REG - British Smlr Comp 2 - Half-year Report
12/09/2025 07:00
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RNS Number : 0238Z British Smaller Companies VCT2 Plc 12 September 2025
British Smaller Companies VCT2 plc
Unaudited Interim Results and Interim Management Report for the six months
ended 30 June 2025
British Smaller Companies VCT2 plc (the "Company") announces its unaudited
interim results for the six months ended 30 June 2025.
HIGHLIGHTS
· Net Asset Value at 30 June 2025 of 55.05p per share (31 December
2024: 57.10p) following payment of dividends of 2.50p per share during the
period
· Total Return increase of 0.45p per share in the quarter, to
146.80p per share
· Fully subscribed offer raised net proceeds of £28.3 million
· The Board has declared a second interim dividend of 1.50p per
share in respect of the year ending 31 December 2025, which will bring total
dividends paid in the current financial year to 4.00p per share, which equates
to 7.0 per cent of the opening net asset value per share
· Two new investments and six follow-on investments totalling £7.7
million completed during the period. Subsequent to the period-end, one new
investment and three follow-on investments totalling £3.8 million completed,
bringing the total invested this year to £11.5 million
· Proceeds from realisations of £4.3 million in the period, a gain
of £0.1 million over the opening carrying value and £4.2 million over cost.
CHAIR'S STATEMENT
I am pleased to present the interim results of British Smaller Companies VCT2
plc (the "Company") for the six months to 30 June 2025.
The first half of 2025 has been marked by a challenging macroeconomic
backdrop. In the UK, early-year growth gave way to a slowdown in Q2, with
inflationary pressures resurfacing and the Bank of England taking finely
balanced decisions to cut interest rates in an effort to stimulate the
economy. Globally, volatility remains with evolving US tariff policies and
ongoing conflicts.
The Company continues to navigate these conditions through its active
portfolio management approach. By focusing on and working closely with
high-growth businesses that help their customers address critical challenges,
reduce costs, or grow revenues, the portfolio remains well-positioned to
deliver long-term value.
This has resulted in the Company's Total Return increasing by 0.45 pence in
the period, a 0.8 per cent increase on the opening net asset value per share.
PORTFOLIO PERFORMANCE
The period has seen ongoing positive performance from several portfolio
companies, with many showing strong potential. Of the 27 companies valued on a
revenue basis, 22 have grown sales in the last year, with 12 delivering growth
of over 25 per cent. We are seeing opportunities to help our fastest growing
businesses to accelerate their progress by providing material further funding.
This was seen in the period, with an aggregate £4.7 million invested into six
portfolio companies and a further £2.6 million invested into three portfolio
companies since 30 June.
The 12 companies that are growing revenues at over 25 per cent per annum
produced aggregate revaluation gains of £7.1 million in the first half of the
year.
There were upward revaluations from Summize, AutomatePro, Vypr, Unbiased,
DrDoctor, Xapien and SharpCloud, offset by aggregate downward revaluations of
£4.1 million in the period across three portfolio companies: Matillion, where
the Company's holding has been impacted by the weak US dollar; Wooshii, where
post-period-end the Company sold its interest in the trade and liabilities in
the business following trading difficulties in a challenging market; and
Outpost, which continues to navigate industry-specific challenges arising from
the Hollywood writers' strike.
These movements reflect the disciplined approach the Company takes with
valuations. The Company's Manager works closely with the businesses across the
portfolio, focusing on both market-specific challenges and opportunities for
growth.
NEW INVESTMENTS
The Company completed two new investments during the first half of the year,
with investments into S4labour (£1.6 million), a workforce management
platform purpose-built for the hospitality sector; and Stormharvester (£1.4
million), an AI-driven SaaS provider that helps wastewater utilities detect
blockages, prevent flooding, and reduce pollution through smart wastewater
management solutions.
Subsequent to the period-end the Company has invested £1.2 million into cyber
risk platform DynaRisk; DynaRisk helps insurers, brokers and businesses reduce
cyber threats through short risk assessment tools.
REALISATION IN THE PERIOD
In February 2025, the Company sold its investment in ACC Aviation for initial
cash consideration of £3.1 million, plus potential deferred consideration of
£1.5 million, of which £1.2 million has been recognised at the end of the
period. The ACC investment has generated an overall return of £6.7 million to
date, a 4.8x return on the original cost of £1.4 million. Including deferred
consideration, proceeds have the potential to rise to £8.2 million, and the
return to 5.9x.
Following the period end, the sale of the trade and liabilities of Wooshii was
completed; no proceeds were received on exit, although there is the potential
for a small return for the Company depending on future trading. Despite early
promise in what was seen as a fast-growing market, the business struggled as
market conditions deteriorated and customers reduced their spending in the
face of rising inflation.
FINANCIAL RESULTS
The movement in net asset value ("NAV") per ordinary share and the dividends
paid are set out in the table below.
Pence per ordinary share £000
NAV at 31 December 2024 57.10 160,451
Net gain from investment portfolio 2,778
0.85
Net operating costs (0.35) (1,059)
Total Return in period 1,719
0.50
Issue/buy-back of new shares* (0.05) 27,729
NAV before the payment of dividends 57.55 189,899
Dividends paid (2.50) (7,772)
NAV at 30 June 2025 55.05 182,127
Cumulative dividends paid 91.75
Total Return:
At 30 June 2025 146.80
At 31 December 2024 146.35
* the first allotment on 30 January 2025 from the 2024/25 fundraising reduces
Total Return per ordinary share as the allotment was priced at the unaudited
30 September 2024 NAV, being the latest published NAV at the allotment date,
as adjusted for the interim dividend of 1.50 pence per ordinary share paid on
1 November 2024 and the special dividend of 1.00 pence per ordinary share paid
on 27 January 2025.
