TIDMBVT
RNS Number : 0893A
Baronsmead Venture Trust PLC
27 May 2021
Baronsmead Venture Trust plc
Half-yearly report for the six months ended 31 March 2021
The Directors of Baronsmead Venture Trust plc are pleased to
announce the unaudited half-yearly financial report for the six
months to 31 March 2021. Copies of the half-yearly report can be
obtained from the following website: www.baronsmeadvcts.co.uk
Our Investment Objective
-- Baronsmead Venture Trust is a tax efficient listed company
which aims to achieve long-term investment returns for private
investors, including tax-free dividends.
Investment Policy
-- To invest primarily in a diverse portfolio of UK growth
businesses, whether unquoted or traded on AIM.
-- Investments are made selectively across a range of sectors in
companies that have the potential to grow and enhance their
value.
Dividend Policy
-- The Board will, wherever possible, seek to pay two dividends
to Shareholders in each calendar year, typically an interim 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
NAV of that financial year.
Key elements of the business model
Access to an attractive, diverse portfolio
Baronsmead Venture Trust plc 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
+16.6% Net Asset Value (NAV) per share increased 16.6 per cent.
to 79.2p in the six months to 31 March 2021, before deduction of
dividends.
460.1p NAV total return to shareholders for every 100.0p
invested at launch (April 1998).
GBP32.5m Funds raised in the period (before costs).
GBP8.1m Realised proceeds in the period, returning 3.0x
cost.
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.
Cumulative
dividends
Income Net cash
Cash invested tax reclaim invested paid(#)
(p) Return on
cash invested(#)
Year subscribed (p) (p) (p) (%)
1998 (April) 100.0 20.0 80.0 170.4 190.4
============= ============ ========== ========== =================
1999 (May) 102.0 20.4 81.6 166.9 183.6
============= ============ ========== ========== =================
2000 (February) 137.0 27.4 109.6 163.7 139.5
============= ============ ========== ========== =================
2000 (March) 130.0 26.0 104.0 163.7 145.9
============= ============ ========== ========== =================
2004 (October) - C shares* 100.0 40.0 60.0 119.3 159.3
============= ============ ========== ========== =================
2009 (April) 91.6 27.5 64.1 102.5 141.9
============= ============ ========== ========== =================
2012 (December) 111.8 33.5 78.3 77.0 98.9
============= ============ ========== ========== =================
2014 (March) 103.8 31.1 72.7 59.5 87.3
============= ============ ========== ========== =================
2016 (February) 102.8 30.8 72.0 45.0 73.8
============= ============ ========== ========== =================
2017 (October) 94.8 28.4 66.3 27.0 58.4
============= ============ ========== ========== =================
2019 (February) 84.2 25.3 58.9 20.5 54.4
============= ============ ========== ========== =================
2019 (November) 76.8 23.0 53.8 13.0 46.9
============= ============ ========== ========== =================
2020 (January) 82.4 24.7 57.7 13.0 45.8
============= ============ ========== ========== =================
2020 (February) 80.1 24.0 56.1 9.5 41.8
============= ============ ========== ========== =================
2020 (March) 63.8 19.1 44.7 9.5 44.8
============= ============ ========== ========== =================
2020 (November) 75.2 22.6 52.6 6.5 38.6
============= ============ ========== ========== =================
2020 (December) 78.0 23.4 54.6 6.5 38.3
============= ============ ========== ========== =================
2021 (January) 81.3 24.4 56.9 6.5 38.0
============= ============ ========== ========== =================
2021 (February) 78.8 23.6 55.2 3.0 33.8
============= ============ ========== ========== =================
2021 (March) 80.9 24.3 56.6 3.0 33.7
============= ============ ========== ========== =================
* Share dividend calculated using conversion ratio of 0.9657,
which is the rate the C shares were converted into ordinary
shares
#Includes interim dividend of 3.0p per share payable 10
September 2021.
