Baronsmead Venture Trust plc
Half-yearly report for the six months ended 31 March
2024
The Directors of Baronsmead Venture
Trust plc are pleased to announce the unaudited half-yearly
financial report for the six months to 31 March 2024. Copies of the
half-yearly report can be obtained from the following
website: www.baronsmeadvcts.co.uk.
Our
investment objective
· Baronsmead Venture Trust plc (the "Company") is a tax
efficient listed company which aims to achieve long-term positive
investment returns for private investors, including tax-free
dividends.
Investment policy1
· To
invest primarily in a diverse portfolio of UK growth businesses,
whether unquoted or traded on the Alternative Investment Market
("AIM").
·
Investments are made
selectively across a range of sectors in companies that have the
potential to grow and enhance their value.
Dividend policy2
· The Board will, wherever possible, seek to pay two dividends
to shareholders in each financial year, typically an interim
dividend in September and a final dividend following the Annual
General Meeting in February/March.
· The
Board will use, as a guide, when setting the dividends for a
financial year, a sum representing 7 per cent. of the opening
net asset value of that financial year.
1. This is a summary of the
Company's investment policy that is set out on page 99 of the
Company's Annual Report and Financial Statements for the year ended
30 September 2023.
2. This is a summary of the
Company's dividend policy that is set out on page 36 of the
Company's Annual Report and Financial Statements for the year ended
30 September 2023.
Key
elements of the business model
Access to an attractive, diverse portfolio
The Company gives shareholders
access to a diverse portfolio of growth businesses.
The Company will make investments in
growth businesses, whether unquoted or traded on AIM, which are
substantially based in the UK in accordance with the prevailing VCT
legislation. Investments are made selectively across a range of
sectors.
The
Manager's approach to investing
The Manager endeavours to select the
best opportunities and applies a distinctive selection criteria
based on:
· Primarily investing in parts of the economy which are
experiencing long term structural growth.
· Businesses that demonstrate, or have the potential for, market
leadership in their niche.
· Management teams that can develop and deliver profitable and
sustainable growth.
· Companies with the potential to become an attractive asset
appealing to a range of buyers at the appropriate time to
sell.
In order to ensure a strong pipeline
of opportunities, the Manager invests in building deep sector
knowledge and networks and undertakes significant proactive
marketing to target companies in preferred sectors. This approach
generates a network of potentially suitable businesses with which
the Manager maintains a relationship ahead of possible investment
opportunities.
The
Manager as an influential shareholder
The Manager is an engaged and
supportive shareholder (on behalf of the Company) in both unquoted
and significant quoted investments.
For unquoted investments,
representatives of the Manager often join the investee
board.
The role of the Manager with
investees is to ensure that strategy is clear, the business plan
can be implemented and the management resources are in place to
deliver profitable growth. The aim is to build on the business
model and grow the company into an attractive target which can be
sold or potentially floated in the medium term.
Financial highlights
410.8p Net Asset Value ("NAV")
total return to shareholders for every 100.0p invested at launch
(April 1998).
NAV per share increased 4.2 per cent. to 55.1p before the deduction of dividends
in the six months to 31 March 2024.
£25.0mn raised in the period
(before costs).
£7.0mn Investments made
into four new and six follow-on opportunities during the period.
(Unquoted: £6.1mn, Quoted: £0.9mn).
Cash returned to shareholders
The table below shows the cash
returned to shareholders that invested in Baronsmead Venture Trust plc dependent
on their subscription cost, including the income tax available to
be reclaimed on the subscription.
Year
subscribed
|
Cash invested
(p)
|
Income tax reclaim
(p)
|
Net
cash invested
(p)
|
Cumulative dividends
paid#
(p)
|
Return on cash invested#
(%)
|
1998 (April)
|
100.00
|
20.00
|
80.00
|
185.65
|
205.7
|
1999 (May)
|
102.00
|
20.40
|
81.60
|
182.15
|
198.6
|
2000 (February)
|
137.00
|
27.40
|
109.60
|
178.95
|
150.6
|
2000 (March)
|
130.00
|
26.00
|
104.00
|
178.95
|
157.7
|
2004 (October) - C
Shares‡
|
100.00
|
40.00
|
60.00
|
134.10
|
174.1
|
2009 (April)
|
91.60
|
27.48
|
64.12
|
117.75
|
158.5
|
2012 (December)
|
111.80
|
33.54
|
78.26
|
92.25
|
112.5
|
2014 (March)
|
103.80
|
31.14
|
72.66
|
74.75
|
102.0
|
2016 (February)
|
102.80
|
30.84
|
71.96
|
60.25
|
88.6
|
2017 (October)
|
94.76
|
28.43
|
66.33
|
42.25
|
74.6
|
2019 (February)
|
84.20
|
25.26
|
58.94
|
35.75
|
72.5
|
2019 (November)
|
76.80
|
23.04
|
53.76
|
28.25
|
66.8
|
2020 (January)
|
82.40
|
24.72
|
57.68
|
28.25
|
64.3
|
2020 (February)
|
80.10
|
24.03
|
56.07
|
24.75
|
60.9
|
2020 (March)
|
63.80
|
19.14
|
44.66
|
24.75
|
68.8
|
2020 (November)
|
75.20
|
22.56
|
52.64
|
21.75
|
58.9
|
2020 (December)
|
78.00
|
23.40
|
54.60
|
21.75
|
57.9
|
2021 (January)
|
81.30
|
24.39
|
56.91
|
21.75
|
56.8
|
2021 (February)
|
78.80
|
23.64
|
55.16
|
18.25
|
53.2
|
2021 (March)
|
80.90
|
24.27
|
56.63
|
18.25
|
52.6
|
2021 (December)
|
83.10
|
24.93
|
58.17
|
15.25
|
48.4
|
2022 (January)
|
82.40
|
24.72
|
57.68
|
15.25
|
48.5
|
2022 (March)
|
72.60
|
21.78
|
50.82
|
11.75
|
46.2
|
2023 (January)
|
64.25*
|
19.28
|
44.97
|
8.75
|
43.6
|
2023 (March)
|
62.64*
|
18.79
|
43.85
|
6.00
|
39.6
|
2023 (April)
|
60.26*
|
18.08
|
42.18
|
6.00
|
40.0
|
2024 (January)
|
58.78*
|
17.63
|
41.15
|
4.25
|
37.2
|
2024 (February)
|
58.29*
|
17.49
|
40.80
|
1.75
|
33.0
|
2024 (March)
|
58.01*
|
17.40
|
40.61
|
1.75
|
33.0
|
# Includes interim dividend of
1.75p per share payable on 9 September 2024.