DIVIDENDS
A special dividend of 1.00 pence per ordinary share was paid on 27 January
2025. An interim dividend of 1.50 pence per ordinary share was paid on 23 June
2025, bringing the cumulative dividends paid to date to 91.75 pence per
ordinary share.
The Board has proposed a second interim dividend of 1.50 pence per ordinary
share for the year ending 31 December 2025 which, when combined with the above
dividends, will bring total dividends paid in the current financial year to
4.00 pence per ordinary share (2024: 3.00 pence per ordinary share). The
dividend will be paid on 31 October 2025 to shareholders on the register on 26
September 2025.
SHAREHOLDER RELATIONS
This year's Investor Workshop was held in London on 19 June, alongside British
Smaller Companies VCT plc, (together the "BSC VCTs"), welcoming around 200
attendees. The theme for the day was Artificial Intelligence (AI). Alongside
the more regular updates on the performance and outlook of the BSC VCTs that
are covered every year, the attendees also heard from an independent expert
who spoke about the development of AI and what the future might hold. CEOs of
the portfolio businesses, Xapien and AutomatePro, provided overviews on their
companies and how they are using AI within their own product offerings.
FUNDRAISING
In the period the Company issued shares from its fully subscribed 2024/25
share offer across two allotments, on 30 January and 1 April 2025. Gross
proceeds of £29.2 million were raised by the Company, resulting in the
allotment of 50,774,434 ordinary shares.
On 22 August 2025, the Company announced its intention to launch a new joint
offer for subscription for the tax year 2025/26 later this year, alongside
British Smaller Companies VCT plc. The current intention is for the BSC VCTs,
in aggregate, to raise up to £60 million, with over-allotment facilities of
up to a further £25 million, in aggregate, before issue costs. Any election
for the Company to make use of its over-allotment facility will be subject to
the decisions of the individual boards of the BSC VCTs at the relevant time.
A prospectus with full details of the proposed Offer is expected to be
published on or around 25 September, with applications expected to open one
week following publication. Once published, the prospectus will be available
from the BSC VCTs' website, www.bscfunds.com (http://www.bscfunds.com) .
OUTLOOK
The UK's short to medium-term economic outlook remains uncertain, with
government budget pressures, stubborn inflation and modest growth prompting
expectations of further interest rate cuts by the Bank of England; while
globally, tensions remain elevated due to rising tariffs and geopolitical
conflicts.
Despite these conditions, portfolio companies are continuing to make good
progress; no portfolio companies are directly impacted by tariffs, and the
companies are operating in large markets where there remain significant growth
opportunities, despite macro challenges. This is being seen with good levels
of revenue growth in the portfolio, presenting the Company with strong
opportunities to provide further funding into existing portfolio companies.
The Manager also continues to identify attractive new opportunities for the
Company to invest into high-growth, tech-enabled businesses. As such, we
remain optimistic for the Company's outlook as it moves through the second
half of 2025 and into 2026.
I thank our shareholders for their continued support.
Barbara Anderson
Chair
12 September 2025
OBJECTIVES AND STRATEGY
The Company's objective is to maximise Total Return and provide investors with
a long-term tax-free dividend yield whilst maintaining the Company's status as
a venture capital trust.
INVESTMENT STRATEGY
The Company seeks to build a broad portfolio of investments in early-stage
companies focused on growth, with the aim of spreading the maturity profiles
and maximising return, as well as ensuring compliance with VCT Regulations.
The Company predominantly invests in unquoted smaller companies and expects
that this will continue to make up the significant majority of the portfolio.
It will also retain holdings in cash or near-cash investments to provide a
reserve of liquidity which will maximise the Company's flexibility as to the
timing of investment acquisitions and disposals, dividend payments and share
buy-backs.
Unquoted investments are structured using various investment instruments,
including ordinary shares, preference shares, convertible securities and, very
occasionally, loan stock, to achieve an appropriate balance of income and
capital growth, having regard to the VCT Regulations. The portfolio is
diversified by investing in a broad range of industry sectors. The normal
investment period into the portfolio companies is expected to be typically
between the range of five to seven years.
INVESTMENT POLICY
The investment policy of the Company is to invest in UK businesses across a
broad range of sectors that blends a mix of businesses operating in
established and emerging industries that offer opportunities in the
application and development of innovation in their products and services.
These investments will all meet the definition of a Qualifying Investment and
be primarily in unquoted UK companies. It is anticipated that the majority of
these will be re-investing their profits for growth and the investments will
comprise mainly equity instruments.
The Company seeks to build a broad portfolio of investments in early-stage
companies focused on growth with the aim of spreading the maturity profiles
and maximising return as well as ensuring compliance with the VCT guidelines.
INVESTMENT REVIEW
At 30 June 2025 the Company's portfolio was valued at £111.6 million. The top
ten investments represent 38.4 per cent of the net asset value, with the
largest representing 10.0 per cent of the net asset value.
The movements in the investment portfolio are set out below:
TABLE A
INVESTMENT PORTFOLIO
Portfolio
£million
Opening fair value at 1 January 2025 105.5
Additions 7.7
Disposal proceeds (4.3)
Net revaluation arising from the investment portfolio 2.7
Closing fair value at 30 June 2025 111.6
The Company's portfolio value increased by £2.7 million in the period, of
which £2.6 million arose from the residual portfolio, with a gain of £0.1
million from realisations.
There were upward revaluations from Summize, AutomatePro, Vypr, Unbiased,
DrDoctor, Xapien and SharpCloud, offset by decreases from Matillion, Wooshii
and Outpost.
REALISATION OF INVESTMENTS
The Company generated £4.3 million from disposals (inclusive of deferred
consideration) with a gain of £0.1 million over the opening carrying value,
and crystallising a gain of £4.2 million on cost. Further details are given
on page 3 of the interim report and in note 6.
