TIDMBSC
RNS Number : 0213I
British Smaller Companies VCT2 Plc
16 March 2018
BRITISH SMALLER COMPANIES VCT2 PLC
Annual Financial Report Announcement for
the Year to 31 December 2017
British Smaller Companies VCT2 plc (the "Company") today
announces its audited results for the year ended 31 December
2017.
HIGHLIGHTS
-- An increase in total return of 3.5 per cent of the opening net asset value.
-- 5.7 per cent underlying growth in the investment portfolio.
-- The sale of Selima Holding Company Ltd delivered proceeds of
GBP1.0 million, achieving a multiple of 3.7x original cost, with
the potential for further consideration.
-- Total dividends paid in the year of 3.0 pence per ordinary
share (2016: 4.5 pence per ordinary share).
-- Total cumulative dividends paid since inception of 55.5 pence
per ordinary share (2016: 52.5 pence per ordinary share).
-- Proposed final dividend of 1.5 pence per ordinary share in
respect of the year ended 31 December 2017.
-- Successful fundraising during the year, raising net proceeds of GBP4.1 million.
Chairman's Statement
I am pleased to report that the Company has made good progress
during the year with a total shareholder return of 2.1 pence per
ordinary share. This equates to 3.5 per cent of the net asset value
at 31 December 2016 and total shareholder return is now 114.3 pence
per ordinary share.
Your Company's portfolio delivered a steady performance over the
year, generating a return of 5.7 per cent over its opening value.
New and follow-on investments totalling GBP2.37 million have also
been completed.
Realisations in Year
Two full realisations were achieved in the year:
In May 2017 the Company realised its investment in Selima
Holding Company Ltd generating initial proceeds of GBP1.0 million.
The total return (including income) from this investment so far is
GBP1.11 million, a multiple of 3.7x cost. There is the potential
for additional contingent consideration of up to a maximum of
GBP0.7 million, subject to the achievement of agreed milestones
over the period to November 2019.
In August 2017 the Company realised its residual interest in
Harvey Jones Holdings Limited for GBP0.56 million. This takes the
total return from this investment to GBP1.87 million, a multiple of
1.6x cost.
New Investment
During the year your Company completed two new investments and
made three follow-on investments.
In July 2017 your Company completed a GBP1.2 million investment
into Friska Limited. Friska operates a chain of "food-to-go"
restaurants centred in Bristol. This retail chain has a clear roll
out strategy to extend to new UK locations building a distinctive
'Feel Good Food' brand. The Company's investment is being used to
both support new store openings and invest in management and
infrastructure to allow the business to scale its operations.
In September 2017 an investment of GBP0.6 million was completed
into e2E Engineering Limited, a technical consultancy business
operating in the satellite communications market. The business is
utilising new technologies to become a niche managed service
communications provider focusing on areas currently under-served by
existing solutions. The Company's investment formed part of a
GBP1.9 million round to commercialise the first of e2E's products
in conjunction with the European Space Agency.
Follow-on investments totalling GBP0.57 million were made into
existing portfolio companies.
Financial Results
In the year to 31 December 2017 your Company's total return
increased by 2.1 pence per ordinary share to 114.3 pence per
ordinary share, driven mainly by the underlying value growth in the
investment portfolio. This equates to an increase of 3.5 per cent
on the opening net asset value at 31 December 2016.
During the year your Company has paid total dividends of 3.0
pence per ordinary share, bringing the total cumulative dividends
paid since inception to 55.5 pence per ordinary share. The net
asset value at 31 December 2017 is 58.8 pence per ordinary share as
summarised in the table below:
Pence per GBP000
ordinary
share
---------------------------- -------------- -----------------
NAV at 31 December
2016 59.7 56,109
Net underlying increase
in portfolio 2.2 2,249
Net loss after expenses (0.2) (180)
Issue/buy-back of new
shares 0.1 3,898
2.1 5,967
Dividends paid (3.0) (3,020)
---------------------------- ------ ------ -------- -------
(0.9) 2,947
---------------------------- ------ ------ -------- -------
NAV at 31 December
2017 58.8 59,056
Cumulative dividends
paid 55.5
Total at 31 December
return: 2017 114.3
at 31 December
2016 112.2
--------------------------- ------ ------ -------- -------
The charts on page 10 of the annual report show in greater
detail the movement in total return, net asset value and dividends
paid over time.
The investments held at 31 December 2016, amounting to GBP39.32
million, delivered a return over the year of GBP2.25 million,
equivalent to an increase in value for shareholders of 2.2 pence
per ordinary share. This return comprises a gain on the revaluation
of the portfolio of GBP2.21 million and a net gain over the opening
value from the realisation of investments and deferred proceeds of
GBP0.04 million.
Within the current portfolio there were GBP4.88 million of
unrealised gains offset by GBP2.67 million of unrealised losses.
There were strong performances from Matillion Limited, GTK (Holdco)
Limited, Deep-Secure Ltd, Intelligent Office UK (IO Outsourcing
Limited t/a Intelligent Office), Ketech Enterprises Limited, ACC
Aviation, Business Collaborator Limited and Mangar Health Limited,
which in part were offset by the poorer performances of DisplayPlan
Holdings Limited, Immunobiology Limited and The Heritage Window
Company Holdco Limited.
The realisation of Selima Holding Company Ltd contributed
profits on their 31 December 2016 carrying value of GBP0.41 million
and this was offset by losses of GBP0.55 million on the refinancing
of The Heritage Window Company Holdco Limited. The latter also had
a negative impact on the year's income, with a provision of GBP0.29
million against loan interest and preference dividends.
Shareholder Relations
Annual General Meeting
The Annual General Meeting of the Company will be held at 12:00
noon on 9 May 2018 at 33 St James Square, London, SW1Y 4JS. Full
details of the agenda for this meeting are included in the Notice
of the Annual General Meeting on page 75 of the annual report.
Dividends
Dividends paid in the year comprise a final dividend of 1.5
pence per ordinary share in respect of the year ended 31 December
2016, and an interim dividend of 1.5 pence per ordinary share in
respect of the financial year just ended, totalling 3.0 pence per
ordinary share. This brings the cumulative dividends paid to 55.5
pence per ordinary share.
As highlighted in previous statements the VCT rules introduced
and implemented in 2015 will lead to more investments in earlier
stage businesses. The unquoted portfolio as at 31 December 2017
comprised GBP31.18 million (82 per cent) of investments made prior
to the implementation of this change and GBP6.96 million (18 per
cent) after this time. Whilst the older investments in the
portfolio may provide an element of more stable returns in the
short term, over the medium and longer term returns are expected to
have a higher degree of volatility.
With this in mind and to maintain a sustainable level of future
dividends the Board is proposing a final dividend of 1.5 pence per
ordinary share for the year ended 31 December 2017. This final
dividend is subject to approval by the shareholders at the
forthcoming Annual General Meeting and if approved will then be
paid on 11 May 2018 to shareholders on the register at 3 April
2018. The ex-dividend date is 29 March 2018.
Dividend Re-investment Scheme ("DRIS")
Your Company operates a DRIS, which gives shareholders the
opportunity to re-invest any cash dividends and is open to all
shareholders, including those who invested under the recent offers.
The three advantages of the DRIS are:
1 the dividends remain tax free;
2 any DRIS investment attracts income tax relief at the rate of 30 per cent; and
3 the investment is made at a 5 per cent discount to the last reported net asset value.
For the financial year ended 31 December 2017 dividends
totalling GBP0.66 million were invested in your Company by way of
the DRIS.
Fundraising
During the first half of the financial year your Company raised
net proceeds of GBP4.1 million through a "top-up" offer.
Subsequent to the year-end your Company launched a further
top-up fundraising on 11 January 2018. The offer was fully
subscribed from existing shareholders and was not therefore opened
to new shareholders, closing on 26 January 2018. The Company
allotted 7,366,700 ordinary shares on 16 February 2018 raising net
proceeds of GBP4.3 million and following this allotment there were
107,857,275 ordinary shares in issue.
Shareholder Relations
The Investment Adviser recently commissioned a survey to
identify shareholder reasons for investing in VCTs and it is very
pleasing that more than 1,000 shareholders replied. The results
identified that primary drivers for investment are the tax reliefs
and also the dividend yield. The recent Budget did not change the
tax treatment on VCT dividends which I am sure is a positive for
the industry and its shareholders. Almost half of the respondents
(45 per cent) said they chose VCTs in order to support growing UK
businesses and the investments in Selima and Harvey Jones reported
earlier are good examples of the successes achieved by your Company
in supporting the UK economy.
Shareholders also indicated a strong preference to be patient
investors with 64 per cent having held their investment for more
than 10 years and 32 per cent wanting information on how to
transfer their shares to the next generation in their family.
The electronic communications policy continues to be a great
success, with 83 per cent of shareholders now receiving
communications in this way. Documents such as the annual report are
disseminated via the website www.bscfunds.com rather than by post,
saving on printing costs, as well as being more environmentally
friendly.
Your Company's website www.bscfunds.com is refreshed on a
regular basis, and provides a comprehensive level of information in
what I hope is a user-friendly format.
The next Investor Workshop will take place on 16 May 2018 and is
being held at the HAC - Honourable Artillery Company, Armoury
House, City Road, London, EC1Y 2BQ.
Share Premium Cancellation
On 21 September 2017 the Company cancelled the balance of its
Share Premium, GBP20.58 million, which was transferred to the
Capital Reserve. As set out under the Statement of Changes in
Equity this will become available for distribution at various times
over the period to 1 January 2021.
