REG - British Smaller Co's - Half-year Report
29/11/2024 09:00
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RNS Number : 1849O British Smaller Companies VCT PLC 29 November 2024
British Smaller Companies VCT plc
Unaudited Interim Results and Interim Management Report
for the six months ended 30 September 2024
British Smaller Companies VCT plc (the "Company") today announces its
unaudited interim results for the six months ended 30 September 2024.
HIGHLIGHTS
· Net Asset Value ("NAV") at 30 September 2024 of 81.8p per share (31
March 2024: 83.6p) following payment of 2.0p dividend during the period
· Total Return increased by 0.2p to 262.7p per share
· Four new investments and seven follow-on investments totalling £20.4
million completed during the period
· The Board has declared a second interim dividend of 2.0p per
share in respect of the year ending 31 March 2025, which will bring total
dividends paid in the current financial year to 4.0p per share, which equates
to 4.8 per cent of the opening net asset value per share. This will result in
a corresponding reduction in the Company's NAV per ordinary share, adjusting
the last reported NAV to 79.8p per share
· Combined applications exceeding £52 million received to date in
relation to October 2024 offer
Chairman's Statement
I am pleased to present the interim results of British Smaller Companies VCT
plc (the "Company") for the six months to 30 September 2024.
The performance in the period reflects the Company's positive progress despite
ongoing macroeconomic challenges and geopolitical uncertainty, achieving a
Total Return of 0.2 pence from 262.5 to 262.7 pence per share, an increase of
0.2 per cent over the opening NAV. AIC data continues to rank the Company
first across all generalist VCTs when considering a blended average
performance ranking over 1, 3, 5, and 10 years.
The majority of the portfolio continues to perform well, with promising levels
of underlying growth seen in many companies. However, performance in the
quarter was constrained by certain company-specific circumstances that have
reduced valuations in these companies, as well as a decrease in anticipated
deferred proceeds the Company expects to receive from previously exited
investments.
Over the past six months, the Company completed four new investments to the
portfolio, Fuuse, Spotless Water, Integrum ESG and Ohalo, totalling £8.6
million. The Company also made seven follow-on investments, totalling £11.8
million, while a further £0.5 million was invested after the period-end,
taking the total invested so far this year to £20.9 million.
Realisations in the Period
While there were no realisations in the six months to 30 September, in October
2024 the Company sold its investment in Traveltek for £2.6 million. Total
proceeds over the life of the investment are £3.6 million, a 2.1x return on
the Company's cost. There is the potential for further deferred proceeds in
due course.
Financial Results
The investment portfolio generated a return of £0.1 million in the period.
This was offset by a fall of £0.7 million in the anticipated deferred
proceeds from realisations completed in previous periods.
In the current interest rate environment, the Company continues to actively
manage its treasury position to generate a positive return for shareholders,
balanced against the primary objective of capital preservation. This
generated £2.6 million of income in the period, resulting in overall net
operating income of £0.9 million over the six months.
The movement in net asset value ("NAV") per ordinary share and the dividends
paid are set out in the table below.
Pence per £000
ordinary share
NAV at 31 March 2024 83.6p 219,600
Net movement from investment portfolio (0.2p) (612)
Net operating income 0.3p 876
Comprehensive income in the period 0.1p 264
Issue/buy-back of new shares 0.1p 32,991
Total Return in the period 0.2p 33,255
NAV before the payment of dividends 83.8p 252,855
Dividends paid (2.0p) (6,046)
NAV at 30 September 2024 81.8p 246,809
Cumulative dividends paid 180.9p
Total Return: At 30 September 2024 262.7p
At 31 March 2024 262.5p
Dividends
An interim dividend of 2.0 pence per ordinary share in respect of the year
ending 31 March 2025 was paid on 26 July 2024, bringing the cumulative
dividends paid to date to 180.9 pence per ordinary share.
The Board has announced a second interim dividend of 2.0 pence per ordinary
share for the year ending 31 March 2025 which, when combined with the above
dividend, will bring total dividends paid in the current financial year to 4.0
pence per ordinary share (2024: 4.0 pence per ordinary share). The dividend
will be paid on 20 December 2024 to shareholders on the shareholder register
on 22 November 2024.