INVESTMENTS
During the six months ended 30 June 2025, the Company invested £7.7 million
into eight companies. This comprised two new investments, totalling £3.0
million, and six follow-on investments, totalling £4.7 million. A further
£3.8 million was invested post-period end. A breakdown of these investments
is shown below:
Investments made £million
Company Description New Follow-on Total
S4labour Workforce management 1.6 - 1.6
Vypr Data validation - 1.6 1.6
Workbuzz Insights and engagement - 1.4 1.4
Stormharvester AI analytics 1.4 - 1.4
DrDoctor Patient engagement - 1.2 1.2
Force24 B2B marketing automation software - 0.3 0.3
Relative Insight Text data analytics - 0.1 0.1
Immunobiology Life sciences - 0.1 0.1
Invested in the period 3.0 4.7 7.7
DynaRisk Cyber risk solutions 1.2 - 1.2
Panintelligence Business Intelligence software - 0.2 0.2
Fuuse EV charging point software - 1.2 1.2
AutomatePro Automated software testing - 1.2 1.2
Invested in the year to date 4.2 7.3 11.5
CASH DEPOSITS AND OTHER LIQUID FUNDS
The Company takes an active approach to cash management, while ensuring its
primary aim of capital preservation is met. A portion of the Company's liquid
assets are held across a diversified range of Triple-A rated money market
funds, managed by global institutions; while the balance is held as readily
accessible cash, all of which is held at Tier 1 Financial Institutions (A2
rated or above). £1.3 million of income was earned from money market funds
and bank deposits during the period. At 30 June 2025, the Company was
achieving a weighted average return on liquid assets of 4.0 per cent; at the
time of publication, this had reduced to 3.8 per cent, decreasing as global
interest rates fall.
PORTFOLIO
The top 10 investments had a combined value of £69.9 million, 62.6 per cent
of the total portfolio.
Name of company Industry Sector Date of initial investment Amount invested £000 Valuation at 30 June 2025 Recognised Income / proceeds to date Realised & unrealised value to date*
£000 £000 £000
Matillion Limited Data Nov 16 1,778 18,129 5,946 24,075
Unbiased EC1 Limited Tech-enabled Services Dec 19 3,731 9,703 - 9,703
Vypr Validation Technologies Limited Tech-enabled Services Jan 21 3,798 7,292 - 7,292
Xapien (via Digital Insight Technologies Ltd) Application Software Mar 23 4,064 5,817 - 5,817
AutomatePro Limited Cloud & DevOps Dec 22 2,683 5,602 - 5,602
SharpCloud Software Limited Data Oct 19 2,920 5,462 - 5,462
Summize Limited Application Software Oct 22 1,700 5,247 - 5,247
DrDoctor (via ICNH Ltd) Application Software Feb 23 3,570 4,273 - 4,273
Workbuzz Analytics Ltd Application Software Jun 23 3,135 4,203 - 4,203
Force24 Ltd Application Software Nov 20 2,850 4,173 112 4,285
Quality Clouds Limited Cloud & DevOps May 22 3,880 3,952 - 3,952
Outpost VFX Limited New Media Feb 21 3,833 3,763 113 3,876
Elucidat Ltd Application Software May 19 2,840 3,640 481 4,121
Plandek Limited Cloud & DevOps Oct 22 2,360 2,771 - 2,771
Tonkotsu Limited Retail & Brands Jun 19 1,592 2,744 - 2,744
Spotless Water Limited Business Services Jun 24 1,456 2,016 - 2,016
Fuuse Limited Application Software May 24 2,000 2,000 - 2,000
GEEIQ (via Checkpoint GG Limited) Data Sep 23 1,572 1,916 - 1,916
S4 Labour Limited Application Software Apr 25 1,600 1,600 - 1,600
Biorelate Limited Application Software Nov 22 1,540 1,552 - 1,552
Stormharvester Limited Data Jan 25 1,400 1,498 - 1,498
Relative Insight Limited Tech-enabled Services Mar 22 3,057 1,402 14 1,416
Ohalo Limited Data Jun 24 1,110 1,377 - 1,377
Frescobol Carioca Ltd Retail & Brands Mar 19 1,200 1,372 - 1,372
KeTech Technology Holdings Limited Tech-enabled Services Nov 15 2,000 1,291 4,059 5,350
Arcus Global Limited Application Software May 18 2,050 1,220 234 1,454
Vuealta Holdings Limited Tech-enabled Services Sep 21 2,386 1,173 3,124 4,297
Integrum ESG Limited Data Sep 24 1,160 1,160 - 1,160
Value £1.0 million and below 16,140 5,278 4,603 9,881
Total unquoted investments 83,405 111,626 18,686 130,312
Full disposals to date 52,827 - 98,017 98,017
Total portfolio 136,232 111,626 116,703 228,329
* Represents recognised income and proceeds received to date plus the
unrealised valuations at 30 June 2025.
PORTFOLIO AT A GLANCE
AGE OF INVESTMENTS (%)
2025
Less than 1 year 4%
Between 1 and 3 years 33%
Between 3 and 5 years 19%
Greater than 5 years 44%
Total 100%
VALUE COMPARED TO COST (%)
2025
Value above cost 88%
At cost 6%
Value below cost 6%
Total 100%
INVESTMENT INSTRUMENT (%)
2025
Loan 2%
Preference shares 2%
Equity 96%
Total 100%
INDUSTRY SECTOR (%)
2025
Application Software 30%
Data 27%
Tech-enabled Services 19%
Cloud & DevOps 12%
New Media 4%
Retail & Brands 4%
Business Services 2%
Other 2%
Total 100%
PRINCIPAL RISKS AND UNCERTAINTIES
In accordance with DTR 4.2.7, the Board confirms that the principal risks and
uncertainties facing the Company have not materially changed from those
identified in the Annual Report and Accounts for the year ended 31 December
2024. The Board acknowledges that there is regulatory risk and continues to
manage the Company's affairs in such a manner as to comply with section 274 of
the Income Tax Act 2007. In summary, the principal risks are:
· Macroeconomic;
· Portfolio;
· ESG;
· Strategic;
· Legislative & Regulatory;
· Operational;
· Liquidity; and
· Emerging Risk - Cyber Security & Information Technology.
