REG - British Smlr Comp 2 - 3rd Quarter Results

British Smaller Companies VCT2Announcement

24/11/2023 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:20231124:nRSX5276Ua&default-theme=true

RNS Number : 5276U  British Smaller Companies VCT2 Plc  24 November 2023

British Smaller Companies VCT2 plc

Interim Management Statement

For the quarter ended 30 September 2023

British Smaller Companies VCT2 plc (the "Company") presents its interim
management statement for the quarter ended 30 September 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 30 September 2023, the Company generated a 0.8 per cent
return on its opening Net Asset Value of 57.95 pence, compared to a 0.1 per
cent rise in the FTSE Small Cap.

The Company's Total Return at 30 September 2023 was up 0.45 pence at 143.15
pence per ordinary share.

During the quarter, the Company invested £1.6 million into GEEIQ, a data and
market intelligence platform in the gaming space. The Company has also
invested a further £0.2 million into Elucidat.

Following the quarter end, a £0.5 million follow-on investment into Force24
has been completed, taking the total invested in the current financial year to
£9.7 million, following the £16.3 million invested in 2022.

Post-period end, in November 2023, the Company exited its investments in E2E,
a consultancy in the satellite industry, for £1.4 million, representing a
2.5x return on the Company's cost; and MacroArt, a large scale branding and
signage specialist, for £1.0 million, representing a 2.0x return on the
Company's cost.  This was a pleasing outcome for the Company following a
challenging hold period, and reflects the Company's ethos of working hard to
generate positive returns from all of its investments.

Performance

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

 

                                  30 June 2023  Increase in value  Buy-back of shares  Movement    30 Sept 2023

                                                                                       in period
 Net Assets (£m)                  133.0         1.0                (0.5)               0.5         133.5
 NAV per share (PPS)              57.95p        0.45p              -                   0.45p       58.40p
 Cumulative dividends paid (PPS)  84.75p        -                  -                   -           84.75p
 Total Return (PPS)               142.7p        0.45p              -                   0.45p       143.15p
 Shares in issue                  229,484,783   -                  (907,200)           (907,200)   228,577,583

 

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

                              £m            Pence per

                                            ordinary share
 NAV at 30 June 2023                 133.0            57.95
 Increase in portfolio value  1.4           0.6
 Net operating costs          (0.2)         (0.05)
 Incentive fee                (0.2)         (0.1)
                              1.0           0.45
 Buy-back of shares           (0.5)         -
 Total Return in the period          0.5              0.45
 NAV at 30 September 2023            133.5            58.40

 

Post-period end, on 3 November 2023, a second interim dividend of 1.5 pence
per ordinary share for the year ending 31 December 2023 was paid, taking
cumulative dividends paid to paid to 86.25 pence per ordinary share and
resulting in a corresponding reduction to the 30 September 2023 unaudited NAV,
to 56.90 pence per ordinary share.

Buy-backs, dividends and shares in issue

On 25 September 2023, the Company purchased 907,200 ordinary shares of 10
pence each at a price of 55.55 pence per ordinary share. These shares were
placed in treasury.

The number of ordinary shares in issue at 30 September 2023 was 228,577,583
(30 June 2023: 229,484,783).  In addition, at 30 September 2023 the Company
held 20,449,923 ordinary shares in treasury (30 June 2023: 19,542,723).

Subsequent to the quarter end, on 3 November 2023 the Company issued 1,114,927
shares under the Company's Dividend Re-investment Scheme (DRIS) following the
payment of the interim dividend, taking the number of shares in issue at that
date to 229,692,510, with a further 20,449,923 shares held in treasury.

Net assets

Net assets at 30 September 2023 comprised the following:

                                     £000     % of net assets
 Unquoted investments at fair value  92,274   69.1
 Listed investment funds             1,698    1.3
 Cash and cash equivalents           39,273   29.4
 Other net current assets            269      0.2
 Net assets                          133,514  100.0

 

Investments

The investment portfolio at 30 September 2023 comprised:

                    Valuation  Cumulative valuation as a % of net assets

                    £000
 Matillion          21,314     16.0%
 Unbiased           7,708      21.7%
 Outpost            5,957      26.2%
 Displayplan        4,637      29.7%
 Elucidat           4,330      32.9%
 Wooshii            4,004      35.9%
 Force24            3,195      38.3%
 ACC Aviation       2,949      40.5%
 Vypr               2,746      42.6%
 Quality Clouds     2,628      44.5%
                    59,468     44.5%
 Other investments  32,806     69.1%
 Total investments  92,274     69.1%

 

Shareholder relations

The Company will be hosting an online webinar on 27 November 2023 to provide
an update to shareholders; for further details please contact Tracey Nice at
tracey.nice@yfmep.com (mailto:tracey.nice@yfmep.com) .

Regulatory Developments

In the Autumn Statement on 22 November 2023, the Government announced it would
extend the sunset clause currently in place for Venture Capital Trusts until
April 2035, and that it would include legislation to achieve this in the next
Finance Bill.

Fundraising

Having assessed its expected cash requirements, the Company announced a new
share offer on 20 September 2023, alongside British Smaller Companies VCT plc,
with the intention of raising up to £90 million (in aggregate), which
includes an over-allotment facility of £25 million. Applications exceeding
£45 million have been received as of the date of this report, of which £18
million relate to the Company. The first allotment of £30 million of gross
proceeds will take place between 29 and 31 January 2024. The second and final
allotment will take place in early April 2024.

Outlook

The UK macro-economic environment has stabilised somewhat and the economy may
well avoid a recession, although growth levels are likely to remain weak.
And while rates of inflation are expected to reduce, interest rates are
anticipated to remain at the current elevated levels for some time.
Portfolio companies have coped well in this environment, and continue to grow
revenues, which helps to offset the impact on the Company of muted valuations
multiples.  It has also been pleasing to continue to achieve good
realisations of portfolio companies and we feel the Company's investments are
well placed to deliver further exits in the coming quarters.

We continue to see opportunities to deploy capital into promising new
businesses, as well as to continue funding existing portfolio companies to
help them scale up their growth plans.

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

24 November 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

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  QRTPPGPPGUPWGRW