REG-Unaudited half-yearly financial report for the six months ended 30 September 2025
20/11/2025 15:15
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20 November 2025
Northern 2 VCT PLC
Half-yearly financial report for the six months ended 30 September 2025
Northern 2 VCT PLC is a Venture Capital Trust (VCT) managed by Mercia Fund
Management Limited. It invests mainly in unquoted venture capital holdings and
aims to provide long-term tax-free returns to shareholders through a
combination of dividend yield and capital growth.
Financial highlights:
Unaudited six months ended Unaudited six months ended Audited year ended
30 September 30 September 31 March
2025 2024 2025
Net assets £138.4m £127.5m £128.1m
Net asset value per share 57.7p 57.2p 58.3p
Return per share
Revenue 0.2p 0.2p 0.5p
Capital 0.7p 0.8p 3.3p
Total 0.9p 1.0p 3.8p
Dividend per share declared in respect of the period 1.7p 1.7p 3.0p
Cumulative return to shareholders since launch
Net asset value per share 57.7p 57.2p 58.3p
Dividends paid per share* 143.3p 140.3p 142.0p
Net asset value plus dividends paid per share 201.0p 197.5p 200.3p
Mid-market share price at end of period 54.5p 55.0p 53.5p
Share price discount to net asset value 5.5% 3.8% 8.2%
Annualised tax-free dividend yield (based on net asset value per share)** 5.1% 5.0% 5.2%
* Excluding interim dividend not yet paid.
** The dividend yield is calculated by dividing the dividends
declared in the 12 month period ended on each reference date by the net asset
value per share at the start of that period.
Chair’s statement
I am pleased to present our half-yearly financial report. Over the past six
months, the UK economy has lagged behind most of our international peers, with
sluggish growth and stubbornly high inflation. Speculation on the upcoming UK
government budget, global political tensions and trade wars continue to
influence market sentiment. Your Company has maintained its long-term strategy
of investing in promising early-stage businesses, supporting its existing
portfolio companies, and generating cash from realisations where circumstances
permit.
Venture capital investment activity and portfolio update
We are pleased to report an overall increase in the holding value of the
unquoted portfolio, with strong performances from a number of portfolio
companies increasing valuations by more than some necessary reductions in
valuations of companies that have performed less well.
During the period, we made a new investment totalling £2.4 million in Thanks
Ben. Thanks Ben is an intelligent digital platform that enables organisations
to manage employee benefits, rewards, and allowances through a single system.
We also deployed £3.1 million into ten existing portfolio companies. Partial
realisations were made in Buoyant Upholstery, Fresh Approach, and Project Glow
(trading as The Beauty Tech Group), all at holding value, and in Angle plc, a
listed investment, at a price marginally below its last reported holding value
at 31 March 2025. In aggregate, realisation proceeds were £0.5 million.
Since the period end, investment activity has continued with £4.2 million
invested into seven companies, including a new investment into Space and Time
Limited (t/a Tesseract). Tesseract is a cloud-based field service management
software company that helps organisations manage assets, scheduling, and
mobile workflows for engineers. We were also pleased to announce that on 3
October 2025 our largest portfolio company Project Glow (trading as The Beauty
Tech Group) successfully completed its IPO on the London Stock Exchange. As
part of the transaction, we realised 30% of our holding, generating proceeds
of £2.3 million and delivering a 5.8x return on our original investment cost.
The company’s IPO was reported upon in the press as an encouraging sign of
activity returning to the UK stock market, and is a very positive step for the
company, which the Northern VCTs have supported since 2018.
In addition, one further realisation was completed, with Thanksbox Limited
(t/a Mo) returning £0.8 million, a £0.5 million uplift on June’s holding
value. Although the proceeds were above the 30 June 2025 holding value, the
exit was below investment cost resulting in an overall 0.5x return on our
investment.