Shareholder Relations
The shareholder workshop held on 20 June 2024 was very well attended.
Attendees heard from Steve Frost, CEO of Workbuzz, and Scott Morris, Managing
Director of Displayplan, an investment that was sold earlier this year.
Documents such as the annual report are now received electronically by 84 per
cent of shareholders, which helps to meet the Board's impact objectives and
reduces printing costs. The Board continues to encourage all shareholders to
take up this option.
The Company's website is refreshed on a regular basis and provides a
comprehensive level of information in what I hope is a user-friendly format.
Regulatory Developments
During the period, the process of extending the Venture Capital Trust regime
to 2035 was completed by the Government, with the underlying regulations
brought into force. As part of the Budget on 30 October 2024, Chancellor
Rachel Reeves noted this extension as a sign of the Government's commitment to
supporting growth and entrepreneurship.
Most new portfolio investments are now self-assured as VCT qualifying on a
case-by-case basis and always with confirmation from professional advisers
that they are Qualifying Investments. Advance assurance is sought from HMRC
where there is an element of uncertainty over the application of the rules.
Fundraising
On 3 April 2024 the Company allotted shares from the final allotment of its
fully subscribed 2023/24 share offer. £55.5 million was raised over the whole
fundraising by the Company, including £36.8 million allotted on 3 April 2024,
resulting in the issue of 42,588,037 ordinary shares.
Having assessed its expected cash requirements, the Company announced a new
share offer on 17 October 2024, alongside British Smaller Companies VCT2 plc,
with the intention of raising up to £75 million (in aggregate), which
includes an over-allotment facility of £25 million. Applications exceeding
£52 million have been received as of the date of this report, of which £31.5
million relate to the Company. The allotment of the first £25 million of
gross proceeds will take place between 27 and 31 January 2025. The second and
final allotment will take place between 1 and 4 April 2025. Funds awaiting
allotment will receive additional shares equivalent to a 3.35 per cent per
annum return (rate subject to change by the receiving agent's banking
provider).
Outlook
There continues to be strong levels of underlying growth in the portfolio,
across a range of investments. The Company took the opportunity to invest
further into many of these companies in the period to accelerate their growth,
which is hoped will come through to value in subsequent periods.
With four new investments made in the year to date, and a pipeline of
opportunities to add further to the portfolio, there continues to be
opportunities to deploy capital into fast-growing, innovative businesses.
The positive progress of the 2024/25 fundraising to date will ensure that the
Company continues to have the firepower to support these opportunities.
I thank shareholders for their continued support.
Rupert Cook
Chairman
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
buybacks.
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 September 2024 the Company's portfolio was valued at £147.1 million.
The top ten investments represent 35.5 per cent of the net asset value, with
the largest representing 9.1 per cent.
The movements in the investment portfolio are set out below:
Investment Portfolio
Portfolio
£million
Opening fair value at 1 April 2024 126.6
Additions 20.4
Gain arising from the investment portfolio 0.1
Closing fair value at 30 September 2024 147.1
The Company's portfolio delivered a small positive performance overall over
the period, of £0.1 million. This was offset by a fall of £0.7 million in
the anticipated deferred proceeds from realisations completed in previous
periods.
There were upward revaluations from ACC, Unbiased, Summize, Teraview,
AutomatePro, Vypr, Plandek and Xapien, offset by decreases from Matillion,
Outpost and Wooshii.
Realisation of Investments
There were no disposals during the period. Subsequent to the period-end, the
Company sold its investment in Traveltek for £2.6 million. Total proceeds
over the life of the investment are £3.6 million, a 2.1x return on the
Company's cost. There is the potential for further deferred proceeds in due
course.