Full details of the principal risks can be found in the financial statements
for the year ended 31 December 2024 on pages 31 to 34, a copy of which is
available at www.bscfunds.com (http://www.bscfunds.com) .
DIRECTORS' RESPONSIBILITIES STATEMENT
The directors of British Smaller Companies VCT2 plc confirm that, to the best
of their knowledge, the condensed set of financial statements in this interim
report have been prepared in accordance with International Accounting Standard
34 "Interim Financial Reporting" as adopted by the UK, and give a true and
fair view of the assets, liabilities, financial position and profit and loss
of British Smaller Companies VCT2 plc, and that the interim management report
includes a true and fair review of the information required by DTR 4.2.7R and
DTR 4.2.8R.
The directors of British Smaller Companies VCT2 plc are listed in note 11.
By order of the Board
Barbara Anderson
Chair
UNAUDITED STATEMENT OF COMPREHENSIVE INCOME
FOR THE SIX MONTHS ENDED 30 JUNE 2025
Unaudited 6 months Unaudited 6 months ended 30 June 2024
ended 30 June 2025
Revenue Capital Total Revenue Capital Total
Notes £000 £000 £000 £000 £000 £000
Gain (loss) on investments held at fair value 6 - 2,719 2,719 - (1,104) (1,104)
Gain on disposal of investments 6 - 59 59 - 459 459
Income 2 1,548 - 1,548 1,701 - 1,701
Total income 1,548 2,778 4,326 1,701 (645) 1,056
Administrative expenses:
Manager's fee (341) (1,023) (1,364) (296) (890) (1,186)
Other expenses (388) - (388) (343) - (343)
Fair value movement related to credit risk (557) - (557) - - -
Incentive fee - (298) (298) - - -
(1,286) (1,321) (2,607) (639) (890) (1,529)
Profit (loss) before taxation 262 1,457 1,719 1,062 (1,535) (473)
Taxation 3 (91) 91 - - - -
Profit (loss) for the period 171 1,548 1,719 1,062 (1,535) (473)
Total comprehensive income (expense) for the period 171 1,548 1,719 1,062 (1,535) (473)
Basic and diluted earnings (loss) per ordinary share 5 0.05p 0.50p 0.55p 0.40p (0.58p) (0.18p)
The Total column of this statement represents the Company's Unaudited
Statement of Comprehensive Income, prepared in accordance with UK adopted
international accounting standards. The supplementary Revenue and Capital
columns are prepared under the Statement of Recommended Practice 'Financial
Statements of Investment Trust Companies and Venture Capital Trusts' (issued
in July 2022 - "SORP") published by the Association of Investment Companies.
UNAUDITED BALANCE SHEET
AS AT 30 JUNE 2025
Unaudited Unaudited Audited
30 June 30 June 31 December
2025 2024 2024
Notes £000 £000 £000
ASSETS
Non-current assets at fair value through profit or loss
Financial assets at fair value through profit or loss 6 112,571 97,716 106,767
Other assets 1,144 - -
113,715 97,716 106,767
Current assets
Accrued income and other assets 1,015 936 1,651
Current asset investments 46,000 38,000 35,500
Cash at bank and other cash equivalents 21,912 26,440 17,627
68,927 65,376 54,778
LIABILITIES
Current liabilities
Trade and other payables (217) (198) (1,094)
Provisions for liabilities and charges 7 (298) - -
Net current assets 68,412 65,178 53,684
Net assets 182,127 162,894 160,451
Shareholders' equity
Share capital 36 30,855 31
Share premium account 29,444 53,681 -
Capital redemption reserve - 88 -
Other reserve 2 2 2
Merger reserve 217 217 217
Capital reserve 116,117 42,035 121,455
Investment holding gains and losses reserve 34,859 33,639 36,280
Revenue reserve 1,452 2,377 2,466
Total shareholders' equity 182,127 162,894 160,451
Net asset value per ordinary share 8 55.05p 57.50p 57.10p
Signed on behalf of the Board
Barbara Anderson
Chair
UNAUDITED STATEMENT OF CHANGES IN EQUITY
FOR THE SIX MONTHS ENDED 30 JUNE 2025
Investment
holding
Share gains and
Share premium Other reserves* Capital losses Revenue Total
capital account reserve reserve reserve equity
£000 £000 £000 £000 £000 £000 £000
At 31 December 2023 25,014 25,386 5,615 37,458 40,245 1,898 135,616
Revenue return for the period - - - - - 1,062 1,062
Expenses charged to capital - - - (890) - - (890)
Investment holding loss on investments held at fair value - - - - (1,104) - (1,104)
Realisation of investments in the period - - - 459 - - 459
Total comprehensive (expense) income for the period - - - (431) (1,104) 1,062 (473)
Issue of share capital 5,720 28,814 - 34,534
Issue of shares - DRIS 121 577 - - - - 698
Issue costs - (1,096) - - - - (1,096)
Purchase of own shares - - - (2,115) - - (2,115)
Dividends - - - (3,687) - (583) (4,270)
Total transactions with owners 5,841 28,295 - (5,802) - (583) 27,751
Transfer between reserves - - (5,308) 5,308 - - -
Realisation of prior year investment holding gains - - - 5,502 (5,502) - -
At 30 June 2024 30,855 53,681 307 42,035 33,639 2,377 162,894
Revenue return for the period - - - - - 899 899
Expenses charged to capital - - - (1,800) - - (1,800)
Investment holding gain on investments held at fair value - - - - 4,209 - 4,209
Realisation of investments in the period - - - (225) - - (225)
Taxation - - - 12 - (12) -
Total comprehensive (expense) income for the period - - - (2,013) 4,209 887 3,083
Issue of shares - DRIS 125 584 - - - - 709
Issue costs - (35) - - - - (35)
Reduction in nominal value (30,949) - - 30,949 - - -
Share premium cancellation - (54,230) (88) 54,318 - - -
Purchase of own shares - - - (1,971) - - (1,971)
Dividends - - - (3,431) - (798) (4,229)
Total transactions with owners (30,824) (53,681) (88) 79,865 - (798) (5,526)
Realisation of prior year investment holding gains - - - 1,568 (1,568) - -
At 31 December 2024 31 - 219 121,455 36,280 2,466 160,451
Revenue return for the period - - - - - 262 262
Expenses charged to capital - - - (1,321) - - (1,321)
Investment holding gain on investments held at fair value - - - - 2,719 - 2,719
Realisation of investments in the period - - - 59 - - 59
Taxation - - - 91 - (91) -
Total comprehensive (expense) income for the period - - - (1,171) 2,719 171 1,719
Issue of share capital 5 29,165 - 29,170
Issue of shares - DRIS - 1,213 - - - - 1,213
Issue costs - (934) - - - - (934)
Purchase of own shares - - - (1,720) - - (1,720)
Dividends - - - (6,587) - (1,185) (7,772)
Total transactions with owners 5 29,444 - (8,307) - (1,185) 19,957
Realisation of prior year investment holding gains - - - 4,140 (4,140) - -
At 30 June 2025 36 29,444 219 116,117 34,859 1,452 182,127
* Other reserves includes the capital redemption reserve, the merger reserve
and the other reserve, which are non-distributable.
