REG - Baronsmead Venture - Annual Financial Report
22/12/2023 07:00
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RNS Number : 6985X Baronsmead Venture Trust PLC 22 December 2023
Baronsmead Venture Trust plc
Annual Report and Audited Financial Statements
for the year ended 30 September 2023
The Directors of Baronsmead 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 2.3 per cent to
57.2p, before the deduction of dividends, for the financial year ended 30
September 2023.
· NAV total return of 395.6p to shareholders for every 100.0p
invested at launch (April 1998).
· Annual tax free dividend yield of 7.3 per cent based on 4.25p
dividends paid (including proposed final dividend of 2.5p) and opening NAV of
58.5p.
· £10.4million of investments made into six new investments and
eight follow-on opportunities during the year.
Our investment objective
Baronsmead Venture Trust plc (the "Company") is a tax efficient listed company
which aims to achieve long‑term 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 policy1
· The Board will, wherever possible, seek to pay two dividends to
shareholders in each calendar year, typically an interim in September and a
final dividend following the Annual General Meeting in February/March.
· The Board will use, as a guide, when setting the dividends for a
financial year, a sum representing 7 per cent of the opening net asset value
of that financial year.
1 This is a summary of the Company's Dividend Policy that is set out in the
full Annual Report.
Key elements of the business model
Access to an attractive, diverse portfolio
The Company gives shareholders access to a diverse portfolio of growth
businesses.
The Company will make investments in growth businesses, whether unquoted or
traded on AIM, which are substantially based in the UK in accordance with the
prevailing VCT legislation. Investments are made selectively across a range of
sectors.
The Manager's approach to investing
The Manager endeavours to select the best opportunities and applies a
distinctive selection criteria based on:
· Primarily investing in parts of the economy which are
experiencing long term structural growth.
· Businesses that demonstrate, or have the potential for, market
leadership in their niche.
· Management teams that can develop and deliver profitable and
sustainable growth.
· Companies with the potential to become an attractive asset
appealing to a range of buyers at the appropriate time to sell.
In order to ensure a strong pipeline of opportunities, the Manager invests in
building deep sector knowledge and networks and undertakes significant
proactive marketing to target companies in preferred sectors. This approach
generates a network of potentially suitable businesses with which the Manager
maintains a relationship ahead of possible investment opportunities.
The Manager as an influential shareholder
The Manager is an engaged and supportive shareholder (on behalf of the
Company) in both unquoted and significant quoted investments.
For unquoted investments, representatives of the Manager often join the
investee board.
The role of the Manager with investees is to ensure that strategy is clear,
the business plan can be implemented and the management resources are in place
to deliver profitable growth. The intention 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.
STRATEGIC REPORT
CHAIR'S STATEMENT
The economic environment over the 12 months to 30 September 2023 remained
challenging. Consumer and business confidence continued to be affected by
persistently high inflation and rising interest rates. During the year, the
Net Asset Value per share decreased by 1.3p per share (2.3 per cent) from
58.5p to 57.2p before the payment of 4.25p dividends per share.
In the short term, the weight of economic opinion suggests that UK inflation,
and therefore interest rates, may have peaked. The Manager is therefore
hopeful that the economic uncertainty of the last few years will start to
diminish from early 2024, although any improvement in the external environment
may take some time to feed through to businesses more generally. The approach
of the Manager is to invest into its chosen sectors throughout the economic
cycle into both unquoted and AIM‑listed companies, avoiding making large
macro‑economic predictions and rather focusing on the quality of the
underlying businesses and their management teams. Your Board believes this
strategy can provide greater consistency of investment returns over the medium
to long term.
Results
Pence per ordinary share
NAV as at 1 October 2022 (after final dividend) 58.54
Valuation decrease (-2.3 per cent) (1.35)
NAV as at 30 September 2023 before dividends 57.19
Less: (1.75)
Interim dividend paid on 8 September 2023
Proposed final dividend of 2.5p payable, after shareholder approval, on 8 (2.50)
March 2024
Illustrative NAV as at 30 September 2023 after proposed dividend 52.94
Portfolio review
At 30 September 2023, the Company's investment portfolio was valued at £107
million and comprised 84 direct investments, of which 37 are in unquoted
companies and 47 are in quoted companies. The Company's investments in three
Gresham House Equity Funds(1) were valued at £68 million at 30 September.
