Schroder Br.Opps.Tst - Half-year Report
02/12/2024 07:00
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RNS Number : 2620O Schroder British Opportunities Tst. 02 December 2024
Monday, 2 December 2024
SCHRODER BRITISH OPPORTUNITIES TRUST PLC
(the "Company")
INTERIM FINANCIAL RESULTS FOR THE PERIOD ENDED 30 SEPTEMBER 2024
Schroder British Opportunities Trust plc announces its interim financial
results for the period ended 30 September 2024
· During the six-month period to 30 September 2024, the net asset value
("NAV") per share decreased marginally by 2.4%, from 110.05 pence per share to
107.39 pence per share.
· The slight fall in NAV for the period was driven by a 2.7% decrease
in the private equity portfolio. Overall, the value of this portfolio remains
at 1.5x cost and we are happy with the performance of our investments.
· The decrease in the private equity portfolio was primarily due to
valuation reductions of Rapyd, Cera Care and Learning curve as well as
unfavourable foreign exchange movements. From an operational perspective, both
Rapyd and Cera Care continue to perform well, and we are pleased with their
progression.
· The Company's public equity performance was largely flat,
contributing 0.1% to the NAV over the period. Volution and Watches of
Switzerland performed strongly during the period.
· The main activity over the period included investments in Warpaint
London (quoted), Forterra (quoted) and Headfirst (unquoted), as well as exits
from Ascential (quoted) and Graphcore (unquoted).
Investor Presentation
The Company's Investment Managers are hosting an interim results presentation
for investors on Monday, 2 December at 3.00 p.m. Investors can register for
the event at: https://www.schroders.events/SBOHY24.
Justin Ward, Chair of Schroder British Opportunities Trust plc commented:
"The current portfolio of innovative growth businesses is performing well and
the pipeline for attractive investment opportunities remains strong."
The Company's Interim Report and Financial Statements for the period ended 30
September 2024 are also being published in hard copy format and an electronic
copy will shortly be available to download from the Company's website
www.schroders.co.uk/sbo.
Enquiries:
Katherine Fyfe 020 7658 6000
Schroder Investment Management Limited
Charlotte Banks 020 7658 6000
Schroder Investment Management Limited
Interim Report and Financial Statements for the period ended 30 September 2024
Chair's Statement
"The current portfolio of innovative growth businesses is performing well and
the pipeline for attractive investment opportunities remains strong."
Introduction
I am pleased to present my first report as Chair following the retirement of
Neil England from the Board at the AGM in September. My Board colleagues and I
would like to thank Neil for his time as Chairman, and we wish him well for
the future. This report covers the Company's progress in the six months to 30
September 2024 and its financial position at that date.
Investment Strategy
The Company invests in a diversified mix of public and private companies,
either based in the UK or generating a significant proportion of their revenue
in the UK. We seek to invest in companies with potential for high growth. Our
objective is to deliver long-term and sustainable capital growth for
shareholders. We are not venture investors. We focus on the growth and later
stage buyout sector where earnings are more predictable but strong growth is
still available.
On 28 November 2023, the FCA published its final policy statement (PS23/16) on
Sustainability Disclosure Requirements and investment labels and, as a result,
the Board has reviewed the Company's disclosures with the Investment Manager.
The Board confirms that pursuant to the SDR's voluntary labelling regime, the
Company will not seek to adopt a label. As a result, the Board has decided to
make a non-material change to the Company's Investment Policy, removing the
paragraph set out below, which makes reference to the United Nations'
Sustainable Development Goals.
"The Company will focus on companies which the Portfolio Managers consider to
be sustainable from an environmental, social and governance perspective,
supporting at least one of the goals and/or sub-goals of the United Nations'
Sustainable Development Goals ("SDGs"), or which the Portfolio Managers
consider would benefit from their support in helping them incorporate SDGs
into their business planning and/or in reporting their alignment with SDGs."
For the avoidance of doubt, it is the Board and the Investment Managers'
intention that there will be no change to how the investment portfolio is
managed as a result of this amendment.
Portfolio Manager
As previously announced Rory Bateman, Co-Investment Manager and Co-Head of
Investment at Schroders, has informed the Board of his intention to retire
from Schroders in February 2025. Rory will continue in his role as
Co-Investment Manager until his retirement and the Board is currently
reviewing, with Schroders, options for the public equity portion of the
portfolio. I would like to thank Rory for his significant contribution to the
Company, and we wish him well for the future.