RESERVES AVAILABLE FOR DISTRIBUTION
Under the Companies Act 2006, the capital reserve and the revenue reserve are
distributable reserves. The table below shows amounts that are available for
distribution.
Capital Revenue Total
reserve reserve
£000 £000 £000
Distributable reserves as above 116,117 1,452 117,569
Share capital and cancelled share premium not yet distributable (89,580) - (89,580)
Revaluation losses (3,187) - (3,187)
Income/proceeds not yet distributable (1,771) (945) (2,716)
Reserves available for distribution* 21,579 507 22,086
* Subject to filing the interim financial statements at Companies House.
The capital reserve and the revenue reserve are both distributable reserves.
These reserves total £117,569,000, representing a decrease of £6,352,000 in
the period since 31 December 2024. The directors consider the level of the
investment holding gains and losses reserve and the future
requirements of the Company when determining the level of dividend payments.
Of the potentially distributable reserves of £117,569,000 shown above,
£2,716,000 relates to income/proceeds not yet receivable, and revaluation
losses of £3,187,000 included within the investment holding gains and losses
reserve are not considered recoverable. In addition, £89,580,000 relates to
the 2024 cancellation of the Company's share premium and reduction in the
nominal value of share capital, which will become distributable from the dates
shown in the table below.
£000
1 January 2026 25,253
1 January 2027 29,523
1 January 2028 34,804
Total amount not yet distributable 89,580
UNAUDITED STATEMENT OF CASH FLOWS
FOR THE SIX MONTHS ENDED 30 JUNE 2025
Unaudited Unaudited Audited
6 months 6 months year
ended ended ended
30 June 30 June 31 December
2025 2024 2024
Notes £000 £000 £000
Profit (loss) before taxation* 1,719 (473) 2,610
Decrease in trade and other payables (877) (1,644) (748)
Decrease (increase) in accrued income and other assets 390 (178) (14)
Increase in provisions for liabilities and charges 298 - -
Gain on disposal of investments (59) (459) (234)
(Gain) loss on investments held at fair value (2,719) 1,104 (3,105)
Net cash outflow from operating activities (1,248) (1,650) (1,491)
Cash flows from (used in) investing activities
Purchase of financial assets at fair value through profit or loss 6 (7,666) (7,257) (15,127)
Proceeds from sale of financial assets at fair value through profit or loss 6 3,142 6,482 8,406
Deferred consideration 6 600 43 43
Net cash outflow from investing activities (3,924) (732) (6,678)
Cash flows from (used in) financing activities
Issue of ordinary shares 29,170 34,534 34,542
Costs of ordinary share issues** (934) (1,096) (1,131)
Purchase of own shares (1,720) (2,115) (4,086)
Dividends paid 4 (6,559) (3,572) (7,100)
Net cash inflow from financing activities 19,957 27,751 22,225
Net increase in cash and cash equivalents 14,785 25,369 14,056
Cash and cash equivalents at the beginning of the period 53,127 39,071 39,071
Cash and cash equivalents at the 67,912 64,440 53,127
end of the period
Cash and cash equivalents comprise
Money market funds 46,000 38,000 35,500
Cash at bank and other cash equivalents 21,912 26,440 17,627
Cash and cash equivalents at the end of the period 67,912 64,440 53,127
*Includes net income from:
Dividends - - 248
Interest 1,422 1,448 3,083
**Issue costs include both fundraising costs and expenses incurred from the
Company's DRIS.
EXPLANATORY NOTES TO THE UNAUDITED CONDENSED FINANCIAL STATEMENTS
1. GENERAL INFORMATION, BASIS OF PREPARATION, AND PRINCIPAL ACCOUNTING
POLICIES
These half-year statements have been approved by the directors whose names
appear at note 11, each of whom has confirmed that to the best of their
knowledge:
· the interim management report includes a fair review of the
information required by rules 4.2.7 and 4.2.8 of the Disclosure Rules and the
Transparency Rules; and
· the half-year statements have been prepared in accordance with
IAS 34 'Interim financial reporting' and the Disclosure and Transparency Rules
of the Financial Conduct Authority.