Regulatory Developments
The new rules set out in the November 2017 Budget and the
outcome of the Patient Capital Review included some changes
principally to ensure that investment activity remains targeted at
younger UK-based smaller businesses. The technical changes around
investment structures are likely to see an even more sparing use of
loan finance, with instruments now being unsecured but in general
these changes are not expected to have a material impact on the
Company. There was, however, a significant change with regards to
investment limits which saw a doubling in the annual investment
limit for Knowledge Intensive businesses to GBP10 million from GBP5
million. The lifetime investment limit for these businesses is
GBP20 million. This provides the opportunity for the Company to
provide greater amounts of capital for scale up investment for
individual businesses than previously.
HMRC are still struggling to process applications for advance
assurance. Despite HMRC's stated intention of bringing the approval
process down to fifteen workings days for the significant majority
of investments this has yet to be achieved. In fact in the short
term waiting times seem to have increased and the Company has
potentially lost one investment opportunity for GBP2 million where
advance assurance had been requested but no response received in
time.
This is not unique to your Company and the Investment Adviser
and other VCT advisers are lobbying HM Treasury and HMRC to remedy
this situation.
Post Balance Sheet Events
In March 2018 the Company made a new investment of GBP0.98
million into Ncam Technologies Limited and also made a follow-on
investment of GBP0.38 million into Matillion Limited.
Outlook
The Board recognises that the new regulatory environment for
VCTs will change the portfolio's composition over time. New
investments will be in growing, earlier-stage businesses that will
be less able to fund debt instruments or pay dividends with the
result that the Company's ability to pay dividends will become
increasingly dependent on the timing and amount of realisation
proceeds.
The population of potential investments has been limited by
recent legislative changes and this has led to some pressure on
investment terms and pricing, especially in competitive processes.
A number of other VCTs have recently raised large amounts of new
funding and combined with new rules that come into effect in the
near future this may see these pressures increase further.
Nonetheless the recent changes that increase the investment limits
in respect of Knowledge Intensive businesses allowing greater
funding in any one year and a GBP20 million lifetime limit are
welcomed as this affords the opportunity to follow investments as
they scale.
It is pleasing that HMRC have recently given advance assurance
for a number of potential investments (including Ncam Technologies
Limited) and the Company is well placed to continue to pursue its
objective of delivering long-term value through a diversified
portfolio.
Richard Last
Chairman
Objectives and Key Policies
The Company's objective is to provide investors with an
attractive long-term tax free dividend yield whilst maintaining the
Company's status as a venture capital trust.
Investment Policy
The Company's investment policy is to create a portfolio that
blends a mix of businesses operating in traditional industries with
those that offer opportunities in the application and development
of innovation. Investing across a range of companies and sectors
reduces exposure to particular markets and individual companies.
The changes to the VCT legislation in November 2015 and those
announced in the November 2017 Budget mean that there is greater
emphasis on opportunities focussing on the application and
development of innovation in their particular markets.
To this end the Company will invest in UK businesses across a
broad range of sectors including but not limited to software,
information technology and telecommunications, retail and brands,
business services, manufacturing and industrial services and
healthcare. These investments will primarily be in unquoted UK
companies which meet the definition of a Qualifying Investment, in
order to maintain the Company's VCT status. It is anticipated that
the majority of these businesses will be re-investing their profits
for growth and the investments will, therefore, comprise mainly
equity instruments.
Borrowing
The Company funds the investment programmes out of its own
resources and has no borrowing facilities for this purpose.
Co-investment
British Smaller Companies VCT2 plc and British Smaller Companies
VCT plc ("the VCTs") have in aggregate first choice of all
investment opportunities meeting the VCT qualifying criteria that
require up to GBP4.5 million of equity. Amounts above GBP4.5
million will be allocated one third to YFM's co-investment funds
and two thirds to the VCTs. Where there are opportunities for the
VCTs to co-invest with each other the basis for allocation is 40
per cent to the Company and 60 per cent to British Smaller
Companies VCT plc. The Board of the Company has discretion as to
whether or not to take up or, where British Smaller Companies VCT
plc does not take its allocation, increase its allocation in such
co-investment opportunities.
Asset mix
Pending investment in VCT-qualifying securities, surplus cash is
primarily held in interest bearing instant access, and short-notice
bank accounts. Subsequent to the Finance (No. 2) Act 2015
investments can no longer be made in non-qualifying quoted
investments traded on an unregulated exchange. This change
therefore now excludes AIM investments in this category.
Remuneration Policy
The Company's policy on the remuneration of its directors, all
of whom being non-executive directors, can be found on page 40 of
the annual report.
Other Key Policies
Details of the Company's policies on the payment of dividends,
the DRIS and the buy-back of shares are given on the inside of the
front cover of the annual report. In addition to these the
Company's anti-bribery and environmental and social
responsibilities policies can be found on page 29 of the annual
report.
Processes and Operations
The Investment Adviser is responsible for the sourcing and
screening of initial enquiries, carrying out suitable due diligence
investigations and making submissions to the Board regarding
potential investments. Once approved, further due diligence is
carried out and HMRC clearance is obtained as the Board deem
necessary for approval as a Qualifying Holding.
The Board approves all investment and divestment decisions save
in that new investments up to GBP250,000 in companies whose
securities are traded on a regulated stock exchange and where the
decision is required urgently, in which case the Chairman of the
Board of Directors, if appropriate, may act in consultation with
the Investment Adviser.
The Board regularly monitors the performance of the portfolio
and the investment requirements set by the relevant VCT
legislation. Reports are received from the Investment Adviser
regarding the trading and financial position of each investee
company and senior members of the Investment Advisory Team
regularly attend the Company's Board meetings. Monitoring reports
are also received at each Board meeting on compliance with VCT
regulations so that the Board can monitor that the Venture Capital
Trust status of the Company is maintained and take corrective
action if appropriate.
The Board reviews the terms of YFM Private Equity Limited's
appointment as Investment Adviser on a regular basis.
YFM Private Equity Limited has performed investment advisory,
administrative and secretarial services for the Company since its
inception on 28 November 2000. The principal terms of the agreement
under which these services are performed are set out in note 3 to
the financial statements.
Performance Incentive
The Investment Adviser will receive an amount (satisfied by the
issue of shares) equivalent to 20 per cent of the amount by which
the cumulative dividends per ordinary share paid as at the last
business day in December in any year, plus the average of the
middle market price per ordinary share on the five dealing days
prior to that day, exceeds 120 pence per ordinary share, multiplied
by the number of ordinary shares issued and the ordinary shares
under option (if any) (the "Hurdle"). Under the terms of the
Subscription Rights Agreement, once the Hurdle has been exceeded it
is reset at that value going forward, which becomes the new Hurdle.
Any subsequent exercise of these rights will only occur once the
new Hurdle has been exceeded. The subscription rights are
exercisable in the ratio 95:5 between the Investment Adviser and
Chord Capital Limited. Further details are given in note 3 to the
financial statements.
In the opinion of the directors the continuing appointment of
YFM Private Equity Limited as Investment Adviser is in the
interests of the shareholders as a whole in view of its experience
in advising venture capital trusts and in making, managing and
exiting investments of the kind falling within the Company's
investment policies.
Key Performance Indicators
The commonly used benchmarks of performance for VCTs are total
return, calculated as cumulative dividends paid plus net asset
value, and dividends paid. The charts on page 10 of the annual
report show the performance history of these benchmarks.
The evaluation of comparative success of the Company's total
return is by way of reference to the share price total return for
approximately 50 generalist VCTs as published by the Association of
Investment Companies ("the AIC"). This is the Company's stated
benchmark index. A comparison and explanation of the calculation of
this return is shown in the Directors' Remuneration Report on page
42 of the annual report.
Shareholder Returns
The table below shows the cumulative dividends, the total return
on each fundraising round per ordinary share and the total return
if a shareholder had opted to participate in the Company's DRIS.
The cumulative dividend and total return figures in this table
exclude the benefits of all tax reliefs, whilst the last column
includes the benefit of tax reliefs as noted.
Tax year Net Cumulative Total Offer Offer Overall
asset dividends return price price return
value paid since net including
as since fundraising of tax relief
at fundraising / date initial since
31 of tax fundraising
December acquisition relief with
2017 participation
in the
DRIS
(1)
Pence Pence Pence Pence Pence Pence
2000/01 and
2001/02 58.8 55.5 114.3 100.0 80.0 180.3
2001/02 and
2002/03 58.8 55.5 114.3 100.0 80.0 180.3
December 2005
issue of shares
on acquisition
of British Smaller
Technology Companies
(2) 40.4 37.2 77.6 100.0 80.0 178.9
2009/10 and
2010/11 58.8 33.5 92.3 77.3 54.1 137.8
2010/11 and
2011/12 58.8 29.5 88.3 70.3 49.2 127.9
2012 58.8 25.5 84.3 70.5 49.4 120.3
2012/13 and
2013/14 58.8 21.0 79.8 68.0 47.6 111.6
2013/14 and
2014/15 58.8 16.5 75.3 68.0 47.6 103.9
2014/15 and
2015/16 58.8 12.0 70.8 65.0 45.5 95.7
2015/16 58.8 7.5 66.3 63.0 44.1 88.3
----------------------- ---------- ------------- ------------- ------- --------- ---------------
Notes
1. NAV plus tax relief on the initial subscription plus
additional tax relief and NAV on DRIS shares purchased. Assuming
that all dividends since inception were invested under terms of
current DRIS
2. Assuming initial offer price and initial tax relief from
original subscription in British Smaller Technology Companies VCT
plc
Expenses
Ongoing Charges
The Board monitors expenses using the Ongoing Charges figure, as
calculated in line with the AIC recommended methodology. This
figure shows shareholders the annual percentage reduction in net
asset value as a result of recurring operational expenses which,
whilst based on historical information, provides an indication of
the likely level of costs that will be incurred in managing the
Company in the future.