Performance
During the six-month period to 30 September 2024, the net asset value ("NAV")
per share decreased marginally by 2.4%, from 110.05 pence per share to 107.39
pence per share.
The slight fall in NAV for the period was driven by a 2.7% decrease in the
private equity portfolio. Overall, the value of this portfolio remains at 1.5x
cost and we are happy with the performance of our investments. The decline was
primarily due to valuation reductions in Rapyd, Learning Curve and Cera Care
as well as unfavourable foreign exchange movements. Rapyd and Cera Care's
valuation retrenchment was driven by multiple compression to reflect
respective peer group comparators that have decreased in the period. Both
companies, however, continue to perform well from an operational perspective
and remain valued above cost (Rapyd 1.2x and Cera Care 2.2x). It was pleasing
to see Headfirst, an investment made in Q2 2024, already positively
contributing to NAV, as well as Expana, previously known as Mintec.
As previously announced, Graphcore was acquired by SoftBank Group during the
period which led to the Company receiving back its original capital
investment, less some minor expenses and resulted in an uplift to fair market
value, as it has previously been held at a below cost valuation.
The Company's public equity performance was largely flat, contributing 0.1% to
the NAV over the period. Volution and Watches of Switzerland performed
strongly during the period, however SSP and discoverIE detracted from the
Company's performance during the period.
In-line with the fall in net asset value per share, the Company's share price
decreased by 2.5% to 77.50 pence at the period end, as the Company's discount
remained relatively stable over the period. At period end, the portfolio
consisted of nine private companies (64% of NAV); 22 public companies (27% of
NAV) and a cash holding of £7.1 million (9% of NAV). The Top 10 holdings
represented 67% of total investments.
The Investment Manager's report, beginning on page 6, includes a detailed
review of the portfolio, individual company performance, and investment
transactions in the period.
Valuations
As previously reported, public investments are valued at the listed share
price and the private portfolio has valuations developed by a specialist
valuations team within Schroders. This team is independent from the Investment
Manager. In general, we use public market comparable companies to avoid
insulating the private valuations from the broader market. Valuations are
calculated using established methodologies and public market comparators in
accordance with International Private Equity and Venture Capital guidelines.
The Valuations Committee reviews, and where necessary challenges, the
recommendations it receives. The outcome of the Valuations Committee will be
then subject to further review by the Audit and Risk Committee and, in respect
of the annual results, the Company's external auditors. Shareholders can be
assured that the Board is cognisant of scepticism toward private equity
valuations due to a reduced level of transparency and leads a discursive and
challenging process.
Discount Control
The Company's shares continued to trade at a discount to NAV during the period
under review and up to the date of this report. Buy-backs are one of several
mechanisms the Board actively considers to reduce the discount and the use of
our cash reserves is a matter of regular review. Given the current pipeline,
particularly from companies that want to stay private for longer and taking
into consideration the current size of the Company, we have chosen not to
buy-back in the period.
Results webinar
Please join the Investment Manager for a webinar in which they will report on
the half year ended 30 September 2024 and outline their thoughts on the future
direction of the portfolio. The presentation will be followed by a live
Q&A session. The webinar will take place on Monday 2 December 2024 at
3:00p.m. Register for the event at https://www.schroders.events/SBOHY24.
Outlook
The economic environment is improving with inflation reduced from recent highs
and the possibility of further interest rate reductions ahead together with
some political stability in the UK at least. As a result, market conditions
appear to be increasingly favourable for growth companies, as demonstrated by
recent gains in small and mid-cap shares.
The Schroders Capital team provides shareholders with unique access to a range
of high quality private equity investments. The current portfolio of
innovative growth businesses is performing well and the pipeline for
attractive investment opportunities remains strong. Within the private equity
market small to mid-cap exits have remained stable compared to 2019 levels
with expectations that increased economic certainty will enhance market
conditions for future exits. Over time, we anticipate that this should lead to
a narrowing of the discount at which our shares are trading which continues to
undervalue the Company and does not reflect the strong fundamentals and
trading progression of the underlying portfolio.
Looking ahead, there may be some volatility to come driven by global events
and geopolitical issues but the value and quality of the underlying portfolio
should reward patient shareholders as private and public market conditions
continue to improve.
