British Smaller Companies VCT2 Plc Interim Management Statement (2214U)

TIDMBSC

RNS Number : 2214U

British Smaller Companies VCT2 Plc

21 November 2019

British Smaller Companies VCT2 plc

Interim Management Statement

For the quarter ended 30 September 2019

British Smaller Companies VCT2 plc (the "Company") presents its interim management statement for the quarter ended 30 September 2019. 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 has continued to make good progress in the quarter with Total Return rising to 120.2 pence per ordinary share. This is an increase of 1.8 pence per ordinary share and represents an increase of 3.0 per cent over the Net Asset Value ("Nav") of 59.9 pence per share at the beginning of the financial year.

Realisation of Eikon

Subsequent to the period end your Company has part-realised its investment in Eikon Holdco Limited which has resulted in a valuation uplift of GBP2.0 million in the quarter to 30 September 2019. The Company has to date received proceeds of GBP2.0 million out of a total value of GBP4.3 million. The balance comprises deferred consideration, loan notes and a residual equity stake. The terms of the deferred consideration are expected to result in further receipts in the near term.

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 2019                                   65.0 
 Net Asset Value at 30 June 2019                                        53.4 
                                                                    -------- 
 Total Return at 30 June 2019                                                    118.4 
 Net underlying increase in portfolio                                    1.9 
 Net income after expenses / share buy-backs                           (0.1) 
                                                                    -------- 
 Increase in Total Return                                                          1.8 
------------------------------------------------------------------  --------  -------- 
 Total Return at 30 September 2019                                               120.2 
---------------------------------------------------   ------------  --------  -------- 
 
 
 
                              30 September   Movement   30 June 2019 
                                  2019 
 Net Assets (GBPm)                71.0         0.8          70.2 
                             -------------  ---------  ------------- 
 NAV per share (PPS)             53.7p         0.3p        53.4p 
                             -------------  ---------  ------------- 
 Cumulative dividends paid 
  (PPS)                          66.5p         1.5p        65.0p 
                             -------------  ---------  ------------- 
 Total Return (PPS)              120.2p        1.8p        118.4p 
                             -------------  ---------  ------------- 
 Shares in issue              132,200,546    688,151    131,512,395 
                             -------------  ---------  ------------- 
 

The Total Return at 30 September 2019, calculated by reference to the NAV per ordinary share and the cumulative dividends paid per ordinary share, was 120.2 pence per ordinary share compared to 118.4 pence per ordinary share at 30 June 2019.

The unaudited NAV per ordinary share as at 30 September 2019 was 53.7 pence per ordinary share (30 June 2019: 53.4 pence per ordinary share) representing an increase of 1.8 pence per ordinary share from the portfolio/net income, offset by the interim dividend of 1.5 pence per share paid on 23 September 2019.

Cumulative dividends paid were up 1.5 pence per ordinary share at 66.5 pence per ordinary share (30 June 2019: 65.0 pence per ordinary share).

The movement in NAV per ordinary share and the dividends paid are set out in the table below:

 
                                             GBPm            Pence per 
                                                           ordinary share 
 NAV at 30 June 2019                              70.2                53.4 
 Net underlying increase in portfolio      2.5               1.9 
 Net income after expenses               (0.1)             (0.1) 
 Issue of shares/buybacks                  0.4                 - 
 Increase                                          2.8                 1.8 
 NAV before the payment of dividends              73.0                55.2 
 Dividends paid                                  (2.0)               (1.5) 
--------------------------------------  ------  ------  --------  -------- 
 NAV at 30 September 2019                         71.0                53.7 
--------------------------------------  ------  ------  --------  -------- 
 

Dividends and shares in issue

An interim dividend of 1.5 pence per ordinary share was paid on 23 September 2019. On the same date 923,151 ordinary shares were issued under the Company's DRIS.

On 26 September 2019 the Company purchased 235,000 ordinary shares of 10 pence each at a price of 49.81 pence per ordinary share. These shares were placed in treasury.

The number of ordinary shares in issue at 30 September 2019 was 132,200,546 (30 June 2019: 131,512,395). In addition, at 30 September 2019 the Company held 8,209,092 ordinary shares in treasury (30 June 2019: 7,974,092).

Net assets

Net assets at 30 September 2019 comprised the following:

 
                                       % of net 
                              GBP000     assets 
 Unquoted investments at 
  fair value                  45,351      63.9% 
 Quoted investments at 
  bid price                      226       0.3% 
                             -------  --------- 
 Total investments            45,577      64.2% 
 Cash and cash equivalents    24,322      34.3% 
 Other net current assets      1,067       1.5% 
                             -------  --------- 
 Net assets                   70,966       100% 
                             =======  ========= 
 

The investment portfolio at 30 September 2019 was comprised as follows:

 
                                              Valuation 
                                                 as a % 
                                  Valuation      of net 
                                     GBP000      assets 
 ACC Aviation Group Limited           6,479        9.1% 
 Matillion Limited                    5,489        7.7% 
 Eikon Holdco Limited                 4,331        6.1% 
 Intelligent Office UK Limited        3,142        4.4% 
 Business Collaborator Limited        2,847        4.0% 
 KeTech Enterprises Limited           2,311        3.3% 
 Springboard Research Holdings 
  Limited                             1,759        2.5% 
 Tonkotsu Limited                     1,592        2.3% 
 Deep-Secure Limited                  1,515        2.1% 
 Wooshii Limited                      1,440        2.0% 
                                     30,905       43.5% 
 Other investments                   14,672       20.7% 
 Total investments                   45,577       64.2% 
                                 ==========  ========== 
 

Although there were no investments during the quarter, subsequent to the quarter end the Company invested GBP1.5 million into SharpCloud Software Limited, which has developed an enterprise software product that is a visualisation and collaboration tool for large organisations and made a small further investment into Ncam Technologies Limited.

In the quarter to 30 September 2019 the realisation and repayment of investments generated cash proceeds of GBP0.7 million.

Investments made prior to the November 2015 Budget represented 53 per cent of the value of the unquoted portfolio at 30 September 2019.

Portfolio Performance

Over the quarter to 30 September 2019 the aggregate unrealised portfolio valuation has increased by GBP2.5 million. The Board continues to follow its policy of maintaining a diversified portfolio. At 30 September 2019, only three investments represented more than 5 per cent of the Company's NAV, the largest being 9.1 per cent, with the top ten investments representing 43.5 per cent of NAV (30 June 2019 40.2 per cent).

Outlook

It is pleasing that Total Return has increased further in the third quarter against a background of political change and economic uncertainty. The portfolio businesses continue to invest and grow and your Company will to continue to fund this as appropriate. The level of investment enquiries remains strong and the speed of conversion has been helped because of your Company's ability to self-assure under HMRC's revised guidelines.

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.

21 November 2019

For further information please contact:

David Hall YFM Private Equity Limited Tel: [phone]

   Robert Naylor          Panmure Gordon (UK) Limited                            Tel:  [phone] 

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact [e-mail] or visit www.rns.com.

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November 21, 2019 08:00 ET (13:00 GMT)