Expenses Year to 31 December Year to 31 December
2017 (%) 2016 (%)
Ongoing Charges
figure 2.48 2.51
Expenses Cap
The total costs incurred by the Company in the year (excluding
any performance related fees, trail commission payable to financial
intermediaries and VAT) is capped at 2.9 per cent of the total net
asset value as at the relevant year end. The treatment of costs in
excess of the cap is described in note 3 on page 58 of the annual
report. There was no breach of the expenses cap in the current or
prior year.
Compliance with VCT Legislative Tests
The main business risk facing the Company is the retention of
VCT qualifying status. The Board receives regular reports on
compliance with the VCT legislative tests from its Investment
Adviser. In addition the Board receives formal reports from its VCT
Status Adviser twice a year. The Board can confirm that during the
period all of the VCT legislative tests have been met.
Under Chapter 3 Part 6 of the Income Tax Act 2007, in addition
to the requirement for a VCT's ordinary share capital to be listed
in the Official List on a European regulated market throughout the
period, there are a further five specific tests that VCTs must meet
following the initial three year provisional period.
The Board can confirm that during the period all of the VCT
legislative tests set out below have been met.
Income Test
The Company's income in the period must be derived wholly or
mainly (70 per cent) from shares or securities.
Retained Income Test
The Company must not retain more than 15 per cent of its income
from shares and securities.
Qualifying Holdings Test
At least 70 per cent by value of the Company's investments must
be represented throughout the period by shares or securities
comprised in Qualifying Holdings of investee companies.
Eligible Shares Test
At least 30 per cent of the Company's Qualifying Holdings must
be represented throughout the period by holdings of
non-preferential ordinary shares.
For monies raised from 6 April 2011 onwards the eligible shares
test above increases to at least 70 per cent of Qualifying Holdings
that must be represented by eligible shares.
In addition, monies are not permitted to be used to finance
buy-outs or otherwise to acquire existing businesses or shares.
There is also an annual limit for each investee company which
provides that they may not raise more than GBP5 million of state
aid investment (including from VCTs) in the 12 months ending on the
date of each investment (GBP10 million for Knowledge Intensive
Companies).
Maximum Single Investment Test
The value of any one investment has, at any time in the period,
not represented more than 15 per cent of the Company's total
investment value. This is calculated at the time of investment and
further additions and therefore cannot be breached passively.
The Budget in November 2017 introduced further changes that come
into effect in future years and more detail on these is given on
page 16 of the annual report under the heading "Budget Highlights
and Patient Capital Review".
Further restrictions placed on VCTs are:
Dividends from cancelled share premium
The Finance Act 2014 introduced a restriction with respect to
the use of monies in respect of VCTs. In particular, no dividends
can be paid out of cancelled share premium arising from shares
allotted on or after 6 April 2014 until at least three full
financial years have elapsed from the date of allotment.
Of amounts relating to cancelled share premium GBP20.24 million
remains undistributable until on or after 1 January 2019.
Other
The Finance (No. 2) Act 2015 imposes further conditions in
respect of investments, including those regarded as non-qualifying
investments, including:
i) An aggregate limit of GBP12 million (or GBP20 million for
Knowledge Intensive Companies) on the amount of State Aid Risk
Finance investment a business can receive during its lifetime;
ii) No more than seven years can have elapsed since the first
commercial sale achieved by the business (ten years in the case of
a Knowledge Intensive Company), unless:
a. the business has previously received an investment from a fund that has received state aid; or
b. the investment comprises more than 50 per cent of the average
of the previous five years' turnover and the funds are to be used
in the business to fund growth into new product markets and/or new
geographies.
Investment Performance
Portfolio Structure and Diversity
Set out on page 13 of the annual report is a profile of the
investment portfolio by age, value compared to cost, investment
instrument and industry sector. This illustrates the broad range of
the investment portfolio with 71 per cent of the portfolio
valuation being held for more than 3 years, whilst 88 per cent is
held at cost or above. 47 per cent of the portfolio's value is held
in income generating financial instruments.
Investment Review
The portfolio delivered a strong performance in the year, with a
return of GBP2.25 million on the opening value and income of
GBP1.41 million.
Your portfolio
The portfolio as a whole delivered an increased value of GBP2.25
million in the year, as shown in Table A below. A value gain of
GBP1.45 million has come from the unquoted portfolio with strong
performances from Matillion Limited, GTK (Holdco) Limited,
Deep-Secure Ltd and Intelligent Office UK (IO Outsourcing Limited
t/a Intelligent Office) offset by the impact of difficult trading
conditions at DisplayPlan Holdings Limited, Immunobiology Limited
and The Heritage Window Company Holdco Limited. DisplayPlan
suffered from its exposure to the retail sector, with a number of
clients cutting back expenditure. Management at Heritage Windows
has been changed and in December 2017 its funding was restructured,
receiving additional funding of GBP0.5 million with the new team
investing alongside to drive future performance.
Table A
Investment portfolio GBPmillion %
------------------------------- ----------- ----
Unquoted value gain 1.45 64
Quoted value gain 0.76 34
Gain on disposal over opening
value 0.01 1
------------------------------- ----------- ----
2.22 99
Gain from deferred proceeds 0.03 1
------------------------------- ----------- ----
Total value movement 2.25 100
------------------------------- ----------- ----
At 31 December 2017 the investment portfolio was valued at
GBP40.42 million, representing 68.4 per cent of net assets (70.1
per cent at 31 December 2016). Cash at 31 December 2017 was
GBP17.67 million representing 29.9 per cent of net assets (28.3 per
cent at 31 December 2016). In April 2016 a new VCT rule came into
force preventing your Company from holding deposits with more than
seven days' notice. While this did not require pre-existing
deposit/notice accounts to be closed, over time this will limit the
level of income that can be generated from cash awaiting
investment. As a result the Board continues to review alternative
investments that would generate a higher level of income while
minimising the level of risk.
Other Significant Investment Movements
Investments
During the year ended 31 December 2017 the Company completed 5
investments totalling GBP2.37 million. This comprised 2 new
investments of GBP1.80 million and 3 follow-on investments of
GBP0.57 million. The analysis of these investments is shown in
Table B below. The case study on page 17 of the annual report gives
more information on the investment in Friska Limited.
Table
B
Date Company Investments made
GBPmillion
New Follow-on Total
-------- -------------------------- ------ ---------- ------
Mar-17 PowerOasis Limited - 0.06 0.06
Sipsynergy (via Hosted
Jun-17 Network Services Ltd) - 0.41 0.41
Jun-17 Immunobiology Limited - 0.10 0.10
Jul-17 Friska Limited 1.20 - 1.20
Sep-17 e2E Engineering Limited 0.60 - 0.60
-------- -------------------------- ------ ---------- ------
Invested in the year 1.80 0.57 2.37
------ ---------- ------
Capitalised interest and
dividends 0.06
------
Total additions in the
year 2.43
----------------------------------- ------ ---------- ------
Disposal of Investments
During the year to 31 December 2017 the Company received
proceeds from disposals, repayments of loans/preference shares and
deferred consideration of GBP3.57 million. Overall this resulted in
a value gain on disposal of investments of GBP0.04 million above
the 31 December 2016 valuations as set out in Table C. The case
study on page 17 of the annual report gives some insight into the
value created from the investment in Selima Holding Company
Ltd.
Table C
Disposal of Investments Net proceeds Opening Gain on
from sales value 31 opening
of investments December value
2016
GBPmillion GBPmillion GBPmillion
Sale of portfolio
investments 3.54 3.53 0.01
Deferred proceeds
received 0.03 - 0.03
------------------------- ---------------- ----------- -----------
Total investment
disposals 3.57 3.53 0.04
------------------------- ---------------- ----------- -----------
The sale of Selima Holding Company Ltd and Harvey Jones Holdings
Limited account for GBP1.56 million of the proceeds contributing a
combined profit on cost of GBP0.81 million. The quoted portfolio
delivered proceeds of GBP0.64 million with a profit on cost of
GBP0.47 million.
Further analysis of all investments sold in the year can be
found in note 7 to the financial statements on page 64 of the
annual report.
Portfolio Composition
As at 31 December 2017 the portfolio had a value of GBP40.42
million which comprised GBP38.14 million in unquoted investments
(94 per cent) and GBP2.28 million in quoted investments (6 per
cent). An analysis of the movements in the year is shown on page 61
of the annual report.
The portfolio remains well diversified, with 24 of 38
investments having a value greater than GBP0.5 million, compared to
26 a year earlier, with the single largest investment representing
5.6 per cent of the net asset value.
The charts on page 13 of the annual report show the composition
of the portfolio as at 31 December 2017 by industry sector, age of
investment, investment instrument and the valuation compared to
cost. This demonstrates representation across a wide range of
industry sectors.
Valuation Policy
Unquoted investments are valued in accordance with the valuation
policy set out in note 1 on pages 54 and 55 of the annual report,
which takes account of current industry guidelines for the
valuation of venture capital portfolios. Adjustments to fair value
are made where an investment is significantly under-performing. As
at 31 December 2017 the value of investments falling into each
valuation category is shown in Table D. Now that the focus of new
investments is on younger businesses that are investing for growth
a higher proportion of valuations are based on a multiple of sales.
This is likely to increase as the more mature companies in the
portfolio are divested.