Justin Ward
Chair
29 November 2024
Investment Manager's Review
"The Company's differentiated public-private equity strategy enables us to
continue to invest without boundaries. We are pleased with the performance of
the portfolio to date and optimistic about the outlook and future
opportunities."
Investment activity
The Company focuses on quality, growing and mostly profitable companies that
have strong balance sheets and that can sustainably compound their earnings
over the long term.
The unquoted portfolio is focused on growth capital and small/mid-market
buyout stage companies, avoiding areas at greatest valuation risk.
During the six months to September 2024, the net asset value ("NAV") slightly
decreased by 2.4%, driven by a fall in value of the private portfolio (which
represents 64% of total NAV).
The main activity over the period included investments in Warpaint London
(quoted), Forterra (quoted) and Headfirst (unquoted), as well as exits in
Ascential (quoted) and Graphcore (unquoted).
The sale of Graphcore to SoftBank Group Corp was completed during this period.
Following the quarter end, the Company made an investment into Acturis, a
leading Software as a Service ("SaaS") provider for brokers, insurers, and
managing general agents across the general insurance market.
We continue to focus on identifying companies that exhibit strong underlying
performance, poised to do well in the current environment and have a strong
pipeline of investment opportunities.
Market
The UK small-cap sector is displaying signs of recovery, bolstered by a more
favourable macroeconomic climate. A significant milestone was reached when the
Consumer Price Index hit its 2% target, preceding similar achievements by
Europe and the US. This feat is particularly remarkable given that the UK's
inflation had previously risen to a 40-year peak of over 11% in 2022. The
reduction in inflation has created room for the Bank of England to cut base
rates, with additional cuts potentially on the horizon. This monetary policy
adjustment aligns with the broader economic recovery, where the UK has
returned to growth following a historically modest recession, and unemployment
has hit its lowest point in 50 years.
Private equity markets have not been immune to the economic headwinds over the
past years. However, the Company's private equity portfolio has proven
resilient and continues to perform well. As a reminder, our principal focus is
on the small and mid-market area of the UK private equity landscape, and we
hope the following provides useful insight into recent activity to
contextualise the period under review.
According to KPMG's UK mid-market private equity analysis, deal volumes in
this area declined by 11% in H1 2024 when compared with H1 2023. However,
against a pre-pandemic M&A activity (H1 2019), 2024's figure reflects an
increase in activity of 25%, suggesting the market is beginning to normalise.
Similarly, the UK private equity market as a whole saw a greater decline of
20% H1 2023 to H1 2024.
Despite this decline, 2024 has brought some optimism, with stabilised interest
rates and tamed inflation bringing increased certainty, the attractiveness of
UK businesses is increasing and the UK remains a key target for international
investors seeking opportunities.
Portfolio performance
Since the Company's IPO in December 2020, the net asset value has proved
resilient despite a volatile market. The Company's NAV has slightly decreased
over the six-month period under review, predominantly due to prudent valuation
reductions in three businesses in the private portfolio, combined with the
impact of the depreciation in GBP versus USD and EUR during the period.
Attribution analysis (£m) for 6 months to 30 September 2024
Money
Market
Quoted Unquoted Funds(1) Net cash Other NAV
Value as at 31 March 2024 19.4 52.9 10.8 0.8 (2.6) 81.3
+ Investments 3.1 3.5 4.5 (11.1) 0.0 0.0
- Realisations at value (1.5) (3.0) (7.0) 11.5 0.0 0.0
+/- Fair value gains/(losses) 0.1 (2.2) 0.2 0.0 0.0 (1.9)
+/- Costs and other movements 0.0 0.0 0.0 (0.4) 0.4 0.0
Value as at 30 September 2024 21.1 51.2 8.5 0.8 (2.2) 79.4
Past Performance is not a guide to future performance and may not be repeated.
The value of investments and the income from them may go down as well as up
and investors may not get back the amount originally invested. Exchange rate
changes may cause the value of investments to fall as well as rise.
Source: Schroders.
