REG - Baronsmead Second VT - Annual Financial Report
22/12/2023 07:00
For best results when printing this announcement, please click on link below:
http://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20231222:nRSV6987Xa&default-theme=true
RNS Number : 6987X Baronsmead Second Venture Trust PLC 22 December 2023
Baronsmead Second Venture Trust plc
Annual Report and Audited Financial Statements
for the year ended 30 September 2023
The Directors of Baronsmead Second Venture Trust plc are pleased to announce
the Annual Financial Report for the year ended 30 September 2023. The Annual
Report and Financial Statements can be obtained from the following website:
www.baronsmeadvcts.co.uk (http://www.baronsmeadvcts.co.uk)
Financial Highlights
· Net Asset Value ("NAV") per share decreased 3.1 per cent to
60.1p, before the deduction of dividends, for the financial year ended 30
September 2023.
· NAV total return of 318.5p to shareholders for every 100.0p
invested at launch (January 2001).
· Annual tax free dividend yield of 7.2 per cent based on 4.5p
dividends paid (including proposed final dividend of 2.25p) and opening NAV of
62.1p.
· £10.9million of investments made into six new investments and
eight follow-on opportunities during the year.
Our investment objective
Baronsmead Second Venture Trust plc (the "Company") is a tax efficient listed
company which aims to achieve long‑term positive 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, where possible, seek to pay two dividends to
shareholders in each calendar year, typically an interim dividend 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 interesting 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 that the management resources are in
place to deliver profitable growth. The intention is to build on the business
model and grow the company into an attractive target able to be either sold or
potentially floated in the medium term.
STRATEGIC REPORT
CHAIR'S STATEMENT
The economic environment over the past year has remained challenging. Consumer
and business confidence continued to be affected by high inflation and rising
interest rates during the year, weighing on the value of the Company's
unquoted and AIM-traded investments. As a result, the Company's NAV per share
decreased 2.0p per share (3.1 per cent) before dividend payments for the year
ended 30 September 2023.
The Company aims to achieve long‑term positive investment returns for its
shareholders from a diverse portfolio of investments in UK growth companies.
Despite the difficult conditions leading to a 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 continues to be 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.
Results
Pence per ordinary share
NAV as at 1 October 2022 (after final dividend) 62.08
Valuation decrease (-3.1 per cent) (1.95)
NAV as at 30 September 2023 before dividends 60.13
Less:
Interim dividend paid on 8 September 2023 (2.25)
Proposed final dividend of 2.25p payable, after shareholder approval, on 8 (2.25)
March 2024
Illustrative NAV as at 30 September 2023 after proposed dividend 55.63
Portfolio review
At 30 September 2023, the Company's investment portfolio was valued at £129
million and comprised 82 direct investments, of which 37 are in unquoted
companies and 45 are in quoted companies. TheCompany's investments in the WS
Gresham House UK Micro Cap Fund ("Micro Cap"), WS Gresham House UK Multi Cap
Income Fund ("Multi Cap Income") and WS Gresham House UK Smaller Companies
Fund ("Small Cap") were valued at £63 million at 30 September. These
investments provide investment exposure to an additional 76 AIM‑traded and
fully listed companies, spreading investment risk across a highly diversified
portfolio of 158 companies.
The ongoing economic and political difficulties noted in my opening remarks
resulted in the unquoted portfolio decreasing by 15 per cent in value during
the year. Clearly, this is a disappointing result. However, the quoted
portfolio proved to be resilient and, in the face of continued outflows of
overall investor capital from the UK, increased by 3 per cent in value during
the year. To put this in context, the FTSE AIM All Share Index decreased by
9.9 per cent over the same period, highlighting the challenges faced by most
UK smaller companies.
Investments and divestments
The Board is once again pleased to report that the Company continues to see
attractive opportunities and make new investments. The Company invested a
total of £10.9 million in 14 companies over 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. However, the
more mature, established portfolio of existing investments should assist in
sustaining returns and dividends for shareholders, as the newer holdings
develop and grow. The priority for portfolio companies is to operate in a
difficult macroeconomic environment with proactivity and resilience. The
Company has the resources to support new and existing portfolio companies and
the Manager is focusing on the key challenges and opportunities of each
holding.