Table D
Valuation Policy Valuation % of
GBPmillion portfolio
by value
Earnings multiple 24.19 60
Sales multiple 6.96 17
Cost, reviewed for change
in fair value 5.37 13
Price of recent investment,
reviewed for change in fair
value 1.62 4
Quoted investments at bid
price 2.28 6
------------------------------ ------------ -----------------
Total 40.42 100
------------------------------ ------------ -----------------
Budget Highlights and Patient Capital Review
It was pleasing that the Government reaffirmed its commitment to
the Venture Capital Trust Schemes as one of the tools to support
investment in the UK's small businesses which remain an engine of
future growth and innovation. The changes announced seek to focus
investment on earlier stage higher risk businesses and away from
any capital preservation/asset-backed investments and also to
achieve higher levels of investment in qualifying companies.
There are two new qualifying investment tests; the first is that
for the Company as a whole 80 per cent of its investments will have
to be held in Qualifying Investments as opposed to the current test
of 70 per cent; for the Company this comes into force from 1
January 2020. The second test applies to financial years commencing
on or after 6 April 2019 where 30 per cent of any funds raised have
to be invested in Qualifying Investments within 12 months. This
will apply for the year ending 31 December 2020. It is not believed
that either of these changes will significantly impact the
Company.
There are also proposed changes to the investment instruments
that VCTs can use. In particular the use of loan structures will
have conditions, these include that loans will have to be unsecured
and be subject to a principles-based test with what is described as
a safe harbour restricting the return on debt instruments to no
more than 10 per cent on average over a five year period. Whilst
this will have some limited impact on the Company, the majority of
investments made subsequent to November 2015 have not included
significant levels of loan stock.
The Government published the results of its consultation known
as the Patient Capital Review at the same time as the November 2017
Budget.
Full details can be found at
www.gov.uk/government/uploads/system/uploads/attachment_data/file/661398/Patient_Capital_Review_Consultation_response_web.pdf
Summary and Outlook
In addition to the recent investment in Ncam Technologies
Limited HMRC has now granted advance assurance in respect of a
number of other investments. There is a good pipeline of enquiries
following these. We continue to lobby HMRC and HM Treasury to
improve the speed of advance assurances. We continue to
pro-actively manage the portfolio seeking to add to, enhance and
support the management teams that operate the businesses in which
the Company is investing as well as setting agendas for
realisations, re-investment and further fundraisings. As the
portfolio realises and matures the nature of the underlying
investments is likely to change with a greater proportion of equity
instruments into younger businesses.
David Hall
YFM Private Equity Limited
Investment Portfolio Summary at 31 December 2017
Name of Date Location Industry Current Valuation Proceeds Realised
company of Sector cost at to & unrealised
initial 31 date value
investment December to
2017 date*
GBP000 GBP000 GBP000 GBP000
Unquoted
portfolio
Intelligent
Office
UK (IO
Outsourcing
Limited
t/a
Intelligent Business
Office) May-14 Alloa Services 1,956 3,307 - 3,307
ACC Aviation
(via NewAcc
(2014) Business
Limited) Nov-14 Reigate Services 760 3,119 618 3,737
Mangar
Health
Limited Jan-14 Powys Healthcare 1,640 2,641 - 2,641
KeTech Software,
Enterprises IT &
Limited Nov-15 Nottingham Telecommunications 2,000 2,336 - 2,336
Software,
Matillion IT &
Limited Nov-16 Knutsford Telecommunications 1,400 2,222 - 2,222
GTK (Holdco) Manufacturing
Limited Oct-13 Basingstoke & Industrial 295 1,950 1,055 3,005
Springboard
Research
Holdings Milton Business
Limited Oct-14 Keynes Services 1,765 1,930 - 1,930
Gill Marine
Holdings Retail
Limited Sep-13 Nottingham & Brands 1,870 1,922 - 1,922
Business Software,
Collaborator IT &
Limited Nov-14 Reading Telecommunications 1,340 1,802 - 1,802
Leengate
Holdings Manufacturing
Limited Dec-13 Derbyshire & Industrial 934 1,522 - 1,522
Software,
Deep-Secure IT &
Ltd Dec-09 Malvern Telecommunications 500 1,276 - 1,276
Friska Retail
Limited Jul-17 Bristol & Brands 1,200 1,200 - 1,200
DisplayPlan
Holdings Business
Limited Jan-12 Baldock Services 70 1,109 820 1,929
Sipsynergy
(via Hosted
Network Software,
Services IT &
Limited) Jun-16 Ware Telecommunications 1,309 1,074 - 1,074
Wakefield
Acoustics
(via Malvar
Engineering Manufacturing
Limited) Dec-14 Heckmondwike & Industrial 720 1,058 41 1,099
Traveltek
Group Software,
Holdings East IT &
Limited Oct-16 Kilbride Telecommunications 980 1,001 - 1,001
Macro Art
Holdings Business
Limited Jun-14 Cambridgeshire Services 523 912 316 1,228
Software,
Biz2Mobile IT &
Limited Oct-16 Oxfordshire Telecommunications 1,000 863 - 863
Immunobiology
Limited Jun-03 Cambridge Healthcare 2,482 806 - 806
Seven
Technologies Software,
Holdings IT &
Limited Apr-12 Belfast Telecommunications 1,238 619 762 1,381
e2E Welwyn Software,
Engineering Garden IT &
Limited Sep-17 City Telecommunications 600 600 - 600
Software,
TeraView IT &
Limited Dec-11 Cambridge Telecommunications 377 557 - 557
Retail
& Brands
Bagel Nash / Manufacturing
Group Limited Jul-11 Leeds & Ind Services 630 507 200 707
Other investments
GBP0.5
million
and below 4,526 3,808 409 4,217
-------------------------------------------------- ------------------- -------- ---------- --------- --------------
Total unquoted
investments 30,115 38,141 4,221 42,362
------------------------------ ----------------- ----------------------------- ---------- --------- --------------
Quoted
portfolio
Software,
Iomart IT &
Group plc May-11 Glasgow Telecommunications 119 529 209 738
Other investments
GBP0.5
million
and below 1,129 1,753 1,466 3,219
-------------------------------------------------- ------------------- -------- ---------- --------- --------------
Total quoted
investments 1,248 2,282 1,675 3,957
------------------------------ ----------------- ----------------------------- ---------- --------- --------------
31,363 40,423 5,896 46,319
----------------- -------------------------------------------------- -------- ---------- --------- --------------
Full disposals
to date 22,534 - 28,258 28,258
-------------------------------------------------- ------------------- -------- ---------- --------- --------------
Total investment
portfolio 53,897 40,423 34,154 74,577
------------------------------ ----------------- ----------------------------- ---------- --------- --------------
* represents proceeds received to date plus the unrealised
valuation at 31 December 2017.
Summary of Investment Portfolio Movement since 31 December
2016
Name of Company Investment Disposal Additions Valuation Investment
valuation proceeds including gains valuation
at 31 capitalised including at 31
December interest profits December
2016 and / (losses) 2017
dividends on disposal
GBP000 GBP000 GBP000 GBP000 GBP000
Unquoted portfolio
Intelligent Office
UK (IO Outsourcing
Limited t/a Intelligent
Office) 2,951 - - 356 3,307
ACC Aviation (via
Newacc (2014) Limited 3,480 (618) - 257 3,119
Mangar Health Limited 2,486 - - 155 2,641
KeTech Enterprises
Limited 2,000 - - 336 2,336
Matillion Limited 1,400 - - 822 2,222
GTK (Holdco) Limited 1,675 (446) - 721 1,950
Springboard Research
Holdings Limited 1,706 - 59 165 1,930
Gill Marine Holdings
Limited 1,690 - - 232 1,922
Business Collaborator
Limited 1,743 - - 59 1,802
Leengate Holdings
Limited 1,408 - - 114 1,522
Deep-Secure Ltd 625 - - 651 1,276
Friska Limited - - 1,200 - 1,200
Displayplan Holdings
Limited 2,015 - - (906) 1,109
Sipsynergy (via Hosted
Network Services Ltd) 900 - 409 (235) 1,074
Wakefield Acoustics
(via Malvar Engineering
Limited) 883 - - 175 1,058
Traveltek Group Holdings
Limited 980 - - 21 1,001
Macro Art Holdings
Limited 959 (104) - 57 912
Biz2Mobile Limited 1,000 - - (137) 863
Immunobiology Limited 1,486 - 100 (780) 806
Seven Technologies
Holdings Limited 619 - - - 619
e2E Engineering Limited - - 600 - 600
TeraView Limited 555 - 2 - 557
Bagel Nash Group Limited 548 - - (41) 507
The Heritage Window
Company Holdco Limited 954 - - (617) 337
Selima Holding Company
Ltd 586 (996) - 410 -
Harvey Jones Holdings
Limited 622 (559) - (63) -
Other investments
GBP0.5 million and
below 3,976 (180) 60 (385) 3,471
---------------------------- ----------- ---------- ------------- ------------- -----------
Total unquoted investments 37,247 (2,903) 2,430 1,367 38,141
---------------------------- ----------- ---------- ------------- ------------- -----------
Quoted portfolio
Iomart Group plc 407 - - 122 529
AB Dynamics plc 636 (409) - 247 474
Other investments
GBP0.75 million and
below 1,029 (229) - 479 1,279
---------------------------- ----------- ---------- ------------- ------------- -----------
Total quoted investments 2,072 (638) - 848 2,282
---------------------------- ----------- ---------- ------------- ------------- -----------
Total 39,319 (3,541) 2,430 2,215 40,423
---------------------------- ----------- ---------- ------------- ------------- -----------
Risk Factors
The Board carries out a regular and robust review of the risk
environment in which the Company operates. The principal risks and
uncertainties identified by the Board and techniques used to
mitigate these risks are set out in this section.