Main positive and negative performers over the 6 months to 30 September 2024
Top 5 contributors Contribution %
Headfirst (unquoted) 1.0
Volution (quoted) 0.7
Graphcore (unquoted) 0.6
Watches of Switzerland (quoted) 0.6
Expana (unquoted) 0.6
Bottom 5 contributors Contribution %
Rapyd Financial Network (unquoted) -3.8
Learning Curve (unquoted) -1.1
Cera EHP S.à r.l. (unquoted) -0.6
SSP (quoted) -0.5
discoverIE (quoted) -0.3
The NAV as of 30 September 2024 was £79.4 million, a decrease of 2.4%
compared with the NAV (£81.3 million) as of 31 March 2024. This 2.4% decrease
comprised:
• Quoted holdings: 0.1%
• Unquoted holdings: -2.7%
• Money market funds: 0.2%
• Costs and other movements: 0.0%
Private equity performance
The portfolio's private equity (unquoted) holdings saw an aggregate value
decrease of £1.7 million over the six months ended 30 September 2024. This
has been driven primarily by the revaluation of Rapyd, Learning Curve and Cera
Care, combined with the impact of a depreciation in GBP against the USD and
EUR during Q3 2024 (contributing £0.7 million/40% to the overall decrease).
Focusing on the businesses valued on an Earnings Before Interest, Depreciation
and Amortisation ("EBITDA") basis, we are valuing them at a notable discount
(c.18%) to public comparators(2).
At present, the total value of the private portfolio is held at 1.5x cost and
we are happy with the performance to date and opportunities going forward.
(1)A money market fund is a type of mutual fund that invests in short-term,
high-quality debt instruments, offering high liquidity, making it suitable for
preserving capital and accessing cash easily.
(2)Weighted average of private equity portfolio companies that are valued
using EBITDA multiple.
Private equity allocation attribution - six months to 30 September 2024
Company events, valuation multiple and FX has driven the valuation decline
Past performance is not a guide to future performance and may not be repeated.
The value of investments and the income from them may go down as well as up
and investors may not get back the amounts originally invested.
(1)Includes distribution from the sale of Graphcore.
Source: Schroders Capital 2024.
Headfirst, Graphcore and Expana were key contributors during the period. The
investment into Headfirst, an international HR tech service provider, was made
in Q2 2024. The Company gained exposure to Headfirst following Schroders
Capital's initial investment in 2022. The new capital invested was used to
finance Headfirst's acquisition of Impellam Group to create a world leader in
workforce solutions for STEM (science, technology, engineering and
mathematics).
Graphcore was sold during the period to SoftBank Group Corp, which led to the
Company receiving its original capital investment, less some minor expenses.
The uplift to valuation at exit illustrates the prudent at which the
investment was held prior to exit.
Expana, previously Mintec, rebranded during the first half of 2024 to
consolidate its diverse portfolio of products and brands under one identity.
The business is a global price reporting agency and market intelligence
company with over 200 years of heritage and expertise. During the period the
business has continued to perform well, with the rebranding positively
received by the market.
On the more challenging side, the valuations for holdings in Rapyd, Learning
Curve and Cera Care have decreased over the past six months.
Rapyd continues to grow and is awaiting regulatory approval to close the
acquisition of a substantial part of PayU Global Payment Organisation, a
leading provider of best-in-class payment solutions to emerging markets,
operating in over 30 countries worldwide. Upon completion, this deal will
continue Rapyd's global expansion and enhance its market position. While the
company continues to perform operationally, the investment landscape in the
payments sector remains challenging, with comparable businesses amending their
long-term growth outlooks. As a result, the valuation multiple applied has
been reduced, offsetting the company's positive financial performance and thus
leading to a reduction in valuation over the period.
The Learning Curve Group has seen some softening in demand during the year,
leading to an adjustment in valuation in Q2 2024.
The valuation for Cera Care, a digital-first healthcare-at-home company, has
declined due to further prudence baked into the valuation multiple. The
Company continues to perform well overall and has now delivered over 60
million at-home patient visits, an impressive feat in under eight years.
Public equity performance
The performance of our publicly listed investments had a positive impact on
the trust's NAV over the period. Leading supplier of ventilation products,
Volution, was the best performer, helped by a good set of results, where the
company reported stronger than expected growth. Meanwhile our position in
luxury watch and jewellery retailer, Watches of Switzerland, also did well,
driven by a reassuring trading update where its year-end financial guidance
was maintained.
Elsewhere, our holding in food and beverage concessions operator, SSP, held
performance back, driven by investor concerns around rising capital
expenditures, as well as lower than expected margins. Finally, shares in
electronic component design and manufacturer, discoverIE, fell due to concerns
about destocking in its end markets, thus contributing negatively to
performance.
Portfolio Diversification
While having notable exposure to software, the portfolio is well-diversified
across a number of growing industry sectors.