‡ C Share dividend calculated
using conversion ratio of 0.9657 which is the rate the C shares
were converted into ordinary shares.
*
Average effective offer price. Shares were allotted pursuant to the
2023 & 2024 Offers at individual prices for each investor in
accordance with the allotment formula as set out in each Offer's
Securities Note.
Chair's statement
I am pleased to announce that
despite the volatile market conditions witnessed over the last six
months, the Company's net asset value increased by 2.2p per share
to 55.1p. As described more fully below,
the strong performance of the Company's listed portfolio outweighed
the weakness in the value of the Company's unquoted
investments. Once again, this highlights
the benefits of the Company's investment policy of having a
combination of unquoted and listed assets. Performance in recent
periods shows how this supports the Company's aim of providing a
more consistent total return to shareholders over the medium to
long term. After the period end, the NAV
has continued to increase through further good performance of the
listed portfolio, as reported on below.
As we enter the new quarter,
consumer and business confidence remains fragile with continued
macroeconomic and geopolitical uncertainty expected to drive market
volatility over the coming months. However, your Board continues to
believe that, in aggregate, the fundamentals of the underlying
portfolio companies remain robust. Having said that, it is in the
nature of VCT qualifying investments that some portfolio companies
will fail to achieve their potential, despite the efforts of the
Manager to mitigate these risks.
Results
During the six months to 31 March
2024, the Company's NAV per share increased 4.2 per cent. from
52.9p to 55.1p after the payment of the final dividend of 2.5p per
share on 8 March 2024. The following table breaks down the movement
in NAV over the 6 months.
|
Pence per ordinary
share
|
NAV
as at 1 October 2023 (after
deducting the final dividend of 2.5p)
|
52.9
|
Valuation increase (4.2 per
cent.)
|
2.2
|
NAV
as at 31 March 2024
|
55.1
|
The Board is pleased to report as at
31 May 2024, the NAV was 57.1p per share, a 3.6 per cent. increase
over the NAV as at 31 March 2024. This was driven by firmer quoted
markets and further increases in the value of the Company's listed
investments.
Dividends
The Board has declared an interim
dividend of 1.75p per share to be paid on 9 September 2024 to
shareholders on the register as of 9 August 2024. The Board is
aware that dividends are an important part of the total return to
the shareholders' investment in the Company. As such, the Board is
aiming to achieve its dividend policy objective of an annual yield
of 7.0 per cent. based on the NAV at the beginning of the financial
year. I must of course remind shareholders this is not a guarantee
and that payment dates and the amount of future dividends depend on
the level and timing of profitable realisations.
Portfolio review
The table below provides a summary
of each asset class and the return generated during the period
under review.
Asset class
|
NAV
(£mn)
|
% of NAV*
|
Number of investee
companies**
|
% return in the
period***
|
Unquoted
|
50
|
23
|
40
|
(4)
|
AIM- traded companies
|
63
|
29
|
44
|
9
|
WS Gresham House Equity
Funds
|
73
|
34
|
90
|
8
|
Liquid assets#
|
29
|
14
|
N/A
|
2
|
Total
|
215
|
100
|
174
|
4
|
*
By value at 31 March 2024.
** Includes
investee companies held in more than one fund. Total number of
individual companies held is 160.
***
Return includes interest received on unquoted realisations during
the period.
# Represents cash, cash
liquidity funds and net current assets. % return in the period
relates only to the cash liquidity funds.
The value of the unquoted portfolio
decreased 3.6 per cent. in the six months to 31 March 2024. The
drop in value was driven by the reduction in value of one key
asset, with the remaining portfolio showing an increase in value
over the period. The Manager continues to focus on improving and
sustaining unquoted performance.
The value of the Company's portfolio
of investments directly held in AIM‑traded companies increased 8.6 per
cent in the six months to 31 March 2024. The value of the Company's
investment into the WS Gresham House Equity Funds increased by 7.7
per cent. in the period. This was primarily due to positive news
flow across the portfolio being well received by the markets with a
number of trading updates demonstrating better than expected
financial performance.
