REG - British Smlr Comp 2 - 1st Quarter Results

British Smaller Companies VCT2Announcement

16/06/2023 12:00

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RNS Number : 0282D  British Smaller Companies VCT2 Plc  16 June 2023

British Smaller Companies VCT2 plc

Interim Management Statement

For the quarter ended 31 March 2023

British Smaller Companies VCT2 plc (the "Company") presents its interim
management statement for the quarter ended 31 March 2023. 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 (http://www.bscfunds.com) .

Overview

In the quarter to 31 March 2023, the Company generated a 1.0 per cent return
on its opening Net Asset Value of 61.6 pence, compared to a 1.9 per cent fall
in the FTSE Small Cap. AIC data ranks the Company second across all generalist
VCTs when considering a blended average performance ranking over 1, 3, 5 and
10 years.

The Company's Total Return at 31 March 2023 was up 0.6 pence at 143.2 pence
per ordinary share.

During the quarter, the Company invested £2.4 million into new investment
DrDoctor, a patient engagement and communications software platform; and £1.2
million into new investment Xapien, an AI-powered software platform that fully
automates detailed background research on individuals and companies. The
Company has also invested a further £1.6 million into Quality Clouds, to
provide the runway and resources to accelerate the company's sales growth.

Following the quarter end, one follow-on investment totalling £0.5 million
into Relative Insight has been completed, taking the total invested in the
current financial year to £5.7 million, following the £16.3 million invested
in 2022.

The Company realised its investment in Wakefield Acoustics in January 2023,
generating proceeds of £0.6 million and an overall return of 1.5x cost.
Subsequent to the quarter end, the Company realised its investment in Ncam, in
line with the valuation at 31 March 2023, with initial proceeds of £0.9
million being received.

 

Performance

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

                                  31 December                        2022                         Increase in Value  Dividends paid/shares issued  Buyback of shares  Movement    31 March 2023

                                                                                                                                                                      in Period
 Net Assets (£m)                  111.9                                                           1.0                (3.3)                         (0.3)              (2.6)       109.3
 NAV per share (PPS)              61.6p                                                           0.6p               (2.25p)                       -                  (1.65p)     59.95p
 Cumulative dividends paid (PPS)  81.0p                                                           -                  2.25p                         -                  -           83.25p
 Total Return (PPS)               142.6p                                                          0.6p               -                             -                  0.6p        143.2p
 Shares in issue                  181,468,710                                                     -                  1,427,418                     (552,351)          875,067     182,343,777

The unaudited NAV per ordinary share was down 1.65 pence at 59.95 pence per
share (31 December 2022: 61.6 pence per ordinary share), following the
dividend of 2.25 pence per share paid on 11 January 2023.

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

                                      £m            Pence per

                                                    ordinary share
 NAV at 31 December 2022                     111.9            61.6
 Increase in portfolio value          1.5           0.8
 Net operating costs                  (0.5)         (0.2)
                                      1.0           0.6
 Issue/buy-back of shares             0.5           -
 Total Return in the period                  1.5              0.6
 NAV before the payment of dividends         113.4            62.2
 Dividends paid                              (4.1)            (2.25)
 NAV at 31 March 2023                        109.3            59.95

Buybacks, dividends and shares in issue

On 28 March 2023, the Company purchased 552,351 ordinary shares of 10 pence
each at a price of 56.88 pence per ordinary share. These shares were placed in
treasury.

Following payment of the special dividend for the year ending 31 December 2023
of 2.25 pence per ordinary share on 11 January 2023, the Company issued
1,427,418 ordinary shares under the DRIS, taking cumulative dividends paid to
83.25 pence per ordinary share.

The number of ordinary shares in issue at 31 March 2023 was 182,343,777 (31
December 2022: 181,468,710).  In addition, at 31 March 2023 the Company held
19,219,163 ordinary shares in treasury (31 December 2022: 18,666,812).

Following the successful fundraising, the Company issued 46,357,328 ordinary
shares of 10 pence each on 4 April 2023, taking the number of shares in issue
to 228,701,105 ordinary shares with voting rights.

The Board has approved an interim dividend of 1.5 pence per ordinary share for
the year ending 31 December 2023, which will be paid on 26 June 2023 to those
shareholders on the Company's register at the close of business on 12 May
2023.

Net assets

Net assets at 31 March 2023 comprised the following:

                                     £000     % of net assets
 Unquoted investments at fair value  87,428   80.0
 Listed investment funds             1,504    1.4
 Cash and cash equivalents           19,993   18.3
 Other net current assets            383      0.3
 Net assets                          109,308  100.0

 

Investments

The investment portfolio at 31 March 2023 comprised:

                    Valuation  Cumulative valuation as a % of net assets

                    £000
 Matillion          21,281     19.5%
 Unbiased           6,652      25.6%
 Outpost            6,280      31.3%
 Wooshii            4,761      35.7%
 Displayplan        4,254      39.5%
 Elucidat           4,184      43.4%
 ACC Aviation       3,614      46.7%
 Force24            3,172      49.6%
 Quality Clouds     2,716      52.1%
 Vypr               2,701      54.5%
                    59,615     54.5%
 Other investments  27,813     80.0%
 Total investments  87,428     80.0%

Shareholder relations

An in-person Shareholder Workshop will be held on Tuesday 2o June 2023 at 1
Great George Street, Westminster, London SW1P 3AA. Please email Tracey Nice at
Tracey.nice@yfmep.com (mailto:Tracey.nice@yfmep.com) for further information.

Fundraising

On 4 April 2023, the Company allotted shares from its fully subscribed 2022/23
share offer. £27.5 million was raised by the Company, resulting in the
allotment of 46,357,328 ordinary shares.  This increased the number of
ordinary shares issued with voting rights to 228,701,105.

Outlook

The economic environment remains challenging; while energy prices and
inflation are moving down from peaks, these remain high, keeping interest
rates elevated. This has fed through to valuation multiples, which remain
dampened.  In this environment, the portfolio continues to be robust, with
the Company's performance buoyed by positive uplifts when exiting investments
and continued revenue growth from existing investments.

There continues to be a good pipeline of new companies seeking investment, and
the opportunity to deploy funds into existing portfolio companies to help them
accelerate their growth.

The Board thanks new and existing shareholders for their support in the recent
fundraising and look forward to updating shareholders on progress deploying
these funds over the coming quarters.

 

 

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.

16 June 2023

For further information please contact:

David Hall               YFM Private Equity
Limited
Tel:  0113 244 1000

Alex Collins              Panmure Gordon (UK) Limited
                            Tel:  0207 886 2767

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