There was one full realisation in the unquoted portfolio during the year, with
proceeds of £0.8 million received from the realisation of Evotix, for a gross
multiple of 0.7x cost. In addition to this, the Key Travel Loan Notes matured
for £0.4 million and a gross money multiple of 3.2x cost, along with deferred
earn-out consideration of £1.4 million from the sale of Pho for a gross money
multiple of 3.1x cost. The Manager has also continued its approach of
profitable partial realisations of Cerillion during the year, resulting in the
receipt of proceeds of £0.7 million at an aggregate of 15.8x original
invested cost in this listed company.
Dividends
The Board is pleased to declare a final dividend of 2.25p per share for the
year to 30 September 2023, payable on 8 March 2024. This is in addition to the
2.25p interim dividend paid in September and means that the total dividends
for the year are 4.5p. This is a 7.2 per cent yield based on the opening NAV
of 62.1p and meets the target policy of 7 per cent of the NAV at the start of
the year. Including the proposed final dividend of 2.25p per share, tax free
dividends paid since launch in 2001 now total 164.8p per share, 86.5p of which
has been paid over the past 10 years.
Fees
We are happy to announce that with effect from 1st October 2023, the fee
payable to the Investment Manager has been amended so that the Investment
Manager is entitled to receive an annual management fee of the aggregate of
2.5 per cent per annum of the net assets of BSVT up to and including
£209,658,860 (being the total net assets of BSVT as at 30 September 2023) and
2.0 per cent. per annum of the amount by which the net assets of BSVT exceed
£209,658,860, calculated and paid on a quarterly basis.
Unclaimed Dividends
The Company's Registrar was holding £0.8 million in unclaimed dividends as at
30 September 2023. Of this amount, £0.1 million was unclaimed for over 12
years. Any shareholders who have not been able to claim their dividends are
requested to contact the Company's Registrar. Their contact details are in the
full Annual Report.
Under the terms of the Company's Articles of Association, any dividends
unclaimed for a period of 12 years after having become due for payment shall,
if the Board so resolves, be forfeited and shall cease to remain owing by the
Company. Additionally, under the terms of the Company's Articles of
Association, I would like to remind shareholders that it is their
responsibility to keep their address and, for those who receive their
dividends by bank transfer, their bank account details up to date by informing
the Company's Registrar of any changes.
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 in the Strategic Report section of the full Annual Report.
Loss of tax reliefs Clause
When EU State Aid approval of the UK's VCT and EIS schemes was given in 2015,
a "Sunset Clause" was introduced for the schemes whereby, in the absence of
new or amended legislation, investors will no longer be able to claim upfront
income tax relief on subscriptions for new VCT shares made after 5 April 2025.
In November 2023, the Chancellor announced in the Autumn Statement that
legislation will be introduced in the Finance Act 2023 to move the effective
date of the Sunset Clause to 6 April 2035.
The Board continues to monitor the situation closely and has taken this into
consideration with respect to its planned fundraising.
Acquisition of the Investment Manager, Gresham House
Further to the announcement on 17 July 2023 of the acquisition of the
Investment Manager by Searchlight Capital Partners L.P., the acquisition has
now completed, and Gresham House plc delisted from the London Stock Exchange
on 20 December 2023, to become a privately owned company.
The acquisition is expected to have minimal impact on the Company and business
is continuing as usual.
For further information please visit the website link:
https://greshamhouse.com/about/. (https://greshamhouse.com/about/)
Consumer Duty
The Financial Conduct Authority's (FCA) new Consumer Duty regulation came into
effect on 31 July 2023. The Consumer Duty which sets higher and clearer
standards of consumer protection across financial services and requires all
firms to put their customers' needs first, is an advance on the previous
concept of 'treating customers fairly'.
As previously notified, the Company is not regulated by the FCA and therefore
it does not directly fall into the scope of Consumer Duty. However, Gresham
House as the Investment Manager, and any IFAs or financial platforms used to
distribute future fundraising offers, are subject to Consumer Duty.
The Board will ensure that the principles behind Consumer Duty are upheld and
have worked closely with the Investment Manager on the information now
available to assist consumers and their advisers to be able to discharge their
obligations under Consumer Duty.
Fundraising
In September 2023, 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. On 4 December 2023, the Company launched an
offer for subscription to raise £15 million (before costs) with an additional
£10 million over‑allotment facility available if required. Investing
throughout an economic cycle is a key part of the Company's investment
strategy. The additional funds raised will be deployed in smaller UK
companies, at what the Manager believes to be an advantageous time.