Results and dividend
The Company achieved a return of 0.9 pence per share in the period (2024: 1.0p
per share), equivalent to 1.5% of the audited net asset value (NAV) per share
on 31 March 2025. After deducting the final dividend for the year to 31 March
2025 of 1.3p, paid in September 2025, the NAV per share at 30 September 2025
was 57.7 pence. The performance was driven by an unrealised increase of £2.5
million in the valuation of investments.
It remains our objective to pay a dividend at least equivalent to 5% of the
opening NAV in each year. The Board has declared an interim dividend for the
year ending 31 March 2026 of 1.7 pence per share, which will be paid on 21
January 2026 to shareholders who are on the register on 19 December 2025.
We continue to operate our dividend investment scheme, which enables
shareholders to invest their dividends in new ordinary shares free of dealing
costs and with the benefit of the tax reliefs available on new VCT share
subscriptions. We have included details of the scheme within the dividend
section of our website, which can be found at: www.mercia.co.uk/vcts/n2vct/.
Shareholder matters
As a result of the fully subscribed public share offer launched in January
2025, 25,531,778 shares were issued for gross proceeds of £15.0 million.
We continue to observe a sustained demand for long-term growth capital for
smaller companies in the UK. In order to continue to support our existing
portfolio and invest in new early-stage opportunities, in September 2025, we
published our fund raising prospectus, together with the other two Northern
VCTs. The Company sought to raise £7million with an over-allotment facility
of £3 million, and we are pleased to report that it has successfully received
subscriptions totalling £10 million. The allotment is scheduled to take place
on 25 November 2025.
We have maintained our policy of being willing to buy back the Company’s
shares in the market to maintain liquidity, at a 5% discount to NAV. During
the period a total of 6,396,825 shares were purchased by the Company for
cancellation, representing around 2.9% of the opening ordinary share capital.
VCT legislation and qualifying status
The Company has continued to meet the stringent and complex qualifying
conditions laid down by HM Revenue & Customs for maintaining its approval as a
VCT. The Investment Manager monitors the position closely and reports
regularly to the Board. Philip Hare & Associates LLP has continued to act as
independent adviser to the Company on VCT taxation matters.
Outlook
Despite ongoing macroeconomic headwinds, the portfolio continues to
demonstrate resilience and growth potential. We remain confident in the
strength and quality of the portfolio, many of which are well positioned to
benefit from long-term structural trends. The Company will continue to invest
selectively, supporting high-growth businesses with strong fundamentals, while
also seeking to deliver timely realisations where opportunities arise. With a
diversified portfolio and a clear strategy for growth, we believe the Company
is well placed to continue to create shareholder value in the years ahead.
The board very much appreciates the continuing support of shareholders.
On behalf of the Board
Thomas Chambers
Chair
Responsibility statement
In accordance with Disclosure and Transparency Rule (DTR) 4.2.10, Thomas
Chambers (Chair), Ranjan Ramparia (Chair of the Audit Committee), Simon
Devonshire and David Gravells, being the Directors of the Company, confirm
that to the best of their knowledge:
(a) The condensed set of financial statements, which has been prepared in
accordance with Financial Reporting Standard 104 “Interim Financial
Reporting” gives a true and fair view of the assets, liabilities, financial
position and profit of the Company as required by DTR 4.2.10;
(b) the half-yearly management report includes a fair review of the
information required by DTR 4.2.7, being an indication of important events
that have occurred during the first six months of the financial year and their
impact on the condensed set of financial statements;
(c) a description of the principal risks and uncertainties facing the Company
for the remaining six months of the financial year are set out under the
summary of principal risks and uncertainties below, in accordance with DTR
4.2.7; and
(d) there were no related party transactions in the first six months of the
current financial year that are required to be disclosed, in accordance with
DTR 4.2.8.