Investments
During the six months ended 30 September 2024, the Company completed 11
investments, totalling £20.4 million. This comprised four new investments of
£8.6 million; and seven follow-on investments totalling £11.8 million. The
breakdown of these investments is shown below:
Company Description New Follow-on Total
£million £million £million
Fuuse Electric vehicle charge point management system 3.0 - 3.0
Spotless Water Ultra-pure water distribution network 2.2 - 2.2
Integrum ESG A specialist ESG ratings and analytics platform 1.7 - 1.7
Ohalo Unstructured data governance platform 1.7 - 1.7
Xapien Automated research on individuals and companies - 4.4 4.4
Quality Clouds B2B software - 1.9 1.9
AutomatePro Automated software testing - 1.8 1.8
Plandek Software development analytics platform - 1.5 1.5
SharpCloud B2B - 0.8 0.8
Biorelate Medical data curation - 0.7 0.7
Summize An e-learning software authoring platform - 0.7 0.7
Invested in the period 8.6 11.8 20.4
Subsequent to the period-end, the Company invested £0.5 million into existing
portfolio companies Wooshii and Relative Insight.
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 at Tier 1 Financial Institutions (A2
rated or above). £2.6 million of income was earned from money market funds
and bank deposits during the period. At 31 October 2024, the Company was
achieving a weighted average return on liquid assets of 4.5 per cent.
Portfolio
The top 10 investments had a combined value of £87.6 million, 59.6 per cent
of the total portfolio.
Name of company Sector First Amount invested Value at Recognised income/ Return
investment 30 Sept proceeds to date*
2024 to date
£000 £000 £000 £000
Matillion Limited Data Nov 16 2,666 22,460 7,071 29,531
Unbiased Ec1 Limited Tech-enabled Services Dec 19 5,596 13,722 - 13,722
Outpost VFX Limited New Media Feb 21 5,750 7,553 103 7,656
Xapien (via Digital Insight Technologies Limited) Application Software Mar 23 6,095 6,896 - 6,896
SharpCloud Software Limited Data Oct 19 4,380 6,662 - 6,662
ACC Aviation Group Limited Business Services Nov 14 2,068 6,395 5,280 11,675
Elucidat Ltd Application Software May 19 4,260 6,061 498 6,559
Vypr Validation Technologies Limited Tech-enabled Services Jan 21 3,300 6,020 - 6,020
Force24 Ltd Application Software Nov 20 3,900 5,946 87 6,033
Quality Clouds Limited Cloud & DevOps May 22 5,821 5,840 - 5,840
Total top 10 investments 43,836 87,555 13,039 100,594
AutomatePro Limited Cloud & DevOps Dec 22 4,025 5,763 - 5,763
Plandek Limited Cloud & DevOps Oct 22 3,540 4,196 - 4,196
Summize Limited Application Software Oct 22 2,550 4,036 - 4,036
Workbuzz Analytics Limited Application Software Jun 23 2,577 3,617 - 3,617
DrDoctor (via ICNH Ltd) Application Software Feb 23 3,565 3,565 - 3,565
Tonkotsu Limited Retail & Brands Jun 19 2,388 3,472 - 3,472
Traveltek Group Holdings Limited Application Software Oct 16 1,716 3,224 1,049 4,273
Fuuse Limited Application Software May 24 3,000 3,000 - 3,000
GEEIQ (via Checkpoint GG Limited) Data Sep 23 2,358 2,979 - 2,979
Wooshii Limited New Media May 19 4,644 2,569 781 3,350
Vuealta Holdings Limited Tech-enabled Services Sep 21 3,580 2,458 4,646 7,104
Spotless Water Limited Business Services Jun 24 2,183 2,414 - 2,414
Biorelate Limited Application Software Nov 22 2,310 2,367 - 2,367
Frescobol Carioca Ltd Retail & Brands Mar 19 1,800 2,199 - 2,199
Ohalo Limited Data Jun 24 1,665 1,790 - 1,790
Integrum ESG Limited Data Sep 24 1,740 1,740 - 1,740
Panintelligence (via Paninsight Limited) Data Nov 19 1,500 1,652 - 1,652
Relative Insight Limited Tech-enabled Services Mar 22 4,200 1,450 - 1,450
Arcus Global Limited Application Software May 18 3,075 1,410 339 1,749
KeTech Technology Holdings Limited Tech-enabled Services Nov 15 2,000 1,137 4,059 5,196
Teraview Limited Advanced Manufacturing Dec 11 377 1,100 - 1,100
£1 million and below 10,295 3,372 6,816 10,188
Current portfolio 108,924 147,065 30,729 177,794
Full disposals to date 80,135 - 166,934 166,934
Total portfolio 189,059 147,065 197,663 344,728
* represents recognised income and proceeds received to date, plus the
unrealised valuation at 30 September 2024.
