British Smaller Companies VCT2 plc
Interim Management Statement
For the quarter ended 30 September 2024
British Smaller Companies VCT2 plc (the "Company") presents its interim management statement for the quarter ended 30 September 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.
Overview
In the quarter to 30 September 2024, the Company saw a 0.3 per cent reduction in its Net Asset Value per share to 57.35 pence.
The Company's Total Return at 30 September 2024 was down 0.15 pence at 145.10 pence per ordinary share.
During the quarter, the Company invested £6.4 million into five existing portfolio companies: Xapien, Quality Clouds, AutomatePro, SharpCloud and Biorelate; and £1.2 million into new investment Integrum ESG. Subsequent to the period-end, a further £0.3 million has been invested, taking the total amount invested so far this year to £15.1 million.
In October 2024 the Company sold its investment in Traveltek for £1.9 million. Total proceeds over the life of the investment are £2.6 million, a 2.3x return on the Company's cost. There is the potential for further deferred proceeds in due course.
Performance
The movement in Total Return in pence per ordinary share is set out in the table below:
|
| 30 June 2024 | Decrease in value | Buy-back of shares | Movement in period | 30 September 2024 |
| Net Assets (£m) | 162.9 | (0.4) | (0.8) | (1.2) | 161.7 |
| NAV per share (PPS) | 57.50p | (0.15p) | - | (0.15p) | 57.35p |
| Cumulative dividends paid (PPS) | 87.75p | - | - | - | 87.75p |
| Total Return (PPS) | 145.25p | (0.15p) | - | (0.15p) | 145.10p |
| Shares in issue | 283,400,383 | - | (1,422,727) | (1,422,727) | 281,977,656 |
The movements in NAV per ordinary share are set out in the table below:
|
| £m | Pence per ordinary share | ||
| NAV at 30 June 2024 | | 162.9 | | 57.50 |
| Increase in portfolio value | 0.1 | | 0.05 | |
| Net operating costs | (0.5) | | (0.20) | |
| | (0.4) | | (0.15) | |
| Buy-back of shares | (0.8) | | - | |
| Total Return in the period | | (1.2) | | (0.15) |
| NAV at 30 September 2024 |
| 161.7 |
| 57.35 |
Buy-backs and shares in issue
On 26 September 2024, the Company purchased 1,422,727 ordinary shares of 10 pence each at a price of 55.13 pence per ordinary share. These shares were placed in treasury.
The number of ordinary shares in issue at 30 September 2024 was 281,977,656 (30 June 2024: 283,400,383), with a further 26,573,146 ordinary shares held in treasury (30 June 2024: 25,150,419).
Subsequent to the quarter end, on 1 November 2024 the Company issued 1,251,293 shares arising from the Company's Dividend Re-Investment Scheme (DRIS) following the payment of the interim dividend, taking the number of shares in issue at that date to 283,228,949, with a further 26,573,146 in treasury.
Net assets
Net assets at 30 September 2024 comprised the following:
| | £000 | % of net assets |
| Unquoted investments at fair value | 104,164 | 64.4 |
| Cash and cash equivalents | 55,922 | 34.6 |
| Other net current assets | 1,625 | 1.0 |
| Net assets | 161,711 | 100.0 |
Investments
The investment portfolio at 30 September 2024 comprised:
| | Valuation £000 | Cumulative valuation as a % of net assets |
| Matillion | 18,972 | 11.7% |
| Unbiased | 9,149 | 17.4% |
| Outpost | 5,035 | 20.5% |
| Xapien | 4,598 | 23.3% |
| SharpCloud | 4,441 | 26.1% |
| ACC Aviation | 4,282 | 28.7% |
| Elucidat | 4,040 | 31.2% |
| Vypr | 4,013 | 33.7% |
| Force24 | 3,964 | 36.2% |
| Quality Clouds | 3,894 | 38.6% |
| | 62,388 | 38.6% |
| Other investments | 41,776 | 64.4% |
| Total investments | 104,164 | 64.4% |
Fundraising
Having assessed its expected cash requirements, the Company announced a new share offer on 17 October 2024, alongside British Smaller Companies VCT 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 £20.5 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).
General Meeting
The Company held a general meeting on 12 November 2024 at which special resolutions were passed relating to the cancellation of the Company's share premium account and capital redemption reserve, and the reduction in the nominal value of the Company's issued share capital. Once the relevant cancellations have been approved by the High Court, which is expected by the end of the year, this will create c.£85 million of additional distributable reserves over the next three years. There is no dilution to shareholders' interests.
Outlook
The Company registered a small 0.3 per cent decrease in its net asset value per share in the period, reflecting a small number of specific investee company circumstances that have reduced valuations in these investments. In contrast, several companies in the portfolio are showing strong levels of underlying growth, and we have been pleased to have the opportunity to invest further in a number of these businesses in the year to date, to help them accelerate this progress.
The Company has invested in four new companies in the first nine months of the year and continues to have an active pipeline of opportunities. The current 2024/25 fundraise continues to progress well and will ensure that the Company is well placed to continue to invest in innovative, growing UK companies.
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.
29 November 2024
For further information please contact:
Marcus Karia YFM Equity Partners Tel: 0113 244 1000
Alex Collins Panmure Liberum Tel: 0207 886 2767
RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our Privacy Policy.