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 Financial Statements for the year ended 31
March 2025 (“the Annual Report”). The Board considers that the present
processes for mitigating those risks remain appropriate. Following the
admission of the Company’s largest investment on the London Stock Exchange
in October 2025, the Board has included stock market risk as an additional
principal risk to those included in the Annual Report. Stock market risk is
the risk of adverse price movements on the Company’s listed portfolio
holdings as a result of macroeconomic or other factors resulting in the
decline of the overall market.
The principal risks faced by the Company are:
* Availability of qualifying investments risk
* Credit risk
* Economic and geopolitical risk
* Financial risk
* Investment and liquidity risk
* Legislative and regulatory risk
* Operational risk
* Performance of the Investment Manager risk
* Stock market risk
* VCT qualifying status risk
A detailed explanation of the principal risks facing the Company can be found
in the Annual Report and Financial Statements for the year ended 31 March 2025
on pages 21 to 22, as well as in Note 18 on Financial Instruments on pages 67
to 70 of that report. Copies can be viewed or downloaded from the Company’s
website: www.mercia.co.uk/vcts.
Environmental, Social and Governance considerations
The Company is committed to conducting its affairs responsibly and considers
environmental, social and governance (ESG) issues as part of its operations.
More details of the Company’s considerations can be found in the Responsible
Investment section in the Annual Report and Financial Statements for the year
ended 31 March 2025 on pages 33 to 34.
Going concern
The Board has assessed the Company’s operation as a going concern. The
Company’s business activities, together with the factors likely to affect
its future development, performance and position are set out earlier in the
half-yearly management report. The Directors have satisfied themselves that
the Company’s cash position is adequate to enable the Company to continue as
a going concern under downside scenarios. The portfolio remains well funded
and the Manager’s investment team are ensuring that management teams
undertake adequate cost control and cashflow planning. The major cash outflows
of the Company (namely investments, share buy-backs and dividends) are within
the Company’s control. The Board’s assessment of liquidity risk and
details of the Company’s policies for managing its capital and financial
risks are shown in Note 18 of the Annual Report and Financial Statements for
the year ended 31 March 2025 on pages 67 to 70. Accordingly, the Directors
continue to adopt the going concern basis of accounting in preparing the
half-yearly report and financial statements.
Cautionary statement
This report may contain forward looking statements with regard to the
financial condition and results of the Company, which are made in the light of
current economic and business circumstances. Nothing in this report should be
construed as a profit forecast.
For and on behalf of the Board:
Thomas Chambers
Chair
20 November 2025
Investment portfolio
As at 30 September 2025 (unaudited)
Description Cost £000 Valuation £000 % of net assets by value
Fifteen largest venture capital investments
Project Glow Topco (t/a The Beauty Tech Group) Online marketplace for home-use beauty products 1,322 7,481 5.4%
Pure Pet Food Production of organic pet food 1,516 6,253 4.5%
Rockar E-commerce and fulfilment platform for new car sales 1,766 3,293 2.4%
Pimberly Product information management software 1,876 3,283 2.4%
Tutora (t/a Tutorful) Website to help parents and students find private tutors 3,023 3,023 2.2%
Risk Ledger Cyber security focused on supply chain risk 1,509 2,631 1.9%
Semble Practice management software for healthcare clinicians/clinics 2,072 2,583 1.9%
Netacea AI-powered cyber security consultancy 2,486 2,486 1.8%
Forensic Analytics Call data communications analytics software 2,475 2,475 1.8%