Annual General Meeting ("AGM")
I look forward to meeting as many shareholders as possible at the next AGM, to
be held at 11.00 am on 5 March 2024. The Company intends to hold this AGM in
person again, 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
Second Venture Trust website.
Outlook
The geopolitical and economic outlook is expected to remain challenging, with
the impact of higher inflation and interest rates likely to continue to affect
business and consumer confidence for some time.
We anticipate that these forces will 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 and we remain vigilant for
evidence of mispricing which can be used to the Company's advantage. We
recognise, and are encouraged by, the additional investment and operational
resources which Gresham House is deploying in the management of your Company
and expect these efforts to provide attractive longer‑term returns.
Despite these economic headwinds, the portfolio remains highly diversified and
the Board continues to 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.
Sarah Fromson
Chair
21 December 2023
MANAGER'S REVIEW
Equity markets continued to experience high levels of volatility during the
year brought about by geopolitical and macroeconomic uncertainty with downward
pressure on growth company multiples. Against this backdrop, the portfolio,
whilst well diversified, with exposure to 158 quoted and unquoted companies,
has delivered a decrease in net asset value per share of 3.1 per cent over
the year.
PORTFOLIO REVIEW
Overview
The closing net assets of £210 million were invested as follows:
Asset class NAV (£mn) % of NAV* Number of investees** % return in the year***
Unquoted 49 23 37 (15)
AIM‑traded companies 80 38 45 3
WS Gresham House UK Micro Cap Fund 25 12 45 5
WS Gresham House UK Multi Cap Income Fund 21 10 42 10
WS Gresham House UK Smaller Companies Fund 17 8 40 0
Liquid assets# 18 9 N/A 4
Totals 210 100 209 (3)
* By value as at 30 September 2023.
** Includes investee companies held in more than one fund. Total number of
individual companies held is 158.
*** Return includes interest received on unquoted realisations during the
year.
# Represents cash, OEICs and net current assets. % return in the period
relates only to the OEICs.
The tables b 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
networks.
During the year, £10.9 million was invested into 14 companies including six
new additions to the portfolio and eight follow-on investments.
Five new unquoted investments totalling £3.3 million were completed during
the year into Branchspace, Cognassist, Connect Earth, Dayrize B.V. and Mable
Therapy.
Below are descriptions of the new investments made;
· Branchspace is a provider of software and consulting services to
airlines/carriers to enhance their digital and ecommerce offerings.
· Cognassist is a provider of neurodiversity assessment and support
software.
· Connect Earth is a provider of a proprietary environmental
database that estimates carbon emissions.
· Dayrize is a provider of a rapid product‑level sustainability
impact assessment software tool for
retailers and Consumer Packaged Goods companies.
· Mable Therapy is a digital platform offering mental health
counselling and speech and language therapy to children.
· One new AIM quoted investment of £1.0 million was made during
the year:
· Tan Delta Systems is a manufacturer of oil condition analysis sensors
that detect and measure wear and contamination in industrial applications.
· The Company made additional investments totalling £6.6 million
into eight existing portfolio companies,
three quoted and five unquoted, across the year. This is consistent with the
investment strategy of continuing to back the Company's high potential assets
with further capital to support future growth. We anticipate the level of
follow‑on investment will continue to grow as the capital hungry earlier
stage portfolio continues to mature.
Unquoted Portfolio
Performance
The unquoted portfolio decreased in value by 15 per cent during the year. The
macroeconomic environment remained challenging for the Company's portfolio
companies although some stability has been seen in market multiples in more
recent months. UK businesses have seen both demand and operating margins come
under pressure due to marked increases in inflation and interest rates. Such
macroeconomic conditions have not been faced by management teams in a
generation, however Gresham House's experienced non‑executive directors and
portfolio consultants continue to support the portfolio's companies during
these turbulent times.
Orri and SecureCloud+ were the two investments that made the biggest positive
contribution in the year. Orri, a provider of intensive out‑patient care for
adults with eating disorders, delivered year on year revenue growth, in excess
of 20 per cent. The company opened a new site and drew down a further VCT loan
in the period which is expected to support continuing growth in the coming
year.SecureCloud+ is a specialist IT managed services company specifically
serving the Ministry of Defence and related contractors. The company delivered
both revenue and profit growth in the period, growing EBITDA, in particular by
over 40 per cent. A focus on maintaining margins for new contract wins in a
growing market helped SecureCloud+ deliver a very encouraging performance. It
is now well set to continue on its positive trajectory. Overall performance
was also positively impacted by the receipt of the maximum deferred
consideration relating to the earnout arrangements on Pho, a divestment
completed in a previous period. In line with our valuation policy, this was
only recognised on receipt.