Chairman's statement
The six months to 31 March 2021 saw strong performance from our
AIM-traded investments, which provided a 31.7 per cent. return in
the period, and was supported by positive progress from our
unquoted investments, including the successful realisation of
Ten10.
I am delighted to report that during the period the Company
successfully raised GBP32.5m (before costs) through an offer for
subscription which became fully subscribed in March 2021. The
Directors are pleased to welcome the 1,200 new shareholders who
invested for the first time and to thank the 980 existing
shareholders who continue to support the Company.
The Board is also pleased to declare an interim dividend of 3.0p
to be paid on 10 September 2021 to shareholders on the register as
of 13 August 2021. The dividend will be paid from realised capital
profits generated from the sale of portfolio companies.
I must of course remind shareholders that payment dates and the
amount of future dividends depend on the level and timing of
profitable realisations and cannot be guaranteed.
Results
During the six months to 31 March 2021, the Company's NAV per
share decreased 16.6 per cent. from 67.9p to 79.2p after the
payment of a final dividend of 3.5p per share on 5 March 2021. The
table below shows this increase in NAV, which was due to a
combination of a strong performance across the unquoted
investments, AIM-traded investments and equity funds.
Pence per
ordinary
share
----------------------------------------------- ----------
NAV as at 1 October 2020 (after deducting the
final dividend of 3.5p) 67.9
----------------------------------------------- ----------
Valuation increase (16.6 per cent.) 11.3
----------------------------------------------- ----------
NAV as at 31 March 2021 79.2
----------------------------------------------- ----------
The 30 April 2021 NAV was 82.9p, a 4.7 per cent. increase driven
by further uplifts in the value of the quoted portfolio during the
month.
Portfolio review
The table below provides a summary of each asset class and the
return generated during the period under review.
Number of
NAV* investees % return in
Asset class (GBPm) % of NAV* companies** the period***
Unquoted 45 21 35 13
-------- ---------- ------------- ---------------
AIM- traded companies 71 33 44 32
-------- ---------- ------------- ---------------
LF Gresham House
UK Micro Cap Fund 36 17 48 32
-------- ---------- ------------- ---------------
LF Gresham House
UK Multi Cap Income
Fund 3 1 47 15
-------- ---------- ------------- ---------------
Liquid assets(#) 61 28 - -
-------- ---------- ------------- ---------------
Total 216 100 - -
-------- ---------- ------------- ---------------
*By value at 31 March 2021.
**Includes investee companies with holdings by more than one
fund. Total number of individual companies held is 145.
***Return includes interest received on unquoted realisations
during the period.
(#) Represents cash, OEICs and net current assets.
The value of the unquoted portfolio increased 12.6 per cent. in
the six months to 31 March 2021. Continued trading momentum in
software and e-commerce investments together with a bounce back in
demand within several businesses initially impacted by COVID-19,
drove the portfolio performance. The performance was moderated by
write downs in the valuation of investments operating in consumer
travel, hospitality and accommodation markets, which are still
being negatively impacted by lockdown and travel restrictions.
Public markets have continued to recover from lows 12 months
ago, driven by the speed of the vaccination rollout, growth in
economic activity and further Government support and investment
programmes. Healthcare, education and technology investments were
the key contributors to the strong performance of the direct AIM
investments and the Equity Fund portfolios over the period.
Investments and divestments
The Company's investments and divestments during the period are
set out below.
Investments
I am pleased to report that the Company made four new
investments totalling GBP5.1m and three follow-on investments with
a combined value of GBP1.4m in the six months to 31 March 2021.
Below are descriptions of the new investments made:
-- eConsult (unquoted) develops and operates a digital
consultation platform used in both GP surgeries and hospitals.
-- RevLifter (unquoted) provides software that helps e-commerce
companies optimise website conversion by offering tailored
promotions to customers by using advanced behavioural
analytics.
-- Counting Up (unquoted) is the leading UK provider of unified
banking and accounting software to micro-businesses. Counting Up
develops and operates the software which provides an all-in-one
financial tool for small business users.