Broker Insights Platform connecting insurers and brokers 2,282 2,401 1.7%
Send Technology Solutions Platform for insurers, reinsurers, and managing general agents 2,046 2,397 1.7%
Thanks Ben Employee benefits orchestration platform 2,392 2,392 1.7%
Ridge Pharma Sale of pharmaceuticals (branded, generics, specials) 1,387 2,385 1.7%
Biological Preparations Group Environmental biotechnology products 2,166 2,325 1.7%
Administrate SAAS training management and LMS platform 3,117 2,233 1.6%
Fifteen largest venture capital investments 31,435 47,641 34.4%
Other venture capital investments 56,462 47,739 34.5%
Total venture capital investments 87,897 95,380 68.9%
Net current assets 43,026 31.1%
Net assets 138,406 100.0%
Extracts from the unaudited half-yearly financial statements for the six
months ended 30 September 2025 are set out below:
Condensed income statement
For the six months ended 30 September 2025 (unaudited)
Unaudited six months ended Unaudited six months ended Audited year ended
30 September 2025 30 September 2024 31 March 2025
Revenue Capital Total Revenue Capital Total Revenue Capital Total
£000 £000 £000 £000 £000 £000 £000 £000 £000
(Loss)/gain on disposal of investments - (2) (2) - 1,469 1,469 - 3,148 3,148
Movements in fair value of investments - 2,491 2,491 - 884 884 - 5,338 5,338
- 2,489 2,489 - 2,353 2,353 - 8,486 8,486
Dividend and interest income 1,145 - 1,145 1,349 - 1,349 3,144 - 3,144
Investment management fee (306) (918) (1,224) (277) (832) (1,109) (567) (2,022) (2,589)
Other expenses (289) - (289) (332) (332) (675) - (675)
Return before tax 550 1,571 2,121 740 1,521 2,261 1,902 6,464 8,366
Tax on return (116) 116 - (187) 187 - (852) 852 -
Return after tax 434 1,687 2,121 553 1,708 2,261 1,050 7,316 8,366
Return per share 0.2p 0.7p 0.9p 0.2p 0.8p 1.0p 0.5p 3.3p 3.8p
Condensed balance sheet
As at 30 September 2025 (unaudited)
Unaudited 30 September 2025 Unaudited 30 September 2024 Audited 31 March 2025
£000 £000 £000
Fixed assets
Investments 95,380 78,056 87,889
Current assets
Debtors 159 640 2,670
Cash and cash equivalents 43,052 49,023 38,062
43,211 49,663 40,732
Creditors (amounts falling due within one year) (185) (174) (543)
Net current assets 43,026 49,489 40,189
Net assets 138,406 127,545 128,078
Capital and reserves
Called-up equity share capital 11,985 11,159 10,993
Share premium 76,195 62,193 62,633
Capital redemption reserve 1,788 1,256 1,468
Capital reserve 40,379 54,405 47,177
Revaluation reserve 7,483 (2,281) 4,939
Revenue reserve 576 813 868
Total equity shareholders' funds 138,406 127,545 128,078
Net asset value per share 57.7p 57.2p 58.3p
Condensed statement of changes in equity
Non-distributable reserves Distributable reserves
Called up share capital Share premium Capital redemption reserve Revaluation reserve Capital reserve Revenue reserve Total
£000 £000 £000 £000 £000 £000 £000
Six months ended 30 September 2025 (unaudited)
At 1 April 2025 10,993 62,633 1,468 4,939 47,177 868 128,078
Return after tax - - - 2,544 (857) 434 2,121
Dividends paid - - - - (2,419) (726) (3,145)
Net proceeds of share issues 1,312 13,562 - - - - 14,874
Shares purchased for cancellation (320) - 320 - (3,522) - (3,522)
At 30 September 2025 11,985 76,195 1,788 7,483 40,379 576 138,406
Six months ended 30 September 2024 (unaudited)
At 1 April 2024 10,434 52,737 1,079 (853) 54,973 1,156 119,526
Return after tax - - - (1,428) 3,136 553 2,261
Dividends paid - - - - (1,791) (896) (2,687)
Net proceeds of share issues 902 9,456 - - - - 10,358
Shares purchased for cancellation (177) - 177 - (1,913) - (1,913)
At 30 September 2024 11,159 62,193 1,256 (2,281) 54,405 813 127,545
Year ended 31 March 2025
At 1 April 2024 10,434 52,737 1,079 (853) 54,973 1,156 119,526
Return after tax - - - 5,792 1,524 1,050 8,366
Dividends paid - - - - (5,109) (1,338) (6,447)
Net proceeds of share issues 948 9,896 - - - - 10,844
Shares purchased for cancellation (389) - 389 - (4,211) - (4,211)
At 31 March 2025 10,993 62,633 1,468 4,939 47,177 868 128,078
Condensed statement of cash flows