The largest detractors from performance were in the healthcare and B2C
ecommerce sectors. Panthera Biopartners, an independent site management
organisation which provides patient recruitment services to clinical research
organisations, pharma and biotech companies, struggled to scale its operations
and deliver a growing number of contracts as profitably as it had previously.
This resulted in a significantly loss‑making year and the requirement for
further funding. Since then the company has started to deliver profitable
revenue growth. Yappy is an e‑commerce business that provides personalised
products to companion pet owners. It struggled to acquire customers at a cost
that would deliver sufficient lifetime value to support a profitable business
once significant scale was achieved. As a result, the company has pivoted its
strategy to exploit its proprietary personalisation software, but this new
strategy remains in its early stages of development.
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.
This will ensure we are well positioned to help the companies that the Company
invests in to navigate the challenges they face whilst also continuing to
develop and scale.
Divestments
There was one full realisation in the unquoted portfolio during the year with
proceeds of £0.8 million received from the realisation of Evotix, for a gross
money multiple of 0.7x cost. In addition to this, the Key Travel Loan Notes
matured for £0.4 million taking the gross money multiple to 3.2x cost along
with deferred earn‑out consideration of £1.4 million from the sale of Pho
for a gross money multiple of 3.1x cost.
Quoted Portfolio (AIM-traded investments)
Performance
The quoted portfolio delivered positive absolute performance of 3 per cent
during the year, despite the significant geopolitical and macroeconomic
uncertainty in the markets. For reference the AIM market in the UK fell 10 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 sit within the software sector with Cerillion,
a provider of billing and charging software to the telecoms industry
continuing to deliver strong revenue and profit growth with the release of
their interim results indicating 20 per cent organic growth with record
margins and strong Free Cash Flow generation. In addition, Netcall, a provider
of cloud contact centre and business process automation software demonstrated
ongoing strong trading driven by demand for cloud services and robust new
customer acquisition.
The largest detractors from performance were both in the healthcare and
education sector with Aptamer, a developer of a platform technology with
applications in the therapeutic and diagnostic areas of healthcare,
experiencing share price weakness after the release of a trading update
indicating a significant downgrade to full year revenue expectations. The
company consequently considered funding options and the CEO resigned. Anpario,
an international manufacturer and distributor of natural animal feed additives
for animal health, nutrition and biosecurity, also suffered share price
weakness following a profit warning indicating a significant reduction in full
year EBITDA due to raw material costs, Covid in China and delays in shipment.
We closely monitor the 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
The opportunity to crystallise further gains was taken for Cerillion plc; over
the course of the year proceeds of £0.7 million were realised at 15.8x cost.
Seven companies which were impacted by difficult trading conditions entered
into administration during the year and have subsequently been moved to
realised values. The impact on NAV per share for the year was ‑0.7 per cent
in aggregate with the majority of the impact taken in prior years.
Collective Investment Vehicles
The Manager believes that the Company's investments in Micro Cap, Multi Cap
Income and Small Cap are a core component of the Company's portfolio
construction. These investments provide shareholders with additional
diversification through exposure to an additional 76 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 5 per cent return, Multi Cap
delivered a return of 10 per cent and the Small Cap fund delivered 0.4 per
cent.
Micro Cap and Multi Cap Income 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 fifth best performing
fund over the past 10 years. Multi Cap Income's cumulative performance has
remained the best performer within the IA UK Equity Income sector since launch
in June 2017 and is the second best performer over five years. Small Cap has
also achieved top quartile cumulative performance since launch in 2019 and is
the fifth best performing fund over the past three years.
Liquid assets (cash and near cash)
The Company held cash and liquidity OEICs of approximately £18 million at the
year‑end. This asset class is conservatively managed to take minimal or no
capital risk. The average 7 day yield on the liquidity OEICs was 5.17 per
cent at the end of the year.
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 section of the full
Annual Report.