-- Metrion Biosciences (unquoted) is a UK-based Contract
Research Organisation focused on delivering a range of high-quality
ion channel drug discovery services.
Following the period end, a new quoted investment of GBP0.6m was
made into Crimson Tide, a workforce management
software-as-a-service provider.
Realisations
Proceeds of GBP2.2m were received during the period from sales
of quoted investments, including:
-- Cerillion plc - top-slicing delivered proceeds of GBP1.6m,
equating to a money multiple of 4.2x.
-- Collagen Solutions plc - a full exit through a takeover offer
for the company realised proceeds of GBP0.6m, giving a money
multiple of 1.3x.
There continues to be a good level of liquidity in public
markets and the Manager has made a select number of divestments
within the quoted portfolio where share prices have rallied
strongly since the initial decline in markets, following the first
national lockdown in March last year.
From the unquoted portfolio, the sale of the investment in Ten10
successfully completed in October 2020. The sale returned total
proceeds of GBP5.9m resulting in a total gross money multiple of
3.7x original investment cost.
From the quoted portfolio, following the end of the financial
period there has been a takeover of Wey Education, resulting in the
full realisation of the Company's investment, returning 13.6x cost
and delivering proceeds of GBP5.8m.
COVID-19 impact
COVID-19 has had a material impact on UK businesses over the
last year and has caused significant volatility and disruption to
the global economy. The pandemic has presented operational risks
for the Company, but the Board continues to appreciate the strong
response and resilience of key service providers during this
difficult time.
Although there are now several approved vaccines in circulation,
there may still be the risk of a third wave of infections, which
could lead to a further period of uncertainty and volatility in
markets. We are encouraged by the Manager's ongoing engagement with
portfolio companies and the focus on investing in businesses with
strong fundamental characteristics which should continue to grow
consistently through the economic cycle.
Fundraising
The Board will consider whether to raise new funds in the
2021/22 tax year. This will be determined by the Company's cashflow
and its anticipated requirements 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 any
such fundraising at the earliest practical time.
Change of auditor
The audit committee has considered the external audit
arrangements and held an audit tender process in early 2021.
Following the conclusion of this process, the audit committee has
appointed BDO LLP as the Company's auditor and KPMG LLP will retire
with effect from 28 May 2021. KPMG's resignation letter will be
sent to the Company's shareholders alongside this half-yearly
report.
Board succession
The Board acknowledges that succession planning and refreshment
of the Board remains one of the priorities for the year ending 30
September 2021, during which process there will be an emphasis on
ensuring that the Board and its Committees continue to have a
suitable combination of skills, experience, knowledge and
diversity.
Shareholder scam warning
We are aware that some of our shareholders have received
unsolicited phone calls or correspondence concerning their
investment in the Company.
Shareholders are advised to be very wary of any unsolicited
advice, offers to buy shares at a discount or offers for free
company reports.
Please note that none of the Investment Manager, Company or the
Company's Registrar, Computershare, would make unsolicited
telephone calls to shareholders. Any calls made would relate only
to official documentation already circulated to shareholders and
never in respect of investment "advice".
If you are in any doubt about the veracity of an unsolicited
phone call, please call either the Company or the Registrar at the
numbers provided in the Contact information page below.
Outlook
The economic outlook in the UK continues to improve as COVID-19
restrictions ease and consumer confidence recovers. The March
Budget included an extension of Government support and investment
in infrastructure and the technology sector to help rebuild the UK
economy. While most economic commentators expect the economy to
rebound strongly over the next two quarters, the longer-term impact
of the pandemic remains uncertain. Any additional wave of the virus
could lead to the reintroduction of restrictions and the
possibility of further volatility in both public markets and
revenues within some portfolio companies. However, the Board
continues to believe that the portfolio is well positioned to
deliver robust investment performance over the long-term and the
Company remains well capitalised to actively support the high
growth, entrepreneurial businesses that will be key forces in
driving a sustainable economic recovery.