Investments
In the six months to 31 March 2024,
the Company made four new investments totalling £4.4mn and six
follow‑ on
investments with a combined value of £2.6mn. Descriptions of the
new investments are as follows:
· Azarc
(unquoted) - £0.7mn - Cross‑border customs automation software
provider.
· CitySwift
(unquoted) - £0.9mn - Passenger transport data and
scheduling software provider.
· Ozone API
(unquoted) - £1.9mn - Open banking software
developer
· SciLeads
(unquoted) - £0.9mn - Life Sciences data and lead
generation provider
Following the period end, a total of
£2.1mn was invested in one new unquoted investment, OnSecurity
Technology, and follow‑on investments in three unquoted companies, Rockfish, Yappy
and Counting.
Realisations
In the listed portfolio, Gresham
House was acquired via a recommended cash offer resulting in a
gross money multiple of 3.9x original cost. The Manager also
continued to take profits from partial sales of the Company's
holding of Cerillion resulting in proceeds of £3.4mn, and a gross
money multiple of 21.0x original cost.
During the period, in the unquoted
portfolio, Funding Xchange, a SME lending marketplace, was acquired
resulting in a gross money multiple of 0.1x original cost and
Armstrong Craven, a recruitment company, went into administration.
The business had experienced very challenging trading conditions
over the past year. Both of these investments had previously been
written down to zero.
Fundraising
During the period, the Company
successfully raised £25.0mn (before costs) through an offer for
subscription which became fully subscribed in March 2024. The
Directors want to welcome the 669 new shareholders who invested for
the first time and also thank the 491 existing shareholders who
continue to support the Company.
The Board will consider whether to
raise new funds in the 2024/25 tax year. This will be determined by
the Company's cashflow, the overall balance of the Company's
portfolio, and its anticipated requirements and opportunities to
fund new and follow‑on investments over the next two to three years. The Board
appreciates that shareholders would like plenty of notice of its
fundraising intentions and will ensure that shareholders are
informed of the Board's intention to raise new funds, as soon as it
becomes practical.
VCT
Regulation
Retirement Date of the UK Government's Venture Capital
Schemes
The Government has paved the way for
the extension of the availability of upfront tax relief for
subscriptions for new shares in VCTs from April 2025 to April 2035
by including the relevant provisions in the Finance Act 2024.
Although the extension to the Sunset Clause remains subject to EU
approval, it is very welcome news and the Board is especially
pleased that both the government and the opposition remain so
supportive of the EIS and VCT schemes and for this extension of the
sunset clause.
Financial Health Test
Following discussions between VCT
representative bodies and government officials, it would appear
that HMRC is now prepared to consider a somewhat broader
application of a Financial Test when a VCT is making a
follow‑on
investment. The Board continues to closely monitor developments in
this area and remains fully supportive of the representations being
made by the Association of Investment Companies ("AIC") and the
Venture Capital Trust Association ("VCTA").
Board Change
Susannah Nicklin has informed the
Board that she wishes to step down from the Board at the end of
June 2024 due to an increase in her other work commitments.
Susannah has been a Director since February 2018 and before that
was a Director of Baronsmead VCT plc from May 2014 to February
2016. Her insight and dedication to the Company have been of
significant value to the Company as well as our predecessor sister
Company over the past 10 years. The Board will miss her and would
like to thank her for her input and expertise and wish her
continued success in her other ventures. I will be taking over the
role of Chair of Nomination Committee and Michael Probin will
become our Senior Independent Director when Susannah steps
down.
The Board has started its search for
a new Director and will keep shareholders updated regarding
this.
Outlook
The General Election has now been
confirmed for 4th July in the UK. Whilst this may create
uncertainty for some of our investments, we look forward to working
with whichever government is elected to help maintain and improve
the VCT scheme given its vital role investing in small businesses
that would otherwise find it difficult to find funding. It has been
encouraging to see the AIC and the VCTA working in a cross party
way to highlight the important role that VCTs play in the funding
landscape.
The Board expects that elevated
macroeconomic and geopolitical uncertainty will continue to drive
market volatility over the coming months, and this has the
potential to impact our investments beyond the risks that would
normally be associated with investing in smaller
companies.
Against this the Company's portfolio
remains highly diversified and is largely positioned in sectors
which the Manager expects to provide long‑term growth potential. We remain
committed to investing through the economic cycle as experience
suggests that this can produce superior returns over the longer
term. This can also provide an opportunity for the Company to make
high quality investments and build strategic stakes in businesses
with great potential at good prices. This applies to both new
investments and follow‑on investments in the portfolio. The Manager sees a good
pipeline of potential investments and the Company remains focussed
on ensuring that it and the Manager are suitably resourced to
support investment into new and existing portfolio
companies.