These investments provide investment exposure to an additional 75 AIM‑
traded and fully listed companies spreading investment risk across a highly
diversified portfolio of 159 companies.
The value of the Company's unquoted investments decreased by 14 per cent
during the year. This is clearly very disappointing and stems from weaker
trading conditions and lower valuations based on the market valuation of
comparable companies. On the other hand, the Company's portfolio of
AIM‑listed and other quoted investments was more resilient and increased by
3 per cent during the year. To put this in context, the FTSE AIM All Share
Index decreased by 9.9 per cent over the same period.
1. WS Gresham House UK Micro Cap Fund ("Micro Cap"), WS Gresham House UK Multi
Cap Income Fund ("Multi Cap") and WS Gresham House UK Smaller Companies Fund
("Small Cap").
Investments and divestments
Against this backdrop, your Board is once again pleased to report that the
Manager continues to see attractive opportunities for investment. During the
year, the Company deployed a total of £10.4 million in 14 companies in both
new and follow‑on investments. Further details of these investments are
included in the Manager's review in the full Annual Report. As we have
communicated 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 new
portfolio develops and grows.
The priority for portfolio companies is to face any difficult trading
conditions in a controlled way and focus on their investment fundamentals. The
Manager has the experience in portfolio and talent management to assist
portfolio companies and actively engages with portfolio companies to achieve
this.
There was one full realisation in the unquoted portfolio during the year with
proceeds of £0.7 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 £0.3 million and a
gross money multiple of 3.2x cost along with deferred earn‑out consideration
of £1.1 million from the sale of Pho for a gross money multiple of 3.1x cost.
In the listed portfolio, the Manager has also continued its approach of
profitable partial realisations of Cerillion during the year, resulting in the
receipt of proceeds of £0.5 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 2.5p per share for the
year to 30 September 2023, payable on 8 March 2024. This is in addition to the
1.75p interim dividend paid in September and means that the total dividends
for the year are 4.25p. This is a 7.3 per cent yield based on the opening NAV
of 58.5p and meets the target policy of 7 per cent of the NAV at the start of
the year. Including the proposed final dividend of 2.5p per share, tax free
dividends paid since launch in 1998 now total 183.9p per share, 81.0p of which
has been paid over the past 10 years.
Unclaimed Dividends
The Company's Registrar was holding £1.1 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 can be
found 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 shareholders that it is their
responsibility to keep their Company's Articles of Association, I would like
to remind 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 can be found in the full Annual Report.
VCT Regulations - Retirement Date of the UK Government's Venture Capital
Schemes
When EU State Aid approval of the UK's VCT and EIS schemes was given in 2015,
a "retirement date" 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, in the Autumn Statement, the Government announced that
legislation will be introduced as part of the Finance Act 2023 to move the
retirement date to 6 April 2035. This is very welcome news. Your Board would
like to thank the Treasury Select Committee for their thorough and interesting
report on the Venture Capital Market published in July 2023. This report was
broadly positive about VCTs and urged the government to act to remove the
uncertainty being caused by the imminence of the original retirement date of
April 2025. We would like to thank the Manager for their representations made
through the VCTA and the AIC for the representations they made to government
and officials concerning the retirement date.
We believe VCTs have provided and will continue to provide valuable
investments in early stage, high growth UK companies that would not otherwise
be made, while providing the UK taxpayer with good value for money with the
various tax benefits VCTs provide to their investors.