Peter Lawrence
Chairman
27 May 2021
Investments in the period
Book cost
Company Location Sector Activity GBP'000
Unquoted investments
New
================================================================================================
Online consultation provider
Healthcare used by GP practices
eConsult Surrey & Education and hospitals 2,400
=========== ============== ================================= =========
Ion channel drug discovery
Metrion Biosciences Healthcare and safety assessment
Ltd Cambridge & Education services provider 1,057
=========== ============== ================================= =========
Business Banking and accounting
Counting Ltd London Services software for small business 940
=========== ============== ================================= =========
A-I platform using advanced
behavioural analytics
to deliver tailored promotions
RevLifter Ltd London TMT to users 719
=========== ============== ================================= =========
Follow on
Business
Glisser Ltd London Services Audience engagement software 705
=========== ============== ================================= =========
Equipsme (Holdings) Business SME health insurance
Ltd London Services plans provider 211
=========== ============== ================================= =========
Total unquoted investments 6,032
=========
AIM-traded Investments
Follow on
CloudCall Group Cloud software and integrated
plc Leicester TMT communications 495
=========== ============== ================================= =========
Total AIM-traded investments 495
=========
Total investments in the period 6,527
=========
TMT - Technology, Media and Telecommunications
Realisations in the period
Original
First book cost Proceeds Overall
investment (#) (++) multiple
Company date GBP'000 GBP'000 return
Unquoted realisations
==========
Full trade
Ten10 Group Ltd sale Feb 15 1,908 5,933 3.7 *
============= ============ ========== ======== ==========
Total unquoted realisations 1,908 5,933 3.7*
========== ======== ==========
AIM-traded realisations
==========
Cerillion plc Market sale Nov 15 376 1,574 4.2
============= ============ ========== ======== ==========
Collagen Solutions plc Takeover Mar 17 450 586 1.3
============= ============ ========== ======== ==========
Total AIM-traded realisations 826 2,160 2.6
------------------------------------------------------------ ---------- -------- ----------
Total realisations in
the period 2,734 8,093 3.0
---------- -------- ----------
(#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.)
Responsibility statement of the directors in respect of the
half-yearly financial 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 Chairman's Statement and the
Strategic Report.
The principal risks facing the Company are substantially
unchanged since the date of the Company's Annual Report for the
financial year ended 30 September 2020 and continue to be as set
out in that Report on pages 18 and 19.
Risks faced by the Company include but are not limited to; loss
of approval as a Venture Capital Trust, investment performance
risk, legislative risk, regulatory and compliance risk, operational
risk, and economic and political risk. The Board considers the
COVID-19 pandemic and Brexit to befactors which permeate these
risks, and their impact is considered within the relevant risk
within the Annual Report.
Responsibility statement
Each Director confirms that to the best of their knowledge:
-- the condensed set of nancial 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 rst six months of the nancial year and their impact on the
condensed set of nancial 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 rst
six months of the current nancial year and that have materially
affected the nancial 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
27 May 2021 and was signed on its behalf by Mr Peter Lawrence,
Chairman.
