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.
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
in period
|
31 March
2024
|
|
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
£000
|
Cumulative
valuation as a % of net assets
|
|
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.
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