THE PORTFOLIO AT A GLANCE
The charts on page 13 of the interim report illustrate the broad range of the
investment portfolio.
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 March 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:
> VCT Qualifying Status;
> Economic;
> Investment Performance;
> Strategy;
> Legislative & Regulatory;
> Operational;
> Cyber Security and Information Technology; and
> Liquidity.
Full details of the principal risks can be found in the financial statements
for the year ended 31 March 2024 on pages 31 to 33, a copy of which is
available at www.bscfunds.com.
Directors' Responsibilities Statement
The directors of British Smaller Companies VCT 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 VCT 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 VCT plc are listed in note 10 of
these interim financial statements.
By order of the Board
Rupert Cook
Chairman
Unaudited Statement of Comprehensive Income
for the six months ended 30 September 2024
Notes Unaudited 6 months ended Unaudited 6 months ended
30 September 2024 30 September 2023
Revenue Capital Total Revenue Capital Total
£000 £000 £000 £000 £000 £000
Gains on investments held at fair value 6 - 50 50 - 2,280 2,280
(Loss) profit on disposal of investments 6 - (662) (662) - 96 96
(Loss) gain arising from the investment portfolio - (612) (612) - 2,376 2,376
Income 2 3,084 - 3,084 1,629 - 1,629
Total income 3,084 (612) 2,472 1,629 2,376 4,005
Administrative expenses:
Manager's fee (446) (1,338) (1,784) (367) (1,100) (1,467)
Other expenses (424) - (424) (359) - (359)
(870) (1,338) (2,208) (726) (1,100) (1,826)
Profit (loss) before taxation 2,214 (1,950) 264 903 1,276 2,179
Taxation 3 - - - - - -
Profit (loss) for the period 2,214 (1,950) 264 903 1,276 2,179
Total comprehensive income (expense) for the period 2,214 (1,950) 264 903 1,276 2,179
Basic and diluted earnings (loss) per ordinary share 5 0.73p (0.64p) 0.09p 0.38p 0.53p 0.91p
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 September 2024
Notes Unaudited Unaudited Audited
30 September 30 September 31 March
2024 2023 2024
£000 £000 £000
ASSETS
Non-current assets at fair value through profit or loss
Investments 6 149,569 130,293 128,662
Listed investment funds - 3,620 -
Financial assets at fair value through profit or loss 6 149,569 133,913 128,662
Accrued income and other assets - 1,891 -
149,569 135,804 128,662
Current assets
Accrued income and other assets 940 825 1,382
Current asset investments 66,750 32,500 53,500
Cash and cash equivalents 29,805 29,635 36,304
97,495 62,960 91,186
LIABILITIES
Current liabilities
Trade and other payables (255) (200) (248)
Net current assets 97,240 62,760 90,938
Net assets 246,809 198,564 219,600
Shareholders' equity
Share capital 33,226 26,452 28,830
Share premium account 90,648 41,586 58,293
Capital reserve 69,334 75,609 79,171
Investment holding gains and losses reserve 49,257 52,397 49,207
Revenue reserve 4,344 2,520 4,099
Total shareholders' equity 246,809 198,564 219,600
Net asset value per ordinary share 7 81.8p 82.4p 83.6p
Unaudited Statement of Changes in Equity