Peter Lawrence
Chairman
27 May 2021
Condensed Income Statement (unaudited)
For the six months to 31 March 2021
Six months to Six months to Year to 30 September
31 March 2021 31 March 2020 2020
Revenue Capital Total Revenue Capital Total Revenue Capital Total
Notes GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Gains/(losses)
on investments 5 - 31,241 31,241 - (13,269) (13,269) - 5,865 5,865
Income 436 - 436 369 - 369 3,679 - 3,679
Investment management
fee (471) (1,414) (1,885) (363) (1,088) (1,451) (750) (2,251) (3,001)
Performance fee - (286) (286) - - - - - -
Other expenses (342) - (342) (331) - (331) (599) - (599)
--------------------- ----- -------- -------- -------- -------- -------- -------- -------- -------- --------
(Loss)/profit
before taxation (377) 29,541 29,164 (325) (14,357) (14,682) 2,330 3,614 5,944
Taxation on ordinary
activities - - - - - - (333) 333 -
--------------------- ----- -------- -------- -------- -------- -------- -------- -------- -------- --------
(Loss)/profit
for the period,
being the total
comprehensive
income for the
period after
taxation (377) 29,541 29,164 (325) (14,357) (14,682) 1,997 3,947 5,944
--------------------- ----- -------- -------- -------- -------- -------- -------- -------- -------- --------
Return per ordinary
share:
--------------------- ----- -------- -------- -------- -------- -------- -------- -------- -------- --------
Basic and Diluted 2 (0.15p) 11.72p 11.57p (0.15p) (6.65p) (6.80p) 0.90p 1.77p 2.67p
--------------------- ----- -------- -------- -------- -------- -------- -------- -------- -------- --------
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 2021 (unaudited)
Non-distributable reserves Distributable reserves
Called-up Share Revaluation Capital Revenue
share capital premium reserve reserve reserve Total
Notes GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
At 1 October 2020 25,268 49,397 29,590 58,399 2,180 164,834
Profit/(loss) after
taxation - - 26,543 2,998 (377) 29,164
Net proceeds of share
issues, share buybacks
& sale of shares
from treasury 3 4,232 27,314 - (784) - 30,762
Dividends paid 4 - - - (8,177) (1,055) (9,232)
At 31 March 2021 29,500 76,711 56,133 52,436 748 215,528
For the six months to 31 March 2020 (unaudited)
Non-distributable reserves Distributable reserves
Called-up Share Revaluation Capital Revenue
share capital premium reserve reserve reserve Total
Notes GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
At 1 October 2019 22,053 28,397 26,909 72,401 1,309 151,069
Loss after taxation - - (11,945) (2,412) (325) (14,682)
Net proceeds of share
issues, share buybacks
& sale of shares from
treasury 3,215 21,000 - (1,265) - 22,950
Dividends paid - - - (7,100) (665) (7,765)
At 31 March 2020 25,268 49,397 14,964 61,624 319 151,572
For the year ended 30 September 2020 (Audited)
Non-distributable reserves Distributable reserves
Called-up Share Revaluation Capital Revenue
share capital premium reserve reserve reserve Total
Notes GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
At 1 October 2019 22,053 28,397 26,909 72,401 1,309 151,069
Profit after taxation - - 2,681 1,266 1,997 5,944
Net proceeds of share
issues, share buybacks
& sale of shares from
treasury 3,215 21,000 - (1,715) - (22,500)
Dividends paid - - - (13,553) (1,126) (14,679)
At 30 September 2020 25,268 49,397 29,590 58,399 2,180 164,834
Condensed Balance Sheet
As at 31 March 2021 (Unaudited)
As at As at As at
31 March 31 March 30 September
2021 2020 2020
Notes GBP'000 GBP'000 GBP'000
Fixed assets
Unquoted investments 5 44,698 38,894 39,187
Traded on AIM 5 71,151 46,570 55,686
Collective investment vehicles 5 58,155 53,117 59,390
Listed on LSE 5 25 - 29
=============================== ======= =========== =========== =============
Investments 5 174,029 138,581 154,292
Current assets
Debtors 108 2,297 469
Cash at bank 42,849 11,801 11,042
42,957 14,098 11,511
Creditors (amounts falling
due within one year) (1,458) (1,107) (969)
Net current assets 41,499 12,991 10,542
Net assets 215,528 151,572 164,834
Capital and reserves
Called-up share capital 29,500 25,268 25,268
Share premium 76,711 49,397 49,397
Capital reserve 52,436 61,624 58,399
Revaluation reserve 5 56,133 14,964 29,590
Revenue reserve 748 319 2,180
Equity shareholders' funds 215,528 151,572 164,834