Portfolio breakdown by industry as % of total investments (30 Sep 24)
Portfolio Changes
In terms of private equity, the Company made an investment into Headfirst, an
international HR tech service provider operating in fifteen European
countries.
The sale of Graphcore to Softbank Group Corp was completed during this period,
which led to the Company receiving its original capital investment, less some
minor expenses.
Additionally, after the period end, the Company invested in Acturis Ltd, a
leading SaaS provider for brokers, insurers, and managing general agents
across the general insurance market.
Two new public investments were added to the portfolio during the six-month
period. These were cosmetics supplier Warpaint London and building supply
manufacturer Forterra. Elsewhere, we exited our position in events and
analysis firm Ascential, after Informa made a bid for the company.
Portfolio Holdings
The Company's top ten holdings as of 30 September 2024 are set out below
Fair value as of Fair value as of
31 March 30 September
Quoted/ 2024 % of total 2024 % of total
Top 10 holdings unquoted (£'000) investments (£'000) investments
Expana (formerly Mintec)(1) Unquoted 9,591 13.3 10,056 13.9
Cera EHP S.à r.l. Unquoted 8,046 11.1 7,606 10.5
Pirum Systems(1) Unquoted 6,884 9.5 7,030 9.7
EasyPark(1) Unquoted 6,171 8.5 5,997 8.3
CFC Underwriting(1) Unquoted 5,661 7.8 5,870 8.1
Culligan(1) Unquoted 5,585 7.7 5,835 8.1
Headfirst(1) Unquoted - - 4,224 5.8
Rapyd Financial Network(1) Unquoted 6,837 9.5 3,842 5.3
Watches of Switzerland Quoted 1,326 1.8 2,062 2.9
Volution Quoted 1,376 1.9 1,941 2.7
Source: Schroders. Total equity investments = total investments minus holding
in money market fund.
(1) The fair value disclosed for the following investments
represents the Company's investment in an intermediary vehicle:
- Mintec held via Synova Merlin LP.
- Pirum Systems held via Bowmark
Investment Partnership LP.
- Rapyd Financial Network held via
Target Global Fund.
- EasyPark held via Purple Garden
Invest (D) AB).
- CFC Underwriting held via Vitruvian
Investment Partnership.
- Culligan held via EPIC-1b Fund.
Outlook
The aftermath of the UK election has brought greater economic certainty, with
political resolution boosting business confidence in both the private and
public markets. Additionally, prospective interest rate cuts by the Bank of
England are expected to maintain a favourable financing environment,
benefiting private businesses and small-cap performance by reducing borrowing
costs and attracting growth-seeking investors.
In private equity markets, we continue to believe that strategies focused on
identifying companies that exhibit strong underlying financial performance are
poised to do well. This may be achieved by the expansion of product lines,
geographic footprint and professionalising companies to improve profit
margins, which is all easier to do in small and medium-sized companies, and
typically harder to achieve in larger companies, which have often been through
several rounds of private equity or institutional ownership.
Small and mid-cap exits in private equity have remained relatively stable when
compared to 2019 levels. We expect to see the increased economic certainty to
provide improved market conditions and a favourable backdrop for future exits.
The pipeline for attractive unquoted UK opportunities remains robust and we
hope to see an increase in activity with these improved market conditions.
Domestically focused public equities have rallied since the UK election. Small
and mid-caps are benefitting from policy clarity following the recent budget
announcements and the partial retention of inheritance tax relief has
especially benefited AIM listed companies. Indicators have reached their
highest levels in over two years, suggesting a strong economic recovery.
UK small-cap companies, relying on domestic economic resilience, are poised
for further re-rating as they historically deliver substantial gains following
periods of underperforming the larger FTSE 100 companies. Additionally, UK
small-caps are drawing takeover offers with premiums around 50%, showcasing
their value.
Schroder Investment Management Limited
29 November 2024
Source: Schroders.
Past Performance is not a guide to future performance and may not be repeated.
The value of investments and the income from them may go down as well as up
and investors may not get back the amount originally invested. Exchange rate
changes may cause the value of investments to fall as well as rise.
This document may contain "forward-looking" information, such as forecasts or
projections. Please note that any such information is not a guarantee of any
future performance and there is no assurance that any forecast or projection
will be realised.