Fiona Miller Smith
Chair
10 June 2024
Investments in the period
Company
|
Location
|
Sector
|
Activity
|
Book cost
£'000
|
Unquoted investments
New
|
Ozone Financial Technology
Ltd
|
London
|
Technology
|
Open banking infrastructure
provider
|
1,867
|
Huddl Mobility Ltd (trading as
CitySwift)
|
Ireland
|
Technology
|
SaaS product for bus operators and
local authorities to aggregate, cleanse and access insight from
data from across their bus networks
|
949
|
SciLeads Ltd
|
London
|
Technology
|
A data‑intelligence platform that enables
companies operating within Life Science verticals to identify,
track and convert potential customers
|
942
|
Azarc.io Inc
|
London
|
Technology
|
Automating customs
declarations
|
659
|
Follow-on
|
Patchworks Integration
Ltd
|
London
|
Technology
|
Leading integration platform for
fast‑growing retail
and ecommerce businesses
|
840
|
Metrion Biosciences Ltd
|
Cambridgeshire
|
Healthcare &
education
|
Ion channel drug discovery and
safety assessment services provider
|
486
|
Focal Point Positioning
Ltd
|
Cambridgeshire
|
Technology
|
A research and development focused
technology business focusing on global navigation and satellite
systems
|
226
|
Orri Ltd
|
London
|
Healthcare &
education
|
Provider of intensive day care
treatments for eating disorders
|
113
|
Total unquoted investments
|
6,082
|
AIM-traded investments
|
Follow-on
|
Eden Research plc
|
Oxfordshire
|
Business services
|
Developer of biological fungicides
and bio equivalents
|
732
|
PCI‑PAL plc
|
London
|
Technology
|
Secure payment services
provider
|
196
|
Total AIM-traded investments
|
928
|
Total investments in the period#
|
7,010
|
# Includes unquoted and AIM investments only.
Realisations in the period
Company
|
|
First investment
date
|
Original book
cost# £'000
|
Proceeds‡
£'000
|
Overall multiple return
(x)
|
IRR (%)
|
Unquoted realisations
|
Funding Xchange Ltd
|
Full trade sale
|
Nov
19
|
705
|
44
|
0.1
|
0.0
|
Armstrong Craven Ltd
|
Written off
|
Jun
13
|
543
|
-
|
1.1*
|
1.6
|
Total unquoted realisations
|
|
|
1,248
|
44
|
|
|
AIM-traded realisations
|
Cerillion plc
|
Market sale
|
Nov
15
|
161
|
3,377
|
21.0
|
44.3
|
Gresham House plc
|
Takeover
|
Nov
14
|
112
|
433
|
3.9
|
15.9
|
Total AIM - traded realisations
|
|
|
273
|
3,810
|
|
|
Total realisations in the period**
|
|
|
1,521
|
3,854
|
|
|
Liquidation proceeds of £114k were
received during the period from InterQuest Group plc, which was
written off in September 2023.
# Residual book cost at realisation date.
‡ Proceeds at time of realisation including
interest.
* Includes interest/dividends
received, loan note redemptions and partial realisations accounted
for in prior periods.
** Includes unquoted and AIM
investments only.
Responsibility statement of the Directors in respect of the
half-yearly report
Half-yearly report
The important events that have
occurred during the period under review, the key factors
influencing the financial statements
and the principal uncertainties for the remaining six months of the
financial year are set out in the Chair's statement and the
Strategic report.
The principal risks facing the
Company are unchanged since the date of the Company's Annual Report
for the financial year ended 30 September 2023 and continue to
be as set out in that Report on pages 22 and 23.
Risks faced by the Company include
but are not limited to; loss of approval as a Venture Capital
Trust, legislative risk, investment performance risk, risk of
economic, political and other external factors, regulatory and
compliance risk and operational risk. The Board considers the
conflicts in Ukraine and the Middle East to be factors which
permeate these risks, and their impacts for the remaining six
months of the year continue to be kept under review.
Responsibility statement
Each Director confirms that to the
best of their knowledge:
· the
condensed set of financial statements has been prepared in
accordance with FRS 104 Interim Financial Reporting Standards and
gives a true and fair view of the assets, liabilities, financial
position and profit or loss of the Company.
·
This half-yearly report includes a fair review of
the information required by:
a) DTR 4.2.7R of the
Disclosure Guidance and Transparency Rules, 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; and a description of the principal risks and
uncertainties for the remaining six months of the year;
and
b) DTR 4.2.8R of the
Disclosure Guidance and Transparency Rules, being related party
transactions that have taken place in the first six months of the
current financial year and that have materially affected the
financial position or performance of the Company during that
period; and any changes in the related party transactions described
in the last annual report that could do so.
The half-yearly report was approved
by the Board of Directors on 10 June 2024 and was signed on its
behalf by Ms Fiona Miller Smith, Chair.