------------------------------- ------- ----------- ----------- -------------
Net asset value per share 79.16p 65.43p 71.35p
Number of ordinary shares
in circulation 272,255,245 231,677,817 231,016,950
Condensed Statement of Cash Flows
For the six months to 31 March 2021(unaudited)
Six Six
months months Year
to to to
31 March 31 March 30 September
2021 2020 2020
GBP'000 GBP'000 GBP'000
Net cash outflow from operating activities (1,159) (1,327) (179)
Net cash inflow/(outflow) from investing activities 11,497 (9,852) (6,428)
Equity dividends paid (9,232) (7,765) (14,679)
Net cash inflow/(outflow) before financing
activities 1,106 (18,944) (21,286)
Net cash inflow from financing activities 30,701 20,953 22,536
Increase in cash 31,807 2,009 1,250
Reconciliation of net cash flow to movement
in net cash
Increase in cash 31,807 2,009 1,250
Opening cash at bank and on deposit 11,042 9,792 9,792
Closing cash at bank and on deposit 42,849 11,801 11,042
Reconciliation of profit/(loss) before taxation
to net cash outflow from operating activities
Profit/(loss) before taxation 29,164 (14,682) 5,944
Gains/(losses) on investments (31,241) 13,269 (5,865)
Changes in working capital and other non-cash
items 918 86 (258)
Net cash outflow from operating activities (1,159) (1,327) (179)
Notes to the financial statements
For the six months to 31 March 2021 (Unaudited)
1. Basis of preparation
The condensed financial statements for the six months to 31
March 2021 comprise the unaudited statements together with the
related notes. The Company applies FRS 102 and the AIC's Statement
of Recommended Practice ('the SORP') for its annual financial
statements. The condensed financial statements for the six months
to 31 March 2021 have therefore been prepared in accordance with
FRS 104 'Interim Financial Reporting' and the principles of the
SORP. They have been prepared on a going concern basis. The
accounts 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 2020.
The financial information contained in this half-yearly
financial report does not constitute statutory accounts as defined
in sections 434 - 436 of the Companies Act 2006. The half-yearly
financial report for the six months ended 31 March 2021 and for the
six months ended 31 March 2020 have been neither audited nor
reviewed by the Company's auditors. The information for the year to
30 September 2020 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 2020 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 2020
have been reported on by the Company's auditors or delivered to the
Registrar of Companies.
Copies of the half-yearly financial report have been made
available to shareholders and are available from Gresham House,
Octagon Point, 5 Cheapside, London EC2V 6AA.
2. Performance and shareholder returns
Return per share is based on a weighted average of 252,148,059
ordinary shares in issue (31 March 2020 - 215,978,185 ordinary
shares; 30 September 2020 - 222,939,528 ordinary shares).
Earnings for the first six months to 31 March 2021 should not be
taken as a guide to the results of the full financial year to 30
September 2021.
3. Called-up share capital
Allotted, called-up and fully paid:
Ordinary shares GBP'000
--------------------------------------------------------- -------
252,6 252,685,805 ordinary shares of 10p each listed
at 30 September 2020 25,268
42,321,229 ordinary shares of 10p each issued during
the period 4,232
295,007,034 ordinary shares of 10p each listed at 31
March 2021 29,500
--------------------------------------------------------- -------
21,668,855 ordinary shares of 10p each held in treasury
at 30 September 2020 (2,166)
1,502,934 ordinary shares of 10p each repurchased during
the period and held in treasury (150)
420,000 ordinary shares of 10p each sold from treasury
during the period 42
22,751,789 ordinary shares of 10p each held in treasury
at 31 March 2021 (2,274)
--------------------------------------------------------- -------
272,255,245 ordinary shares of 10p each in circulation*
at 31 March 2021 27,226
--------------------------------------------------------- -------
* carrying one vote each
During the six months to 31 March 2021, the Company issued
42,321,229 shares at net proceeds of GBP31,546,000 (after costs).
