REG - British Smlr Comp 2 - Interim Management Statement

British Smaller Companies VCT2Announcement

14/06/2024 12:30

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RNS Number : 5420S  British Smaller Companies VCT2 Plc  14 June 2024

British Smaller Companies VCT2 plc

Interim Management Statement

For the quarter ended 31 March 2024

British Smaller Companies VCT2 plc (the "Company") presents its interim
management statement for the quarter ended 31 March 2024. The statement also
includes relevant financial information between the end of the quarter and the
date of this statement. A copy of this interim management statement can be
found at www.bscfunds.com (http://www.bscfunds.com) .

 

Overview

In the quarter to 31 March 2024, the Company saw a 0.1 per cent reduction in
its Net Asset Value per share to 59.25 pence, compared to a 0.6 per cent fall
in the FTSE Small Cap.

The Company's Total Return at 31 March 2024 was down 0.05 pence at 145.50
pence per ordinary share.

During the quarter, the Company invested £1.2 million into three existing
portfolio companies: Outpost, Relative Insight and SharpCloud. Subsequent to
the period-end, £3.1 million has been invested into two new investments,
Fuuse and Ohalo.

The Company has had a busy quarter of exit activity; it partially realised its
investments in KeTech and Arcus in January 2024, and fully exited its
investment in Displayplan in February 2024.

The Company realisation of Displayplan generated proceeds of £4.8 million.
Total proceeds received over the life of the investment are £6.7 million, an
excellent 9.6x return on the Company's cost. There is the potential for
further receipts in due course, with £0.4 million of deferred proceeds
recognised at the period end.

The KeTech business was split into its two component parts, Rail and Defence,
to maximise shareholder value, with the Defence business subsequently sold in
January 2024, generating proceeds of £1.5 million.  To date, the Company has
realised proceeds of £4.1 million from its KeTech investment, a 2.0x return
on cost, while still retaining its investment in the Rail business, which at
the period-end was valued at £1.2 million.

The Company realised part of its investment in Arcus, generating proceeds of
£0.2 million, while still retaining its investment in the remaining
restructured business, which at the period-end was valued at £0.6 million.

The Company, alongside British Smaller Companies VCT plc, raised £90 million
in aggregate under the Offers launched on 20 September 2023 in relation to the
2023/24 tax year. A total of £34.5 million was raised by the Company, of
which £11.4 million was allotted on 30 January 2024 and £23.1 million was
allotted shortly after the period-end, on 3 April 2024.

Performance

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

 

                                  31 December 2023  Increase in value  Issue/Buy-back of shares  Movement    31 March 2024

                                                                                                 in period
 Net Assets (£m)                  135.6             0.3                10.4                      10.7        146.3
 NAV per share (PPS)              59.30p            0.15p              (0.20p)                   (0.05p)     59.25p
 Cumulative dividends paid (PPS)  86.25p            -                  -                         -           86.25p
 Total Return (PPS)               145.55p           0.15p              (0.20p)                   (0.05p)     145.50p
 Shares in issue                  228,758,665       -                  18,214,394                18,214,394  246,973,059

 

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

                              £m            Pence per

                                            ordinary share
 NAV at 31 December 2023             135.6            59.30
 Increase in portfolio value  0.4           0.15
 Net operating costs          (0.1)         -
                              0.3           0.15
 Issue/buy-back of shares*    10.4          (0.20)
 Total Return in the period          10.7             (0.05)
 NAV at 31 March 2024                146.3            59.25

 

* The allotment of shares from the first allotment of the 2023/24 fundraising
reduced Total Return per ordinary share as the fundraising was priced at the
last reported NAV at the time of the allotment of 56.90 pence per ordinary
share, being the NAV as at 30 September 2023 of 58.40 pence per ordinary
share, adjusted for the interim dividend of 1.50 pence per ordinary share paid
on 3 November 2023.

Buy-backs and shares in issue

On 30 January 2024 the Company issued 19,533,372 shares at prices between
57.76 pence and 60.83 pence per share in the first allotment relating to the
2023/34 fundraising.

On 25 March 2024, the Company purchased 1,318,978 ordinary shares of 10 pence
each at a price of 56.84 pence per ordinary share. These shares were placed in
treasury.

The number of ordinary shares in issue at 31 March 2024 was 246,973,059 (31
December 2023: 228,758,665), with a further 22,702,746 ordinary shares held in
treasury (31 December 2023: 21,383,768).

Subsequent to the quarter end, on 3 April 2024 the Company issued 37,666,087
shares at prices between 59.76 pence and 63.95 pence per share in the second
and final allotment relating to the 2023/34 fundraising, taking the number of
shares in issue at that date to 284,639,146, with a further 22,702,746 shares
held in treasury.

Net assets

Net assets at 31 March 2024 comprised the following:

                                     £000     % of net assets
 Unquoted investments at fair value  91,163   62.3
 Cash and cash equivalents           54,682   37.4
 Other net current assets            454      0.3
 Net assets                          146,299  100.0

 

Investments

The investment portfolio at 31 March 2024 comprised:

                    Valuation  Cumulative valuation as a % of net assets

                    £000
 Matillion          23,158     15.8%
 Unbiased           8,554      21.7%
 Outpost            6,346      26.0%
 Elucidat           3,954      28.7%
 Force24            3,890      31.4%
 SharpCloud         3,584      33.8%
 Vypr               3,544      36.2%
 ACC Aviation       3,163      38.4%
 Wooshii            2,767      40.3%
 Quality Clouds     2,679      42.1%
                    61,639     42.1%
 Other investments  29,524     62.3%
 Total investments  91,163     62.3%

 

New director and Chair

On 13 June 2024, at the end of the Company's AGM, Peter Waller retired as
Chair and stood down from the Board.  The Board and the Manager thank Peter
for all of his efforts and valuable contributions over the course of his
tenure.  Barbara Anderson, who has served as a director of the Company for
three years, succeeds Peter as Chair.

Also on 13 June 2024, Arif Ahmed joined the Board of Directors.  Arif is a
serial entrepreneur and private equity investor with particular expertise in
healthcare and technology.

Shareholder relations

The Company will be hosting a physical investor workshop jointly with British
Smaller Companies VCT plc on 20 June 2024 at One Great George Street,
Westminster, London SW1 3AA to provide an update to shareholders; for further
details please contact Tracey Nice at tracey.nice@yfmep.com
(mailto:tracey.nice@yfmep.com) .

Outlook

Despite recent declines in inflation rates, central banks remain cautious,
with interest rates remaining at elevated levels for longer than originally
anticipated.  2024 has the potential for further geopolitical instability,
with elections taking place across a significant proportion of the globe and
ongoing conflicts in Ukraine and the Middle East.

Portfolio companies continue to demonstrate resilience in their trading and
navigation of this environment.  Last year's priority of capital efficiency
has left companies well positioned for growth, with multiple opportunities for
the Company to deploy capital anticipated over the next six to 12 months.
The Company's successful 2023/24 fundraising provides the capital to support
this strategy, as well as continuing to invest in exciting new opportunities.

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.

14 June 2024

For further information please contact:

Dan Perkins               YFM Private Equity
Limited                                Tel:
0113 244 1000

Alex Collins              Panmure Gordon (UK) Limited
                            Tel:  0207 886 2767

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