The Board seeks to mitigate its principal risks by setting
policy, regularly reviewing performance and monitoring progress and
compliance. In the mitigation and management of these risks, the
Board applies rigorously the principles detailed in section C.2:
"Risk Management & Internal Control" of The UK Corporate
Governance Code issued by the Financial Reporting Council in April
2016. Details of the Company's internal controls are contained in
the Corporate Governance Internal Control section on pages 38 and
39 of the annual report and further information on exposure to
risks including those associated with financial instruments is
given in note 17a of the annual report.
Loss of Approval as a VCT
Risk - The Company must comply with Chapter 3 Part 6 of the
Income Tax Act 2007 which allows it to be exempted from corporation
tax on capital gains. Any breach of these rules may lead to the
Company losing its approval as a VCT, qualifying shareholders who
have not held their shares for the designated holding period having
to repay the income tax relief they obtained and future dividends
paid by the Company becoming subject to tax. The Company would also
lose its exemption from corporation tax on capital gains.
Mitigation - One of the Key Performance Indicators monitored by
the Company is the compliance with legislative tests. Details of
how the Company manages these requirements can be found under the
heading "Compliance with VCT Legislative Tests" on page 12 of the
annual report.
Economic
Risk - Events such as recession and interest rate fluctuations
could affect investee companies' performance and valuations.
Mitigation - As well as the response to 'Investment and
Strategic' risk below the Company has a clear investment policy
(summarised on page 8 of the annual report) and a diversified
portfolio operating in a range of sectors. The Investment Adviser
actively monitors investee performance which provides quality
information for monthly reviews of the portfolio.
Investment and Strategic
Risk - Inappropriate strategy, poor asset allocation or
consistently weak stock allocation may lead to under performance
and poor returns to shareholders. The quality of enquiries,
investments, investee company management teams and monitoring, and
the risk of not identifying investee under performance might also
lead to under performance and poor returns to shareholders.
Mitigation - The Board reviews strategy annually. At each of the
Board meetings the directors review the appropriateness of the
Company's objectives and stated strategy in response to changes in
the operating environment and peer group activity. The Investment
Adviser carries out due diligence on potential investee companies
and their management teams and utilises external reports where
appropriate to assess the viability of investee businesses before
investing. Wherever possible a non-executive director will be
appointed to the board of the investee on behalf of the
Company.
Regulatory
Risk - The Company is required to comply with the Companies Act
2006, the rules of the UK Listing Authority, the Prospectus Rules
made by the Financial Conduct Authority and International Financial
Reporting Standards as adopted by the European Union and is subject
to the EU's Alternative Investment Fund Manager's Directive. Breach
of any of these might lead to suspension of the Company's Stock
Exchange listing, financial penalties or a qualified audit
report.
Mitigation - The Investment Adviser and the Company Secretary
have procedures in place to ensure recurring Listing Rules
requirements are met and actively consult with brokers, solicitors
and external compliance advisers as appropriate. The key controls
around regulatory compliance are explained on pages 38 and 39 of
the annual report.
Reputational
Risk - Inadequate or failed controls might result in breaches of
regulations or loss of shareholder trust.
Mitigation - The Board is comprised of directors with suitable
experience and qualifications who report annually to the
shareholders on their independence. The Investment Adviser is
well-respected with a proven track record and has a formal
recruitment process to employ experienced investment staff.
Allocation rules relating to co-investments with other funds
managed/advised by the Investment Adviser, have been agreed between
the Investment Adviser and the Company. Advice is sought from
external advisors where required. Both the Company and the
Investment Adviser maintain appropriate insurances.
Operational
Risk - Failure of the Investment Adviser's and administrator's
accounting systems or disruption to its business might lead to an
inability to provide accurate reporting and monitoring.
Mitigation - The Investment Adviser has a documented business
continuity plan, which provides for back-up services in the event
of a system breakdown.
Financial
Risk - Inadequate controls might lead to misappropriation of
assets. Inappropriate accounting policies might lead to
misreporting or breaches of regulations.
Mitigation - The key controls around financial reporting are
described on pages 38 and 39 of the annual report.
Market/Liquidity
Risk - Lack of liquidity in both the venture capital and public
markets. Investment in unquoted and AIM quoted companies, by their
nature, involve a higher degree of risk than investment in
companies trading on the main market. In particular, smaller
companies often have limited product lines, markets or financial
resources and may be dependent for their management on a smaller
number of key individuals. The fact that a share is traded on AIM
or on the main market does not guarantee its liquidity. The spread
between the buying and selling price of such shares may be wide and
thus the price used for valuation may not be achievable. The market
for stock in smaller companies is often less liquid than that for
stock in larger companies, bringing with it potential difficulties
in acquiring, valuing and disposing of such stock.
Mitigation - Overall liquidity risks are monitored on an ongoing
basis by the Investment Adviser and on a quarterly basis by the
Board.
Other Matters
Environment
The Board recognises the requirement under Section 414C of the
Companies Act 2006 to detail information about environmental
matters (including the impact of the Company's business on the
environment), employee, human rights, social and community issues,
including information about any policies it has in relation to
these matters and effectiveness of these policies.
The Company seeks to ensure that its business is conducted in a
manner that is responsible to the environment, and has introduced
an electronic communications policy. This policy has led to a
significant increase in the number of such communications, with a
commensurate reduction in the distribution of hard copy documents.
The management and administration of the Company is undertaken by
the Investment Adviser. YFM Private Equity Limited recognises the
importance of its environmental responsibilities, monitors its
impact on the environment and implements policies to reduce any
damage that might be caused by its activities. Initiatives of the
Investment Adviser designed to minimise its and the Company's
impact on the environment include recycling and reducing energy
consumption.
Given the size and nature of the Company's activities and the
fact that it has no employees, the Board considers there is limited
scope to develop and implement social and community policies.
Anti-Bribery and Corruption Policy
The Company has a zero tolerance approach to bribery. The
following is a summary of its policy:
-- it is the Company's policy to conduct all of its business in
an honest and ethical manner. The Company is committed to acting
professionally, fairly and with integrity in all its business
dealings and relationships;
-- the directors of the Company, the Investment Adviser and any
other service providers must not promise, offer, give, request,
agree to receive or accept financial or other advantage in return
for favourable treatment, to influence a business outcome or gain
any business advantage on behalf of the Company or encourage others
to do so; and
-- the Company has communicated its anti-bribery policy to the
Investment Adviser and its other service providers.
The Company had no employees during the year. The Board is
composed of three male non-executive directors. For a review of the
policies used when appointing directors to the Board of the Company
please refer to the Directors' Remuneration Report on pages 40 to
42 of the annual report.
Directors' Responsibilities Statement
The directors are responsible for preparing the annual report
and the financial statements in accordance with applicable law and
regulations.
Company law requires the directors to prepare the financial
statements for each financial year. Under that law the directors
are required to prepare the financial statements and have elected
to prepare the Company's financial statements in accordance with
International Financial Reporting Standards (IFRSs) as adopted by
the European Union. Under company law the directors must not
approve the financial statements unless they are satisfied that
they give a true and fair view of the state of affairs of the
Company and of the profit or loss for the Company for that
period.
In preparing these financial statements, the directors are
required to:
-- select suitable accounting policies and then apply them consistently;
-- make judgements and accounting estimates that are reasonable and prudent;
-- state whether they have been prepared in accordance with
IFRSs as adopted by the European Union, subject to any material
departures disclosed and explained in the financial statements;
and
-- prepare a strategic report, directors' report and directors'
remuneration report which comply with the requirements of the
Companies Act 2006.
The directors are responsible for keeping adequate accounting
records that are sufficient to show and explain the Company's
transactions and disclose with reasonable accuracy at any time the
financial position of the Company and enable them to ensure that
its financial statements comply with the Companies Act 2006. They
are also responsible for safeguarding the assets of the Company and
hence for taking reasonable steps for the prevention and detection
of fraud and other irregularities.
Website Publication
The directors are responsible for ensuring the annual report and
the financial statements are made available on a website. Financial
statements are published on the Company's website at
www.bscfunds.com in accordance with legislation in the United
Kingdom governing the preparation and dissemination of financial
statements, which may vary from legislation in other jurisdictions.
The maintenance and integrity of the Company's website is the
responsibility of the directors. The directors' responsibility also
extends to the ongoing integrity of the financial statements
contained therein.
Directors' Responsibilities pursuant to DTR4
The directors confirm to the best of their knowledge:
-- the financial statements have been prepared in accordance
with IFRSs as adopted by the European Union and give a true and
fair view of the assets, liabilities, financial position and profit
and loss of the Company; and
-- the annual report includes a fair review of the development
and performance of the business and the financial position of the
Company, together with a description of the principal risks and
uncertainties that it faces.
Having taken advice from the Audit Committee, the Board
considers the annual report and accounts, taken as a whole, are
fair, balanced and understandable and that it provides the
information necessary for shareholders to assess the Company's
performance, business model and strategy.
The names and functions of all the directors are stated on page
30 of the annual report.
This statement was approved by the Board and signed on its
behalf on 16 March 2018.