During the same period, the Company purchased 1,502,934 shares to
be held in treasury at a cost of GBP1,093,000. The Company also
sold 420,000 treasury shares at a cost of GBP309,000. At 31 March
2021 the Company held 22,751,789 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 272,255,245 ordinary
shares in issue at 31 March 2021 (31 March 2020 - 231,667,817
ordinary shares; 30 September 2020 - 231,016,950 ordinary
shares).
4. Dividends
The final dividend for the year ended 30 September 2020 of 3.5p
per share (3.1p capital, 0.4p revenue) was paid on 5 March 2021 to
shareholders on the register on 5 February 2021. The ex-dividend
date was 4 February 2021.
During the year to 30 September 2020, the Company paid an
interim dividend in September 2020 of 3.0p per share (2.8p capital,
0.2p revenue).
5. Investments
All investments are initially recognised 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:
- Rebased Cost
- Earnings Multiple
- Offer Less 10 per cent
The earnings multiple approach involves more subjective inputs
than the Rebased Cost 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 2020. 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
---------------------------------
Collective
Traded Traded Traded investment
on AIM on LSE on AIM vehicles Unquoted Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
--------- ----------
Opening book cost 40,287 2,315 4,481 44,412 33,207 124,702
Opening unrealised
appreciation/(depreciation) 13,533 (2,286) (2,615) 14,978 5,980 29,590
----------------------------- -------- --------- --------- ----------- ---------- --------
Opening fair value 53,820 29 1,866 59,390 39,187 154,292
----------------------------- -------- --------- --------- ----------- ---------- --------
Movements in the
period:
Transfer between
levels 4,481 - (4,481) - - -
Purchases at cost 495 - - - 6,032 6,527
Sale - proceeds (2,160) - - (10,362) (5,509) (18,031)
Sale - realised gains/
(losses) on sales 82 - - - (2) 80
Unrealised gains
realised during the
period 1,251 - - - 3,367 4,618
Increase/(decrease)
in unrealised appreciation/
(depreciation) 13,182 (4) 2,615 9,127 1,623 26,543
----------------------------- -------- --------- --------- ----------- ---------- --------
Closing fair value 71,151 25 - 58,155 44,698 174,029
----------------------------- -------- --------- --------- ----------- ---------- --------
Closing book cost 44,436 2,315 - 34,050 37,095 117,896
Closing unrealised
appreciation/(depreciation) 26,715 (2,290) - 24,105 7,603 56,133
----------------------------- -------- --------- --------- ----------- ---------- --------
Closing fair value 71,151 25 - 58,155 44,698 174,029
----------------------------- -------- --------- --------- ----------- ---------- --------
Equity shares 71,151 25 - - 26,261 97,437
Preference Shares - - - - 6,903 6,903
Loan notes - - - - 11,534 11,534
Collective investment
vehicles - - - 58,155 - 58,155
----------------------------- -------- --------- --------- ----------- ---------- --------
Closing fair value 71,151 25 - 58,155 44,698 174,029
----------------------------- -------- --------- --------- ----------- ---------- --------
The AIM-traded investments held in Level 2 as at 30 September
2020 have been transferred to Level 1 after recent trading activity
in the period.
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 or
traded on AIM.
6.2 Principal risks and uncertainties
The Company's financial instruments consist of equity and fixed
interest investments, 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 & Uncertainties table within the Strategic
Report section in the Company's Report and Financial Statements for
the year to 30 September 2020. The Board continues to regularly to
review the risk environment in which the Company operates.
The COVID-19 pandemic has presented the Company with immediate
risks in respect of the performance and valuation of portfolio
companies and operational risks such as the resilience of third
party providers. These risks are discussed further in the
Chairman's statement.
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
2020. During the period the Company has incurred management fees of
GBP1,885,000 (31 March 2020 - GBP1,451,000; 30 September 2020 -
GBP3,001,000) and secretarial fees of GBP62,000 (31 March 2020 -
GBP77,500; 30 September 2020 - GBP154,000) payable to the Manager.