Third party independent valuations
During the year, the Company engaged the services of Lincoln International and
Kroll to conduct independent third party valuations as a means of managing the
Board's risk in respect of a systematic error regarding the valuation of one
or more of the material VCT portfolio assets. It was agreed that valuation
responsibility is, and will remain, with the Investment Manager and that this
does not constitute outsourcing of any part of the valuation. The Investment
Manager uses these independent valuations in conjunction with their own
valuations to provide independent assurance and risk mitigation to the Board
and the Board continues to support this.
Levelling up
On 18 July 2023, the House of Commons Treasury Committee published its report
(the "Report") on Venture Capital, which includes growth capital funding
provided by Venture Capital Trusts, which was broadly positive. MPs
recommended that venture capital firms and their investment companies should
collect and publish their diversity statistics. The Report also considered the
allocation of investment capital to the various regions of the UK.
The Company and the Investment Manager have long supported the creation of
opportunities for everyone across the UK through its investment portfolio.
The investment due diligence process for any proposed new investment includes
a consideration of the board structure and composition as part of the
Manager's governance considerations within the ESG Decision Tool.
We have considered the findings of the Report and set out for the first time
the relevant metrics pertaining to the Company's portfolio of unquoted
investments as at 30 September 2023, Gresham House plc and the Gresham House
Strategic Equity division, responsible for managing the public and private
equity portfolios managed or advised by the Manager.
Table 1 below shows that the portfolio companies were predominantly founded by
males, or groups of male founders, with 14 per cent being founded by all
females or groups of mixed male and female founders.
Table 1 - Portfolio company founders
All male 86%
Female/mixed gender 14%
Table 2 - Portfolio company board composition1
All male 85%
Female 15%
Table 2 above shows that board composition within the portfolio was similarly
predominantly male, with 15 per cent of board members being female, after
excluding representatives of Gresham House.
Table 3 - Allocation of capital by region2
London and South East 65%
Other regions 35%
Table 3 above shows the regions of the UK where the Company's capital has been
invested, with the majority of capital being invested in London and/or the
South East.
As of the end of 2023, the Company is in the process of signing up to the
Investing in Women Code. This is a commitment to support the advancement of
female entrepreneurship in the United Kingdom by improving female
entrepreneurs' access to tools, resources and finance from the financial
services sector.
1. Excluding Gresham House representatives.
2. Based on cost of investment.
In September 2023, the Manager hosted its first female‑ led event bringing
together innovators, investors, and advisers to foster relationships and share
learnings.
Table 4 below shows the gender diversity within Gresham House as at 30
September 2023.
Table 4 - Gresham House gender diversity(1)
Male 62%
Female 38%
Table 5 - Gresham House strategic equity division gender diversity2
Male 70%
Female 30%
1. As at 30 September 2023.
2. As at 30 September 2023
Table 5 above shows the gender diversity within the Strategic Equity division
of Gresham House, responsible for managing the Company's portfolio.
Gresham House released their Diversity, Equity & Inclusion ("DEI")
strategy at the start of 2022 to help understand the changing landscape of
DEI. Included within the strategy are initiatives to improve DEI such as
carrying out unconscious bias training for all employees; evolving Human
Resources systems to include DEI data which is now shared quarterly with our
Group Management Committee and divisional heads and developing clear DEI
guidelines for recruiters.
During the year Gresham House have promoted or actively attended a number of
events targeted at women entrepreneurs and the senior women from across
Gresham House have all attended a 12‑week external Resilient Women's
Leadership Programme to develop their capability to lead.
Gresham House is committed to improving the diversity of its investment teams,
the management teams of the investee companies that they support and
increasing the amount and number of investments across the UK.
Outlook
The UK economic outlook remains uncertain but the investment portfolio is well
diversified and 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. We
have an experienced team working closely with the portfolio companies to help
them navigate the challenges that lie ahead.
The exit environment is likely to remain subdued, resulting in longer average
investment hold times, but also providing further portfolio re‑investment
opportunities. Previous evidence has shown that investing throughout the
economic cycle has the potential to yield strong returns and we are seeing a
number of opportunities, both new deals and further investment into the
existing portfolio, which have the potential to drive shareholder value over
the medium term.