Statement of Comprehensive Income
For the year ended 31 December 2017
2017 2016
Notes
Revenue Capital Total Revenue Capital Total
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
Gains on investments
held at fair value 7 - 2,209 2,209 - 704 704
Income 2 1,413 - 1,413 1,937 - 1,937
Gain on disposal of
investments 7 - 40 40 - 339 339
Total income 1,413 2,249 3,662 1,937 1,043 2,980
Administrative expenses:
---------- ---------- --------- ---------- ---------- ---------
Investment Adviser's
fee (289) (866) (1,155) (280) (839) (1,119)
Other expenses (438) - (438) (449) - (449)
---------- ---------- --------- ---------- ---------- ---------
3 (727) (866) (1,593) (729) (839) (1,568)
Profit before taxation 686 1,383 2,069 1,208 204 1,412
Taxation 4 (73) 73 - (116) 116 -
Profit for the year 613 1,456 2,069 1,092 320 1,412
---------------------------- ------ ---------- ---------- --------- ---------- ---------- ---------
Total comprehensive
income for the year 613 1,456 2,069 1,092 320 1,412
---------------------------- ------ ---------- ---------- --------- ---------- ---------- ---------
Basic and diluted earnings
per ordinary share 6 0.61p 1.46p 2.07p 1.17p 0.34p 1.51p
---------------------------- ------ ---------- ---------- --------- ---------- ---------- ---------
The Total column of this statement represents the Company's
Statement of Comprehensive Income, prepared in accordance with
International Financial Reporting Standards ('IFRSs') as adopted by
the European Union. The supplementary Revenue and Capital columns
are prepared under the Statement of Recommended Practice 'Financial
Statements of Investment Trust Companies and Venture Capital
Trusts' (issued in November 2014 and updated in January 2017 with
consequential amendments - "SORP") published by the AIC.
Balance Sheet
At 31 December 2017
Notes 2017 2016
GBP000 GBP000
Assets
Non-current assets
Financial assets at fair value
through profit or loss 7 40,423 39,319
Trade and other receivables 825 837
-------------------------------- ------ -------- --------
41,248 40,156
Current assets
Trade and other receivables 392 391
Cash on fixed term deposit 1,988 3,037
Cash and cash equivalents 15,681 12,826
18,061 16,254
Liabilities
Current liabilities
Trade and other payables (253) (301)
Net current assets 17,808 15,953
Net assets 59,056 56,109
-------------------------------- ------ -------- --------
Shareholders' equity
Share capital 10,450 9,652
Share premium account 257 16,902
Capital redemption reserve 88 88
Other reserve 2 2
Merger reserve 5,525 5,525
Capital reserve 32,198 15,621
Investment holding gains and
losses reserve 9,090 7,077
Revenue reserve 1,446 1,242
Total shareholders' equity 59,056 56,109
-------------------------------- ------ -------- --------
Net asset value per ordinary
share 8 58.8p 59.7p
-------------------------------- ------ -------- --------
The financial statements were approved and authorised for issue
by the Board of directors and were signed on its behalf on 16 March
2018.
Statement of Changes in Equity
For the year ended 31 December 2017
Share Share Other Capital Investment Revenue Total
capital premium reserves(1) reserve holding reserve equity
account gains
and
losses
reserve
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
--------------------- --------- --------- ------------- --------- ----------- --------- --------
Balance at
31 December
2015 8,939 13,337 5,615 20,781 5,127 1,051 54,850
--------------------- --------- --------- ------------- --------- ----------- --------- --------
Revenue return
for the year - - - - - 1,208 1,208
Capital expenses - - - (839) - - (839)
Investment
holding gain
on investments
held at fair
value - - - - 704 - 704
Realisation
of investments
in the year - - - 339 - - 339
Taxation - - - 116 - (116) -
--------------------- --------- --------- ------------- --------- ----------- --------- --------
Total comprehensive
(expense) income
for the year - - - (384) 704 1,092 1,412
--------------------- --------- --------- ------------- --------- ----------- --------- --------
Issue of share
capital 568 3,030 - - - - 3,598
Issue costs
(2) - (146) - - - - (146)
Purchase of
own shares - - - (240) - - (240)
Issue of shares
- DRIS 145 681 - - - - 826
Dividends - - - (3,321) - (870) (4,191)
Total transactions
with owners 713 3,565 - (3,561) - (870) (153)
Transfer between
reserves - - - (1,933) 1,964 (31) -
Realisation
of prior year
investment
holding gains - - - 718 (718) - -
--------------------- --------- --------- ------------- --------- ----------- --------- --------
Balance at
31 December
2016 9,652 16,902 5,615 15,621 7,077 1,242 56,109
--------------------- --------- --------- ------------- --------- ----------- --------- --------
Revenue return
for the year - - - - - 686 686
Capital expenses - - - (866) - - (866)
Investment
holding gain
on investments
held at fair
value - - - - 2,209 - 2,209
Realisation
of investments
in the year - - - 40 - - 40
Taxation - - - 73 - (73) -
--------------------- --------- --------- ------------- --------- ----------- --------- --------
Total comprehensive
(expense) income
for the year - - - (753) 2,209 613 2,069
--------------------- --------- --------- ------------- --------- ----------- --------- --------
Issue of share
capital 679 3,571 - - - - 4,250
Issue costs
(2) - (176) - (10) - - (186)
Cancellation
of share premium
account, net
of costs - (20,579) - 20,569 - - (10)
Purchase of
own shares - - - (814) - - (814)
Issue of shares
- DRIS 119 539 - - - - 658
Dividends - - - (2,611) - (409) (3,020)
--------------------- --------- --------- ------------- --------- ----------- --------- --------
Total transactions
with owners 798 (16,645) - 17,134 - (409) 878
Realisation
of prior year
investment
holding gains - - - 196 (196) - -
--------------------- --------- --------- ------------- --------- ----------- --------- --------
Balance at
31 December
2017 10,450 257 5,615 32,198 9,090 1,446 59,056
--------------------- --------- --------- ------------- --------- ----------- --------- --------
Reserves available for distribution
Under the Companies Act 2006 the capital reserve and the revenue
reserve are distributable reserves. The table below shows amounts
that are available for distribution.
Capital Revenue Total
reserve reserve
GBP000 GBP000 GBP000
Distributable reserves as above 32,198 1,446 33,644
---------------------------------------- ---------- ---------- ---------
Less : Interest and dividends
not yet distributable - (1,181) (1,181)
: Cancelled share premium not
yet distributable (21,922) - (21,922)
---------------------------------------- ---------- ---------- ---------
Reserves available for distribution(3) 10,276 265 10,541
1. Other reserves include the capital redemption reserve, the
merger reserve and the other reserve, which are non-distributable.
The other reserve was created upon the exercise of warrants, the
capital redemption reserve was created for the purchase and
cancellation of own shares, and the merger reserve was created on
the merger with British Smaller Technologies Company VCT plc.
2. Issue costs include both fundraising costs and costs incurred from the Company's DRIS.
3. Subject to filing these financial statements at Companies House, see table below.
The merger reserve was created to account for the difference
between the nominal and fair value of shares issued as
consideration for the acquisition of the assets and liabilities of
British Smaller Technology Companies VCT plc. The reserve was
created after meeting the criteria under section 131 of the
Companies Act 1985 and the provisions of the Companies Act 2006 for
merger relief. The merger reserve is a non-distributable
reserve.
The capital reserve and revenue reserve are both distributable
reserves. The reserves total GBP33,644,000 representing an increase
of GBP16,781,000 during the year. The directors also take into
account the level of the investment holding gains and losses
reserve and the future requirements of the Company when determining
the level of dividend payments.
Of the potentially distributable reserves of GBP33,644,000 shown
above, GBP1,181,000 relates to interest and dividends not yet
distributable and GBP21,922,000 of cancelled share premium which
becomes distributable from 1 January 2018 onwards (see below).
The total amount held in the share premium account at 30 June
2017 (GBP20,579,000) was cancelled on 21 September 2017.
This reduction enables the Company to create distributable
reserves which may be used for the purposes of buy-backs of the
Company's shares, thereby improving the liquidity of its shares and
minimising their discount to net asset value, and for other
corporate purposes capable of being undertaken by the Company from
time to time.
Total share premium cancelled including GBP1,343,000 previously
cancelled will be available for distribution from the following
dates.
GBP000
1 January 2018 1,343
Date of filing these financial statements
at Companies House 342
1 January 2019 12,995
1 January 2020 3,565
1 January 2021 3,677
Cancelled share premium not yet distributable 21,922
----------------------------------------------- -------
On filing these financial statements at Companies House the
reserves available for distribution will be GBP12,226,000.
Statement of Cash Flows
For the year ended 31 December 2017
Notes 2017 2016
GBP000 GBP000
Net cash (outflow) inflow from operating
activities (211) 20
------------------------------------------ ------ -------- --------
Cash flows from (used in) investing
activities
Purchase of financial assets at
fair value through profit or loss 7 (2,371) (4,508)
Proceeds from sale of financial
assets at fair value through profit
or loss 3,479 2,874
Deferred consideration 34 183
Cash maturing from (placed on) fixed
term deposit 1,049 (1,045)
Net cash inflow (outflow) from investing
activities 2,191 (2,496)
------------------------------------------ ------ -------- --------
Cash flows from (used in) financing
activities
Issue of ordinary shares 4,230 3,598
Costs of ordinary share issues* (166) (146)
Purchase of own ordinary shares (814) (240)
Share premium cancellation costs (10) -
Dividends paid 5 (2,365) (3,354)
Net cash inflow (outflow) from financing
activities 875 (142)
------------------------------------------ ------ -------- --------
Net increase (decrease) in cash
and cash equivalents 2,855 (2,618)
Cash and cash equivalents at the
beginning of the year 12,826 15,444
Cash and cash equivalents at the
end of the year 15,681 12,826
------------------------------------------ ------ -------- --------
*Issue costs include both fundraising costs and expenses
incurred from the Company's DRIS.