For the six months ended 30 September 2025 (unaudited)
Unaudited six months ended Unaudited six months ended Audited year ended
30 September 2025 30 September 2024 31 March 2025
£000 £000 £000
Cash flows from operating activities
Return before tax 2,121 2,261 8,366
Adjustments for:
(Gain)/loss on disposal of investments 2 (1,469) (3,148)
Movements in fair value of investments (2,491) (884) (5,338)
Decrease in debtors 2,511 271 38
(Decrease)/increase in creditors (358) 11 380
Net cash inflow from operating activities 1,785 190 298
Cash flows from investing activities
Purchase of investments (5,473) (5,940) (14,605)
Proceeds on disposal of investments 471 6,016 9,184
Net cash inflow/(outflow) from investing activities (5,002) 76 (5,421)
Cash flows from financing activities
Issue of ordinary shares 15,409 10,802 11,309
Share issue expenses (535) (444) (465)
Purchase of ordinary shares for cancellation (3,522) (1,913) (4,211)
Equity dividends paid (3,145) (2,687) (6,447)
Net cash inflow from financing activities 8,207 5,758 186
Net (decrease)/increase in cash and cash equivalents 4,990 6,024 (4,937)
Cash and cash equivalents at beginning of period 38,062 42,999 42,999
Cash and cash equivalents at end of period 43,052 49,023 38,062
Other matters
The unaudited financial statements are prepared in accordance with accounting
policies consistent with Financial Reporting Standard 102 (“FRS102”),
Financial Reporting Standard 104 (“FRS104”) - Interim Financial Reporting,
with the Companies Act 2006 and the 2014 Statement of Recommended practice,
‘Financial Statements of Investment Trust Companies and Venture Capital
Trusts’ (“the SORP”) (updated in July 2022) issued by the Association of
Investment Companies (“AIC”). The condensed financial statements comply
with FRS 104, applying the recognition and measurement principles of FRS 102.
The financial statements have been prepared on a going concern basis.
The preparation of the financial statements requires management to make
judgements and estimates that affect the application of policies and reported
amounts of assets, liabilities, income and expenses. The most critical
estimates and judgements relate to the determination of carrying value of
investments at fair value through profit and loss (“FVTPL”) in accordance
with FRS 102 sections 11 and 12. The Company values investments by following
the International Private Equity and Venture Capital Valuation (“IPEV”)
Guidelines as updated in 2022.
The accounting policies have been applied consistently throughout the period.
Full details of principal accounting policies are disclosed in Note 1 on page
57 of the Annual Report and Financial Statements for the year ended 31 March
2025. The significant accounting estimates and judgements applied are
consistent with those disclosed in the Annual Report for the year ended 31
March 2025.
The interim dividend of 1.7 pence per share for the year ending 31 March 2026
will be paid on 21 January 2026 to shareholders on the register on 19 December
2025.
The calculation of the return per share is based on the return after tax for
the six months ended 30 September 2025 and on 242,946,704 (30 September 2024:
224,542,017) ordinary shares, being the weighted average number of shares in
issue during the period.
The calculation of net asset value per share is based on the net assets at 30
September 2025 divided by the 239,707,349 (30 September 2024: 223,175,719)
ordinary shares in issue at that date.
The half-yearly financial report is being sent to shareholders and copies will
be made available to the public at the registered office of the Company,
Companies House, the National Storage Mechanism and also electronically at
www.mercia.co.uk/vcts.
The contents of the Mercia Asset Management PLC website and the contents of
any website accessible from hyperlinks on the Mercia Asset Management PLC
website (or any other website) are not incorporated into, nor form part of,
this announcement. Recent news on Northern 2 VCT
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