for the six months ended 30 September 2024
Share Share Capital Investment Revenue Total
capital premium reserve holding reserve equity
account gains and
losses
reserve
£000 £000 £000 £000 £000 £000
At 31 March 2023 20,969 1,700 82,893 49,215 2,255 157,032
Revenue return for the period - - - - 903 903
Expenses charged to capital - - (1,100) - - (1,100)
Investment holding gain on investments held at fair value - - - 2,280 - 2,280
Realisation of investments in the period - - 96 - - 96
Total comprehensive (expense) income for the period - - (1,004) 2,280 903 2,179
Issue of share capital 5,356 40,893 - - - 46,249
Issue of shares - DRIS 127 911 - - - 1,038
Issue costs - (1,918) - - - (1,918)
Purchase of own shares - - (1,200) - - (1,200)
Dividends - - (4,178) - (638) (4,816)
Total transactions with owners 5,483 39,886 (5,378) - (638) 39,353
Realisation of prior year investment holding losses - - (902) 902 - -
At 30 September 2023 26,452 41,586 75,609 52,397 2,520 198,564
Revenue return for the period - - - - 1,579 1,579
Expenses charged to capital - - (1,284) - - (1,284)
Investment holding gain on investments held at fair value - - - 3,765 - 3,765
Realisation of investments in the period - - 4,379 - - 4,379
Total comprehensive income for the period - - 3,095 3,765 1,579 8,439
Issue of share capital 2,256 16,344 - - - 18,600
Issue of shares - DRIS 122 858 - - - 980
Issue costs - (495) - - - (495)
Purchase of own shares - - (1,669) - - (1,669)
Dividends - - (4,819) - - (4,819)
Total transactions with owners 2,378 16,707 (6,488) - - 12,597
Realisation of prior year investment holding gains - - 6,955 (6,955) - -
At 31 March 2024 28,830 58,293 79,171 49,207 4,099 219,600
Revenue return for the period - - - - 2,214 2,214
Expenses charged to capital - - (1,338) - - (1,338)
Investment holding gain on investments held at fair value - - - 50 - 50
Realisation of investments in the period - - (662) - - (662)
Total comprehensive (expense) income for the period - - (2,000) 50 2,214 264
Issue of share capital 4,259 32,584 - - - 36,843
Issue of shares - DRIS 137 981 - - - 1,118
Issue costs - (1,210) - - - (1,210)
Purchase of own shares - - (3,760) - - (3,760)
Dividends - - (4,077) - (1,969) (6,046)
Total transactions with owners 4,396 32,355 (7,837) - (1,969) 26,945
At 30 September 2024 33,226 90,648 69,334 49,257 4,344 246,809
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 69,334 4,344 73,678
Income/proceeds not yet distributable (341) (2,564) (2,905)
Cancelled share premium not yet distributable (33,612) - (33,612)
Reserves available for distribution* 35,381 1,780 37,161
* subject to filing these interim financial statements at Companies House.
The capital reserve and the revenue reserve are both distributable reserves.
These reserves total £73,678,000, representing a decrease of £9,592,000 in
the period since 31 March 2024. The directors also 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 £73,678,000 shown above,
£2,905,000 relates to income and proceeds not yet distributable and
£33,612,000 relates to cancelled share premium which becomes distributable
from the dates shown below.