Reconciliation of Profit before Taxation to Net Cash (Outflow)
Inflow from Operating Activities
2017 2016
GBP000 GBP000
Profit before taxation 2,069 1,412
(Decrease) increase in trade
and other payables (45) 6
Decrease (increase) in trade
and other receivables 73 (275)
Gain on disposal of investments (40) (339)
Gains on investments held at
fair value (2,209) (704)
Capitalised interest and dividends (59) (80)
------------------------------------- -------- --------
Net cash (outflow) inflow from
operating activities (211) 20
------------------------------------- -------- --------
Notes to the Financial Statements
1. Principal Accounting Policies
Basis of Preparation
The accounts have been prepared on a going concern basis and in
accordance with International Financial Reporting Standards (IFRSs)
as adopted by the European Union and those parts of the Companies
Act 2006 applicable to companies reporting under IFRS.
The financial statements have been prepared under the historical
cost basis as modified by the measurement of investments at fair
value through profit or loss.
The accounts have been prepared in compliance with the
recommendations set out in the Statement of Recommended Practice
'Financial Statements of Investment Trust Companies and Venture
Capital Trusts' issued by the Association of Investment Companies
(issued in November 2014 and updated in January 2017 with
consequential amendments - "SORP") to the extent that they do not
conflict with IFRSs as adopted by the European Union.
The financial statements are prepared in accordance with IFRSs
and interpretations in force at the reporting date. New standards
coming into force during the year have not had a material impact on
these financial statements.
Standards, amendments to standards and interpretations have been
issued which will be effective for future reporting periods but
have not been adopted early in these financial statements. These
include IFRS 9, IFRS 15, and amendments to IFRS 2 and IFRS 10. The
Company has carried out an assessment and considers that these
standards, amendments and interpretations, issued but not yet
effective, will not affect the Company's accounting policies,
results or net assets. In particular the Company will be able to
continue to quantify its investments at fair value through profit
and loss under IFRS 9, and will consequently not need to apply the
impairment model.
The financial statements are presented in sterling and all
values are rounded to the nearest thousand (GBP000), except where
stated.
2. Income
2017 2016
GBP000 GBP000
Dividends from unquoted companies 290 611
Dividends from AIM quoted companies 17 17
Interest on loans to unquoted
companies 989 1,140
Income from investments held at
fair value through profit or loss 1,296 1,768
Interest on bank deposits 117 169
1,413 1,937
------------------------------------- ------- -------
The above is stated net of GBP349,000 (2016: GBP133,000) of
income in relation to loan interest and preference dividends, which
has not been recognised.
3. Administrative Expenses
2017 2016
GBP000 GBP000
Investment Adviser's fee 1,155 1,119
Administration fee 63 62
------------------------------------- ------- -------
Total payable to YFM Private Equity
Limited 1,218 1,181
Other expenses:
Trail commission 120 133
Directors' remuneration 82 81
General expenses 57 52
Listing and registrar fees 47 46
Printing 26 34
Auditor's remuneration - audit
fees (excluding irrecoverable
VAT) 25 23
Irrecoverable VAT 18 18
1,593 1,568
------------------------------------- ------- -------
Ongoing charges figure 2.48% 2.51%
------------------------------------- ------- -------
Directors' remuneration comprises only short term benefits
including social security contributions of GBP7,000 (2016:
GBP7,000).
The directors are the Company's only key management
personnel.
No fees are payable to the auditor in respect of non-audit
services supplied pursuant to legislation (2016: GBPnil).
YFM Private Equity Limited has acted as Investment Adviser and
performed administrative and secretarial duties for the Company
under an agreement dated 28 November 2000, superseded by an
agreement dated 31 October 2005 and as varied by agreements dated 8
December 2010, 26 October 2011, 16 November 2012, 17 October 2014
and 7 August 2015 (the "IAA"). The agreement may be terminated by
not less than twelve months' notice given by either party at any
time. Following the Financial Conduct Authority's registration of
the Company as a Small Registered Alternative Investment Fund
Manager in 2014, the Company has retained responsibility for the
custody of its investments.
The key features of the agreement are:
YFM Private Equity Limited receives an Investment Adviser fee,
payable quarterly in advance, calculated at half-yearly intervals
as at 30 June and 31 December. The fee is allocated between capital
and revenue as described in note 1;
The annual advisory fee payable to the Investment Adviser is
2.50 per cent of net assets up to GBP16.0 million, 1.25 per cent of
net assets in excess of GBP16.0 million and up to GBP26.667
million, and 2.00 per cent of net assets in excess of GBP26.667
million. Based on the Company's net assets at 31 December 2017 of
GBP59.056 million, this equates to 2.0 per cent of net assets, or
GBP1,181,000 per annum;
YFM Private Equity Limited shall bear the annual operating costs
of the Company (including the advisory fee set out above but
excluding any payment of the performance incentive fee, details of
which are set out below and excluding VAT and trail commissions) to
the extent that those costs exceed 2.9 per cent of the net asset
value of the Company; and
Under the IAA YFM Private Equity Limited also provides
administrative and secretarial services to the Company for a fee of
GBP46,000 per annum plus annual adjustments to reflect movements in
the Retail Prices Index. This fee is charged fully to revenue, and
totalled GBP63,000 for the year ended 31 December 2017 (2016:
GBP62,000).
When the Company makes investments into its unquoted portfolio
the Investment Adviser charges that investee an advisory fee. With
effect from 1 October 2013 if the average of relevant fees exceeds
3.0 per cent of the total invested into new portfolio companies and
2.0 per cent into follow-on investments over the Company's
financial year, this excess will be rebated to the Company. As at
31 December 2017, the Company was due a rebate from the Investment
Adviser of GBPnil (2016: GBPnil).
Monitoring and directors' fees the Investment Adviser receives
from the investee companies are limited to a maximum of GBP40,000
(excluding VAT) per annum per company.
The total remuneration payable to YFM Private Equity Limited
under the IAA in the year was GBP1,218,000 (2016:
GBP1,181,000).
Under the IAA, YFM Private Equity Limited is entitled to receive
fees from investee companies in respect of the provision of
non-executive directors and other advisory services. YFM Private
Equity Limited is responsible for paying the due diligence and
other costs incurred in connection with proposed investments which
for whatever reason do not proceed to completion. In the year ended
31 December 2017 the fees receivable by YFM Private Equity Limited
from investee companies which were attributable to advisory and
directors' and monitoring fees amounted to GBP385,000 (2016:
GBP412,000).
Under the Subscription Rights Agreement dated 23 November 2001
between the Company, YFM Private Equity Limited and Chord Capital
Limited ("Chord" formerly Generics Asset Management Limited), as
amended by an agreement between those parties dated 31 October
2005, YFM Private Equity Limited and Chord have a
performance-related incentive, structured so as to entitle them to
an amount (satisfied by the issue by the Company of ordinary
shares) equivalent to 20 per cent of the amount by which the
cumulative dividends per ordinary share paid as at the last
business day in December in any year, plus the average of the
middle market price per ordinary share on the five dealing days
prior to that day, exceeds 120 pence per ordinary share, multiplied
by the number of ordinary shares issued and the ordinary shares
under option (if any) (the "Hurdle"). Under the terms of the
Subscription Rights Agreement, once the Hurdle has been exceeded it
is reset at that value going forward, which becomes the new Hurdle.
Any subsequent exercise of these rights will only occur once the
new Hurdle has been exceeded. The subscription rights are
exercisable in the ratio 95:5 between the Investment Adviser and
Chord Capital Limited.
By a Deed of Assignment dated 19 December 2003 (together with a
supplemental agreement dated 5 October 2005), the benefit of the
YFM Private Equity Limited subscription right was assigned to YFM
Private Equity Limited Carried Interest Trust (the "Trust"), an
employee benefit trust formed for the benefit of certain employees
of YFM Private Equity Limited and associated companies. Pursuant to
a deed of variation dated 16 November 2012 between the Company, the
trustees of the Trust and Chord, the Subscription Rights Agreement
was varied so that the subscription rights will be exercisable in
the ratio of 95:5 between the trustees of the Trust and Chord.
Pursuant to a deed of variation dated 5 August 2014 the
Subscription Rights Agreement was varied so that the recipient was
changed from the Trust to YFM Private Equity Limited.
As at 31 December 2017 the total of cumulative cash dividends
paid and mid-market price was 110.50 pence per ordinary share. No
shares have been issued under this agreement.
Under the terms of the offer launched on 3 January 2017, YFM
Private Equity Limited was entitled to 5.0 per cent of gross
subscriptions from execution brokers and 3.0 per cent of gross
subscriptions for applications through intermediaries offering
financial advice or directly from applicants, less the cost of
incentive shares and re-investment of intermediary commission. The
net amount paid to YFM Private Equity Limited under this offer
amounted to GBP148,597.
The Investment Adviser met all costs and expenses arising from
this offer out of this fee, including any payment or re-investment
of initial intermediary commissions.
The details of directors' remuneration are set out in the
Directors' Remuneration Report on page 41 of the annual report
under the heading "Directors' Remuneration for the year ended 31
December 2017 (audited)".
4. Taxation
2017 2016
--------------------------- ---------------------------
Revenue Capital Total Revenue Capital Total
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
Profit before taxation 686 1,383 2,069 1,208 204 1,412
-------------------------- -------- -------- ------- -------- -------- -------
Profit before taxation
multiplied by standard
rate of corporation
tax in UK of 19.25%
(2016: 20%) 132 266 398 242 40 282
Effect of:
UK dividends received (59) - (59) (126) - (126)
Non-taxable profits
on investments - (433) (433) - (209) (209)
Excess advisory expenses - 94 94 - 53 53
-------------------------- -------- -------- ------- -------- -------- -------
Tax charge (credit) 73 (73) - 116 (116) -
-------------------------- -------- -------- ------- -------- -------- -------
The Company has no provided or unprovided deferred tax liability
in either year.