The half-year statements are unaudited and have not been reviewed by the
auditors pursuant to the International Standard on Review Engagements (UK and
Ireland) 2410 guidance on Review of Interim Financial Information performed by
the independent Auditor of the entity. They do not constitute full financial
statements as defined in section 435 of the Companies Act 2006. The
comparative figures for the year ended 31 December 2024 do not constitute full
financial statements and have been extracted from the Company's financial
statements for the year ended 31 December 2024. Those accounts were reported
upon without qualification by the auditors and have been delivered to the
Registrar of Companies.
The accounting policies and methods of computation followed in the half-year
statements are the same as those adopted in the preparation of the audited
financial statements for the year ended 31 December 2024. They do not include
all disclosures that would otherwise be required in a complete set of
financial statements and should be read in conjunction with the 2024 annual
report.
The accounts have been prepared on a going concern basis as set out below and
in accordance with UK adopted international accounting standards.
The accounts have been prepared under the historical cost basis as modified by
the measurement of investments at fair value through profit or loss.
The accounts have been prepared in compliance with the recommendations set out
in the Statement of Recommended Practice 'Financial Statements of Investment
Trust Companies and Venture Capital Trusts' issued by the Association of
Investment Companies (issued in July 2022 - "SORP") to the extent that they do
not conflict with UK adopted international accounting standards.
The financial statements are prepared in accordance with UK adopted
international accounting standards (International Financial Reporting
Standards ("IFRS") and International Accounting Standards ("IAS")) and
interpretations in force at the reporting date. New standards coming into
force during the year and future standards that come into effect after the
period-end have not had a material impact on these financial statements.
The Company has carried out an assessment of accounting standards, amendments
and interpretations that have been issued by the IASB and that are effective
for the current reporting period. The Company has determined that the
transitional effects of the standards do not have a material impact.
The financial statements are presented in sterling and all values are rounded
to the nearest thousand (£000), except where stated.
Going Concern: The directors have carefully considered the issue of going
concern and are satisfied that the Company has sufficient resources to meet
its obligations as they fall due for a period of at least 12 months from the
date these half-year statements were approved. As at 30 June 2025 the Company
held cash balances and money market funds with a combined value of
£67,912,000. Cash flow projections show the Company has sufficient funds to
meet both its contracted expenditure and its discretionary cash outflows in
the form of share buy-backs and the dividend policy. In the year ended 31
December 2024 the Company's costs and discretionary expenditures were:
£'000
Administrative expenses (before incentive fee) 3,247
Share buybacks 4,086
Dividends (before DRIS) 8,499
Total 15,832
The directors therefore believe that it is appropriate to continue to apply
the going concern basis of accounting in preparing these half-year statements.
2. INCOME
Unaudited Unaudited
6 months 6 months
ended ended
30 June 2025 30 June 2024
£000 £000
Income from investments
- Interest on loans to unquoted companies 75 71
- Dividends from unquoted companies 147 213
222 284
Interest on money market funds 950 921
Income from investments held at fair value through profit or loss 1,172 1,205
Interest on bank deposits 376 496
1,548 1,701
3. TAXATION
Unaudited 6 months ended Unaudited 6 months ended
30 June 2025 30 June 2024
Revenue Capital Total Revenue Capital Total
£000 £000 £000 £000 £000 £000
Profit (loss) before taxation 262 1,457 1,719 1,062 (1,535) (473)
Profit (loss) before taxation multiplied by the standard small company rate of 50 277 327 202 (292) (90)
corporation tax in UK of 19.0% (2024: 19.0%)
Effect of:
UK dividends received 41 - 41 (40) - (40)
Non-taxable (profits) losses on investments - (528) (528) - 123 123
Deferred tax not recognised - 160 160 (162) 169 7
Tax charge (credit) 91 (91) - - - -
The Company has no provided, or unprovided, deferred tax liability in either
period.
Deferred tax assets in respect of losses have not been recognised as the
directors do not currently believe that it is probable that sufficient taxable
profits will be available against which the assets can be recovered.
Due to the Company's status as a venture capital trust, and the continued
intention to meet the conditions required to comply with Chapter 3 Part 6 of
the Income Tax Act 2007, the Company has not provided deferred tax on any
capital gains or losses arising on the revaluation or
realisation of investments.
4. DIVIDENDS
Amounts recognised as distributions to equity holders in the period:
Unaudited six months ended Unaudited six months ended
30 June 2025 30 June 2024
Revenue Capital Total Revenue Capital Total
£000 £000 £000 £000 £000 £000
First interim dividend for the year ending 31 December 2025 of 1.50p (2024: 1,185 3,777 4,962 583 3,687 4,270
1.50p) per ordinary share
Special dividend for the year ending 31 December 2025 of 1.00p per ordinary - 2,810 2,810 - - -
share
1,185 6,587 7,772 583 3,687 4,270
Shares allotted under DRIS (1,213) (698)
Dividends paid in the Statement of Cash Flows 6,559 3,572
Audited year ended
31 December 2024
Revenue Capital Total
£000 £000 £000
First interim dividend for the year ended 31 December 2024 of 1.50p per 583 3,687 4,270
ordinary share
Second interim dividend for the year ended 31 December 2024 of 1.50p per 798 3,431 4,229
ordinary share
1,381 7,118 8,499
Shares allotted under DRIS (1,399)
Dividends paid in the Statement 7,100
of Cash Flows
The special dividend of 1.00 pence per ordinary share was paid on 27 January
2025 to shareholders on the register as at 27 December 2024.
The first interim dividend of 1.50 pence per ordinary share was paid on 23
June 2025 to shareholders on the register as at 23 May 2025.
A second interim dividend of 1.50p per ordinary share amounting to
approximately £5.0 million is proposed. This dividend has not been recognised
in these half-year financial statements as the obligation did not exist at the
balance sheet date.