For help in understanding any terms used, please visit address:
https://www.schroders.com/en-gb/uk/individual/glossary/
Interim Management Report
Principal risks and uncertainties
The Board has determined that the principal risks and uncertainties for the
Company fall into the following categories: strategic risks, market risks and
operational risks. These risks are set out on pages 29 to 31 of the Annual
Report and Financial Statements for the year ended 31 March 2024. The
Company's principal risks and uncertainties, and their mitigation, have not
materially changed during the six months ended 30 September 2024 or since the
Annual Report was published on 11 July 2024.
Going concern
The Directors have a reasonable expectation that the Company has adequate
resources to continue in operational existence until 31 December 2025, which
is more than 12 months from the date when these financial statements were
signed and the Directors have accordingly adopted the going concern basis in
preparing the financial statements.
The Board has considered the Company's principal risks and uncertainties
including whether there are any emerging risks. They have additionally
considered the liquidity of the Company's portfolio of listed investments, the
Company's cash balances and the forecast income and expenditure flows as well
as commitments to provide further funding to the Company's private equity
investee companies; the Company currently has no borrowings. A substantial
proportion of the Company's expenditure varies with the value of the
investment portfolio. In the event that there is insufficient cash to meet the
Company's liabilities, the listed investments in the portfolio may be realised
and the Directors have reviewed the average days to liquidate the listed
investments. On this basis, the Board considers it appropriate to adopt the
going concern basis of accounting in preparing the Company's financial
statements.
Related party transactions
There have been no transactions with related parties that have materially
affected the financial position or the performance of the Company during the
six months ended 30 September 2024.
Directors' responsibility statement
The Directors confirm that, to the best of their knowledge, this set of
condensed financial statements has been prepared in accordance with United
Kingdom Generally Accepted Accounting Practice, in particular with Financial
Reporting Standard 104 "Interim Financial Reporting" and with the Statement of
Recommended Practice, "Financial Statements of Investment Companies and
Venture Capital Trusts" issued in July 2022 and that this Interim Management
Statement includes a fair review of the information required by 4.2.7R and
4.2.8R of the Financial Conduct Authority's Disclosure Guidance and
Transparency Rules.
The half-yearly financial report has not been audited or reviewed by the
Company's auditor.
Signed on behalf of the Board of Directors.
Justin Ward
Chair
29 November 2024
Income Statement
for the six months ended 30 September 2024 (unaudited)
(Unaudited) (Unaudited) (Audited)
For the six months For the six months For the year ended
ended 30 September 2024 ended 30 September 2023 31 March 2024
Revenue Capital Total Revenue Capital Total Revenue Capital Total
Note £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
(Losses)/gains on investments
held at fair value through
profit or loss - (1,846) (1,846) - (1,735) (1,735) - 2,738 2,738
Gains on foreign exchange - 31 31 - - - - - -
Income from investments 232 232 464 202 - 202 267 - 267
Other interest receiveable and
similar income 12 - 12 115 - 115 98 - 98
Gross (loss)/return 244 (1,583) (1,339) 317 (1,735) (1,418) 365 2,738 3,103
Investment management fee (218) - (218) (232) - (232) (432) - (432)
Administrative expenses (407) - (407) (314) - (314) (655) - (655)
Net (loss)/return before
finance costs and taxation (381) (1,583) (1,964) (229) (1,735) (1,964) (722) 2,738 2,016
Finance costs - - - - - - - - -
Net (loss)/return before
taxation (381) (1,583) (1,964) (229) (1,735) (1,964) (722) 2,738 2,016
Taxation 3 - - - - - - - - -
Net (loss)/return after taxation (381) (1,583) (1,964) (229) (1,735) (1,964) (722) 2,738 2,016
(Loss)/return per share (pence) 4 (0.52) (2.14) (2.66) (0.31) (2.35) (2.66) (0.98) 3.71 2.73
The "Total" column of this statement is the profit and loss account of the
Company. The "Revenue" and "Capital" columns represent supplementary
information prepared under guidance issued by The Association of Investment
Companies. The Company has no other items of other comprehensive income, and
therefore the net return after taxation is also the total comprehensive income
for the period.
All revenue and capital items in the above statement derive from continuing
operations. No operations were acquired or discontinued in the period.