Fiona Miller Smith
Chair
10 June 2024
Condensed income statement
For
the six months to 31 March 2024 (Unaudited)
|
|
Six months to
31 March 2024
|
Six
months to
31 March 2023
|
Year
to
30 September 2023
|
|
Notes
|
Revenue
£'000
|
Capital
£'000
|
Total
£'000
|
Revenue
£'000
|
Capital
£'000
|
Total
£'000
|
Revenue
£'000
|
Capital
£'000
|
Total
£'000
|
|
|
|
|
|
|
|
|
|
|
|
Gains/(losses) on
investments
|
5
|
-
|
7,423
|
7,423
|
-
|
(1,243)
|
(1,243)
|
-
|
(3,428)
|
(3,428)
|
Income
|
|
2,051
|
-
|
2,051
|
925
|
-
|
925
|
2,486
|
-
|
2,486
|
Investment management fee
|
|
(417)
|
(1,250)
|
(1,667)
|
(437)
|
(1,315)
|
(1,752)
|
(885)
|
(2,657)
|
(3,542)
|
Other expenses
|
|
(383)
|
-
|
(383)
|
(336)
|
-
|
(336)
|
(659)
|
-
|
(659)
|
Profit /(loss) before taxation
|
|
1,251
|
6,173
|
7,424
|
152
|
(2,558)
|
(2,406)
|
942
|
(6,085)
|
(5,143)
|
Taxation
|
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
Profit/(loss) for the period, being the total comprehensive
income for the period
|
|
1,251
|
6,173
|
7,424
|
152
|
(2,558)
|
(2,406)
|
942
|
(6,085)
|
(5,143)
|
Return per ordinary share:
|
|
|
|
|
|
|
|
|
|
|
Basic and Diluted
|
2
|
0.35p
|
1.72p
|
2.07p
|
0.05p
|
(0.80p)
|
(0.75p)
|
0.28p
|
(1.80p)
|
(1.52p)
|
All items in the above statement
derive from continuing operations.
There are no recognised gains and
losses other than those disclosed in the Income
Statement.
The revenue column of the Income
Statement includes all income and expenses. The capital column
accounts for the realised and unrealised profit or loss on
investments and the proportion of the management fee charged to
capital.
The total column of this statement
is the unaudited Statement of Total Comprehensive Income of the
Company prepared in accordance with the Financial Reporting
Standard ("FRS"). The supplementary revenue return and capital
return columns are prepared in accordance with the Statement of
Recommended Practice issued by the Association of Investment
Companies ("AIC SORP").
Condensed statement of changes in equity
For
the six months to 31 March 2024 (Unaudited)
|
|
Non-distributable
reserves
|
|
Distributable
reserves
|
|
|
Called-up share
capital
£'000
|
Share
premium
£'000
|
Revaluation
reserve
£'000
|
|
Capital
reserve
£'000
|
Revenue
reserve
£'000
|
Total
£'000
|
At
1 October 2023
|
38,162
|
-
|
20,357
|
|
133,959
|
2,414
|
194,892
|
Profit after taxation
|
-
|
-
|
5,358
|
|
815
|
1,251
|
7,424
|
Net proceeds of share issues, share
buybacks & sale of shares from treasury
|
4,284
|
20,036
|
-
|
|
(2, 037)
|
-
|
22,283
|
Dividends paid
|
-
|
-
|
-
|
|
(8,749)
|
(364)
|
(9,113)
|
Share premium cancellation
costs
|
-
|
-
|
-
|
|
(4)
|
-
|
(4)
|
At
31 March 2024
|
42,446
|
20,036
|
25,715
|
|
123,984
|
3,301
|
215,482
|
For
the six months to 31 March 2023 (Unaudited)
|
|
Non-distributable reserves
|
|
Distributable reserves
|
|
|
Called-up
share capital
£'000
|
Share
premium
£'000
|
Revaluation
reserve
£'000
|
|
Capital
reserve
£'000
|
Revenue
reserve
£'000
|
Total
£'000
|
At
1 October 2022
|
34,205
|
108,435
|
16,912
|
|
31,786
|
2,487
|
193,825
|
(Loss)/profit after
taxation
|
-
|
-
|
(2,307)
|
|
(251)
|
152
|
(2,406)
|
Net proceeds of share issues, share
buybacks & sale of shares from treasury
|
3,674
|
18,970
|
-
|
|
(1,
516)
|
-
|
21,128
|
Dividends paid
|
-
|
-
|
-
|
|
(8,458)
|
(663)
|
(9,121)
|
At
31 March 2023
|
37,879
|
127,405
|
14,605
|
|
21,561
|
1,976
|
203,426
|
For
the year ended 30 September 2023 (Audited)
|
Non-distributable
reserves
|
Distributable reserves
|
Total
£'000
|
Called-up
share capital
£'000
|
Share
premium
£'000
|
Revaluation
reserve
£'000
|
Capital
reserve
£'000
|
Revenue
reserve
£'000
|
At
1 October 2022
|
34,205
|
108,435
|
16,912
|
31,786
|
2,487
|
193,825
|
Profit/(loss) after
taxation
|
-
|
-
|
3,445
|
(9,530)
|
942
|
(5,143)
|
Net proceeds of share issues, share
buybacks & sale of shares from treasury
|
3,957
|
20,346
|
-
|
(2,801)
|
-
|
21,502
|
Dividends paid
|
-
|
-
|
-
|
(14,260)
|
(1,015)
|
(15,275)
|
Cancellation of share
premium
|
-
|
(128,781)
|
-
|
128,781
|
-
|
-
|
Share premium cancellation
costs
|
-
|
-
|
-
|
(17)
|
-
|
(17)
|
At
30 September 2023
|
38,162
|
-
|
20,357
|
133,959
|
2,414
|
194,892
|
|
|
|
|
|
|
|
Condensed balance sheet
As at 31 March 2024
(Unaudited)
|
Notes
|
As at
31 March
2024
£'000
|
As at
31 March
2023
£'000
|
As at
30 September 2023
£'000
|
|
|
|
|
|
|
|
Fixed assets
|
|
|
|
|
|
Unquoted investments
|
5
|
51,050
|
44,426
|
46,806
|
|
Traded on AIM
|
5
|
62,336
|
59,156
|
60,384
|
|
Collective investment
vehicles
|