5. BASIC AND DILUTED EARNING (LOSS) PER ORDINARY SHARE
The basic and diluted earnings (loss) per ordinary share is based on the
profit after tax attributable to equity shareholders of £1,719,000 (30 June
2024: loss of £473,000) and 311,829,500 (30 June 2024: 262,540,942) ordinary
shares being the weighted average number of ordinary shares in issue during
the period.
The basic and diluted revenue earnings per ordinary share is based on the
revenue profit attributable to equity shareholders of £171,000 (30 June 2024:
£1,062,000) and 311,829,500 (30 June 2024: 262,540,942) ordinary shares being
the weighted average number of ordinary shares in issue during the period.
The basic and diluted capital earnings (loss) per ordinary share is based on
the capital profit attributable to equity shareholders of £1,548,000 (30 June
2024: loss of £1,535,000) and 311,829,500 (30 June 2024: 262,540,942)
ordinary shares being the weighted average number of ordinary shares in issue
during the period.
During the period the Company allotted 50,774,434 new ordinary shares from the
fundraising, and 2,216,441 new ordinary shares in respect of its DRIS.
The Company has also repurchased 3,213,443 of its own shares in the period and
these shares are held in the capital reserve. The total of 31,984,406 treasury
shares has been excluded in calculating the weighted average number of
ordinary shares during the period.
The Company has no dilutive shares and consequently, basic and diluted
earnings per ordinary share are equivalent at 30 June 2025, 31 December 2024
and 30 June 2024.
6. FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS
30 June 2025 30 June 2024
£000 £000
Investment portfolio 111,626 96,178
Accrued income and other assets* 945 1,538
Financial assets at fair value through profit and loss 112,571 97,716
*Relates to accrued income not past due which has been disclosed as part of
the investment value.
IFRS 13, in respect of financial instruments that are measured in the balance
sheet at fair value, requires disclosure of fair value measurements by level
within the following fair value measurement hierarchy:
· Level 1: quoted prices in active markets for identical assets or
liabilities. The fair value of financial instruments traded in active markets
is based on quoted market prices at the balance sheet date. A market is
defined as a market in which transactions for the asset or liability take
place with sufficient frequency and volume to provide pricing information on
an ongoing basis. The quoted market price used for financial assets held by
the Company is the current bid price. These instruments are included in Level
1 and comprise money market funds classified as held at fair value through
profit or loss. The Company's current asset investments fall into this
category.
· Level 2: the fair value of financial instruments that are not
traded in an active market is determined by using valuation techniques. These
valuation techniques maximise the use of observable market data where it is
available and rely as little as possible on entity specific estimates. If all
significant inputs required to fair value an instrument are observable, the
instrument is included in Level 2. The Company held no such instruments in the
current or prior year.
· Level 3: the fair value of financial instruments that are not
traded in an active market (for example, investments in unquoted companies) is
determined by using valuation techniques such as revenue or earnings
multiples. If one or more of the significant inputs is not based on observable
market data, the instrument is included in Level 3. All of the Company's
investments classified as financial instruments classified at fair value
through profit and loss fall into this category.
Each investment is reviewed at least quarterly to ensure that it has not
ceased to meet the criteria of the level in which it was included at the
beginning of each accounting period. There have been no transfers between
these classifications in the period (2024: none). The change in fair value for
the current and previous year is recognised through profit or loss. All items
held at fair value through profit or loss were designated as such upon initial
recognition.
Valuation of Investments
Unquoted investments are valued in accordance with IFRS 13 "Fair Value
Measurement" and using the International Private Equity and Venture Capital
("IPEV") Valuation Guidelines ("the Guidelines").
Initial Measurement
The best estimate of the initial fair value of an unquoted investment is the
cost of the investment. Unless there are indications that this is
inappropriate, an unquoted investment will be held at this value within the
first three months of investment.
Subsequent Measurement
Based on the Guidelines we have identified six of the most widely used
valuation methodologies for unquoted investments. The Guidelines advocate that
the best valuation methodologies are those that draw on external, objective
market-based data in order to derive a fair value.
Full details of the methods used by the Company were set out on pages 66 and
67 of the financial statements for the year ended 31 December 2024, a copy of
which can be found at www.bscfunds.com (http://www.bscfunds.com) .
The primary methods used for valuing non-quoted investments, and the key
assumptions relating to them are:
Unquoted Investments
· Revenue multiple. An appropriate multiple, given the risk profile
and revenue growth prospects of the underlying company, is applied to the
revenue of the company. The multiple is adjusted to reflect any risk
associated with lack of marketability and to take account of the differences
between the investee company and the benchmark company or companies used to
derive the multiple.
· Earnings multiple. An appropriate multiple, given the risk
profile and earnings growth prospects of the underlying company, is applied to
the maintainable earnings of the company. The multiple is adjusted to reflect
any risk associated with lack of marketability and to take account of the
differences between the investee company and the benchmark company or
companies used to derive the multiple.
Movements in investments at fair value through profit or loss during the six
months to 30 June 2025 are summarised as follows:
IFRS 13 measurement classification Level 3
Unquoted
Investments
£000
Opening cost 69,273
Opening valuation gain 36,253
Opening fair value at 1 January 2025 105,526
Additions at cost 7,666
Disposal proceeds (4,312)
Net profit on disposals* 27
Change in fair value 4,404
Foreign exchange loss (1,685)
Closing fair value at 30 June 2025 111,626
Closing cost 76,794
Closing valuation gain 34,832
Closing fair value at 30 June 2025 111,626
*The net profit on disposal in the table above is £27,000 whereas that shown
in the Statement of Comprehensive Income is £59,000. The difference comprises
the change in the value of deferred proceeds totalling £32,000 in respect of
assets that have been disposed of and are not included in the investment
portfolio at 1 January 2025.
Level 3 valuations include assumptions based on non-observable data, such as
discounts applied either to reflect changes in the fair value of financial
assets held at the price of recent investment, or to adjust revenue or
earnings multiples.