A performance fee of GBP286,000 has been accrued at 31 March 2021
(31 March 2020 - GBPnil; 30 September 2020 - GBPnil). 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 2020.
A related party relationship exists between Baronsmead Venture
Trust and Happy Days Consultancy Limited, owing to the significant
influence deemed to be held over the operations of the company. As
at 31 March 2021, the loan balance stood at GBP5,414,000, including
GBP2,336,000 of capitalised interest, as provided for in the
Agreement with the company.
A related party relationship exists between Baronsmead Venture
Trust and Storyshare Holdings Limited, owing to the significant
influence held over the operations of the company.
6.4 Investment in associates
The Company has made the presumption that the following holding
is an investment in an associate, owing to the proportion of equity
held and representation on the board representing significant
influence over the operations of the company. The investment is
held as part of an investment portfolio, and is therefore measured
at fair value through profit and loss, as detailed in note 7 rather
than using the equity method, as permitted by Section 14 of FRS
102:
Name Location Class of % of Equity Profit Net Assets Results
Shares (GBPm) (GBPm) for year
held ended
Happy Days 31 December
Consultancy UK A Ordinary 25.2 (1.3) (9.7) 2019(1)
(1) Latest published set of financial statements available at
Companies House.
6.5 Going Concern
The Board has considered a detailed assessment of the company's
ability to meet its liabilities as they fall due, including stress
and liquidity tests which modelled the effects of substantial falls
in markets and significant reductions in market liquidity
(including further stressing the current economic conditions caused
by the COVID-19 pandemic) on the Company's assets and liabilities.
In light of the results of these tests, the Company's cash
balances, the liquidity of the Company's investments and the
absence of any gearing, the Directors are 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.
6.6 Post balance sheet events
The following events occurred between the balance sheet date and
the signing of these financial statements:
-- The 30 April 2021 NAV of 82.9p was announced on 07 May 2021.
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.
-- Full realisation: a takeover of Wey Education completed on 25
May 2021, realising proceeds of GBP5.8m and returning 13.6x
invested cost.
Corporate Information
Directors Registrars and Transfer Office
Peter Lawrence (Chairman) Computershare Investor Services
Valerie Marshall# PLC
Les Gabb* The Pavilions
Susannah Nicklin Bridgwater Road
Bristol BS99 6ZZ
Secretary Tel: 0800 923 1533
Gresham House Asset Management
Ltd Brokers
Panmure Gordon & Co
Registered Office One New Change
5 New Street Square London EC4M 9AF
London EC41 3TW Tel: 020 7886 2500
Investment Manager Auditor
Gresham House Asset Management BDO LLP
Ltd 55 Baker Street
5 New Street Square London W1U 7EU
London EC41 3TW
0207 3875 9862 Solicitors
Dickson Minto
Registered Number Broadgate Tower
03504214 20 Primrose Street
London EC2A 2EW
VCT Status Adviser
PricewaterhouseCoopers LLP
1 Embankment Place
London WC2N 6RH
Website
www.baronsmeadvcts.co.uk
# Senior Independent Director and Chairman of the Nomination
Committee
*Chairman of the Audit Committee
Chairman of the Management Engagement and Remuneration
Committee
LEI: 213800VQ1PQHOJXDDQ88
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
RNS may use your IP address to confirm compliance with the terms
and conditions, to analyse how you engage with the information
contained in this communication, and to share such analysis on an
anonymised basis with others as part of our commercial services.
For further information about how RNS and the London Stock Exchange
use the personal data you provide us, please see our Privacy
Policy.
END
IR FLFFSEAIDFIL
(END) Dow Jones Newswires
May 27, 2021 10:37 ET (14:37 GMT)
Baronsmead Venture (LSE:BVT)
Historical Stock Chart
From Apr 2024 to May 2024
Baronsmead Venture (LSE:BVT)
Historical Stock Chart
From May 2023 to May 2024