Deferred tax assets of GBP596,000 (2016: GBP514,000) calculated
at 17% in respect of unrelieved management expenses (GBP3.51
million as at 31 December 2017 and GBP3.02 million as at 31
December 2016) have not been recognised as the directors do not
currently believe that it is probable that sufficient taxable
profits will be available against which assets can be
recovered.
Due to the Company's status as a venture capital trust and the
continued intention to meet with the conditions required to comply
with Section 274 of the Income Tax Act 2007, the Company has not
provided for deferred tax on any capital gains or losses arising on
the revaluation or realisation of investments.
5. Dividends
Amounts recognised as distributions to equity holders in the
period to 31 December:
2017 2016
Revenue Capital Total Revenue Capital Total
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
Final dividend for
the year ended 31 December
2016 of 1.5p (2015:
2.5p) per ordinary
share 177 1,334 1,511 277 2,045 2,322
Interim dividend for
the year ended 31 December
2017 of 1.5p (2016:
2.0p) per ordinary
share 232 1,277 1,509 593 1,276 1,869
----------------------------- -------- -------- ------- -------- -------- -------
409 2,611 3,020 870 3,321 4,191
----------------------------- -------- -------- ------- -------- -------- -------
Shares allotted under
DRIS (658) (826)
Unclaimed dividends 3 (11)
----------------------------- -------- -------- ------- -------- -------- -------
Dividends paid in Statement
of Cash Flows 2,365 3,354
----------------------------- -------- -------- ------- -------- -------- -------
The final year-end dividend of 1.5 pence per ordinary share in
respect of the year to 31 December 2016 was paid on 12 May 2017 to
shareholders on the register at 31 March 2017.
The interim dividend of 1.5 pence per ordinary share was paid on
29 September 2017 to shareholders on the register as at 1 September
2017.
A final dividend of 1.5 pence per ordinary share in respect of
the year to 31 December 2017 is proposed. This dividend has not
been recognised in the year ended 31 December 2017 as the
obligation did not exist at the balance sheet date.
During the year the Company has received GBPnil (2016:
GBP14,000) from the Registrars in respect of unclaimed dividends.
The Company has made efforts to contact the relevant shareholders,
with the result that GBP3,000 (2016: GBP3,000) has been paid to
shareholders in the year. The unclaimed balance is held in a
separate bank account until contact can be made with the
shareholders affected.
6. Basic and Diluted Earnings per Ordinary Share
The basic and diluted earnings per ordinary share is based on
the profit after tax attributable to shareholders of GBP2,069,000
(2016: GBP1,412,000) and 99,881,803 (2016: 93,363,744) ordinary
shares being the weighted average number of ordinary shares in
issue during the year.
The basic and diluted revenue earnings per ordinary share is
based on the profit for the year attributable to shareholders of
GBP613,000 (2016: GBP1,092,000) and 99,881,803 (2016: 93,363,744)
ordinary shares being the weighted average number of ordinary
shares in issue during the year.
The basic and diluted capital earnings per ordinary share is
based on the capital profit for the year attributable to
shareholders of GBP1,456,000 (2016: GBP320,000) and 99,881,803
(2016: 93,363,744) ordinary shares being the weighted average
number of ordinary shares in issue during the year.
During the year the Company allotted 6,787,231 new ordinary
shares from a top up offer, and 1,189,635 new ordinary shares in
respect of its DRIS.
The Company has also repurchased 1,460,605 of its own shares in
the year, and these shares are held in the capital reserve. The
total of 4,006,351 treasury shares has been excluded in calculating
the weighted average number of ordinary shares for the period. The
Company has no securities that would have a dilutive effect and
hence basic and diluted earnings per ordinary share are the
same.
The only potentially dilutive shares are those shares which,
subject to certain criteria being achieved in the future, may be
issued by the Company to meet its obligations under the
Subscription Rights Agreement as set out in note 3. No such shares
have been issued or are currently expected to be issued because the
conditions have not been met at the year end. Consequently, basic
and diluted earnings per ordinary share are equivalent in both the
year ended 31 December 2017 and 31 December 2016.
7. Financial Assets at Fair Value through Profit or Loss
Movements in investments at fair value through profit or loss
during the year to 31 December 2017 are summarised as follows:
IFRS 13 measurement classification Level 3 Level 1
---------------------------------------- --------------------- -------------------------- ------------------
Unquoted Investments Quoted Equity Investments Total Investments
GBP000 GBP000 GBP000
Opening cost 30,853 1,419 32,272
Opening investment holding gain 6,394 653 7,047
---------------------------------------- --------------------- -------------------------- ------------------
Opening fair value at 1 January 2017 37,247 2,072 39,319
Additions at cost 2,371 - 2,371
Capitalised interest and dividends 59 - 59
Disposal proceeds (2,903) (638) (3,541)
Net (loss) profit on disposal* (87) 93 6
Change in fair value 1,454 755 2,209
---------------------------------------- --------------------- -------------------------- ------------------
Closing fair value at 31 December 2017 38,141 2,282 40,423
---------------------------------------- --------------------- -------------------------- ------------------
Closing cost 30,115 1,248 31,363
Closing investment holding gain** 8,026 1,034 9,060
---------------------------------------- --------------------- -------------------------- ------------------
Closing fair value at 31 December 2017 38,141 2,282 40,423
---------------------------------------- --------------------- -------------------------- ------------------
*The net profit on disposal in the table above is GBP6,000
whereas that shown in the Statement of Comprehensive Income is
GBP40,000. The difference comprises deferred proceeds of GBP34,000
in respect of assets which have been disposed of in prior years and
are not included within the investment portfolio at 1 January
2017.
**Following the merger between the Company and British Smaller
Technologies Company VCT plc a total of GBP975,000 of negative
goodwill was recognised in the investment holding gains and losses
reserve in respect of the investments acquired. The relevant amount
per investment is realised at the point of disposal to the capital
reserve. At 31 December 2017 a total of GBP30,000 (2016: GBP30,000)
was held on investments yet to be realised in the investment
holdings gains and losses reserve.
There were no individual reductions in fair value during the
year that exceeded 5 per cent of the total assets of the Company
(2016: GBPnil).
8. Basic and Diluted Net Asset Value per Ordinary Share
The basic and diluted net asset value per ordinary share is
calculated on attributable assets of GBP59,056,000 (2016:
GBP56,109,000) and 100,490,575 (2016: 93,974,314) ordinary shares
in issue at the year end.
The treasury shares have been excluded in calculating the number
of ordinary shares in issue at 31 December 2017.
The only potentially dilutive shares are those shares which,
subject to certain criteria being achieved in the future, may be
issued by the Company to meet its obligations under the
Subscription Rights Agreement as set out in note 3. No such shares
have been issued or are currently expected to be issued because the
conditions have not been met at the year end. Consequently, basic
and diluted net asset values per ordinary share are equivalent in
both the year ended 31 December 2017 and 31 December 2016.
9. Total Return per Ordinary Share
The total return per ordinary share is calculated on cumulative
dividends paid of 55.5 pence per ordinary share (2016: 52.5 pence
per ordinary share) plus the net asset value as calculated per note
8.
10. Financial Commitments
There are no financial commitments at 31 December 2017.
11. Related Party Transactions
Mr R Last is chairman and non-executive director of Gamma
Communications plc, in which he has a 0.06 per cent equity stake.
During the year to 31 December 2017 he received remuneration of
GBP76,500 from Gamma in respect of his services.
12. Events after the Balance Sheet Date
On 16 February 2018 the Company allotted a total of 7,366,700
ordinary shares pursuant to the offer detailed under "Fundraising"
on page 6 of the annual report, raising net proceeds of
approximately GBP4.3 million.
In March 2018 the Company made a new investment of GBP0.98
million into Ncam Technologies Limited and also made a follow-on
investment of GBP0.38 million into Matillion Limited.
13. Annual Report and Accounts
Copies of the statutory accounts for the year ended 31 December
2017 will shortly be submitted to the National Storage Mechanism
and will be available to the public for viewing online at
www.hemscott.com/msn/do. They can also shortly be viewed on the
Company's website at www.bscfunds.com. Hard copies of the statutory
accounts for the year to 31 December 2017 will be distributed by
post or electronically to shareholders and will thereafter be
available to members of the public from the Company's registered
office.
14. Directors
The directors of the Company are: Mr R Last, Mr P C Waller and
Mr R M Pettigrew.
15. Annual General Meeting
The Annual General Meeting of the Company will be held at 12.00
noon on 9 May 2018 at 33 St James Square, London, SW1Y 4JS.
16. Final Dividend for the Year Ended 31 December 2017
Further to the announcement of its final results for the year
ended 31 December 2017, the Company confirms that, subject to its
approval by shareholders at the forthcoming Annual General Meeting
to be held on 9 May 2018, the final dividend of 1.5 pence per
ordinary share ("Final Dividend") will be paid on 11 May 2018 to
those shareholders on the Company's register at the close of
business on 3 April 2018. The ex-dividend date will be 29 March
2018.
17. Dividend Re-investment Scheme
The Company operates a dividend re-investment scheme ("DRIS").
The latest date for receipt of DRIS elections so as to participate
in the DRIS in respect of the Final Dividend is the close of
business on 26 April 2018.
18. Inside Information
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.
For further information, please contact:
David Hall YFM Equity Partners Limited Tel: 0113 244 1000
Jonathan Becher Panmure Gordon (UK) Limited Tel: 0207 886 2715
This information is provided by RNS
The company news service from the London Stock Exchange
END
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