Acquisition of the Investment Manager, Gresham House
Further to the announcement on 17 July 2023 about 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 FCA's Consumer Duty came into force on 31 July 2023 and, in summary,
requires firms to which this applies to act to deliver good outcomes for their
retail customers. The Consumer Duty regulations apply to the regulated and
ancillary activities of all FCA authorised firms under the Financial Services
and Markets Act 2000, the Payment Services Regulations 2017 and the Electronic
Money Regulations 2011. The Company is not a FCA authorised firm and
accordingly does not fall within scope of these regulations. However, the
Company's Manager, Gresham House, being an FCA authorised firm, is covered by
the regulations and the Board is cognisant of the Manager's obligations to
comply with the Consumer Duty. The Board receives regular updates from the
Manager on the delivery of its obligations under the Consumer Duty.
Succession planning
During the year, the Board began the process of implementing its succession
plan with Isabel Dolan joining the Board. Isabel has over 25 years' experience
working with growth companies as a corporate financier, equity investor,
lender and Finance Director and I am very much looking forward to working with
her.
Our current Audit Chair, Les Gabb, will be retiring with effect from 31
December 2023. Les has served as a director of Baronsmead VCT plc from May
2014 and then continued as a director of Baronsmead Venture Trust plc after
the merger in 2016. I would like to thank Les for his dedication and hard work
during this time and wish him all the best in his future endeavours.
Fundraising
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, with the additional funds
raised being 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 1.30 pm on 5 March 2024. The Manager will deliver a presentation at
11.30am followed by some light refreshments at 12.30pm. Shareholders are
invited to attend an introductory presentation by the Company Chair, Ms Fiona
Miller Smith, followed by a Q&A session from 1.00pm. The formal business
of the AGM will then start at 1.30pm. 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
Venture Trust website.
Outlook
The geopolitical and economic outlook is likely to remain challenging and any
recovery in the next year is likely to be slow and fragile. Inflation in the
UK remained high throughout the year under review although the reduction in
the headline rate of inflation post period end is welcome and hopefully this
will lead in turn to a reduction in interest rates and a return of more benign
and less volatile economic conditions.
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 is actively seeking to complete new
investments, believing that this is a propitious time in the economic cycle
ahead of the typical up swing that follows the uncertain times of the past few
years. We remain confident that the Manager is suitably positioned to provide
the necessary levels of support to the portfolio companies and remains
focussed on retaining, recovering and helping to grow value in existing and
future investee companies.
Fiona Miller Smith
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 159 quoted and unquoted companies,
has delivered a decrease in net asset value per share of 2.3 per cent over the
year.
PORTFOLIO REVIEW
Overview
The closing net assets of £195 million were invested as follows:
Asset class NAV % of Number of investees** % return in the year***
(£mn) NAV*
Unquoted 46 24 37 (14)
AIM-traded companies 61 31 47 3
WS Gresham House UK Micro Cap Fund 28 15 45 5
WS Gresham House UK Multi Cap Income Fund 16 8 42 7
WS Gresham House UK Smaller Companies Fund 24 12 40 2
Liquid assets(♯) 20 10 N/A 4
Totals 195 100 211 (2)
* By value as at 30 September 2023.
** Includes investee companies held in more than one fund. Total number of
individual companies held is 159.
***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 below show the breakdown of new investments and realisations over
the course of the year and below is a commentary on some of the key highlights
in both the unquoted and quoted portfolios.
Investment activity - Unquoted and Quoted
The Company's investment strategy is primarily focused on companies operating
in parts of the economy that we believe are benefiting from long‑term
structural growth trends and in sectors where we have deep expertise and
networks.
During the year, £10.4 million was invested into 14 companies including six
new additions to the portfolio and eight follow‑on investments.
Five new unquoted investments totalling £3.4 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 of £0.9 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 follow‑on investments totalling £6.0 million into eight
existing portfolio companies, three quoted and five unquoted, during 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 14 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 manage
risk and spot opportunities in a quickly changing environment. We have
continued to invest in our portfolio and in‑house talent teams, 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 £0.7 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 £0.3 million taking the gross money multiple to 3.2x cost along with
deferred earn‑out consideration of £1.1 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 stating +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; over the
course of the year proceeds of £0.5 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 recognised as
realised losses. In aggregate, the impact on NAV per share for the year was a
decrease of 0.7per cent, with the majority of the losses recognised in prior
years.