Gresham House Asset Management Ltd
Investment Manager
21 December 2023
Investments in the year
Company Location Sector Activity Book cost
£'000
Unquoted investments
New
Cognassist UK Ltd Newcastle upon Tyne Healthcare & education A platform for supporting those with learning needs 902
Dayrize B.V. Amsterdam Technology A rapid product‑level sustainability impact assessment software tool for 756
retailers and Consumer Packaged Goods ("CPG") companies
Mable Therapy Ltd Leeds Healthcare & education Digital health platform for speech therapy & counselling for children and 619
young adults
Branchspace Ltd London Technology Specialist digital retailing consultancy and software provider to the aviation 609
and travel industry
Connect Earth Ltd London Business services Helps businesses track their carbon emissions 451
Follow-on
Patchworks Integration Ltd London Technology A platform for connecting businesses' applications 2,080
TravelLocal Ltd London Consumer markets Online travel agent specialising in tailor‑made holidays 715
Airfinity Ltd London Healthcare & education Provides real time life science intelligence as a subscription service 676
Panthera Biopartners Ltd Lancashire Healthcare & education Recruitment services for clinical trials 480
Orri Ltd London Healthcare & education Provider of intensive day care treatments for eating disorders 227
Total unquoted investments 7,515
AIM-traded investments
New
Tan Delta Systems plc South Yorkshire Business services Supplier of real‑time oil condition monitoring sensors 956
Follow-on
Crossword Cybersecurity plc* London Technology Commercialisation of university research‑based cyber security software and 1,040
consulting
Oberon Investments Group plc London Business services Wealth advisory service for individuals and businesses 688
SEEEN plc London Technology A video technology business 659
Total AIM-traded investments 3,343
Total investments in the year # 10,858
*Investment in to unquoted convertible loan note
# includes Unquoted and AIM investments only.
Realisations in the year
First investment Original book cost# Proceeds‡ Overall multiple return
Company date £'000 £'000
Unquoted realisations
Evotix Ltd Full trade sale Jul 21 423 792 0.7*
Key Travel Ltd Escrow loan note maturity Jun 13 255 383 3.2**
Glisser Ltd Written off Nov 19 1,787 - -
Rezatec Ltd Written off Jan 20 1,620 - -
CMME Group Ltd Written off Apr 15 1,136 - -
Vinoteca Ltd Written off Sep 19 1,054 - -
Your Welcome Ltd Written off Aug 18 1,030 - -
Total unquoted realisations 7,305 1,175
AIM-traded and LSE listed realisations
Cerillion plc Market sale Jul 15 42 661 15.8
MXC Capital Ltd Tender offer May 15 30 17 0.6
Hawkwing plc Written off Nov 11 2,136 - -
InterQuest Group plc Written off Feb 07 620 - -
Total AIM-traded and LSE listed realisations 2,828 678
Total realisations in the year 10,133 1,853
Earn out proceeds of £1.4mn were received during the year from Pho, which was
realised in July 2021, making a total return of 3.1x cost.
# Residual book cost at realisation date.
‡ Proceeds at time of realisation including interest.
* Original investment was £1.1 million and following a restructuring in July
2021, the residual book cost was £0.4 million.
** 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 2.25p per
share will be paid on 8 March 2024 to shareholders on the register at 9
February 2024. The ex-dividend date will be 8 February 2024.
Annual General Meeting
The AGM will be held on 5 March 2024 at Butchers' Hall, 87 Bartholomew Close,
London, EC1A 7EB.
Shareholders are invited to attend the AGM from 10.30am with an introductory
presentation to shareholders by the Company Chair, Ms Sarah Fromson, followed
by a Q&A session with the Board and the Manager. The formal business of
the AGM will commence at 11.00am.The Manager will deliver a presentation at
11.30am, followed by some light refreshments at 12.30pm. 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 2023 will be
available today on www.baronsmeadvcts.co.uk (http://www.baronsmeadvcts.co.uk)
.
Each of the above documents will 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
(https://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: 2138008D3WUMF6TW8C28
END
Neither the contents of the Company's website nor the contents of any website
accessible from hyperlinks on this announcement (or any other website) is
incorporated into, or forms part of, this announcement.
This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
or visit
www.rns.com (http://www.rns.com/)
.
RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
. END FR FFFIVFALLFIVRecent news on Baronsmead Second Venture Trust
See all newsREG - Baronsmead Second VT - Change of Allotment Date
AnnouncementREG - Baronsmead Second VT - Half-year Report
AnnouncementREG - Baronsmead Second VT - Net Asset Value(s)
AnnouncementREG - Baronsmead Second VT - Total Voting Rights
AnnouncementREG - Baronsmead Second VT - Close of Offer to New Applications
Announcement