5
|
91,445
|
75,140
|
87,969
|
|
Investments
|
5
|
204,831
|
178,722
|
195,159
|
|
|
|
|
|
|
|
Current assets
|
|
|
|
|
|
Debtors
|
|
11,574
|
1,213
|
208
|
|
Cash at bank and on
deposit
|
|
649
|
24,600
|
680
|
|
|
|
12,223
|
25,813
|
888
|
|
Creditors (amounts falling
due within one year)
|
|
(1,572)
|
(1,109)
|
(1,155)
|
|
|
|
|
|
|
|
Net
current assets/(liabilities)
|
|
10,651
|
24,704
|
(267)
|
|
|
|
|
|
|
|
Net
assets
|
|
215,482
|
203,426
|
194,892
|
|
|
|
|
|
|
|
Capital and reserves
|
|
|
|
|
|
Called-up share capital
|
3
|
42,446
|
37,879
|
38,162
|
|
Share premium
|
|
20,036
|
127,405
|
-
|
|
Capital reserve
|
|
123,984
|
21,561
|
133,959
|
|
Revaluation reserve
|
5
|
25,715
|
14,605
|
20,357
|
|
Revenue reserve
|
|
3,301
|
1,976
|
2,414
|
|
Equity shareholders' funds
|
|
215,482
|
203,426
|
194,892
|
|
|
|
|
|
|
|
Net
asset value per share
|
|
55.07p
|
57.96p
|
55.44p
|
|
Number of ordinary shares in
circulation
|
|
391,292,410
|
350,947,945
|
351,534,507
|
|
|
|
|
|
|
| |
Condensed statement of cash flows
For
the six months to 31 March 2024 (Unaudited)
|
Six months to
31 March
2024
£'000
|
Six months
to
31 March
2023
£'000
|
Year
to
30 September
2023
£'000
|
|
|
|
|
Net cash outflow from operating
activities
|
(1,171)
|
(1,384)
|
(2,352)
|
Net cash outflow from investing
activities
|
(1,473)
|
(21,072)
|
(38,257)
|
Net cash outflow before financing
activities
|
(2,644)
|
(22,456)
|
(40,609)
|
Net cash inflow from financing
activities
|
2,613
|
12,005
|
6,238
|
|
|
|
|
Decrease in cash
|
(31)
|
(10,451)
|
(34,371)
|
|
|
|
|
Reconciliation of new cash flow to movement in net
cash
|
|
|
|
Decrease in cash
|
(31)
|
(10,451)
|
(34,371)
|
Opening cash at bank and on
deposit
|
680
|
35,051
|
35,051
|
|
|
|
|
Closing cash at bank and on deposit
|
649
|
24,600
|
680
|
|
|
|
|
Reconciliation of profit/(loss) before
taxation
to
net cash outflow from operating activities
|
|
|
|
Profit/(loss) before
taxation
|
7,424
|
(2,406)
|
(5,143)
|
(Gains)/losses on
investments
|
(7,423)
|
1,243
|
3,428
|
Changes in working capital and other
non-cash items
|
(1,172)
|
(221)
|
(637)
|
|
|
|
|
Net
cash outflow from operating activities
|
(1,171)
|
(1,384)
|
(2,352)
|
Notes to the financial statements
For
the six months to 31 March 2024
(Unaudited)
1.
Basis of preparation
The condensed financial statements
for the six months to 31 March 2024 comprise the unaudited
financial statements set out on pages 13 to 16 together with the
related notes on pages 17 to 20. The Company applies FRS 102 and
the AIC SORP for its annual financial statements. The condensed
financial statements for the six months to 31 March 2024 have
therefore been prepared in accordance with FRS 104 'Interim
Financial Reporting' and the principles of the AIC SORP. They have
been prepared on a going concern basis. The financial statements
have been prepared on the same basis as the accounting policies set
out in the Company's Annual Report and Financial Statements for the
year ended 30 September 2023.
The financial information contained
in this half‑yearly
report does not constitute statutory accounts as defined in
sections 434 - 436 of the Companies Act 2006. The
half‑yearly report
for the six months ended 31 March 2024 and for the six months
ended 31 March 2023 have been neither audited nor reviewed by
the Company's Auditor. The information for the year to
30 September 2023 has been extracted from the latest published
audited financial statements, which have been filed with the
Registrar of Companies. The report of the Auditor for the audited
financial statements for the year to 30 September 2023 was:
(i) unqualified; (ii) did not include a reference to any matters to
which the Auditor drew attention by way of emphasis without
qualifying their report; and (iii) did not contain a statement
under section 498 (2) or (3) of the Companies Act 2006. No
statutory accounts in respect of any period after 30 September
2023 have been reported on by the Company's Auditor or delivered to
the Registrar of Companies.
The Company's half yearly report has
been made available on the Company's website (www.baronsmeadvcts.co.uk)
and sent to shareholders where
requested.
2. Performance and shareholder
returns
Return per share is based on a
weighted average of 358,163,251 ordinary shares in issue
(31 March 2023 - 321,742,586 ordinary shares;
30 September 2023 - 337,263,955 ordinary shares).
Earnings for the first six months to
31 March 2024 should not be taken as a guide to the results of
the full financial year to 30 September 2024.