Collective Investment Vehicles
The Manager believes that the Company's investments in Micro Cap, Multi Cap
and Small Cap remain a core component of the Company's portfolio construction
for funds awaiting investment in VCT qualifying companies. These investments
provide shareholders with additional diversification through exposure to an
additional 75 underlying companies, as well as access to the potential returns
available from a larger and more established group of companies that fall
within the Manager's core area of expertise.
Over the year Micro Cap delivered a positive return of 5 per cent, Multi Cap
delivered a positive return of 7 per cent and the Small Cap fund delivered a
positive return of 2 per cent.
Micro Cap and Multi Cap continue to be both highly rated by independent
ratings agencies. Micro Cap's cumulative performance is currently top quartile
within the IA UK Smaller Companies sector and is the fifth best performing
fund over the past 10 years. Multi Cap'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 £21 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
Following the year end, we commenced our latest 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 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 diversity1
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.
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 896
Dayrize B.V. Amsterdam Technology A rapid product-level sustainability impact assessment software tool for 757
retailers and Consumer Packaged Goods ("CPG") companies
Mable Therapy Ltd Leeds Healthcare & education Digital health platform for speech therapy & counselling for children and 670
young adults
Branchspace Ltd London Technology Specialist digital retailing consultancy and software provider to the aviation 659
and travel industry
Connect Earth Ltd London Business services Helps businesses track their carbon emissions 447
Follow-on
Patchworks Integration Ltd London Technology A platform for connecting businesses' applications 1,920
TravelLocal Ltd London Consumer Markets Online travel agent specialising in tailor‑made holidays 634
Airfinity Ltd London Healthcare & education Provides real time life science intelligence as a subscription service 624
Panthera Biopartners Ltd Lancashire Healthcare & education Recruitment services for clinical trials 443
Orri Ltd London Healthcare & education Provider of intensive day care treatments for eating disorders 227
Total unquoted investments 7,277
AIM-traded investments
New
Tan Delta Systems plc South Yorkshire Business services Supplier of real‑time oil condition monitoring sensors 918
Follow-on
Crossword Cybersecurity plc* London Technology Commercialisation of university research‑based cyber security software and
consulting
960
Oberon Investments Group plc London Business services Wealth advisory service for individuals and businesses
609
SEEN plc London Technology A video technology business 609
Total AIM-traded investments 3,096
Total investments in the year# 10,373
*Investment in to unquoted convertible loan note.
#includes Unquoted and AIM investments only.
Realisations in the year
Company First Investment date Original Proceeds‡ Overall multiple return
book cost(#) £'000
£'000
Unquoted realisations
Evotix Ltd Full trade sale Jul 21 375 702 0.7*
Key Travel Ltd Escrow loan note maturity Jun 13 209 313 3.2**
Glisser Ltd Written off Nov 19 1,585 - -
Rezatec Ltd Written off Jan 20 1,380 - -
Vinoteca Ltd Written off Sep 19 934 - -
CMME Group Ltd Written off Apr 15 931 - -
Your Welcome Ltd Written off Aug 18 914 - -
Total unquoted realisations 6,328 1,015
AIM-traded and LSE listed realisations
Cerillion plc Market sale Nov 15 34 541 15.8
MXC Capital Ltd Tender offer May 15 24 15 0.6
Hawkwing plc Written off Nov 11 1,466 - -
InterQuest Group plc Written off Feb 07 620 - -
Total AIM-traded realisations 2,144 555
Total realisations in the year 8,472 1,570
Earn out proceeds of £1.1mn 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 £1.0 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 2.5p 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. The Manager will deliver a presentation at 11.30am, followed
by some light refreshments at 12.30pm, after which the Chair will present a
review of the year at 1.00pm. Formal business of the AGM will start at 1.30pm.
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: 213800VQ1PQHOJXDDQ88
END
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