Total share premium cancelled is available for distribution from the
following dates:
£000
1 April 2025 32,128
1 April 2026 1,484
Cancelled share premium account not yet distributable 33,612
Unaudited Statement of Cash Flows
for the six months ended 30 September 2024
Notes Unaudited Unaudited Audited
6 months 6 months year ended
ended ended 31 March
30 September 30 September 2024
2024 2023 £000
£000 £000
Profit before taxation* 264 2,179 10,618
Increase (decrease) in trade and other payables 7 (158) (110)
Increase in accrued income and other assets (654) (599) (732)
Loss (profit) on disposal of investments 662 (96) (4,475)
Gains on investments held at fair value (50) (2,280) (6,045)
Net cash inflow (outflow) from operating activities 229 (954) (744)
Cash flows (used in) from investing activities
Purchase of financial assets at fair value through profit or loss 6 (20,423) (6,039) (9,390)
Proceeds from sale of financial assets at fair value through profit or loss 6 - 1,508 19,625
Deferred consideration - - 96
Net cash (outflow) inflow from investing activities (20,423) (4,531) 10,331
Cash flows from (used in) financing activities
Issue of ordinary shares 36,843 46,249 64,849
Costs of ordinary share issues** (1,210) (1,918) (2,413)
Purchase of own shares (3,760) (1,200) (2,869)
Dividends paid 4 (4,928) (3,778) (7,617)
Net cash inflow from financing activities 26,945 39,353 51,950
Net increase in cash and cash equivalents 6,751 33,868 61,537
Cash and cash equivalents at the beginning of the period 89,804 28,267 28,267
Cash and cash equivalents at the end of the period 96,555 62,135 89,804
Cash and cash equivalents comprise
Money market funds 66,750 32,500 53,500
Cash at bank 29,805 29,635 36,304
Cash and cash equivalents at the end of the period 96,555 62,135 89,804
* includes net income from:
Dividends - - 341
Interest 2,423 948 2,899
**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 10, 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)
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 March 2024 do not constitute full
financial statements and have been extracted from the Company's financial
statements for the year ended 31 March 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 March 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 (IFRSs) and interpretations in force at the
reporting date. New standards coming into force during the period 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 twelve months from
the date these half year statements were approved. As at 30 September 2024 the
Company held cash balances and money market funds with a combined value of
£96,555,000. 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 for at least 12 months
from the date of publication of this report. In the year ended 31 March 2024
the Company's costs and discretionary expenditures were:
£000
Administrative expenses 3,947
Share buybacks 2,869
Dividends (before DRIS) 9,635
Total 16,451
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 September 30 September
2024 2023
£000 £000
Income from investments
- Interest on loans to unquoted companies 137 103
- Dividends from unquoted companies 323 243
Income from unquoted portfolio 460 346
Income from listed investment funds - 62
Income from investments held at fair value through profit or loss 460 408
Interest on bank deposits/money market funds 2,624 1,221
3,084 1,629
3 Taxation
Unaudited 6 months ended Unaudited 6 months ended
30 September 2024 30 September 2023
Revenue Capital Total Revenue Capital Total
£000 £000 £000 £000 £000 £000
Profit (loss) before taxation 2,214 (1,950) 264 903 1,276 2,179
Profit (loss) before taxation multiplied by the standard small company rate of 421 (371) 50 172 242 414
corporation tax in UK of 19.0% (2023: 19.0%)
Effect of:
UK dividends received (61) - (61) (47) - (47)
Non-taxable losses (gains) on investments - 116 116 - (451) (451)
Deferred tax not recognised (360) 255 (105) (125) 209 84
Tax charge - - - - - -
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 Unaudited Audited
6 months ended 6 months ended Year ended
30 September 2024 30 September 2023 31 March 2024
Revenue Capital Total Revenue Capital Total Revenue Capital Total
£000 £000 £000 £000 £000 £000 £000 £000 £000
Interim dividend for the year ending 31 March 2025 of 2.0p (2024: 2.0p) per 1,969 4,077 6,046 638 4,178 4,816 638 4,178 4,816
ordinary share
Second interim dividend for the year ended 31 March 2024 of 2.0p per ordinary - - - - - - - 4,819 4,819
share
1,969 4,077 6,046 638 4,178 4,816 638 8,997 9,635
Proceeds from shares allotted under DRIS (1,118) (1,038) (2,018)
Dividends paid in the Statement of Cash Flows 4,928 3,778 7,617
The interim dividend of 2.0 pence per ordinary share was paid on 26 July 2024
to shareholders on the register as at 28 June 2024.
A second interim dividend of 2.0p per ordinary share, amounting to
approximately £6.0 million, has been announced. 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 Earnings per Ordinary Share
The basic and diluted earnings per ordinary share is based on the profit after
tax attributable to equity shareholders of £264,000 (30 September 2023:
£2,179,000) and 303,413,390 (30 September 2023: 240,246,488) 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 £2,214,000 (30
September 2023: £903,000) and 303,413,390 (30 September 2023: 240,246,488)
ordinary shares being the weighted average number of ordinary shares in issue
during the period.
