2.2p         50.6p 
                 ------------  ----------  -----------  ----------  -----------  ------------- 
 Cumulative 
  dividends 
  paid (PPS)         68.5p          -           -          1.5p         1.5p         70.0p 
                 ------------  ----------  -----------  ----------  -----------  ------------- 
 Total Return 
  (PPS)             116.9p        3.7p          -            -          3.7p         120.6p 
                 ------------  ----------  -----------  ----------  -----------  ------------- 
 Shares in 
  issue           129,373,784       -        481,632         -        481,632     129,855,416 
                 ------------  ----------  -----------  ----------  -----------  ------------- 
 

The Total Return at 30 September 2020, calculated by reference to the NAV per ordinary share and the cumulative dividends paid per ordinary share, was 120.6 pence per ordinary share compared to 116.9 pence per ordinary share at 30 June 2020.

The unaudited NAV per ordinary share increased from 48.4 pence per share to 52.1 pence per share, equivalent to 7.6 per cent in the period. Of this increase 1.5 pence per ordinary share was paid as an interim dividend on 21 September 2020, taking cumulative dividends paid at 30 September 2020 to 70.0 pence per ordinary share (30 June 2020: 68.5 pence per ordinary share). The resultant Net Asset Value at the end of the period is 50.6 pence per share.

The movements in NAV per ordinary share are set out in the table below:

 
                                       GBPm            Pence per 
                                                     ordinary share 
 NAV at 30 June 2020                        62.6                48.4 
 Increase in portfolio value         5.0               3.9 
 Value realised as income          (1.9)             (1.5) 
                                  ------          -------- 
 Net movement in portfolio           3.1               2.4 
 Net income after expenses           1.7               1.3 
 Issue/buy-back of shares            0.2                 - 
                                  ------          -------- 
                                             5.0                 3.7 
                                          ------            -------- 
 NAV before payment of dividend             67.6                52.1 
 Dividend paid                             (1.9)               (1.5) 
 NAV at 30 September 2020                   65.7                50.6 
                                  ------  ------  -------- 
 

Dividends and shares in issue

On 25 September 2020 the Company purchased 441,258 ordinary shares of 10 pence each at a price of 45.00 pence per ordinary share. These shares were placed in treasury.

Following the payment of the interim dividend of 1.5 pence per share on 21 September 2020 the Company issued 922,890 ordinary shares under the DRIS.

The number of ordinary shares in issue at 30 September 2020 was 129,855,416 (30 June 2020: 129,373,784). In addition, at 30 September 2020 the Company held 11,477,112 ordinary shares in treasury (30 June 2020: 11,035,854).

Dividend Re-Investment Scheme

Following a review of market practice the Board has decided that future issues of shares under the Company's DRIS will be re-invested at the last reported net asset value, as adjusted for the relevant dividend in question if this has not already been recognised. The Company will be writing to shareholders to give them the required one month's notice of this change.

Net assets

Net assets at 30 September 2020 comprised the following:

 
                                       % of net 
                              GBP000     assets 
 Unquoted investments         39,911      60.7% 
 Cash and cash equivalents    25,277      38.5% 
 Other net current assets        547       0.8% 
                             -------  --------- 
 Net assets                   65,735       100% 
                             =======  ========= 
 

The investment portfolio at 30 September 2020 comprised:

 
                                              Valuation 
                                                 as a % 
                                  Valuation      of net 
                                     GBP000      assets 
 Matillion Limited                    8,895       13.5% 
 Intelligent Office UK Limited        3,185        4.8% 
 ACC Aviation Group Limited           3,060        4.7% 
 Unbiased EC1 Limited                 2,449        3.7% 
 Springboard Research Holdings 
  Limited                             2,424        3.7% 
 KeTech Enterprises Limited           2,283        3.5% 
 Arcus Global Limited                 2,136        3.2% 
 Deep-Secure Limited                  1,698        2.6% 
 Elucidat Limited                     1,580        2.4% 
 Wooshii Limited                      1,519        2.3% 
                                     29,229       44.4% 
 Other investments                   10,682       16.3% 
 Total investments                   39,911       60.7% 
                                 ==========  ========== 
 

Investments made prior to the November 2015 Budget represented 41 per cent of the value of the unquoted portfolio at 30 September 2020.

On 20 November 2020 the Company invested GBP1.6 million into Leeds based marketing automation software business Force24.

Portfolio performance

Over the quarter to 30 September 2020 the aggregate unrealised portfolio valuation has increased by GBP5.0 million prior to recognising the GBP1.9 million ordinary dividend received from ACC Aviation.

Board composition

As previously announced Barbara Anderson joined the Board as an independent non-executive director with effect from 1 October 2020, and Robert Pettigrew will resign as a director on 31 December 2020.

Shareholder relations

Your Company will be holding an on-line version of the investor workshop on 14 December 2020, details of which have been communicated to shareholders.

Outlook

The portfolio has adapted well to the various restrictions imposed as a result of the coronavirus pandemic and valuations have continued to recover. Demand for growth capital continues, as the recent investment in Force24 shows and the Company continues to look for opportunities in innovative businesses and growing sectors. The Company is well positioned to provide further funding for these opportunities and to the portfolio as its investments seek to further expand and, where appropriate, accelerate their growth plans.

The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulations (EU No. 596/2014). Upon the publication of this announcement via Regulatory Information Service this inside information is now considered to be in the public domain.

25 November 2020

For further information please contact:

David Hall YFM Private Equity Limited Tel: [phone]

Alex Collins Panmure Gordon (UK) Limited Tel: [phone]

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November 25, 2020 11:00 ET (16:00 GMT)