Statement of Changes in Equity
for the six months ended 30 September 2024 (unaudited)
Called-up Special Capital Revenue
share capital reserve reserve reserve Total
£'000 £'000 £'000 £'000 £'000
At 31 March 2024 750 71,957 10,991 (2,371) 81,327
Net loss after taxation - - (1,583) (381) (1,964)
At 30 September 2024 750 71,957 9,408 (2,752) 79,363
for the six months ended 30 September 2023 (unaudited)
Called-up Special Capital Revenue
share capital reserve reserve reserve Total
£'000 £'000 £'000 £'000 £'000
At 31 March 2023 750 71,957 8,253 (1,649) 79,311
Net loss after taxation - - (1,735) (229) (1,964)
At 30 September 2023 750 71,957 6,518 (1,878) 77,347
for the year ended 31 March 2024 (audited)
Called-up Special Capital Revenue
share capital reserve reserve reserve Total
£'000 £'000 £'000 £'000 £'000
At 31 March 2023 750 71,957 8,253 (1,649) 79,311
Net return/(loss) after taxation - - 2,738 (722) 2,016
At 31 March 2024 750 71,957 10,991 (2,371) 81,327
Statement of Financial Position
at 30 September 2024
(Unaudited) (Unaudited) (Audited)
30 September 30 September 31 March
2024 2023 2024
Note £'000 £'000 £'000
Fixed assets
Investments held at fair value through profit or loss 80,821 71,406 83,092
Current assets
Debtors 33 75 15
Cash and cash equivalents 753 8,160 790
786 8,235 805
Current liabilities
Creditors: amounts falling due within one year (574) (624) (900)
Net current assets/(liabilities) 212 7,611 (95)
Total assets less current liabilities 81,033 79,017 82,997
Creditors: amounts falling due after more than one year
Performance fee (1,670) (1,670) (1,670)
Net assets 79,363 77,347 81,327
Capital and reserves
Called-up share capital 5 750 750 750
Special Reserve 71,957 71,957 71,957
Capital reserve 9,408 6,518 10,991
Revenue reserve (2,752) (1,878) (2,371)
Total equity shareholders' funds 79,363 77,347 81,327
Net asset value per share (pence) 6 107.39 104.66 110.05
Registered in England and Wales as a public company limited by shares
Company registration number: 12892325
Cash Flow Statement
for the six months ended 30 September 2024
(Unaudited) (Unaudited) (Audited)
For the six For the six For the
months ended months ended year ended
30 September 30 September 31 March
2024 2023 2024
Note £'000 £'000 £'000
Operating activities
(Net loss)/return before finance costs and taxation (1,964) (1,964) 2,016
Adjustments for:
Capital loss/(return) before taxation 1,583 1,735 (2,738)
(Decrease)/increase in prepayments and accrued income (15) 93 122
(Increase)/decrease in other debtors (3) (17) 14
Special dividends allocated to capital 232 - -
Decrease in creditors (327) (433) (157)
Net cash outflow from operating activities (494) (586) (743)
Investing activities
Purchases of investments (11,076) (872) (14,658)
Sales of investments 11,502 1,859 8,432
Net cash inflow/(outflow) from investing activities 426 987 (6,226)
Net cash (outflow)/inflow from investing activities (68) 401 (6,969)
Cash and cash equivalents at the beginning of the period 790 7,759 7,759
Exchange movements 31 - -
Cash and cash equivalents at the end of the period 753 8,160 790
Notes to the Financial Statements
1. Financial statements
The information contained within the financial statements in this half year
report has not been audited or reviewed by the Company's independent auditor.
The figures and financial information for the year ended 31 March 2024 are
extracted from the latest published financial statements of the Company and do
not constitute statutory financial statements for that year. Those financial
statements have been delivered to the Registrar of Companies and included the
report of the auditor which was unqualified and did not contain a statement
under either section 498(2) or 498(3) of the Companies Act 2006.
2. Accounting policies
Basis of accounting
The financial statements have been prepared in accordance with United Kingdom
Generally Accepted Accounting Practice, in particular with Financial Reporting
Standard 104 "Interim Financial Reporting" and with the Statement of
Recommended Practice "Financial Statements of Investment Trust Companies and
Venture Capital Trusts" issued by the Association.
All of the Company's operations are of a continuing nature.
The accounting policies applied to these financial statements are consistent
with those applied in the financial statements for the year ended 31 March
2024.
3. Taxation
The Company's effective corporation tax rate is nil, as deductible expenses
exceed taxable income. The Company intends to continue meeting the conditions
required to maintain its status as an Investment Trust Company, and therefore
no provision has been made for deferred tax on any capital gains or losses
arising on the revaluation or disposal of investments.