3. Called-up share capital
Allotted, called-up and fully paid:
Ordinary shares
|
£'000
|
381,621,257 ordinary shares of 10p
each listed at 30 September 2023
|
38,162
|
42,843,562 ordinary shares of 10p
each issued during the period
|
4,284
|
424,464,819 ordinary shares of 10p each listed at 31 March
2024
|
42,446
|
30,086,750 ordinary shares of 10p
each held in treasury at 30 September 2023
|
(3,009)
|
3,100,659 ordinary shares of 10p
each repurchased during the period and held in treasury
|
(310)
|
15,000 ordinary shares of 10p each
sold from treasury during the period
|
2
|
33,172,409 ordinary shares of 10p each held in treasury at 31
March 2024
|
(3,317)
|
391,292,410 ordinary shares of 10p each in circulation* at 31
March 2024
|
39,129
|
* Carrying one vote each.
|
|
During the six months to 31 March 2024, the Company issued
42,843,562 shares at net proceeds of £23,925,000 (after costs).
During the same period, the Company purchased 3,100,659 shares to
be held in treasury at a cost of £1,650,000. The Company also sold
15,000 treasury shares at a cost of £8,000. At 31 March 2024
the Company held 33,172,409 ordinary shares in treasury. Shares may
be sold out of treasury below Net Asset Value as long as the
discount at issue is narrower than the average discount at which
the shares were bought into treasury.
Excluding treasury shares, there
were 391,292,410 ordinary shares in issue at 31 March 2024
(31 March 2023 - 350,947,945 ordinary shares;
30 September 2023 - 351,534,507 ordinary shares).
4. Dividends
The final dividend for the year
ended 30 September 2023 of 2.50p per share (2.40p capital,
0.10p revenue) was paid on 8 March 2024 to shareholders on the
register on 9 February 2024. The ex‑dividend date was 8 February
2024.
During the year to 30 September
2023, the Company paid an interim dividend on 8 September 2023
of 1.75p per share (1.65p capital, 0.10p
revenue).
An interim dividend of 1.75p per
share has been declared for the year to 30 September 2024 and is
payable on 9 September 2024 to shareholders on the register as
of 9 August 2024. The ex dividend date is 8 August
2024.
5. Investments
All investments are initially
recognised and subsequently measured at fair value. Changes in fair
value are recognised in the Income Statement.
The methods of fair value
measurement are classified into a hierarchy based on reliability of
the information used to determine the valuation.
· Level
1 - Fair value is measured based on quoted prices in an active
market.
· Level
2 - Fair value is measured based on directly observable current
market prices or indirectly being derived from market
prices.
· Level
3 - Fair value is measured using a valuation technique that is not
based on data from an observable market.
The valuation of unquoted
investments contained within level 3 of the Fair Value hierarchy
involves key assumptions dependent upon the valuation methodology
used. The primary methodologies applied are:
· Cost
of recent investment.
· Earnings multiple.
· Offer
less 10 per cent.
The earnings multiple approach
involves more subjective inputs than the cost of recent investment
and offer approaches and therefore presents a greater risk of over
or under estimation. Key assumptions for the earnings multiple
approach are the selection of comparable companies and the use of
either historic or forecast revenue or earnings, as considered most
appropriate. Other assumptions include the appropriateness of the
discount magnitude applied for reduced liquidity and other
qualitative factors. These assumptions are described in more detail
in note 2.3 in the Company's Report and Financial Statements for
the year to 30 September 2023. The techniques used in the valuation
of unquoted investments have not changed materially since the date
of that Report.
|
Level 1
|
Level 2
|
Level 3
|
|
|
Traded
on AIM
£'000
|
Collective
investment
vehicles
£'000
|
Unquoted
£'000
|
Total
£'000
|
Opening book cost
|
48,904
|
73,895
|
52,003
|
174,802
|
Opening unrealised
appreciation/(depreciation)
|
11,480
|
14,074
|
(5,197)
|
20,357
|
Opening fair value
|
60,384
|
87,969
|
46,806
|
195,159
|
Movements in the year:
|
|
|
|
|
Transfer between levels
|
(100)
|
-
|
100
|
-
|
Purchases at cost
|
928
|
13,292
|
6,082
|
20,302
|
Sale - proceeds
|
(3,810)
|
(14,084)
|
(159)
|
(18,053)
|
- realised gains on
sales
|
621
|
-
|
159
|
780
|
Unrealised gains/(losses) realised
during the period
|
2,912
|
-
|
(1,627)
|
1,285
|
Increase in unrealised
appreciation/(depreciation)
|
1,401
|
4,268
|
(311)
|
5,358
|
Closing fair value
|
62,336
|
91,445
|
51,050
|
204,831
|
Closing book cost
|
49,455
|
73,103
|
56,558
|
179,116
|
Closing unrealised
appreciation/(depreciation)
|
12,881
|
18,342
|
(5,508)
|
25,715
|
Closing fair value
|
62,336
|
91,445
|
51,050
|
204,831
|
Equity shares
|
62,336
|
-
|
22,325
|
84,661
|
Preference shares
|
-
|
-
|
19,428
|
19,428
|
Loan notes
|
-
|
-
|
9,297
|
9,297
|
Collective investment
vehicles
|
-
|
91,445
|
-
|
91,445
|
Closing fair value
|
62,336
|
91,445
|
51,050
|
204,831
|
6. Other required disclosures
6.1 Segmental reporting
The Company has one reportable
segment being investing in primarily a portfolio of UK growth
businesses, whether unquoted, traded on AIM or collective
investment vehicles.