The basic and diluted capital (loss) earnings per ordinary share is based on
the capital loss attributable to equity shareholders of £1,950,000 (30
September 2023: profit of £1,276,000) and 303,413,390 (30 September 2023:
240,246,488) ordinary shares being the weighted average number of ordinary
shares in issue during the period.
During the period the Company allotted 42,588,037 new ordinary shares in
respect of the 2023/24 fundraising and 1,369,910 new ordinary shares in
respect of its DRIS.
The Company has also repurchased 4,725,559 of its own shares in the period and
these shares are held in the capital reserve. The total of 30,363,980 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 September 2024, 31 March 2024
and 30 September 2023.
6 Financial Assets at Fair Value through Profit or
Loss
30 September 2024 30 September 2023
£000 £000
Investment portfolio 147,065 133,913
Accrued income and other assets* 2,504 -
Financial assets at fair value through profit and loss 149,569 133,913
* Relates to accrued income which is not past due which has been disclosed as
part of the investment value. Prior year income was not included as it was not
material.
IFRS 13 and IFRS 7, in respect of financial instruments that are measured in
the balance sheet at fair value, require 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. The Company held no such investments at 30 September
2024.
> 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 earnings or
revenue 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 fall into this category at 30 September 2024.
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 (2023: 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 March 2024, a copy of
which can be found at 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 September 2024 are summarised as follows:
IFRS 13 measurement classification Level 3
Unquoted
Investments
£000
Opening cost 77,385
Opening valuation gain 49,207
Opening fair value at 1 April 2024 126,592
Additions at cost 20,423
Net loss on disposals* -
Change in fair value 1,614
Foreign exchange loss (1,564)
Closing fair value at 30 September 2024 147,065
Closing cost 97,808
Closing valuation gain 49,257
Closing fair value at 30 September 2024 147,065
* The net loss on disposals in the table above is £nil whereas that shown in
the Statement of Comprehensive Income is a loss of £662,000. The difference
comprises the change in anticipated deferred proceeds in respect of assets
which have been disposed of in prior periods and were not included in the
portfolio at 1 April 2024.
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 fair value measurement. Each unquoted
portfolio company has been reviewed and both downside and upside alternative
assumptions have been identified and applied to the valuation of each of the
unquoted investments. Applying the downside alternative, the value of the
unquoted investments would be £6,257,000 (4.3 per cent) lower. Using the
upside alternative, the value would be increased by £6,414,000 (4.4 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 March
2024: none).
There were no disposals during the period.
7 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 £246,809,000 (30 September 2023 and 31 March 2024:
£198,564,000 and £219,600,000 respectively) and 301,891,749 (30 September
2023 and 31 March 2024: 240,991,484 and 262,659,361 respectively) ordinary
shares in issue at 30 September 2024.
The treasury shares have been excluded in calculating the number of ordinary
shares in issue at 30 September 2024.
The Company has no potentially dilutive shares and consequently, basic and
diluted net asset values are equivalent at 30 September 2024, 31 March 2024
and 30 September 2023.
8 Total Return
Total Return per ordinary share is calculated on cumulative dividends paid of
180.9 pence per ordinary share (30 September 2023: 176.9 pence per ordinary
share and 31 March 2024: 178.9 pence per ordinary share) plus the net asset
value as calculated in note 7.
9 Post Balance Sheet Events
Subsequent to the period-end the Company invested £0.5 million into existing
portfolio companies Wooshii and Relative Insight.
In October 2024 the Company sold its investment in Traveltek for £2.6
million. Total proceeds over the life of the investment are £3.6 million, a
2.1x return on the Company's cost. There is the potential for further deferred
proceeds in due course.
10 Directors
The directors of the Company are Rupert Cook, Adam Bastin, Jonathan Cartwright
and Purvi Sapre.
11 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 March 2025
The directors have previously announced the payment of a second interim
dividend for the year ending 31 March 2025 of 2.0 pence per ordinary share
("Interim Dividend").
The Interim Dividend will be paid on 20 December 2024 to those shareholders on
the Company's register at the close of business on 22 November 2024. The
ex-dividend date will be 21 November 2024.
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 6 December 2024.
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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