4. (Loss)/return per share
(Unaudited) (Unaudited) (Audited)
For the six For the six For the
months ended months ended year ended
30 September 30 September 31 March
2024 2023 2024
£'000 £'000 £'000
Revenue loss (381) (229) (722)
Capital (loss)/return (1,583) (1,735) 2,738
Total (loss)/return (1,964) (1,964) 2,016
Weighted average number of shares in issue during the period 73,900,000 73,900,000 73,900,000
Revenue loss per share (pence) (0.52) (0.31) (0.98)
Capital (loss)/return per share (pence) (2.14) (2.35) 3.71
Total (loss)/return per share (pence) (2.66) (2.66) 2.73
5. Called-up share capital
Changes in called-up share capital during the period were as follows:
(Unaudited) (Unaudited) (Audited)
For the six For the six For the
months ended months ended year ended
30 September 30 September 31 March
2024 2023 2024
£'000 £'000 £'000
Opening balance of ordinary shares of 1p each 739 739 739
Subtotal, ordinary shares of 1p each, excluding shares held in treasury 739 739 739
Shares held in treasury 11 11 11
Closing balance, ordinary shares of 1p each, including shares held in treasury 750 750 750
Changes in the number of shares in issue during the period were as follows:
(Unaudited) (Unaudited) (Audited)
For the six For the six For the
months ended months ended year ended
30 September 30 September 31 March
2024 2023 2024
Opening balance of shares in issue 73,900,000 73,900,000 73,900,000
Closing balance of shares in issue, excluding shares held in treasury 73,900,000 73,900,000 73,900,000
Closing balance of shares held in treasury 1,100,000 1,100,000 1,100,000
Closing balance of shares in issue, including shares held in treasury 75,000,000 75,000,000 75,000,000
6. Net asset value per share
(Unaudited) (Unaudited) (Audited)
30 September 30 September 31 March
2024 2023 2024
Total equity shareholders' funds (£'000) 79,363 77,347 81,327
Shares in issue at the period end, excluding shares held in treasury 73,900,000 73,900,000 73,900,000
Net asset value per share (pence) 107.39 104.66 110.05
7. Financial instruments measured at fair value
The Company's financial instruments within the scope of FRS 102 that are held
at fair value comprise its investment portfolio and any derivative financial
instruments.
FRS 102 requires that financial instruments held at fair value are categorised
into a hierarchy consisting of the three levels below. A fair value
measurement is categorised in its entirety on the basis of the lowest level
input that is significant to the fair value measurement.
Level 1 - valued using unadjusted quoted prices in active markets for
identical assets.
Level 2 - valued using observable inputs other than quoted prices included
within Level 1.
Level 3 - valued using inputs that are unobservable.
At 30 September 2024, the Company's investment portfolio were categorised as
follows:
30 September 2024 (unaudited)
Level 1 Level 2 Level 3 Total
£'000 £'000 £'000 £'000
Investments in equities 21,131 8,525 - 29,656
- - 51,165 51,165
Total 21,131 8,525 51,165 80,821
30 September 2023 (unaudited)
Level 1 Level 2 Level 3 Total
£'000 £'000 £'000 £'000
Investments in equities 21,049 - - 21,049
- - 50,357 50,357
Total 21,049 - 50,357 71,406
31 March 2024 (audited)
Level 1 Level 2 Level 3 Total
£'000 £'000 £'000 £'000
Investments in equities 19,433 10,795 - 30,228
- - 52,864 52,864
Total 19,433 10,795 52,864 83,092
The Level 2 asset relates to the holding in Schroders Special Situations -
Sterling Liquidity Plus Fund.
There have been no transfers between levels during the period ended 30
September 2024.
8. Uncalled capital commitments
At 30 September 2024, the Company had uncalled capital commitments amounting
to £3,236,000 (30 September 2023: £5,171,000; 31 March 2024: £3,726,000) in
respect of follow-on investments, which may be called at any time by investee
companies, subject to their achievement of certain milestones and objectives.
9. Events after the interim period that have not been
reflected in the financial statements for the interim period
In October 2024 the Company announced the completion of a new private equity
investment in Acturis Ltd ("Acturis"), a leading SaaS provider for brokers,
insurers, and managing general agents across the general insurance market.
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