6.2 Principal risks and uncertainties
The Company's financial instruments
consist of equity and fixed interest investments, shares in
collective investment schemes, cash balances and liquid resources.
Its principal risks are therefore market risk, price risk, credit
risk and liquidity risk. Other risks faced by the Company include
loss of approval as a Venture Capital Trust, legislative,
investment performance, economic, political and other external
factors, regulatory and compliance and operational risks. These
risks, and the way in which they are managed, are described in more
detail in the principal risks and uncertainties table within the
Strategic report section in the Company's Report and Financial
Statements for the year to 30 September 2023. The Board
continues to regularly review the risk environment in which the
Company operates.
6.3 Related parties
Gresham House Asset Management Ltd
(the "Manager") manages the investments of the Company. The Manager
also provides or procures the provision of secretarial,
administrative and custodian services to the Company. Under the
management agreement, the Manager receives a fee of 2.0 per
cent. per annum of the net assets of the Company. This is described
in more detail under the heading 'The management agreement' within
the Strategic Report in the Company's Annual Report and Financial
Statements for the year to 30 September 2023. During the
period the Company has incurred management fees of £1,667,000
(31 March 2023 - £1,752,000; 30 September 2023 -
£3,542,000) and secretarial fees of £83,000 (31 March 2023 -
£74,000; 30 September 2023 - £155,000) payable to the Manager.
A performance fee of £nil has been accrued at 31 March 2024
(31 March 2023 - £nil; 30 September 2023 - £nil). This is
described in more detail under the heading 'Performance fees'
within the Strategic Report in the Company's Annual Report and
Financial Statements for the year to 30 September
2023.
Under the terms of an Offer for
Subscription, launched on 4 December 2023, the Manager was entitled
to fees of 4.50% of the investment amount received from investors.
This amount totalled £679,000 out of which all the costs associated
with the allotments were met.
6.4 Going concern
After making enquiries, and bearing
in mind the nature of the Company's business and assets, the
Directors consider that the Company has adequate resources to
continue in operational existence for the foreseeable future. In
arriving at this conclusion, the Directors have considered the
Company's cash balances, the liquidity of the Company's investments
and the absence of any gearing. The Directors are therefore also
satisfied that the Company has adequate financial resources to
continue in operation for at least the next 12 months and that,
accordingly, it is appropriate to adopt the going concern basis in
preparing the financial statements.
6.5 Post balance sheet events
The following events occurred
between the balance sheet date and the signing of these financial
statements:
· The 30 April 2024 NAV of 55.8p was announced on 7 May 2024 and
the 31 May 2024 NAV of 57.1p was announced on 6 June 2024. At
the date of publishing this report, the Board is unaware of any
matter that will have caused the NAV per share to have changed
significantly since the latest NAV.
· Purchased 0.8mn Ordinary Shares of 10.0p on 2 April 2024 at a
price of 52.5p per share to be held in Treasury.
· Purchased 1.3mn Ordinary Shares of 10.0p on 24 May 2024 at a
price of 53.0p per share to be held in Treasury.
· One
new investment, into OnSecurity Technology, completed in June 2024
totalling £1.2mn.
· Three follow‑on investments, into Yappy, Rockfish and Counting, completed
between April to May 2024, totalling £0.9mn.
· Partial realisations in Cerillion were made in May 2024,
realising proceeds of £1.5mn and making a return of 21.0x
cost.
· Realised Gama Aviation in May 2024, receiving proceeds of
£0.4mn and making a return of 0.6x cost.
Directors
Fiona Miller Smith
(Chair)
Isabel Dolan*
Susannah
NicklinĆ
Michael
Probin††
Secretary
Gresham House Asset Management
Ltd
Registered Office
5 New Street Square
London EC4A 3TW
Investment Manager
Gresham House Asset Management
Ltd
5 New Street Square
London EC4A 3TW
Tel: 020 7382 0999
Registered Number
03504214
Registrars and Transfer Office
The City Partnership (UK)
Ltd
The Mending Rooms
Park Valley Mills
Meltham Road
Huddersfield HD4 7BH
Tel: 01484 240 910
|
Brokers
Panmure Gordon &
Co‡
40 Gracechurch Street
London EC3V 0BT
Tel: 020 7886 2500
Auditor
BDO LLP
55 Baker Street
London W1U 7EU
Solicitors
Howard Kennedy LLP
1 London Bridge
London SE1 9BG
VCT
Status Adviser
PricewaterhouseCoopers
LLP
1 Embankment Place
London WC2N 6RH
Website
www.baronsmeadvcts.co.uk
|
Corporate information
Δ Senior Independent Director
* Chair of the Audit Committee
† Chair of the Nomination Committee
†† Chair of the Management Engagement and Remuneration
Committee
‡ Merger between Liberum and Panmure Gordon completed May
2024
LEI: 213800VQ1PQHOJXDDQ88