IFRS13 requires disclosure, by class of financial instruments, if the effect
of changing one or more inputs to reasonably possible alternative assumptions
would result in a significant change to the fair value measurement. Each
unquoted portfolio company has been reviewed in order to identify the
sensitivity of the valuation methodology to using alternative assumptions,
which still fall within the IPEV Guidelines. Where discounts have been applied
(for example to revenue/earnings levels or multiple ratios) alternatives have
been considered. For each unquoted investment, two scenarios have been
modelled, principally a 5 per cent change to discount rates, although other
factors were considered on an individual portfolio company basis: more prudent
assumptions (downside case) and more optimistic assumptions (upside case).
Applying the downside case, the value of the unquoted investments would be
£4.2 million or 3.7 per cent lower (2024: £4.0 million or 4.1 per cent
lower). Using the upside case, the value would be increased by £4.3 million
or 3.8 per cent (2024: £4.1 million or 4.3 per cent).
All of the Company's investments are in unquoted companies held at fair value.
The valuation methodology for these investments includes the application of
externally produced revenue and earnings multiples. Therefore, the value of
the unquoted element of the portfolio is also indirectly affected by price
movements on the listed market. Those using revenue and earnings multiple
methodologies include judgements regarding the level of discount applied to
that multiple. The effect of changing the level of discounts applied to the
multiples is considered above.
There have been no individual fair value adjustments downwards during the
period that exceeded 5 per cent of the total assets of the Company (31
December 2024: none).
The following disposals took place during the period.
Opening Profit
carrying over
Net value as at opening
proceeds 1 January carrying
from sale Cost 2025 value
£000 £000 £000 £000
Unquoted investments
ACC Aviation Group Limited 4,312 145 4,285 27
Total from portfolio 4,312 145 4,285 27
Traveltek Group Holdings Limited 32 - - 32
Deferred consideration 32 - - 32
Total from investment portfolio* 4,344 145 4,285 59
* The total from disposals in the table above is £4,344,000 whereas that
shown in the Statement of Cash Flows is £3,742,000. This is due to the timing
differences between the recognition of the deferred income arising on
realisations and its receipt in cash.
7. PROVISIONS FOR LIABILITIES AND CHARGES
Incentive Fee
Under the terms of the Subscription Rights Agreement, the Manager and Chord
Capital are entitled to a performance-related incentive fee if the year-end
share price total return* exceeds a Hurdle. The Hurdle for the year ending 31
December 2025 is 143.800 pence per ordinary share, representing a return of
2.0 per cent over the closing share price at the end of the prior year.
The incentive fee payable is 20 per cent of returns per share in excess of the
Hurdle, multiplied by the number of ordinary shares issued. Based on the net
asset value per share at 30 June 2025, the Company estimates that the share
price total return will increase to 144.250 pence per ordinary share. At this
level, the Hurdle would be exceeded and a fee of £298,000 would be due. As
such, this amount has been accrued at 30 June 2025. Any incentive fee
ultimately paid is calculated on the actual share price total return at
year-end, as defined below, and not on the estimated level.
*Share price total return for the purposes of the performance incentive fee
means cumulative dividends per ordinary share paid or payable as at the last
business day of December in any year, plus the average of the middle market
price per ordinary share of the five dealing days prior to that day.
8. BASIC AND DILUTED NET ASSET VALUE PER ORDINARY SHARE
The basic and diluted net asset value per ordinary share is calculated on
attributable assets of £182,127,000 (30 June 2024 and 31 December 2024:
£162,894,000 and £160,451,000 respectively) and 330,808,564 (30 June 2024
and 31 December 2024: 283,400,383 and 281,031,132 respectively) ordinary
shares in issue at 30 June 2025.
Treasury shares have been excluded in calculating the number of ordinary
shares in issue at 30 June 2025.
The Company has no potentially dilutive shares and consequently, basic and
diluted net asset values are equivalent at 30 June 2025, 31 December 2024 and
30 June 2024.
9. TOTAL RETURN
Total Return per ordinary share is calculated on cumulative dividends paid of
91.75 pence per ordinary share (30 June 2024: 87.75 pence per ordinary share
and 31 December 2024: 89.25 pence per ordinary share) plus the net asset value
as calculated in note 8.
10. POST BALANCE SHEET EVENTS
Subsequent to the period end the Company has invested an aggregate £3.8
million into new investment DynaRisk and portfolio companies Panintelligence,
Fuuse and AutomatePro.
Following the period end, the sale of the trade and liabilities of Wooshii was
completed; no proceeds were received on exit, although there is the potential
for a small return for the Company depending on future trading.
11. DIRECTORS
The directors of the Company are Barbara Anderson, Arif Ahmed and Roger
McDowell.
12. OTHER INFORMATION
Copies of the interim report can be obtained from the Company's registered
office: 4th Floor, 2 Bond Court, Leeds, LS1 2JZ or from www.bscfunds.com
(http://www.bscfunds.com) .
13. INTERIM DIVIDEND FOR THE YEAR ENDING 31 DECEMBER 2025
The directors are pleased to announce the payment of a second interim dividend
for the year ending 31 December 2025 of 1.50 pence per ordinary share
("Interim Dividend").
The Interim Dividend will be paid on 31 October 2025 to those shareholders on
the Company's register at the close of business on 26 September 2025. The
ex-dividend date will be 25 September 2025.
14. DIVIDEND RE-INVESTMENT SCHEME ("DRIS")
The Company operates a DRIS. The latest date for receipt of DRIS elections
so as to participate in the DRIS in respect of the Interim Dividend is the
close of business on 17 October 2025.
15. INSIDE INFORMATION
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.
For further information, please contact:
Marcus Karia YFM Equity Partners
Tel: 0113 244 1000
Alex Collins Panmure
Liberum Tel:
0207 886 2767
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